Home Topics News Broken Victorian businesses should be spared closure costs: Ombudsman

Broken Victorian businesses should be spared closure costs: Ombudsman

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has called on the Victorian Government to cover the costs associated with small business closures, with tough trading restrictions to remain in place until the end of October, at the earliest.

In announcing his Government’s much-anticipated steps to easing the nation’s strictest lockdown, Premier Daniel Andrews revealed Melburnians would face another two weeks of stage 4 restrictions after September 13, but with some modifications.

These include:

  • Easing curfew from 8:00pm to 9:00pm
  • Allowing 2 hours of exercise, up from one
  • Allowing outdoor public gatherings of two people or one household
  • Creating “social bubbles” for people who live alone
  • Reopening playgrounds

Step 2, 3 and 4 of the plan are all subject to health advice, and depend entirely on daily case increases going down.

However, Ms Carnell says the roadmap announcement by the Premier was a devastating blow to thousands of small businesses, many of which now have no other choice but to close their doors forever.

“Under the Victorian Government’s roadmap, many small businesses will not be able to open for another eight weeks at least and that’s only on the condition that there is less than five cases per day as a state-wide average,” Ms Carnell says.

Related: “6 out of 10 Australian SMEs report losses up to 75 per cent”

“For those struggling small businesses that know they cannot remain viable under these imposed conditions, the Victorian Government needs to step up and help them make the sensible business decision to exit.”

“This means the Victorian Government needs to pay for all break-lease termination fees – not just on the premises but also equipment so small business owners can walk away without further penalties.

“It is unreasonable to expect small businesses to continue to hang on and accumulate debt, given this ongoing forced closure is not fault of their own.   

“This is a situation no small business could have planned for. The lockdown extension has forced small businesses into this dire predicament and now the government needs to do the right thing to support them to exit if they cannot afford to hang on.

“The enormity of this lockdown extension and the psychological distress inflicted on small business owners cannot be underestimated.

“Small business loans are often secured against the family home, so these hard-working small business owners are now faced with gut-wrenching decisions about their future. They need to be supported in every aspect.

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Ellie Dudley
Ellie Dudley
Ellie Dudley is a journalist at Dynamic Business with a background in the startup space and current affairs reporting . She has a specific interest in foreign investment and the Australian economy.