Full extent of lockdown impacts revealed

Western Australian businesses have revealed the full impacts of the recent snap lockdown and subsequent restrictions through a rapid-fire Chamber of Commerce and Industry WA (CCIWA) survey.

While CCIWA welcomes the WA Government’s announcement of a business compensation grant scheme, which includes key design elements from our recommended approach, the survey results clarify a strong case for the proposed relief to go further than the $2,000 cap flagged by the Premier.

The survey recorded 351 responses in just over 24 hours, representing all sectors of the economy. It shows the average expected impact on a business across the seven days is $25,200. Only a quarter of these losses are expected to be recovered as restrictions ease. However, the extent to which businesses expect to claw back the lost revenue is much lower in the food (16% of losses), retail (10%), events (10%) and education (1%) sectors.

For small businesses, the average impact of the lockdown and subsequent restrictions is $8,060.

This direct response from across the business community suggests the total costs borne by WA businesses across just the seven days amount to around $170 million. This is close to the $200 million estimate of total costs provided by CCIWA at the beginning of the lockdown.

Results show that reduced sales and turnover have hit businesses hard, particularly in the events (78% of businesses suffering losses), food (84%), and retail (83%) sectors.

WA business owners have also provided their views on what a fair amount of compensation would be for the seven days of restrictions. The average figure nominated was $8,857. For small businesses, the average figure was $4,720. The ultimate costs will be slightly higher given some restrictions will remain into next week.

View the full survey results here.

This is direct feedback from Western Australian businesses, which can be used by the State Government to inform an appropriate design for its proposed grant scheme. While we note the Premier has indicated payments of $2 000, CCIWA is recommending $3,000 and $5,000 payments be made to affected businesses, depending on the extent to which they are impacted. The full details of CCIWA’s proposal are detailed below.

Thousands of businesses have made major sacrifices, forfeiting their livelihoods to safeguard the community. It is only fair that we do all we can to support them, especially given the extraordinarily strong financial position of the State.

The Chamber supported the three-day lockdown on the basis that the health advice deemed it necessary to protect the community, as well as our expectation that businesses would receive fair compensation for shouldering the financial burden.

That expectation remains. We look forward to working with the State Government as it seeks to finalise the proposed grants scheme over coming days.

Details of CCIWA’s proposed compensation scheme

  • Use of an online portal for accepting applications from businesses for a compensation payment. The compensation would be for the direct financial impacts from the lockdown and/or subsequent partial restrictions. The Office of State Revenue appears well placed to administer the process given the range of grants and taxes it already administers.
  • Direct financial impacts could include, but would not be limited to:
    • Reduced turnover
    • The loss of perishable goods
    • Cancellation fees and charges
    • Booking cancellations
    • Other costs and losses incurred due to the lockdown and subsequent partial restrictions that could not be reasonably avoided.
  • Payment structure
    • Businesses that declare lost turnover between 30–50% (or alternatively up to $5 000 in direct financial impacts) receive a $3,000 payment.
    • Businesses that declare lost turnover above 50% (or alternatively above $5 000 in direct financial impacts) receive a $5,000 payment.
    • These figures have been arrived at on the basis of levels of support provided elsewhere and the responses to our survey.
  • Businesses would be required to retain evidence of direct financial impacts for two years, and provide this to Government on request. Businesses would be open to audit for two years following payment. If an audited business could not provide the required evidence, they would be required to repay the grant.
  • The scheme would be open to businesses from any sector of the economy, with a payroll less than $4 million. A $4 million payroll was the threshold used for the $17,500 one-off payment last year.

Media contact:

 

Casey Cahill               0413 992 195

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