ABN change could boost eligibility for government grants, but Melbourne business owner says problems remain

Boulevard @ Montsalvat

Boulevard @ Montsalvat. Source: supplied.

The process for applying for government support payments could soon be easier for small businesses across the country, thanks to a change in how businesses can register for business categories or ANZIC codes. 

However one small business owner in Melbourne — who has missed out on government support payments — says the bigger issue is how governments design their support programs in the first place. 

Tax Commissioner Chris Jordan revealed in a speech to the Tax Institute’s Tax Summit on Thursday that the Australian Taxation Office will soon allow businesses to register in up to five business categories or codes using a single Australian Business Number (ABN), instead of needing to use different ABNs. 

The change is expected to help government agencies better understand the range of activities undertaken by small businesses, which can then be used to inform what business support is offered during crisis, like the COVID-19 pandemic. 

For example, Jordan said the change should help a winery that operates both a restaurant and an accommodation business qualify for government support payments that are targeted to those different business categories. 

While the date for the change is yet to be confirmed, SmartCompany understands it is expected to occur in the coming months. 

NSW Small Business Commissioner Chris Lamont welcomed the development, which should make it easier for businesses that operate across multiple categories to apply for government assistance that is targeted to those categories. 

The change has also been welcomed by CPA Australia, with Gavan Ord, senior manager of business and investment policy, telling SmartCompany it is a “better reflection of how businesses actually operate” given many businesses are involved in a range of activities and have several revenue streams. 

“This change will support the delivery of government support, services and information to businesses,” says Ord. 

Tight eligibility requirements “ridiculous”

Melbourne small business owner Kendall Knight, however, says it is unclear if such a change would help a business like his, which operates two hospitality venues under the one ABN. 

Knight is the owner of Boulevard @ Montsalvat and Boulevard @ Mont Albert, which he operates under one ABN because of historical reasons relating to a contract for one of the venues. 

While the business initially qualified for a business support payment for the venue at Montsalvat in 2020 and successfully applied for relief under the Licensed Hospitality Venue Fund for the Mont Albert cafe, Knight says the ABN issue has meant he has been unable to qualify for additional support during Melbourne’s most recent lockdown. 

He explains the most recent small business grant program offered by the Victorian government is only available to businesses that had not previously received other government payments. 

Knight says he has tried taking his case to his the minister for industry support and recovery, Martin Pakula, as well as his local member and industry association, to no avail.

The “ridiculous” situation is at odds with rhetoric from political leaders that “we are all in this together”, says Knight, who says the process of trying to understand and apply for the various government support programs has been time consuming and stressful. 

While Knight says the changes to ANZIC code registrations may be theoretically beneficial to his business if it means he could register for both licensed and non-licensed premises with the one ABN, he says the bigger issue is how governments choose to design the support programs in the first place, and how they choose to “interpret” a particular business structure. 

“Not every business is set up in the same financial way,” he tells SmartCompany

“And it is not because we are trying to hide anything.”

In Knight’s eyes, the Victorian government is “making a decision that one type of business is acceptable, and another is not” by designing its support programs with strict eligibility criteria.

“That arbitration of what sort of business should survive is fundamentally flawed,” he says. 

“I understand the need to get things out quickly, but it highlights that there isn’t any small business acumen or small business understanding of how businesses are structured and why.”

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