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Sole Trader Financial Support

Yesterday, we wrote a letter to the Premier seeking support for sole traders regarding financial support.

 

Dear Premier Andrews,

COVID-19 has up-ended everything about how we live, work and interact and has us considering our hopes and plans for the future in a different way.

As leader of this state, you have the unenviable position of navigating us all through this period of uncertainty and providing the support to ensure we are carried through to the other side of the pandemic with as little damage to our health and the economy.

This has no doubt been a monumental undertaking that is far from over with countless considerations impossible to address comprehensively at the speed with which a response to the situation has demanded. It is for this reason that I write to you to draw your attention to the plight of the sole trader.

Many of the businesses operating under this entity structure have fallen through the cracks in this pandemic. Mostly, the distinct lack of business support appears to be because these businesses do not always employ staff in the traditional sense of the word. Except for this fact, many run profitable, legitimate enterprises, are registered for GST and have overheads and outgoings just as any other operation.

I expect you have been contacted by numerous individuals in this predicament, as I have. There have been representations from a number of different industries all conveying similar messages – that they have been overlooked. A valid and undeniable point for which it is not clear whether this has been deliberate or an oversight. Along with those businesses excluded by strict eligibility criteria for business boost programs I seek justification as to why the line of support has been drawn to dismiss so many small businesses.

I will not comment on specifics apart from to elaborate further for those constituents who I represent in the taxi and hire car game.

The great majority of Commercial Passenger Vehicle (CPV) operators are sole traders who may engage drivers but do not employ them. Many of these operators lost their entire superannuation as a result of the CPV licencing reforms of 2017. Not only do they carry legacy debts associated with purchases for assets which no longer exist, they have car loans (akin to the lease on a commercial property) and other overheads for work cover, insurance, registration and vehicle maintenance. Quite a few operate multiple vehicles, compounding these expenses. COVID has exacerbated an already precarious financial position.

All personalised transport providers rely exclusively on the movement of people to earn an income. There have been thousands of sole traders who have not turned a dollar since March yet whose overheads have not diminished and all the while trying to keep a roof over their head and food on the table for their families.

Prior to the pandemic, there were just under 110,000 registered CPV drivers and almost 80,000 registered CP vehicles across taxis, hire cars and ride share. Were it not for the poor performance of the regulator, Commercial Passenger Vehicles Victoria, in collecting meaningful industry data it would be easier to discern which of those are active compared to those who may be very part time or even a one shift wonder. Inexplicably, CPV driver and vehicle registers maintained by the regulator are not linked to payment of annual licencing fees. Rather the default is to record a perpetual status reflecting any historical activity instead of only current and ongoing industry engagement.

This creates challenges in providing targeted support to those in the CPV industry and has proven to be a topic of lively discussion in my dealings with the Minister for Public Transport while advising on the CPV Industry COVID support package.

I seek a commitment from your government to review support packages to also include non-employing sole trader businesses which can verify genuine full-time activity and business turnover in the period prior to the pandemic. For the CPV industry, this may be through their Business Activity Statements, collection of the $1 trip levy and evidence of vehicle ownership for a registered CPV.

The future of so many sole traders is uncertain, a situation shared across all businesses but difficult to accept when there are lifelines being thrown at some and not others. Particularly brutal is the second round of support offered to arrest the damage of stage 4 restrictions yet so many others have been in freefall since March. They are also deserving contributors to our economy who require our support and consideration.

Funding for non-employing small businesses is desperately needed to ensure their survival beyond the pandemic. I am offering to work with your government to address the short comings of the existing COVID support program to ensure that any expansion is measured, targeted and tailored to catch those businesses currently falling through the cracks.

I look forward to your prompt reply.

Kind regards
Rod Barton MP

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