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Coronavirus puts thousands of small business on the brink of ruin

Entire streets of shops could be wiped out and thousands of workers out of jobs as coronavirus crushes small business across Australia.

Staff in cafes, bars, florists, and yoga studios are already being laid off en masse as sales plunge up to 80 per cent in just two weeks.

On Thursday Scott Morrison announced the closure of Australia’s borders to all non-resident foreigners, which could cripple the tourist industry for six months. 

The drastic move to shut Australia’s borders from 9pm on Friday came as local cases surged to over 700, with about 80 per cent of those coming in from overseas. 

Every business Daily Mail Australia spoke to in Sydney and Melbourne on Thursday said they were either about to close or would be broke within weeks.

Owners are desperately hoping for a break from their landlords, or that the government’s stimulus package will swoop in and save them.

Small businesses like Nutrition Station Café in Marrickville, Sydney, fear they will go broke within weeks as sales plunge amid the coronavirus panic

Tax-free cash grants of up to $25,000 will be given to 7,000 small businesses that employ people and have sales of less than $50 million.

However, many businesses said that would barely get them through a few weeks and some might even be gone by the time payments arrive on March 31.

Barangaroo House in the Sydney CBD laid off 40 staff in a week and shut its upstairs bar indefinitely as so many of its customers are now working from home. 

Cafes with no customers 

In Melbourne’s CBD, business has gone from bad to catastrophic in a matter of days, with many preparing to close up shop completely by Monday.

Operations manager for Sunshine Sparrow Café Pty Ltd, Nunzio Vizzini, said the company’s network of cafes could collapse within a week without financial support.

Its popular city café, Blended Beard, near Melbourne’s court district, was practically empty on Thursday.

‘Our aim is to just try and keep our heads above water and pay our rent,’ he said.

Sunshine Sparrow Café Pty Ltd's network of cafes across Melbourne could collapse within a week without financial support. Blended Beard, near Melbourne's court district, was practically empty on Thursday, staff member Harry Nguyen (left) said

Sunshine Sparrow Café Pty Ltd’s network of cafes across Melbourne could collapse within a week without financial support. Blended Beard, near Melbourne’s court district, was practically empty on Thursday, staff member Harry Nguyen (left) said

‘It’s definitely not about making profit, it’s all about giving these guys some wages because as it stands the government really hasn’t done much for casual employees.

CORONAVIRUS CASES IN AUSTRALIA: 710

New South Wales: 307

Victoria: 150

Queensland: 144

Western Australia: 52 

South Australia: 42 

Tasmania: 10

Australian Capital Territory: 4 

Northern Territory: 1  

TOTAL CASES:  710

DEAD: 6

‘I’m just trying to give them some earnings. Honestly we’re just trying to put them first.’

Business owners in Sydney’s inner-west said the whole once-popular Marrickville Road shopping strip could be wiped out within weeks.

Trish Calligas, manager of Nutrition Station Café next door to the yoga studio, said she was forced to cut the hours of her seven staff by a quarter this week. 

Some casuals are only working half what they usually do and someone will go next week and another the week after if the situation continues. 

‘It’s usually packed on Saturday but now it’s a ghost town. We disinfect everything multiple times a day but people are still too scared to eat out,’ she said.

Trish Calligas, manager of Nutrition Station Café, said she was forced to cut the hours of her seven staff by a quarter this week

Trish Calligas, manager of Nutrition Station Café, said she was forced to cut the hours of her seven staff by a quarter this week

Lily Tran and Michael Vo, owners of Mimosa Jewellery and Perfumery said they had lot 80 per cent of their business in two weeks

Lily Tran and Michael Vo, owners of Mimosa Jewellery and Perfumery said they had lot 80 per cent of their business in two weeks

The shop has been in the same spot for 33 years and was once visited by Bob Hawke when he was still Australian Prime Minister

The shop has been in the same spot for 33 years and was once visited by Bob Hawke when he was still Australian Prime Minister

The cafe usually makes about $2,000 a day on Monday, the biggest day of the week, and is now not even making half that.

