Cafe owner’s COVID shock
A HOBART cafe owner says he has lost nearly $100,000 since taking on the business during the COVID-19 pandemic — and he blames much of it on a loophole that rendered the business ineligible for the JobKeeper wage subsidy.
Richard Scarr acquired Jam Packed Cafe in August and believed the five full-time staff he took on would be eligible for JobKeeper because they were receiving the subsidy under the cafe’s former owner, Federal Group.
But they were not, and despite repeatedly pressing his case for a rethink, including directly to Prime Minister Scott Morrison when he visited Hobart in November, Mr Scarr has been told the business will not receive the allowance.
Mr Scarr had been told that because he recently acquired the business, he could not sat
isfy criteria relating to a demonstrated fall in income.
He had hoped a review would lead to the business becoming eligible, and potentially being back paid.
But it was not to be, and Federal Treasurer Josh Frydenberg this month wrote to Federal Member for Clark Andrew Wilkie, who had advocated for Mr Scarr. Mr Frydenberg wrote that, after consideration of the matter, he had concluded it was “not desirable” to make changes to the JobKeeper payment rules at this “late stage of the program”.
“The JobKeeper rules were carefully designed to ensure that businesses that expanded in the year prior to COVID-19 were not unfairly excluded from the JobKeeper payment solely because of that expansion,’’ he wrote.
“However, the rules are not designed to support entities that acquire distressed businesses to automatically continue receiving JobKeeper for those businesses.”
Mr Scarr said the response was disappointing, and said it was not the case that he had bought a business that had been struggling.
“It was going perfectly fine back in January and I was in a process to buy it when [coronavirus] hit in March,’’ he said.
Mr Scarr said despite the challenges, business had picked up and he was breaking even.
“You roll the dice and have a go. That’s the Aussie way,’’ he said.