Frydenberg and state MPs gather together to address the biggest challenges SMEs are facing

Treasurer Josh Frydenberg sought to reassure small business owners that there is “light at the end of the tunnel” and federal and state governments are working together to help businesses get to the “other side” of the current lockdowns, during a live Q&A panel on Wednesday evening. 

NSW is now in a full lockdown, Sydney entering its eighth week of restrictions and Melbourne in its sixth lockdown. So, when Bondi Chamber of Commerce invited me as a member to join the live discussion via Zoom with Frydenberg, federal MP Dave Sharma and NSW MP Gabrielle Upton to hear how the government can help support us small business owners, I was eager to find out more.

Posting on my social media, I put the call out to Australian business owners: “What challenges do you want the government to be aware of as a business owner?” I was overwhelmed with the number of comments, calls, and text messages that my friends and followers begged me to ask. 

Joining other Bondi Chamber of Commerce members, Frydenberg opened the discussion panel with what he said was a message of “hope”. 

“To know that there is a light at the end of the tunnel and that federal and state governments are working together to provide the economic support and relief that can help you get to the other side. Because we know from the Doherty modeling and the Treasury analysis on top of that, that once we get to 70 and 80 % vaccination rates, we see a dramatic reduction in the transmissibility of the virus,” he said. 

“It then becomes a virus of the unvaccinated as everybody who has wanted to have a vaccine is able to get access to a vaccine. That’s what we are striving for before year’s end and that’s what will enable states like NSW to lift their restrictions and make lockdowns a thing of the past” Frydenberg added. 

From all the questions put forward to myself, prior, along with other questions business owners had on the night, I noticed an underlying theme – many company owners aren’t aware of what they may be eligible for.

The discussion touched on several ways the federal government is helping small businesses navigate through the pandemic and sought to clear up some of the confusion around current support programs. 

Eligibility questions for COVID-19 grants

In affected states across the country, businesses by now are probably aware of the COVID 19 grant programs, including the JobSaver program in NSW. What wasn’t evident was the eligibility.

One small business owner in the discussion said he thought he wasn’t eligible for any government assistance as his turnover was under the 30% threshold in the first month but now as Sydney is in its eighth week of lockdown, his business is experiencing a decline of 40%.

The COVID-19 Grant only applies to weeks one to three of lockdown in NSW, between June 26 to July 17, 2021; however, businesses that meet the guidelines during any given two-week period of the lockdown could still be eligible for the JobSaver program.

It was discussed that companies that experience more than 30% decline in turnover, within the guidelines, and keep their employees on — even if it means paying them zero hours per week — could still be eligible for the JobSaver program, while their employees could apply for the COVID-19 Disaster Payment. 

A Bondi gym owner voiced his frustration that he owns a chain of gyms, each under one ABN, but has four different sets of staff to pay, along with four separate rents and operating costs. While all the four gyms fall under the one trust and ABN, this local business owner “may be still eligible for government support”, said Sharma. The advice from here would be when it doubt speak to your local MP about your specific circumstances as they may be able to assist.

Support for sole traders

There also seems to be a misconception that sole traders don’t get any support; however, in NSW, sole traders could be eligible for a weekly payment of $1000 per week. 

The NSW government is also offering a rebate of $1500 in government fees and charges that many aren’t aware that they can tap into.

Rent relief 

With many small businesses having a hard time negotiating with landlords, a common question put to Frydenberg what the government is doing when it comes to rent.

One retailer asked the Treasurer: “This year, one of the problems we’re facing as a retail business is obviously the high rentals and the issue for us is that last year, we were able to negotiate, and the rentals went down by the amount of our income going down. This year, all the big companies, they’re not willing to negotiate because the government hasn’t stepped in to say that’s how it should be. Is there a reason why this year, this has not been covered and will it be covered in any way shape or form?”            

In response, Frydenberg said last year’s decision on rent relief was “a decision that was worked through the National Cabinet that was ultimately implemented, by the different states, because this is their particular responsibility”. 

“We don’t have responsibility with respect to tenancies, in the way that state governments do,” he continued. “I’ve just seen the press release I was looking at from the New South Wales government with respect to the commercial properties, they make it pretty clear that commercial and retail tenants with retail turnover of up to $15 million who qualify for that micro business COVID grant, that will have the benefit of this new, code of conduct. 

“The code of conduct requires landlords to renegotiate rent, having regard to the National Cabinet’s code of conduct, and they have to provide rent relief in proportion with their tenants’ decline in turnover. Of the rent relief provided, at least 50% must be in the form of a waiver and the balance, a deferral. And on top of that, they established a $40 million hardship fund, which can provide monthly grants of up to $3,000 for small commercial or retail landlords who provide those rental waivers because landlords too rely on their rent as a source of income.

“So, that’s a welcome program. As you can see, it provides rental relief, proportionate with the declines in turnovers. It’s a combination of either waivers or deferrals, and there’s also some assistance for those landlords.”

Loss carry-back scheme 

Cash is key with any small business and with many businesses just starting to recover from COVID’s emergence last year are now plunged into another year filled with lockdowns, unfortunately stopping many companies’ progress.

Questioning Frydenberg, one business owner asked: “As we had a pretty good end of year last year and beginning of this year, unfortunately the lockdown has halted all of that progress towards, hopefully getting back into the green for us. So, is there any information on the loss carry back and if that might be approved.”

The Treasurer said the scheme is now in place and will allow business operators to carry back their losses as a result of COVID to the 2018 and 2019 financial years, up to 2023. This will give businesses access to increased working capital, as they get a rebate from the ATO, he explained. 

“It works together with the immediate expensing provision, where businesses are able to invest in various equipment machinery shop fit-outs and the like, which then can, be offset against their revenue, their income, and can be written off all in year one as opposed to over a number of years,” he said. 

“The loss carry back is in and that should provide real support for people who are maybe carrying some difficult times and may need a boost to their working capital based on profits that they have previously made ahead of time.”

When will our local hospitality industry re-open?

With COVID-19 cases being quite low in Bondi and other areas of Sydney, there seemed to be a level of confusion as to why local hospitality businesses can’t just open up to those who are vaccinated.

Sharma said while he doesn’t want to “erode social solidarity or anything else”, he thinks a “risk-based approach” should be taken. 

“I think there’s a case to be made for lockdowns that reflect the level of risk in that particular LGA, the number of active cases, the level of vaccinations to allow some businesses to get back to work because there’s a high number of cases in Sydney right now, but, those cases are concentrated in certain parts of Sydney,” he said. 

“Keeping businesses closed longer than is necessary and keeping mental health services and any number of other social outlets and things closed any longer than is necessary is also doing harm and we need to be very mindful of the harm that’s being done,” he said.

Gabrielle Upton added: “When everyone has had a reasonable chance of people getting vaccinated, there must be some privileges to those who are vaccinated and help our local economy open up. I think we will move to a liberated way. We must reward those who are vaccinated but we aren’t at that point yet though”.