‘I didn’t think it would hit us this hard because we offer orders online through Menulog, but that is way down too and I don’t know why,’ she said.

‘If the landlord or the government doesn’t help us we won’t be able to survive much longer.’

Family businesses on the brink 

Lily Tran and Michael Vo, owners of Mimosa Jewellery and Perfumery in Marrickville, once visited by Bob Hawke, said they had lot 80 per cent of their business in two weeks. 

‘We are getting three customers a day, not even. The only businesses doing well on this street are toilet paper and butcher,’ Ms Tran said.

‘Hopefully people will spend the $750 Mr Morrison gives them, but they probably aren’t going to spend it on perfume – probably on toilet paper.’

Simon Joannou is already closing Marrickville Yoga Centre from Sunday and sacking four staff - and doesn't know if the doors will ever open again

Simon Joannou is already closing Marrickville Yoga Centre from Sunday and sacking four staff – and doesn’t know if the doors will ever open again

Ms Tran said the collapse in sales meant they had to let go two staff and would lose a third soon unless things dramatically improved.

‘We don’t know how long we can stay open, we have to just pray and keep going even if it’s just the two of us,’ she said.

‘We’ve been here 33 years, we can’t just close. We have to be very cautious about everything.’  

Help for casuals 

Casual workers will no longer have to wait to receive sickness payment under Newstart. 

‘People who are casual employees that wouldn’t be able to go to work or because they have to self-isolate or, indeed, have the virus, they would be able to access that payment,’ Mr Morrison said.

‘The normal assets test rules apply to those as they do to all these payments, but the waiting period will be waived to enable them to access that payment and that will provide that support. 

‘Many other countries don’t have that in the system.’ 

Simon Joannou is already closing Marrickville Yoga Centre from Sunday and sacking four staff – and doesn’t know if the doors will ever open again. 

‘It went from a thriving business to zero in two weeks,’ he said, as a just handful of clients filed out of his upstairs studio.

‘We don’t have the money to keep paying rent and my first responsibility to my staff. I have no income myself either.’

Mr Joannou said classes are half the size they were a week ago and he himself questioned whether yoga classes were even safe amid the pandemic.

‘We aren’t adjusting anyone’s positions and are keeping everyone apart but that doesn’t stop people worrying,’ he said.

‘It’s no worse than getting on a bus but anywhere where you’re gathering people it just takes one person being infected.

‘We can’t operate our business in this crisis, it’s not a responsible thing to do and there’s no finances.’ 

Vivian Chung, who owns Sincere Florist in the same suburb, said her business was battered by both fewer walk-ins and many cancelled events.

Vivian Chung, who owns Sincere Florist, said her business was battered by both fewer walk-ins and many cancelled events

Vivian Chung, who owns Sincere Florist, said her business was battered by both fewer walk-ins and many cancelled events

Ms Chung said she had two staff besides her and her husband and both of them would lose their jobs soon without a dramatic recovery

Ms Chung said she had two staff besides her and her husband and both of them would lose their jobs soon without a dramatic recovery

‘There was a wedding tomorrow that called up today and cancelled, a funeral went without flowers, there’s been birthdays called off. We have a few weddings in May that will probably be cancelled too,’ she said.

‘Even on Saturday people aren’t buying for their homes anymore. I think all their money is going on groceries.’

Ms Chung said she had two staff besides her and her husband and both of them would lose their jobs soon without a dramatic recovery.

‘We can’t afford to keep going like this. We had no customers from lunch to the end of the day on Wednesday,’ she said.

‘There’s usually lots of people, especially after work people come by. We have to shut the door early because no one is coming in.’

Bookstores could die out 

Rachel Margolius has run Marrickville’s quirky Urchin Books for ten years but worries this month will be her last in business. 

‘Coronavirus has really scared people off and I’m worried that this is going to be my death kneel,’ she said from her empty shop.

