Speaking to My Business, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, urged the government to act, stressing that the coronavirus is having a much broader impact on local businesses than the bushfires.
“We think that the low-interest loans that are available for bushfire and drought-affected small businesses should be extended to small businesses who have been significantly affected by the coronavirus,” Ms Carnell said.
Speaking about the severity of the coronavirus, Ms Carnell explained that all businesses in the tourism sector are feeling the effects.
“The numbers of tourists have declined dramatically. First off, they declined because of the bushfires. People in America and other places saw Australia as a pile of ash because of the way the media represented Australia globally,” Ms Carnell explained.
“So, we already had a problem with people cancelling trips and now we’ve got the scenario that Chinese tourists, which is a million a year, aren’t coming or can’t come.”
She said the struggles extend beyond accommodation venues to transport companies, restaurants and tour providers.
But the impacts are also being felt elsewhere, with supply chains suffering across the board.
“That means people whose stock is coming from China and it’s not coming now because the factories are closed or output has been significantly reduced.
“The construction industry is concerned that they’re starting to be affected because a lot of the hardware-type items, paneling, cabling, a whole range of things, come from China. So, they’re likely to be affected.”
The extensiveness of the problem is best exemplified by reports that dentists are facing a serious mask shortage.
“We had a dentist come to us. He said they were perilously close to running out of face masks and they can’t practise if they don’t have face masks,” Ms Carnell said.
“That’s a professional requirement when you treat patients, and the advice to them is that if they run out, they have to close.”
Prevent staff reductions
Stressing the need for government help, the ombudsman said it is crucial that businesses don’t find themselves in a situation where they have to reduce staff.
“Looking at ways that the government can support small business to keep staff on, through this downturn, is a really good approach.”
Commenting on the emergency loans launched by UK banks to help businesses showing signs of financial stress as a result of the coronavirus outbreak, Ms Carnell said that a similar move by the big four wouldn’t be overly helpful.
“I think going into new loans, new debt, is something that small businesses would be very reticent to do.”
Earlier this week, Barclays, Santander UK and the Royal Bank of Scotland announced they were contacting their business customers to check whether the coronavirus was putting their supply chains at risk.
According to The Guardian, Barclays has signed off its first batch of overdrafts and short-term loans.