The Council of Small Business Australia (COSBOA) has suggested a range of measures for the government to consider following a crisis meeting of its members and the wider small-business community in Canberra late last week, suggesting that the government needs to sacrifice a surplus to stem the effects.
The meeting — which brought together news agents, hairdressers, accountants, retailers, sole traders and more — investigated various scenarios that may impact Australian small businesses and resulted in a draft plan and budget for responses of around $14 billion.
“This is needed to ensure that the immediate needs of businesses and their employees are met and that, importantly for the economy, the businesses that have to close will reopen,” said Peter Strong, CEO of COSBOA.
“The governments — federal, state and local — may not need to react with big spending, but they must be prepared to do so and it appears that they are.”
COSBOA underlined that the government needs to work with the business community to ensure that solutions are developed in unison.
Financial aid vital
Recognising that small business “lives and dies” on cash flow, COSBOA explained that assistance to small businesses impacted by COVID-19 must seek to underpin cash flow so that businesses continue to remain viable and retain staff in the face of any dramatic falls in revenue.
Among its recommendations is a direct cash injection, proportionate to need and provided early.
Tax forgiveness is also imperative, COSBOA noted, urging federal, state and local governments to announce a regime of tax forgiveness, as opposed to tax deferral, of BAS, company tax, payroll tax and rates.
In addition, wage assistance is being recommended in cases where businesses are forced to stand down employees from a workplace.
“The 13-week eligibility period for the employment benefits of affected employees should be waived and businesses should be given financial assistance to maintain the wages of impacted staff at the minimum award wage,” COSBOA said in its post meeting communiqué.
Also among its recommendations is a push for regional economic stimulus for affected communities.
“Federal and state governments should develop and implement one-off payments to households in regions that are impacted by major outbreaks of COVID-19, possibly by the provision of business vouchers.”
Real impact unknown
Recognising that the real impact of the virus is as yet unknown and is difficult to predict, Mr Strong said scenario planning is vital.
“Planning ahead is what businesses and governments — federal, state and local — must do.
“We also know the psychological impact on employers and employees will be an issue and the funds provided by the government to those who offer support with mental health will also need to be reviewed and increased as necessary.”
On Friday, new figures from the Australian Bureau of Statistics revealed a fall in retail sales by 0.3 of a percentage point in January, following a 0.7 of a percentage point drop a month earlier.
Commenting on the news, Australian Retailers Association executive director Russell Zimmerman warned that the coronavirus impact is yet to be felt, urging the Commonwealth to urgently consider stimulus measures.
“Whether that’s pulling legislated tax cuts forward, or some kind of monetary incentive to consumers directly or something else, I don’t know; but, obviously, there’s a real economic problem the government is going to have to confront if it doesn’t want to preside over a possible first recession in 30 years,” Mr Zimmerman concluded.