How can businesses prepare for government support rollback?

How can businesses prepare for government support rollback? | Insurance Business Australia

How can businesses prepare for government support rollback?

Australian businesses are showing resilience and strength in the face of the economic challenges brought on by the COVID-19 pandemic, according to CreditorWatch’s The Economic Road Ahead annual report.

While the report highlights the “strong health” and “buoyancy” of many businesses across the nation, Patrick Coghlan (pictured), CEO of CreditorWatch, is urging those struggling to seek help early on, especially as the government prepares to roll back support.

“The good thing is, the government has given almost two-months’ notice that the JobKeeper payments are going to reduce,” Coghlan said. “The government has also given itself time to make adjustments between when they first announced it and the end of September, and we’ve already seen a first adjustment.

“For example, the government announced the new eligibility requirements for JobKeeper recently and I think that prepares businesses for the next stage of COVID-19 with the government support of $1,200. They can start to budget towards surviving in the future. I think it’s important to be able to give people as much time as possible, despite the fact that things are changing so quickly at the moment.”

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Coghlan says the introduction of JobKeeper during the onset of the virus helped ensure many businesses’ survival. However, he also says there are “many businesses out there” that are “taking advantage” of the payments now because their businesses are operating at levels that indicate they’re no longer eligible.

“If there are companies that are out there that are back to pre-COVID levels or sub-30% down in terms of revenue, they really need to be starting to either wean themselves off it to prepare for the real future, or be pushed off it by the government to ensure money isn’t wasted on businesses that don’t need it,” Coghlan claimed.

Brokers will play a central role in assisting and preparing businesses to be less financially dependent on government support. Coghlan says brokers should act with clients’ “best interests at heart” to “breed better brand loyalty and retention.”

“I think it’s important that brokers educate themselves on what is happening out there so that they’re able to speak with confidence about the economy, the conditions of the economy, the various stimulus packages, anticipated changes to that support, providing advice, so to speak, to customers around which industries have been heavily hit as well as the ones that are doing well,” Coghlan continued.

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“Being armed with information is extremely important and powerful, and I would encourage them to be reading up on and consuming as much information and data as possible to be able to share with their clients, but to also make decisions about their own business.”

Coghlan adds that, from a broker perspective, he would imagine more insurance applications are either being rejected or coming back with much bigger premiums in place, making their life harder.

“If they can target their sales efforts to the healthier parts of the economy, then there’s a huge benefit for them as well,” he said.