HOW CAN GOVERNMENT BETTER HELP SMALL BUSINESS SURVIVE COVID-19?
18th March 2020
Author: Carl Valentine
With the outbreak of COVID-19 in Australia, small businesses are facing unprecedented challenges and will continue to do so for an unknown, but likely prolonged, period of time.
PVW Partners believes there are immediate, medium and longer-term measures which could be introduced by all levels of Government in Australia to lessen the impact on small business, ensuring operators can keep their doors open, staff employed and the supply chain operational.
Today Greg Peel and Carl Valentine held an urgent meeting with Herbert MP Phillip Thompson to discuss measures we believe could help businesses to survive the far-reaching impacts of COVID-19.
Immediate (March 2020) measures we advocate should be introduced include the following that all have the common theme of enhancing business cash flows:
- Automatic deferrals of Business Activity Statement (BAS) payments for up to 6 months (currently available on application to the ATO). This would give businesses immediate cash flow without the need to apply, but would encourage them to continue lodging activity statements (and accessing the existing $25,000 cash for business arrangements).
- Additional cash payments to business (potentially linked to both PAYGW amounts and GST payable amounts, with an appropriate cap).
- Defer the payment of employer superannuation amounts for up to 6 months (either by a specific extension or a more general extension of the period covered by the existing Superannuation Amnesty).
- State based Offices of State Revenue to defer payroll tax payments for up to 6 months on an automatic basis.
- Banks to be supported to enable interest only payment periods to ensure small business cash flow (government guaranteeing business debt, in whole or in part, would facilitate this).
- Local government to provide deferral for up to 6 months for payment of rates for commercial premises.
- Keep employees in jobs by way of government support payment to employers.
Medium term (from April 2020) measures we advocate should be introduced include the following that strengthen business and prepare them for the new future:
- Targeted business financial assistance and mentoring (similar to the disaster assistance following the Northern and Western QLD Monsoon Trough event administered in QLD by Department of Employment, Small Business and Training), allowing for business development, resilience and contingency planning.
- Provision of low or no interest loans to business by Government with generous repayment terms (5 to 10 years).
- Fast track proposed corporate and personal tax rate cuts such that they apply from 1 July 2020 to provide further consumer and corporate stimulus.
Longer term (from July 2020) measures we advocate should be introduced include the following that provide new business opportunities to expedite recovery:
- Funding for shovel ready infrastructure projects to create economic stimulus and employment opportunities. It is important these projects are broken up into “bite size chunks” for regional businesses who can’t compete with the larger, metropolitan counterparts. This would also ensure support for local jobs in regional communities.
PVW Partners believes these measures would ensure grass roots economic stimulus and sustainable communities to weather the COVID-19 storm.