The State Council today finalized the details of the cantonal emergency measures to support the economy impacted by COVID-19. These measures complement those announced by the Federal Council on March 20. The State Council has confirmed the introduction of interest-free loans for the self-employed and small businesses totaling 30 million francs; an expansion of economic development support tools for SMEs operating in strategic sectors within the canton, amounting to 4 million francs; and various relief measures for taxpayers.
On March 18, 2020, the State Council announced its decision to implement various cantonal measures aimed at supporting businesses and preserving jobs, as well as the launch of a dedicated hotline for businesses. Following the decisions made by the Federal Council on March 20, the State Council established the procedures for implementing the cantonal measures, which are designed to complement federal measures.
The Council of State Commends the Adaptation of Federal Support Measures
Through its decisions of March 20, 2020, the Federal Council allocated significant resources to meet the needs of the economy. It strengthened the short-time work program (RHT) by expanding its scope to include fixed-term contracts, temporary jobs, apprentices, and employees in management positions. Payment deadlines have also been shortened to ensure that all wages can be paid on time. The scope for guaranteeing bank loans has been expanded to cover amounts of up to 20 million francs per company. Income replacement benefits will provide a source of income for self-employed individuals whose work has been interrupted. Finally, specific aid has been announced for the culture and sports sectors.
The Council of State welcomes these major decisions, which will provide crucial support to the vast majority of businesses in difficulty. Cantonal measures complement this set of measures, working in tandem with them.
Interest-Free Loans for Small Businesses and Self-Employed Individuals
The thousands of inquiries received through the economic hotline have enabled the Council of State to better understand the range of practical challenges faced by self-employed individuals and small businesses. One of the most significant problems these entities face is an immediate lack of cash flow and the inability to pay their bills. At the same time, the State Council emphasizes the need to continue, in strict compliance with public health regulations, all economic activities that remain feasible.
The Council of State thus confirmed the allocation of 30 million francs to provide interest-free loans to organizations facing this situation.
The goal is to provide a simple and quick liquidity solution to a large number of self-employed individuals and small businesses that need it to ensure the survival of their businesses and their owners, and for whom obtaining a guarantee would not be possible or appropriate.
The loans will take the form of a one-time payment of 5,000, 10,000, or 15,000 francs, repayable over a 24-month period. Applications will be submitted directly online using a form that will be available starting March 24 at 7:30 a.m. The website will provide information on the application process and eligibility requirements. This tool will be available through April 30, 2020. The State Council will evaluate whether to extend it by that time.
Strengthening Support for Innovation
The Council of State also confirmed an increase in aid allocated to support economic development, amounting to 4 million francs. This amount will help support small and medium-sized enterprises (SMEs) operating in strategic sectors (DAS) that decide to continue investing in particularly promising development projects despite the crisis. Through this measure, the State Council aims to help ensure that innovation efforts continue, so that the regional industrial base can strengthen its resilience and its potential to generate added value and jobs once the crisis is over.
Relief Measures for Taxpayers
In addition to these measures providing direct support to the economy, the State Council has adopted a series of measures designed to ease the burden on Neuchâtel taxpayers over the coming months. In addition to the flexibility requested from the tax department in reviewing each individual case, the following measures have been adopted: an extension until the end of June of the option to request, free of charge, an extension for filing tax returns; a freeze on payment demands and the transfer of disputed cases to the litigation department; a suspension of notifications and the resulting balance statements; and the waiver, through the end of June, of compensatory interest and late-payment interest calculated as part of a payment arrangement. Late payment interest charged outside of such arrangements remains unchanged. As for the new property tax assessment for individuals, it will not be sent out until at least May.
Business Hotline and Guidance on the Range of Tools
Alongside the implementation of the aforementioned tools, the Business Hotline, launched on March 19, will continue to provide advice and guidance. To help manage the very high volume of inquiries, please note that it is strongly recommended that you first visithttps://www.ne.ch/coronavirus. This page provides important information for both businesses and employees and directs you to the appropriate contacts based on your situation.
The work continues
The State Council and the cantonal administration continue to provide support to sectors that remain operational, while closely monitoring developments in the situation, in collaboration with the social partners and the Neuchâtel Cantonal Bank (BCN). The BCN has also announced that it will actively participate in efforts to support the Neuchâtel economy, in coordination with the measures decided upon by federal and cantonal authorities.