Rachel Margolius has run the quirky Urchin Books for 10 years and worries this month will be her last in business

Rachel Margolius has run the quirky Urchin Books for 10 years and worries this month will be her last in business

Ms Margolius said she was also very disappointed with the government's response to the crisis and the support offered to small businesses

Ms Margolius said she was also very disappointed with the government’s response to the crisis and the support offered to small businesses

‘We all want to have bookshops around and we’ve already suffered from Kindle, but we’ve survived – will coronavirus be the thing that brings us down?’ 

Ms Margolius said she was also very disappointed with the government’s response to the crisis and the support offered to small businesses. 

‘It will force a lot of small businesses to close and it doesn’t have to,’ she said.

Inner-city havens desperately hanging on

Mr Vizzini, said the outlook was bleak but while Australians attacked one another at supermarkets, his staff were pulling together.

‘They’re all being understanding. They’re all taking a hit. We’re in this together… unfortunately it’s a tricky time,’ he said.

Mr Vizzini said the company was trying to do everything it could to stay open but business had dropped by 30 percent by Monday, and Tuesday was even worse.

By Wednesday it was dire. 

With fewer people outside and many trying to avoid strangers who could carry the virus, city taxi drivers like Sohail Shafi in Sydney are almost broke

With fewer people outside and many trying to avoid strangers who could carry the virus, city taxi drivers like Sohail Shafi in Sydney are almost broke

'The corporate clients are gone because everyone is working from home and everyone else is too scared (of getting sick) to get into a taxi,' he said

‘The corporate clients are gone because everyone is working from home and everyone else is too scared (of getting sick) to get into a taxi,’ he said

‘We’re probably 60-80 percent down depending on what venue,’ Mr Vizzini said.

Without major rent relief, the business faces annihilation.

‘They’ve already taken that step, something is on the cards, how far away we don’t know,’ he said. ‘Rent, is by far, even during normal trading, it’s a killer.’

Upstairs from one of Mr Vizzini’s cafes, Slate Restaurant and Bar is hoping it can trade its way out of trouble. 

‘Numbers over lunch have obviously decreased over the past few days, but people have still been coming up for a drink,’ manager Ilyias Yildirim said.

The bar is known for its three outdoor areas, which has traditionally been popular with the fast-flowing Melbourne city traffic.

‘If business continues to decline, and we think it will, we still plan to remain open and deliver food to our customers to their door,’ Mr Yildirim said.

Slate Restaurant and Bar is hoping it can trade its way out of trouble, manager Ilyias Yildirim said

Slate Restaurant and Bar is hoping it can trade its way out of trouble, manager Ilyias Yildirim said

Barangaroo House in the Sydney CBD laid off 40 staff in a week and shut its upstairs bar indefinitely as so many of its customers are now working from home

Barangaroo House in the Sydney CBD laid off 40 staff in a week and shut its upstairs bar indefinitely as so many of its customers are now working from home

Despite the ongoing turmoil, Mr Yildirim believes the people of Melbourne will still need comfortable places to drink and from next week they’ll be delivering to people’s offices direct.

‘We’ll be here because we’re taking every measure and adapting to the ever changing conditions ,’ he said.

Taxis with no passengers 

Not just shops are doing it tough. With fewer people outside and many trying to avoid strangers who could carry the virus, city taxi drivers are almost broke. 

‘My business is down 80 per cent in two weeks. I can’t even afford rent,’ Legion Taxi driver Sohail Shafi said.

‘Usually if I wait here it’s less than 10 minutes until I get a fare but now I’m waiting two hours.

‘The corporate clients are gone because everyone is working from home and everyone else is too scared (of getting sick) to get into a taxi.’ 

Scott Morrison’s stimulus package

Stimulus payments to households to support growth

· $4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. 

Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. 

There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.

Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

Delivering support for business investment

· $700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. 

For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.

· $3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. 

Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.

These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or 3 in every 4 workers. 

The measures are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the short term.

Cash flow assistance for businesses

· $6.7 billion to boost cash flow for employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. 

The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. 

This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Installment Activity Statement from 28 April with refunds to then be paid within 14 days.

· $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. 

Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. 

Assistance for severely-affected regions

· $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.

This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. 

It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. 

Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.

Read more at DailyMail.co.uk