As the Territory readies for a resumption of business, with fingers crossed for a smooth transition and no further lockdowns, financial advisors have reported a last-minute rush of businesses and sole traders applying for the ACT’s Business Support Grant by the 7 October deadline.
RSM Australia senior advisor Young Han said there has been a mix of businesses rushing to claim but sole traders, who had been receiving the COVID Disaster Payment and were looking to switch, made up the majority of last-minute applications.
“I guess it is human nature to wait until the last minute but we were certainly busy last week,” Ms Han said.
She added they are starting to see some financial distress among commercial landlords who may require some further assistance from the ACT Government.
Emergency measures were put in place to help commercial tenants and landlords impacted by the COVID-19. This included a rates credit of 50 per cent of the total rent reduction provided to eligible tenants, capped at the lower of $10,000 or two-quarters of rates.
Credits are based on rent reductions between 1 August 2021 and 31 December 2021 and landlords must reduce rent payable by at least four weeks in this period.
But commercial landlords applying for or receiving assistance through the Small Business Hardship Scheme are not eligible for a commercial rates credit, neither are landlords whose primary income is generated indirectly, that is non-trading income, such as rent, shares and dividends.
“These landlords are ineligible for any Business Support Grant and the $10,000 is not enough to cover the reductions in rent. Making this more complicated, if their tenant has received any government support grants, then the tenant must include any grant income in their declared income. If this has meant the tenant’s income reduction is above the threshold, some landlords are ineligible even for the rates credit even while their tenant is losing income,” Ms Han said.
“We are starting to see more and more landlords in this position and in real difficulty.”
With the Territory due to start emerging from lockdown on 15 October, many businesses will resume trading in some capacity, with the exception of retail business that will remain at ‘click and collect’ level until the next level of easing on 29 October.
Last week’s 2021-22 budget revealed some big-ticket items, including a $5 billion five-year infrastructure program, $500 million to boost core health services in the ACT’s health system and $90 million to the continuing COVID response.
Chief Minister Andrew Barr said the government was anticipating a consumer-led recovery.
“There’s a lot of pent-up demand,” he observed.
Mr Barr said the budget will rely on the ACT’s lockdown being lifted as scheduled.
Canberra Business Chamber welcomed the budget’s increased focus on support for small business but says more is still needed for this sector.
Canberra Business Chamber CEO Graham Catt said new funding to support tourism, events and the arts is badly needed and welcomed, but other businesses in a range of sectors will need additional financial help to survive as the economy slowly reopens over the remainder of 2021.
“There are 30,000 private businesses in the ACT. The vast majority are small enterprises, it is these businesses, not the public sector, that now provide over 60 per cent of the Territory’s jobs,” Mr Catt said.
“Many were hit hard by COVID-19 in 2020, then even harder again in 2021, and we have seen jobs lost and businesses closed. Now is the time to do everything possible to protect and then create jobs in the private sector. Only in this way will we drive the economic diversity, growth and local champions needed for a sustainable economy.”
Original Article published by Karyn Starmer on The RiotACT.