Canberra’s lockdown, just over a year ago, had far-reaching effects for business, Graham Catt, CEO of the Canberra Business Chamber, remembers. Businesses adapted and innovated to difficult times, but the post-lockdown world has brought its own challenges.

Ninety-seven per cent of Canberra’s 31,500 private businesses are small businesses, employing fewer than 20 people – but they provide more than 63 per cent of the ACT’s jobs, more than the public sector. They are, Mr Catt believes, an important part of the community.

“These are the people that were here for us over those years of lockdown and restrictions. They’re not big enterprises. They’re not faceless boards gouging profit. They are very much people and their families that have taken a risk to provide goods and services.”

Lockdown was declared on Thursday 12 August 2021.

• Update: ACT to enter lockdown at 5pm 12 August (12 August 2021)

“The most striking thing,” in Mr Catt’s view, “was how swift and how total it was. Just about every business in every sector was required to close, other than for very essential services. That obviously had a swift and dramatic effect on trade.”  

Some business owners struggled to understand what the new rules were.

“Can we open the doors? Can our customers come here? Can we provide goods and services in the way that our business was traditionally built to do?”

Could they even go into their business to get mail, water plants, or take orders? Could Canberra residents who owned businesses in Queanbeyan cross the border into NSW?

Many business owners wondered how to look after their staff, now confined to home.

“It was a very, very challenging time,” Mr Catt said.

Both the Federal and ACT Governments provided support payments to business – but the ACT Government’s Small Business Hardship Scheme was delayed until mid-November, to the frustration of many local and small businesses who needed those payments to survive.

“When you’ve got no customers coming in the door, no ability to trade, and that inability to trade was caused by government regulation, that was too slow,” Mr Catt said. “It wasn’t so much the size of the support, as the speed at which it found its way into businesses could have been done more quickly.”

But businesses adapted, and 2021, like 2020 before it, saw a lot of innovation. Although non-essential retail closed, businesses found ways to continue operating, such as contactless click-and-collect, delivery services, takeaway services, and the rapid adoption of online trading and e-commerce.

One year later, Mr Catt said, the situation is dramatically different.

“We have shifted from those concerns being very much about demand, and about finding customers, and getting goods and services to customers, to issues that are much more about our ability to supply that demand.

Skills and workforce shortages affect local business, as they do schools, hospitals, and the health system.

“Businesses are not able to find the people they need for their team,” Mr Catt said.

According to last month’s labour data from the Australian Bureau of Statistics, the number of job vacancies is almost double the number of people seeking work: 12,300 job vacancies and only 7,000 unemployed people.

In addition, absentee rates are very high. On a given day, businesses report that 25 to 30 per cent of staff are not able to come in.

Businesses are struggling to get the supplies they need to fill orders, or the price of supplies has escalated sharply – up to 600 per cent for a container load from another part of the world, Mr Catt said.

More and more businesses are adapting and innovating to their new operating reality, as they did to health restrictions.

For instance, cafés and restaurants that would have offered table service now have QR codes for customers to place their order.

“That’s obviously effective from a health point of view, but it streamlines business in terms of the staff they need to employ to get the work done,” Mr Catt said.

Hotels might have demand for 100 per cent of their rooms, but only be able to run an 85 per cent occupancy because they don’t have the staff to make up rooms and provide room service and ancillary services. To manage those restraints, they offer guests credit vouchers for the bar in exchange for not making up the room that day.

“This is what small business does,” Mr Catt said. “It adapts. It adapted during the lockdown; it adapted when there were restrictions in place; and I think they’re starting to adapt to some of those circumstances.”

Some of those adaptations are less positive, Mr Catt feels. In some sectors, businesses are finding it more economical to break contracts and accept penalties than to purchase supplies whose costs escalate.

Due to staff shortages, more and more business owners are washing dishes, pulling coffee, and waiting on tables.

“That’s OK in the short term … but in the long term, you’ve got to worry about the sustainability of that arrangement,” Mr Catt said. “Business owners are working incredibly long hours just to keep the business ticking along. It isn’t great for their mental health. It also means those entrepreneurs aren’t working on strategy, growth, and creating new employment.”

He expects the return of more skilled migrants, working holiday makers, and overseas students will ease that workforce constraint.

Many of these problems, he explains, are driven by international factors; the conflict in Ukraine, for instance, affects the cost and movement of supplies.

Rising interest rates and high inflation are also part of the picture.

“Small business owners, particularly just as everybody is dealing with the rapidly spiralling costs of living, are also dealing with the rapidly spiralling costs of doing business,” Mr Catt said.

“It is very hard to say how long this current cycle will last. That’s why we’re starting to see businesses really turn their minds now to how do we adapt, and how do we innovate to current conditions on the understanding that they may be with us for quite a while yet.”

Mr Catt had hoped the recent 2022–23 ACT Budget would address some of the “pain points” businesses are feeling now: no staff, high rates of absenteeism, inflation, lack of supplies, lack of stock.

Business is looking for government support – not necessarily support payments or handouts, Mr Catt emphasised, but investment in programs that can help local businesses grapple with the issues they face now, such as changing their operating model to trade successfully with fewer staff and resources.

Government could make it easier for business to deal with government and regulators, and reduce their compliance burden. The time business owners and operators spend on paperwork they could instead devote to running their business.

“That kind of initiative around improving business interactions doesn’t require government investment, but can make a big difference in terms of how businesses operate and how they can drive growth and build jobs,” Mr Catt said.

ALSO READ: Emma Davidson: ACT lockdown ‘burned into my memory’ (12 August 2022)

Canberra Daily would love to hear from you about a story idea in the Canberra and surrounding region. Click here to submit a news tip.