Government offers grants, loans and tourism to assist bushfire-hit SMEs

by | Feb 20, 2020

A large out of control bushfire approaches the township of Yanderra.
Helitak430 [CC BY-SA (]

Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, recently announced that the Morrison government must move quickly to extend financial support to small businesses affected by the Australian bushfire crisis, before there is a wave of SME insolvencies.

The provision of planning grants, low-cost finance, bill support and tourism marketing were discussed with Minister for Small Business Michaelia Cash and Minister for Emergency Management David Littleproud in January, as advocates meet with frontbenchers to develop a Commonwealth assistance plan, according tot e a recent Smart Company report.

It follows a series of discussions with national small business stakeholders, including the Council of Small Businesses of Australia (COSBOA) and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), as the Morrison Government looks to develop a “comprehensive support package” for SMEs.

Ms Carnell also stressed the urgency of taxpayer support for affected firms, saying entire communities have had the biggest tourism window of the year taken from them.

“One of the things we have learnt from our insolvency practices inquiry is that if you don’t act early when you’ve got cashflow problems, your capacity to bail the ship out goes down really quickly,” Ms Carnell said.

Businesses in Lakes Entrance, Victoria reported a collapse in tourism spending as bushfires rage in East Gippsland, with one cafe owner saying  per cent on last year, according to the Smart Company report.

Other businesses in metropolitan areas have not been directly affected by the fires, but have been navigating air pollution in Canberra, Sydney and Melbourne, which has forced shops in many areas to close throughout the Christmas trading period.

Community initiatives have sprung up to fill the gaps, but charitable efforts aside, businesses say they are still not sure what Commonwealth help they are able to access, according to the report.

Ms Carnell said the Morrison government is preparing a support package for SMEs and will this week consider what to include, with a possible extension of low-cost finance for drought-affected farmers to all small businesses already floated by Mr Littleproud last week.

“They are really keen to have a comprehensive package to get money out the door quickly where appropriate, and to have a longer-term approach. There is a real commitment; the hard thing is working out what we need to do to ensure these businesses don’t die prior to things like an infrastructure rebuild,” she said.

Prime Minister Scott Morrison last week allocated several billion dollars to a new bushfire recovery fund and has flagged the possibility of further spending as needed, although no estimates for the quantum of prospective Commonwealth support for SMEs have been finalised yet.

 “It is really important that small businesses be in a position to put together a financial plan right now for how they’re going to get through this next little while. This does not get better tomorrow … we’d really like that grant extended,” Ms Carnell said.

Other areas set for discussion include how the Commonwealth could help liaise with utility companies and other large businesses with SME suppliers to offer bill deferrals and the immediate payment of outstanding invoices.

Tourism has also emerged as an area of concern, and as the bushfires make international headlines, Ms Carnell said the government needs to consider outlaying tourism marketing to offset negative perceptions about Australia “burning down”.

Ken Phillips, Executive Director of Self-Employed Australia, urges the Commonwealth to learn from the response to the 1983 Ash Wednesday bushfires and ensure adequate mental health support is made available to small business owners.

“It is the longevity of the support that’s critical, and in particular towards the post-traumatic stress that rolls in,” he said in the Smart Company report. 

The federal government recently outlaid $76 million for mental health support for bushfire victims.