The Victorian Ombudsman has found about 12,000 businesses may have been unfairly excluded from the government fund created to offset the “hammer blow” of Melbourne lockdowns in 2020.

Ombudsman Deborah Glass found just five people were staffing the jobs department call centre when the fund was announced for the tens of thousands of businesses thrown into turmoil by the first and second lockdowns.

After receiving more than 1100 complaints, Ms Glass found the scheme’s good intentions were undermined by poor administration.

“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 found about 12,000 businesses could be entitled to up to $120 million after many of them were knocked back in unfair circumstances.

These included applications being stalled as “in draft awaiting further information” when the deadline expired – but the business owners never being told.

Deborah Glass says some grant approval decisions demonstrated a lack of the compassion.

Ms Glass also found the department’s processes failed to recognise the “severe stresses” and range of computer and language skills held by businesses making applications.

The ombudsman’s report found 79,500 applications were approved in what was the quickest Victorian government grant rollout in 52 years.

“To the department’s credit, they did actually give out tens of thousands of grants to small business owners, and they did have a very short time to set this up,” Ms Glass said.

“What comes through here is that lack of compassion, the lack of discretion that you need to be able to apply in circumstances like this.”

No follow-up after applicant’s email address bounced

Caulfield printer Andrew Freeman, whose business does a lot of work with universities, said getting access to the grants was critical to “keep our head above water”.

After successfully receiving $5000 after the first Victorian lockdown, his second grant application languished in the system.

“We just waited and waited … and nothing happened,” he said.

He later learnt that a typo on his email address in his application was to blame, but nobody from the department tried calling the other numbers or trying the other emails on the form to follow up.

“They just gave up, didn’t look any further than their nose,” he said.

“It was only really when the ombudsman complained and the new people in the department of business were looking at it, and they could see immediately what the problem was, and they fixed it.”

Move to fix things after ‘nudge of ombudsman’s elbow’

Ms Glass noted the department’s call centre staff grew from five to 500 over time, but said it was not given access to the department’s case management system.

“The people were forgotten in the process,” she said.

She said the Department of Jobs, Precincts and Regions had committed to reopening the Business Support Fund for eligible business owners who were denied the $10,000 grant offered after Stage 4 restrictions were announced.

That sum was available to businesses in greater Melbourne and the Mitchell Shire, regions that endured two 2020 lockdowns.

“Sometimes, it takes the nudge of the ombudsman’s elbow to encourage public servants to do the right thing,” Ms Glass said.

“In the end, that they do the right thing is what matters.”

Acting Premier James Merlino said it was important not to lose sight of the 134,000 businesses supported through the government’s various pandemic support programs.

“This was a critical part of our response to the pandemic … the department has accepted all of the [ombudsman’s] recommendations,” he said.