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Helping small business stay open for business

Opinion Piece

Date : 21 January 2020

Author: The Hon Josh Frydenberg MP

Publication: The Daily Telegraph

As bushfire-affected communities get back on their feet, the role of small business will be critical.

There are thousands of small businesses and sole traders in the most severely impacted areas. These businesses are not only a major source of economic activity and employment, but they are also at the heart of the social fabric that makes up these regional communities.

We heard stories at roundtables we have convened with businesses affected by the fires of shop owners who can no longer afford to employ their staff and whose bills are piling up for pre-ordered stock they bought for customers who never arrived.

These businesses need our support, which in turn will give them hope that they can keep their doors open and remain part of their communities.

This is why the Morrison government is implementing a Small Business Package that is more comprehensive in scale and scope than has been undertaken previously.

Grants, loans, taxation and financial counselling support together with regional economic recovery plans are all being rolled out.

For businesses that have suffered significant damage from the fires with less than twenty full-time employee equivalents, they will receive grants of up to $50,000. These funds can be used for clean-up and restoration costs, including replacing damaged equipment. This complements our recent announcement of grants of up to $75,000 for primary producers.

The Commonwealth contribution is a “top-up” on what is currently available to small businesses in some states. For example, in New South Wales, small businesses can access disaster assistance of up to $15,000, half of which is already paid by the Commonwealth.

Now, small businesses will be able to get $50,000 with the additional amount paid fully by the Commonwealth.

Small businesses in the fire-affected areas that have been directly and indirectly damaged will now also be able to access loans of up to $500,000.

These loans will go towards repairing damaged assets as well as providing working capital to deal with income loss. They will also be given for up to ten years with up to two years interest- and repayment-free, with the interest rate thereafter at half the ten-year Commonwealth bond rate (equivalent to around 0.8 per cent) and significantly less than what is otherwise available in the market.

This new $500,000 loan will be delivered via the states, and again, will be a “top-up” to what some states offer under their existing disaster recovery schemes.

At the same time the federal government has worked with the Commissioner of Taxation to alleviate some of the pressures on small businesses affected by the fires.

The quarterly BAS Statement for the December period will now be due on May 28th and businesses can vary pay- as-you-go instalment amounts to zero for the December 2019 quarter.

Impacted businesses can also get a refund for instalments made for the September 2019 quarter, all of which is then reconciled at the end of the financial year. Any business that is in doubt as to the support that is available should contact the ATO hotline, 1800 806 218.

After recent funding announcements to boost financial counselling services for households and primary producers, yesterday we announced a new Small Business Bushfire Financial Support Hotline.

This Hotline will be an opportunity for small business owners to be informed of programs on offer and will also provide financial counselling advice from financial counsellors.

There will be a significant rebuild of homes, businesses and community infrastructure in bushfire-affected areas. For this reason the government will also be partnering with the states, local government and impacted communities to develop Local Economic Recovery Plans. These plans will support the long-term recovery of these regions.

But in the interim there is a bridging period when it’s vital that these businesses have access to cash flow and advice that will allow them to remain part of their communities.

Josh Frydenberg is the Federal Treasurer.

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