ACT Chief Minister Andrew Barr says the government is not in a position to become a bank for small businesses. Photo: Region Media.
The president of the Phillip Business Community called on the ACT Government to provide more fiscal stimulus through grants to help struggling industries that have fallen through the cracks during COVID-19 restrictions.
Tom Adam said the ACT should follow in the footsteps of Queensland, NSW and Victoria by providing cash grants of up to $10,000 for struggling businesses. He emphasised the ACT Government cannot afford not to help.
“We are local businesses in local communities with local customers who are all ACT residents,” said Mr Adam. “It is not just a Federal Government issue, it is not just a Territory government issue – they need to work together.”
Mr Adam – who also runs Canberra Martial Arts – took aim at ACT Chief Minister Andrew Barr after he announced the Territory’s most recent stimulus measures for the hotel and hospitality industries, and said small businesses “do not want discounts on taxes and rates [they] do not pay”.
A further $6 million in rate rebates and free permits was set aside by the ACT Government on Friday, 29 May. Mr Barr defended the new measures and said the ACT is not seeking to invent a new way to deliver fiscal support. He stated that existing fiscal channels are the most effective way to deliver stimulus.
“We will look for ways to assist those industries, but if they do not pay any tax or any fees and charges then our capacity to rebate any of that is obviously limited because they do not have a financial relationship with the ACT Government by way of paying any taxes or charges,” he said.
“Clearly the broader initiatives we announced several months ago would flow through to those in these industries by way of their relationship with their landlord, or if they happen to own their own commercial property.
“The broad answer is if you do not pay any fees, rates or charges to the ACT Government, it is hard for us to rebate anything to you.”
Businesses which have a payroll under $2 million are not subject to the ACT’s payroll tax, and businesses which do not need special licences are getting very little help from the ACT Government, said Mr Adam.
The Federal Government’s JobKeeper payment does not cover four of Mr Adam’s casual employees at his martial arts business, and even with decreased rent, his business has still been losing more than $1000 a week during the past 10 weeks.
Phillip Business Community president Tom Adam (left) with retiring president Robert Issell when handing over the reins of the organisation in December 2019. Photo: Supplied.
“My JobKeeper payment is going back into the business,” said Mr Adam. “I cannot afford to pay myself a wage. A $10,000 grant would give my business the confidence to get through the next 10 weeks.”
Mr Barr said the JobKeeper payment is primarily an issue for the Federal Government, but he is lobbying through National Cabinet to extend JobKeeper’s September cutoff.
“With small business finance, the banks have been given hundreds of millions of dollars in guarantees to ensure lines of credit to small business so I cannot duplicate an ACT Government bank and just click my fingers and whip it up,” he said.
“The banks are the best places to seek very low interest, and in some instances, no-interest loans or lines of credit in the short term.
“[In terms of grants] that is what the Commonwealth Government does. They have the mechanisms to do that. It is their role and they have programs in place doing just that.”
But Mr Adam maintains the Barr Government is trying to maintain its budget bottom line.
“I have to take money out of my mortgage to inject into the business and use my own savings to pay my staff,” he said.
“No-interest and low-interest loans are rubbish. Banks do not refinance old debt; they only offer you new money that you have to pay back in a shorter time frame so you end up paying more.
“I would like to ask Mr Barr if he has ever run a small business, and if not, he can come do my books with me to see why I am nearly in tears each week.”
Original Article published by Dominic Giannini on The RiotACT.
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