In a recent position paper released in response to the Victorian government imposing stage 4 lockdown restrictions to fight COVID-19 in the state, COSBOA said financial assistance should occur in three steps, namely:
- Immediate cash-flow assistance designed to keep the business viable through the lockdown period.
- Business planning assistance designed to help the business owner determine whether there is a pathway to near-term viability, or whether the business should shut down altogether.
- Access to special forms of government-backed loan assistance to support viable businesses to get back to profitability, or assistance with the wind-up process.
Immediate cash-flow assistance
COSBOA said governments can provide relief through measures including:
- Provision of a $10,000 Business Survival Grant to all businesses, which would not be subject to any eligibility requirements whatsoever and would be co-funded by the federal government and the relevant state/territory government.
- Removal of the requirement for participating businesses in the federal JobKeeper program to fund staff JobKeeper payments in advance, with eligible businesses immediately paid JobKeeper fortnights by the ATO monthly in advance.
Business planning assistance
COSBOA said the provision of an electronic voucher from the Australian Taxation Office advising SMEs about their eligibility for a business planning assistance voucher of $10,000. It said eligible business owners would then use this voucher to secure business planning assistance from their existing financial adviser.
Business recover assistance measures
COSBOA suggested that the federal government should adapt existing loan guarantee measures to introduce a revenue contingent loan scheme.
It said such a scheme would work much like the Higher Education Contribution Scheme (HECS), where SMEs would receive a government loan and would not be required to pay back the loan until such time as the business’s revenue reaches a predetermined threshold.
“Additional measures should also be put in place for SMEs that are forced to wind up their operations because of the stage 4 lockdown,” COSBOA said.
“This assistance should include assistance with any shortfall in staff entitlements and relaxation of entitlements afforded to SME owners by Services Australia.”