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07 September 2020

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.

Ms Carnell says yesterday’s roadmap announcement by Victorian Premier Daniel Andrews 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.

“On that basis, small businesses that were thinking this lockdown would only last for another couple of weeks, now don’t know if they will ever be able to re-open.

“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 no 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.

“I encourage all small business owners to seek help if they need it. The Partners in Wellbeing telephone hotline is 1300 375 330 and Beyond Blue’s Coronavirus Mental Wellbeing Support Service is at coronavirus.beyondblue.org.au

“Our My Business Health web portal also provides free practical resources for small business owners and also links to leading mental health organisations.”