Author: Michael Brennan
The Qld State Government appears to have gone missing in action when it comes to meaningful assistance for small businesses.
The payroll tax and land tax concessions are meaningless for small businesses, most of which fall below the payroll tax threshold and aren’t land rich so don’t pay land tax.
Last year there were 438,000 small businesses in Qld. This is 97.7% of all businesses in the State. Qld small businesses contribute a massive $113B to the State’s economy. Why then has the State Government abandoned this invaluable part of the economy?
Politicians are masters of quoting stats and patting themselves on the back. It was reported recently by Treasurer Trad that the State has refunded payroll tax to over 11,000 businesses. I am going to guess that she is referring to ‘medium’ businesses employing over 20 staff. As at 2018, we had 10,450 medium businesses so those numbers would add up. Credit to the Government for the payroll tax assistance but it is not hitting the mark with the nearly half a million small businesses left in tatters by COVID-19.
By their own numbers, small businesses employed 933,000 people or 44.3% of the workforce.
Despite being a late starter (17 March) in the economic response stakes, Qld looked like being committed to the cause with the announcement of the Jobs Support Loan Scheme. The dire need of small businesses in Qld meant that the scheme was oversubscribed in less than two weeks and stopped taking applications.
QRIDA’s loan page stated as at 30 April that they had approved 2, 298 loans to a value of $347.4M. I will admit, that is a good start. But, the loans approved represent assistance to less 0.5% of Qld small businesses.
By contrast to COVID-19 and to give credit where it was due, the State Government’s response to small business after the 2019 monsoon was nothing short of impressive.
One of the most effective post disaster responses I have seen in a long time was the Small Business Disaster Recovery Grants for businesses impacted by the monsoon.
Under that grant, which is still open until June 2020, eligible businesses are provided a $10,000 grant to apply towards
- business plan development;
- business mentoring;
- financial counselling; and
- exploring options for business sustainability.
Businesses that utilised this grant last year found themselves with a head start on disaster preparation when COVID-19 started to impact. They already had cashflow management plans that they could adapt and relationships with advisors they could re-ignite.
Right now, every small business needs assistance from their professional advisers. The realities are that with money is tight as it is, they just don’t have the capacity to pay for the vital advice that they need.
Repurposing the Disaster Recovery Grant to meet COVID needs would make an enormous beneficial difference to every micro and small businesses in Qld. The pre-existing qualification process for JobKeeper would streamline vetting down to a box ticking process.
Not every small business in Qld is going to make use of such a grant. When assessing the cost of rolling out a grant, the key numbers that need to be remembered are:
- 438,000 businesses;
- Employing 44.3% of the state workforce; and
- Contributing $113 Billion into the State economy.
Even if 10% of small businesses were provided a grant costing $450M, this is just 0.4% of the contribution this vital sector injects into paying for nurses, teachers, police and roads.
As an aside, for any businesses in local government areas that were impacted by the 2019 monsoon event, I urge you to follow this link and apply for a Small Business Disaster Recovery grant. Get yourself a cash flow, get yourself some business mentoring and get yourself a plan to survive.