Finance Finance News Alan Kohler: Small family businesses and small government hearts

Alan Kohler: Small family businesses and small government hearts

Lockdown support for businesses
It's shameful that governments aren't doing more to help family businesses affected by ongoing restrictions, writes Alan Kohler. Photo: TND
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The Lee family has owned and operated the Brighton Savoy Hotel since 1967.

Des Lee bought it a decade after arriving penniless in Australia as a refugee, having survived the Holocaust and the Hungarian Revolution.

He died heartbroken last August in the middle of Victoria’s second lockdown, the hotel empty and losing money, a refurbishment half-done.

His children, Michael and Jennifer, now run the hotel with their mother, Maya, and with JobKeeper gone on March 28 they are losing $60,000 a week in the third lockdown – on land tax, a skeleton staff and utilities.

In fact, they’ve paid $423,675 in land tax to the state government in the past 12 months despite being closed for nine of them because of state government decisions.

They told me last week the mental health impact on their family has been devastating, even though JobKeeper kept them going initially.

This time around, with JobKeeper cut off, the state government grants have come nowhere near offsetting the losses, so they’re sinking.

Lockdown support for businesses is MIA

The Raponi family has been running a soccer store in Pascoe Vale for 33 years, but last week were forced to close it.

Soccer fields across Victoria have been abandoned for most of 2020 and in 2021 as well; stock bought at the start of last year is still sitting on the shelves, and there were no orders for end-of-season trophies in December.

Eli Censor Hazell owns seven KX Pilates studios across Melbourne. She has had to stand down 50 staff without pay and is facing $20,000 in rent.

“My staff are living pay cheque to cheque and we can’t help them,” she told Smart Company.

Business lockdown support
Thousands of business owners have been forced to close permanently as a result of restrictions. Photo: Getty

Emma Leckenby has an occupational therapy business in Eltham called Little Rockets that also misses out on the state government support because it’s too small.

She told the ABC the latest lockdown will cost her $3000, which is putting “significant financial pressure” on her family.

Bill Morton owns the Paperback Bookshop on Bourke Street, which has had to go entirely online. Turnover is 20 per cent of what it used to be.

Johnny Vakalis runs The Journal Cafe in Flinders Lane. He’s losing $20,000 to $30,000 per week.

And so on. There are thousands of stories of family businesses in Victoria that have been forced to close, or eat their savings to stay open, and there are about to be thousands more in Sydney with a lockdown starting up there.

These families are not victims of nameless misfortunes, or incompetence, or even an economic downturn, but of government decisions designed to protect the community’s health.

In other words, they are being forced by our representatives to sacrifice their own family’s wealth and happiness, and in many cases their health, so the rest of us don’t get sick.

Different rules apply

Meanwhile, 66 large ASX-listed companies received $1.38 billion from the government in JobKeeper payments, about half of which went to companies that actually reported an increase in earnings.

Harvey Norman received $22 million in JobKeeper payments even though its profits doubled.

Gerry Harvey has famously declared he won’t be giving any money back and the government is going to let him keep it.

Of course, a lot of family businesses were kept going with JobKeeper as well, and a few of them would have got money they didn’t need.

But that’s over now, and the lockdowns are not.

And that’s because Australia’s vaccination rate is pitiful.

Other countries are opening up and allowing businesses to operate because more than half the population has had at least one dose; the Australian government has fully vaccinated 4.3 per cent of the population, less than half the world average and a tenth of the UK and America.

Yet no provision is being made to look after the families still being devastated by the lockdowns that are a direct result of the government’s vaccination failure.

Broad decisions have been made to end “fiscal support” based on budget targets and the obvious economic recovery, but decisions are still being made by governments to stop us going to certain businesses to protect community health, which have nothing to do with the health of the economy.

And they shouldn’t be seen as businesses – they’re families, and they are being run over and left on the side of the road, victims of a bureaucratic hit and run.

If even one family was ruined to protect the rest of us, even though the federal government could easily find the money to help them, it would be unacceptable, but there are thousands of them.

It’s shameful.

Alan Kohler writes twice a week for The New Daily. He is also editor in chief of Eureka Report and finance presenter on ABC news

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