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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THE OVERWHELMING majority of Australia’s top economists and housing experts agree Australian governments pay too little attention to housing system impacts on productivity and growth, according to a new survey.

In the UNSW City Futures Centre study, led by honorary professor Duncan Maclennan and commissioned by the Housing Productivity Research Consortium, formed by a group of private sector and non-profit stakeholders, 84 percent of respondents agreed with the statement: 'Australian governments have paid too little attention to how housing outcomes also affect productivity and growth'.

And 80 percent agreed that 'Rising mortgage debt poses an economic stability risk to Australia'.

Only 12 percent of respondents agreed with the statement: 'Over-expensive housing for low-income renters has little impact on economic productivity'.

The survey analysed attitudes of 47 leading economists and 40 senior experts from government, industry and academia.

Speaking for the research team, UNSW City Futures Research Centre professor Bill Randolph said the study highlighted worries about over-reliance on ultra-low interest rates for housing, employment and productivity.

“The vast bulk of housing experts and economists surveyed are concerned that ongoing Treasury dependence on ‘cheap money’ policy will further ratchet up house prices and widen the gap between rich and poor,” Prof. Randolph said. “From a purely economic perspective, the informed expert view is that this will undermine productivity and economic growth.

“Among the best ways to broaden Australia’s economic recovery strategy would be a large-scale national social housing program. Minimal construction for most of the past 25 years means that national social housing supply has effectively halved since the 1990s .”^[1]

The survey found a strong preference to direct Commonwealth stimulus to social rather than private housing. Almost seven in 10 (69 percent) of respondents agreed that 'Coming out of COVID, stimulating housing is best achieved through social/affordable housing investment rather than private market'.

Only one in 10agreed that 'In its 2020 Budget, the Federal Government rightly resisted calls for inclusion of social housing investment in its recovery stimulus package'.

Even in the past year, public housing waiting lists have grown another four percent, while high need applications have surged 11 percent. 

Everybody’s Home, a national advocacy campaign to end homelessness, said a powerful social and economic dividend was available if the Commonwealth chose to invest in social and affordable housing.

“A $7 billion dollar investment in social and affordable housing would unlock more than $18 billion in economic expansion, creating more than 18,000 jobs a year over four years, and making a serious dent in homelessness,” Everybody’s Home national spokesperson, Kate Colvin said.

“Longer term this would also boost productivity, by allowing people better access to jobs. Social housing can lift people out of poverty and put them on a path to prosperity.

“A better-balanced housing system is the right thing to do. It also happens to be the smart thing to do.”

Survey respondents were drawn from academic, industry and government sectors. The majority were trained economists, at least 15 of whom were members of The Conversation’s Economics Panel convened by the Economics Society of Australia. Respondents were mainly employed in senior positions such as Professor, Partner or CEO.

Further details are provided in the published UNSW research report.

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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 House Standing Committee on Employment, Education and Training will hold its first public hearing on Wednesday, February 17, 2021 as part of the committee’s inquiry into adult literacy and its importance.

The Committee will hear evidence from the Productivity Commission and the Department of Education, Skills and Employment (DESE).

The Productivity Commission’s review of the National Agreement for Skills and Workforce Development found there should be a coordinated national strategy to improve school education, ‘second-chance’ learning in the Vocational Education and Training (VET) sector and other adult education services.

This would seek to reduce the large number of Australians with low language, literacy, numeracy and digital literacy skills. The review also proposed improvements in foundation skills, better credit pathways, an expansion of VET Student Loans and a trial of a new financing instrument for mature-age Australians to reskill and upskill.

Committee chair, Andrew Laming MP said, "It is concerning that up to one in five adult Australians may have low literacy and/or numeracy skills, which limits their capacity to participate fully in employment, education and training, and social and civic life.

"The committee looks forward to examining the Productivity Commission’s findings and will seek evidence from DESE about a range of relevant Commonwealth-funded programs that support adult literacy and numeracy. These programs include the $1 billion JobTrainer Fund, Skills for Education and Employment, Foundation Skills for Your Future, Remote Community Pilots, and the Reading Writing Hotline," Mr Laming said.

Submissions to the inquiry have been requested by Friday, March 5, 2021. Further details about upcoming public hearings will be available on the Committee’s website as the inquiry progresses.

Public hearing details
Date: Wednesday, 17 February 2021
Time: 11.40am to 1.00pm
Location: Committee Room 2R1, Parliament House, Canberra
Witnesses: Productivity Commission and the Department of Education, Skills and Employment

The hearing will be broadcast live at aph.gov.au/live.

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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 Indigenous Affairs Committee will hear from Indigenous Business Australia (IBA) this Thursday as part of its inquiry into pathways and participation opportunities for Indigenous Australians in employment and business.

Witnesses will be attending by conference call.

Committee chair Julian Leeser MP said IBA had played a significant role in providing investment support for Indigenous businesses over many decades and would provide valuable input into the inquiry.

"IBA has now been assisting Indigenous entrepreneurs for 30 years to start and grow their businesses. The committee looks forward to discussing ways to further promote economic self-sufficiency among First Nations people at this hearing," Mr Leeser said.

Public hearing details
Date: Thursday 18 February 2021
Time: 11.45am to 12.25pm AEDT

A live webcast of the hearing will be accessible at https://www.aph.gov.au/Watch_Read_Listen.

A full program will be available at the inquiry website.

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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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THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell said the Victorian Government needs to urgently compensate small businesses forced to close their doors on one of the busiest holidays of the year.

“Small businesses such as florists and restaurants currently have their storage rooms packed with supplies, ahead of what they thought would be one of their busiest trading days of the year,” Ms Carnell said.

“Unfortunately, this snap lockdown means thousands of Victorian small businesses need to shut up shop for five days without any notice.

“It is for this reason the Victorian Government needs to immediately announce a compensation package for affected small businesses who have lost stock such as flowers and food," she said.

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

“It is impossible for small businesses to plan for sudden lockdowns and the timing of this one – coinciding with Valentine’s Day and Lunar New Year celebrations – could not be worse.

“Victorian restaurant owners are understandably frustrated, given this lockdown announcement came just hours after their additional supplies were delivered. Many were fully-booked all weekend.

“These small businesses are set to lose thousands of dollars worth of stock through no fault of their own. Given the nightmarish 12 months these cash-strapped small businesses have already been through, there’s a real risk this lockdown could break them.                     

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

www.asbfeo.gov.au

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