Government support for businesses should help those most in need | Kathryn Bermingham

While the government pours millions into some businesses to create jobs, workers are getting laid off in droves in others, writes Kathryn Bermingham.

There’s a crisis unfolding among Adelaide’s hospitality scene – and it doesn’t look to be letting up any time soon.

As household budgets buckle under prolonged cost-of-living pressure, restaurants and cafes are facing the same issues.

For an increasing number, the burden has become too great and there has been no other option but to close down.

Compared to the funding that some businesses are getting from the state government, the assistance has been lacking.

Last year, the government launched its $154.2m Economic Recovery Fund — a fund designed to help South Australian businesses to recover and grow post-Covid.

Such a significant amount of money could go a long way to help businesses struggling with rising costs.

But, under round one, $26.3m in financial assistance was offered to just 17 businesses for projects in the manufacturing and tourism sectors.

Some received loans but many received grants for, in multiple cases, half of the total project value – like in the case of AML3D Limited, which received a grant of $1.12m for a $2.24m project.

EntX received a $1.9m grant for a $3.8m project, while Lencom Antennas Pty Ltd received a $1.2m grant for a $2.7m project.

These projects are worthwhile and the success of those industries is crucial to South Australia’s future.

But it’s difficult to justify doling out such huge amounts of money to single businesses at a time when other industries are on their knees.

At the time the successful projects were announced, the government spruiked that they will create jobs. What about the ones that are lost when small businesses shut up shop?

A series of cafes and restaurants, plus a host of nightclubs and bars, have been closed down in recent months as small-to-medium business owners struggle to pay the bills.

Beloved Adelaide LGBTIQ+ bar My Lover Cindi, on Pirie St, shut its doors this month after the “exorbitant costs” of running a nightclub left them with no other option.

Owner Rachel Hosking at My Lover Cindi, which closed this month. Picture: Naomi Jellicoe

It’s the latest of several venues that met the same fate: they simply cannot make ends meet.

Round two of the Economic Recovery Fund, announced this month by the state government, will go much further to alleviate such strain.

Under a $20m initiative, the government will support up to 8000 small businesses to invest in more energy efficient equipment or make improvements that optimise energy usage and costs.

The grants, ranging from $2,500 up to $50,000, will match business’ contribution dollar for dollar to buy eligible equipment.

For businesses struggling to cover their power bills, that is the sort of help so desperately needed.

When taxpayer money is used to help households, the government says it unapologetically designs concessions to help those people who are most in need.

When helping businesses, it should consider the same factor.