The New South Wales government has unveiled a $1bn support package for businesses after a summer of exploding Covid-19 infections caused by the Omicron variant.
But the scaled-down, jobsaver-style payment for small- and medium-size businesses will be capped at half of what was offered during the Delta wave of infections in 2021, after the federal government refused a request from the NSW government to split the cost of the package.
On Sunday the NSW government announced a new $700m small business support program, which will provide payroll support to businesses with turnover of between $75,000 and $50m.
The package will provide a payment of 20% of weekly payroll costs to companies that can prove a decline in turnover of at least 40% across January. Payments would range from a minimum of $500 to a maximum of $5,000 a week.
But businesses which meet the threshold for the payment would not receive relief for losses incurred during January. Instead, the payment would cover February and be paid as a lump sum.
While the size of the fund may increase if payments extend beyond next month, the support plan is considerably smaller than those rolled out during earlier waves of the Covid virus, including $10bn in relief during the Delta lockdown from both the state and commonwealth governments.
Despite calls from premier Dominic Perrottet for the commonwealth to split the cost of the package as it did during the long Delta lockdown in 2021, the NSW government has been forced to fund the package itself after the calls for support were rejected by the federal government.
On Sunday deputy prime minister Barnaby Joyce defended the decision not to provide financial support to the program, saying it wasn’t “penny pinching”.
Joyce said the Morrison government had laid out billions of dollars out in the form JobKeeper, JobSeeker, stimulus for the airline industry, concessions for the rapid antigen tests and other measures during the pandemic.
“It goes on and on and on,” Mr Joyce told Sky News’ Sunday Agenda program on Sunday.
“So I don’t think it is penny pinching. You can’t just keep putting things on the credit card over and over and over again.”
By capping the payment to businesses with a turnover of $50m and asking businesses to prove the loss of turnover, the NSW government hopes to avoid a similar situation to the commonwealth’s jobkeeper program which allowed large companies such as Harvey Norman able to claim millions of dollars in assistance despite posting record profits.
Perrottet said the package would “help support businesses that experienced the worst effects of the Omicron wave”.
“NSW is tracking better than expected and confidence is returning. And as we did with earlier recoveries, we will come through this recent challenge stronger than ever,” he said.
The package comes amid increasing pressure on the government to provide support for businesses amid the wave of Covid-19 infections which have swept through NSW since the Omicron variant of the virus arrived in late November.
While Perrottet has resisted pressure to increase Covid restrictions amid the surge, businesses have felt the brunt of both a decrease in economic activity and the effect of isolation measures which have led to workforce shortages.
In January consumer confidence fell to its lowest point since 1992, when Australia was emerging from recession, while a survey of 2,000 members by the lobby group Business NSW found 40% “don’t have enough cashflow for the next three months”.
But while the business support program will be based on losses in January, no retrospective payments will be made for this month.
This week the opposition leader, Chris Minns, criticised the government for the time it had taken to announce the package.
“Talk to anybody in this state and they’ll tell you that many businesses hoped that they would make up for lost revenue over the Christmas and New Year period,” he said.
“They cross their fingers, they kept their doors open, but as a result of the Omicron wave it’s had a severe effect on the NSW economy.”
The $1bn package will also include an extension of the commercial landlord hardship grant to 13 March. The payment provides up to $3,000 per month to landlords who provide rental relief waivers to tenants affected by downturns. The fund also includes a further injection of funds into the performing arts sector with the performing arts package extended until April 2022.
“As we continue to protect the health and safety of our community, we have to ensure our economy is resilient and our businesses are supported so they bounce back from this most recent phase of the pandemic,” the treasurer, Matt Kean, said.
