Business confidence collapses amid surging wave of Omicron

BUSINESS and consumer confidence has collapsed, with 40 per cent of businesses saying they don’t have enough cashflow for the next three months.

The findings, from the first survey of NSW businesses statewide about the impact of the Omicron surge, will increase pressure on the Perrottet government to unveil an economic support package to soften the blow of the state’s current outbreak.

The Business NSW survey of 2,000 businesses across the state found that business owners are also not expecting conditions to improve over the next quarter.

Three quarters of business owners surveyed believe the economy is weaker than the previous three months, and almost half of businesses expected that to continue.

The dramatic drop in spending and activity has led to growing calls for the government to provide financial support to businesses struggling to stay afloat.

The state government is finalising a broad economic support package to assist businesses through the latest Covid downturn.

Ahead of the wider support package, Premier Dominic Perrottet and Treasurer Matt Kean will on Monday announce a so-called “Event Saver” fund for major festivals and events. Organisers will be able to claim government payments to cover nonrecoverable costs if major events are significantly impacted by public health orders – like the singing and dancing ban which effectively made music festivals illegal. Payments are set to be capped at $10m per event.

“Unlike previous surveys throughout 2021, where business owners felt the next quarter would get better, that isn’t the case this time as there are no government support packages in place,” Business NSW CEO Daniel Hunter said.

“Short-term targeted support for those businesses and staff that are highly impacted is a must,” he said.

Mr Hunter said the government should be encouraging people to “spend freely in safety,” while ensuring supply chain issues are resolved.

Business owners who completed the peak body’s January survey spoke of “financial and mental anguish” caused by the Covid downturn, and overwhelmingly expressed uncertainty about whether they could stay open.

NSW reported 34,660 new Covid-19 cases on Sunday, including about 11,200 RAT results from the past seven days.