Victorian government now reassessing rejected COVID-19 small business support applications after Business Victoria issued “incorrect” advice

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The popular dining precinct on Degraves Street in Melbourne. Source: Unsplash/Steven Groeneveld.

The Victorian government has revealed it is reassessing COVID-19 support grant applications it rejected last year, after small businesses claimed they were provided contradicting eligibility advice from Business Victoria.

But other small business owners claim they have been left out in the cold, with the Department of Jobs, Precincts and Regions (DJPR) taking a markedly different approach to similar rejected applications.

The Business Costs Assistance Program (BCAP) was designed by the Victorian government to assist small businesses materially impacted by the on-again, off-again COVID-19 lockdowns of 2021.

Its July edition, BCAP2, plus subsequent extensions and top-ups, provided as much as $8,400 a week to eligible businesses.

The fifth round of BCAP funding, announced in late September, was valued at $2.27 billion alone, on top of the state and federal government funding provided through prior iterations of the program.

The funding served as a lifeline for an estimated 175,000 small businesses as health authorities rushed to elevate the state’s vaccination rate.

But some hard-hit firms were never able to receive BCAP2 funding⁠ — a loss that affected business owners say had a profound impact on their operations.

GST requirements barred small business from funding

To access BCAP’s July extension, businesses must have been registered for GST from July 15, 2021.

SmartCompany understands a handful of small business owners called Business Victoria to clarify if they could apply for GST registration and backdate it to before July 15, 2021, making them eligible for BCAP2 funding and subsequent top-ups.

Those business owners claim Business Victoria representatives informed them that backdating their GST application would be sufficient.

However, some business owners who acted on that advice found their BCAP2 grant application was rejected on GST eligibility grounds.

In an attempt to overturn their rejections and access thousands of dollars in grant funding, some asked Business Victoria last year to identify the call records in which representatives said GST backdating was sufficient.

In a statement provided to SmartCompany late last year, a Victorian government spokesperson said the DJPR “has not found any evidence to suggest agents have been advising applicants to backdate their GST registration.”

That changed on Friday.

Some small businesses handed “incorrect advice”, DJPR says

Responding to questions about rejected BCAP applications, a DJPR spokesperson told SmartCompany: “Where the Department of Jobs, Precincts and Regions has reviewed an application and found there to have been incorrect advice provided, the application has been reassessed.”

The statement confirms the claims of some small business owners, who said they were recently provided with BCAP funding after pushing for Business Victoria to identify call logs in which they were told GST backdating was sufficient.

The statement also opens the door for businesses which believe they were fed conflicting advice by Business Victoria to seek similar reassessments.

While the Victorian government has now confirmed a limited number of cases in which applicants were provided “incorrect” information, other applicants find themselves in a confusing bind: they also backdated their GST registration and were rejected, but were not informed to do so by Business Victoria itself.

Small business owners still seek answers

Jacob Kotaridis, founder of events management firm Modus Operandi, told SmartCompany he is still seeking clarification from Business Victoria and Victorian Small Business Minister Jaala Pulford over his rejection from the BCAP grant scheme.

He is one of several business owners still pleading their case to Business Victoria, claiming they should have received BCAP funding.

Kotaridis said Modus Operandi was not registered for GST when the grant was announced. However, he was advised by his tax agent to apply for GST registration and backdate it to before July 15, 2021, thereby meeting the BCAP eligibility criteria.

He applied for the support payments on September 9. His claim was not formally rejected until December 10, 2021, when Business Victoria said he was not registered for GST on July 15.

“Backdated GST registration is not sufficient,” Business Victoria said, in an email viewed by SmartCompany.

With COVID-19 restrictions cutting deep into the events sector, Kotaridis told SmartCompany BCAP grant funding would have greatly assisted his business.

Now, his attempts to understand why Business Victoria rejected his application, despite being registered for GST through the backdating process, have left him disillusioned and contemplating leaving the events sector entirely.

“I’m trying to piece together what happened, but it’s still traumatising,” he says.

Kotaridis says such claims suggest a disparity in how claims are being treated: while small businesses that weren’t directly advised by Business Victoria to backdate their GST are being locked out of BCAP funds, he says businesses that were given this advice are now accruing financial support.

“It’s really fishy, I don’t understand,” says Kotaridis says, who is now considering filing a fresh enquiry with the Victorian Ombudsman to provide more detail into his rejected application.

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