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Barr promises government financial support to businesses after lockdown

The ACT Government will continue financial assistance to Canberra businesses until the end of the year, Chief Minister Andrew Barr announced today, acknowledging that some measures revealed this week were not viable for some businesses.

“It is recognised that some industry sectors will require ongoing financial support beyond the time that the lockdown ends,” Mr Barr said today.

“This includes businesses in hospitality, tourism, the arts, events, and personal services. It may include other niche industry sectors as well.”

The ACT Government’s COVID-19 Small Business Hardship Scheme, Commercial Tenancy Support Scheme, Accommodation and Tourism Venue Operator Support Scheme, and Small Tourism Operator Covid Recovery Payment will be extended beyond the projected end of lockdown on 15 October.

Similarly, the Food Business Registration Fee will be waived, and the annual liquor licence fee halved until 31 March 2022, and outdoor dining permit fees waived until 30 June.

Payroll tax will be waived or deferred for the 10 per cent of ACT businesses not already exempt; the ACT has the highest payroll tax-free threshold in the nation as a permanent standing concession to small and medium-sized businesses, Mr Barr said.

Mr Barr and Commonwealth Treasurer Josh Frydenberg were negotiating a further package of jointly funded grants for impacted ACT businesses. Mr Barr hoped to finish negotiations today.

He also wants the Federal Government to continue the COVID-19 Disaster Payment for people who have lost hours of work beyond 15 October; some people would still have their hours of work restricted because of the gradual transition out of lockdown.

Reaction from business community

Canberra’s beleaguered business community had called for financial support to continue after Mr Barr revealed the roadmap out of lockdown yesterday.

Graham Catt, president of the Canberra Business Chamber, said Monday’s roadmap provided clarity and detail desperately needed by businesses left disappointed and despondent by the pathway launched a few weeks ago.

But, Mr Catt said: “For some sectors, that long-awaited clarity is not good news at all.”

Many restaurants, clubs, and licensed venues could not operate viably under a one in four square metre rule, Mr Catt said; and retailers could only operate delivery for click-and-collect until 29 October and would be subject to density restrictions after that.

“For many businesses, operating under this level of restrictions for so many weeks means they’ll need ongoing financial support,” Mr Catt said.

For many, he said, their greatest fear was that with lockdown ending on 15 October, they could not operate, but government support would end, leaving them with nothing.

“The sad reality is that some Canberra business owners have been eating into their life savings to make ends meet, and debts are mounting,” Mr Catt explained.

“Businesses are going to need a survival strategy, and that means access to the right level of financial support to see them through until December.

 “It’s tough for Canberra businesses in this situation, as their counterparts in NSW and other Australian states were provided with more support to keep operations going during lockdown.

“Our businesses do appreciate the government support given to date, but they also know their counterparts in NSW have received up to 40 per cent of their salary bill through the JobSaver program. For a $10 million business, that might be $40,000 a week. Their ACT equivalent has been receiving $4,000 a week.”

“The middle ground is the worst time for businesses,” agreed John-Paul Romano, Chairman of the Inner-South Business Council.

Many businesses would remain closed after 15 October, Mr Romano predicted; without JobKeeper to pay wages, the one person per four square metres or 25 maximum capacity was “incredibly difficult” for businesses to work around. While small shops, like his Manuka business, or other small venues could manage, it was not worthwhile for big pubs and many other businesses to open. “They would lose money.”

“If we want a nightlife to go back to, we need to support the businesses till we’re back to normal,” he said.

Without business support from government, he reflected, a huge number of businesses would fall into debt, and be gone by February.

“If a business is running at a reduced rate because of government restrictions, there has to be some kind of support for that business; otherwise, it’s just not viable.”

Hospitality businesses run on a hairline margin on a good day, Mr Romano said, let alone with only 20 per cent capacity. At the moment, many food businesses rely on takeaway to survive – but it was widely feared in the business community that fewer people would order takeaway when they could eat out at a restaurant.

“It’ll be a busy time for some businesses; other businesses will have a really rough time, and they might even have a reduced turnover to what they have now.” In his view, the ACT needed the Queensland model: full reopening, or nothing.

Mr Barr said it was well understood that one person per four square metres was not viable for some parts of the hospitality sector – hence why economic support would continue – but the industry ranged from high-risk venues (night clubs, which will not open until December) to low risk (smaller, outdoor venues with lower numbers).

“The effective choice was: Do we keep everything shut until December, or do we allow some of the safer end of the hospitality industry to open up?” Mr Barr said. “Continuing to limit activity in the highest risk areas (nightclubs and the like) allow other parts of the economy that had been under lockdown restrictions to gradually open up as well.”

Gyms and fitness studios would also struggle, the Chamber’s Mr Catt feared.

Tom Adam, president of the Phillip Business Community, runs Canberra Martial Arts and Fitness. He states that under post-lockdown restrictions, contact fitness / martial arts businesses like his would not be able to trade properly until December, one of the two quietest months of the year for business.

“The biggest issue with number restrictions is that we cannot generate new revenue,” he said. New memberships, sales of uniforms, seminars, and the like provide 20 per cent of income; without them, he would have to focus on existing membership, his extant pool of revenue. “We’ll basically have our hands tied behind our backs.”

Mr Barr said he hoped businesses would not close.

“I know some will just be treading water, and will be breaking even, and some may need additional financial support, be that through fee waivers or deferral of certain payments.

“No politician can guarantee even in normal circumstances that every single business will survive for the rest of time, but we recognise that there will be a need for ongoing financial support,” he said.

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