A revenue contingency scheme will help ‘mitigate the risk for small businesses’

The Australian National University’s Bruce Chapman says the “trouble” for small businesses is the “anxiety” with having to find the money, and the potential for foreclosure.

Mr Chapman is proposing a revenue contingency scheme, similar to HECS, for small businesses who are doing it tough and suffering a shortage in skilled migrant workers due to the COVID-19 pandemic.

The scheme would mean small businesses can borrow from future revenue in good years, and pay back later when the money is there to do so.

“Small businesses are very reluctant to take further normal debt at the moment, even if the debt is guaranteed by the government to repay the bank,” Mr Chapman told Sky News host Alan Jones.

“That doesn’t help the small business who in this time of great economic uncertainty … must be very concerned that any kind of debt that needs to be repaid irrespective of their financial circumstances.

“Instruments like the one I’m talking about mitigate the risk for small business and in ways that, I think, will not cost the budget.”