In this article, we take a look at how coronavirus (or COVID-19) is affecting Australian businesses.
A recent survey by the Australian Bureau of Statistics (ABS) shows that almost 50% of Australian businesses have said that they are experiencing an adverse impact of the COVID-19 situation. The survey also reveals how the coronavirus pandemic has hit Australian businesses and the economy as a whole.
According to the ABS, the adverse impacts are mostly prevalent in accommodation and food services. More than 78% of businesses have already reported impacts and approximately 96% said that they are expecting impacts in the future months.
It is also expected that over a million Australians can lose their jobs if the unemployment rate rises above 10%, as predicted by some economists. Numerous people working for various listed companies in Australia have already faced significant disruption to their regular employment conditions, including loss of income, even if it is temporary.
Author: Farrah Motley, Legal Principal of Prosper Law.
Australian Businesses Are Needing to Become More Flexible
Following the COVID-19 pandemic situation, the restrictions imposed to combat the crisis have forced much of the workforce to think about new ways of working. Some believe that this has changed the future of work irreversibly, as a few of the world’s largest industries have been forced to pivot in response to this global challenge.
Many people feel that the traditional work weeks like Monday to Friday, 9 to 5, with a busy commute into a city business district, are coming to an end. Both Australian employers as well as the employees are coming to terms with the benefits and challenges of flexible solutions and roles. Flexible working is gaining popularity with most organisations across Australia, as they are beginning to recognise it as a key enabler of gender equality and employee retention.
Flexible working is helping to attract and retain diverse talent, which is crucial for future-proofing the workplace, as well as the Australian economy as a whole. To achieve this, many companies are trying to make their workplace more flexible and responsive to the needs of the employees. Flexible working is also helping in driving employee engagement and productivity on the one hand and boosting employee well-being and happiness on the other.
Australian Businesses Are Leaning on the Government More for Financial Support
Because of the current economic situation, most industries are leaning on the Australian Government for more financial support. That is the reason why the Federal Government has taken some initiatives to support Australian businesses.
Those financial initiatives include:
- Cash flow boost
- Backing Business Investment
- Temporary relief for financially distressed businesses
- Coronavirus SME Guarantee Scheme
Some Australian Industries are Booming
Even though many industries have and continue to be adversely affected by the COVID-19 pandemic, some industries are booming. The industries that appear to have withstood the economic turmoil of the pandemic include:
Because of the pandemic, patient intake at hospitals has increased. Even the suppliers of essential equipment are also enjoying increased demands. Companies manufacturing medical equipment and the businesses providing information technology to support them are also financially benefiting.
Manufacturers that have been able to adapt their production lines to make vital supplies are also experiencing increased demand. Local manufacturers are also benefiting from Australians who are motivated to buy locally due to the crisis caused by coronavirus.
HOUSEHOLD FURNISHINGS, HOME IMPROVEMENT AND DIY
Work from home has given people more time at home. This has led to an increase in demand for home building and renovations. As a result, the household furnishings, home improvement, DIY and building related industries have not been impacted by the same coronavirus-led downturn of other Australian industries.
Workplaces and other spaces that are open to the public are doing their best to keep their visitors and employees safe. With increased awareness about the spread of the virus via surfaces, cleaning companies are also seeing a significant increase in the demand for their services.
Delivery services like takeaway food providers and grocery services are seeing a significant increase in consumer demand, as people are opting for home delivery as a result of restaurant and café closures. This has led to a boom for delivery services in general.
Some Australian Industries Are Suffering Severe Financial Hardship
While many industries are suffering from the adverse impacts of the pandemic outbreak, some industries like the tourism industry have been hit hard. Currently, they need maximum support to rebuild the industry from scratch. Recently the Government has announced to offer loans in the range of $250,000 to $50 million to the tourism industry under a new capital facility that will be provided by Export Finance Australia.
Government financial assist will help to support the previously profitable Australian tourism businesses that have been unable to capitalise on domestic tourism and have suffered due to the closure of Australian borders. The tourism industry will have to start rebuilding from a standing point once the COVID restrictions are taken down, and only a strong product and supply chain can help them to restart.
Australian Chamber & Tourism Executive Chair, John Hart, believes that this loan facility for Australian exporters will eventually save some of the assets vital to restarting the tourism industry when the time is right. This is because the core tourism assets and businesses are of significant importance to the Australian economy. The Australian Government and the tourism industry need to take steps to ensure tourism businesses are ready to offer their services once the COVID-19 restrictions are removed.
The Overseas Arrivals and Departures figures recently released by the ABS demonstrate the broader issues faced by the Australian tourism industry. In Australia, tourism and events are the worst affected sectors in the economy as a result of the coronarivus pandemic.
It is important to revive these sectors as they are the key to Australia’s economic recovery from the devastating effects of the COVID-19 pandemic. However, the successful restart of the tourism industry is dependent on programs such as loans and other Commonwealth, State and Territory Government support initiatives, as well as the need for detailed planning undertaken by the Australian Government.
The COVID-19 pandemic situation has brought about irreversible changes to the Australian economy as a whole. While many industries are seeing an increase in demand, some industries are suffering severe hardship and require help from the Australian Government to survive the crisis period. The Federal, State and Territory Governments have carried out numerous initiatives to help these businesses.
How Can Prosper Law help your business?
If your business needs advice about access to COVID-19 financial assistance, Government initiatives or commercial legal advice, contact Prosper Law for a free consultation and a no-obligation quote.
Farrah Motley | Legal Principal
PROSPER LAW – Australia’s Online Law Firm
M: 0422 721 121
A: Suite No. 99, Level 54, 111 Eagle Street, Brisbane, Queensland Australia 4000