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Small business suffers, but no help guaranteed

Coalition wants disaster payments extended to help small businesses suffering in the aftermath of floods and Cyclone Yasi

By Brad Gardner | February 11, 2011

The Coalition wants disaster payments extended to help small businesses recover from floods and Cyclone Yasi, but the Federal Government is unlikely to act anytime soon.

Opposition spokesman on small business Bruce Billson wants concessional loans of up to $100,000 made available to businesses indirectly affected by recent natural disasters in Queensland.

The Natural Disaster Relief and Recovery Arrangements (NDRRA) is a joint state-federal scheme that grants loans of up to $250,000 to small businesses directly affected by natural disasters.

Billson says small businesses are suffering financially because the companies they rely on for an income have been damaged.

“Small businesses such as tourism operators, trucking companies and shopkeepers in cut-of towns are suffering from a serious loss of income and their workers are at risk of losing their livelihoods,” he says.

Prime Minister Julia Gillard says those unable to work due to the floods can claim up to 13 weeks of financial assistance, but adds that consultation is necessary before anything is done.

“We understand that there are impacts broadly in the regions that have been hit by these disasters…But we do want to design any additional assistance both in consultation with the Queensland government…and in consultation with the local community,” Gillard says.

Applicants must prove they have suffered substantial damage to buildings, plant equipment or stock due to disasters.

Before applying, small businesses must have used all cash assets and credit sources. They must demonstrate they took reasonable precautions to prevent damage from a disaster.

Queensland Senator Sue Boyce has criticised what she claims is the Federal Government’s sole focus on businesses and individuals directly affected by the floods and Yasi.

“You do not have to be flood or cyclone damaged to be flood or cyclone affected,” Boyce says.

She says there might be instances where a company has suffered because its major customer has been sent broke or where a major supplier cannot deliver goods.

“Trucking companies have had problems too with lost trucks, roads that they cannot use and customers that have not got anything from them to put on the trucks to send somewhere. It goes on an on and affects every corner of Queensland but, in my view, this has not been acknowledged,” Boyce says.

The Federal Government’s Disaster Income Recovery Subsidy allows individual adults to claim $469.70 a fortnight, with the rate increasing to $508.20 for a single adult with a dependent child.

Concessional loans under the NDRRA scheme are capped at 4 percent and come with a maximum loan term of seven years. Before receiving loans, businesses must show reasonable prospects of remaining viable and that equipment cannot be repaired or replaced without assistance.

The recent Queensland floods left 75 percent of the state declared a disaster zone and caused around $2.5 billion damage to the road network.

The road freight task was brought to a standstill, with trucks forced to remain on the side of the road after key routes were closed due to rising waters.

Yasi tore you North Queensland earlier this month, severely damaging Tully, Innisfail and Mission Beach.

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