While it has been announced that the federal government is fast-tracking a second wave of stimulus measures, the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has written to Scott Morrison, requesting support for the small-business sector, including the nation’s 1.4 million sole traders.
Warning that the COVID-19–driven downturn is already an unprecedented toll on Aussie small businesses, Ms Carnell has suggested a suite of measures that could help sole traders, independent contractors and small businesses — particularly those operating in tourism, events, training, catering and hospitality industries — in the short term.
“Sole traders, which account for more than 60 per cent of Australian businesses, are currently ineligible for cash-flow assistance of up to $25,000 because it is only available to businesses that directly employ staff,” Ms Carnell said.
“Our view is that government support should be extended to small businesses, including sole traders who are facing dire circumstances amid this COVID-19 health crisis.”
She opined that New Zealand’s recently announced wage subsidy scheme providing eligible businesses, including sole traders and self-employed people, with $585 per week (employers can receive a maximum of $150,000), for each full-time employee for a period of 12 weeks, is a model the government should consider.
“We also believe New Zealand’s COVID-19 leave and self-isolation support package providing all small-business employees, including sole traders, who are unable to work or are caring for others with weekly payments of up to $585 for a period of up to eight weeks is worthy of government consideration.”
The ombudsman has also urged the PM to ensure sole traders are eligible for immediate rebates of PAYG quarterly instalment payments paid during the 2019–2020 financial year and PAYG payments on income drawn from the business.
Among her other recommendations are low-interest loans, similar to what has been offered to bushfire-affected small businesses, as well as a national recovery program.
“A national small-business recovery program, including fast-tracked regional infrastructure projects and mandated small-business supplier quotas in all government procurement is required for the nation to get back to business,” Ms Carnell concluded.
Queensland government urged to step up
While the Queensland government was one of the first to offer payroll tax deferral to small and medium businesses to ease the impact of the coronavirus outbreak, it too has been criticised for not doing enough.
Tuesday’s announcement by the Palaszczuk government to create access to interest-free loans and extend the coronavirus payroll tax deferral to all businesses is welcomed, but is not enough, said the Chamber of Commerce and Industry Queensland (CCIQ).
To protect Queensland jobs, the CCIQ is calling on the state government to implement a freeze on payroll tax for six months for businesses with wages up to $5 million.
“Payroll tax is a huge burden on business, we have been advocating for changes to it for some time,” CCIQ’s general manager of advocacy and policy, Amanda Rohan, said.
“While a deferment provides immediate relief, the current crisis means business need further relief to the direct cash-flow pressures they are facing, so they can keep their doors open and staff employed at this confronting time.”
Ms Rohan opined that implementing a payroll tax freeze for businesses with wages of up to $5 million will save 9,477 Queensland businesses between $472 million and $696 million, and support between 190,000 and 580,000 Queensland jobs.
“Rather than this money into government revenue, let’s see it being kept within businesses to help keep Queenslanders employed,” Ms Rohan said.
“Our priority is on supporting business with practical assistance and advocating for policies and changes which will help them now and in the long term.”
In addition to adopting the payroll tax reform, the CCIQ is also calling on the Palaszczuk government to use next month’s state budget to deliver a transformational stimulus package for Queensland’s economy.
“It should include immediate and long-term economic recovery funding, infrastructure spending and practical business assistance and grants program.”
NSW pledges help
Also on Tuesday, the NSW government said it is allocating $2.3 billion to battle the coronavirus, with $1.6 billion dedicated to economic stimulus measures designed to keep people in jobs.
A total of $450 million will go towards waiving payroll tax for businesses with payrolls of up to $10 million for three months, Premier Gladys Berejiklian confirmed, meaning that these businesses will not have to pay tax for the rest of the financial year.
Commenting on the news, Business NSW said that given the unprecedented times, “we all understand the need for drastic support measures to safeguard our business and broader community”.
“Given how important it is to help as many SMEs and their staff to survive the coming winter as possible, it would be disappointing to hear any cheap shots aimed at the government for spending the budget surplus.
“We appreciate that the government does not have a bottomless pit of money, but the community expects support when a crisis like this hits,” said Business NSW chief executive Stephen Cartwright.
The NSW package comes on the back of various other support packages aimed at helping drought and bushfire-impacted businesses get back on their feet as quickly as possible.