The Path Ahead for Australian Businesses

Australian businesses themselves need to work in an agile manner and actively contact customers as much as possible to make them aware and understand how you are handling the business in these circumstances.

While doing so, businesses also need to keep in mind and oblige the Australian Consumer Law which asks the businesses to not mislead the customers, to not behave unconsciously while dealing with their customers and to not rely on unfair factors in standard form contract with customers.  

Digitalization is the new path for many Australian businesses. While some industries are successfully working in this direction, there are some who are still trying hard and working towards it. Many businesses are investing in new technologies to adapt at these times. With the constantly changing consumer demands and expectations the businesses need to adapt with innovative and creative ways to manage everything.

Corrective measures to be undertaken over time to get businesses back

At these unprecedented times, it’s very important to take corrective measures to get the local, small and huge businesses back to working normal and earn profits.

The Australian government has extended safe harbor protections until 31 December, 2020 for the directors. This will ensure that the businesses can have safety and protection from insolvent trading liabilities. These liabilities will be applicable for the debts incurred during the course of business since March 2020.

The Australian government has undertaken these measures as they are aware of the overall repercussions on the businesses like huge loss in staff, disrupted avenues in the market and supply chains of goods and services, diminished capital and balanced sheets and even short term working capital and deficiencies.

These measures have substantially helped make the situation a little better for the businesses and for their overall operation.

Australian Economy hit by Covid-19 crisis

Covid-19 has caused a great economic dive and caused recession all over the world. Australia also experienced a major dive in the economy in the pandemic period since the great depression. According to the data released on the country, Australia is experiencing recession for the first time in 28 years. The government reported that the economy shrunk up to 7% in June, which is one of the biggest contraction recorded since the year in 1959.

The unemployment level is at its maximum in 2020, almost similar to the depression era period which is one of the major concerns for the country. The country experienced a drop of 0.3% in the first quarter of the year, after logging two straight quarters of contraction.

Businesses gone for a downward spiral

The pandemic has caused a great havoc in the lives of everyone especially students, IT corporations, businesses, small businesses. 

According to a report the largest dive in the Australian economy was a total of 12.1% in the household spending which accounted for a 7% fall in business and industry. With the continuing struggle of having the business premises shut, shifting the workplace from offices to homes, relocating the staff to their respective homes, the harsh reality of mass layoffs and experimenting new and creative ways of working from home, businesses are facing continuous struggles.

Businesses are facing struggles mainly because of the considerable reduction in the cash flow and also the transport of raw materials and goods and services. This is one of the major reason of lay off and reducing overall staff working hours. As per overall surveys conducted, since the onset of pandemic, 30% of the businesses have reduced the staff numbers, compared to the 17% in the previous years. More than 50% businesses have reported to have been affected in ‘a great deal’ by the Covid-19 pandemic.

The business sectors that largely got affected to ‘a great deal’ were health care and social assistance services, accommodations and food services. Currently even the manufacturing, construction, scientific, professional and technical services are facing great struggles as well.

Due to the second wave of Covid-19, few businesses are seen to be going back to the lockdown while few are still reopening.