Retail struggle in January 2020

The Coronavirus pandemic continues to unfold with the World Health Organization (WHO) officially declaring it a pandemic. At the time of writing Victoria has declared a state of emergency and the number of Australian cases continues to snowball.

And of course, it’s not just the health risks associated with this deadly virus that are cause for concern. The uncertainty generated by the outbreak is already starting to make a hit on the economy and this is something we all need to brace for.

The reduction in foot traffic and impacts to the supply chain have retailers feeling more pressure. The National Retail Association continues to advocate strongly for extended trading hours for businesses, a reduction on curfews for delivery vehicles, and spreading the message that now is the time to support your local stores. Our dedicated new website which offers free resources for employers surrounding the Coronavirus also contains information on how to access financial assistance for your business.

In an attempt to curb the economic impact the Federal Government has announce a $17.6 billion stimulus package. Even if the measures do not directly assist you or your business there will hopefully be a positive knock-on effect throughout the economy. The package contains the following measures:

  • Instant asset write-off threshold extended from $30,000 to $150,000, with turnover for eligible businesses extended from $50 million to $500 million until 30 June 2020.
  • A 15 month investment incentive for businesses with a turnover of less than $500 million to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules to apply.
  • A payment of up to $25,000 for eligible SMEs with a turnover of less than $50 million that employ staff.
  • A 50 per cent wage subsidy for eligible businesses that employ trainees or apprentices for up to nine months from 1 January 2020 to 30 September 2020.
  • A one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders.
  • A $1 billion payment to communities significantly affected by the Coronavirus. This includes measures such as the waiver of fees and charges to tourism businesses in certain regions, assistance to help business find alternative export markets or supply chains, and administrative assistance from the ATO to affected businesses.

To come into effect all of the above will need to pass through Federal Parliament when it sits next week, but we don’t anticipate any delay in these Bills being legislated. While we shouldn’t pretend that a few stimulus initiatives will see us come out of this unscathed, anything that eases the burden on small and medium-sized businesses at this point is greatly welcomed.

In the meantime, please keep safe. We are all in this together from both a health and economic perspective. Governments at all levels are doing all within their powers to mitigate the impacts and we need to listen carefully to advice from medical authorities. We will continue to work to support this industry through this challenging time.

Have a great week and look after one another.