The government is announcing new programs to support entrepreneurs. At the same time, however, it cuts their support.
The Cabinet has launched two new programs to support entrepreneurs for losses due to the coronavirus epidemic, quarantine and closure.
In the COVID 2021 program it will contribute to employees, in the COVID Uncovered costs program it will cover part of the costs. However, the condition in both cases will be a drop in sales of at least 50 percent compared to last year or the year before last and February.
Entrepreneurs who ‘closed the shop’ and waited for a more convenient time will receive support. On the other hand, it cannot be reached by those who tried to stay afloat on their own – for example, opened a ‘window’ or invested in online sales. Although they also had a drop in sales, they were usually less than 50 percent.
Captured ‘signals’
The government imposed further restrictions on the program Antivirus, which is currently planned for the end of April. It now pays state wage compensation contributions only to employees who have been with the company for at least three months, ie after a probationary period. The decision was initiated by the Ministry of Labor and Social Affairs.
Antivirus has three modes, Antivirus A is intended for companies with quarantined employees, Antivirus A+ for companies closed by government regulation and Antivirus B for companies affected by the decline in sales or supply. In the first case, the state pays compensation up to 39 thousand, in the second up to 50 thousand and in the third up to 29 thousand.
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The ministry claims that these compensations are being abused. At the same time, he refers to labor offices, which allegedly recorded “signals” that companies are hiring employees only to collect tens of thousands of crowns a month from the state.
When asked how often these “signals” were, the ministry replied in a statement to Tiscali.cz: “We cannot evaluate the purposeful conduct of employers as a massive misuse of support. However, the purposeful recruitment of new employees could be observed to a significant extent. “
Asked whether it was necessary to take comprehensive measures when labor offices were able to record “signals” about fraud, ministry spokesman Vladimír Dostálek said that “individual fulfillment of conditions would not allow allocating funds to employers in a short time.” He pointed out that the goal of government support in the Antivirus program is primarily to prevent redundancies.
Will unemployment increase?
However, some companies did not anticipate a change in the rules, so – whether due to normal employee turnover or the introduction of Internet or remote sales – they hired employees. Now they complain that they will have to release some of them because they will not pay them from the proceeds from the lockdown.
The company’s manager, who did not want to publish its name, warned that the government had thrown entrepreneurs into one bag with new restrictions and called them fraudsters. In his opinion, she could have chosen a more selective approach.
“With this restriction, the government will increase unemployment by a few percent,” the manager warned, noting that the goal of the program was the opposite.
Business unions, including the Chamber of Commerce, point out that the government has enforced a 500 billion state budget deficit for 2021. However, only seven percent is set aside to support entrepreneurs. | source: Chamber of Commerce
Click to enlarge the graph.
In the supply chain where he works, the new restriction will cause a problem because he has recently hired dozens of employees as a replacement for those who have left. However, in the conditions of another lockdown, sales are declining, so they will probably have to release them again.
What about an entrepreneur, a cheater?
Stanislav Sádovský, a legal expert of the Chamber of Commerce, commented on the limitations of compensation to entrepreneurs for Tiscali.cz. “The government’s approach – preferring to limit compensation as a whole on the grounds that someone may have abused it, or even abuse it, and therefore make aid unavailable to most honest entrepreneurs affected by government restrictions – cannot be accepted from a firm perspective,” Sadovsky.
The legal expert commented: “I am of the opinion that the state with a swelling apparatus has sufficient resources to control the possible misuse of compensation.”
However, the government chooses a different, simpler approach. He could express himself in a paraphrase of Cimrman’s inspector Trachta’s winged statement: “We have vulgar suspects in front of us – businessmen.”
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