Lockdown toll prompts business calls for government relief

The spreading coronavirus is hurting business operations and prompting calls for governments to step in.

Construction work is on halt during lockdown in Sydney as restrictions – which have shuttered most shops, businesses and classrooms – may have prevented a tidal wave of cases, but have so far failed to stop the outbreak. Picture: AFP

Tens thousands of workers are again at risk of being stood down with no pay across the nation in the face of extended lockdowns, prompting major businesses to call for clear policies and more government support until the economy reopens.

Deep job losses are expected as shuttered retailers begin to stand down staff again and vulnerable industries like travel and hospitality are also hit by Sydney’s extended Covid lockdown and the Melbourne outbreak.

Qantas boss Alan Joyce warned of the possibility of further stand-downs in response to the current low level of domestic and trans-Tasman flying.

At the same time major retailers have shuttered after the NSW government tightened the definition of essential services and shopping strips are deserted and business owners are receiving less support than in earlier lockdowns. At the same time Victoria’s lockdown has extended into its second week.

Paul Zahra, chief executive officer, Australian Retailers Association, said he had feedback from his retailer members that wide-scale staff cuts would start to be triggered, as the protracted lockdowns now across three states inflicts pain on business balance sheets.

“Even the retailers that had chosen not to stand down staff and continued to pay their staff are now commencing a stand down, enforcing stand down provisions, specifically those retailers that have deemed to be non essential by the New South Wales state government,” Mr Zahra told The Australian.

“We are hearing of it being in the tens of thousands of people that are progressively being stood down.”

He called for the return of JobKeeper and easing of leasing obligations to project jobs and the $320bn sector.

Pitt Street Mall in the Sydney CBD during lockdown. Picture: NCA NewsWire/Gaye Gerard

“The only way we could safeguard the industry is to put the safety nets that were proven to be successful back in, which were JobKeeper, a leasing code of conduct and the third thing would be industrial relations reform, flexibilities put in over Covid that allowed retailers to reduce full-time staff hours.

“This is not groundhog day. We are seeing a new set of circumstances with (Covid) variant that is highly infectious, where cases of infection has happened in retail stores and that is impacting confidence, which impacts shopping and we are seeing certainly people not only spending less but actually where retailers can’t continue to maintain the payroll whilst the revenue is not there to support it.”

Business Council of Australia chief executive Jennifer Westacott said that in NSW there should be a focus on getting construction up and running as soon as possible, and she called for a shift away from imposing sudden, potentially open-ended restrictions on business.

“We have to, I think, move from snap lockdowns, if you will, to smart lockdowns,” she said. Ms Westacott said if the delta strain was so much more contagious then there was a need to revisit the national hotspot definition.

“Let’s get one definition through national cabinet because that triggers the disaster relief funding … I think we do need to look at that two-week period and we need to be very clear on the objective of what we’re trying to solve,” Ms Westacott said.

Lockdown restrictions have been further tightened as NSW continues to record new community COVID-19 cases. Picture: Getty Images

Landlords have told The Australian that they will direct relief to smaller tenants and they expect larger retail chains, many of which had booming profits through the pandemic as consumer spending was fuelled by stimulus packages, to shoulder the load at a time when many have stalled developments in Sydney and Melbourne.

Property Council of Australian chief executive Ken Morrison said the industry was working with the NSW and SA governments on the road map to a Covid-safe construction reopening.

He warned of the impact on the construction sector of longer lockdowns and said this was the last time any Australian state should ever go through a full construction lockdown.

“Construction small to medium enterprises run on skinny margins of between 1 and 3 per cent per annum and can be vulnerable to cash flow shocks putting jobs at risk,” he said.

Urban Taskforce chief executive Tom Forrest said the vast majority of the construction industry workforce were subcontractors and sole traders. “They have no security of employment and rely on government support packages where loss of income is not covered by insurance,” he said.

Australian Retailers Association chief executive officer Paul Zahra.

“Throughout 2020, the construction industry stayed open. Those who were impacted were supported by JobKeeper and ‘Cash Boost’ for smaller businesses,” Mr Forrest said.

“This lockdown has had a massive impact on working families and this flows through the entire economy and society,” he added. “This close-down was an over-reaction and it will have a massive impact.”

Businesses that depend on events and travel are also suffering.

ASM Global Asia Pacific chairman Harvey Lister, whose company operates the International Convention Centre Sydney, said the facility had lost a tremendous amount of business because of the lockdown.

Mr Lister, who also manages convention centres in Brisbane, Darwin and Cairns, said the long-term economic impact of the lockdowns was unknown at this stage.

“If you could tell me that this pandemic was going to end tomorrow I would be more confident,” Mr Lister said. “But we just don‘t know where this thing is going to end. We are up to Covid Delta, so what does Gamma look like.”

 

Mr Lister said he had offered the facility along with others around Australia as mass vaccination sites to help fast-track the road out of lockdowns.

“The key to a quicker roll out is not only supply but people to give the injections,” said Mr Lister, who said options such as using military personnel to deliver vaccinations should be considered.

The concern was that the NSW lockdown would drag on beyond a few weeks adding to the economic toll.

Brisbane Convention and Exhibition Centre general manager Bob O’Keeffe said the facility had lost about 30 per cent of its business in July as lockdowns in southern states forced the postponement of several key events.

“We had our best June on record in terms of profit,” said Mr O’Keeffe. “But then the lockdowns hit.”