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Analysis – it is the COVID half way mark but we are still fully in strife

08 July 2020 6:21AM

The Federal Government provided relief from various provisions of the Corporations Act to try to ease stresses related to compliance while the pandemic had the attention of directors, managers, staff and other stakeholders of business.

This relief was much needed at the time, but it is prudent to consider what might occur come September given that we have now reached the halfway mark.

Look, for instance, at the dire prediction made by Peter Strong, the chief executive officer of the Council of Small Businesses of Australia.

Strong believes several hundred thousand businesses may wind up on the junk heap once things get back to full capacity.

He acknowledges that the times have been tough but whether people have the ability to repair their businesses to the point where they can be as good as prior to the pandemic remains a critical issue.

Strong is deeply concerned about the implications of the current environment for the small business sector.

It is for this reason that he and COSBOA have recently issued a media statement calling on people to go out and apply for jobs or recommence working.

There has been a phenomenon where some people have received more in pandemic support payments than they would going back into the workforce. Thus the measures providing assistance to those that are either without work (in the form of Job Seeker) or are waiting to be pulled back in (Job Keeper) may in some cases result in fewer people wanting to head back into an office or retail environment.

That may be one factor that leads to businesses not being able to get themselves back to firing on all cylinders irrespective of the calls from Strong and others encouraging people to get themselves back into the office.

Commentators are also expressing other concerns, and one of them is a prediction that businesses in certain sectors may not see a future beyond six months.

You can understand the nervousness of former or hibernating employees if you hear that there are businesses that believe they cannot survive more than six months without third party assistance.

The Harris Café Report, which was released by Harris Coffee last week, noted that there were coffee shops and cafes that believed the prognosis for them was bleak if the government removed all of the supports that exist.

Some of the 204 café and coffee shop owners surveyed told You Gov Galaxy that they did not see themselves lasting beyond six months without government assistance, which is part of the reason for Harris Coffee putting up a million dollars for a stimulus scheme for cafes that will involve the installation of machines, coffee beans, cups and funds for promotion in their local areas. The million dollars will not go far with Harris Coffee itself estimating only about 25 cafes or coffee shops may be helped.

The data from that report was jumped on by various commentators that included Kate Carnell, the small business and family enterprise ombudsman, as evidence that people are going to be doing it tough if assistance disappears.

Add to that the

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