The State Government needs to step up and support those still suffering from pandemic pain, Business SA says

The end of JobKeeper payments does not mean the end of trying times for thousands of businesses, and the State Government needs to step in, Business SA says.

Businesses need a multifaceted State Government safety net, including cash grants and a lockdown contingency fund, implemented straight away, to ensure their survival following the end of JobKeeper payments which stop within days, Business SA says.

In its pre-Budget submission released to The Advertiser, Business SA commends the government for its handling of the pandemic, but warns that many businesses still face the threat of closure.

In order to ensure that businesses do not fail as a result of current pandemic-related loss of business, or potential future lockdowns, Business SA says a “contingency fund” should be set up to protect against future snap lockdowns, payroll tax exemptions should be extended until the end of the year, and cash grants be considered for small businesses whose payrolls fall below the payroll tax threshold.

While the size of the proposed fund is not specified, Business SA said Western Australia provided $43m in support for businesses affected by its five-day lockdown and Victoria $143m for the same period.

It also wants an Autumn/Winter hospitality and recreation voucher scheme to support businesses through the next few months, and continues to lobby for a major motorsport event to be held in Adelaide, with a bias towards an electric vehicle race.

A Porsche Formula E race car at the company's booth at the International Auto Show in 2019.

Business SA chief executive Martin Haese said many businesses were still hurting.

“This State Budget must reflect those still needing a helping hand, until such time as we are living without government-imposed restrictions,’’ he said.

The lobby group says “it has been the business community and private sector employees that have borne the financial brunt of COVID-19 restrictions’’.

“This is not an argument against protecting the health of the broader community, but a recognition that the financial burden has been quite uneven, even with government support,’’ the submission says.

“While many businesses have been able to adjust to varying degrees, there is only so much many businesses can do if faced with future snap lockdowns or periods of heavy restrictions. “There is ample evidence now from interstate that other jurisdictions are providing additional financial support in these instances and Business SA is calling on the State Government to prepare a financial mechanism now.’’

Business SA says that for 15 per cent of businesses – an estimated 7000 – revenue is still down more than 50 per cent from pre-COVID levels.

The Advertiser reported earlier this week that prominent restaurant Pranzo is up for sale after a large downturn in patronage. Restaurant co-owner Aaron Martin said they’d been devastated by the pandemic.

There are fears for the survival of these and other businesses once JobKeeper payments end on Sunday, along with commercial rent relief measures, and temporary protections against insolvent trading prosecutions or directors which ended in December.

Payroll tax exemptions, which currently run until the end of June this year, should be extended until the end of 2021, Business SA says, and for small businesses which fall below the $1.5m payroll tax threshold, cash payments should be considered.

“While ideally determining eligibility should run in tandem with a Federal Government framework, this may not be possible and the State Government may need to work on targeting businesses in affected sectors that are at least down 50 per cent on pre-COVID revenues,’’ Business SA says.

The organisation’s latest Survey of Business Expectations showed that while many businesses had recovered well, in areas such as accommodation and food services, tourism, events and recreation, 56 per cent of businesses still fell below this 50 per cent threshold.

The purchase of electric vehicles, such as Hyundai’s IONIQ 5, should be incentivised, Business SA says.

The submission also references a South Australian Centre for Economic Studies report, which estimated the loss in turnover from the Parafield Cluster shutdown in November at $100m, with between $7m to $10m lost in food waste alone.

Other business support measures proposed by Business SA include a temporary waiver on stamp duty for business insurance policies for heavily-affected sectors, ongoing incentives to take on apprentices and trainees through payroll tax exemptions and cash grants, and for the State Government to reduce its payment terms from 30 to 20 days.

The submission also looks to the future, urging the government to start feasibility studies on duplicating the Dukes and Augusta Highways.

Business SA is also calling for $50m in new money for a Circular Economy Procurement Fund to bolster the production of value-added recycled products.

In direct opposition to the government’s now-stalled plan to introduce a new levy on electric vehicles, Business SA is also recommending a registration incentive for hydrogen and electric vehicles, including consideration of a stamp duty waiver.

Business SA chief executive Martin Haese says many businesses are still hurting.