As lockdown eases, we are entering a new phase of the COVID-19 pandemic.
Tim Pallas, Victorian Treasurer who presented to a Melbourne Chamber of Commerce webinar in May 2020 has predicted that Q3 & 4 will have 14% lower growth in the state of Victoria.
Meanwhile Chief Economist Bill Evans who presented to a Westpac webinar last week has predicted that once September comes around and the Job Keeper payment stops, we will be operating our businesses in an environment of weak wage growth and low household income.
Grim news indeed.
We are already in recession so we all MUST be prepared for Black September
Where many businesses will be either reopening now as restrictions are easing in the hope that business returns to normal or re-opening with no clue as to how to adapt to a changed market both will fail.
Relaunching your business requires an intensive study of current market reactions, values, priorities, industry trends, behaviours and buyer psychology to assess the likely post pandemic direction the market, analysing data and making assessments of how the best way to adapt and relaunch.
Like flipping a coin, some business owners will be thinking of waiting until September when Job Keeper ceases to see what will happen. This is complete suicide.
Once September comes, these businesses will be squeezed out of the market with businesses who did adapt, relaunched or new start- ups offering the same service at a lower price. Both scenarios will be in a better position to handle whatever is coming at them.
You’ve heard the saying information or knowledge is power.
Those who are smart are out there NOW are using job keeper to invest in businesses like our agency to research and talk to their target market, obtaining the information we provide them which analyses consumer behaviours, new market trends.
Smart business owners are up to date with the economic predictions by engaging with financial experts like those in our CAT team.
By having informative conversations with financial planners, accountants, bankers those businesses are finding ways to adapt by cutting costs, finding cheaper ways to operate or deliver or tapping into new markets that are emerging since the original market dried up.
Whilst the good news is that the embarrassing blunder that the Morrison Government made with their expenditure forecasts for Job Seeker and Job Keeper wrong, it doesn’t necessarily follow that we can all sit around expecting more money to be handed out once it all comes to an end on September 27.
In an article posted in the ABC News 11th May 2020, “Conservative elements within the Federal Government and commentariat are pressuring Mr Morrison and Treasurer Josh Frydenberg to use a pre-planned June review of JobKeeper to cut back the program.”
Scott Morrison is in a quandary over handing out more assistance post September as it will mean future generations will inherit the debt for years.
Economists all agree it can’t just come to a halt in September, that a transition period is necessary.
Our Agency believes that Job keeper is not a plan. To reopen the Government is expecting you have a COVID 19 plan.
Businesses should start the transition period now to create some much-needed business investment, cashflow and if possible, to use as a buffer for whatever is coming next.
Please look out for our next blog post on the “Steps Every Business Owner Must Take to Reboot your Restart.”
We are also planning a webinar late June with our CAT finance team to brief you on what you should know and prepare for Black September.