The newest strain of Coronavirus, COVID-19, has all but shut down a huge number of countries around the world. Businesses of all sizes are suffering as entire industries cease work, leaving many entrepreneurs facing the options of making redundancies or downsizing their companies. Freelance workers are also suffering, despite the chancellor’s efforts to support the self-employed. Here’s how governments around the world are dealing with the outbreak and helping business owners and employees stay afloat.
Keeping businesses alive
Governments around the world are focused on keeping their countries’ local businesses afloat in order to prevent their economies from failing. President Macron, for example, has announced a pledge to prevent French businesses from failing in the struggle against the virus, guaranteeing billions of euros in loans, delayed tax payments, and suspended rent and utility bills for commercial and residential properties alike. This is arguably the boldest approach offered by any government, and Macron has even gone so far as to announce the nationalisation of industries, if required. While the idea of ‘writing blank cheques’ may seem extreme, Macron’s plan makes sense when you consider France’s status as one of the best countries in the world to do business.
Its huge domestic market of around 67 million consumers reached a peak level of spending confidence since the previous global recession. France had also made a name for itself as an excellent place for entrepreneurs to launch their business ideas, backed by Macron’s efforts to rebrand the country as the “start-up nation”. As noted by London Translations, France offers favourable business initiatives, including the Responsibility and Solidarity Pact, and the Competitiveness and Employment Tax Credit. Safeguarding businesses during this uncertain period ensures that future entrepreneurs continue to set up in France which, in turn, boosts the French economy.
Paying off employee wages
As the coronavirus spreads, entire cities and countries are being forced into lockdown, preventing non-essential workers from going to work. This means employees like retail staff and agency workers are legally prevented from working, which stops businesses from making any money to pay their staff. This can quickly lead to redundancies being made, leaving workers jobless. In an attempt to avoid mass layoffs, the UK government is offering a furlough system to cover the wages of millions of workers who are unable to do their job. Chancellor Rishi Sunak announced that 80% of salaries would be covered, at a rate of up to £2,500 per month. Any employer is able to claim this for their newly-furloughed employees.
Elsewhere, Italy is offering self-employed workers one-off payments worth €600 in an attempt to avoid bankruptcies. The government is also allowing parental leave of up to 15 days and announced plans to cover 50% of salaries for families with children under the age of 15. Italy is one of the worst-hit countries, leaving it in lockdown and enduring Europe’s biggest death toll. Despite going into full lockdown for a preliminary month as of early March, there have reportedly been discussions around extending this further in an attempt to stop the spread, leaving people out of work for even longer.
Offering tax cuts and industry breaks
In America, despite Trump’s assurances that concern over the virus was a “hoax”, the administration passed a historical $2 trillion coronavirus aid bill. This includes direct payments worth up to $1,200 to most American adults earning less than $75,000, as well as offering aid to small businesses so that they can pay employees. Each adult will also receive an additional $500 if they have small children to look after.
As countries continue to close their borders and travellers are forced to cancel bookings, the aviation industry has been amongst the hardest-hit. American Airlines is set to apply for up to $12 billion in government aid to ensure no layoffs or pay cuts will directly affect their staff. The Australian government recently announced a similar deal, worth $715 million, for affected airlines. A $1 billion fund has also been set up for specific regions which have been “disproportionately” affected by the outbreak, and Prime Minister Scott Morrison also announced more than $100 billion in emergency banking measures in order to avoid a credit freeze.
Since the start of the outbreak, the Australian government has offered support worth a cool $189 billion — almost 10% of its GDP — while continuing to announce new tax breaks and deals as the pandemic continues to ravage the economy. Businesses are able to apply for support, while anyone who is unemployed or able to work can still claim benefits.