CPA AUSTRALIA is calling for urgent financial support needed for businesses harmed by lockdowns.

Surveys by CPA Australia show that businesses cannot continue to absorb lockdown losses and severely impacted businesses need financial support to survive lockdowns.

CPA Australia is calling for Federal, State and Territory governments towork together to deliver a national response in which financial support becomes "standardised, scaleable, targeted and rapidly deployed".

CPA Australia chief executive officer, Andrew Hunter said future lockdowns are foreseeable "as we continue to deal with the impacts of COVID-19". However, businesses cannot continue to absorb losses created by snap lockdowns and border closures. 

“Most Australian states have implemented at least one snap lockdown," Mr Hunter said. "Each time, many businesses have experienced significant, unrecoverable losses.

“We’ve been living with COVID-19 for more than a year now. JobKeeper ends next month and we still don’t have a substitute for businesses that are compulsorily closed or those otherwise impacted by lockdowns, such as suppliers and customers outside the lockdown areas.

“We understand the need for swift action to control the spread of COVID-19. However, it seems businesses are being treated as an afterthought when making lockdown decisions. If governments are going to rip the rug out from under them at short notice, they need to provide a safety net.”

CPA Australia is calling on governments to work together to develop and deliver financial support to businesses severely impacted by lockdowns and is recommending:

• Standardised (consistent across jurisdictions)

• Scaleable (to the duration of each lockdown)

• Targeted (to severely impacted businesses)

• Rapidly deployed (in hours not days or weeks)

Mr Hunter said, “This is not a reaction to events in an individual state. The next lockdown could occur anywhere in Australia.

“Sympathy won’t pay for spoilt produce, cancelled bookings and empty chairs at empty tables. Businesses need more certainty – they need a coordinated national response that will deliver help fast when the next lockdown occurs.”

CPA Australia first proposed a standardised model of disaster support for businesses before the pandemic and reiterated calls for it in its 2021-22 Federal Budget Submission. Mr Hunter said the proposal was equally applicable to natural disasters such as bushfires and floods, as it is to the current circumstances.


About CPA Australia

CPA Australia is Australia’s professional accounting body and one of the largest in the world. CPA services more than 168,000 members in over 100 countries and regions, supported by 19 offices globally. Core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. CPA Australia engages with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes.  www.cpaaustralia.com.au

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CLASS ACTIONS AUSTRALIA is warning that Federal Treasurer Josh Frydenberg’s intention to water down Australia’s stock market disclosure laws would weaken the economy by making it easier for company directors to "act poorly and dodge accountability".

Mr Frydenberg has announced the government’s intention to permanently relax stock market disclosure laws. The Treasurer had originally introduced the changes as a temporary measure to respond to the Covid-19 crisis.

“Funny how the pandemic crisis has apparently abated enough to stop JobKeeper, but is still serious enough to warrant permanently watering down corporate responsibility,” Class Actions Australia spokesperson Ben Hardwick said.

“The ASX is about to hit an all-time high, and the Treasurer thinks it’s important to offer extra shields to company directors to avoid accountability. It’s madness.

“Australia’s robust stock market disclosure laws mean investors can operate from a position of knowledge," he said. "Australian directors know they have to be open with the market or they might be accountable to their investors through a class action. Josh Frydenberg is apparently uncomfortable with this situation.

“His plan to water down continuous disclose laws would advantage powerful company directors over mum and dad investors.”

Mr Hardwick said he thought it was unlikely the government’s new laws would make it through the Senate, because they were "not just morally wrong, but economically irresponsible".

“Robust disclosure requirements and class actions are our economy’s best friend,” Mr Hardwick said.

“If you truly believe in markets then you’ll consider transparency and accountability to be good things, because they allow investment to flow rationally. If, however, you prefer crony capitalism and protecting corporations from consequences then you’ll take a different view.

“Josh Frydenberg has revealed his hand with this decision, but I suspect the Senate crossbench may have greater integrity when it comes to defending the true interests of investors and our markets.

“The last thing we should want is for Australia to develop an international reputation as a jurisdiction that’s soft on corporate misbehaviour. That’s a surefire way to dry up investment.”

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THE Joint Standing Committee on Trade and Investment Growth has commenced an inquiry into the prudential regulation of investment in Australia’s export industries. 

The inquiry will investigate the potential impact on investment opportunities for Australian exporters of changes in practices by banks, insurers and superannuation funds, as well as the advice and guidance provided by financial regulators which affects the investment opportunities for Australian exporters. Submissions from interested individuals, businesses and organisations are invited by Wednesday, March 31, 2021.

The committee chair, George Christensen MP, said that, given the importance of exports to Australia’s economy, the inquiry would be an opportunity to examine an issue which could have significant ramifications for the country’s economic recovery from COVID-19 and beyond.

"Exports from sectors such as agriculture, resources, and Defence manufacturing generate billions of dollars for the Australian economy and attract a significant amount of investment. If there are changes in the financial services sector which impact on Australia’s exporting industries, particularly those in regional areas, the Parliament must take an interest," Mr Christensen said.

The committee deputy chair, Ged Kearney MP, said, "The inquiry will consider the possible opportunities and challenges that could arise for Australian exporters from any changes in financial services sector practices."

More information about the inquiry, including the full terms of reference and details on how to lodge a submission, is available on the committee’s webpage. The preferred method of receiving submissions is by electronic format lodged online using a My Parliament account.

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THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell said while small businesses were relieved the state-wide lockdown is lifting, the Victorian Government is still yet to announce any support measures for the sector.

“It is fantastic news that small businesses can open their doors again tomorrow, however I am disappointed the Victorian Government has not yet announced what it will do to support the thousands of small businesses forced to shut up shop for five days with next to no notice,” Ms Carnell said.

“The Victorian Government needs to urgently compensate small businesses impacted by this snap lockdown, such as florists and restaurants that had their storage rooms packed with supplies ahead of Valentine’s Day and Lunar New Year celebrations.

“Many Victorian small businesses are understandably shattered by the latest sudden lockdown, given they were expecting their busiest weekend of trade in months. Many restaurants were fully-booked all weekend and were not given time to cancel the delivery of their additional supplies," Ms Carnell said.

“It’s for this reason the Victorian Government needs to immediately announce a compensation package for affected small businesses who have lost stock such as perishable food and fresh flowers.

“The compensation should also cover all other costs associated with running a business including staff wages and rent.

“We know a lot of small businesses have lost thousands of dollars worth of stock through no fault of their own," she said.

“It is unreasonable to expect these small businesses to shoulder the cost of this snap lockdown, given the nightmarish 12 months these cash-strapped small businesses have already been through.                         

“It’s absolutely critical these small businesses have the support and certainty they need from the Victorian Government to recover from this.”

www.asbfeo.gov.au

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