The proposed small business viability review program will see small businesses with up to $10 million in annual turnover eligible to obtain a subsidy valued up to $5,000 to access a tailored 15-month plan from an accredited professional on the next steps in their business recovery.
Modelling by the Australian Small Business and Family Enterprise Ombudsman suggests that 500,000 small businesses would qualify for the professional advice subsidy, at a cost of $1.5 billion to the government.
The joint proposal by Chartered Accountants Australia and New Zealand, CPA Australia, the Institute of Public Accountants, the Institute of Certified Bookkeepers, the ASBFEO and the Council of Small Business Australia comes ahead of the anticipated big-spending federal budget on 6 October.
While all three accounting bodies had used their federal budget submissions to push for such a subsidy, it is the first time that a united call across the accounting and small-business sector has been made to the government.
“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,” Ms Carnell said.
“Small businesses need access to an accredited professional adviser such as an accountant or bookkeeper to judge the viability of the business now.
“This is the critical first step that the small-business owner needs to take so they can make an informed decision about the future of their business.”
There is also precedent for such a program, with Tasmania’s Business Continuity Grant program providing up to $750 for businesses on the Apple Isle to access specialist accounting, legal and business planning advice.
“Access to professional advice is essential to enable businesses to manage through a crisis, adapt to the new environment and aid in their recovery,” CPA Australia chief executive Andrew Hunter said.
“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.”
Likewise, CA ANZ’s chief executive, Ainslie van Onselen, believes small businesses will only have a short window to either revitalise their business or choose to exit it, with those decisions hinging on advice from the profession.
“Tight cash flow, compounded by other business costs, could make professional advice unaffordable and that would imperil their future,” Ms van Onselen said.
The call for a subsidy also coincides with the government’s plan to reform insolvency laws ahead of an expected wave of closures by allowing certain businesses to continue trading while restructuring their affairs.
The IPA’s Andrew Conway believes the government should simultaneously provide such businesses with financial support to access timely and crucial advice.
“The government’s recently announced plans to overhaul insolvency laws to give small businesses a chance to trade through the coming months is welcome,” Mr Conway said.
“It’s now vital the government supports these small businesses to get the tailored advice they need to plan ahead.”
Mounting pressure on the government
Shadow minister for small and family business Brendan O’Connor said it was time the Morrison government took advice from the accounting profession, noting their efforts in delivering the bulk of the stimulus measures in JobKeeper and the cash flow boost.
The Labor MP had written to assistant treasurer Michael Sukkar in mid-April to request for such subsidies but failed to receive a response.
“The need for this type of support is only heightened with the ongoing recession, the withdrawal of critical support from the economy during the worst recession in almost a century, and the announcement of measures such as the complex insolvency reforms announced by the government last week,” Mr O’Connor said.
“Businesses are already closing, workers are already being laid off and many vulnerable Australians are at serious risk. A professional services subsidy would help small businesses with serious cash flow issues access professional advice.
“Vulnerable workers, businesses and communities need and deserve a comprehensive plan to get them through the recovery and alleviate some of the understandable anxiety in the community.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.