It is an important part of my job as Queensland Small Business Champion to advocate for the needs of small business, some of which are now more urgent than ever.

I believe it would have been impossible for all of the small business COVID-19 relief and economic stimulus packages released by both the federal government and state governments to precisely hit the mark, first time, every time.

There needed to be a level of experimentation, flexibility and fast learning. To have nailed it for absolutely everyone, on the first go was never going to happen. However, some gaps in support are now clearer, and how governments choose to respond over the coming weeks is critical for the survival of many small businesses.

We all got very little warning as the COVID-19 health restrictions were ramped up, which left a lot of small business owners with major cashflow shortages. Many businesses had no choice but to close altogether, leaving them suddenly without revenue, and no idea as to when that situation could change.

Cash and how it flows through a business is core to its survival.In a comparatively quick response, the Queensland government started with an early array of approaches, including payroll tax relief (initially a deferral, then a waiver) and the announcement of the business COVID-19 loan fund of $500m.

The Australian Government’s ATO PAYG cashflow boost was a likewise early response, and from what I hear is now in full swing with refunds already flowing into business bank accounts based on April BAS reporting. The JobKeeper payment scheme has seen enormous demand with enrolments for April being now expanded until 1 May. Some nuancing remains to be done around eligibility and assessment of economic loss/impact, but that is understandable – business is not a one-size-fits-all situation and the JobKeeper package is attempting to cater for diverse structures, inconsistent revenue cycles and different accounting methods of business.

So where are we now?

What remains as the urgent priorities for COVID-19 affected small businesses?

The conversations I am having with small businesses are all about cashflow. Specifically, the top two priorities are:

1. Finding money to pay for wages (and surviving until the JobKeeper payment kicks in); and
2. Rent.

I’ll start with wages

For those who are eligible, enrolling for JobKeeper as soon as possible is really important, not just for cashflow, but also because it may become a trigger for accessing rent relief.

I have received many emails and phone calls from businesses who can’t afford to pay their wages until the JobKeeper payment starts to come through in a month or so. It is especially alarming to also hear that some might opt out of JobKeeper altogether, because they can’t find a way to pay staff by 30 April (which triggers the first payment in May).

It needs to be understood that when a business is not trading at all, or not trading in the usual way –covering staff wages and other business costs can be impossible.

I’ve heard of some business owners taking jobs stacking shelves at Coles at night, just to get some money in the door. I’ve even heard some owners have sought early access to their own superannuation to cover their staff costs. Others maxed out their credit cards, the list goes on. And I hear mixed stories of how receptive the banks are really being.

Some state governments have introduced small business cashflow grants up to $10,000 to cover wages, rent or other operational costs. This certainly fulfils an urgent need and I am not surprised to hear these grants have been well utilised.

The Queensland Government COVID-19 Job Support Loans administered by QRIDA promise welcome cashflow relief. The loan terms are highly attractive, better than what can be secured elsewhere, which is why the fund has been so popular. Over $350m has already flowed out. That is positive news, and well done to QRIDA for that. However, that also means the $500m loan fund is almost gone. Initially described as open until September 2020, the demand was such that the loan fund had to close a week ago for new applications – leaving many unable to access urgent working capital.

Early intervention and getting on top of cashflow problems quickly is key to business survival.

Other options need to be explored to address this gap, and urgently.

On 23 April 2020, the federal Treasurer announced the CBA, NAB, Westpac and ANZ banks agreed to establish dedicated hotlines for their customers to call to receive the bridging finance necessary to pay their staff ahead of receiving the Job Keeper Payment.

Shifting responsibility onto the banks is one approach to take. I haven’t yet heard how effective this option has been in reality. The hotline numbers are as follows:

According to the Treasurer’s announcement, the banks have also agreed to bring to the front of the queue all bridging finance applications. We shall see.

The second key challenge is rent, and how to pay it when the business is generating no or little income.

I should be clear at the outset. I have been contacted by nearly as many worried landlords as I have tenants. Governments must be mindful there are two parties to a lease, and many landlords are small businesses or families too.

So far these are the most-asked questions coming through to me:

The Western Australian government has announced it will offer eligible landlords payment of three months’ rent, if they fully waive, or agree to fully waive rent and outgoings for COVID-19 affected small business tenants. I have to say, that sounds very appealing.

On 22 April 2020, it was announced in parliament that the Queensland government is appointing a Queensland Small Business Commissioner, who will be taking an active role in helping small businesses affected by COVID-19 by providing information and support including retail leasing advice and dispute mediation.

The Queensland regulations which implement the terms of the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles during COVID-19 are currently being drafted. I would encourage the Queensland Government to make those regulations very clear and simple, in particular how a tenant can demonstrate financial impact by COVID-19.

In the meantime, based on some useful content published by the Australian Small Business & Family Enterprise Ombudsman and other of my interstate colleagues, here are some suggested considerations for those tenants and landlords working out a way forward:

Tenants - What should I do if I can’t afford to pay my rent?

Maree Adshead
Queensland Small Business Champion

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