Omicron is worse than any other pandemic wave
Ayesha de KretserSenior Reporter
Updated Jan 12, 2022 – 7.37pm, first published at 6.09pm
Judo Bank chief executive Joseph Healy has warned the worst is still to come as omicron's rapid spread and closed borders combine to stifle Australia's economic recovery.
Mr Healy slammed a lack of leadership from the top and said the federal government's failure to articulate a clear course of action for the omicron variant was hurting consumer confidence when businesses were already fatigued.
Judo CEO Joseph Healy says this could be the worst wave yet.
"There's been no real vision created about how we're going to ride it out and how the health service is going to cope," said Mr Healy, a veteran business banker who spent decades at NAB.
"The thing that's just going to add to the negative psychology is that leadership has been really ordinary. It's been inconsistent, the communications have been inconsistent with the rules constantly changing and people have not had a clear sense of direction," Mr Healy said.
The impact of broad-based business closures driven by a lack of workers is yet to be felt on bank balance sheets, said Mr Healy. But he warned this current wave is the most devastating because it struck just as many were starting to regain confidence to invest.
"At the end of last year we talked a lot about light at the end of the tunnel and that light has dimmed quite a bit," Mr Healy said.
"There's a real risk of businesses being exhausted and the risk of them facing some sort of financial crisis is heightened, but there's not enough evidence to see that yet."
Mr Healy said he was "more concerned about this situation that we're in now than any other wave" during the pandemic.
'We need to open the borders up'
He urged the Morrison government to allow businesses access to international workers as a priority.
"We need to open the borders up so people can come in and so that we can open the economy. The staff shortages are almost as big an issue as the virus itself," Mr Healy said.
The domestic and international border policies need urgent review, said Jim Sarris, Bendigo Bank general manager for business banking, adding that omicron's spread had taken many by surprise and that Bendigo was closely monitoring the situation.
"What we're seeing today is that this latest wave has unfolded differently to what any business had forecast," Mr Sarris said.
"It's still very early to say if there would be an impact but definitely the situation as it unfolds is something that we're always watching. Close watch is where we've been for the last couple of years and where we still are."
As the federal government weighs changes to allow more migrants to enter Australia, Mr Sarris said businesses needed to see the government's plan for the year ahead.
"Do you start off with students and then work your way through? Businesses are saying that the government should maybe tell us the plan so that they can work through because at the moment they're really struggling to see how they get through the next 12 months with all the stopping and starting," Mr Sarris said.
Mr Healy said those at the smaller end of the scale were faring worse, agreeing with Mr Sarris that many bigger businesses remain well-capitalised for now.
Both executives said most of the challenges stemmed from worker shortages arising from the rapid spread of COVID-19.
"When a bunch of your staff all test positive and all have to isolate and the rapid antigen tests aren't readily accessible, it is proving quite challenging for businesses," Mr Sarris said, adding that the government should ensure the price of rapid antigen tests is capped.
50pc of SMEs facing staff shortages
Bendigo Bank business banking boss Jim Sarris stands on a near-deserted Glenferrie Rd in Melbourne on Wednesday. Eamon Gallagher
Mr Sarris said supply chain and rapid antigen testing shortages have hit the retail and hospitality sectors hardest.
"Hospitality and retail have really struggled through this period and some of them have clearly opted to close temporarily or reduce their hours or reduce the options they're putting out to market," Mr Sarris said.
"My anecdotal evidence suggests 50 per cent are experiencing labour shortages as a result of COVID-19 at the moment."
Mr Healy says businesses are fatigued and "we shouldn't underestimate the psychological impact of this current wave that we're managing through because it comes at a time when a lot of small business people felt that the last wave was going to be the last wave that we would see."
The lack of clarity from the government over how it will navigate omicron is having a cascading effect on consumer confidence and spending, with Mr Healy and Mr Sarris expressing concern about the number of businesses forced to either shut, or scale back opening hours.
"What we're seeing today is that this latest wave has unfolded differently to what any business had forecast," said Mr Sarris.
Adding to their worker shortage challenge is the difficulty of keeping up to date with all the changing requirements for staff.
"From the lens of a customer I spoke to the other day that's got a national business, they're struggling to keep up with the different approach in each state," Mr Sarris said, adding that they would like to see more consistency and co-ordination across state borders.
"You've really got to stay on top of it and every state is quite different. For businesses that are operating at a national level the ability to stay on top of every detail is quite challenging."
The biggest stories in business, markets and politics and why they matter.
Need to know. Our daily reporting, in your inbox.
Ayesha de Kretser is a Senior Financial Services Reporter with The Australian Financial Review Connect with Ayesha on Twitter. Email Ayesha at ayesha.dekretser@afr.com.au
Bendigo and Adelaide Bank
Judo Bank
Latest In Financial services
Most Viewed In Companies