Coronavirus: Queensland’s small-business grants ‘are a waste of money’

The Queensland government’s $200m small business COVID-recovery grants are ‘largely a waste of money’, according to expert economist.

Adept Economics director Gene Tunny.

The Queensland government’s $200m coronavirus-recovery small business grants are “poorly designed, pretty embarrassing and largely a waste of money”, according to an economist regarded as an expert by the Palaszczuk administration.

Employment Minister Shannon Fentiman has announced two-$100m rounds of the grants, made available to businesses with a Queensland headquarters, fewer than 20 employees, and have experienced a minimum 30 per cent decline in revenue since March due to COVID-19.

The first round of $10,000 grants was announced in May and was snapped up in just 4.5 days, but there have been delays in payment. It has been less than ten days since the second round started, and already nearly 75 per cent of the funds have been requested.

Former Commonwealth Treasury economist Gene Tunny, director of Adept Economics, said he was concerned the speedy grants approval process meant the neediest businesses could miss out.

“(It) is poorly designed and pretty embarrassing,” Mr Tunny said. “It is not well targeted to those businesses most in need … it shouldn’t just set broad eligibility criteria and dole out money until it runs out. This is extremely poor policy and I suspect largely a waste of money that could be better spent in this time of twin economic and health crises.”

Mr Tunny is one of four economists invited by Queensland parliament’s economics committee – investigating the state government’s response to the coronavirus crisis — to give evidence as part of an expert panel on Monday.

The Australian understands that the government is still accepting applications for the second round of grants; half of the fund is specifically set aside for rural and regional businesses.

Ms Fentiman said the $200m small business grants program was specifically designed to support enterprises that were affected by the outbreak of COVID-19.

“This level of support has never before been provided to small businesses.

“Applicants must demonstrate a 30 per cent drop in revenue from COVID-19 – this is the same criteria as (the federal government’s) JobKeeper,” Ms Fentiman said.

“This is on top of $1bn in interest-free loans, energy rebates, free online TAFE courses and payroll tax relief.”

Small business lobby CCIQ said the grants might be approved rapidly but they are not getting out to businesses quickly enough.

“Business have been disappointed these grants have been dispersed so slowly as cashflow is one of the biggest problems business faces, and these grants were an opportunity to get them through to the next phase,” a CCIQ spokeswoman said.

The spokeswoman said CCIQ pushed for the grants to be available, welcomed the first round and applauded the government for backing a second round.

“But they won’t serve their purpose if businesses aren’t receiving the funds when they need it, which is now.”

The small business grants are part of the Queensland government’s $6bn economic stimulus and emergency health response to the coronavirus crisis.