Both the Maitland and Newcastle Hunter Business Chambers have welcomed the continuation of wage subsidies for businesses affected by COVID-19 - but acknowledge some businesses will be challenged by the reduction in payments.
The Federal Government announced on Tuesday that from September 27, under the revised arrangements, payments will drop from a flat $1500 a fortnight per eligible employee to $1200 for those working more than 20 hours a week. For those who average less hours per week (based on their hours in February of this year), payments will drop to $750.
The payments will drop further, to $1000 and $650 respectively, for the March 2021 quarter.
For Maitland Business Chamber chief Judy Brown, the move by the government was prudent.
"I acknowledge that at some point we have to look at getting back into the black, but that time is certainly not now," she said. "Government assistance is still a necessary evil.
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A"But I do think the time was right to start reducing payments.
"I think people are worried by COVID and their priorities have changed. They're learning to live more frugally. I think the time is right to rein in that spending by government."
Money that was to be spent in the community to keep things ticking over is now being kept in many instances, so l agree with what the government has done."
Newcastle Business Chamber CEO Bob Hawes said the decision to ease back payments rather than stop them altogether "will avoid the economic cliff that was looming in late September".
He pointed out that it was a lifeline, not a rescue package and that it was important that businesses who are relying on the subsidy get advice and maybe reassess their business models.
We now know there is no quick fix to the situation we are in and the challenges will be longer term.Bob Hawes, Newcastle Business Chamber CEO
"When the first phase of JobKeeper was announced, we all hoped it would be an interim measure that would help see businesses through to better times," Mr Hawes said.
"Following the resurgence of the virus in Victoria and elsewhere, we now know there is no quick fix to the situation we are in and the challenges will be longer term.
"Businesses cannot assume that there will be a return to what they know as normal trading conditions any time soon. With that in mind, some will decide to continue and others to close - either way, the extension of the program gives them six months to plan for that outcome."
A report issued by Business NSW earlier this week, based on responses by more than 1000 businesses, revealed that one in three had not planned how they would continue operations after JobKeeper payments stopped and about half did not think they would be able to retain current staff numbers without the subsidy.
Mr Hawes said the implications of the reduced payments would be most significant for the many businesses in the Hunter who relied on part-time and casual workers.
The new version of JobKeeper would also put a higher administrative burden on recipient businesses, which would now be required to provide evidence of reduced downturn through activity statements and actual GST turnover, rather than simply relying on projected turnover.
"It is a necessary evolution of the program for governance purposes but it will put more demands on business at a time when many are working around the clock just to stay open," Mr Hawes said.
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