Businesses face major impacts due to border delay; survey

CCIWA Chief Economist

Aaron Morey

CCIWA has today revealed survey results showing the negative impact on businesses due to the delay in reopening Western Australia’s borders, with many sustaining large financial losses.

A snap survey of 400 WA businesses conducted this week shows 65 per cent of respondents report the impacts will be “negative”, while just 23 per cent of respondents indicate the delay will have a positive impact.

The survey results reinforce CCIWA’s calls for the State Government to set a new reopening date as soon as possible and for the key rules attached to the Safe Transition Plan to also be announced. The results also clearly reflect the need for compensation to be provided to impacted businesses.

Many businesses report multi-million dollar losses, with an average cost of $2.5 million estimated by respondents.

Businesses most likely to report a negative impact from the delay are in the agriculture, manufacturing, construction, ICT and professional services sectors. The survey also reflects significant impacts on the tourism and international education sectors, with immediate term revenue and longer term reputational impacts of critical concern. Businesses in the health and community services sector were the most likely to report a positive impact (44%) from the delayed reopening, mostly due to concern around the need to furlough staff as the Omicron variant spreads.

For small businesses, 57 per cent indicated a negative impact, while 26 per cent reported a positive impact. Across medium and large businesses surveyed, only 18% considered the delayed border reopening “positive”.

The most common reason why businesses reported a negative impact was a greater difficulty recruiting staff (74%). One in three survey respondents reported an increase in staff resigning since the decision to delay the reopening was made. Some businesses reported that FIFO staff based in the eastern states travelled home for Christmas, and are now stranded outside WA. Others reported that workers originally from the east coast were relocating back home.

Other impacts included a reduced capacity to manage operations (62%), lost customer sales (48%) and loss or reduction in commercial contracts (40%). In this context, one small business in the professional services sector said:

“Customers outside of WA are increasingly forming the view that doing business with WA domiciled businesses carries risk because of the unpredictable COVID regulation.”

There is also heightened concern that Western Australia’s national competitiveness will be reduced, with 72 per cent of respondents indicating a “negative” impact on WA’s competitiveness relative to other states from the delayed reopening. For example, one respondent from the manufacturing sector noted that their business may move their head office from Western Australia to another state.

A summary report on the rapid survey on border impacts is attached.

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