As Australia’s Politicians Enforce Yet Another Lockdown, Small Businesses Keep Suffering

The idea of owning a beauty clinic in an iconic downtown Melbourne retail centre once seemed like a promising business opportunity. So promising, in fact, that I opened a second store nearby, and expanded my total payroll to 20 employees.

Capital costs across the two stores came to $1.6 million; while monthly expenses included $11,000 in loan interest, equipment leases totalling around $30,000, and rent at almost $40,000 (all figures in Australian dollars). It’s a substantial commitment, but this was a vibrant locale. And our market research indicated that demand would be high enough to sustain the necessary investment. Fortunately, the customers showed up—enough to meet wages, pay the bills, and allow me to put money away for a rainy day.

That day arrived last year, in the form of COVID. And not just the disease itself, but also the draconian, one-dimensional response from government officials: throughout the state of Victoria, 600,000 small business owners like me—men and women who collectively employ millions of people and generate a substantial share of the region’s economic output—have been marginalized in the name of public health and safety.

Small-business entrepreneurs are, by nature, both aspirational and pragmatic. We pay our taxes like everyone else, and understand the role government must play in managing national emergencies—including pandemics. But we also expect leaders to avoid imposing unnecessary and unreasonable regulatory burdens and operating prohibitions.

One of the lessons learned over the last year and a half by small business owners is that Australia’s flawed, multi-layered government structure can easily enmesh an owner in overlapping forms of red tape. This has forced us to reflect on what type of society we are becoming, and whether, in Victoria at least, it is still worth setting up businesses here.

With each new lockdown (as of August, Victoria is at six) the level of outrage has risen, and fissures in society have deepened. Supporters who lash out at critics of the government have ignorantly lumped small business owners in with fringe anti-vaxxers and violent protestors. Rules-following businesspeople such as myself, who endorse the vaccination program because they understand the threat of COVID (and who feel guilty about where our plight sits relative to people in countries that have suffered huge death tolls), simply want to have an adult discussion about how best to live with the virus in a way that doesn’t squeeze them to death financially.

Frustrated owners have pled for more advance notice of lockdowns and re-starts, so as to allow them to plan their work schedules, inventories, staff management, and customer communications. Yet at 4.30pm on August 5th, Victoria Premier Daniel Andrews announced that the state would be going into its (current) lockdown at 8pm that night, thereby affording business owners and operators just three and a half hours to shut down and scurry home. Some of my own clients who’d booked appointments between 8pm and 9pm became angry when they couldn’t be fitted in sooner, and were abusive to staff.

Businesses are being targeted by police for breaking the rules. Well-known restaurateurs Chris Lucas and Paul Dimattina were issued substantial fines, despite the fact that neither was serving customers after the lockdown deadline. Rather, Lucas had patrons inside his restaurant waiting for Uber services (which, ironically, were in short supply at the time because of an anti-lockdown protest that was occurring on the street outside). For his part, Dimattina was found to be in violation of the rules because a small group of friends were inside his establishment, commiserating over this latest financial disaster they were all suffering.

Lucas and Dimattina appear to have been singled out from among many Melbourne business operators who were in technical violation of the hastily announced government order. Many suspect that this is related to their status as prominent advocates for Melbourne’s locked down retail businesses. This advocacy has included appearances on Sky News, a platform that often has been critical of Victoria’s government. “We’re going to throw out $20 million in food … $100 million in reservations are going down the tubes and our businesses are on their knees,” Lucas told a Sky News host earlier this month. (Meanwhile, a Sydney-based mover who actually introduced COVID’s delta strain into Melbourne in July was fined just $200—a 50th of the fines being handed out to some restaurants.)

In November last year, after Victoria had come out of a 112-day lockdown, I received a letter from the State Revenue Office, touting the government’s credentials as a supporter of business, and offering a deferral (not waiver) of payroll tax owing for 30 days beyond the due date. Even in the best of times, the 4.85 percent payroll tax provides a significant disincentive to take on more staff. But in this case, I was required to pay it not on real wages (we’d been closed for almost four months), but on certain amounts received under the federal government’s “job-keeper” assistance package.

Any support is welcomed, but the Victorian government’s boast that it “has provided more than $3 billion to support business” ignores how this sum is spread out over an enormous number of recipients. The truth is that for most businesses, the amount of relief is very small relative to the losses incurred.

Much of the health advice relied upon by Victoria’s government has been provided by the state’s Chief Health Officer, Brett Sutton, who’s become something of a media darling among progressive urbanites. For small business, however, Sutton is a wolf in sheep’s clothing. In 2019, before the pandemic, Sutton was responsible for the order to temporarily close down I Cook Foods, a commercial catering company based in Melbourne’s Dandenong suburb, over unproven claims that it was responsible for a listeria outbreak. More than 40 people, including disabled workers, were affected, and the business’s reputation never fully recovered. The fallout continues to this day, as owner Ian Cook (who is suing Dandenong Council and health-department officials) alleges that the takedown of his business was connected to the machinations of a rival business called Community Chef, in which the council and its CEO were commercially vested. This scandal is already two and a half years old, and has become the focus of a parliamentary inquiry, yet Sutton remains on the job. Like other public officials, he’s also avoided paying any real political price for gross failures in Victoria’s hotel-quarantine program in 2020, which led to approximately 800 COVID deaths.

Ending Lockdown

Sydney. London. Toronto.

QuilletteSam Ashworth-Hayes

On building sites, construction workers are able to keep working—a fluoro vest and union card evidently being sufficient to repel COVID—despite sometimes exhibiting little in the way of social distancing and mask wearing. But even when the current lockdown ends and Premier Andrews once again sells the false claim that COVID has been defeated, most downtown customers will still be housebound, due to restrictions that allow no more than 25 percent of office workers to return to offices in the central business district. While white-collar employees and members of the increasingly bloated public sector will continue to earn income from home, chatting daily on Zoom calls and Slack chats, retail business owners will be left to rue the empty footpaths and shuttered shopfronts.

