Only four Canberra businesses received financial help from the Commonwealth's disaster recovery scheme, after heavy bushfire smoke forced business across the capital to shut their doors over summer.
The air quality in Canberra was ranked among the worst in the world for several weeks over December and January due to smoke from bushfires burning throughout south-eastern Australia.
It resulted in a "significant" downturn in business activity across the city and region, the ACT government told the Royal Commission into National Natural Disaster Arrangements.
Shops, construction companies, childcare centres, school holiday programs and tourist attractions were forced to close or suspend operations due to the smoke in the second week of January. Commonwealth departments also closed or asked staff to work from home during this period while universities also shut.
The hospitality, retail and tourism industries were hardest hit by the closures, which came during one of their most profitable times of year. There were also major flow-on effects to the broader economy from the closures, the ACT government said.
"For example, the YWCA in Canberra closed five school holiday programs and five early learning centres on 5 January 2020 due to poor air quality in Canberra, affecting 300 families - 346 children- and 150 staff, resulting in lost revenue and causing parents to either find alternative care arrangements or not work," the government said.
However businesses the ACT did not become eligible for help under the Commonwealth's Disaster Recovery Funding Arrangements until February 12.
Under the program, which is jointly funded by the federal and territory government, businesses that experienced significant disruptions as an indirect impact of the fire could receive a concessional loan, while businesses that were directly hit could get a grant of $50,000.
The ACT had tried to activate as a disaster zone under the scheme earlier in January but was unable to as there was no active fire in the territory.
More than 100 businesses registered with Access Canberra for bushfire-related business support and assistance.
However, just three to date have actually received the loans.
Another business that was directly hit by the Orroral Valley bushfire received a grant under the same scheme.
"With the emergence of the COVID-19 crisis it is believed that Canberra businesses quickly turned attention to a new wave of business impacts and the national and state-based assistance measures," the government said.
The ACT developed its own measures to help smoke-affected businesses, including waiving outdoor dining permit fees.
In a letter to the royal commission, Chief Minister Andrew Barr said the disaster recovery arrangements proved "cumbersome and challenging" to implement in these circumstances, despite the best of intentions.
"The 2019-20 bushfire disaster has highlighted that many government systems and structures that have served us well in the past may no longer be suitable for responding to the emergencies this country face," Mr Barr said.
"Reviewing and updating the [scheme] to make it more practical and responsive during prolonged and changing disasters across multiple jurisdictions is one practical step governments can take to ensure we are better placed to respond to future disasters and support our communities in their time of need."
The ACT also said it did not have the capability to deal with more than a small number of businesses seeking financial help in the aftermath of a disaster.
It hired the Queensland Rural and Industry Development Authority to manage the delivery of the Commonwealth concessional loans to ACT businesses.
The territory government suggested a series of standing, nationally consistent relief measures be developed to be rolled out during times of crisis.
