April 1, 2020 – The second package of Government measures is very similar to the list of 10 demands the Initiative GLAS PODUZETNIKA sent ten days ago.
REACTION TO THE ANNOUNCEMENT OF THE SECOND PACKAGE OF GOVERNMENT MEASURES
“Glas Poduzetnika has, in less than two weeks, gathered around 100,000 micro, small and medium businesses, artisans and their employees. Looks like our voice was heard after all. We believe that the announced measure package will be confirmed by the Government and presented tomorrow. Two main points necessary for the survival of small and medium businesses from our demands are following, writing off and not just postponing of income tax and contribution charges and stopping the payment of rent to the government and local jurisdictions, utility and parafiscal charges. This will, together with subsidizing a minimal salary of 3,250 kuna, help our members who have been prevented from doing business to survive this period of no income with minimal expenses, and ensure the job loss would be as small as possible.”, stated Hrvoje Bujas, one of the initiators of the initiative. “We believe that the Government will find a common language with the banks as well to extend the loan and leasing postponement to 12 months form current 3, and that after the crisis our economy can finally breathe a little. In any case, we are sure that the Government agrees that this is only the beginning of structural changes that will help our economy exit this crisis with minimal losses. We hope we can ensure a sustainable budget deficit, we will address this together with the Government through cooperation in the Economy council whose members we have proposed last week.”
The Government has shown empathy for small and middle businesses problems and they were ready to listen to propositions coming from the private sector, HUP (Croatian Employer Association), Glas Poduzetnika, economy experts and entrepreneurs themselves. Enactment of the second measure package is in fact the real start of the fight against the economic crisis, Glas Poduzetnika notes. Quality enforcement of the measures that must be ensured with unambiguous enforcement of directions is key. A lot of our members in the field asked about operational problems and vagueness of the first measure package. The same problems were predicted and warned about by our legal and bookkeeping advisors. We are of opinion that the state needs to change the stance towards entrepreneurs and to simplify the approval process, with minimal restrictions and rigorous misuse penalties.
Many local jurisdictions have already made measures that write off businesses’ rent and utility charges for the duration of the crisis, and we hope that soon the others will do the same. It is necessary that local jurisdictions come to an agreement around a unified and singular common approach, so that all can have similar conditions.
A good part of private sector employers impatiently awaits new measures form the Government. But in a crisis of these proportions, these are not their only problems. Of course, expectations from their local representatives are bigger and constantly being checked. Their survival will depend on their buyers, clients and business partners, not just the government. A lot of questions are being asked about real-estate loans the companies are using.
Our question – What if the rent write off is not agreed upon, was met with the answer that, at this moment, only 10% of companies will try to get a loan with which to pay for that kind of obligations. Furthermore, 23% of them are planning to close the company (and lay off all employees). 16% are planning to reduce the number of employees and see how things develop.
Around 51% plans to minimize expenses in different ways and try to survive the crisis! That data should be considered in the context of a previous poll that shows that over 90% of companies can, with minimized expenses, survive 3 months at most.
This is more data that suggest that a holistic solution is necessary and that partial measures, that can be good in and of itself, will not be enough for the survival of a large part of the private sector and its jobs. Today, 39% of entrepreneurs are ready to pull drastic measures, and we can see that the number grows week to week.
GLAS PODUZETNIKA has, to this day, gathered almost 100,000 companies, self-employed, artisans and their employees. With the support of businesses, small and large, that made more than 22 billion kunas of profit in 2019, it’s main goal is to ensure the existence of as many employees and entrepreneurs as possible, and save Croatian economy from a potential long-lasting recession. You can follow Glas Poduzetnika on Facebook.