Retail Boss Questions Whether $130-Billion Handout Will Be Enough
Rob Scott, the Managing Director of Wesfarmers Group, believes that the government’s wage subsidy payment of $1500 per fortnight “only goes so far”.
“Notwithstanding the generous package, there are many, many people who will face a lot of financial hardship as a result of businesses being unable to operate,” Scott told the Sydney Morning Herald. “We should all be mindful that while the Jobkeeper subsidy certainly helps workers for businesses that are essentially shut down, we all need to brace ourselves for what is likely to be a more significant downturn in GDP and the economy.”
Wesfarmers itself – which includes Bunnings, Kmart, Target and Officeworks – has recorded strong sales growth during the COVID-19 pandemic, as panic-buying has driven sales of hygiene products, home office equipment and technology, and education supplies.
Scott told the Sydney Morning Herald that Wesfarmers was not yet considering taking advantage of the subsidy at this stage, due to the recent upsurge in sales, but did not rule it out if the government does enforce stricter shutdown rules on retailers.
“There are some challenges facing bricks-and-mortar retailers relating to the way leases are structured, the size of stores, and also some of the more onerous regulations that disadvantage retailers that employ a lot of people versus online retailers that employ far less,” Scott said.
Today, Wesfarmers announced that trades had been executed on the sale of 5.2% of the issued capital in Coles Group, at $15.39 per share. The sale is expected to provide Wesfarmers some $130 million in pre-tax profits, which will help buoy the company as the COVID-19 pandemic continues. Wesfarmers also retains a 4.9% interest in Coles.