Small business calls for help as coronavirus hit outstrips bushfires

Small business groups are urging the government to consider stimulus measures and concessional loans, as the coronavirus epidemic starts to have a greater impact on some sectors of the economy than the bushfires.

Small business ombudsman Kate Carnell said Australian small businesses had already been struggling before the virus hit.

Sohini Trivedi serves a client at one of Ottoman3 Brow Bar’s three Melbourne locations. The owner of the business says it has experienced a 15 per cent drop in sales.Credit:Simon Schluter

"It has the potential to be worse than the bushfires and, in a lot of areas, it already is," she said. "For small businesses that were already doing it pretty tough between bushfires and floods and drought, this is just really hard."

Ms Carnell said while business was booming for those selling specific goods, such as toilet paper and hand sanitiser, a broader downturn was being felt across the small business sector.

"It impacts businesses selling to China and businesses relying on China for their supply chain," she said.

"Over the last ten years or so most businesses have moved from warehouses full of stock to just-in-time delivery, which means there is not much stock sitting in Australia."

Trade is down at beauticians, with Ottoman3 Brow Bar experiencing a 15 per cent drop in sales.

Owner Mini Latif said the business, which turns over around $3 million a year across three Melbourne locations, was already experiencing difficulty in a tough retail environment.

"When we first saw the pattern we didn't want to admit to the fact it could have an impact for us," she said. "I thought 'Is it just a coincidence?' There is just fear. People are just not wanting to leave the house."

Ms Latif said retail landlords were denying there was a problem.

'We are not going to fold over this at the moment. Although if we sold toilet paper we'd be fine.'

"We are not going to fold over this at the moment," she said. "Although if we sold toilet paper we'd be fine."

Peter Strong, head of the Council of Small Business of Australia, said small businesses needed to prepare for the worst-case scenario.

"The bushfire relief took too long, businesses closed that shouldn't have closed if the response had been quicker. Preparation needs to happen now."

Mr Strong said the government should consider a stimulus package or a payroll holiday for small businesses.

Ms Carnell said a stimulus package was "absolutely essential" for small businesses.

"There needs now to be a stimulus package and, in the first instance, they could extend low-interest, no-payment-for-two-years loans to businesses affected by the coronavirus."

Speaking on Sky News on Thursday morning, Treasurer Josh Frydenberg said he was not ruling out direct stimulus for small business.

"Well, I'm not in the rule in, rule out game right now," he said. "What I am doing is saying that our package of measures will be responsible, it will be targeted, it will be scalable and it will reflect what is in the best interests of the Australian economy."

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