On the eve of the 7th annual BDO State Business Survey, business leaders took part in an online webinar last week Rethink the Direction for Business in South Australia.
“It’s been a pretty challenging year for many businesses and we’re now rolling into October with the changes to JobKeeper and the introduction of JobMaker – so a lot has been going on,” BDO Adelaide Business Services Partner David Fechner said.
“Our discussion and this year’s survey are both intended to talk through the issues that are most important to SA businesses. Getting a first-hand account of how they and their staff are tracking, but also what concerns and ideas they have for the future is important to all of us.”
The panel included Discovery Holiday Parks Chief People Officer Kate Berry, SA Small Business Commissioner John Chapman and St Vincent De Paul Society SA CEO Louise Miller Frost.
Berry said the sentiment around the tourism and hospitality industry particularly in regional areas continued to be very strong as South Australians explored their own state.
“We had thought that at the end of JobKeeper we might have seen changes in consumer behaviour, however, we are still seeing a really great pipeline of business and our suppliers seem to have the same sentiment,” she said.
“I’m pleasantly surprised that in South Australia there seems to be a reasonable outlook economically so may that continue.”
However, Berry said the city of Adelaide was facing a different scenario.
“It’s evident that regional accommodation, hospitality providers and tour operators are doing far better than the city,” she said.
“The city is now a focus as to how we can ensure that businesses and accommodation providers, conferencing etcetera can occur in the CBD so that is a real worry.
“We’ve seen a reduction in the Adelaide Oval usage and that is a hot topic for the state and the tourism industry as well.”
The Property Council last week estimated Adelaide’s office building occupancy rate had reached about 70 per cent as workers returned to their city desks.
Chapman said although things were starting to look up economically, his organisation was dealing with a significant number of disputes around retail and commercial leases between landlords and tenants
“I’m seeing generally positive developments in terms of the economy but we’re not right back to normal, particularly in the CBD,” he said.
“Not all the government workers are back, for example, and some of the corporates and that has an impact on small businesses.
“Obviously there are sectors that continue to struggle with international and some state borders still closed.
“There are big hotels still closed in Adelaide while some are being used as quarantine hotels and if you’re a travel agent then you are in great difficulty.”
Chapman said a reduction in daily city workers was not just an Adelaide problem but had been experienced in CBDs across Australia.
He said the issue would likely lead to a rise in vacant office space in the city.
“Certainly in our state the premier has made it quite clear that he wants people back into work and it’s necessary because if you haven’t got a vibrant heart in your city then you really haven’t got much so I think we should be encouraging everybody to come back as soon as possible,” Chapman said.
“I can’t imagine a new office building built in the CBD for some time unless you’ve got the anchor tenant signed up because people are re-looking at it and corporates are re-looking at it so there are some dynamics still to play out in that space.”
Miller Frost said reductions in federal government support such as JobKeeper and JobSeeker this month were starting to be reflected in an increased number of people seeking support following a “relatively quiet” few months.
“We are starting to see people who previously haven’t needed to come to us before and that’s risen even in the last week and we expect it to rise over the rest of the year and into next year,” she said.
“These are people who are needing help for the first time and they might still have financial commitments like kids at schools that are expensive, they might have mortgages and there are a whole range of things they are trying to maintain in their new lifestyle and trying to find jobs at the same time.”
This year’s BDO SA State Business Survey is shaping as the most important in recent years as local companies assess the damage from the coronavirus pandemic and map out their futures.
The 15-minute survey is open and will provide crucial insights into the state’s economic recovery results to not only the broader community, but those in positions of influence.
Miller Frost said the coronavirus pandemic had changed the way we look at disruption.
“I do think this is an opportunity to rethink how we do business and how we work as a community to ensure that we are all safe and we all have opportunities,” she said.
Berry said she was reasonably confident the tourism industry would continue to rebound over the next two years if the virus was managed.
She said Discovery Holiday Parks was now looking to access incentives such as JobMaker to grow its workforce while domestic tourism was booming.
“Obviously there are some sectors that rely on international tourists that will struggle but we don’t have that reliance so we’re seeing investment in greenfield sites and reinvigorating some Australian products and sites that have been neglected for the past 10 years,” Berry said.
“We’re in the acquisition phase so for us it’s really positive and hopefully we can hold.
“We’ve learnt a lot about the sorts of levers we can pull if and when we get a hot spot such as Victoria so we can only hope that things continue to go well.”
Premier Steven Marshall and more business leaders joined a chorus urging South Australian workplaces not to cancel major functions and Christmas parties, and to make the shift from remote working back to the CBD in a bid to bolster the broader economy.
Chapman said although he would like to be “super confident” about SA’s economic future, it would be driven by border openings and potentially closures.
“We’re still no closer to seeing international travel opening up … until there’s a vaccine or a better way of treatment then that’s going to shape the economy particularly in Australia.
“So it’s about resilience and being ready to change, move and adapt in a very uncertain environment.
“It is pretty hard to look too far forward but you should always plan for the future and if you have to deviate then so be it.
“Things change, things happen along the way but if you are not aiming to get somewhere you will never get there.
“COVID-19 has been the mother of all disruptors, the way it’s come upon business and they’ve had to adapt. I think there are lessons there and if we all take them on board it will set us up very well for the future.”
Click here to participate in the BDO SA State Business Survey.