Now pandemic restrictions will ease on Friday, Chief Minister Andrew Barr predicts an upsurge in economic activity. Local businesses have welcomed the news, but some say certain sectors will still need support to survive.

The V-shaped economic recovery that he spoke about a month ago was “definitely occurring”, Mr Barr announced today.

Based on Commonwealth Treasury figures, he said, there were $6 billion of savings sitting in business accounts and household accounts, aggregated across the ACT economy, as a result of Federal and Territory government stimulus payments.

“That money is going to be spent,” Mr Barr said. “We are seeing a massive amount of pent-up demand.”

Spending was already back up above 2019 levels, Mr Barr stated, and would pick up pace over the next four to six weeks. Retailers and the peak industry bodies had reported the Black Friday sales at the end of this month and the traditional Christmas spend looked “incredibly encouraging”. It would be “a bumper summer” for travel; spending was up 50 per cent on where it was previously.

“We’re going to see very strong economic outcomes; Canberra is going to be a big part of that; and our above-national-average incomes are going to be spent in our economy,” Mr Barr said. “And so that’s going to be welcome news to a lot of businesses in the ACT.

“The challenge, of course, for every business is to get their share of that, and to think creatively about how they can grow their markets. And I know there’s a lot of businesses that are doing that right now.”

Employers would also have to pay more to attract and retain staff, Mr Barr continued. After a decade of relatively low wage growth, the economy was about to turn.

For decades, the share of the economy that went to wage and salary earners had declined, and the profit share that went to capital had increased.

“That’s why our society is becoming increasingly unequal.” The wage share paid to employees would increase as a share of total economic output, for the first time since the 1970s. Already, Mr Barr said, hospitality wages were on the rise.

“Jobs that have been seen as quite dispensable or low-paying or low-skilled are going to be seen as indispensable and get more pay, and then even stronger desire from employers to retain their staff and to attract new ones. So it will be a good time for employees for the first time in a while.”

The business community’s response

The Canberra Business Chamber welcomed the announcement that the restrictions applied to Canberra businesses would now align with those of their NSW counterparts.

“There will be a lot of happy ACT businesses this morning,” said Chamber CEO Graham Catt. “For many, these changes will be their first chance to operate profitably since Canberra first entered a one-week lockdown back in August, and some of them have been dealing with major hits to their businesses since late 2019.”

Similarly, John-Paul Romano, chairman of the Inner-South Canberra Business Council, said it was great news that businesses would be able to go back to normal.

“The hospitality sector has suffered greatly, and we encourage the Canberra community to get out and have a big weekend. Eat out for your community!”

“Every dollar we spend with a local business helps business owners, employees and families, creates jobs, and supports the whole ACT economy,” Mr Catt said.

Tom Adam, president of the Phillip Business Community, applauded the announcement.

“The fights that we have had to have with our customers have seen a loss of face for many business owners,” Mr Adam said.

But life would still be tough for local small businesses, Mr Catt pointed out.

“We can’t just say ‘Lockdown over, it’s all good’,” he said.

“Small businesses are still dealing with restrictions; they’ve built up debt; they’ve lost stock. Many are only making a profit for the first time in months, and only a percentage of what they’d normally take at this time of the year. And while we can see solid consumer demand for some good and services, this isn’t the case for everyone.”

Many owners were under financial stress, Mr Catt said, and needed all the support they could – including locals buying local, especially in the lead-up to Christmas, and financial support from government.

The ACT Government’s Small Business Hardship Scheme ($10,000 per ABN to reimburse costs for electricity, gas, rates, and commercial vehicle registration) will open on Monday. It also supports local businesses through the Business Support Grants, and top-up payments, including for the Tourism, Accommodation Provider, Arts and Events, Hospitality and Fitness industries.

The fitness, martial arts, and movement industries could still be hard-hit, according to Mr Adam, who runs a martial arts and fitness centre in Phillip.

“We are all pleased things are easing – but it’s not over yet,” he said.

“Even if we get a full $10,000 from the Business Hardship Scheme – which is unlikely – it’s still less than half what many small businesses need to survive December. January is looking bright, but December is the issue.”

Moreover, Mr Adam said, most small businesses received 60 per cent or less of the support they received in 2020 for a lockdown that was two weeks longer. “Small businesses don’t care for half measures with business support,” he said.

He believes small businesses – many now desperate – should be able to apply twice for the Hardship Scheme; in its current form, he said, it will not help smaller businesses much.

He wants the government to release information before Monday so businesses can consider the detail. He also argues that the top-ups were announced as ‘payments’ at the start, but turned to a single ‘payment’ during lockdown.

Mr Adam said he and local trader groups have spent two months trying to get “proactive engagement” from the ACT Government, and arrange a meeting with Mr Barr.

The ACT Government has no plans to reintroduce ChooseCBR or a similar voucher scheme, a spokesperson said. 

“We would encourage Canberrans to get out and enjoy our local tourism attractions, visit our hotels and hospitality businesses, and shop at local small businesses as restrictions continue to ease.”

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