Flow-on effects of COVID-19 are hitting Hunter businesses hard

Omicron is hitting the hardest and the deepest, Hunter business owners and advocates say, citing unpredictability as one of their biggest challenges.

Chief executive officer of the Business Hunter, Bob Hawes, who has been in isolation over Christmas, said he was hopeful the government would consider re-instituting targeted support.

"It would be a real shame, with all of the work we have done in the past two years to support businesses, to see it fall over at the last hurdle," Mr Hawes said. "Businesses are really suffering with changes that are completely out of their control ... while not being able to operate at full capacity, and staff not working because they either have the virus or have been identified as a close contact, and are having to test and re-test before they can return to work."

He also pointed to density limits and a "conservative response on behalf of the public" as adding to their woes.

"Many people, because of the alarming numbers compared to what we have seen over the past two years, are deciding to stay home and keep their hands in their pockets. It is a real perfect storm in many cases"

Mr Hawes said reports were coming in from across the board, from hospitality and manufacturing, to urban services and businesses like mechanics, and construction contractors.

"You can't be a one-man band to build a roof, and while having one or two workers off might be ok, if the third or fourth is out, you can't operate. It's similar to what's happening in the health sector. No one's been missed this time around, unfortunately."

The worst is yet to come, business owners fear, as health authorities maintain that the omicron wave has yet to peak. Gillian Summers, Managing Director of manufacturing company Brain Industries in Carrington, said that while she was still quietly optimistic about 2022, it had been a particularly challenging start to the year.

After returning to work last week, a senior member of staff was off with COVID, and when he returned, three more people were away from work, waiting on test results after being identified as close contacts. "It means that we have had to negotiate delivery dates with our customers because we just haven't had the staff to do all of the jobs that we've got," Ms Summers said.

The chain reaction up and down the lines of supply was likely to become more acute next week, she said. "It's not just our workforce, it's our suppliers, and both of those combined affect our ability to provide on-time delivery.

"We've had to cancel jobs that are worth tens of thousands of dollars in the last week. Our jobs vary from being worth $2,000 to $200,000, so some of the large orders are still coming through.

"It's that unknown element that is fairly new ... omicron seems to be hitting the hardest and deepest from a business perspective."

President of the Hunter division of the Master Builders Association, Matthew Haines, of Hainesbuild, said he was hearing from builders 'on a large scale' that are struggling hit with delays making it impossible to finish fixed contracts on time.

"It's a massive issue," he said. "Every delay, whether it be weather-related, COVID, or a supplier that is COVID positive, the flow on effect means massive delays on the finishing of a job," he said.

"One young bloke lost $42,000 on a job because there was no flexibility ... and there is also the flow-on effects of price increases. They are getting lumbered with all of the price increases."

At the start of his first week back at work, after 20 days in lockdown with different members of the family testing positive, Mr Haines' plumber had two workers off due to COVID, delaying his return to work by another week.

"I think the flow on of that is going to go on until the end of February. We are just going to have delay after delay after delay."

And prices are still rising. The price of steel, from steel reinforcing to roof sheeting, had gone up three times in six months, and roofing had increased by 13 per cent since the new year, he said.

"Everything has gone up between 5 and 7.5 per cent just in the new year," he said. So if you have a job you quoted back in June, all of a sudden, at $100,000 you've lost $13,000 straight away."

Everybody needed to take a little hit so that everyone could get through, Mr Haines said. "My advice has been that if you do have a price increase, get a copy of what that is and go to the client."

Meanwhile, supermarkets are also being stretched, navigating high levels of COVID absenteeism, low and patchy supplies and a lack of available of delivery drivers.

Coles has introduced purchase limits on some items to help tackle the issue, including on toilet paper (one pack per customer) and medicines (paracetamol, ibuprofen and aspirin, two packs per customer), while the one-pack limit on Rapid Antigen Tests also remains in place. The delivery of "in-demand products" was being prioritised, a spokesperson said, and in some cases pallets were being delivered direct to shop floors to speed the process up.

