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When COVID-19 saw Australia's borders closed to international travellers just over six weeks ago, Kimberley tour operator Bryce Humphrey's business, Outback Horizons, effectively shut too.
Key points:
- Tourism operators say the JobKeeper program is a lifeline for business
- But experts believe the stimulus won't be enough to keep many afloat
- It's feared some businesses will fail within three to six months
"They closed the international borders and emails and phone calls started coming in that night … because some of the guests were actually due to fly out that night," he said.
"They were on their way to the airport from London and that obviously started to set alarm bells off."
The hurt was compounded just a few weeks later when Western Australia imposed some of the strictest border restrictions in the nation, effectively closing itself off to the rest of the country for the first time in history.
The financial fallout was swift.
"It is just heartbreaking.
"It's been of no fault of our own and you know, you always have in the back of your mind having a slow season or slow period, but everything just being turned upside down and wiped off the plate … it's hard to deal with."
The Federal Government's JobKeeper package has provided a lifeline that Mr Humphrey said would keep his business afloat for six months.
"It's going to be tight, it's going to be tough … and we will have to get rid of some of the assets that we've got," he said.
But if travel restrictions did not ease within six months, he said he would need to borrow heavily.
"If we could get going by August that would be ideal, but look it's going to be an absolute stretch to get anything past that," he said.
"We will manage, but it's going to be going into a lot of debt."
Businesses will 'go to the wall'
WA’s regional chambers of commerce and industry recently polled 371 businesses across WA and more than three-quarters said they were confident they would outlast the pandemic.
But three to six months was how long Paul Alexander, an Associate Professor at Curtin University's School of Management, predicted many businesses would last with the current restrictions in place.
"Can we keep existing like this, realistically, for six months from now? The answer is no," he said.
"Every business is taking a massive hit in one form or another. A lot of them will go to the wall."
He based his prediction on many businesses having contingency plans for between three to six months.
"Complete disruption of just a few months is a serious existential threat," he said.
"They [businesses] go into the unknown and the unthinkable at that point.
"This means they have thought through and already negotiated a way of surviving for three months, perhaps with reduced repayment plans, drawing on reserves, changing their business models, delaying and reducing non-essential expenses, changing markets, deferring asset acquisition and absorbing higher expenses.
"There will have been some thoughts for six months, but more savage responses to stay viable will be required."
Calls for JobKeeper extension
Associate Professor Alexander said the JobKeeper program was also "literally" buying businesses time.
"However, many things in business have a three- to six-month cycle that provides gates through which they must pass to stay viable," he said.
"And these gates close when a company defaults on things like lease and insurance payments, falls below statutory reserves including for staff benefits, delays of things like maintenance or product development, and posts of negative revenue and other forecasts that send strong 'sell' signals to the market."
The JobKeeper program is due to run until the end of September.
Mr Humphrey has called for Kimberley businesses to get a special six-month continuance, given that is when the region's tourist season ends and floodwaters brought by the wet season make many attractions inaccessible.
"[We're] just coming off of the wet season going into the dry season, which is usually our peak, and then back into another wet season," he said.
"[So if borders stay shut for six months] it ends up being close to 18 months [without income]."
Popular support for border closure
University of Notre Dame Associate Professor of politics and international relations Martin Drum said public opinion was currently in favour of border restrictions.
"The approach of keeping the borders shut is probably quite popular at the moment," he said.
"Whether that will be the case over a period of time is another thing.
"Indeed it might get a bit harder down the track if we have very low [COVID-19] transmission rates, not just in WA but across Australia, probably to keep those borders in place.
"You wouldn't want to miss a family wedding, you wouldn't want to miss a funeral."
Mr Humphrey said he did not want the Kimberley's vulnerable population put at risk by borders being reopened too soon, but was looking forward to sharing the region with visitors once it was safe.
"I'm sure people have been crammed up in homes and in cities and they just want to get out in the outdoors, and the Kimberley's the perfect place to do that," he said.
"There is abundant wildlife, there's vast landscapes … there's nowhere else like it on earth."
