STATEMENT BY CSPA EXECUTIVE CHAIRPERSON

RE: THE CHAPEL STREET PRECINCT ASSOCIATION (CSPA) OFFICIAL STATEMENT FROM THE INQUIRY INTO THE VICTORIAN GOVERNMENT’S RESPONSE TO COVID-19 

We thank the Committee for allowing us the time today to share our feedback.

The Chapel Street Precinct Association is made up of around 2,200 businesses and is a true microcosm of business here in Victoria. Whilst we are famously Australia’s largest retail and entertainment precinct, additionally, almost one-third of our businesses are in business and professional services.

This diverse mix of businesses gives us a very thorough insight into the effects COVID-19 has had on business here in Victoria.

COVID-19 has seen a high percentage of our businesses report a drop in turnover of between 70% up to 100% and this has devastated our local economy.

Both the Federal and State Government support packages have been integral to limiting the amount of businesses that otherwise would have already been forced to close and or lay off employees.

JobKeeper has been integral to many businesses in retaining their employees, this by far has been one of the most important initiatives and has saved thousands of jobs.

The State Governments Commercial Tenancy Relief Scheme was absolutely critical to most businesses surviving, a very high percentage of our businesses have stated that without this key piece of legislation they would have been forced to close their businesses permanently. Many landlords have supported them with this, however many have said that landlords have offered the bare minimum to assist which shows without the legislation this may not have happened and resulted in many more closures than what we have seen so far. Unfortunately, we are still hearing that some are yet to reach agreements with landlords so mediation may be required.

Our larger businesses have said the payroll tax refunds have assisted.

The businesses that qualified for the Business Support Fund Grant said this helped immensely and was received in a timely fashion, however, many of our businesses in business service categories that were rejected initially for this grant were extremely disappointed that they were ignored by our State Government.

The grant said it was for businesses heavily impacted by the lockdown measures, however, our State Government decided that they would determine which business categories were heavily impacted by the ABN classification, this was a fallacy and completely ignored the reality that if you forcefully close that many businesses in a local economy that many other businesses in that local economy are equally impacted. For these businesses to receive rejection letters from the State Government stating that their business was not considered to be heavily impacted when in reality many had seen a 70% downturn or greater was devastating for these business owners and showed a lack of compassion and understanding for the plight of these businesses. This was exacerbated by the lack of response or reply, many businesses did not receive a rejection letter or notification until they followed up with phone calls.

Thankfully, the State Government finally announced on the 1st of May that this was now being opened up to all businesses who qualify regardless of business category as long as they qualified for JobKeeper, yet many are still waiting to hear back, and to date have not received the grant as of yet – this almost two-months since the forced lockdown of many businesses and our economy. This is not acceptable or fair in our view.

The State Government’s decision to not allow our restaurants and cafes to take part in stage one easing of restrictions and have up to 10 patrons whilst maintaining social distancing measures has not been received favourably. Our business owners would have appreciated the choice here. Whilst it may not have been economically viable for all, many businesses have said that with the JobKeeper scheme in place that it would have been vital to help start generating some profitable revenue as takeaway alone will not keep them afloat as most delivery services are taking up to 35% of their profits which is not sustainable. Three weeks may not seem a long time, however, for many businesses this may make all the difference to them surviving or not.

Our Premier’s statement that the overwhelming majority of businesses he had spoken to about this said that 10 patrons would not be viable anyway does not gel with the overwhelming majority of our businesses feedback. How can the Premier make this statement yet not speak to the largest member group of restaurants and cafes in his state. Nobody from the Government asked us about this before making this decision. We sincerely ask that based on this that the Government reconsider this urgently as many businesses need to start trading again, we are confident they will adhere to stringent measures to ensure public health and safety. Not everyone will reopen yet, however, please give them the choice.

The misguided belief that businesses have been able to go into hibernation is just not realistic or true.

Whilst JobKeeper is assisting with some wages, some of our employees on Sponsor or International Student Visas do not receive support and do not even qualify for JobSeeker, so we have many businesses still paying their wages so they can at least feed themselves.

Some businesses have been able to negotiate rent relief, however, in a lot of these cases at least half of this is in deferred rent, meaning that this is a debt that continues to build. Banks have deferred loans, however, they are capitalising the interest, so once again this is a debt that continues to build. Council rates, outgoings, equipment finance and insurance premiums are all still due and payable.

Therefore, businesses still have many expenses and bills and cannot truly hibernate, every week they are kept closed sees debts mounting, every week is critical and for every week they are forced to remain closed we will see more having to close permanently.

We have seen a number close permanently already and this will only continue to increase for every week these decisions are delayed and for every closure the impact will continue to add to those who remain as they will have less and less customers on the other side.

Thank you.

Mr. Justin O’Donnell
Executive Chairperson | President
Chapel Street Precinct Association Inc.
On behalf of CSPA businesses, the CSPA Board of Directors & General Manager