NSW industry leaders have praised the new flood of emergency government funding – but critics say it’s no JobKeeper 2.0

Jenny Evans/Getty Images
  • Industry groups have welcomed the new emergency funding for businesses and workers impacted by the Greater Sydney coronavirus lockdown, which has been lengthened another two weeks.
  • Grants, cash flow support, elevated emergency payments, and industry-specific financial infusions were announced on Tuesday, delighting the business sector.
  • But unions and social services advocates are more circumspect, raising questions about why it took so long for the support to be announced in the first place.
  • Visit Business Insider Australia’s homepage for more stories.

Industry groups have welcomed the announcement of $5.1 billion in new government support for NSW businesses and employees impacted by the state’s worsening coronavirus outbreak, while unions and social service advocates argue the new and boosted payments may still miss the jurisdiction’s most vulnerable workers.

Prime Minister Scott Morrison and NSW Premier Gladys Berejiklian announced a major increase to both federal and state support payments on Tuesday, preparing workers and businesses for an extension of the Greater Sydney lockdown past Friday.

Those fears became reality on Wednesday morning, when Berejiklian said fears over the growing COVID-19 outbreak necessitated a lockdown extension until July 30, at the earliest.

$500 million a week in new business support payments

Businesses and individuals can expect a raft of new and expanded payments over the coming weeks.

The boosted support measures will expand access to the COVID-19 emergency payment to all eligible workers across the state, not just federally-designated hotspots, with the minimum payment rising from $325 a week to $375, and the maximum payment growing from $500 a week to $600.

The state government will foot the bill for its expansion outside of Greater Sydney, with Canberra covering those in official hotspots.

More business support measures are on the cards, too.

Businesses which can demonstrate more than a 30% drop in turnover as a result of the lockdowns, and which have an average turnover between $75,000 and $50 million per year, will be provided with payments of up to $10,000 per week, depending on the size of their payroll.

Those firms must not slash their headcount, Morrison said. That project is set to cost $500 million per week, split between the federal and state government.

A separate grant system for small businesses is on the way, providing $1,500 fortnightly to eligible firms with a turnover of between $30,000 and $75,000.

Additional grant payments are on the way for the arts and accommodation sectors, which will amount to $75 million and $26 million, respectively.

Payroll tax waivers are on the way for impacted businesses, and further land tax reductions will apply to commercial and retail landlords who negotiate rent reductions with hard-hit tenants.

Residential tenants have also been granted a brief reprieve, with the state government announcing a 60-day eviction moratorium for those who lose income as a result of the shutdowns. Landlords who renegotiate rents may be eligible for a separate $1,500 grant, or a land tax cut.

Hard-hit industries respond to a “critical lifeline”

News of the elevated payments has been welcomed by the retail, hospitality, and tourism industries, all of which are set to lose millions of dollars in lost trade for each week of the lockdown.

The new payments will “provide small businesses in particular with the confidence they need and will help alleviate some of the mental health pressures staff and business owners confront with extended lockdowns,” said Paul Zahra, CEO of the Australian Retailers Association.

Despite click-and-collect options and the growth of local online shopping, the state’s retail sector is expecting to miss out on a billion dollars for each week of lockdowns, Zahra said.

“We’re into week three of this lockdown, and people and businesses up until now have been trying to survive without a proper safety net in place,” he added.

Restaurant & Catering Australia (R&CA) CEO Wes Lambert said the new funding package marked a direct response to the industry group’s calls for help.

“We are delighted that the NSW Government listened to the common-sense proposals of businesses groups like R&CA and have taken our suggestions directly on board,” he said.

“This lockdown will end and when it does this package means businesses will be ready to ramp back up quickly and keep the recovery going,” Business Council of Australia chief executive Jennifer Westacott said.

While calling for government support past the lockdown period, Margy Osmond, CEO of the Tourism & Transport Forum, said the new package “shows that policymakers are hearing industry’s calls that something had to replace JobKeeper as lockdowns and border closures slam our sector.”

Similarly, APRA AMCOS, the industry body representing more than 100,000 Australian musicians and songwriters, said the new arts sector fund will assist workers who are the “first to be fired, last to be hired”.

The payments “will be a critical lifeline to our industry right now,” said APRA AMCOS chief Dean Ormston.

And the commercial real estate sector has expressed its appreciation for the land tax kickbacks.

“The government support packages announced today are very welcome news and commercial property owners are also once again stepping up to play their part, working closely with their smaller hard-hit tenants,” said Lauren Conceicao, the group’s state executive director.

Unions and social services advocates have expressed more conditional support for the measures.

Cassandra Goldie, head of the Australian Council of Social Services, welcomed the new and expanded payments — but said the COVID-19 emergency payment’s eligibility criteria, which exclude those already claiming government support payments, will leave at-risk workers exposed to extreme financial hardship.

“While we welcome that the increased disaster payments will help many people on low and modest incomes who have lost paid work due to the lockdown, those on the lowest incomes are being left to face destitution and homelessness,” she said.

The NSW Council of Social Services voiced its appreciation for the eviction moratorium. Nevertheless, CEO Joanna Quilty said that if lockdowns persist even further than imagined, the state’s at-risk renters will need further support.

The SDA union, representing thousands of Australian retail and fast food workers, praised measures which could allow hard-hit businesses to keep their employees on the books.

Yet Gerard Dwyer, SDA national secretary, criticised the latest tranche of support measures for only coming into effect from the fourth week of a federally-recognised lockdown.

“They should have applied in the recent Victorian lockdown rather than waiting for a lockdown to be forced on another state,” he said. “But, better late than never.”

The Australian Council of Trade Unions (ACTU) used the announcement to redouble its calls for another round of the JobKeeper wage subsidy, and argued there is no guarantee businesses will pass their grants on to stood-down workers.

“Instead of guaranteeing workers weekly pay and a connection to their jobs, workers now have to navigate Centrelink and hope their employers keep them on,” said secretary Sally McManus.