State governments have opened applications from small businesses for bushfire recovery grants announced earlier this month by the federal government, sparking confusion as to the amount on offer.
According to documents available on Service NSW, while the maximum grant amount for clean-up and reinstatement is $50,000, this will be divided into two separate $25,000 claims.
A document posted on Service NSW website reads: “An initial amount of up to $25,000 is available (an initial claim). To support an initial claim, evidence of the direct damage such as photographs, quotations, tax invoices or official receipts are required.
“A subsequent amount of up to $25,000 is available (a subsequent claim). To support subsequent claims, full evidence of payment is required.”
Speaking to My Business, small business ombudsman Kate Carnell said that putting small businesses through two separate application processes conflicts with the Prime Minister’s suggestion that this would be a “quick” rescue response.
“The Prime Minister said quite clearly that what he is trying to do is get money out of the door quickly for the people who need it. Now I think having two separate applications required for the $50,000 just puts more red tape in this space,” Ms Carnell opined.
She called on the government to clear up the process to evade differing interpretations.
“I’m assuming that with the second application, you have to be able to show what you used the first lot for to make sure it’s not the same stuff.
“It just strikes me as putting a whole lot of impediments to getting the money out the door quickly for the smallish number of businesses who were directly affected.”
Restrictive eligibility criteria
Small businesses across the country have also taken issue with the government’s eligibility criteria.
According to the eligibility criteria, the $50,000 grant is only available to businesses that have suffered “direct damage”. This means businesses are required to submit “a list of bushfire-related damage, supported by photographic evidence of the direct damage; or other appropriate evidence to prove financial impact if/when the damage is unable to be photographed or receipts lost due to the extent of the disaster event”.
Ms Carnell explained that a limited number of small businesses actually fit this criteria.
“For all of the businesses that just don’t have any customers, and that’s huge numbers and it’s horrible and dramatic, they can’t apply for the $50,000.”
As a result, her office has suggested that the government introduce smaller unsecured loans of up to $50,000, as opposed to $500,000 the government announced last week, with a repayment holiday of two years and no interest accruing during this period.
“I think that’s a very interesting product for a lot of small businesses. If you’re getting that long to pay it back, and there is no interest and no repayments in the first two years, it really does let them get back on track,” Ms Carnell said.
Asked how likely the government is to listen to her office, Ms Carnell said, “I’m hopeful.”
“The great dilemma here is that it’s the state governments that are delivering this stuff, not the federal government, so the negotiations around these things are happening between the federal government and the state governments, and how these things are rolled [out] depends on the negotiations between the two. So, it’s taking a lot longer that we’d like to see.
“But I am hopeful that they’ll see the benefit of having a smaller loan requiring less documentation, less information.... You just got to be able to show that you’re using it to get your business up and running again. That’s exactly what we want them to do.”
Last week, a group of businesses from the Far South Coast NSW appealed to the government with a number of suggestions to help them get their businesses up and running following the devastating bushfires that ravaged their region.
Although they did not suffer directly from the fires, these businesses, including Top Lake Boat Hire Merimbula and Sunset Kiosk, have taken a great financial hit, which has left them on the brink of extinction.
Taking to Facebook, Robbie Robertson, the owner of Top Lake Boat Hire, published a list of demands on behalf of some 20 peers, and urged the government to act.
Included on the list is a suggestion pleading with the government to relocate its business and supported business events to bushfire-affected zones from 2020 to 2022. The small businesses are also proposing grants and tax relief for those not directly affected by the fires, and a 200 per cent hike in the regional budget, which excludes shared resources such as the Princes Highway upgrade.
Maja Garaca Djurdjevic is the editor of My Business.
Maja has an extensive career as a journalist across finance, business and market intelligence. Prior to joining Momentum Media, Maja spent several years unravelling social, political and economic intricacies in Eastern Europe.