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Retail boss Paul Zahra has warned Victoria’s roadmap out of lockdown could wipe out 50% of small businesses in the state as he accused the state government of failing to consider alternatives such as “progressive reopening”.
Zahra, the former chief executive of David Jones who is now head of the Australian Retailers Association, made the comments at the National Press Club in Canberra on Wednesday.
He said he expects to see in Victoria in the coming weeks “the first signs of the economic collapse” through the “highly visible” failure of retail businesses and proliferation of for lease signs.
Zahra said there were “no signs yet” that the Victorian government would vary its roadmap which controversially does not lift most restrictions until there are fewer than five new coronavirus cases a day – estimated to be reached in late November.
“We were called into what was classed as a consultation session but was more like information sessions,” he said. “Unfortunately, there was very little feedback that was taken on board.”
Zahra on Wednesday appeared alongside the Australian Council of Social Services chief executive, Cassandra Goldie, and Deloitte Access Economics’ Chris Richardson. The trio was united in calling for jobseeker to be permanently raised and warning that bringing forward tax cuts would be a less effective stimulus in comparison.
Zahra’s comments come as the Victorian premier, Daniel Andrews, flagged he would soon discuss the next round of economic support with the prime minister, Scott Morrison, and pointedly warned against playing politics over the issue.
Zahra said the ARA had asked for “a progressive reopening of retail [but] what we got was a delayed reopening”.
“Most of our members are small business and we believe that 50% of small businesses in Victoria will permanently close,” he said.
Government should not measure success only by “one health factor” but also consider financial health and mental health, Zahra said. “It should’ve been a much broader conversation and it wasn’t.”
He argued a progressive reopening would reflect that retail stores had different risk factors, with large retailers like Bunnings presenting less of a risk than smaller retailers, and that many, such as supermarkets, had been “exemplary” in their uptake of Covid safety measures.
On Monday, Morrison said he looked forward to the Victorian government announcing “the economic support plan they will be delivering … to mitigate the economic consequences of the plan that they’ve outlined”.
He noted the federal government had already extended jobkeeper wage subsidies and jobseeker unemployment benefits – at reduced rates – and Victoria was the largest beneficiary.
Andrews was asked on Wednesday about the continuation of economic support and told reporters in Melbourne he would speak with Morrison “later on this week and it is best that I have those conversations with him rather than broadcasting my message”.
“I am not interested … at all in the politics of this. I am just not. It doesn’t work. It doesn’t work. Politics is of no use in the fight against this virus.”
At the press club, Zahra called for “permanent support for jobseeker or a similar scheme”, bringing forward income tax cuts, and greater funding for childcare.
He later qualified that although “we’d all welcome a tax cut” the “timing is probably not great” and the quickest way to stimulate the economy would be to give money to those on the lowest incomes and young people.
Goldie warned that families would suffer if the government returned jobseeker to the old rate of Newstart – $40 a day – which had caused “a brutal reality of deprivation”, with families forced to skip meals and essentials including medication.
Acoss “firmly opposes” proposals to bring forward stages two and three of income tax cuts, she said. “Costing $12bn, the stage-two tax cuts will offer to people on six-digit salaries, who have jobs, up to $50 per week.”
“But if you’re on a low or modest income, if you’re lucky, you may get $5,” Goldie said. “Giving dollars, this proposal would give dollars to people most likely to save the extra dollars, and giving to people who probably need it the least.”
Richardson said he had a “minor hesitation” about income tax cuts “because some of that money is less likely to be spent”.
The economist said the argument that tax cuts were unfair was “incorrect” because Treasury figures showed the three phases of tax cuts do not change the share of tax paid by low, middle and high-income earners.
But tax cuts offered less “bang for buck” as a form of stimulus than other measures, such as infrastructure spending.
“So don’t say no to tax cuts because they’re unfair. Say no to tax cuts if you think they’re going to get in the way of better stimulus that creates jobs faster,” Richardson said.
Asked about the progress of industrial relations roundtables, Zahra, who sits on the casuals working group, said it had been an “onerous” time commitment, was a “work in progress” but had been a “positive experience”.
Richardson said he feared employer and union participants would agree on only “the tiny things” rather than “bigger ideas” like emergency powers to improve flexibility in the case of crises like the pandemic.
Source: The Guardian
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