As we are all aware, many of our small businesses and their employees have been badly impacted by drought, fire and flood across the breadth of the continent. Now they face the impact of disease as we all confront the imminent threat of a COVID-19 (coronavirus) pandemic , writes Peter Strong CEO of COSBOA.
We note the COVID-19 Emergency Response Plan released by the Morrison Government. This plan focuses on health issues but does not yet give enough attention to economic impacts, particularly those on small business. Given many small businesses have already been damaged by the economic impacts of recent disasters, there is a stronger case for comprehensive assistance to be provided to small business in Australia.
We must provide assistance to millions of Australia’s small businesses and their 4.5 million employees. These businesses will be impacted, for example, by any decision to restrict the movement of Australian citizens to minimise transmission of the virus. Many businesses have already been impacted by restrictions on imports and exports to and from COVID-19 affected countries.
Other countries that have imposed movement restrictions on their citizens have put in place financial assistance programmes for small businesses
This is a necessity given the obvious impact on these businesses and the people that they employ.
Asian countries in particular, have been quick to react. China’s central and local governments, as well as its central bank, have announced a range of stimulus measures to support the economy and businesses, including the central bank cutting interest rates and pumping liquidity into the market. Other measures include temporary value-added tax breaks and loss carry-over extensions for the transportation sector, as well as the government encouraging financial institutions to increase lending to SMEs. Similar measures are being enacted now in non-communist regimes in Taiwan, Indonesia, South Korea and Malaysia. These governments recognise small business to be an important part of their economies. In Australia, our small businesses punch well above their weight and many compete internationally. Keeping our businesses strong minimises the cost across our economy when disasters pass, as this one eventually will.
At the federal and state levels (except for Queensland), Australia has not yet confronted the needs of small businesses. Coming so soon after the recent natural disasters, this creates a perfect storm of financial loss for Australian small business.
During these disasters, it is worth noting that Australian small business people have shown resilience and leadership, despite experiencing hardship themselves. They are often the first and the last to support their communities, making personal sacrifices to keep doors open and people employed.
We certainly support the right of the Australian Government to protect the health of the community by imposing restrictions on people’s movement, should an outbreak occur in our cities or towns over the coming months. What is obvious is that any restrictions due to COVID-19 would further impact the economic well-being of Australia’s small businesses and their ability to keep their staff employed. This at a time when many are struggling to recover from the impact of recent disasters.
With all this in mind, COSBOA is holding a special meeting this week of its industry association members to discuss our recommended response to COVID-19 for governments to consider.
We will invite not just industry leaders but also government representatives as well as representatives from the Business Council of Australia and the Australian Banking Association, to ensure small business needs are heard and communicated to the government and key stakeholders.
COSBOA is currently looking at three immediate measures: assist governments with whatever activities are needed to reduce the spread of COVID-19; work closely with government to communicate early and regularly so small business people can plan and mitigate any risks coming from government intervention; and plan for cash flow injections to keep small businesses alive and their employees in a job during any period where the emergency plan impacts normal business functions.
In Australia, we note that Queensland has created a COVID-19 assistance package worth $27M with a focus on its critical and vulnerable tourism industries. Measures that provide immediate cashflow confidence, address the welfare of workers when businesses stand down employees, and contain long-term assistance with cash flow to cope with rebuilding or recovering are critical and obvious.
The need for faster delivery of assistance during disasters is a lesson that has been learnt from the recent bushfires. Let’s make sure we manage our economy during any disaster by planning for support to small business people, their employees, and their communities, if and when required.