Working closely with key ministers in the government – ready to do whatever it takes.
COSBOA appreciates the focus on small business people coming from the federal government. We have been in constant contact with Minister David Littleproud and his office and we are working on immediate and long term responses to the crisis.
To assist inform our recommendations and comments we held an emergency meeting of our members yesterday, Thursday 9 January, to get further information and ideas.
Below is a summary of that meeting with recommendations that have been sent to Mr Littleproud and others.
Summary of COSBOA Members Meeting Held 9 January 2020
The following provides a high level summary of recommended initiatives for providing federal government assistance to small business assistance in the wake of the bushfires in Australia over recent months, following a discussion of this matter via teleconference with stakeholders (i.e. COSBOA members, ASBFEO and others) earlier today:
Initiative 1: Work with the Federal Government to better define Eligibility criteria for assistance.
There was a wide ranging discussion about the different forms of eligibility (including application of means testing) for federal government assistance – noting that it is different for assistance provided to SME’s by State/Territory and Local Governments. There was a strong view amongst all participants in the meeting that eligibility for assistance should be:
a) developed around the ATO definition of businesses with turnover of less than $10M (and not the ABS definition of 20 employees.
b) Extended not only to businesses in the immediate fire affected regions, but also those businesses who have seen a loss of trade as a result of local and regional road closures along destinations to and from fire affected regions (Kate Carnell provided an example of a café in Braidwood where the closure of the Kings Highway for several weeks – the main route for Canberrans travelling to the South Coast – decimated foot traffic to the point that the trading conditions are not viable).
Action 1: COSBOA should ask the Australian Government to include the above in the eligibility criteria for federal government assistance and ensure that the process required for applying this process is as simple as possible (i.e. Low level of documentation).
]
Initiative 2: Centralised information service (Coordinated by ASBFEO)
There was a view that small business owners affected by the recent disasters are typically at a low state of emotional well-being and generally do not know where to start and what to do over time.
There was a unanimous view that there was a need to establish a centralised information service that provided small business with information on what to do and guidance on where to source support. Such a service would include information in areas that include, but are not limited to, the following major areas:
Mental well-being support services (for business owners and employees alike)
Financial assistance opportunities (Local, State/Territory, Commonwealth and other programmes)
What to do about short term payment issues (e.g. ATO, banking service and utility providers)
Assistance with navigation of regulatory issues associated with temporary business re-instatement and business rebuilding
Pre-disaster preparations check-list for communities that are facing imminent bushfire (and other disaster threat)
Employment and industrial relations guidance (likely by referral to FWO and/or industry bodies) in respect of short term leave approvals and other employment issues.
For reasons of both speed of deployment and small business credibility, there was a unanimous view that this service should be provided via the ASBFEO – and the Federal Government should provide the necessary emergency funding and support to ASBFEO for establishment of same ASAP. The ASBFEO, through its network with State/Territory Small Business Ombudsman offices is also in the best position to navigate the challenges associated with avoiding duplication and confusion between actions being advance by Commonwealth and State/Territory Governments.
Action 2: COSBOA should request that the Australian Government provide immediate financial and other assistance to the ASBFEO for the establishment of a Small Business Disaster Recovery Information Service immediately. With all stakeholders pointing to the fact that, judging by the learned experience of past disasters that the recovery process for small business requires sustained assistance over time, this service should evolve as business needs change and should be maintained for a minimum of 18 months (but ideally would be a permanent service offering that can be ramped up and down as required).
Initiative 3: Explore opportunities for greater financial assistance
There was acknowledgment that the initiatives already announced by the Federal Government in terms of free loans with deferred repayments for two years. There was, however, a significant thread of discussion that such assistance would not be attractive to many small business owners as they might not have the emotional capacity to commit to such loans so close after the disaster has occurred.
Many stakeholders highlight the immediate cashflow challenge and there was a suggestion that a small business grant programme might be introduced in respect of the loans programmes already announced. Such grants could be modest ($50k to $100k) and be designed to specifically support the retention of employees and fund costs associated with temporary business reinstatement, affording the business owner time to get there head into the right place and decide what they plan to do with the business long term.
