The impact of COVID-19 on our economy: what now?

We have survived the initial shock of COVID-19 and the end of the financial year. Now is a time for business owners to reflect and plan ahead.

March and April this year saw unprecedented shutdowns required to protect the public health of this country which saw many sectors of the economy spiral. Unfortunately, businesses were forced to act immediately in taking extreme measures to stay afloat. Although the easing of restrictions over recent weeks has allowed trading to return to some degree of normality in some parts of the country, there is an expectation amongst many that harder times are yet to come.

Victoria has been a reminder that this pandemic is far from over. They have reverted to stage 3 restrictions to recover yet NSW government measures are scheduled to expire in only a few months’ time.

The government have actively responded to the crisis by introducing economic measures to help businesses during this time. The stimulus packages have made a significant impact on the economy in order to prevent insolvency and job losses. However, these relief packages are due to soon expire:

• JobKeeper payments are due to cease on the fortnight beginning 27 September 2020;
• The temporary safe harbour protections against personal liability of directors is due to end on 25 September 2020, in addition to changes to statutory demands, bankruptcy and insolvency;
• The Coronavirus Small and Medium Enterprises Guarantee Scheme will only be available for new loans by participating lenders until 30 September 2020.

These dates also coincide with the end to other Federal and State government safety nets including land tax concessions and deferrals for eligible landlords.

Our clients are experiencing many of these concerns about the current state of the economy. They have definitely felt the disruption to their business operations including issues from the restriction of activities, supply issues, the fast need for technological solutions and the difficulties with commercial arrangements that were no longer viable during lockdown.

No doubt the impact of COVID-19 is unique to each individual business. We have witnessed many businesses successfully adapt to the challenges presented by the pandemic and have been able to make critical decisions promptly to ensure their progression. Many of our clients anticipate a new degree of normality and continue to take action to safeguard themselves during unprecedented times.

Our commercial team can assist in determining the risks your business is facing and identify the most appropriate solutions. We work collaboratively with your existing financial advisors and across a number of practice areas including employment, property, corporate and commercial, dispute resolution and insolvency. We can steer you in the right direction to help you solve the most complex business problems.