As Victoria endures the second wave of COVID-19, it’s downright devastating for the small businesses at the coalface of this crisis writes Australian Small Business and Family Enterprise Ombudsman Kate Carnell.
To have been through the first round of restrictions, only to have to close or significantly reduce your operations again a couple of months later – is simply heartbreaking.
News that stage 4 restrictions in Melbourne could shrink real GDP by as much as $9 billion and push effective unemployment to 13% – is an indicator of how much this is hurting small businesses and the economy more broadly. Now, more than ever, Victorian small businesses need to have the confidence the government will continue to back them for as long as it takes to get to the other side of this crisis.
While the Federal Government’s recent six-month extension to JobKeeper, albeit at a tapered rate, came as a welcome relief to many Australian small businesses, it’s clear that small businesses in Victoria will require additional support.
For instance, in cases where cafes and restaurants were forced to throw out stock due to sudden lockdown, compensation should be made available to them.
Regardless of what support measures are in place, what all small businesses should be doing now, if they haven’t already, is sitting down with their trusted, accredited financial adviser to work on a tailored plan in order to make an informed decision about the future of their business.
The proposed program would allow small business owners experiencing significant financial stress to obtain a voucher worth up to $5,000 to access the professional financial advice they need.
This would give the small business owner the information they need to restructure or exit with dignity. It’s these very principles our Insolvency Practices Inquiry was based on.
The inquiry found the system does not work for small businesses and needs to change dramatically to give owners more control over the process, without being pushed into outcomes they don’t want – like losing their family home.
The sad reality is that some small businesses won’t survive and that’s why our Inquiry has recommended a suite of changes to current insolvency practices that aim to achieve the best possible outcomes for small businesses in financial trouble.
We also recently launched our Insurance Inquiry, following a growing number of complaints about insurance companies denying small businesses insurance and pricing them out of the market.
The inquiry will investigate the practices of the insurance industry that impact small businesses and examine whether small business insurance products are fit for purpose.
It will target a range of issues affecting small businesses including:
– The availability and coverage of insurance policies provided to small business
– Insurance policy affordability
– The role of brokers in getting the right coverage
– Contract changes that have not been agreed to and whether they amount to Unfair Contract Terms
– Timelines of insurance payouts and effectiveness of dispute resolution frameworks
Equally my office is welcoming submissions from other industry stakeholders via email email@example.com
Finally – In reflecting on the year so far, I know there has never been a tougher time to be in business. I urge all small business owners to take time to consider their mental health and seek help if you need it. A visit to My Business Health on our ASBFEO website is a good place to start if you are feeling overwhelmed.
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