There’s an old anecdote about a visitor to Maoist China noting all the workers toiling with buckets and spades to dig a massive dam. Why not get a couple of bulldozers? he asks. Because, the cadre replies, then we wouldn’t have full employment.
It’s easy to laugh at the follies of old-school communist states, but the joke’s on us, now. Governments in Australia and New Zealand might congratulate themselves that they’ve steered their countries through the pandemic while avoiding massive unemployment or business closures, but that ignores the looming wave of economic chaos. Thousands of “zombie businesses” will almost certainly collapse as government support is withdrawn.
Businesses are being clobbered by not just lockdowns, but deadly uncertainty.
Sunday’s road map out of lockdown gave clarity to Victorians on crucial matters such as schools reopening, mandatory vaccinations, auctions and hospitality. But for thousands of companies struggling to survive since March last year, it could spell the end – with the economy not likely to return to some semblance of normality until Christmas.
But no business can seriously plan for the future with the lockdown axe hovering over their necks. What business is going to order in costly stock, when a “snap lockdown” could shut them down for weeks at a moment’s notice? What customer is going to make travel plans when borders could be closed at any time?
“We have one in three business owners – employers with revenue of $1 million to $10 million – seriously considering closing,” said Small Business Australia’s Bill Lang of the lobby group’s soon-to-be-released COVID-tracker survey of 500 Australian owners.
Among the hardest hit are those whose livelihoods depend on tourism […] Now, even when people could travel again, “they’re all scared because they worry their plans will change”, [Dale Lacy] said.
Federal government support nursed many businesses through the past 18 months of state government-imposed lockdowns. But governments can only spend other people’s money for so long. Every week Melbourne is locked down is estimated to cost up to a billion dollars to the national economy.
But it’s uncertainty which may well be the killer blow.
Uncertainty over the rules when Melbourne does exit lockdown made planning impossible, Snap Fitness Footscray owner Matt Bender said.
“It’s like trying to get clarity while spinning in circles, blindfolded,” said Mr Bender, who has had to close his business for more than 300 days since the pandemic began.
He suspected many in his industry were operating only to get government payments and would close when support finished. “A lot of these zombie businesses will go under when everything returns to normal.”
Small Business Australia’s Mr Lang said CBD companies in sectors such as retail and hospitality that relied on the city-centre thriving had “literally no hope”. Others could hang on until November, when 80 per cent double vaccination rates are expected, but were still stuck in uncertainty.
“To date, the government has been unable to stick to any road map published. We are at week six of what was going to be a one-week lockdown.”
The Age
Australians are getting a hard lesson in the harsh truth of socialism. Consider the facts of Australia today: businesses operating on the whim of state bureaucrats, government funding choosing which industries to keep running and which to close, workers forced to rely on state welfare to survive. The state has effectively seized control of the means of production and is trying to run a planned economy.
How is this not socialism?
Lest there be any doubt, black-clad paramilitary police are are patrolling the streets, enforcing the diktats of state bureaucrats with rubber bullets and tear gas. Protesters are howled at as “right wing” and “fascists”. Citizens are encouraged to snitch on one another.
Like every socialist house of cards, it can only hold up for so long.
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