Melbourne’s sole traders have a message for the Andrews government: we have bills too.
Later this week, stage four COVID-19 restrictions will force organisations across Victoria to restrict or shut down their operations entirely, with $10,000 support grants outlaid for affected small businesses.
But sole traders with no employees have been left out of the grant program, leaving many livid and seeking answers on Tuesday as the new rules force them to further restrict their operations.
Many took to social media to express their frustration with the decision.
As a sole trader I am being forced to shut down and stop work by @DanielAndrewsMP and @JaalaPulford and will receive NO @VicGovAu financial assistance for the 6 weeks. Yet both these and my local member @NStaikos are about to receive a pay rise! Seem fair ? Retweet’s encouraged!
— Matt (@thethorpstar) August 4, 2020
There $5000 dollar grants to businesses, but as a sole trader, with no staff, I can’t get the grant. I haven’t worked on a full show since last year. I had one for September but now it is postponed. #funtimes
— Christina (@BLEC1) August 4, 2020
Why has Victoria excluded many sole traders?
Asked about why sole traders with no employees were ineligible for the grants on Tuesday, Victorian Premier Daniel Andrews denied it was because doing so would cost too much money.
“We have, to the best extent possible, followed the quality, the eligibility criteria that JobKeeper has followed, and we think that’s an important way to make sure that we maximise the impact of our efforts and the Commonwealth government’s efforts,” he said.
“There’s been a number of industries where we’ve had bespoke approaches to provide specialised support for them. I wouldn’t rule out doing more of that.”
Earlier, Victorian minister for industry support and recovery Margin Pakula, told 2GB the government could not afford to extend the grants to sole traders.
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“In the first trance of Business Support Funds, we paid out $10,000 to 77,000 businesses. If we included sole traders, that number would have at least doubled, probably quadrupled,” he said.
“We simply don’t have the capacity to do that. We would have either had to increase the envelope by some billions of dollars or we would have had to reduce the payment to businesses from $10,000 to maybe $2,000. It wouldn’t have been appropriate support.”
It is devastating for a beauty salon sole trader who is only on jobseeker support to pay commercial rent and outgoings plus residential rent and all living costs for 4.5 months (both lockdowins 66 days each).
Negotiating rents with landlords is not easy and very stressful 1/2
— Pete K (@pkmacedon) August 4, 2020
The Victorian government has paid out the first $5,000 tranche of the grants — initially unveiled during Melbourne’s stage three restrictions — to more than 12,600 businesses so far, totalling over $63 million.
Andrews’ comments raise the prospect of sector-specific support that would include measures for sole traders, but it appears broad-scale efforts to help sole traders through the stage four lockdown will fall on the shoulders of the federal government.
Small business ombudsman Kate Carnell says the Victorian government needs to be clear about the purpose of the grant scheme.
“The Victorian government has got to make it really clear [that] the $10,000 support is to help businesses employing people keep their staff on alongside JobKeeper,” Carnell tells SmartCompany.
The stakes are high for both business owners and Victoria’s economy.
There were more than 640,000 businesses with fewer than 20 employees in Victoria in June last year, the majority of which were sole traders without any employees.
While these businesses aren’t dealing with payroll costs, rent, utility bills, arrangements with suppliers and debt payments remain, and an inability to trade as usual is potentially crushing for cashflow.
Compounding concerns, sole traders accessing federal government support measures such as JobKeeper and JobSeeker will have their payments pared back at the end of September, costing them hundreds of dollars a week in support.