Canberra businesses wary about details of new wage subsidy

Restaurateur Ben Willis said he would wait for the measure to pass Parliament before making promises to staff, for fear of giving them false hope.

The government says it will pay a flat rate of $1500 a fortnight to all workers in businesses impacted by the economic downturn.

Mr Willis said that should mean the non-Australian staff, including university students, in his restaurant would finally be covered - they weren't eligible for the doubling of the unemployment benefit announced last week.

But in Braddon, Tony Lo Terzo is not sure whether his staff will even be eligible, given his restaurant only opened for business on March 23, 2019.

The $1500 wage subsidy goes to all full-timers and part-timers, plus some casuals, in businesses which have lost 30 per cent of revenue over a month. They are paid whether the business is closed - like Mr Willis's restaurant, Aubergine, or still open and offering takeaway and produce, like Mr Lo Terzo's Italian Place.

But the revenue calculation is based on the same month a year ago, and casuals are only paid if they have been with the firm for a year. Mr Lo Terzo's company was set up early last year but only began trading in late March, leaving him unsure what happens next.

"At first I was really excited for most of my employees, but I'm waiting for my bookkeeper to update me on where we stand," he said.

"I'm going to apply anyway even if we are just on the edge of one year. "

Mr Lo Terzo, who is offering his menu for takeaway and has also turned his restaurant over to fresh fruit and vegetables, pasta and deli products, plus other grocery items such as milk, butter and yoghurt, said he had stood down his eight to 10 casuals, judging they would be better off with the boosted unemployment benefit. But he had kept his eight full-timers on with reduced hours.

"We will survive, even if we have to restructure what we do - but the takeaway seems to be doing OK so far," he said.

Mr Willis closed Aubergine last Monday, with all of his staff - eight full-timers and eight casuals - stood down, and he is now home looking after his children. He said he was working through the implications of the wage subsidy, but wouldn't start paying his staff until the details were clear.

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"To be honest, this is so new and rather than jumping to a decision let's get the facts straight officially," he said.

"If do make the wrong decision or the wrong promise, it's pretty unfortunate to tell somebody they're entitled to something then find out they're not because there's a loophole."

Mr Willis said businesses had to work out whether they were better off shutting down completely when they couldn't trade - because staying in business meant ongoing costs such as insurance and rent, or in his case a mortgage, as well as the uncertainty about when they might be able to reopen and whether they would have the capital to reopen.

Under the new wage subsidy, employers are still liable to pay superannuation, other than for any wage boost that staff might receive under the scheme compared with their previous income. And he is unclear whether other entitlements such as leave would also continue to accrue.

Despite the uncertainty, he supports the government's move, saying it was doing a good job when it came to trying to support businesses and workers.

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