“Devastating blow”: Carnell says Victoria must compensate closing businesses

closing businesses

Australian small business ombudsman Kate Carnell. Source: AAP Image/Mick Tsikas.

Small business ombudsman Kate Carnell says the Victorian government should compensate businesses forced to the wall by the state’s extended COVID-19 lockdown, arguing the state’s conservative reopening roadmap is a “devastating blow” to SMEs.

Carnell says the prospect of several more months of stringent coronavirus restrictions will leave many business owners unsure whether they will ever be able to reopen.

“Small businesses that were thinking this lockdown would only last for another couple of weeks, now don’t know if they will ever be able to re-open,” Carnell said in a statement on Monday.

“For those struggling small businesses that know they cannot remain viable under these imposed conditions, the Victorian Government needs to step up and help them make the sensible business decision to exit.”

Carnell says the Andrews government should compensate small business owners for break-lease termination fees — not just for their premises, but for any rented equipment too.

“It is unreasonable to expect small businesses to continue to hang on and accumulate debt, given this ongoing forced closure is not a fault of their own,” Carnell said.

“This is a situation no small business could have planned for. The lockdown extension has forced small businesses into this dire predicament and now the government needs to do the right thing to support them to exit if they cannot afford to hang on.”

The Victorian government has yet to unveil any additional financial support for businesses after unveiling its reopening plans on Sunday.

It has so far paid out millions of dollars in emergency grants to SMEs affected by the ongoing stage four lockdown, having previously argued state government coffers were too stretched to provide additional help to non-employing sole traders.

The federal government, meanwhile, has adopted a wait-and-see approach to the prospect of additional Commonwealth support for Victorian businesses.

Prime Minister Scott Morrison said on Monday that additional financial support would not be considered until Victoria had outlined its own plan.

“When it comes to specific economic support, income support or other forms of support, that they consider is appropriate … I’ll be looking to see what they [the Victorian government] will be doing first before the Commonwealth considers any responses that we’ll be making,” Morrison told reporters.

Under Victoria’s reopening roadmap, retailers and hospitality businesses in Melbourne will be subject to forced closures until at least October 26, when case numbers fall below an average of five over two weeks.

NOW READ: Morrison waits on Victoria: Could JobKeeper be extended in Melbourne?

NOW READ: Explained: What businesses need to know about the regional Victoria re-opening roadmap

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