Retail rescue: rent, tax relief
SHOP OWNERS’ DEBTS MAY BE COVERED THOUSANDS OF WORKERS LAID OFF 90PC OF COMPANIES FEAR FINANCIAL BLOW
Scott Morrison is considering an emergency stimulus package to underwrite the commercial rents, rates, taxes and utility bills of retailers and small businesses facing collapse after tens of thousands of jobs were shed on Thursday as the nation moved towards a retail shutdown.
The closure of large retail chains as a result of COVID-19 restrictions has forced the government to consider putting businesses into a “deep freeze”, with debt and rent holidays to keep them viable before they are rebooted to lead the post-virus economic recovery.
The package will be taken to the national cabinet meeting on Friday morning where NSW and Victoria will flag “third stage” lockdowns that could see all nonessential workers forced to stay home if infection rates continue to rise.
The national death toll from COVID-19 infections rose to 13 on Thursday night, with the total number of cases rising to 2806.
A nationwide survey by the Australian Bureau of Statistics has revealed that 90 per cent of companies are bracing for a massive financial blow, with 50 per cent of businesses claiming to have already been significantly hit.
Federal and state governments are considering further rescue packages to address the collapse of business for retailers, small traders and shops that were facing a “force majeure” and likely closure because of a lack of sales.
States are already looking at ways to reduce tenancy costs, such as land tax and payroll charges to extend the life of small businesses.
The concept of putting small businesses into a cryogenic financial state, to be revived later to lead the economic recovery, would mean shielding them from formal attempts to foreclose on loans, being sued over rent or tenancy agreements or being forced into insolvency.
The move comes as retail giants Premier Investments and Accent Group announced on Thursday the temporary closure of all stores across the country in response to COVID-19 and a collapse in foot traffic. In a statement to the ASX, Premier Investments said it would close its Australian stores for four weeks, directly impacting 9000 jobs here and overseas. The clothing and accessories giant, which owns Smiggle, Dotti, Just Jeans, Jay Jays, Portmans, Peter Alexander and Jacqui E, has said it will not pay rent to landlords.
Footwear retailer Accent Group, which owns The Athlete’s Foot, Platypus and Hype, will close more than 500 stores for a month and stand down up to 4500 staff.
Despite exemptions being provided by the national cabinet for hairdressers and barbers, major hairdressing chains have decided to temporarily shut their doors.
Facing domestic and international travel restrictions, Flight Centre on Thursday stood down 6000 workers globally, including 3800 workers in Australia, as air travel grinds to a halt. The
announcement followed moves this week by Qantas, Virgin and Helloworld to shed a combined 29,500 jobs in response to travel bans.
Tens of thousands more jobs have been lost in the hospitality, health and tourism sectors, with cafes, restaurants, gyms, bars and clubs forced to shutdown. Casino operators Crown Resorts and Star Entertainment this week stood down up to 17,100 employees.
Mall and shopping centre owners have been urged by the industry body to agree to not terminate leases for non-payment of rents following reports that some shopping centre owners were squeezing small retailers.
Shopping Centre Council of Australia chairman Peter Allen said: “This is surprising and, if correct, very disappointing and frustrating to hear.”
The national cabinet is on Friday expected to reconsider potential school closures in term two and whether further lockdown restrictions may be necessary following the health protection committee’s warning that the next step could involve “closure of all activity except essential industries and services”.
State governments have flagged a shift to learning from home following the Easter holidays and begun urging parents to keep children away from schools.
Josh Frydenberg said on Monday Treasury was expecting that an extra one million people, including sole traders, casuals and workers, could be forced on to welfare support following the mass closures of businesses across the nation.
Through a mix of direct fiscal and monetary policy measures, the Morrison government and the Reserve Bank have pledged $190bn in support of small businesses, key sectors, workers, families and welfare recipients to combat the economic shock from COVID-19.
Finance Minister Mathias Cormann went on the attack over Anthony Albanese’s demands for stronger and faster lockdowns on Thursday, accusing the Opposition Leader of undermining expert medical advice.
“Things are tough enough out there without political commentary undermining the medical advice and suggesting that we should close down even more businesses where the medical advice doesn’t says we should,” Senator Cormann said. “We are never going to close down businesses based on political decisions. If there is a decision to close down certain sectors in the economy, it is going to be because the medical advice clearly and unequivocally indicates that is required to protect people’s health and to save lives.”
The commonwealth’s Deputy Chief Medical Officer, Paul Kelly, has been forced to weigh into the political stoush, saying the public commentary by a growing number of health professionals is leading to confusion and unclear messages. “It’s not helpful,” he said.
The latest advice from the medical body set up to provide recommendations to the national cabinet reveals chief medical officers were drawing up lockdown measures that would likely be a “carefully considered closure of all activity except essential industries and services”.
Police divers at Fremantle Harbour during a training session, in sight of the cruise ship Artania, moored off nearby Rottnest Island