Our sense of bitterness is compounded by the self-aggrandizing rhetoric of public officials, who flood social media with messages about how proud they are of “each and every Victorian” alongside photos of donuts indicating zero-COVID-case days.

And at the local level, retailers’ concerns have been superseded by politically fashionable social issues: Seemingly oblivious to the acute commercial devastation that has unfolded around them, city councillors busy themselves with issuing sanctimonious statements about climate change, and advancing their vision of turning Melbourne into the Amsterdam of the south. Incredibly, council recently granted approval for a customer-repelling safe-injection site immediately adjacent to the popular Degraves Street dining and tourist precinct. As Australian Retailers Association chief Paul Zahra put it, “the Melbourne [central business district] is a shadow of its former self, and it’ll take years for the recovery to be complete.”

The inability of industry groups to gain a seat at the table with government is another source of frustration. Business advocates have been reduced to being little more than experts in stating the obvious, the futility of their task laid bare when Premier Andrews recently shut down parliament indefinitely—citing spurious “safety” concerns, and telling Australians, “I answer enough questions here every day.” If the rites of democracy can so easily be cast aside, what hope is there for small business?

What we need is a transparent, honest, and realistic conversation about the optimal trade-off between promoting public health (in regard to all risks, not just COVID), and avoiding economic misery. In May, Virgin Australia boss Jayne Hrdlicka, dealing with a mountain of debt, legions of furloughed staff, and a fleet of idle planes, tried to initiate such a conversation. She was unceremoniously rebuked, and has barely been heard from since. Strong leadership would have embraced her contribution. But to this day, in a number of states, public policy continues to be rooted in the false hope of eradicating the disease entirely.

According to Australia’s Bureau of Statistics, despite the low number of COVID deaths, the country’s overall mortality rate was elevated in 2020, as compared to 2015–2019 benchmarks—a phenomenon likely related to the emotional and financial difficulties that many Australians face due to isolation and lockdowns, not to mention the reduction in available cancer-screening programs and hospital operating rooms. If policymakers are to treat COVID deaths as being more important than deaths from other causes, let us hear the reasons why this should be—not to mention explanations for why children should be kept out of school for extended periods, despite the obvious toll in education, mental health, and heightened risk of physical and sexual abuse at home. Perhaps if we have those conversations, we can find better ways to target lockdowns so that they apply to regions and populations that truly are at acute risk, and avoid impoverishing business owners in locations that have never seen a single COVID case. After all, if rules can be created to allow the Australian Rules Football League to continue operating, surely we can be equally creative in other sectors.

It is apparent that Australia’s leaders lack the courage and candor to lead on this issue, having become locked in to agendas dictated by advisors and spin doctors. There is also a strong element of hypocrisy in their actions. Queensland Premier Anna Palaszczuk, for instance, demanded a moratorium on international travel, even while jetting off to Japan to win a 2032 Olympic Games for Brisbane that no other city was bidding for. Her deputy, Steven Miles, was caught sneaking off to holiday in New South Wales after lecturing residents to boost the Queensland economy by spending their tourism dollars close to home. In South Australia, the entire state went into lockdown last November after a single COVID spreader told a dubious (and subsequently debunked) story about catching the disease while buying a pizza. Was Premier Steven Marshall truly taken in by the tale, or was he desperate to be seen striking a zero-tolerance lockdown pose? Only in New South Wales did the state premier, Gladys Berejiklian, seek to strike a balance between pandemic suppression and civic and business freedoms. But going into 2021, with the Delta strain overwhelming the state’s contact-tracing capability, her reputation has plummeted, and she has given ground to critics.

Prime Minister Scott Morrison, having conceded that the constitutional power to manage the pandemic rests with the states, is in an unenviable position—being seen as politically responsible for outcomes, while having limited influence over actions. But to the extent the PM has acquiesced to the premiers, he has proven to be no friend of small business. And while his recent statement that Australia can “move ahead” safely once 70–80 percent vaccination targets were reached may be a sign of hope to some, that benchmark is likely at least three or four months away—a long time for struggling businesses.

Meanwhile, many business owners are serving as surrogate parents for young people isolated from family in other parts of the country. During an online training program that I conducted with my staff in the middle of last year’s four-month lockdown, I sought to lighten the mood by asking everyone in the group to share something positive they’d taken from their lockdown experience. We learned of new languages, pets, dance moves, and recipes. But when it came to the turn of one young female employee, someone who’d struck me as resilient, she burst into tears and blurted out, “I’m just so lonely.” So much for that pick-me-up (though at least we got to discover her deteriorating emotional situation, and take appropriate action).

As Melbourne’s latest lockdown is extended yet again, small business owners such as myself are forced to determine at what point continuing to incur more debt, which can seem like throwing good money after bad, becomes pointless. Each time, it is not just the actual closures that bite, but the diminution in belief that things will get better—the confidence that seeps away each time Premier Andrews stares down a camera and promises that he won’t hesitate to do the same thing again. In that respect at least, he has proven to be a man of his word.

It didn’t have to be this way. Authentically democratic leadership, informed by consultations with all affected groups in our country, would have ensured the enactment of sensible and proportional solutions to the public-health threat posed by the pandemic. Despite facing bankruptcy and the loss of their homes, many business owners still find it in them to leave a scrawled note on their door-front, thanking past customers and apologising for not being able to stay the distance. But it is not they who should be apologising. It is their politicians.