Wesfarmers chief Rob Scott believes the pandemic threat has been well handled by authorities so far, but has urged political leaders to ensure there is a level playing field when it comes to supporting business. Click through to watch the video interview.
Wesfarmers chief Rob Scott believes the pandemic threat has been well handled by authorities so far, but has urged political leaders to ensure there is a level playing field when it comes to supporting business.
Mr Scott said the government had got a lot of its settings right during the unfolding crisis, but as the economic drag of the COVID-19 impact stretched out there were risks in making bigger businesses, such as Wesfarmers, suffer more than small-to-medium enterprises to access relief packages such as the $130 billion JobKeeper program.
“Many big businesses face significant financial distress before sales drop 50 per cent,” Mr Scott said, referring to the threshold required for larger companies to access the federal government’s JobKeeper program. SMEs need only show a 30 per cent fall in revenue from the same period last year in order to access the $1,500-per-fortnight payments for employees.
Mr Scott said Wesfarmers’ divisions had adjusted in different ways depending on their operations and some had held up well. Retail hardware giant Bunnings was one business that had benefited from people spending more time at home, while Wesfarmers’ Officeworks outlets had experienced a rush of orders as people set up to work remotely.
He said Wesfarmers businesses had also benefited from a digital transformation that had enabled more online trading and greater access to analytics.
The Wesfarmers managing director envisaged more investment in existing businesses as well as potentially acquiring others, having cashed up from the sale of its substantial holding in Coles. With a protracted downturn expected, Mr Scott did believe some opportunities for the group would arise and having cash both protected Wesfarmers and gave it the deep pockets to invest when it could.