Is drought a reason to subsidise small rural businesses?

When Australian Prime Minister Tony Abbott visited Far West NSW and Broken Hill recently to meet with agricultural producers to discuss the drought and potential drought measures, it raised a number of questions about the impact on small business in rural towns.

This included a conversation about the effect of drought on the economic sustainability of rural and regional communities. If the Government provides subsidies and/or financial assistance to the farming community because of the drought, should that assistance extend to small business owners?

The Broken Hill Chamber of Commerce posed this question to some of its members and received a number of responses.

“In the past there was a flow on for small business owners to apply for assistance if their business was drought affected. I don’t know if anyone ever qualified or received any money or support. I believe the criteria was very specific – as it should be. My opinion is YES under the same criteria as in the past. But, it should not be a given that if you are failing, the government of the day needs to pull you out of the Sh.t!.  I do believe that all farmers should receive support because they are the primary producers … everyone else needs to support them. If they walk who is going to put in the long hours and take all the risks in the future.”

“In my opinion – yes. Many small businesses in Broken Hill are in service industries. To borrow an analogy “if the bush sneezes, many small businesses in Broken Hill catch the cold”. That is, if the bushies are doing it hard, discretionary expenditure goes down and many small businesses suffer as a result.”

“Another point – running a grazing property is a business, but even if you manage that business poorly you can still access financial assistance during drought (even if your “hardship” is largely due to your own poor land management practices). Running a small business does not have any such “safety net” – if you manage your business poorly, you go broke.”

“In my opinion, small business in regional areas deserve support, regardless of whether they are retail, services, manufacturing etc. etc.or grazing enterprises.”

“I think small businesses need a reduction in red tape. The cost of electricity and high contributions to superannuation are big costs for small businesses. Giving handouts is dangerous because businesses who do not plan ahead can become dependent on them.”

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