Regional Vic, WA SMEs given COVID support

Regional Victoria given support

Following the release of support packages for Melbourne after it went into lockdown, support has been extended to regional Victoria after it too was placed into lockdown.

Lockdown directions began in regional Victoria on Saturday (21 August) at 1pm, and will continue until 11:59pm on Friday, 2 September, along with metropolitan Melbourne.

As such, the package for regional Victoria – which is jointly funded by the Commonwealth and Victorian governments – includes a $100.9 million allocation to the Business Costs Assistance Program, under which around 18,000 businesses will automatically receive payments of $5,600 ($2,800 a week) if they have previously received grants under the Business Costs Assistance Round Two or July Extension programs.

The program is aimed at allowing businesses across multiple sectors to continue paying overheads and other costs while they are unable to operate.

In addition, for regional premises that have previously received the $34.5 million Licensed Hospitality Venue Fund grants, automatic payments of $5,000, $10,000 and $20,000 per week will be made to more than 2,000 licensed hospitality premises in regional Victoria that have previously received these grants or July extension programs.

Payment amounts will be tiered according to premises capacity, with $5,000 for a capacity of up to 99 patrons, $10,000 for a capacity of 100 to 499 patrons, and $20,000 for a capacity of 500 patrons or more.

Furthermore, the targeted Alpine Resorts Winter Support program for Victoria’s alpine region will provide payments of $5,000, $10,000 and $20,000 a week depending on business type and location, with a total of $11.2 million allocated to the program extension.

The programs will support 20,000 regional Victorian businesses, in addition to the 110,000 businesses in Melbourne that will be paid cash grants for the two-week lockdown extension under an $807-million metropolitan support package announced by the Commonwealth and Victorian governments last week.

Federal Treasurer Josh Frydenberg commented that: “Whether in metropolitan or regional Victoria, businesses have had to deal with so much over the last year and half of the pandemic.

“While we cannot replace the bookings, the patrons or the work lost as a result of the lockdowns, this support package will help businesses to survive and get to the other side.”

“For many, it will be hard to see right now, but there is light at the end of the tunnel with more than 51 per cent of the Australian population aged 16 years and over having now had a first dose of the vaccine.”

Victorian Treasurer Tim Pallas said the Victorian government has provided more than $9 billion in support, including $1.8 billion since June.

He said: “No one wanted to be in this position, but the rapid spread of the Delta strain and the emergence of cases in regional Victoria meant there was no choice.

“This package is about helping regional businesses at a really tough time as we continue to battle this current outbreak.”

Victorian Minister for Industry Support and Recovery Martin Pakula said that automatic payments would be important to provide immediate support.

“Direct payments allow us to get money to businesses across the state without needing to go through any additional applications – cutting red tape,” he said.

He added that the support to the alpine region has recognised the impacts on businesses in this sector in the middle of ski season.

WA tourism sector to receive grants

Tourism businesses in Western Australia impacted by COVID-19 will soon be able to apply for funding support under a new program jointly funded by the Commonwealth and state governments, valued at up to $16.8 million.

However, it has been predicted that the amount expended will likely be less due to the “strength” of intrastate tourism in Western Australia.

Eligible tourism businesses will be able to apply for grants of up to $10,000 to assist with some of the financial impacts of different states facing COVID-19-related restrictions in recent months.

The following funding amounts will be made to eligible businesses:

• $3,000 grant for employing businesses with an annual turnover of between $100,000 and $1 million;
• $2,000 grant for all sole traders and for employing businesses with an annual turnover of between $50,000 and $100,000; and
• $10,000 grant for employing businesses with an annual turnover of between $1 million and $10 million.

In order to be eligible, businesses must be:

• Registered with Tourism WA as a previous grant receipt or as part of the agency’s marketing campaigns in 2020 or 2021;
• A member of, or accredited through, a relevant tourism organisation (as of 24 August); or
• A travel agent that has been offering domestic product to travellers.

