As we begin our – albeit muted – festive season celebrations, we can take comfort that a COVID-19 vaccine is currently being administered in the US and parts of Europe. Australians can expect our turn early next year. This includes a number of former Prime Ministers who have declared they’ll publicly roll up their sleeves for the jab, so as to encourage the rest of us to do the same.
Despite this terrible year, we have a lot to be grateful for. Not least that our medical and political leaders have made courageous, sometimes unpopular, decisions to keep us safe. It appears to be working and has even brought some positive economic signs. You might recall that last month we welcomed news of stronger than expected indications the economy was heading out of the pandemic recession. This month we’ve learned that the number of people on job keeper allowances is down, employment is up, workplaces are opening, the mining sector is strong and large construction programs are underway. Parties, considered unlikely only a few weeks ago, are underway. 50 people are now even allowed on the dance floor, and shoppers are venturing into once-empty malls. Still, as FTI’s 2020 ‘Working Capital Analysis’ reveals, the retail sector is struggling and many small businesses battle to get their invoices paid on time. Unfortunately, credit payment times still need improvement.
The FTI ‘Working Capital Analysis’ cites a recent study by ‘Creditor Watch’ which showed that average payment terms have grown to approximately 43 days, with businesses waiting 2.9 times longer to be paid than during the same period last year.
"Any economic recovery, whether it be in the private or public sector, is dependent upon the positivity of consumers. "
Local governments – which acted early in the pandemic and halted rate collection, removed interest on unpaid debts and reduced other fees like inspection costs and licence registrations – are now gearing up to resume normal rate collection activities in the new year. The sector is keen to recoup much-needed funds that enable them to provide important services to their residents and visitors. Of course, they won’t be heavy-handed. The long-established hardship provisions Councils have had in place for those experiencing financial distress will remain.
Any economic recovery, whether it be in the private or public sector, is dependent upon the positivity of consumers. Goodwill that flows from emerging from lockdowns into the festive season can only help. I’m also hopeful that a successful rollout of the COVID-19 vaccine will provide an extra boost to confidence and give us all some relief from the anxiety this dreadful virus has caused.
As the year draws to a close, I wish you and your families peace and happiness this festive season.
The Board of the AICR thanks you for your trust and support, and we look forward to representing your industry in 2021.
Merry Christmas!
Yours sincerely,
Brian Carter
Chairman