Imbert: No Grants for SMEs yet

AS GOVERNMENT starts implementing phase one of its salary relief grant for workers affected by the economic impact of the covid19 pandemic, Finance Minister Colm Imbert admitted Monday that phase two is a bit more complicated.

The first phase covers three months – April, May and June – and goes live Tuesday, and is open to workers who may have lost their jobs either permanently or temporarily because of covid19, but only from March 19 to June 30. The grant, worth $1,500, is open to people already on National Insurance Scheme record. The second phase, however, will look at people like the self-employed, those not on the NIS system and who have incomplete records, form whom the process to ascertain their status might be more rigorous.

“The people who are in the pay-as-you-earn or NIS system have records. It’s fairly simple when dealing with that group determine, yes, they were employed and made their NIS contributions. A self-employed person, what evidence do they have? Some of them don’t pay any taxes at all. Some of them are not registered in the system at all. Outside of the system, it’s going to be a little more difficult to establish accountability. I know there’s a belief that the grant should just be distributed without any documentation or checking but that doesn’t make any sense.. the government does not have an inexhaustible supply of money,” Imbert said.

The estimated cost for this first phase will be about $400 million. Extending that could take it up to $500 million.

Asked about grants to small businesses, instead of the preferential loan conditions negotiated with commercial banks, Imbert said the government would be setting up a system for the banks with small businesses in the first instance for these companies to get some form of access to money. But, he said, “We have to figure out where we go with this because we really don’t know how long this thing will last.”

In the first instance, one option is a government guarantee for small businesses where they will get a moratorium on payment but, he stressed, it’s not a grant at this point in time. “We don’t know where we going with all this. Yes, that has been raised that perhaps there should be a grant system for small businesses but it’s too early days to get into at this point in time.”

Among the government’s announced relief programmes have been the salary relief grant, a suite of social services programmes and $100 million in soft loans for credit unions. “We are going to do a loan guarantee programme with commercial banks for small businesses. We are looking at the possibility of some sort of grant system. It’s complicated.

It’s not something we can jump into and we are not committed to that at this point in time,” he said.

On the point of possible debt forgiveness, he noted that those loans would be lodged with commercial banks and the government could not write off loans.