Such assistance would not be means tested but would not be provided where similar assistance is already provided by State/Territory and local government programmes. This assistance might be particularly relevant for businesses that, are not eligible for assistance given that they are not directly in the affected areas, but are heavily impacted because they are located in areas normally frequented by tourists travelling to and from affected fire areas.
Other potential areas of federal government financial assistance include:
Removing the current $30K threshold on the instant asset write-off for all small businesses entirely (initially until 30 June 2020 and then to 30 June 2021)
Removing a requirement for payment of fuel excise in fire affected regions for 12 months (possibly done via a refund paid to the fuel retailer via the BAS process) to provide cost relief for small businesses and households alike in affected communities
Initiative 4: Ongoing post disaster regional/rural promotional assistance
Much of the discussion advance by participants stressed the need for assistance to extend well beyond the initial business reinstatement period to include ongoing promotional activities that would aid the rebuilding of business patronage of fire affected regions – given that small businesses in the vast majority of the affected areas typically rely on high seasonal revenues from tourists to sustain annual trading – revenues which have all but been lost as a result of tourist evacuation and a loss of tourist attractiveness following the fires.
COSBOA has heard of many examples of holiday cancellations in tourist parks and hotels and the main streets of many of the affected holiday towns are deserted. One stakeholder has reported cancellations of accommodation bookings for the 2020 Easter period in the Gippsland area, highlighting the likelihood that the tourist down turn in likely to be prolonged in many areas.
It was therefore suggested that the Federal Government could:
Develop a national programme to work cooperatively with local communities to advance rolling regional tourism events in fire affected (and adjacent areas) to encourage capital city populations to take short breaks in fire affected towns to add local economic recovery. Such a programme must be led by local business and supported by Federal Government funding to ensure that the timing, scope and frequency of these events does not overwhelm the resources of recovering communities. Ideally this programme would operate for at least 18 months (to 30 June 2021).
Provide tax incentives for all Australian businesses (regardless of size) to conduct conferences, business meetings and other events in fire affected areas. Such an incentive might be developed along the lines of a business tax break of 150% for expenditure on events in affected postcodes and coordinated through the tax office.
Waive FBT obligations for employers offering paid holidays in affected postcodes as an alternative to other forms of employment bonuses and incentives.
Action 4: COSBOA ask the Federal Government to employ a new regional recovery support programme – incorporating a mix of local promotional funding assistance and taxation incentives for capital city businesses to conduct events and purchase services in fire affected communities.
Initiative 5: Dedicated small business disaster support service
There was a suggestion that the process of recovery for most small business owners is both daunting and complex – as is the process of preparing for an imminent threat (e.g. bushfire). Accordingly, there was a suggestion that in addition to the information service outlined under Initiative 2 above there is a need for some form of hand-holding service (i.e. facilitated service) that provides detailed guidance and support to small businesses that are unable to navigate the process on their own – for reasons of either limited internal capacity or emotional well-being.
It was therefore suggested that a new facilitated service – closely aligned with the disaster management services of the Department of Home Affairs (or equivalent) be implemented for a period of not less than 12 months to work in tandem with Initiative 2 above and to coordinate additional actions that evolve with the recovery task and create a mechanism for ongoing stakeholder discussion around support initiatives.
Action 5: COSBOA ask the Federal Government to establish a new dedicated small business disaster support service with a specific focus on providing small business owners with guidance and support in the event of imminent threat and immediately post a disaster.
Additional (and ongoing) consultation
All stakeholders applauded the opportunity to provide input to the Australian Government at such an early stage following the latest fire disasters in NSW and Victoria but pointed to the fact that many of the comments provided were formative and would likely be further developed over time.
To that end, there was a suggestion that COSBOA could organise a stakeholders meeting (incorporating ABFEO, COSBOA members and a range of other industry representatives) to meet with the Prime Minister and Minister Littleproud to further discuss what actions might be pursued to support small business (and local economic) recovery in fire affected regions – and adjacent areas affected by consequent reduction in tourism traffic over the 2020 Holiday Period.
The above is provided by way of a preliminary (i.e. draft) high level summary of the discussion of today with a view to informing current discussions between the Australian Government and COSBOA (and others such as ASBFEO) on the opportunities to assist with the recovery of small businesses operating in the local communities that have been devastated by bushfires over recent months.