Over the past fortnight, the South Australian and federal governments have announced several stimulus packages to help industries hit hardest by the Covid-19 crisis, including hospitality.

On paper, the figures look like the lifeline needed to pull Adelaide’s restaurants, cafes and bars (and their staff) back from the brink and keep them going for six more months, the time frame Prime Minister Scott Morrison has suggested the country will be locked down. But this sort of financial aid is only as good as the rules governing how it’s distributed. And therein lies the challenge.

So what is available for business owners? At a state level, the Marshall government has dedicated $1 billion to SA’s economy, including a $650 million Jobs Relief Package. The latter comprises a $300 million Business and Jobs Support Fund, including $10,000 one-off cash grants for small businesses and not-for-profits impacted by the crisis. This package also includes a total of $60 million worth of payroll tax waived for six months (for businesses with a payroll of less than $4 million) and the waiver of 2020–2021 liquor licence fees for businesses that have had to shut.

On a federal level, the government has unveiled several stimulus packages.
• March 12 – Stage one stimulus. $17.6 billion, including one-off $750 payments to current welfare recipients and one-off payments of between $2000 and $25,000 to small and medium-sized businesses.
• March 19 – the Reserve Bank of Australia extends $90 billion worth of credit to banks, to help them keep lending to small and medium-sized businesses.
• March 22 – Stage two stimulus. $66 billion, including another one-off $750 payment to current welfare recipients and an extra $550 per fortnight to all new and existing Jobseeker recipients. The one-off employer payments from stage one are increased to a minimum of $10,000 and a maximum of $50,000, to be applied as a credit on business activity statements (BAS) from April 28. Small and medium-sized businesses can also apply for new bank loans, with 50 per cent of the value guaranteed by the government.
• March 30 – Stage three stimulus. $130 billion, including a new Jobkeeper scheme, where employers receive $1500 per fortnight per employee to continue paying them for up to six months.
• April 7 – Under a new, mandatory code of practice for commercial tenancies, landlords are now compelled to reduce rent in proportion to how much their tenant’s revenue has declined.

Each one of these stimulus packages has brought some hope to the industry’s despairing ranks, but none more so than the Jobkeeper scheme. It should, in theory, allow businesses to retain and support valued employees, while at the same time reducing wages. But at the time of writing, no restaurant in Australia has received a cent in Jobkeeper payments and won’t until the first week of May. The scheme is a reimbursement – restaurants pay wages for a month, then receive a backdated subsidy at the start of the next month. For businesses that currently don’t have any cash flow, this is a problem.

“It sounds great, but really all it’s doing is assisting the government in making their unemployment rates look better, because now they’re putting the ownership back on businesses,” says Leigh Street Wine Room owner Sali Sasi.

“It’s alleviating pressure on Centrelink, which we’ve all seen was a massive shit-fight – the long lines, the high demand on calls. They were completely out of their capacity to be able to deal with that, let alone if there are further closures – that’s only going to intensify.

“We’re all screaming that we need assistance and the government has just handed out a package which requires us to lay out more funds. It does not make sense.

“So it puts businesses in quite a difficult situation. Because we now have to either make the call to put our business at further risk by putting people on the books, or put staff at further insecurity by saying no … and it can potentially damage those relationships if the staff don’t understand why their mates are getting onto it and they’re not.”

Simon and Emma Kardachi – who have stood down around 15 working partners (another 15 remain working on takeaway), 170 full-time employees and 200 casuals across 14 venues, including Shobosho, Osteria Oggi and Press – can now hire back around 25 to 30 employees under the Jobkeeper scheme. But they’ve had to borrow $250,000 to foot April’s wages.

“The money we are borrowing from the bank to do this was a safety net that we had negotiated with the bank [before Jobkeeper was announced] to help with expenses to keep us afloat,” Emma tells Broadsheet.

“We now have no available funds. Our safety net is gone, sucked up completely by Jobkeeper. Yes, it’s great for staff, but the administration onus put on businesses is significant.”

Moreover, the Jobkeeper package doesn’t apply to the more than 1.1 million (according to the Guardian) workers across Australia on temporary visas – the backbone of some of the country’s best bars and restaurants.

Simon Kardachi says 12 of the 15 chefs at Shobosho are on temporary visas. “They’re stuffed … they’ve been hung out to dry. I’ve said I would personally finance some of them if they’re at their wit’s end and can’t work out how to survive.”

It’s a similar story at Sparkke at the Whitmore, which had to cut 85 per cent of staff when the business switched to takeaway. Those remaining took a dramatic pay cut to keep the venue afloat. Through Jobkeeper, the team’s been able to bring back two kitchen staff and seven front-of-house staff. “But a lot of our senior staff – our restaurant manager, my two sous chefs – are on working visas, so they’re key players in our business but they’re not eligible for the Jobkeeper payments,” says chef Emma McCaskill.

