What are top business failures

But no full compensation in the event of business failure due to Corona

Although the government has decided to provide comprehensive aid to companies and employees because of the losses in connection with the coronavirus crisis, it has also turned off relevant compensation aid. Because actually, according to the current legal situation (until Sunday), compensation for companies would be provided if official closings are ordered. According to the Epidemic Act, the loss of earnings must be compensated, and the companies were also able to reclaim the wage costs incurred during the lockdown.

That is completely different now. The corresponding part of the Epidemic Act has been nullified with the new provisions. According to the Covid-19 Measures Act passed on Sunday, the rules for closing operations according to the Epidemic Act will not apply when the corresponding ordinance comes into force. Furniture dealers, hairdressers and many other businesses are therefore not entitled to compensation for lost earnings. Instead, the government has launched an aid fund of four billion euros. However: in contrast, the companies are not entitled to support if they are affected by the current ordinance.

Losers and winners

The advantage of the new measures: Companies that have not been blocked but still have massive failures also benefit from them. An example: A caterer who can no longer find buyers due to the slump in tourist traffic would not have any compensation for officially ordered closures. He can now take advantage of both short-time working and liquidity assistance.

A reverse example: An electronics store that now has to close its doors could have demanded the entire loss of earnings during the lock according to the Epidemic Act. Under the new law, in all likelihood, it will receive significantly less. In addition, the support depends on the individual funding institutions.

Many points of contact

The measures are handled by a wide variety of locations. The tax office is responsible for deferring taxes, and the social insurance of the self-employed is responsible for deferring social contributions. Credit guarantees are in turn issued by Austria Wirtschaftsservice. Abbag, which is responsible for processing banks, for example the former Hypo Alpe Adria, is also given responsibility for securing companies with liquidity problems.

There could be financial reasons for changing the aid mode so drastically. Sepp Schellhorn, economic spokesman for Neos, expects that the promised four billion euros will only last a few days. His SPÖ colleague Christoph Matznetter also expresses criticism of the changed cushioning.

Criticism of the opposition

The compensation according to the Epidemic Act has existed since 1913. "The first time it is applied, it is cut straight away," says Matznetter. FPÖ finance spokesman Hubert Fuchs also believes that small and medium-sized enterprises in particular are "falling short" with the new regulation. The opposition's amendments failed. Economics Minister Margarete Schramböck defended the measures. Help would be provided quickly and unbureaucratically, she assured her. She also referred to the more attractive short-time work. (Andreas Schnauder, March 15, 2020)