18 Mar 2020 | Media Release
The Australian Chamber of Commerce and Industry has devised a suite of new business measures aimed at bracing the Australian economy against the devastating fallout from COVID-19.
Since the well-targeted and scalable stimulus was announced by the Federal Government last week, the economic context and public health status of the virus has rapidly shifted. Further support for disproportionately affected businesses and households is needed now.
ACCI CEO James Pearson said: “Small businesses across the country are in dire need, bearing the brunt of restrictions on the movement of people and an economic downturn.”
“Without support for small business, thousands of Australians will lose their businesses, their jobs and their livelihoods and the economy would spiral downwards.
“Supporting businesses at this stage of the crisis requires measures that help them with their cashflow and enhance their capability and readiness for the recovery that lies ahead.”
ACCI has written to Federal Government Ministers today putting forward the following measures which build on the Government’s initial fiscal package:
While most businesses are seeking ways of retaining employees through very challenging operating conditions, there is no doubt the prospect of workers becoming unemployed is high.
ACCI proposes a [email protected] initiative that provides Government support to businesses to allow them to retain their employees during the downturn. This measure should be made available to any business that can demonstrate a material reduction in revenue either directly or indirectly attributable to COVID-19.
The support that eligible businesses receive for each employee would be equivalent to the Newstart payment. For small businesses and sole-traders the owner would also be eligible for the payment. Payment would be made through the tax system and monitored through the Australian Tax Office (ATO). Therefore, businesses would need to be single touch payroll compliant to be eligible. For sole-traders, who are not STP compliant, the payments can be made through BAS.
This measure would not preclude eligible businesses receiving support through other measures and it provides assistance to employees at a level that would be paid by the Government if they became unemployed. Most importantly, the [email protected] initiative helps maintain employment relationships to assist in the recovery.
Businesses directly impacted by COVID-19 will run into heightened cash flow constraints as economic conditions deteriorate. Reduced consumer demand and disrupted supply chains and business models are impacting businesses. affecting a business owner’s ability to access finance through traditional financial intermediaries including banks.
Government could provide loans to affected businesses through:
There are some larger businesses, particularly in the travel and tourism sectors, that are a critical part of the supply chain and will need targeted loan assistance. Their survival will assist in the recovery phase.
Domestic supply chains will come under increasing pressure as the economic impacts of COVID-19 become more widespread. Businesses need assistance with transforming their supply chains in response to changes in demand. Measures that may assist businesses achieve the necessary transformation include:
Changes to workplace arrangements are rapidly becoming essential as virus concerns grow and the Government moves to increase restrictions on the movement of people and public gatherings.
To protect workers, maintain their jobs and to provide urgent incomes, the Fair Work Act needs to change.
In addition, given the uncertainty around COVID-19 and the likely impact on the financial circumstances of many businesses, there is a compelling case to delay the Annual Wage Review decision.
Similarly, any decisions to amend Model Work Health and Safety Laws, current national reviews (i.e. Workplace Exposure Standards), Regulatory Impact Statement processes or jurisdictional WHS law amendments should be delayed until the COVID-19 crisis has passed.
Many employees will have sick leave entitlements or carers leave to deal with children and family members needing care. However, the use of personal leave for isolation without illness is limited, some employees may not yet have accrued paid personal leave, some will have utilised their entitlement, and some casuals have effectively been paid in advance for such leave through an additional pay loading. In such situations there may not be a backup income where someone cannot work, although this is far from a problem with, or restricted to, casual employment.
Two urgent measures suggested are:
Many businesses are experiencing a sharp reduction in activity as a result of COVID-19. Assistance with reducing business costs is critical. Relief from taxes and charges is needed across Federal, State and Local Governments during this time.
To assist in relieving the financial pressure on businesses at this difficult time, Government should consider granting businesses a delay in the payment of BAS and other taxes, and waiving other fees and charges posed on businesses until conditions return to normal. This would reduce the cost of doing business so businesses can continue to operate.
We encourage the Government to continue its support for the business community during this challenging time.
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