Victorian lockdown shows why governments need ‘always-on’ support for SMEs
If there is always the possibility that a state will need to be locked down, there must also be a business support program that can be turned on immediately.
The estimated economic cost of Victoria’s seven-day lockdown is staggering. On Thursday, multiple business groups put the number close to $1 billion, while others said it could be as high as $2.5 billion.
But the stories with smaller numbers are devastating, too.
Like the regional pub bracing for $40,000 in lost earnings this weekend, the owner of an audio business looking at $30,000 lost, and an art store preparing to lose $10,000.
Then there are the stories like the one of a Melbourne restaurateur freezing 200 litres of bolognese and 200 litres of bechamel sauce that was supposed to be served at a now-cancelled event.
And yet, there’s some important numbers all businesses owners in Victoria are waiting to hear: what financial support the government will give to those affected by the snap lockdown.
Acting Victorian treasurer James Merlino said on Thursday assistance for businesses will be announced in the next few days, a comment that was echoed by Small Business Minister Jaala Pulford when I asked her about this on Twitter on Thursday evening.
Will the government be providing direct financial support to small businesses again? If so, when will the details be available?
— Eloise Keating (@ellykeating) May 27, 2021
But even if the support package is announced today, that is one day too late.
Pulford said the government is working through the details of what support will be offered, but this should have already been decided.
The Victorian government has provided considerable financial support to affected businesses since the COVID-19 pandemic first took hold in March 2020 — including a $143 million package announced in response to the last lockdown in February this year — so it already has mechanisms in place to deliver cash payments to businesses that desperately need it them.
Put simply, we’ve been here before and we know how devastating lockdowns are to small businesses.
If there is always the possibility that a state or region will need to be locked down, there must also be a standard business support program that can be turned on immediately.
This is the approach taken in New Zealand, where wage subsidies and business support payments automatically kick in when the country’s alert level increases for seven days or more.
As Gavan Ord, senior manager of business and investment policy at CPA Australia, points out, we’re now 15 months into the pandemic but there is no standardised approach to business support across the country.
“Other countries have developed a standardised support package; they don’t need to listen to thinking music or phone a friend before hitting ‘go’,” Ord tells SmartCompany.
“Why is it that Australia’s business community still has to wait while governments um and ah about the best way to support them?”
This time around in Victoria, it is even more important that the state and federal governments act swifty.
This is the first major lockdown in Victoria without access to JobKeeper payments and it comes after these same businesses endured an extended lockdown in the second half of 2020. As we found out in April, more than 12,000 businesses also wrongly missed out on support payments due to ‘flawed’ application process.
Many Victorian small business owners understand the necessity of lockdowns, and know how critical it is to stop this virus in its tracks.
But they also know better than most the toll these measures take. We are talking about business owners’ livelihoods. Their staff. Their families. Their mental health.
Business support measures that can be turned on as soon as restrictions come into effect would go some way to ensuring these businesses survive, while also letting business owners know they haven’t been left out in the cold.
