- Economic Shock -
Helping business owners is critical

COVID19 & the Economy

Mark Frost - Chief Economist, Business NSW 

22 March, 2020

The Australian Government today announced a $189 billion stimulus package to support Australians and the economy through these difficult times. For many businesses, a vital component of this package is $32 billion in payments to support cash flow for employers. 

  • $189 billion stimulus announced
  • $32 billion vital to employers keeping staff
  • Unknown economic landscape where basic tenets of business success upendede
  • People should remain at centre of all economic assistance for best chance at recovery
  • Businesses calling out for industry-specific guidance about how to operate safely

Protecting the viability of employers and their ability to retain staff is critical to Australia’s economic recovery.

When businesses go under it’s normally because they are unable to compete with others that are typically more efficient and have a more appealing product offering.  But now, even the most successful businesses are vulnerable to what is an unprecedent economic shock. 

It’s important to make sure these successful businesses are in a position to reopen and get back to normal.  We will be left with permanent scars if we lose their organisational capital. 

Successful businesses have well‑functioning systems, people who know how to work well together, the goodwill of their customers and a successful culture. We will lose all of this if they do not survive.

People are at the heart of any organisation.

That is why it is important that businesses are given the support they need to retain their people.  Supporting continuity of employment will also result in improved social outcomes as people have greater certainty about their future without the fear of the unknown when left to rely on Government support payments.

As we see with programs such as the Government-funded paid parental leave scheme, it’s possible for Government to play a role in funding social support while giving the option for employers to remain connected to their employees in anticipation of their future return to the workplace.

All businesses need support now

While stimulus initiatives have focussed on employers, there is also a need to help all businesses including the self-employed.

As we combat this crisis, the organs of government will need to function cohesively in preparing industry‑specific advice as to how businesses can safely operate, whether now or for a future time when lock-down measures start to be relaxed.

In other countries such as South Korea and Singapore businesses have been able to remain open but with the right tools in place such as screens to separate people, temperature checks and other business adaptations.

The appropriate course of action for Australia will depend on the broader strategy we take to fighting COVID-19, but businesses will be vital to tackling this issue on all fronts.

Mark Frost - Chief Economist, Business NSW