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$20,000 stock guarantee to boost NSW SME confidence

Yesterday NSW Premier Dominic Perrottet announced stock guarantee grants of up to $20,000 to small businesses in the lead up to Christmas. Should a local lockdown occur, small and medium enterprises with an annual turnover of $75,000 and $50 million will be eligible to apply for grants up to $20,000 to compensate for losses of perishable stock. 

For businesses trading in non-perishables, up to $10,000 will be made available to make up for the reduced capacity in the event of a local lockdown. 

The grants will be available from 1 December 2021 to 31 January 2022 for businesses forced to shut their doors due to public health orders.

The announcement also included expanding the Small Business Fees and Charges Rebate from $1500 to $2000. The rebate will now include toll charges and can be claimed up until 30 June 2022. 

Stock guarantees

Ben Thompson, co-founder and CEO of people-management platform Employment Hero, said that the summer holiday stock guarantee for small and medium enterprises would lessen the suffering small businesses face during uncertain lockdowns. 

Mr Thompson said, “We’ve seen a version of this play out when state governments have contemplated emerging from lockdown. A Premier says it’ll be Tuesday, no the following Tuesday, then Tuesday fortnight. 

“The restaurants throw up their arms because they’ve just burned through $10,000 in food that has spoiled. They end up worse off, and it dents their confidence to invest next time.

“This policy means businesses can confidently invest in things like product and staff, knowing that if a lockdown is brought back in, they’ll have a bit of support to handle it. It means they can spend more.” 

In a situation where a lockdown is implemented at short notice, small businesses will have more options and more support. Companies trading perishable stock such as food will be able to purchase stock with the confidence that should a lockdown occur, they won’t incur the cost of the lost inventory.

NSW Treasurer Matt Kean said, “It’s devastating for businesses and their employees when they have to shut due to COVID but the grants will make it easier for businesses to manage their stock with confidence.”

NSW economic recovery plan

The announced measures are hoped to give traders in NSW confidence in the lead up to the Christmas period. Premier Perrottet said stock guarantees that support and give confidence to the small business community would effectively reboot the NSW economy. 

He said, “Now that we’ve reached the 70 per cent double vaccination target, it’s wonderful to see businesses reopening their doors and welcoming back customers.

“These measures will give businesses and workers confidence to purchase stock and invest for the future knowing their doors will remain open as we get our economy firing again.”

Mr Thompson said that while the grants were good news, they show that damaging lockdowns are still an option for the NSW government. Mr Thompson spoke on the certainty that the assistance would provide. 

He said, “Up to $20,000 of certainty, that’s for sure. Any small business owner will tell you emerging from COVID-19 lockdowns is a lot more complicated than that, however. 

“What it does do is underline the reality that the NSW government will still consider targeted lockdowns. This was always on the cards; it’s part of the National Reopening Plan. But it also shows the state government has recognised this and will put some money aside for businesses that could be impacted.” 

In terms of economic recovery, the reopening of small and medium businesses that punch above their weight in economic activity is vital to NSW’s recovery. By providing stock guarantees, the NSW Government is encouraging small businesses to invest in reopening. 

Mr Thompson said, “The bulk of the heavy lifting [in economic recovery] will be done by the reopening, but this is a smart way of making sure businesses lean into this reopening, rather than sit on the fence.”

Christmas period 

The Christmas period is the most crucial trading period of the year for many businesses; Treasurer Kean said that a strong Christmas period would help guide the NSW economy into a strong recovery. 

Mr Kean said, “We expect the summer will be a bumper time for businesses as the people of NSW emerge from lockdown and look to support their local, and we want business owners to know we have their back.

“We want businesses to have the confidence to get out and spend and invest in their business ahead of the busy Christmas trading period.”

Mr Thompson also spoke about the importance of the Christmas period for traders, particularly off the back of such a challenging year. 

He said, “Some discretionary retailers do more than half their annual turnover during Christmas. The hospitality sector is also really busy during this period. A lot of companies that have dipped into their savings during the pandemic will be incredibly busy this Christmas making up for lost time.”

The grants serve as assurance to small and medium businesses that even in the event of a local lockdown, the money they have invested into opening their doors won’t be wasted or lost. 

Mt Thompson said, “What if they went into their period thinking another poorly timed lockdown could leave them worse off? The state government can’t afford those sorts of doubts, but it also can’t promise to keep the state open if the hospital system is completely overwhelmed.” 

Other measures 

The expansion of Small Business Fees and Charges Rebate will help small businesses to manage and minimise their expenses, further encouraging a confident reopening. 

Minister for Finance and Small Business Damien Tudehope said, “It hasn’t been an easy ride for businesses across the state and now we are reopening, this should give them some assurance that we will be there for them every step of the way.

“Small businesses will now be able to claim road user tolls under the Small Business Fees and Charges Rebate, which is being increased from $1500 to $2000.

“The rebate can be used to offset NSW and local government fees and charges, and adding tolls to the list of claimable charges is going to make a massive difference to many small business owners who use vehicles for work.”

Mr Thompson said that the reopening of international borders is key to allowing small businesses and the Australian economy to make a full recovery. 

He said, “The big thing is reopening international borders. While it’s a federal issue, there are signs NSW has been working behind the scenes to make sure NSW isn’t passed over.

“Just today [yesterday], Prime Minister Scott Morrison announced that international borders could reopen for vaccinated travellers from NSW as early as 1 November. That’s an encouraging sign.

“Reopening brings in revenue and skills that Australia needs, not to mention the company of family and friends that are best enjoyed at the local pub. Without international borders reopening, there’s a ceiling on the Australian economic recovery.”

Read more: Australian Business Grants & Assistance

Read more: NSW lockdown effect: Study finds dramatic decline in shifts rostered

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