‘Not all doom and gloom’: Businesses better prepared for lockdown lifeAugust 13, 2021
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Switching to online sales, takeaway and working from home has ensured many employers are better prepared to weather coronavirus restrictions now than last year, with the number of businesses taking out a loan repayment holiday in the past month in the hundreds compared to hundreds of thousands last year.
Economists and analysts are optimistic about the resiliency in the business sector despite high case numbers in NSW and a growing outbreak of the Delta strain, pointing to far fewer requests for repayment holidays as one of the signs employers are staying afloat.
Companies have been pivoting more quickly to takeaway and online sales during this round of lockdowns.Credit:Louise Kennerley
The Commonwealth Bank this week revealed only 240 new deferrals for business customers’ loans by July 31, less than 0.1 per cent of its portfolio. At the height of the pandemic last year the bank, the nation’s biggest, gave 83,000 business borrowers a repayment holiday. Australian Banking Association data shows that from July 8 to the first week of August about 600 business loans nationally were in deferral compared to 225,000 business loans last year.
CreditorWatch chief executive Patrick Coghlan said the economy was in a strong position in the lead up to the lockdowns and companies were better prepared to make it through the latest lockdowns than they had been in the past.
“This is not to take away from how difficult and scary and uncertain this can be for businesses, particularly for small and family businesses who basically lost all their revenue overnight, but there are a few key things that bring positivity,” Mr Coghlan said.
“Businesses now seem to be getting enough support to get through lockdowns. The first few weeks of lockdown were uncertain, and it took longer than it should’ve to get the stimulus [and government support issue] solved, but the money is now filtering through,” he said.
“Businesses have also learnt a lot over the last 12 to 18 months about how to prepare and plan for the future. There has been a big shift to online, to automation and to digital … businesses are a lot leaner.”
Ai Group chief executive Innes Willox, whose organisation represents 60,000 businesses collectively employing about one million people, said those in retail and household services could pivot towards online sales and home deliveries.
“Businesses in general are benefitting from the ‘learning by doing’ experience with restrictions in 2020,” Mr Willox said. “More broadly, businesses and individuals are better equipped and more confident about COVID-19 safe workplaces, working from home and managing and keeping people engaged.”
He said QR code checking in was a clear advance on last year and there were more avenues of consultation between business and government. But he said many regulatory requirements around restrictions “remain uncertain”.
ANZ head of Australian economics David Plank also said it’s “not all doom and gloom”.
“The past year has shown how resilient the economy has become, with households and businesses adapting to stay-at-home orders,” he said. However, he said hospitality, tourism, arts and recreation businesses will struggle.
“With movement restrictions set to be part of the landscape for longer than we anticipated, our current forecasts for a 1.3 per cent quarter-on-quarter decline in GDP in the third quarter and a significant snap back in the fourth quarter now look too optimistic,” he said.
Council of Small Business Organisations Australia interim chief executive Alexi Boyd agreed small businesses were much more prepared for lockdowns in terms of the practical requirements but she said there was still confusion about the support measures available.
She said accumulating debts has “a compounding effect” and lots of businesses fear having to leave their premises and pay out the remainder of their lease.
“There’s a real feeling of deep despair and anger, there’s only so long resilience can last, and we need measures to help us be more durable.”
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said many businesses would lose a significant share of their trade if not all of it during the restrictions.
“While some businesses may be able to pivot to online sales or takeaway, it is not a complete substitute. It is far from a panacea for the hit many businesses have taken from the loss of normal trade,” Mr McKellar said.
“The longer lockdowns remain, the more challenging it is for affected business to resume their services.”
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