Small business ombudsman launches inquiry into SMEs’ preparedness for natural disasters

Small Business and Family Enterprise Ombudsman Bruce Billson has launched an inquiry into the preparedness and resilience of small businesses in the face of natural disasters.

It comes as a damning Deloitte Access Economics report found just 3% of Australia’s disaster funds are put towards preventing disaster.

The other 97% of the federal government’s expenditure goes towards the aftermath of bushfires, floods, and droughts, including recovery and repairs.

The inquiry was referred to Billson by Minister for Employment Stuart Robert, who says the devastation for small businesses can be far-reaching.

He says SMEs can suffer “damaged and destroyed assets, reduced production and revenue streams” and in some cases even “a business-ending event … that can have devastating personal impacts”.

“Recovery can be lengthy — taking a heavy toll on small business owners, their staff and the broader community, but can be greatly assisted by good preparedness,” Robert continues.

The inquiry will see recommendations about the development of “targeted resources”, Billson says, that would be used by both small businesses and government agencies in the event of a disaster.

It comes after some bad press for the Coalition over natural disaster recovery spending.

The federal government announced a $448 million grant scheme called the Local Economic Recovery Fund in the wake of the deadly bushfire season of 2019-20.

The NSW government greenlit 71 projects worth $177 million in November 2020, but it was later revealed just $2.5m went to Labor-held seats.

Last year the federal government’s bushfire spending came under intense scrutiny again when activist group GetUp revealed just half of the $2.74 billion bushfire recovery funds had been allocated.

Earlier this month, Labor leader Anthony Albanese announced a policy that would see $200 million a year pledged to help prevent or prepare for bushfires, floods and cyclones, with state, local, or territory governments to match the figure.

The idea would be to use the interest accrued on our Emergency Response Fund (ERF) to shore up flood levees, sea walls, cyclone shelters, evacuation centres, fire breaks, and telecommunications.

The pre-election policy comes after a 2015 productivity report that found governments “overinvest in post-disaster reconstruction and underinvest in mitigation that would limit the impact of natural disasters in the first place”.

Albanese says the “investments will literally save lives, not to mention the taxpayers’ funds that have to be spent on recovery and repairs when disasters hit”.

The government established the ERF in 2019 to allocate funds to mitigation and recovery, but none has been spent so far, Albanese pointed out.

“Three years after it was announced, the ERF has not spent a cent on disaster recovery and has not completed a single disaster prevention project,” he says.

“The only thing it has done is earn the government over $750 million in investment returns.”