Survey shock: Aussie businesses aren’t ready for a post-pandemic world
Australian businesses grappling with the pandemic are clinging to the belief life will return to normal soon, alarming research reveals — and that could have dire consequences for them and their staff.
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Less than a quarter of Australian businesses have developed a restart plan to cope with post-coronavirus life, alarming research reveals.
Business advisory firm BDO surveyed 330 accounting professionals and almost all reported the majority of their clients had no restart plan.
That could have a major impact on employees if there wasn’t enough cash to fund redundancy payouts as businesses faced rent hikes and were forced to pay back loans that had been deferred for six months.
The report showed less than a quarter of the clients had developed a strategy to prepare for operating in a post-coronavirus world, half would need some sort of financial support when JobKeeper ended, and a quarter didn’t think they would get the support they needed from their bank.
BDO Business Restructuring Partner Nicholas Martin said it appeared many businesses were still hoping things will return to how they were, and were failing to plan their way through
the crisis.
“There has been a lot of focus on JobKeeper – which has been a lifesaver for many Australian
businesses – but this is just one part of the equation. Businesses must also be looking at what
other debts they are accruing during this time, which will eventually need to be paid.”
Mr Martin warned there could trouble ahead when a number of the measures introduced by the Federal Government ended next month.
“Businesses need to work out how they will remain financially viable when the support rolls
off. For example, tenant rents will actually increase to above pre-COVID levels after September 2020, as landlords ‘catch up’ on the lockdown period of rent referral. Tenants still have to pay – they have just deferred their liability.”
That would be felt especially hard for Victorian businesses now in a second lockdown.
Mr Martin said businesses should figure out how many staff would need to be cut before JobKeeper ended, as it would have a real cash cost.
Some businesses will not be able to fund the redundancies they need to make, he said.
“Now is the time for businesses to plan how they will operate in the new normal. Business
owners need to be clear on what adjustments they will make to their business model to
remain financially viable.”
There would be opportunity “on the other side” but it would be a vastly different environment, he said.
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