In 2019 it was unfathomable that an Australian government could close the country’s borders and mandate that businesses close and people stay in their homes. It was inconceivable that there would be a reason to create a government program to pay wages for millions of workers. What happened in 2020 was outside the realm of what we believed was possible in our modern, democratic, free-market society. So it’s understandable that COVID-19 assistance measures like JobKeeper (as essential as it was), tacked together in a matter of weeks, were imperfect and quirky.
But a year after the first national lockdown, we have learned many important lessons – lessons that we must apply to our plan for the next pandemic.
While Australia did have a plan in place for an influenza pandemic, it didn’t contain much in the way of managing the economic consequences. We had so much faith in modern medicine that we thought all we had to do was ensure adequate PPE for healthcare workers, provide information to travellers, tell people to wash their hands, and “encourage” sick people to isolate. Mandating isolation and closing the international border were not even considered. Many of the social-distancing measures that have wreaked havoc on small businesses – things like workplace closures, state border closures and cancelling mass gatherings – are discussed but not recommended because they were “impractical,” “would cause substantial economic impact,” or “could seriously affect key societal functions.” And because we thought we could manage a pandemic without reverting to these measures, no plan to manage this substantial economic impact was created.
Now we (hopefully) know better and no longer believe we’re immune to large-scale crises. Now we can better plan our economic assistance measures, keeping the worst-case scenario in mind. Based on our experience over the past 12 months, here are the things that need to be considered for small business before the next pandemic (or other type of national disaster) arrives:
Develop a wage subsidy program that can be turned on or off as the need arises:
We should keep the JobKeeper program in the background ready to be implemented when needed, similar to what Germany does with its Kurzarbeit wage subsidy. Preparing it ahead of time would give us a chance to refine the eligibility criteria, application process, and other rules. For example, we could and should create multiple rates for JobKeeper so that part-time staff who normally work two shifts a week aren’t paid the same amount as full-time staff. The program should be reviewed yearly and remain integrated in payroll software. JobKeeper could also be used in other kinds of crises at the discretion of the government of the day.
Create emergency clauses for industrial awards and agreements
During a crisis, business needs can change quickly. Employers may be forced to give their staff different duties, change the day and time they work, or change the work location. Emergency clauses should be inserted into all Awards and EBAs that allow employers to do this when the government declares a state of emergency. This is an important part of keeping businesses operating and people employed.
Identify what will be essential businesses:
The absence of a nationally consistent list of essential businesses was a cause of confusion and grief for many. Some of the stories we heard from COSBOA members include tired truck drivers in South Australia being physically dragged away from tables because roadside rest areas were interpreted as non-essential; myotherapists being able to practise in every state except for Victoria; and equipment hire not being on the list of essential businesses despite needing to hire equipment to essential construction sites and even COVID testing centres.
A possibility is to have different tiers of essential businesses so that business closure can be scaled up or down depending on the severity of the crisis. The important thing is that business owners know ahead of time when they need to close and why (for example, during a stage 4 lockdown but not during a stage 3).
Prepare transport regulations for cross border movement
State governments should make sure border pass application forms are ready to download or fill out online as soon as travel restrictions are announced. Transporters of essential goods and others who regularly cross state borders for work could have a badge on their vehicle even during normal times so they don’t have to do anything if a border suddenly closes.
Create a national code of conduct for commercial tenancies that is activated during a state of emergency
When extraordinary circumstances outside of a business owner’s control (things like government-mandated business closures and restrictions on movement) mean that they can’t pay rent on time, they should be eligible for rent deferrals, special subsidies, and/or waivers. The details and state implementation of such a code would need to be informed by a review into what worked and what didn’t work in the 2020 Code.
Prepare the financial sector for changes to loan re-payments for customers
The private sector should also be preparing for the next pandemic. For example, banks should establish triggers (such as the declaration of a state of emergency) for allowing customers to defer loan repayments. They should also determine the eligibility criteria and required paperwork in advance. This needs to be communicated right down to the people working in bank branches and on customer service phone lines.
