“It’s the uncertainty that’s the killer”: Victorian businesses are having their government grant applications rejected without explanation

Victorian business owners have had their applications for government grants rejected without explanation as they fight to stay afloat during the extended lockdown.

Slow communications, a lack of transparency, and poorly-designed application criteria are undermining the unprecedented support on offer.

And owners claim it’s pushing their firms to the brink of collapse.

As businesses across most of the country begin the arduous process of reopening in a post-COVID world, beleaguered Victorian businesses face continuing restrictions, especially within Melbourne.

The on-going lockdowns have succeeded in driving down new infection numbers, with the 14-day rolling average dipping below 50 on Wednesday.

But the tough approach has left business confidence in short supply.

Statement on regional Victoria reaching the Third Step. pic.twitter.com/VNMnU3Y7zD

— Dan Andrews (@DanielAndrewsMP) September 15, 2020

The Roy Morgan business confidence index found the state lagged all its peers in August with a score of 76.1, below the national average of 83.1, and well below the 100-plus mark that indicates a positive outlook.

The state government has since unveiled a record-breaking $3 billion support package to assist struggling companies.

But while business owners are thankful for the money offered to date, many have expressed concerns that the grants are not being processed fast enough and don’t meet their needs.

Uncertainty and lack of clarity weighs on venues

Maz Salt, who owns six venues across Melbourne (including the CBD’s Section 8), said the process so far “has been pretty traumatic”.

Salt received between $5,000 and $10,000 in government grants for each of his venues back in May, but nothing since.

And though he’s thankful for what he has been given, he said the payments wouldn’t even cover his utility bills.

With four of his venues fully closed and the other two trading with significantly reduced revenues, Salt fears some of his businesses will not survive.

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He said the 20 or so staff still on his books — whittled down from 100 at the beginning of the pandemic — could lose their jobs.

He has applied for numerous subsequent grants — even appointing one of his team members to dedicate every working hour to putting together applications.

But each one has been rejected without an explanation, and efforts to contact the relevant government officials have been met with automated replies warning responses could take up to eight weeks.

“It’s the uncertainty that’s the killer,” he said.

Salt wants to see greater transparency from state and local governments in the grants process.

He also wants greater support for businesses and more clarity in Premier Daniel Andrews’ recovery roadmap for businesses such as nightclubs and cocktail bars.

“Anecdotally, what we’re hearing is that despite all the big announcements, there’s very little money coming out of the government,” he said.

The Victorian government said in the statement accompanying Sunday’s announcement that more than 108,000 businesses had “already shared in $1.47 billion from the first two rounds of Business Support Fund grants”.

It said another 75,000 stood to receive the third round of grants, which range from $10,000 to $20,000 depending on the size of the business.

Contractor-based businesses left to languish

Nicholas Psarros, director of Melbourne-based pilates studio The Movement Refinery, has also struggled to access government grants.

Like many businesses in the health industry, the company employs most of its team on a contract basis rather than as conventional employees.

As a result, Psarros has been excluded from all but the most recent state support package, which afforded him access to a sole trader grant worth $3,000.

He said the money won’t last long as revenues are down 50% but the bills keep coming.

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“I’ve never worked so hard to make such little money,” he told The New Daily.

When it became clear that businesses like his were ineligible for most government grants, Psarros founded a group of local pilates instructors that has since amassed roughly 1,000 members.

Many face the same problem as him, but their letters to governments at local, state, and federal levels have been met with little action.

Psarros said their concerns are not being properly heard.

“It’s tipped to the point now where there’s too much PR, and not enough action,” he said.

“I don’t have an answer for why we’ve been overlooked, or why this funding isn’t sensitive to different business environments.”

Better support needed

Australian small business and family-owned enterprise ombudsman (ASBFEO) Kate Carnell said these experiences are not uncommon.

ASBFEO is receiving regular complaints that grant applications are being rejected without explanation.

In one case, a business was knocked back three times before being told why: they had written ‘PTY LTD’ instead of ‘Proprietary Limited’ on their application.

Carnell has also raised the issue of contractor-based workforces on numerous occasions.

“For the Victorian government grants, sole proprietors have been left out in the cold,” she said.

“We’ve made this point multiple times. There are lots of sole proprietors in Australia, it’s a reasonable business model and things like gyms and beauty salons that use contractors.”

Carnell said the state government needs to consider how the current grant application criteria affect different businesses.

She added that more support is needed for those who must remain closed on government orders.

This could include helping businesses to break commercial and equipment leases, which continue to accrue debts while businesses are closed.

This article was first published by The New Daily.

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