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March 25, 2020

Labor holds serious concerns the economic package for small business is not substantial enough to keep businesses afloat.

The Boosting Cash Flow for Employers measure is not adequate and isn’t being deployed quickly enough for small and medium enterprises to survive this unfolding economic crisis.

A number of businesses across the nation have contacted federal Labor outlining their concerns about the shortcomings of the package.

If an SME is employing staff that are roughly around median employee income of $50,000, each year that employer will withhold about $7,800 in income tax. That is about $1,950 a quarter, or per BAS statement, per employee.

The withholding is only about 20 per cent of the workers wage, well below the UK’s 80 per cent subsidy and won’t hit pockets until late April, and by then there will be thousands of Australians already out of work.

The economic package has no substantial incentive to protect jobs as the support received by businesses is not nearly enough and is not conditional on keeping workers employed.

We need this government to learn from the mistakes made in getting cash to businesses during the Bushfires. The money for bushfire affected businesses is still not getting out the door, and they should not be forgotten as they are now facing the compounding effects of the fires and the virus.

The lack of more substantial support for sole traders and the self-employed to help them stay in business is also a problem. Sole traders, like staff that have been stood down, can access the coronavirus supplement, however this support is subject to an income test, which takes into account a partners income and may prove redundant.

And for the future health of our economy it is essential we keep as many Australians connected to the labour market as possible.

Businesses are already closing, workers are already being laid off and many vulnerable Australians are at serious risk.

We understand the people are anxious at the moment which is why Labor will continue to be supportive, responsible and constructive and that means injecting a sense of urgency where it is lacking or absent.