Talking Point: Stimulus falls short for Tasmanian retailers

LOUISE GRIMMER: Virus economic package leaves out shops and services that form a cornerstone of our community

Most small retailers and service providers in Tasmania are sole traders or employ one to two staff so measures such as payroll tax waivers won’t make much difference.

THE shopper panic that has set in due to the COVID-19 crisis has shone a light on the vital role of the retail sector. We tend to take retailing for granted; we expect stores, and the people who own and run them, to provide us with what we want when we want it.

The pandemic has disrupted the retail supply chain and caused anxiety and uncertainty for Australian consumers. Footage shared in the mainstream media and on social media of shoppers behaving badly — chaotic scenes over toilet paper, tissues and hand sanitiser, retail staff being abused and even physically assaulted — have shocked the community.

Retail and service workers are some of the lowest paid members of our community and they deserve to be treated with courtesy and respect, particularly as their work allows Australians to access food and other goods and services.

Governments around the globe are grappling with the health and economic impact of the virus on economies and communities. There is no way to sugarcoat it — the outlook for businesses is bleak.

In response to the COVID-19 pandemic, the State Government has announced a raft of stimulus and support measures for “key industry sectors in the state”. While this is commendable, there is a gaping hole with regards to assisting the retail sector, and small retailers in particular. The retail industry throughout Australia, as well as here in Tasmania, is predominantly made up of small businesses. Retail also includes small service businesses such as hairdressers, beauticians, dry cleaners, the list goes on.

The retail industry is going to bear the brunt of much of the change that will come in the economy and our local communities as a result of the virus pandemic. I call on the State Government to add to the support package by ensuring measures that are appropriate for small retail firms, many of which are micro-businesses.

Micro-businesses employ fewer than five staff and many are sole traders. There are many hundreds of these retail and service businesses in the state, and we all rely on them staying in business.

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The current government package provides assistance only for businesses operating in the hospitality, tourism and seafood production sectors — where is the support for small retail and service businesses? It is crucial that the government recognises that this sector of the economy is one that does the heavy lifting not only in terms of contributing to our economy, but also to the social fabric of our society. Imagine your local area without any local shops or services. It is unimaginable. We must do everything we can to stop this happening.

The government’s package offers a range of assistance measures including interest-free loans, payroll tax waivers, a buildings maintenance program, youth employment schemes and modest grants for hiring apprentices and trainees. In my opinion, none of these measures goes far enough to provide meaningful support or stimulus and, importantly, they are not targeted at the retail and services sector.

So, what should the government be doing to support the small retail sector?

Expand interest-free loans for small business to include the retail and service sectors. Or go even further and distribute cash grants that don’t need to be paid back.

Payroll tax waivers are not incredibly helpful for most small operators. Many of these businesses are actually micro (and don’t incur payroll tax). Most small retailers and service providers throughout Tasmania are sole traders or they may employ one to two staff so providing relief through measures such as payroll tax waivers is not a measure that will really make much difference to these businesses.

Similarly, the Youth Employment Scheme, which provides a payroll tax rebate for employing a person under 24 years, is not a measure that is helpful. Most of these businesses are going to struggle to retain the staff members they already employ and it is unlikely that there will be the demand to hire new staff in the short to medium term.

The Small Business Grants Program offering a $5000 grant for businesses hiring an apprentice or trainee is only open to businesses in tourism, hospitality, building and construction and manufacturing. The amount is minimal and similar to the Youth Employment Scheme, there is unlikely to be much capacity for this type of hiring. Even if it were a worthwhile measure, again, it is not available to other sectors.

A sum of $80,000 to the TCCI for human resource and industrial relations assistance is less than that required to hire a single staff member for one year. It is not enough.

Retailers and where possible service businesses, that can shift their businesses online should be supported with grants to help them adjust to selling online. My research over the past seven years has found there are still many small stores and services that are not digitally literate, don’t have an online presence and therefore can’t conduct business or sell products to customers on the internet. It is crucial we support those businesses that can transition to online sales, or improve their capabilities in this area.

This is one way we can all support small stores. It may be that for a time we will have reduced function to be able to shop physically, so by improving online access to stores and other services, we can try to stem the flow of business disruption.

This is just the start of the conversation. We need to go much further and we need the best and brightest to take the lead on how we are all going to support local businesses. Our community without them doesn’t bear thinking about.

Dr Louise Grimmer is senior lecturer in marketing and a retail expert in the School of Business and Economics at UTAS.