The federal government has released details on the funding that will be available to Victorian businesses during the staggered reopening period, and how and when payments will stop.
But for some small businesses, the latest — and perhaps last — package doesn’t go far enough.
Further joint funding from the state and federal governments will be available over the next six weeks, until the state is expected to reach an 80% full vaccination rate, forecast to be around November 5.
The $2.27 billion support package offers some relief to businesses in the period between 70% and 80% of the eligible population being fully vaccinated.
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During this time, many will be able to reopen, but with tight capacity restrictions. Hospitality businesses, for example, will be able to open to fully vaccinated customers, for outdoor service only with density restrictions in place and a maximum capacity of 50 people.
Hair and beauty salons will be able to reopen to a maximum of five customers at a time.
Chrissie Maus, general manager of the Chapel Street Precinct, a group representing businesses on the iconic street in Melbourne, told SmartCompany earlier this week that she would have liked to see support payments continuing for about six weeks after businesses are able to reopen.
The announcement falls short of what small business owners need, she says.
“Sadly it won’t be enough for many.”
Maus points to research from The Corporate Traveller released earlier this week, following a survey of small business owners in Victoria and New South Wales. Almost 20% of respondents said they will not reopen even when lockdowns ease.
“This stat tells the sobering story,” she says.
“It’s going to take time for businesses to get back to their maximum capacity, given strict density quotas put in place by the Victorian Government.”
Peter Mousaferiadis, founder and chief executive of Cultural Infusion, a business that delivers cultural programs in schools, says the package is “absolutely not” adequate for his business.
He feels the government has taken a blanket approach to the funding available, and the reopening timeline. It assumes all businesses will be back up and running from November 5, he says.
While that may be true of those in the hospitality and retail sectors, his business is based around schools, which will be winding down for summer at that time. And he’s not alone, he says. A lot of businesses wind down over December and January.
Mousaferiadis estimates that his business has seen a drop in revenue of between 75% and 80% during 2021.
“It’s not gonna really fire up again until February or March,” he says.
“We need to really have more of a focus, and a nuanced approach, so businesses don’t just fall over.”
In a statement, federal Treasurer Josh Frydenberg said he understands the “significant impact” lockdowns and state border closures have had on Victorian small businesses.
“We can’t eliminate the virus, we need to learn to live with it in a COVID-safe way,” he added.
“Our economy has bounced back strongly before once restrictions are eased and is well positioned to do so again when lockdowns lift.”
Victorian Treasurer Tim Pallas suggested this package will give businesses a strong chance as they navigate the reopening period, adding that they have been “amazingly resilient” since the onset of the crisis.
“We know that the bills don’t stop just because revenue does and we are proud to stand with the businesses that form the backbone of our economy.”
Here’s what we know about the Victorian package:
Business Costs Assistance Program
The state and federal government have pledged a further $1.26 billion to a fifth round of the Business Costs Assistance Program.
Eligible businesses will receive two fortnightly payments between October 1 and October 29.
It is thought payments will be made automatically to previous recipients of funding under this program.
- Eligible non-employing businesses will receive payments of $1,000 per week;
- Businesses with an annual payroll of up to $650,000 will be eligible for $2,800 per week;
- Those with a payroll of between $650,000 and $3 million will be eligible for $5,600 per week; and
- Those with a payroll of between $3 million and $10 million will be eligible for $8,400 per week.
Businesses that continue to be severely restricted, or are forced to remain closed for the first two weeks of November will continue to receive automatic payments during that time, until November 13.
A full list of eligible businesses is expected to be available on the Business Victoria website on Friday.
Licensed Hospitality Venue Fund
Businesses that have previously received funding under the Licensed Hospitality Venue Fund program will also receive further automatic payments throughout October.
- Weekly payments are staggered according to venue capacity:
- Venues with a capacity of up to 99 patrons, or where capacity is not specified, will receive $5,000 per week;
- Those with a capacity of 100 to 499 patrons will be eligible for $10,000 per week; and
- Those with a capacity of 500 or more will be eligible for $20,000 per week.
When the state hits the 70% target for full vaccination, expected to be on October 26, these payments will be reduced by 25% in metropolitan Melbourne and by 50% in regional Victoria.
Small Business COVID Hardship Fund
An additional $600 million has been added to this fund, offering one-off grants to small businesses that have seen a decline in turnover of 70% or more, but who are not eligible for other grant programs.
An additional 30,000 businesses are now expected to become eligible for one-off grants of $20,000.
You can find more information about this fund and eligibility criteria here.