Last week we saw tentative first steps in the ACT Government’s cautious approach to bringing business back online with the resumption of some residential construction.
There is still much debate surrounding the pace of the government’s approach. Industry groups are urging the government to consider some remaining issues, including a lack of specific support for micro-businesses, the importance of a full return to residential construction to the ACT economy, and why ‘click and collect’ for new cars has been singled out for a ban.
The ACT Government has put support measures in place for larger ACT businesses but micro-businesses (those with a turnover of less than $75,000) are yet to receive any specific support.
This week's news update focuses on how business is coping with lockdown. We're talking about the way forward, as we discuss horse paddocks, the space station and a cardboard bus shelter.
Posted by The RiotACT on Friday, September 10, 2021
RSM Australia senior advisor Young Han says the only income support for micro-businesses at present is the COVID-19 disaster payment, a weekly payment of $450 to $750 per week paid to individuals who have lost at least eight hours of work due to the COVID-19 restrictions.
“Unfortunately, there is no specific support available for micro-businesses at this stage apart from the disaster payment. We are hoping the $10,000 small business hardship scheme due to open in October will apply, but we are yet to see the details,” Ms Han said.
“When compared to NSW, the ACT has not yet been subject to the same amount of time in lockdown, which is probably why there is no support available for micro-businesses in the ACT at this stage. However, if it gets extended again, we are hoping there could be a specific grant announced for micro-businesses.
“For the time being, to assist with covering the ongoing costs, we recommend these businesses contact the ATO, their bank, landlord and other creditors to negotiate payment terms for outstanding liabilities.”
Ms Han praised the government for the relatively smooth rollout of assistance payments. As of Wednesday (8 September), around 6000 applications had been received and almost $7 million has been paid out to 400 struggling businesses.
“While micro-businesses have been left out at this stage, overall the ACT Government has done a great job announcing supports for businesses and individuals as soon as lockdown started, which went a long way to providing some level of assurance, and avoided a level of panic in the business community.”
Ms Han says while it took a week for the ACT Government to publish details of the payment, when details were provided, processing and payments went smoothly, and “some businesses who managed to submit their application for the grant on the first day have already received payment”.
Around 13,000 residential construction workers headed back to work on Friday (10 September); however, the resumption is limited as the interaction between workers and residents is banned under the COVID-safe construction guidelines, reflecting the practice in both NSW and Victoria.
Ms Han says the halt to residential construction has had a significant impact on the ACT economy.
“Unlike others in the community who are able to work from home, building trades have not been able to work at all, which means zero income and zero payments. This has affected both new homes and building renovations for both providers and consumers.”
Affected non-employing businesses such as trades operating as sole traders turning over more than $75,000 a year are eligible for a one-off payment of $7,500. However, if turnover is less than $75,000, they are considered a micro-business and need to apply for the COVID-19 Disaster payment of up to $750 a week.
ACT motor vehicle traders are still scratching their heads at being left off the list of businesses able to provide a ‘click and collect’ service for the delivery of new vehicles. Australian Automotive Dealer association CEO James Voortman said members’ yards were piling up with new vehicles, including some ordered many months ago.
“We have put a proposal before the ACT Government, but disappointingly so far, we have received no answer,” Mr Voortman said.
“People are asking to pick up their cars, and while they sit there, interest expenses are accruing. We need to do something that allows our members to deliver cars. The ACT is the only state or territory that does not allow the delivery of new cars. We really do need the government to help the community and allow the vehicles that have built up to be delivered,” Mr Voortman said.
“So many other types of businesses are able to provide ‘click and collect’, it makes no sense to exclude car delivery.”