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Extra support for SA businesses hit by restrictions

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UPDATED: South Australian businesses under financial stress from ongoing density and trading restrictions will be able to apply for thousands of dollars in extra cash support grants under a package announced by the Commonwealth and State Government.

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But the Australian Hotels Association has described it as a “drop in the ocean” for most affected businesses and is calling for a long-term support strategy.

The new relief package will include $3000 cash grants for businesses and $1000 grants for sole traders in eligible industry sectors that have experienced a decline in turnover of 30 per cent or more over a two-week period as a result of trading restrictions imposed on July 28.

An additional CBD-specific grant of $1000 will be available for eligible businesses, recognising the “increased impact” on city businesses as a result of people working from home.

The support is on top of $3000 emergency cash grants announced by the State Government last month during the seven-day lockdown as part of its $100 million Business Support Package.

The State Government says it means that under the combined packages, an eligible CBD business that employs staff – including a pub, cafe or restaurant – would receive a total of $7000 in cash grants “to support their ongoing COVID recovery”.

A joint press release from the state and federal governments said the new grant package would deliver about an extra $40 million in support to an estimated 19,000 local businesses in eligible industries, such as hospitality, performing art venues, artists and performers, tourism, gyms, and transport.

The cost of the package will be split 50/50 between the Commonwealth and State Government, with the Marshall government to administer the program.

The State Government will also fund a new Major Events Support Grant of up to $25,000 for eligible events that were either cancelled, or suffered a significant financial loss because of postponement due to the COVID-19 lockdown in July or further restrictions to August 4.

Premier Steven Marshall said the government was “focused on standing shoulder-to-shoulder with small businesses as we navigate our way out of the global pandemic”.

“We want to do everything we can to support the small business sector,” he said.

“We know it’s the lifeblood of our South Australian economy.

“South Australians have done an incredible job of working together and now is the time to continue to pull together to support our hardworking small businesses who are the backbone of the state’s economy.”

Current restrictions mean SA businesses can trade at only 50 per cent capacity.

“As soon as we can lift those restrictions we will,” Marshall said.

“The Transition Committee is meeting again tomorrow. I’m certainly hoping that they will look at the situation… and there may be some further easing.”

Australian Hotels Association SA boss Ian Horne said “for the significant number of operators… it’s a drop in the ocean.”

“For some very micro businesses, clearly $3000, or $4000 if you’re in the CBD, will have an impact, but for the vast majority of businesses who employ people, while you’re always grateful for a contribution, this falls well short of sustaining an industry,” he said.

Horne said the seven-day lockdown had been devastating for many businesses, as had the subsequent density capacity of 25 per cent and now 50 per cent.

Horne said his association wasn’t consulted about the relief package which “doesn’t really address the fundamental crisis that’s going on in tourism and hospitality”.

He said a “longer term strategy” was needed to set specific financial support for future lockdowns and density caps so that businesses could plan and know what they were entitled to in each situation.

“We would have thought that there could have been an opportunity to talk and work with industry to devise a more responsive approach that has a plan in place so that people know here to expect,” he said.

“So for example, if there is a lockdown then this is what business can expect to get. If there is a (density) restriction of 25 per cent, this is what industry can expect to get, etc.

“From our perspective it’s a lost opportunity.”

Horne said the “immediate solution for everyone is to let us get back to 75 per cent”.

“We are not asking for 100 per cent,” he said.

“For the tourism, hospitality and our accommodation sector in particular, this is just slowly financially bleeding them to potentially a loss of some businesses.”

Opposition Leader Peter Malinauskas said it was “incredibly disappointing that the State Government failed to consult with key industry stakeholders in the development of this package”.

“These are businesses that are having their daily trade affected as a result of government decisions,” he said.

“While I support the decisions of government around restrictions, I don’t support their lack of assistance to people who are really feeling the biggest brunt of the pandemic.”

Malinauskas said “once-off payments don’t address the structural challenge that this industry feels for as long as there is a 50 per cent restriction on their ability to trade”.

“We advocate a per-day payment that is in place when businesses have suffered a downturn of over 30 per cent, with a 50 per cent capacity restriction,” he said.

“We think that per-day payment should be there to acknowledge that every day that goes by with a 50 per cent capacity restriction is another day that a business struggles to survive.”

Prime Minister Scott Morrison said “we are stepping up to provide more support to South Australian businesses that have been impacted by ongoing COVID-19 restrictions that are keeping the state safe”.

“Already we have provided more than $40 million to South Australian workers through the COVID-19 Disaster Payment and now we are ramping up our business payments,” he said.

“We need to protect jobs and support South Australian businesses to get through this difficult time so they can help drive our economic recovery as we plan our way out of this pandemic.”

Morrison said the Commonwealth would continue to work with the Marshall Government “to ensure our funding reaches those small and medium businesses that need it”.

State Treasurer Rob Lucas said the Marshall Liberal Government recognised the significant impact the ongoing restrictions were having on businesses throughout the state, “but particularly those in the Adelaide CBD and in certain industry sectors such as hospitality, tourism and events”.

“This new support package will provide extra cash grants for those businesses that continue to do it tough, to help them cover operating costs such as rent, wages and utilities and help them continue to trade through this
period,” he said.

“Our support package is modelled on the Victorian Government model targeted at eligible businesses in identified ANZSIC industry classes.

“The new jointly funded support is in addition to the $100 million Business Support Package, announced during the state’s recent seven-day lockdown.

“Already more than $26 million in cash grants has been paid to 9036 businesses through this package – from bakeries, butchers and hairdressers to beauty salons, gyms and automotive repairers – as we work to get the money out the door and into the pockets of hardworking businesses as quickly as possible.”

Applications for the new grants will open on August 13 and will close on October 17.

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