Published in Queensland Business Review, January 27, 2011
Many businesses, especially primary producers, are not expected to survive the recent Queensland flood crisis, according to leading Brisbane accountancy firm elliotts.
Managing Partner Matthew Schlyder says even those businesses that had their commercial premises and stock sufficiently insured for flood are vulnerable and unlikely to survive the next few months.
“Many businesses fail to insure themselves for loss of income due to natural disaster,” he says.
“Countless other businesses that may not have been directly affected by the flood will still find their revenue slump, because their flood affected customer base is struggling financially.”
According to Schlyder, businesses that are financially well organised had already considered the unthinkable in their financial plan, and have created a strategy for when disaster strikes.
For those businesses that were affected over recent weeks, he says many business are not aware that their clean up, repair and restoration expenditure is mostly tax deductible.
“I would also like to notify businesses affected by the floods of the ATO’s automatic deferral of the lodgement and payment date for December monthly activity statements, originally due 21 January 2011 to 21 February 2011.”
While most businesses have felt the impact of the floods in one way or another, Schlyder says that one of the hardest hit sectors in Queensland is that of primary producers.
“For rural businesses that were affected, the Queensland Rural Adjustment Authority (QRAA) are offering non-repayable grants of up to $25,000 to assist primary producers in re-establishing their enterprises and will contribute to clean up, repair and restoration expenditure,” he says.
“Small businesses and primary producers within the listed flood disaster areas are eligible, though the grants do not compensate for loss of income.”
Schlyder says a large percentage of businesses operating in the rural sectors are expected to take advantage of loans offered by The Queensland Rural Adjustment Authority (QRAA) of up to $250,000 with an interest rate of 4 percent; payable over seven years.
He says these loans are available through the Natural Disaster Relief and Recovery Arrangements via the QRAA and are intended for small to medium businesses and primary producers in disaster-declared areas.
“They are intended to help with sustenance, restocking, replacement of farm buildings, essential property operations, payment of rent or rates and replanting/restoration/re-establishment of affected areas.”
Another incentive is freight subsidies for flood-affected areas offered by the Department of Employment, Economic Development & Innovation (DEEDI).
“A subsidy of up to 50 percent off freight costs and up to $5,000 is available for the movement of foodstuffs, building and fencing materials, restocking livestock, fodder, machinery, equipment and fuel,” Schlyder says.
He is urging flood-affected businesses to consult with their accountant before taking stock of damages, conducting repairs and purchasing new plant and equipment, to ensure they are doing so in the most tax effective way.
“This is also the time for all businesses to ensure they are adequately protected for natural disasters and thereby guarantee their survival.”