Retail struggle in January 2020

Covid-19 is proving to be a once-in-one-hundred-year crisis. I don’t need to tell any of you of the adverse economic effects it is inflicting on Australia as lockdown measures continue to tighten. With the attention of all governments entirely focused on stopping the spread of this virus and mitigating the job losses, the NRA has outlined a 10-point plan to save retail.

This bold and comprehensive plan includes the following:

  • Ensuring a consistent approach across all states to the National Rental Relief Scheme;
  • National Wage Subsidies, to get money into workers’ hands quickly;
  • Deferral of the Minimum Wage Review;
  • Further financial support for sole traders, micro business and small business;
  • All states to freeze Land Tax payments
  • Banks to freeze loan repayments, not defer them or compound the interest;
  • Federal fund for significantly impacted industries – tourism, fitness, hospitality and retail;
  • Investment in digital upskilling for business;
  • Begin work on a retail recovery plan, to help businesses reopen as soon as it is safe to do so
  • Fund a consumer confidence campaign, to get shoppers backing local retail as soon as possible.

Some of the measures listed have been partially implemented and no doubt some are under consideration, but there can be no denying that urgent action is required.

Following extensive feedback from NRA members, one of the points noted is to defer the minimum wage review. In this environment, retail business owners cannot possibly absorb a wage increase.  Indeed, even the consideration of increasing wages at this point is merely adding more trauma and stress to what is already an extraordinarily difficult business environment for many small operators.

However, there is some hope. The government announced a $130 billion Job Keeper package that will subsidize wages for employees. The Job Keeper program will run for a period of six months, and eligible businesses can apply through the ATO. Payments will be made to businesses in order to pass into their employees, meaning more job retention and less Australians going on welfare during this crisis. Parallel to this program is Job Seeker, previously known as the Newstart Allowance. Eligible persons can receive financial assistance without the waiting period, with payments as high as $790 per fortnight. Those eligible for Job Seeker payments include;

  • Permanent employees stood down because of COVID-19
  • People caring for someone infected with the virus
  • Sole traders, casual workers and part-time employees

Meanwhile, there is one positive piece of news with the rate of infection across Australia dropping considerably in the last seven days. Last week we were on track for a whopping 2.5 million cases nationwide by Anzac Day, now that forecast sits at 150,000. There’s still a long way to go, but the sooner we beat this virus the sooner restrictions will start to be lifted and hopefully jobs saved.

All the best for the week and keep well.