I’m here with the COVID-19 continuity update for Australian businesses on Tuesday 14th July.
Throughout the COVID period we’ve been focusing on adjusting business for when the market lifts, and when JobKeeper ends.
The current state of the market is that lower performing businesses are being propped up by government support mechanisms such as JobKeeper, PAYG cash flow payments, grants and payroll tax relief. These businesses without a real competitive advantage only have one option to win work, which is to cut prices, oftentimes taking work off better performing businesses.
The review of JobKeeper won’t be announced until 23rd July, but we can try to anticipate the government’s direction from the federal treasurer’s comments yesterday. Treasure Josh Frydenberg said the second phase of support would be “governed by the same principles that have defined our economic measures to date”.
He said, “Namely that our support will be targeted, it will be temporary, it will be designed based on existing systems and it will also be demand driven. We’ve gone for a national approach as opposed to state-specific approaches and that continues to be the pathway that we have set and we will follow on.”
What I read from the treasurer’s comments is that we are being positioned that any future iteration of JobKeeper will not be as widely available nor as generous as the first round. It may only be in place for exceptional circumstances, possibly only for businesses who remain shutdown.
What this means for businesses getting JobKeeper
At some stage when the government support turns off, it could actually help.
Without JobKeeper subsidising wages, the lowest performing businesses in each industry may close up, thereby releasing more clients and staff into the market. For businesses that have been able to weather the storm and adjust to the new norm, this could present an opportunity to pick up new clients and eventually more good staff.
A functioning economy is based on supply and demand, and renewal of businesses with some dying and others growing. Australia will have to move back to being a normal function economy at some stage.
Our focus needs to stay on the right strategies for your business to be part of that functioning economy.
Further to my briefing yesterday, I want to add this quote from Daniel Andrews’ press conference on Sunday 12th July when he confirmed that parents who can’t work from home would be able to send their kids to school.
The premier said,
“I want to re-emphasise it, if parents have to work, whether Mum and Dad are stacking shelves at a supermarket or whether Mum or Dad are a police officer or a nurse, whatever the profession might be, if you can’t work from home, your kids can come to school as well and they can receive that same remote and flexible learning, but they will do it in a classroom setting.”
I’ll have more updates this week. In the meantime, if you’d like to get business advice to get through and get ahead, the Tenfold business coaching mentors are here for you.
Ashley Thomson B.Eng(Hons), Grad. Dip. Mgmt, MEI
Tenfold Business Coaching