20TH JANUARY, 2020
Australia’s 2019-2020 bushfire season has impacted hundreds of thousands of lives and businesses around the country. In response, the Morrison Government today announced plans to offer bushfire relief funding and concessions for those severely affected.
The Prime Minister has been doing the rounds on TV and radio, sharing details of the Federal Government’s small business support package for bushfire-affected communities.
The news comes on the heels of a business roundtable last week, which brought together chambers of commerce from fire-affected areas, the Australian Chamber of Commerce and Industry, the Council of Small Business Organisations Australia (COSBOA), and the Government, to discuss the needs of those who have suffered and are suffering.
In short, the relief package is set to include the following:
Grant funding – on top of funding available via the states’ disaster recovery grants, the Government has committed to provide top-up grants, meaning affected businesses will gain access to up to $50,000 of tax-free funding.
Concessional loans – to help out with cash flow, the Government ‘will boost the value and concessions for small business loans…under the Disaster Recovery Funding Arrangements’.
- Loans of up to $500,000 will be offered to businesses that have suffered ‘significant’ asset loss or loss of revenue with a loan term of up to 10 years
- These loans will include a repayment holiday of up to two years, with no interest accruing during this period
- The subsequent interest rate is to be set at 50% of the 10-year Commonwealth government bond rate, which is currently around 0.6%
Tax relief – the ATO has already moved on automatic deferrals in fire-affected postcodes, and the Commissioner of Taxation has confirmed taxpayers in these areas now have until 28 May 2020 to lodge and pay their BAS and income tax returns.
Local economic development plans – The Morrison Government has also committed to helping local communities develop plans to focus ‘on the infrastructure and assets they need to rebuild’.
Speaking with Allison Langdon and Karl Stefanovic on Today, Prime Minister Scott Morrison said the two years of interest-free loans will be of critical importance for some business owners and pastoralists, citing the value in saved interest.
“That’s worth over $100,000 in interest payments they wouldn’t have to make,” said Morrison.
“This means that the loan doesn’t get bigger, they can just get back on with it.”
In a media release from the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell said the support package will help viable small businesses to get through the recovery process, but that more needs to be done.
“…small businesses really need a tailored financial recovery plan. Without it, the chances are they won’t survive,” said Carnell.
“We will continue to push for a Government grant that enables small businesses to go to their trusted advisor for a customised strategy.”
Speaking to ABC News, chief executive for COSBOA Peter Strong welcomed the loans, but cautioned that “you do need a healthy business to take advantage of that particular loan”.
Nevertheless, Strong was optimistic about the direct relief being made available through the grants scheme.
“We were hoping to get grants of around $20,000 and the grants are $50,000.
“So that’s more than double what we were looking at so you can’t complain about that.”
Speaking with Neil Mitchell on 3AW, the Prime Minister also highlighted a funding push to assist the tourism industry specifically, which is considered to be both hard hit and of significant importance to the recovery of fire-affected communities.
“And for the tourist towns, they need tourists coming back, and that’s why we yesterday announced our $76 million dollar package to get people coming back into these communities and right across Australia, in fact,” Morrison said.