Businesses must also have an active and valid ABN and be located in Western Australia.

Applicants must demonstrate at least a 30 per cent reduction in turnover by comparing the period from 15 May to 25 June with 10 July to 20 August to be eligible for support.

Commenting on the targeted measures, Mr Frydenberg said: “Tourism based businesses have been significantly impacted not only by closed international borders but also health restrictions affecting domestic travel.

“This support will help to cushion the blow for these tourism businesses which have been impacted by lockdowns on the east coast.”

Western Australian Premier Mark McGowan said the community spread of COVID-19 in many parts of the country, especially NSW, is currently so severe that it is having impacts on some WA tourism businesses.

He said: “Western Australia’s work to keep COVID-19 largely out of the community has kept the state safe and open – enabling our tourism sector to operate in a way much of the world has been unable to over the past 18 months and fuelling an intrastate visitation boom.”

“The tourism assistance grants will provide targeted support to the Western Australian businesses which have become innocent victims of community spread over east, through no fault of their own.”

The state’s tourism minister David Templeman also commented on the impacts of COVID-19-related restrictions on the tourism sector, stating: “COVID-19 has challenged WA’s tourism sector over the past 12 months – with the loss of international travel having unavoidable impacts on our businesses, accommodation providers and travel agents.

“While there has been notable upside with the intrastate tourism boom, the severity of the current situation in the eastern states warrants this additional support for local businesses.”

The latest round of COVID-19 SME grants has followed the announcements of several other support packages across various states that were or are in lockdown, including NSW, Victoria, Queensland, Tasmania, the ACT and the Northern Territory.

NSW commercial tenancy relief

Indeed, among other measures, the NSW government recently re-introduced commercial tenancy relief, in line with the national cabinet’s mandatory code of conduct for commercial leasing to extend rent relief to eligible tenants impacted by COVID-19.

The state government is providing a $40-million hardship fund to provide a monthly grant of up to $3,000 for small commercial or retail landlords who provide rental waivers of at least the value of the grant and any land tax relief that they are eligible for.

As such, fintech lender OnDeck CEO Cameron Poolman has urged brokers to contact their SME clients such as cafes, restaurants, hair salons and gyms to inform them about the availability of the rental relief.

He told The Adviser: “The last eight weeks have been very challenging for small businesses across NSW, and this rental relief will help give business owners more financial certainty, especially as rent is usually a high fixed cost.

“It’s pleasing to see the government urging landlords and commercial tenants to work together as we all navigate our way through the latest lockdown period.”

SMEs sought help around grants

Mr Poolman’s comments have come on the heels of new figures from Financial Counselling Australia, which has revealed that thousands of individuals and small-business owners have sought help from the National Debt Helpline (NDH) and Small Business Debt Helpline (SBDH) about their financial issues during the current lockdowns.

Indeed, data from the two national not-for-profit organisations – which run free financial counselling helplines and chat services – has shown that since the start of the year, more than 71,900 calls have been made to the helplines.

Demand has increased dramatically in the recent past on SBDH, with 80 per cent more calls in July than May.

The top issues businesses have been calling about include:

• Uncertainty about government grants and how to access them;
• Commercial leases and inability to pay due to insufficient income during lockdowns;
• Issues with debt collectors;
• Problem with personal guarantees – risks and lack of understanding; and
• Overall financial stress, with most callers in distress and frustration.

Visits to the NDH website were 25 per cent higher from the start of 2021 to the end of July than the same period last year, with more than a quarter of a million website visits from 1 January to 31 July.

The top issues of concerns were:

• Mortgage arrears (including difficulty paying, accessing hardship arrangements, catching up on arrears, and some owners handing keys over to the banks);
• Rent arrears and homelessness;
• Credit card debt and personal loans, including car loans; and
• Struggling to afford utilities such as electricity and water.

[Related: NSW releases COVID-19 support for SMEs and individuals]