Confusion reigns as promised $50,000 bushfire grants for SMEs split in two

Small business ombudsman Kate Carnell has echoed calls for a review of disaster management responsibilities between state governments and the Commonwealth, amid ongoing confusion about the availability of federally funded bushfire recovery grants for small businesses.

Following Prime Minister Scott Morrison’s promise of “immediate” support for bushfire affected businesses last week, state officials have begun opening applications for recovery and repair grants.

New details about eligibility requirements emerged over the January long weekend as officials in New South Wales, Victoria and South Australia published their own guidelines.

But this advice has surprised small business advocates, as it has emerged the available grants will be split into two separate $25,000 claims, instead of the promised $50,000 value. The federal grants will also only be available to firms with fewer than 20 full-time workers, and which have suffered “direct damage” as a result of the fires.

“I don’t know why they’re doing that,” Carnell tells SmartCompany, referring to the separate claims.

“It’s still not clear to us how they’re determining the split payments.”

While the federal government unveiled the assistance package, the Commonwealth is constitutionally bound to defer disaster management to state governments, which means while the grants are federally funded, they will be administered on a state-by-state basis.

This patchwork of state-based services has generated some confusion, with business owners who called federal and state government hotlines late last week told to lodge their contact details and sit tight in lieu of more detailed requirements or application forms being available.

The federal government has been negotiating with states on the administration of the program, but varying eligibility criteria are being published between states, while several have yet to publish any guidance at all.

While Services NSW and the Department for Innovation and Skills have begun considering grant applications, Business Victoria is directing firms to an expression of interest form, appearing to contradict itself on its own website, informing readers applications will open “soon” before listing applications as “open”.

A now amended version of Victoria’s expression of interest form — changed following SmartCompany’s inquiries on Tuesday afternoon — stated the Victorian Chamber of Commerce and Industry (VCCI) would be awarding bushfire grants in the state.

Business owners who don’t derive the majority of their annual income from their damaged businesses aren’t eligible to make a claim in NSW or South Australia, though it is not clear whether this requirement will be extended nationally.

The disparate approaches come amid renewed scrutiny over the separation of responsibilities between states and the Commonwealth in responding to natural disasters.

The Prime Minister will today call for an examination of the constitutional and legal framework around allowing the Commonwealth to declare a national state of emergency in an address to the National Press Club.

Carnell says the bushfire grant program highlights the need for “significant improvement” in Australia’s disaster response framework.

“We’ve all accepted there will be more natural disasters going forward, there needs to be more consistency in terms of how disaster areas, like drought and fire affected postcodes, are determined,” she says.

What we know about the bushfire grants

Eligible small businesses will be invited to make an “initial claim” up to $25,000 under the grant scheme, provided they’re able to produce evidence of damage through photographs, quotations, tax invoices or official receipts.

Following an initial application, eligible small business owners can make a “subsequent claim” up to $25,000 if they are able to provide “full evidence of payment” for expenses, including any amounts in the initial claim, if not already provided.

South Australia’s Department for Innovation and Skills and Services NSW have published exhaustative lists of what government funds may be used for, including expenses for equipment replacement, cleaning and repairs.

Here’s what South Australia and Services NSW say constitutes evidence of direct damage:

“A list of bushfire-related damage, supported by photographic evidence of the direct damage; or other appropriate evidence to prove financial impact if/when the damage is unable to be photographed or receipts lost due to the extent of the disaster event.”

Business Victoria had published far fewer details at time of writing on Wednesday morning, providing a short summary of eligible cost claims on a short contact form, which does not serve as an official application.

No other states had published advice about the administration of the grant program in their own jurisdictions at time of writing, but a Commonwealth website says further updates will be provided “soon”.

Businesses are not eligible to make claims for repairs they’ve already claimed through insurance, while applicants who operate more than one small business or across multiple locations may apply for assistance for each eligible separate firm.

SmartCompany contacted Business Victoria for comment but did not receive a response before publication.

This story was updated at 11:00AM January 30 to clarify that South Australia’s Department for Innovation and Skills is administering grants in the state.

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