As the economic fall out from Covid-19 continues to hit small businesses particularly hard, key figures are calling for more support.
Australian Small Business and Family Enterprise Ombudsman Kate Carnell has called on Scott Morrison to ask for additional measures, including for the estimated 1.4 sole traders operating in Australia.
It comes as businesses continue to take drastic measures to try and contain the damage. Qantas today announced it would temporarily ‘stand down’ close to two thirds of its workforce, in the wake of heavy travel restrictions, including the government this week enacting Level 4 restrictions, advising people not to travel and warning those who do may not be covered by travel insurance.
Independent cinema chain Palace Cinemas today announced they would temporarily shut all theatres until further notice.
The Australian Reserve Bank today held a one-off meeting today, breaking with their standard policy of meeting on the first Tuesday of every month. The interest rate is expected to be cut further, down to a historic low of 0.25 per cent.
Ms Carnell also outlined a range of measures the government could introduce to help small businesses/sole traders, particularly those working in hospitality, events, training and tourism, in the short term, including income support.
“New Zealand’s recently announced wage subsidy scheme providing eligible businesses, including sole traders and self-employed people with $585 per week (employers can receive a maximum of $150,000), for each full-time employee for a period of 12 weeks, is a model the government should consider,” Ms Carnell said.
“We also believe New Zealand’s COVID-19 leave and self-isolation support package providing all small business employees, including sole traders, who are unable to work or are caring for others with weekly payments of up to $585 for a period of up to 8 weeks is worthy of government consideration,”
“Cash flow is absolutely vital for all small businesses, including sole traders, who should be given one-off access to their superannuation at this critical time. “Low interest loans should also be extended to those small businesses and sole traders impacted by a loss of trade due to COVID-19, similar to what has been offered to bushfire affected small businesses.”
Ms Carnell also added a small business recovery program, which could include mandated small business supplier quotas is required in order to revive business.
Director of retail shop lease specialist Lease1 Phil Chapman has also called for landlords, lessees/retailers, banks, suppliers and the government to work together through what he describes as a ‘period of trading distress’.
Mr Chapman said a “battle plan” is needed to negotiate the current climate without wholesale closures, and has developed a ten step plan.
He argues a review of rosters vs trading hours, negotiating with banks to defer on loan payments and for equipment and chattel leases.
For supplies to negotiate payment terms and defer part/full payment for a period of time. To review/remove non-essential operating costs, such as storage.
To defer capital expenditure on equipment, refurbishments and channel the funds instead into operating costs. To compare numbers on customer counts, sales, gross profit and P&L reports weekly/monthly to what they were in 2019.
To revise sales and cash flow projections to the end of the calendar year, with the above factored in. And lastly to speak at length with landlords about rent abatement, deferral or lease extension and to know the business is places.