Small business owners are facing ongoing confusion over the state’s various support schemes as a result of changing eligibility criteria, new research shows.
NSW business support applicants suffer sustained confusion
A webinar hosted by BDO Australia on Wednesday found that as many as 30 per cent of small business owners were still unsure if they were eligible for any of the state’s various business support schemes.
James Trainor, a tax partner at BDO Australia, said even though small business owners are desperate for the support, a sizeable cohort remain unsure whether they’re eligible.
“We surveyed our client audience and found that more than 30 per cent were still not sure if they were eligible,” Mr Trainor said.
He said much of the confusion felt among the 220 small business owners surveyed relates to changing eligibility criteria, which he said the state could be working harder to publicise.
“There are some issues with the support measures,” Mr Trainor said. “For example, some businesses have made a decision on their eligibility based on the original announcement, but that decision may now be wrong because the rules have since changed.
“Businesses would benefit from more publicity about those changes.”
The COVID-19 business grants provide NSW businesses with tax-free payments of up to $15,000, while the state’s JobSaver package offers weekly cash-flow support payments of up to $100,000 to businesses to encourage them to maintain their headcount.
Each of the state’s business support packages, along with its micro-business support scheme, which offers non-employing businesses fortnightly payments of $1,500, is being administered by Service NSW.
According to BDO Australia’s findings, some 60 per cent of small business owners have yet to apply for the state’s JobSaver scheme, even though as many as 78 per cent reported having accessed previous federal and state support measures.
As of Tuesday, Service NSW reported having received 104,000 applications for its COVID-19 business grant, with $278 million approved to be paid out to businesses. The state’s micro-business grant has so far attracted 22,000 applications, with $417,000 worth of payments approved.
Meanwhile, more than 67,000 businesses are also on JobSaver, with $86 million approved for payment.
Service NSW’s administration of the support payments came under fire as soon as applications opened, with accountants and business clients grappling with holes in eligibility guidelines and abrupt changes to critical dates.
The sentiment was observed among respondents of BDO Australia’s survey, too, Mr Trainor said. Confusion among small business owners, he said, has also been exacerbated by a shortage of guidance for newer businesses.
“For businesses who do not satisfy the standard conditions, such as new businesses, there is limited guidance on how they can be eligible,” Mr Trainor said.
“The only option for many of these businesses is to contact Services NSW to discuss their circumstances, which slows the application process.
“In comparison, when the JobKeeper wage subsidy was available, the Australian Taxation Office released detailed information about how businesses could meet the eligibility criteria if they did not meet the standard conditions.”
The confusion has seen the state agency swamped with enquiries. Service NSW this week reported fielding up to 20,000 calls a day, and a further 5,000 callback requests.
Mr Trainor said the ongoing lockdown is having a “huge impact” on businesses who are desperately looking to secure access to the state’s support measures, which aren’t expected to land in bank accounts until the end of next week — a month after applications opened.
“The ongoing lockdown is having a huge impact on businesses and they desperately need to be able to access these grants and payments to keep them afloat,” Mr Trainor said.
“It has been almost two months since lockdown began and the end of August will be a very difficult time for cash flow.”
NSW Premier Gladys Berejiklian on Wednesday offered her apologies to businesses across the state for the backlog of support yet to be paid. She told reporters at her 11am press conference that Service NSW is set to deliver the payments by the end of next week.
“I’m advised by the end of next week, at the very latest, the backlog will be dealt with,” Ms Berejiklian said. “I appreciate how frustrating it has been for businesses.
“All of us appreciate the stresses everybody is going through, but know we have always taken … approach in New South Wales to ensure the economic support is there so people don’t feel they have to breach the public health orders.”