Key members of the small business community have come together to urge the federal government to include a Small Business Viability Review program in next week’s federal budget.
Under the proposal, the government would fully fund a subsidy that would allow small business operators to access professional advice about the viability of their business.
The call is being made by the Australian small business and family enterprise ombudsman Kate Carnell, CPA Australia, Chartered Accountants Australia and New Zealand (CANZ), the Institute of Public Accountants (IPA), the Institute of Certified Bookkeepers (ICB) and the Council of Small Business Organisations Australia (COSBOA).
Echoing an earlier call from Carnell’s office for professional advice vouchers to be made available to small businesses, the groups are calling for a subsidy up to the value of $5,000.
Business operators would be able to use the subsidy to access tailored 15-month plans from accredited professionals, which would advise whether the operators should seek to exit the business, or work to turn it around.
Under the proposed plan, the subsidy would be available to businesses with up to $10 million in annual revenue.
Carnell said in a statement on Thursday that modelling conducted by the groups suggests including the program in the federal budget would cost the government approximately $1.5 billion if about 500,000 small businesses were to access the subsidy.
Accessing professional advice from an accountant or bookkeeper is the “crucial first step” many business owners need to take to make a decision about their future, as the country continues to grapple with the ongoing effects of the coronavirus pandemic, Carnell said.
“Small businesses have endured the toughest trading conditions we’ve seen in living memory over the past few months and the sad reality is that not all of them will survive,” she said.
As the JobKeeper wage subsidy program enters its second phase, and many small businesses are weaned off that support because they no longer meet the scheme eligibility criteria, Carnell warned of a “snowball effect” that could place small businesses under further financial pressure.
“Those businesses that aren’t getting JobKeeper will also no longer be eligible for rent holidays or reductions, as JobKeeper eligibility is part of the criteria for commercial rent relief negotiations,” she said.
“With banks also seeking repayment plans from their small business loan holders, there is a snowball effect that could place many otherwise viable small businesses under significant financial distress.”
In the same statement, representatives from the other groups calling for the viability program highlighted that many business operators do not currently have the means to pay for professional advice, and yet they have only a short “window” of time to make important decisions about their business.
“Access to professional advice is essential to enable businesses to manage through a crisis, adapt to the new environment and aid in their recovery,” said CPA Australia chief executive Andrew Hunter.
“This process takes time and requires support. The risks of failure are likely to be higher for businesses that are unable to pay for professional advice.”
The proposal has attracted the support of Shadow Minister for Small and Family Business Brendan O’Connor, who called on the government to heed the call.
O’Connor said Labor previously asked Assistant Treasurer Michael Sukkar to consider introducing a voucher system to help small businesses access professional advice, but did not receive a reply.
“Businesses are already closing, workers are already being laid off and many vulnerable Australians are at serious risk,” O’Connor said in a statement.
“A professional services subsidy would help small businesses with serious cashflow issues access professional advice.”
NOW READ: Budget 2020: $800 million for mega business registry, director ID numbers, e-invoicing and “go digital” business support
NOW READ: “I don’t even own a house”: Frustrated SMEs say Morrison’s unsecured loan program has failed. Has it?
The post Small business leaders call for $5,000 viability review subsidy to be included in the budget appeared first on SmartCompany.