Jeff Kennett says while restriction lifting is great now, the real test for small business is in October

I score premier Dan Andrews eight out of 10 for his handling of the coronavirus so far, but the real test for the economy will come when small businesses face another blow in October, writes Jeff Kennett.

Small businesses will face another blow in October, when government subsidies like JobKeeper ends. Picture: Ian Currie.

Well, we have started the long but slow march back to civilisation.

Premier Daniel Andrews lifted some restrictions from midnight last night, and outlined the return to school yesterday.

As I said previously, demolishing a house can be quickly achieved, replacing it takes a lot longer. Of course, our way back socially and economically is not as easy.

We are dealing with a virus we now know we can keep at bay from the majority but, if we are not careful, a second wave would render greater damage than what we have already experienced. They are experiencing this in Singapore, Japan and South Korea.

Some of the announced changes to the restrictions were obvious.

Increased attendances at weddings and funerals makes sense.

Small businesses have already been put through the ringer, now many await another test come October. Picture: Rob Leeson.

Fishing, hiking and golfing are now possible, which is good for mental health and exercise.

Up to five guests at home, thank goodness. It will mean many grandparents are able to resume looking after grandchildren so parents can resume work.

Shops open. Relaxation for those attending auctions.

While the changes suggest you work from home if you can, I read that to suggest we should start slowly returning to the workplace.

All this is happening while we continue to observe social distancing and cleaning.

We now have a timeline for the resumption of schooling. That is good, particularly for VCE students whose futures so often depend on how they perform in their last two years at school.

Restaurants and cafes remain closed for meals. In a sense this is understandable because bigger such facilities, if limited to 10 or 20 patrons at a time, would only lose money and therefore could not afford to open.

However, smaller — in many cases family-run — restaurants and cafes could open, and at least potentially break even, provide employment for a few, and give the public some welcome dining options.

Such an easing up would be another small step for mankind.

So, I award the premier eight out of 10, which is a pretty good score from me, but I’m looking forward to the next changes to be announced.

While intrastate travel is important to help bolster the economy, so is international travel, writes Jeff Kennett. Picture: Ian Currie

WARNING, WARNING

As we contain the spread of the virus, the bigger, long-lasting challenge will be rebooting the economy and, in particular, getting people back to work.

After talking with many people, I have a real concern.

Many businesses are receiving grants and subsidies from the federal and state governments, such as JobKeeper, as well as deferments of mortgage payments from banks and statutory payments from the Australian Taxation Office and Victorian Government Revenue Office, such as payroll tax.

Many of these grants, subsidies and deferrals conclude at the end of September.

Businesses must use the next five months to shore up their operations and ensure they are profitable.

For when the penny section ends at the end of September, they will be back on their own. In other words, prepare now for post-October and if you can pay your mortgages and statutory payments on time, do so.

The end of September is the start of the most frightening period for me. Many shops, retailers and restaurants had closed before COVID-19 struck. Many more will not reopen. The same will, sadly, apply to many small businesses.

In short, we should manage the government’s largesse, not only to retain staff, but to do what is necessary to our businesses now, to prepare for when we are back on our own.

Go into October with as few or little outstanding financial obligations as possible.

In part it is why I want to see border restrictions in Australia lifted, so we can travel freely and support the tourism industry. The tourism and hospitality industries have small businesses but are big employers.

“Go into October with as few or little outstanding financial obligations as possible,” writes Jeff Kennett. Picture: Ian Currie

NO, NO, NO

I read with amazement the Victorian Government considered a $500 million package to assist in the rescue of Virgin Airlines.

I was disappointed when Virgin collapsed. But its owners made some commercial mistakes and weren’t prepared to put extra funds into the airline to keep it flying.

While the government decided not to go ahead, for it to consider such a deal for a business sector that regularly collapses and it has no experience in running, was madness.

So Premier, love you dearly, having given you eight out of 10 for your handling of coronavirus, I reduce that by a point for your consideration of risking investing in Virgin, and another two points for lifting Victoria’s debt by another $24.5 billion.

Sadly, that’s a five out of 10.

Are you the Pied Piper to lead us back to a good place? I hope you do, because to fail would be a disaster for our state. If you do, I will happily lift my rating, but I will never forgive you for the high level of debt you will leave as your legacy for every Victorian.

Over to you, Mr Premier.

Jeff Kennett is a former Premier of Victoria

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