COVID crisis pushing businesses to the brink

- September 8, 2020 2 MIN READ

With stage four restrictions expected to continue in Victoria until at least September 28, CPA Australia has called for urgent additional support for the state’s business owners.

The CPA suggests the extended lockdown and ‘roadmap to reopening‘ will have devastating consequences for Victorian businesses. The viability of many businesses is under threat. Many have faced at least six months of severe trading restrictions. The result of this has been a significant impact on cash flow, profitability and jobs.

The CPA believes while current business support measures such as the JobKeeper Payment and the Business Support Fund-Expansion grant may limit job cuts and business closures in the short term, their effectiveness will be severely tested over the coming months.

As such the CPA has written to Premier Daniel Andrew to recommend more temporary measures to assist business owners during the pandemic until COVID-normal can be achieved. Further, a clear and less restrictive plan for economic and business recovery is needed to accompany the roadmap period and beyond.

CPA Australia recommends the State Government extend the following supports to businesses facing an uncertain future:

• Increase the Business Support Fund-Expansion grant from $10,000 to $15,000 for ALL businesses in metropolitan Melbourne, and from $5000 to $7500 for ALL businesses in regional Victoria
• Extend the closing date for applications for the Business Support Fund-Expansion grant until two weeks following the commencement of the Third Step of the roadmap to allow those businesses who need assistance to complete the application, the additional time they need to physically meet their accountant to apply for such assistance
• Extend the Business Support Fund-Expansion to include non-employing sole traders
• Extend the payroll tax waiver for businesses with annual taxable wages up to $3 million until 31 December 2020
• Introduce a small business concessional loan for businesses significantly impacted by COVID-19 along similar lines to the bushfire concessional loans for small business
• Establish an economic recovery advisory panel of external experts from business and academia to advise the Government of how best to facilitate business recovery and create jobs
• Incentivise small business to seek professional advice from their existing trusted adviser
• Working in conjunction with professional business advisers, increase the assistance available to support the mental health of small business owners.

In a statement to media the CPA writes:

In a crisis of this magnitude, an effective recovery requires the government to engage with and act on the advice of business experts outside of government as well as within, just as it is acting on the advice of medical and scientific experts in informing its response to COVID-19.

The ongoing lockdown restrictions are unnecessarily limiting the ability of professional service providers, such as tax professionals and business advisers, from providing the services and advice that business so desperately needs.

CPA Australia urges the government to consult frequently with business and professional organisations to better understand the impact the crisis is having on small businesses and those who advise them.

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