Speeds of the economy
From TSBE CEO Ali Davenport: Toowoomba and Surat Basin Enterprise (TSBE) has been working with hundreds of businesses since social distancing measures have been implemented and we’ve identified that there are three speeds to the economy: incredibly busy, completely stopped and those that see a decline in the not too distant future.
The Federal and State Governments have responded quickly and commendably offering stimulus packages designed to keep people employed.
However, these will not be adequate to help all parts of the economy.
Businesses that are operating in the ‘incredibly busy’ economy include those in certain parts of the healthcare industry such as hospitals and GP practices, construction companies with guaranteed government projects, some essential manufacturers and the agricultural sector.
Then there are businesses that have stopped, almost overnight which include the hospitality industry such as restaurants, cafes, gyms and many also retailers.
Workers in these industries have been laid off by the thousands.
The Federal Government’s recently announced JobKeeper payment is designed to support those workers who have been directly impacted and it’s been a godsend to businesses and staff alike.
And finally there are those businesses who can see a decline on the not too distant horizon, who are having to lay off staff to decrease overheads and remain solvent when the downturn hits their bottom line.
These include many large organisations, construction companies, trades people and many businesses who may be completing current work, but with little in their pipeline.
Sadly, the JobKeeper payment will not be of assistance to these businesses as revenue must decline by 30% or 50%, depending on the turnover of the organisation, to enable access to the JobKeeper payments.
For most businesses, a revenue decline of just 5% will signal job losses, therefore waiting until revenue declines by 30% before reductions in headcount are made would mean the company is already likely to be insolvent.
The Federal and State Government’s assistance packages have definitely given hope to many thousands of workers who have been immediately impacted, but if other businesses have to wait until their revenue decreases by 30% for them to access assistance, it will be too late and millions of jobs around the country will be lost.
We know that the Federal and State Governments are working hard to keep people employed, therefore TSBE is hopeful that something can be done for those companies who are laying off staff now, knowing there’s a downturn just ahead.
Ali Davenport, TSBE CEO
