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Chief economist says Perth’s $70 million lockdown bill is actually “much higher”

Michael Colley is weighing up whether he can pay staff at his Perth health and fitness centres this week after he was forced to shut because of ongoing COVID-19 restrictions. “As a business owner what do I do? Do I pay my staff and keep that loyalty happening? Or do I say well, hang on a minute, I can’t,” Mr Colley said.

He is among the thousands of Perth business owners hit hard by the latest COVID-19 lockdown, this time without the protections of JobKeeper and rental moratoriums.

Mr Colley estimated his business, The Reboot Collective, has lost up to $14,000 in the past week.

And the debts keep rising.

A man with a face mask stands in an empty gym
Mr Colley said he was still struggling to pay back rent and loans from previous lockdowns.

Even though the three-day lockdown is over, the financial pain continues for him because gyms and other indoor fitness venues have to remain closed during the four-day post-lockdown transition.


“Outside of approaching individual landlords there’s no technical code of conduct around COVID-19, we are out of that timeframe,” he said.

“And the banks – they are what they are – and they’re saying that payments are due.”

People swim in a pool, with grandstands surrounding it
Fitness Australia has questioned why some Perth pools and recreation centres have been able to open, but not gyms.

Mr Colley’s business was not the only Perth gym doing it tough in the wake of the lockdown.

“We are painted with a very bad brush,” said Barrie Elvish, the head of Health and fitness industry association Fitness Australia.

“The government and health departments are operating on old, outdated perceptions.

“Gyms have gone well and truly above and beyond to provide a safe and hygienic environment for their clients.”

Scepticism over $70 million lockdown bill

Treasury has estimated the cost of the three-day lockdown was $70 million.

But the state’s peak business group is sceptical, and believed it was in fact much higher.

“I’d love to the see assumptions that underpin that estimate,” Chamber of Commerce and Industry chief economist Aaron Morey said.

A head and should shot of Aaron Morey speaking.
CCI chief economist Aaron Morey has cast doubt over the the government’s projected lockdown losses for business.

“Certainly we’d expect those losses to be much higher.”

Feedback from individual small businesses across the Perth and Peel regions to the CCI put the losses at tens of thousands of dollars each.

The chamber wants the state government to use part of its $3.1 billion budget surplus to compensate businesses.

Mr Morey accepted health advice dictated a certain response to COVID-19 outbreaks, including lockdowns.

“But at the same time those businesses expect to be compensated for bearing the financial risk on behalf of society,” he said.

“Those impacts are very acute, they’re very deep for many businesses and we’d like to see them fairly compensated.”

No revenue top-ups on the cards

Premier Mark McGowan has ruled out any financial compensation based on revenue lost over the lockdown period, saying he was sympathetic but it would be very complex to administer and too expensive.

Premier Mark McGowan at a press conference
WA Premier Mark McGowan ruled out any financial compensation based on revenue lost.

The state opposition labelled that a “cop out.”

“This government is sitting on a windfall of iron ore royalties that has already paid for its COVID response to date, and the money continues to roll in,” opposition treasury spokesman Steve Thomas said.

Mr McGowan said the state’s economy was very successful and the best thing to do was to fully re-open so businesses could make money again.

Mr Morey said the strength of the economy would be “cold comfort” to many of those small businesses which have suffered significant losses over the weekend and extending into this week.

People in masks walk down a city street footpath
People in masks walk through the city on the first day out of a snap three-day lockdown.

Mr Colley was not optimistic.

His business was just starting to claw its way back financially following the impact of the first lockdown.

“We’re not having a chance to bounce back,” he said.

“It’s hard enough back-paying rent and loans from when businesses were really struggling.”

The government will look at other measures to support businesses, such as help paying electricity bills.

“Last time I got a $500 credit on my power bill, but I had made a $10,000 loss,” Mr Colley said.

After days of confusion, Mr Colley’s gym will resume offering some small outdoor fitness classes from today.


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