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To contain the corona pandemic, the federal government is shutting down most business operations and service providers that have yet to open. The cost of compensation for the affected companies will double compared to “shutdown light” to an estimated three billion euros, Finance Minister Gernot Blümel (ÖVP) said late at night. Additionally, there are vendor offsets that cannot yet be assessed.
While “close-to-body” service providers that have to shut down now, such as hairdressers or tattooists, such as the hotel and catering industry, will receive 80 percent of last year’s turnover as compensation for November, retail operations alone they will receive 20 to 60 percent of the previous year’s billing in stages. Commerce could make up part of the lost sales later on, but service providers could not, “that’s why the Constitutional Service recommends differentiating,” Blümel said. Trading companies with perishable or seasonal goods would receive 60 percent of the previous year’s sales, while those that, like the furniture trade, can expect recovery effects, only 20 percent. The exact assignments still need to be made.
Trade association threatens legal action
At least the trade association was not convinced by the argument and threatened to sue on Saturday. The private interest group of large commercial companies or individual members are considering a lawsuit in the Constitutional Court (VfGH), they locate an inequality in the state compensation for the loss of sales. “No distinction should be made between the affected industries, after all it was promised that no one would be left behind in this crisis,” the association said in a broadcast Saturday night.
Distributors would be left “in the dark with the greatest need.” Instead, the trade association is asking for an 80 percent revenue replacement, that is, the same amount as for industries already affected by the closures. “For each week of blockage in non-food trade, we anticipate a loss of sales of at least 900 million euros,” said the association’s managing director, Rainer Will.
Sales replacement also for the first week of December
Due to the extension until December 6 inclusive, the replacement of sales for the closing time must also be requested for the first days of December, Blümel said. Applications should be possible from 23 November. In order to make the necessary adjustments, no application will be possible until then. So far, 30,000 applications have been submitted for 900 million euros in sales, of which 800 million euros could be paid “in the next few days.”
In addition to compensation for sales, Blümel also offered the company the possibility to be reimbursed for its fixed costs for the fall. A reimbursement of fixed costs of up to 800,000 euros, approved by the EU Commission for a long time, must be requested from 23 November. Furthermore, Blümel continues to negotiate with the EU Commission on another fixed cost subsidy model, which should bring the company up to 3 million euros of support. But negotiations are difficult here. In any case, the over-authorization in the 2020 budget of € 28 billion is enough to pay the costs of the crown’s aid.
Labor Minister Christine Aschbacher (ÖVP) told the joint press conference that part-time work with zero percent working hours will run until the first days of December.
