NSW business confidence collapses amid Omicron surge

Consumer confidence has collapsed with 40 per cent of businesses saying they don’t have enough cashflow for the next three months.

Business and consumer confidence has collapsed, with 40 per cent of businesses saying they don’t have enough cashflow for the next three months.

The findings, from the first survey of businesses statewide about the impact of the Omicron surge, will increase pressure on the Perrottet government to unveil an economic support package to soften the blow of the state’s current outbreak.

The Business NSW survey of 2,000 businesses across the state found that business owners are also not expecting conditions to improve over the next quarter.

Gosford’s Clip 'n Climb indoor climbing centre owner Geoff Bushnell said the business experienced a huge drop in cash flow in December. Picture: David Swift

Three quarters of business owners surveyed believe the economy is weaker than the previous three months, and almost half of businesses expected that to continue.

The dramatic drop in spending and activity has led to growing calls for the government to provide financial support to businesses struggling to stay afloat.

As first revealed by The Daily Telegraph last week, the state government is finalising a broad economic support package to assist businesses through the latest Covid downturn.

Ahead of the wider support package, Premier Dominic Perrottet and Treasurer Matt Kean will on Monday announce a so-called “Event Saver” fund for major festivals and events. Organisers will be able to claim government payments to cover nonrecoverable costs if major events are significantly impacted by public health orders – like the singing and dancing ban which effectively made music festivals illegal. Payments are set to be capped at $10 million per event.

NSW Premier Dominic Perrottet. Picture: NCA NewsWire / Damian Shaw

Mr Perrottet called the fund a “critical lifeline” for organisers who have had to cancel or postpone events.

“Unlike previous surveys throughout 2021, where business owners felt the next quarter would get better, that isn’t the case this time as there are no government support packages in place,” Business NSW CEO Daniel Hunter said.

“Short-term targeted support for those businesses and staff that are highly impacted is a must,” he said.

Mr Hunter said the government should be encouraging people to “spend freely in safety,” while ensuring supply chain issues are resolved.

Business owners who completed the peak body’s January survey spoke of “financial and mental anguish” caused by the Covid downturn, and overwhelmingly expressed uncertainty about whether they could stay open.

Geoff Bushnell’s indoor rock climbing centre Clip n Climb experienced a 240 per cent drop in cash flow in December.

He said support payments during the Delta lockdown helped him survive, but his business still has not recovered.

“It’s worse than any other period during Covid,” he said.

“Customers just aren’t turning up, everyone’s just so scared that they’re not going out,” Mr Bushnell said.

“We’ve just got nothing left in the bank.”

Mr Kean said that government is confident economic activity will bounce back when the current outbreak is over.

“There is no doubt we are facing an unprecedented challenge at the moment and it is having a significant impact on our economy.

“But we expect this downturn to be short lived as this current Omicron outbreak reaches its peak and case numbers begin to subside,” he said.