Small and medium-sized businesses are concerned about the impact of a potential Covid-19 resurgence as its Delta variant cripples Australia.
New research from small business accounting firm MYOB revealed nearly half of SMEs would feel extreme pressure even with just two weeks of alert level 3 or 4 lockdown.
Sixty per cent of the construction sector said another lockdown would put their business under extreme pressure as they can’t work from home, and more than half of the retail and hospitality industry were in the same boat.
Much of Australia is under lockdown as the more contagious Delta variant spreads in the community in several centres.
Today, quarantine-free transtasman travel was paused for eight weeks because of the risk.
In this country, only 28 per cent said their business would handle another short-term lockdown.
More than a third said they would seek financial assistance to cover expenses or overheads, 28 per cent would delay growth plans, 15 per cent said they would consider job cuts, while one in 10 said they would run out of stock.
MYOB senior sales manager Krissy Sadler-Bridge said SMEs were better prepared for a short-term lockdown but a longer lockdown would put the brakes on their emerging recovery.
SMEs were fearing significant disruption if New Zealand was forced to respond to the recurrence of Covid-19 in the community.
“Despite the potential for major impacts on the sector, a small majority of SME operators believe a lockdown is still the right action for the Government to pursue – possibly because of the certainty it provides and also in the current absence of any other proven strategy being put forward,” she said.
In an event of another large community outbreak of Covid-19, nearly 32 per cent of SME owners and decision-makers said a localised or region-specific lockdown should be actioned, while 20 per cent of SMEs said businesses should be kept open, but with masks mandated for all gatherings and in public areas.
Nearly one in five SMEs said the Government should implement a national lockdown at alert level 3 or 4 for an unknown period until the outbreak is fully contained, while just 13 per cent believe we should remain operating as normal and need to learn to live with the virus.
With domestic tourists travelling across New Zealand, some business was performing well, but things could quickly turn south if lockdown were to extend longer than two weeks.
Marlborough retailer Jane Briggs owns two businesses – EVOLVE Boutique and The Shoe Box – and has five staff in total.
Briggs said her business was doing well and recovering from the previous lockdowns with increase in online sales and domestic tourists.
But another lockdown could change things for the worse.
“For a couple of weeks, I’ll grin and bear it. I’ll take the hit, not my staff.
“But if it went on for months then I would probably go bankrupt,” she said.
Restaurant Association of New Zealand national president and an owner of Monsoon Poon, Mike Egan,has been operating his 100 seat restaurant for 20 years in Wellington.
He said the lockdown would be “devastating” because he can’t do his business online and the length of time they could sustain shut down would all depend on the help they’ll receive from the Government.
But for now, he was doing what he could to cover himself should there be another lockdown.
“I guess we’re being quite prudent and we’re putting money aside for a rainy day so that we can continue to pay our staff if we do have a lockdown.
“But obviously, we’ll have a limited number of weeks that we could afford to do that,” he said.
The Government needed to impose very strict border controls with tightly monitored MIQ facilities to avoid another lockdown, Egan said.
However, should there be a lower-level lockdown, his 39 staff were fully experienced to quickly run the business following strict lockdown rules, he said.
CEO of the restaurant association Marisa Bidois said level 3 or 4 lockdown, even if it was short, would be very concerning for the hospitality industry.
“Even a short lockdown has wide-ranging impacts on the business as often the public will be more cautious about dining out at the end of a lockdown or level change,” she said.
Bidois said she wanted more financial help from the Government for the businesses.
“Lockdowns put an enormous financial strain on our businesses as they offer little or no opportunity to generate revenue,” she said.
“The wage subsidy is a big help for businesses and something we lobbied for at the start of 2020. However, we would like to see more financial help for businesses in particular lease support for,” Bidois said.
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