Retailers need support as Delta runs rampant

The poor vaccination rollout is delaying the recovery. Picture: Getty Images

On Thursday, NSW Covid-19 case numbers hit the highest daily case load in the history of the pandemic. This of course does not bode well for the easing of lockdowns anytime soon within our nation’s economic capital.

By August end, Greater Sydney and surrounds will have spent more time under continuous lockdown than in the height of the pandemic. With Queensland’s lockdown extended this week, this brings Australia’s total time in state-imposed lockdowns in 2021 to around 100 days. The Delta variant has so far put around $12bn worth of retail trade at risk nationally, and for Greater Sydney alone, a billion dollars is at risk each week.

What is unprecedented is not only the duration of the lockdown within our largest economic centre, but the fact we are navigating these national restrictions without an adequate safety net in place.

The national payments for Covid relief in the June quarter of 2020 were $3.6bn a week from the federal government. $750m a week is currently on offer for NSW’s longest lockdown, which is significantly less compared to what the Commonwealth offered previously.

Also missing is rent relief in NSW, which was on offer from landlords throughout 2020 via the Federally introduced Leasing Code of Conduct. Overall, the business and worker support packages announced recently, while welcome news for many, are unlikely to have the same protective nor stimulus effect we saw in 2020. In addition to these significant payment gaps, there’s no certainty that the support payments will be in place after the lockdowns are lifted, making a possible assumption that businesses will snap back to pre-Covid-19 levels which of course, is unlikely.

Our poor vaccination rollout is adding further pressure. This is not only a safety issue but a global reputation challenge, with the return of our tourist community now stretching ever further into the future. This undermines the survival of many businesses – from travel businesses to CBD retailers who rely on this international customer traffic to survive.

These factors mean Delta is not just another bump in the pandemic road, it is a looming fiscal cliff. And we need to respond appropriately.

Comprehensive national measures must be reinstated

We need the Federal Government to urgently reinstate previous business support measures to offset the mounting losses of continued Delta outbreaks. This would include the reintroduction of rental relief in the form of the Leasing Code of Conduct, restoration of the temporary industrial relations flexibility provisions, and the introduction of national protocols for Covid restrictions.

Leasing, along with payroll costs, are the two greatest pain points for retailers and once again rental payments are becoming a trigger for business collapse among many retailers. The federally initiated Leasing Code of Conduct was phenomenally successful in protecting the interests of small business during extended lockdowns and created a helpful framework for negotiations for larger retailers. With this measure now removed, we are already hearing many stories of landlords threatening the financial stability of small retailers.

Reinstating the Fair Work Act flexibilities will enable many employers of hard-hit businesses to help keep staff on and adapt to changing circumstances. Being able to kickstart a business after partial shutdown or hibernation with the same employees on board will make all the difference.

Unfortunately, until vaccination levels increase, any state or territory can be at risk of these lockdown impacts for the foreseeable future. Bespoke provisions and restrictions are occurring within each state and territory each time a lockdown is announced, making the cost to business and safety impacts unnecessarily high. We need a national framework to lay out agreed and consistent protocols around lockdown and reopening triggers, define what is essential shopping and apply nationally consistent Covid-19 safety measures within stores and workplaces.

Many battle-weary businesses are now on the brink of emotional and mental health collapse – not just financial devastation.

The Leasing Code of Conduct, along with JobKeeper and industrial relations flexibility were all highly successful in supporting businesses through the first wave of the pandemic. As the Delta variant runs rampant, businesses are feeling the pinch more now than at any stage before in the pandemic. Retailers need the safety-net of tried and tested support schemes that we know are effective otherwise, expect to see more “for lease” signs.

Paul Zahra is the chief executive of the Australian Retailers Association.