Updated January 07, 2020 15:31:48

Photo: Emergency Services Minister David Littleproud wants to give loans to bushfire-affected businesses. (ABC News: Matt Roberts)

A senior minister has cancelled a trip to a fire-affected community in order to prepare a business assistance package in response to the bushfires.

It follows increasing calls from businesses and employees in regions affected by bushfires for more assistance, due to the low level of support offered by existing payments.

Emergency Management Minister David Littleproud said he cancelled a trip to Tumut on Tuesday to prepare a package of cheap finance for affected businesses.

"While farmers will be eligible in these areas for interest-free, repayment-free loans, we're working as quickly as we can — in fact, I met with the CEO of the [Regional Investment Corporation] yesterday in seeing how we can extend that to small businesses," he said.

"That would then give $500,000 loans — interest-free, repayment-free for two years — that will help them rebuild their cashflow, that's an important aspect of it, and it would allow them to even refinance some of their own debt from a commercial bank to the [Regional Investment Corporation] just to give them some breathing space."

The Regional Investment Corporation underwent sweeping changes last year to provide loans of up to $500,000 for small businesses affected by drought. Larger businesses have access to loans of up to $2 million.

Question of assistance

The mooted assistance comes as people complain that existing payments are inadequate.

David Maher, a consultant from Right Brain Insights who helps tradespeople manage their cashflow, said businesses needed to get back on their feet quickly to avoid knock-on effects for employees and entire communities.

"The concern I would have for them is they remain solvent," he said.

"In order for these communities to truly recover, people need to have livelihoods, it's one thing for someone's house to burn down, but it's truly tragic when someone loses their livelihood."

Currently, the Commonwealth offers a one-off $1,000 payment for those adversely affected by the bushfires, as well as payments equivalent to Newstart for up to 13 weeks to compensate for lost income.

It also partly funds a range of payments made by states to those affected, such as primary producer grants, and provides additional assistance through the Defence Force and bushfire recovery agency.

But many will still lose out. One ABC reader said they worked as an auditor on food safety and their work in fire-affected areas had been pushed back by 12 months or more.

The Australian Tax Office will offer a two-month deferral for lodgement of payments and other obligations for those who are in the fire zone.

Pressure on insurance and banks

Treasurer Josh Frydenberg has spoken to the banking and finance industries to ensure people were getting the assistance and support they needed.

So far, 20 per cent of approximately 8,000 insurance claims have been processed and approximately half have been settled.

Insurance Council of Australia chief executive Rob Whelan said he wanted to make sure "people are treated with dignity and compassion".

"We want to make the claims process as easy as possible for them to get their lives rebuilt and get their business back on an effective basis."

However, in the case of at least one insurer, claims under income protection policies will not be accepted.

"Income protection polices available inside or outside of superannuation provide a benefit to customers if they are unable to work due to illness or injury," said a spokesperson for TAL, which provides income protection insurance for Australian Super.

"Unfortunately, these policies do not provide benefits for unemployment only or where someone is unable to access employment."

Mr Frydenberg praised the banks for donating funds for the recovery effort and said they were providing assistance to businesses.

"This may mean the waiving of fees and charges, this may mean cash advances to deal with some of the cash flow shortages, this may mean the deferral of interest and principal repayments on their loans," he said.

"They recognise that their clients, their customers, their communities have been dramatically affected by these tragic fires."

Minister for Government Services Stuart Robert said the first teams were being deployed to bushfire-affected regions to help people access payments and services as part of its pledge for 20 "pop-up" centres.

"A team left for Moryua today and will be set up tomorrow. Mobile Service Centres are on their way to Wingello [in NSW] and Bairnsdale [Victoria] and will arrive in the next couple of days."

Topics: government-and-politics, disaster-prevention, disasters-and-accidents, business-economics-and-finance, australia

First posted January 07, 2020 14:30:28