Australian small business ombudsman Kate Carnell has written to the Prime Minister requesting additional support for small business, including sole traders, amid pleas from other advocates to help keep freelancers from going under.
The current stimulus package, released last week, only applies to businesses that employ staff, meaning sole traders and freelancers find themselves left out in the cold.
Many have also pointed out that sole traders don’t typically have the spare cash around to take advantage of the extended instant asset write-off measure.
Peter Stanhope, co-founder of GigSuper, a super fund specifically geared towards self-employed people, issued a statement saying freelancers and sole traders, who don’t meet the ‘traditional’ role of small businesses or employers, “are once again overlooked by the government”.
“This oversight is frightening,” the statement said.
Rebekah Lambert, a freelance content creator and founder of the community group Freelance Jungle, has even launched a petition calling for better protections for freelancers and self-employed people during the impending economic downturn.
“We’re already seeing impacts due to the bushfire crisis. And now, contracts and projects are being cancelled, delayed or put on indefinite hiatus,” the petition says.
Many freelancers already struggle with cashflow problems because of late payments, and low-paying clients, it states.
Further disruption could be “catastrophic”.
Lambert’s petition asks for a grant or emergency fund for freelancers who work in significantly affected sectors, such as the arts, mandatory 30-day payment times, and one-off safety-net payments for people who have to take extended periods of time away from work because of illness.
What do we need?
Similarly, Carnell said sole traders and freelancers are “facing dire circumstances amid this COVID-19 health crisis”.
The ombudsman has suggested additional measures that would effectively support the smallest of Aussie small businesses, with a particular focus on those in the vulnerable tourism, events, training, catering and hospitality industries.
First, Carnell demanded income support without the administrative burden of asset testing, using the New Zealand package as an example.
A new wage subsidy scheme across the ditch offers small businesses, including sole traders and self-employed people, $585 per week for each full-time person in the business, up to a maximum of $150,000.
This is “a model the government should consider”, she said.
“We also believe New Zealand’s COVID-19 leave and self-isolation support package providing all small business employees, including sole traders, who are unable to work or are caring for others with weekly payments of up to $585 for a period of up to eight weeks, is worthy of government consideration,” Carnell said in the statement.
Second, Carnell is calling for immediate rebates of PAYG quarterly instalment payments paid in the current financial year, and of PAYG payments on income drawn from the business.
“Cashflow is absolutely vital for all small businesses, including sole traders, who should be given one-off access to their superannuation at this critical time,” she said.
She also suggested small businesses and sole traders who have lost trade due to the virus outbreak should be offered interest-free loans, “similar to what has been offered to bushfire-affected small businesses”.
And finally, she called for a national small business recovery program. This would include fast-tracking regional infrastructure projects, and would also mandate small business quotas in government procurement.
Such measures are “required for the nation to get back to business”, Carnell says.
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