Government to reconsider 12,000 small business grant applications following Ombudsman investigation

Date posted:

About 12,000 struggling businesses may be entitled to up to $120 million after a Victorian Ombudsman investigation into a COVID-19 business fund.

The Department of Jobs, Precincts and Regions has assured the Ombudsman it will reopen the Business Support Fund for eligible businesses owners who were denied the $10,000 grant.

Many of these denials were because, unbeknown to the business owners, applications remained in draft awaiting further information when the deadline expired. More people were unfairly denied a grant on other grounds such as typos on their application, or information being provided through the wrong link.

The Department’s call centre, which was initially staffed with five people, could not handle the volume, and while it later grew to more than 500, was not given access to the Department’s case management system.

The Department set up the Business Support Fund, aimed at providing critical and fast financial support to thousands, in nine days.

Cracks soon started to appear, and the Victorian Ombudsman was inundated with complaints, prompting an investigation into what went wrong. The Ombudsman received more than 1,100 complaints about the fund.

Tabling the Investigation into the Department of Jobs, Precincts and Regions’ administration of the Business Support Fund report today, Victorian Ombudsman Deborah Glass made several key recommendations including inviting almost 12,000 businesses whose applications had been rejected to reapply to the fund.

Ms Glass said while the Victorian Government should be commended for setting up what was viewed as a lifeline for some businesses fighting to stay alive, its execution and how it was managed left much to be desired.

“The COVID-19 lockdowns fell like a hammer blow on small businesses,” Ms Glass said.

“There was desperation in people’s voices, they were counting on a grant to pay bills, rent, wages - to survive.

“Despite the stress and anxiety caused by COVID-19, in an environment where their businesses were being destroyed, people were being penalised for their honest mistakes.

Ms Glass said the Department unreasonably refused some applications, refusing to reassess them even after the Ombudsman highlighted the harshness of its decisions.

“Good intentions got lost in translation. The aim of the fund was laudable, to support a hugely vulnerable cohort affected by lockdown. But administering it inflexibly undermined its very purpose. The people were forgotten in the process,” she said.

“Sometimes, it takes the nudge of the Ombudsman’s elbow to encourage public servants to do the right thing. In the end, that they do the right thing is what matters.”

The Ombudsman’s investigation found the Department’s processes failed to recognise that many of those applying for grants were facing severe stresses, may not have computer or language skills, or were otherwise more than usually vulnerable to human error.

Time constraints, the complexity of the application process and the inflexibility of the Department’s initial decision making also confused and frustrated many business owners.


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