Businesses push through to “new normal”

COVID-19 has upended the way we live, manage our health and work. The impact has been profound and it’s important we recognise the impact the ongoing case numbers are having on the business community so fundamental to Australia’s economy.

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Clearly, and the evidence and experts agree on this, there can be no sustained economic recovery without the health impacts being managed. The “shadow lockdown” in Melbourne and Sydney over the summer was a graphic demonstration of this.

“We are still seeing the signs of business impacts with some simply closing until they can get the confidence back they can operate without future restrictions.”

But for those of us who are salary earners there has also been some serious mental health challenges driven by lockdowns, border closures, job security, inability to visit sick loved ones etc. It has been a massive disruption to normal life. These impacts too are well recognised and increasingly evident in the data we are seeing.

Job security is a function of our business owners being profitable and able to employ staff. A small business owner in particular often has everything on the line and they are subjected to the same mental challenges only amplified by enormous responsibility for the lives of their employees.

There has been some important government support through JobKeeper and other initiatives that have ensured many businesses were able to survive and keep key staff. The challenge now is for business owners to see out the ongoing impact of the Omicron strain which is another blow to their confidence.

And, sadly, while the catastrophic natural disasters in Queensland and New South Wales and the invasion of Ukraine again drive up anxiety.

Resilient spirit

One thing I have learnt from dealing with small businesses for over 20 years is they are mostly entrepreneurial in their thinking and motivated by growing their business and planning for the future. Yet the impact of policy measures and changed regulation on them, combined with labour shortages, stock shortages, rising input costs and uncertainty about what might be next is taking a real toll on their entrepreneurial spirit.

They are, however, a rare breed of resilient humans who still want to get their business and their employees through this crisis. They care deeply about their staff and their families and need the community’s support to keep providing the key services they deliver.

We are still seeing the signs of business impacts with some simply closing until they can get the confidence back they can operate without future restrictions or consumer hesitancy. They need our support and the call to shop local has never been more important. There is always going to be a difficult calculation around the balance between health measures and economic growth – even now that the impact of vaccines, new treatments and previous containment measures have allowed more elements of “normal” living to emerge.

Health and the economy are intertwined and both are important but the reality is, in that balance, there are only so many restrictions you can place on business before it becomes unviable and starts generating losses.

Labour shortages are real and it is a welcome relief to see initiatives to get foreign workers and visitors back into the country as they are so important to tourism, hospitality and agriculture. Regional towns and cities are under real pressure with labour shortages even more pronounced. This is across a broad range of industries and is another impact businesses weren’t anticipating.

Playing our part

The COVID-19 pandemic brings real challenges but it also brings opportunities and domestic tourism is one of those. This opportunity will only be realised if people are confident to travel and get home without being forced into isolation or becoming sick. There needs to come a time, post the current wave, when rules are simplified.

Banks of course have a role to play and have been given federal support to help some of those business impacted. Banks need to play the long game and see through the impacts. That said, businesses need to demonstrate future viability to avail themselves of support and this is made much easier when there is confidence around government policy, health responses and access to labour and key supplies.

As the disastrous inundation of Australia’s east coast plays out these challenges will be evident across multiple fronts.

It is pleasing to see changes to close contacts, borders and social distancing guidelines but these changes need to continue to evolve if businesses are to go back to planning for the future and doing the heavy lifting for the Australian economy and providing for the lifestyle many of us enjoy.

Jeffery Schrale is Regional Executive for Far North Queensland at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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