Stimulus leaves big businesses behind
The Federal Government has announced a further $66 billion of relief measures to businesses and workers impacted by the spread of COVID-19, bringing the total amount pledged to $189 billion.
Prime Minister Scott Morrison told reporters that the package was created to preserve the businesses that comprise Australia’s economy so they can comfortably bounce back once the virus subsides.
Both packages announced in recent weeks largely focus on the small-to-medium business sector, promising a rebate of up to $100,000 of income tax in an effort to keep Australians employed.
This isn’t extended to large businesses, however, and some believe it creates a looming problem for a swath of the industry.
Australian Retailers Association executive director Russell Zimmerman told Inside Retail that larger retailers had been left out of the federal conversation and were likely to face some difficult times ahead if action isn’t taken.
“You can be smug and say retailers that turn over more than $50 million don’t need any help, but unfortunately they do – particularly in clothing, footwear and personal accessories, where businesses have seen sales fall around 70 per cent,” Zimmerman said.
“It is essential that the Government looks at these businesses which are in absolute dire straits at the moment.”
Leaving big business out of relief measures runs the risk of hundreds of thousands of employees being left jobless, as some of Australia’s largest brands fall into voluntary administration and are forced to shut down.
And this could start happening in four or five weeks, according to Zimmerman.
Union on board
To tackle this problem, the ARA teamed up with the Shop, Distributive and Allied Employees Union (SDA) to call on Morrison to deliver an Australian retail industry rescue package. This would include wage subsidies to retail workers, underwriting a line of credit so retailers can trade without fear of insolvency, and a guarantee of retail rental payments.
“I think we have to look beyond [small and medium business] because these big iconic brands have leasing commitments, wage commitments, electricity, insurance… there’s only so much cash you’re going to have in any business until you run out,” Zimmerman said.
SDA national secretary Gerard Dwyer told Inside Retail that while the stimulus package announced over the weekend was a good start, it isn’t enough to stop essential businesses, such as local supermarkets, from needing to shut down.
“If they fall, we will see thousands of jobs go overnight. The Government must adopt the retail rescue package and it must be available to employers – regardless of size – that are facing an existential threat,” Dwyer said.
While the Prime Minister has foreshadowed a third stimulus package in the future, treasurer Josh Frydenberg told 10Daily the next injection is likely to target relieving the burden on renters.
This story first ran in Inside Retail Weekly. Given the current crisis, we have decided to unlock all premium content related to COVID-19. If you would like to support Inside Retail, please consider subscribing here.
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