"At a time when inventory levels were already reduced in the post-Christmas period, our distribution centres are receiving fewer inbound deliveries and we have fewer team members available to process and dispatch stock to our stores," a statement issued on Wednesday said. Demand had also been elevated by the fact customers were choosing to eat more meals at home rather than dine out, to reduce their exposure to the rest of the community, it said.

There are no purchase limits in place at Woolworths supermarkets, but Woolworths CEO Brad Banducci has warned customers to expect gaps on shelves.

"Unlike the surge buying of early 2020 (who could forget the toilet paper), this is because of the number of people in our supply chain in isolation," Mr Banducci said in an email to customers.

"From suppliers to truck drivers and distribution centre team members - which in turn is causing material delays to store deliveries. To give you a sense of the magnitude of the challenge, we are experiencing COVID-driven absences of 20 per cent plus in our distribution centres and 10 per cent plus in our stores."

George Kiriakidis, who owns Nina's IGA in Hamilton, said he received an email on Wednesday morning saying he could expect another shortage of toilet paper.

"There are shortages throughout the shop," Mr Kiriakidis said. "There are low levels of stock and Metcash (their wholesaler) is rationing. There's also problems with drivers. That was the main problem last week, they couldn't get drivers because they've been off with COVID. It's flowing through everywhere. "

The prime minister says patience is needed as solutions are sought to fill gaps in essential service roles left vacant by thousands of Australian workers being struck down by COVID-19.

Scott Morrison said the rapid escalation of case numbers in Australia is having an obvious impact on the country's distribution networks, supply chains and some services as he hosted talks with key ministers and industry leaders.

"The challenge of COVID with escalating cases is keeping things moving. That is what riding this wave of COVID means," he said at the start of Wednesday's virtual meeting.

"With so many people getting COVID that is clearly going to take more and more people out of the workforce. It's important that we continue to problem-solve across all these areas but we (also) require a fair bit of patience."

The government is weighing up expanding the definition of essential services to include road, rail and air transport, mental health, education and schooling services, energy supply and clinics and laboratories.

The classification would exempt these workforces from close-contact isolation requirements to reduce the number of essential workers being furloughed.

Whether essential services mandate a booster shot for staff is also on the agenda, as are additional social measures to reduce the risk of transmission within the workplace.

Acting Small Business Minister Anne Ruston has been seeking solutions to a shortage of workers in the food and grocery sector.

"(We are) working through ways to make sure our essential services, currently food and grocery are our number one priority, keep moving."

Senator Ruston said the government was working towards "unshackling" employment opportunities for cohorts like temporary visa holders and those on unemployment benefits.

"Anybody who is currently on unemployment benefits who is able to work, we would be really keen for them to undertake some really active investigations about how they could help out with these workforce shortages," she said.

"Many older Australians, I am sure, will be happy to do a few extra hours to help out at the moment."

Opposition Leader Anthony Albanese said Australians were already rolling up their sleeves to help cover shortages but they were being undermined by the government.

Mr Albanese said tracing, testing, quarantine and vaccination represented the "grand slam" of the Morrison government's failures, adding to the staff shortages as cases skyrocket.

He knew of professionals who had come out of retirement to help with the pandemic, he said.

"Working people have made incredible sacrifices and stepped up. They did their part of the bargain, the federal government has not done its part," Mr Albanese said.

Businesses are seeking national consistency and clarity around isolation and testing requirements, and more consistent supply of rapid antigen tests to where they are needed.

The roundtable with Senator Ruston included representatives from food and retail associations, transport and distribution associations, the National Farmers Federation, the Pharmacy Guild, the small business chamber and the Regional Airline Association.

Work health and safety ministers are discussing whether businesses in non-critical industries should stop requiring workers to produce negative rapid antigen tests as they recover.

The issues will be thrashed out at a national cabinet meeting on Thursday.

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