Coronavirus stimulus package ‘not enough’ to prevent bankruptcy, says Darwin small business owner

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Coronavirus stimulus package 'not enough' to prevent bankruptcy, says Darwin small business owner - DesiEngine
Coronavirus stimulus package 'not enough' to prevent bankruptcy, says Darwin small business owner - DesiEngine

An auto-electrician fears he could be bankrupt within three months because of coronavirus — and the Federal Government stimulus will “not even come close” to keeping his business afloat.

Key Points:

  • NT Government and landlords called on to assist small businesses amid coronavirus pandemic
  • Fears Federal Government stimulus package will not go far enough
  • Auto-electrician Warren Close says his business and other small Territory businesses could be bankrupt in three months

Prestige Automotive NT has nine staff and has just lost business from a major client that was reliant on China for business.

Plantation Management Partners on Melville Island exports woodchip to China, but this operation has been curtailed because of Coronavirus fears.

Prestige Automotive director Warren Close said the phone stopped ringing about a fortnight ago at his Yarrawonga office and he wants the Northern Territory Government to contribute to the coffers of small businesses, and for landlords to back commercial tenants in economic hardship.

“I think that comes down to people starting to squirrel money away,” he told ABC Radio Darwin.

“We’ve already started prepping for this two weeks ago. That’s probably a little bit smarter than a few people I’ve spoken to.”

‘Doesn’t come close’
Mr Close said the Federal Government’s $17.6 billion coronavirus stimulus package — including small business tax relief, and money to help keep apprentices in work — will not be enough.

“Because at the end of the day they might be offering a one-off $25,000 payment, but our wage bill and cost of running is probably $70,000 a month,” he said.

“By the time you pay superannuation on apprentices, insure them, pay all the ongoing costs, their TAFE, and everything else, [the stimulus] is not even close.”

Mr Close said the business, which employs three apprentices, has stopped spending money.

He has discussed his position with his creditors, banks, the apprenticeship board, and other interests.

Mr Close is calling on the NT Government to “put its hand in its pocket”.

“Maybe that GST money should go to small businesses, if and when we are isolated or have any issues,” he said.

“This will come down to landlords in Darwin as well, whether they’re prepared to back us, and that we’ll be there on the other side.

“As a small business, if we were shut down for a month we’re in trouble. The second month, we’re really, really in trouble. Third month, we’re bankrupt. So it’s pretty serious. That’s how small business works.”

Not spending money
Mr Close said the Darwin 4WD, Boating & Camping Expo in June is a major event in the business’s calendar.

“We normally start prepping for the 4WD show about now and it’s probably about a $20,000 cost to upgrade a whole lot of gear to send to that show,” he said.

“We are squirrelling that money away just in case we are struggling for wages.”

A NT Department of Trade, Business and Innovation spokesperson said the NT Government released a $2-million tourism resilience plan on February 10 in response to coronavirus.

“The Northern Territory Government has taken action by releasing one round of economic stimulus already, and we are working hard on a second round of economic support,” the spokesperson said.

“We are considering a range of options to support local businesses impacted by COVID-19.

“The Department of Trade, Business and Innovation’s Small Business Champions team are on the ground to provide support to businesses as needed, they can be contacted on 1800 193 111.

“The Northern Territory Government have released a $2-million Immediate Tourism Resilience Plan to minimise the impact of COVID-19 and maintain momentum with attracting more visitors to the NT.

“Funding will be directed to tourism marketing and industry initiatives.”

Landlords working with tenants
Executive director of the NT Property Council, Ruth Palmer, said her organisation supported the Federal Government’s stimulus.

“Landlords are working with their tenants where there have been issues, and I have been working with landlords who are seeking advice,” she said.

“What we are seeing here from the Federal Government is a normal response. It happened down south in bushfire-affected parts of Australia which we saw recently.

“There will be some tough times ahead for big business and small business. We’re all in this together and the impacts over the coming months are far from clear.”

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original source: Abc

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