“So we’ve made the decision as a company to pay them their normal rates … which ultimately costs us as a business, but it’s not fair for our key staff to take that pay cut while we bring people back on Jobkeeper and have them paid more.”

As for the government’s recent announcement that workers on temporary visas can pull money out of their superannuation funds? “It’s good they’ve got that option,” says McCaskill. “But they’re diving into their life savings there, it’s not really fair.”

So how can an industry on such thin margins fork out for wages when there’s no revenue? The Reserve Bank’s $90 billion credit line is designed to address this. Combined with the government’s 50 per cent guarantee on new loans (stage two, March 22), the idea is to give small and medium-sized businesses immediate access to cash, to be repaid at a later date. The thing is, most restaurants, cafes and bars already carry significant debt during their first five years or so, paying off the initial cost of their fit-out, furniture and equipment. It’s a significant risk to pile more debt onto that.

As one example, Sali says she and husband Nathan Sasi pay $1800 per week to rent commercial equipment from Silverchef. While they’ve ceased payments for now, that debt is accumulating, with interest. It’s a similar story with property leases.

Under a new mandatory code of practice for commercial tenancies, landlords are compelled to reduce rent for coronavirus-affected businesses with a revenue of less than $50 million. The federal government has also placed a moratorium on evictions. But the debt is still piling up. “We want a rent freeze so we can pick up where we left off,” says Sali. “It shouldn’t be something that accumulates.”

This brings us to the state government’s $650 million Jobs Relief Package, which includes a $300 million Business and Jobs Support Fund and the recently announced $10,000 one-off cash grants for small businesses (with a turnover of more than $75,000 per year and a payroll of less than $1.5 million) to help with utility bills, rent, supplier fees and more.

While Sali says it’s a good start, that $10,000 barely pays for two invoices. (In her case: a $7500 wine order placed before the shutdown and a $3000 bill for a de-scaler for the dishwasher.) “It looks like potentially we’ll be able to get it, which is great,” she says. “But the reality is $10,000 is not a lot of money.”

“I don’t think there should be a blanket ruling for finances being dished out, both with Jobkeeper and the grants for small businesses,” she adds. “It makes no sense … I would personally prefer to see people write in saying, ‘This is my business, this is what I need the money for, this is how I’d utilise it’ … but $10,000 is nothing for a business of my size.

“Then you look at a business that’s making $75,000, and $10,000 for them might actually see them through for six months.”

For the Kardachis, only two of their 14 businesses are eligible for the cash grants. “It will help Nido and Proof, and it will not help anybody else,” says Emma.

“It’s missed, once again, the businesses that have been forced to close, who aren’t trading, who aren’t generating payroll tax, who aren’t generating PAYG tax,” adds Simon. “It’s picked up little businesses like Nido and Leigh Street Wine Room, but it’s missed 75 per cent of my business.”

The rest of the businesses in their portfolio are considered medium-sized (either alone or when grouped, as is the case with Melt, SeaSalt and West, and Bread & Bone and Maybe Mae), with a payroll of more than $1.5 million, and don’t qualify. These businesses would be eligible for the government’s recently announced payroll tax waiver, but they’re either shut or trading with skeleton staff, and thus not accumulating enough payroll tax to be waived, says Simon.

So what would help? “The only thing that would help us, specifically and directly, would be to refund the 2019–2020 payroll tax from last July onwards,” says Simon. “Exactly what Victoria’s done. I’ve spoken to publicans, I’ve spoken to every other restaurateur I know and it’s all the same thing – we need the payroll reimbursement. The only thing we’ve been holding our breaths for is that.”

If this doesn’t happen, Simon says most hospitality venues in this state won’t come back. “We already carry debt … We’re already on ATO/BAS payment plans in better times,” he says. “It’s not like a magic wand gets waved and we go back to making money and employing people. That’s why we need cash incentives.”

“We’re talking a two to five per cent margin industry,” adds Emma. “It’s impossible to come back from this kind of thing for most businesses.”

“I’ve controlled everything in my life for 20 years, which got me to where I am,” says Simon. “And I now have no control, no say, no voice and I’m being told by muppets and puppets what my future is going to be, and it’s pretty frustrating.”

Both Sali (who returned to Adelaide from Sydney last year) and Emma fear for South Australia if the hospitality scene collapses.

“If we don’t protect it, it’s in real jeopardy of turning back time to 1990,” says Sali. “We came here because we could see how exciting the industry was.

“We feel deserted and let down … and when you see other premiers actually delivering, that’s even more disheartening,” she continues.

“The industry has worked so hard to get to where it is and Nathan and I feel really privileged to be a part of it, and I would be really fucking pissed off if the state government doesn’t do everything in its power to protect it.”