Saturday
The damage that has already been done to the Australian economy is immense. As awareness of that damage seeps into the minds of our politicians, there will likely be an about turn.
But, even if businesses are allowed to re-open next week, is it already too late?
With few exceptions, small business has been operating on the margins for years in Australia. Why re-open when one can go on welfare and probably make as much money? That is literally true for many small businesses operators.
Our restaurant was one of few still making modestly good profit when we
were closed. If possible, we will re-open. I believe that some sort
of ‘force majeure’ deal will emerge with regard to the rent. But my
belief is that an unknown, but significant percentage, will never re-open their
doors. Ditto for shops; I think that even fewer shops will re-open than
restaurants/cafes.
Business operators are caught in the no-go area of the period between
commercial properties being valued to the moon, with corresponding rents, and
commercial properties collapsing in value. How long will it take for
rents that correspond to the new value of the buildings in a devastated economy
to come down the pipeline? Until they
do, especially while we are still labouring under the destructive burden of ‘Award Wages’, the situation is untenable.
Making the decision to close a business is a gut-wrenching, emotional time. Not only is it the monetary loss with the consequent worry about the future, it is a huge ‘loss of face’. However, that decision was taken out of their hands and they have had to confront that already. Now they have been presented with a very different decision. Do they wish to put themselves back in that stressful situation? For many, the answer will be ‘no’.
The economy is a business momentum that builds up over generations. Beginning from scratch again will be like trying to push-start a heavy car that has broken down. Obtaining that first motion takes a lot of huff and puff, especially when there are rental and wage hills on the road.
And we know that the economy will be very different and much poorer. What products will be needed and wanted, and what price will people be able to pay? No one can answer that.
I have been in business since 1958, I had never seen tougher conditions than at the point when we were closed. All we can know is that conditions are going to be considerably worse when, or if, businesses re-open.
Welcome to the Depression.
Government: If you think that the problem is bad, just wait till you see our solution.