, January 13, 2020
The Morrison government must move quickly to extend financial support to small businesses affected by the Australian bushfire crisis, or risk a wave of SME insolvencies across the country, small business ombudsman Kate Carnell says.
The provision of planning grants, low-cost finance, bill support and tourism marketing are slated to be discussed with Minister for Small Business Michaelia Cash and Minister for Emergency Management David Littleproud this week, as advocates meet with frontbenchers to develop a Commonwealth assistance plan.
It follows a series of discussions with national small business stakeholders last week, including the Council of Small Businesses of Australia (COSBOA) and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), as the Morrison government looks to develop a “comprehensive support package” for SMEs.
Speaking to SmartCompany ahead of round table discussions scheduled for Tuesday, the small business ombudsman stressed the urgency of taxpayer support for affected firms, saying entire communities have had the biggest tourism window of the year taken from them.
“One of the things we’ve learnt from our insolvency practices inquiry is that if you don’t act early when you’ve got cashflow problems, your capacity to bail the ship out goes down really quickly,” Carnell says.
Businesses in Lakes Entrance, Victoria that SmartCompany spoke to last week report a collapse in tourism spending as bushfires rage in East Gippsland, with one cafe owner saying trading has plummeted 85% on last year.
Other businesses in metropolitan areas have not been directly affected by the fires, but have been navigating air pollution in Canberra, Sydney and Melbourne, which has forced shops in many areas to close throughout the Christmas trading period.
Community initiatives have sprung up to fill the gaps, but charitable efforts aside, businesses say they’re still not sure what Commonwealth help they’re able to access.
Carnell said the Morrison government is preparing a support package for SMEs and will this week consider what to include, with a possible extension of low-cost finance for drought-affected farmers to all small businesses already floated by Littleproud last week.
“They are really keen to have a comprehensive package to get money out the door quickly where appropriate, and to have a longer-term approach,” Carnell says.
“There’s a real commitment; the hard thing is working out what we need to do to ensure these businesses don’t die prior to things like an infrastructure rebuild.”
Prime Minister Scott Morrison last week allocated several billion dollars to a new bushfire recovery fund and has flagged the possibility of further spending as needed, although no estimates for the quantum of prospective Commonwealth support for SMEs have been finalised yet.
Small business stakeholders will on Tuesday pitch an extension of $2,500 planning and advice grants, currently only available to farmers, in an effort to ensure business owners have access to subsidised accounting and other services to help them get on top of their individual situations.
“It’s really important that small businesses be in a position to put together a financial plan right now for how they’re going to get through this next little while,” Carnell says.
“This doesn’t get better tomorrow … we’d really like that grant extended.”
Other areas set for discussion include how the Commonwealth could help liaise with utility companies and other large businesses with SME suppliers to offer bill deferrals and the immediate payment of outstanding invoices.
Tourism has also emerged as an area of concern, and as the bushfires make international headlines, Carnell says the government needs to consider outlaying tourism marketing to offset negative perceptions about Australia “burning down”.
In a media statement issued over the weekend, COSBOA chief executive Peter Strong, who last week criticised the Morrison government’s climate change policies, called for adaption and co-operation in the planning of Commonwealth assistance.
“The question is when will we start the process? Tomorrow seems a perfect time,” Strong said.
Ken Phillips, executive director of Self-Employed Australia, urges the Commonwealth to learn from the response to the 1983 Ash Wednesday bushfires and ensure adequate mental health support is made available to small business owners.
“It’s the longevity of the support that’s critical, and in particular towards the post-traumatic stress that rolls in,” he tells SmartCompany.
The federal government outlaid $76 million for mental health support for bushfire victims over the weekend.