Calls for support emerge as COVID-19 lockdowns impact small businesses

The Australian Small Business and Family Enterprise Ombudsman and Council of Small Business Organisations Australia (COSBOA) have both expressed their concerns over small businesses facing financial struggles as COVID lockdowns continue in some Australian states.

COSBOA mentioned that “the reality is some of them won’t survive”, while The Australian Small Business and Family Enterprise Ombudsman Bruce Billson said, “lockdowns do have a significant and immediate impact on small and family businesses and a cumulative effect when those businesses have endured multiple lockdowns”.

“Many have far less cash in reserve, having eaten into savings to get through previous lockdowns,” Bilson added.

As such, Billson has urged the Federal Government and regulators to consider the reactivation of temporary insolvency protections to support small and family businesses doing it tough in lockdown.

He said the re-introduction of measures, such as the extension to existing safe harbour provisions, would provide temporary additional protections for small and family businesses that may be trading insolvent due to lockdown trading restrictions.

“Small businesses aren’t like a light that can be switched on and off,” Billson said.

“CreditorWatch has released data revealing a 75 per cent increase in businesses entering administration in the last week of June, and that trend is widely expected to continue with payment times stretching out.

“Bringing back temporary protections that were in place last year, would be a sensible and appropriate policy measure. Insolvency protections introduced temporarily last year worked to reduce the threat of creditors taking action against a small business impacted by trading restrictions and offered temporary relief for directors from any personal liability for trading while insolvent.

“Crucially, it’s measures like this that give otherwise viable small businesses more time to recover or turnaround, preventing a wave of unnecessary insolvencies.”

COSBOA CEO Alexi Boyd said the current JobSaver support is welcome, but it won’t be enough on its own to save small businesses and their employees.

As continued support is needed to transition from lockdowns to economic recovery, COSBOA has proposed a Business Rebuilder’ program to provide cash flow assistance to eligible SMEs once the JobSaver program has ceased.

COSBOA suggested that the program should be national and build upon the support mechanisms that worked for small businesses in 2020. The components it suggested include:

  • BAS Forgiveness for the first two quarters after the program starts
  • Existing measures such as JobSaver, sole trader and micro support extend into the rebuilding phase of the economy, with a gradual step-down approach as the economy recovers
  • Continued, tailored support for severely impacted industries (such as events)
  • Waiver of Payroll Tax for the first two quarters after the program starts
  • A meaningful rent relief mechanism incorporating mediated outcomes to support recovering businesses and the provision for ‘no fault – no penalty’ early termination for businesses that cannot reasonably continue to trade
  • Eligibility contingent upon maintaining staff headcount for at least one quarter
  • JobSaver headcount is maintained through best endeavours

“Recovery takes time, but the JobSaver program is only available when there is a Commonwealth hotspot declaration in place. Unlike JobSaver, the financial distress small businesses are experiencing won’t suddenly stop the moment lockdowns and hotspot declarations are lifted. Financial support should be dialed down gradually as businesses get back on their feet,” Boyd said.

“The critical time for business survival and job protection is the period immediately after the lockdown is lifted. Without post-lockdown assistance, we might see businesses having to shed staff in order to survive but such assistance should continue to require the maintenance of headcount as an extension of the ‘in lockdown’ Job Saver objective.”

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at  

Sign up to the Sprinter newsletter

One thought on “Calls for support emerge as COVID-19 lockdowns impact small businesses

  1. We are a small business in a hot spot (Fast Print Services) and still waiting for any government assistance from NSW Gov. Our applications are ‘in progress’ and no financial help is on its way. it is demoralizing and frustrating.

Leave a comment:

Your email address will not be published. All fields are required


Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.