Business groups including the National Retail Association (NRA), Australian Retailers Association (ARA) and the Pharmacy Guild of Australia (PGA) have called on the major banks to extend further support to struggling businesses during the Covid-19 crisis.
While acknowledging the assistance they have already provided, more substantial help is needed to keep the economy moving during the current downturn.
NRA CEO Dominique Lamb says that measures such as six-month interest deferrals were great, but more extensive remedies would be needed to prevent retail businesses from hitting the wall between now and the recovery phase.
“This is an unprecedented economic crisis and every lever available to keep businesses afloat needs to be pulled,” she says. “Banking institutions have put in place some good measures, but they won’t be enough to stop many businesses and jobs being lost due to the Covid-19 crisis.”
ARA CEO Paul Zahra says comprehensive assistance is required to keep the economy moving across all sectors. “Retailers understand that banks can’t single-handedly save the economy, but they play an integral role in providing immediate and effective relief to businesses struggling to survive.”
Examples of practical proposals banks can do to help the economy keep moving may include:
• A freeze on interest accruals on business loans while lockdown restrictions remain in place and for a reasonable recovery period.
• A freeze on interest accruals on personal loans to benefit sole traders while lockdown restrictions remain in place and for a reasonable recovery period.
• A freeze on interest accruals on investments while lockdown restrictions remain in place and for a reasonable recovery period.
• Banks to lower interest rates on business loans until the end of the Covid-19 recovery phase (the first quarter of positive economic growth, following the removal of business restrictions).
• Banks to waive interest for landlords who have been forced to waive rent on properties they own until property owners can collect rent again.
• Banks to waive any establishment or service fees associated with business overdrafts until the end of the Covid-19 recovery phase.
• Banks to lower interest rates on business overdrafts until the end of the Covid-19 recovery phase.
• Banks to waive merchant terminal rental fees for all small and medium-sized businesses until the end of the Covid-19 recovery phase.
App to help you stay safe
The Government has introduced the COVIDSafe app that helps find close contacts of Covid-19 cases. The app helps state and territory health officials to quickly contact people who may have been exposed to Covid-19.
The COVIDSafe app speeds up the current manual process of finding people who have been in close contact with someone with Covid-19. This means you’ll be contacted more quickly if you are at risk. This reduces the chances of you passing on the virus to your family, friends and other people in the community.
State and territory health officials can only access app information if someone tests positive and agrees to the information in their phone being uploaded. The health officials can only use the app information to help alert those who may need to quarantine or get tested.
The new COVIDSafe app is completely voluntary.
JobKeeper issues for small business
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell is concerned by reports many small businesses may not be applying for the JobKeeper payment because they can’t pay staff by30 April.
“Small businesses that believe they are eligible to apply for JobKeeper really must do so quickly,” Carnell says.
“There have been reports that some small businesses, particularly in the tourism and hospitality sectors, have not applied for JobKeeper because they cannot pay $1,500 for each eligible staff member per fortnight.
“The big four banks have established JobKeeper help lines that are dedicated to this issue alone. There are lines of credit that are readily available so that you can pay your staff in the lead up to the initial payment from the ATO at the start of May, which will be a month in arrears.
“The banks are promising to fast-track these applications, so you can get the necessary funds you need to pay your staff.
“It’s especially critical that small businesses that are struggling to pay their rent apply for the JobKeeper payment for their staff because you are only covered by the Mandatory Commercial Tenancy Code of Conduct if you are using JobKeeper. This may be essential to your business’ survival.
“Above all, we want to see small business survive this difficult time, so they can thrive on the other side. JobKeeper provides the practical financial support small businesses need as we wait for this health crisis to pass.”
The ATO announced yesterday it has extended the JobKeeper deadline by a month, which would give businesses more time to get their payments sorted.
Retailers can collectively negotiate with landlords
The ACCC has granted interim authorisation allowing retailers to collectively bargain with landlords about rent relief during the COVID-19 pandemic.
The interim authorisation, granted to the Australian Retailers Association and its current and future members, will also allow retailers to share information relevant to the negotiations including in relation to requests by landlords for certain information as part of considering and negotiating support to be provided in the context of Covid-19.
“We see a clear public benefit in allowing retailers to work together in the negotiations with landlords as it will help those tenants who are experiencing financial hardship during this pandemic to reach a fair outcome,” ACCC chair Rod Sims says.
“We need to maintain strong competition in the retail sector and supporting these businesses will help with economic recovery once the pandemic subsides.”
It is planned that the proposed cooperation will have regard to the proposed mandatory Code of Conduct, which sets out the good faith leasing principles applicable between landlords and small and medium shopping centre tenants.
“As with all of the temporary arrangements that industries are looking to implement as a means to deal with the COVID-19 issues they are facing, we will keep under consideration when they are no longer necessary,” Sims says.
