NSW Government announces summer stock guarantee to give SMEs confidence

NSW Government announces summer stock guarantee to give SMEs confidence

Small and medium enterprises (SMEs) in New South Wales will soon be able to take advantage of a new ‘Summer Holiday Stock Guarantee’, giving businesses the confidence to open up now and plan for the future.

Under the program, eligible businesses with an annual turnover of between $75,000 and $50 million will be able to apply for a grant of up to $20,000 to compensate for the loss of perishable stock or claim $10,000 for reduced capacity to sell non-perishable items in the even they are affected by another lockdown.

In addition, the State Government is planning on expanding the Small Business Fees and Charges Rebate for all eligible SMEs for use until 30 June 2022.

NSW Premier Dominic Perrottet said the measures were key to giving businesses the confidence to reopen and helping to reboot the state economy.

“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,” Perrottet said. 

“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.” 

Treasurer Matt Kean said the Stock Guarantee of up to $20,000 would be available if non-essential SMEs were forced to shut their doors between 1 December 2021 to 31 January 2022 due to public health orders. 

“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,” Mr Kean said.

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

“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.”

The changes have been welcomed by the state’s peak business organisation Business NSW.

“Business confidence has taken a hit in recent times and we know one of the pressure points for business has been being left with stock they can’t sell while their business is closed,” Business NSW chief executive Daniel Hunter said.

“Businesses can now plan and order the stock they the think they’ll need while their business begins to scale up again, with the knowledge the Government has a level of protection in place for them.

“This confidence will be particularly welcome in regional NSW, where lockdowns have had a dramatic impact on business prosperity – not only have they missed out on local trade but tourists from Sydney who stay and spend money in their town.”

For Ben Thompson, co-founder and CEO of people-management platform Employment Hero, the prospect of localised lockdowns would "understandably make employers in NSW nervous", but the announcement from the state government today is sure to ease some anxiety for SMEs.

"The national reopening plan, which was driven by the Doherty Institute, warned of “highly targeted lockdowns” beyond the 80% vaccination target. This is just the reality, which means today’s announcement by the NSW government looks like sensible policy to me and it’s certainly a win for small business owners," Thompson said.

"That $20,000 isn’t a lot in the context of a lockdown that lasts months and months. But if the NSW can keep future lockdowns not just targeted, but relatively short, that’ll mean they get more bang for their buck out of the loss of revenue support.

"The extra $500 for fees and charges rebates until the end of the year will also be handy. There’s going to be a lot more deliveries on the road, combined with a surge in consumer demand, which will create yet more deliveries. A little bit more help for things like toll road charges and council rates will be welcome."

Whether it is enough for businesses to prosper over summer, Thompson said it "depends on the amount of capital they’re sitting on or their ability and appetite to borrow".

"A lot of small businesses went under during the first 18-months of the pandemic because they had no choice but to whittle down their capital base," he said.

"Small business owners would be looking at their bank accounts and thinking to themselves, “Gee, I’d love to make those investments but I’ve got to spend the first few months building that breathing room back up again.

"Some small businesses will be blessed with some extra firepower, so I’d expect to see some companies go berserk this summer and all the power to them. But for those that are just able to start putting the pieces back together, I’m sure they’ll be happy to have survived and be operating again. That’s also an extraordinary achievement."

Updated at 9.38am AEDT on 12 October 2021.

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