Small business advocates say a federal government assistance package for bushfire-affected firms could be unveiled as soon as next week, following a roundtable discussion with Prime Minister Scott Morrison on Tuesday.
Representatives from more than 50 business lobby groups and community organisations met for a two-hour meeting with the PM, Treasurer Josh Frydenberg and Small Business Minister Michaelia Cash yesterday afternoon in Canberra to discuss urgent Commonwealth support for struggling SMEs.
It comes as small business ombudsman Kate Carnell urges a fast turnaround on the Morrison government’s response, warning insolvencies could spike in the coming months as businesses affected by the fires struggle to pay their bills.
Morrison addressed the roundtable directly yesterday, speaking of the need for a localised response to business concerns and outlining the federal government’s intention to commit further funds to supporting affected SMEs — although no monetary figure has been floated yet.
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Council of Small Business Organisations of Australia (COSBOA) chief, Peter Strong, who also met separately with the Prime Minister yesterday to discuss the Commonwealth response, described the meeting as “historic” in scale and access to the top levels of the Australian government.
“We’re discovering problems we’ve never had before,” Strong tells SmartCompany.
“These are huge issues, and nobody has a full answer yet.”
Cash injection needed
Everything from cashflow, tourism assistance, rent relief, free advice, mental health and staff entitlements were discussed in the meeting, and Cabinet is considering extending a range of grants and low-cost loans to affected firms.
Business lobbyists stressed the need to inject cash into firms teetering on the edge of insolvency, with the expectation that a large-scale Commonwealth grant program will be part of the Morrison government’s response.
Extra financial support to pay staff who may have been stood down during the bushfires was also discussed, amid concern many firms will be unable to pay staff entitlements.
Sandy Chong, chief executive of the Australian Hairdressing Council, attended Tuesday’s meeting and expressed a need for assistance with staff entitlements, saying many businesses have been left with no incoming revenue to pay bills.
Carnell: Loans could make things worse
Natural Disaster and Emergency Management Minister David Littleproud has floated extending two-year interest-free loans of up to $500,000 — currently only available to drought-affected farmers — to all small businesses.
But small business ombudsman Kate Carnell believes low-cost loans would be meaningless if they’re offered to small businesses that have no prospect of paying back the money.
“[Loans] won’t be appropriate for every business and potentially for not that many businesses,” Carnell tells SmartCompany.
Carnell says businesses with a solid foundation could use the loans to satisfy creditors in the short term, helping them get back on their feet, but many aren’t that lucky.
“For businesses that are on their last legs, these loans would just make it worse.”
“Stupid” red tape spotlighted
Assistant Minister to the Prime Minister Ben Morton was also in attendance yesterday, and was asked how the federal government could cut grant program “red tape” for bushfire-affected firms.
“It was raised with Ben Morton yesterday that some of the forms are truly stupid,” Carnell says.
“You have to provide your up-to-date financials … people were being asked to provide invoices for the stock they lost; that’s just stupid.”
Small business owners have previously complained about the application process for federal government grants, noting long delays, complex forms and a lack of transparency.
In a short press release issued after the meeting yesterday, Michaelia Cash said further support would be announced in the coming days, but did not detail what the highly anticipated package would include.
“The Morrison government has always supported small businesses as the backbone of the economy and we are determined to work with state and local counterparts to assist with those affected by these devastating bushfires,” Cash said.
Australia is not “burning down”
Considerable attention was also paid to negative perceptions developing in the United States and Europe that Australia is “burning down”, and how the federal government may need to counter this sentiment with bolstered international marketing efforts.
Liz Ward, chief executive of tourism marketing firm Tourism Tribe, said “time is of the essence” when it comes to restoring consumer confidence.
“Specific and targeted communications and marketing, whilst finding the right open and honest style, are critical to restore consumer confidence as quickly as possible to reduce the downturn time,” Ward said in an emailed statement.
There are proven actions that a tourism business can take to minimise the impact to their bottom line and build a healthy pipeline of bookings into the future.”
“Build back better”
The Morrison government has faced considerable domestic and international criticism for its fossil fuel and emissions policies in recent weeks, as scientists link the severity of the crisis and climate change.
Morrison spoke to business lobbyists yesterday about the need to “build back better” by ensuring new infrastructure takes into account the likelihood of hotter and more severe bushfire seasons in the future.
Carnell says she would like to see the Morrison government do more to address climate change, but said the current focus is on ensuring the coming rebuild is fit for purpose.
“It’s important the rebuild takes into account that we’re going to have longer summers, that bushfires are going to be part of the Australian summer in areas we might not have seen before and in an intensity we may not have seen before,” Carnell says.
“The government should do more [to combat climate change] … but I think to suggest that somehow if the government did more now we’d have less bushfires is just simply not true.
“It’s global climate change, not just Australian climate change.”