Presidents Report September 2020
In March this year, when the full impact of the COVID 19 virus was making itself apparent on the Australian economy, I chaired an exceedingly difficult Board Meeting of the Melbourne International Flower and Garden Show. Our 25th Anniversary Show was about to commence, and exhibitors and suppliers were loading trucks in preparation for the ‘bump-in”. In many respects, the Australian and Victorian Governments made the decision for us, as they had just closed the Australian F1 Grand prix and other events, however the shock on our industry’s premier horticultural event and the wider industry were profound. Since then, the Board and owners have had to imagine what a “COVID normal” show might look like in March 2021 and plan accordingly. While Victoria continues with its interrupted recovery, this task has become even more difficult.
From a business perspective, the industry has done remarkably well in adapting to the changes in trading conditions. This has mostly been reactionary and very necessary. However, while the search for a vaccine continues, it is incredibly important for the industry to assume that the virus will continue to affect our businesses for quite some time ahead. The wider effects on the national economy are only just starting to present themselves and its incredibly important for our Association to ensure the Federal Government’s current and future support packages meet the needs of our businesses. However, as is the case with MIFGS, we need to look forward and imagine what the business trading conditions might look like and plan accordingly. KPMG recently hosted a webinar on what a post COVID Australia might look like and they saw four stages that outline the path through recovery:
- Reaction. All organisations are simultaneously impacted as professional and personal lives are disrupted. Volatility and uncertainty permeate society as the primary focus is on limiting damage to lives and livelihoods as we weather the unprecedented storm.
- Resilience. Controls loosen as virus spread is contained and/or a vaccination or cure is available. Consumer demand begins to return but is constrained by lost wages, investment losses and recession fears.
- Recovery. Anxiety passes and hiring, investment and consumer sentiment cautiously improve. Recovery paths for organisations will vary based on ability to limit damage from the Reaction stage, length and severity of recession, post COVID-19 industry demand and willingness to adapt.
- New Reality. A number of enduring shifts will remain post recovery as many learnt behaviours born out of the crisis will become central to the new normal.
Our New Reality
The onset of COVID-19 has exposed existing weak links across industries, government and in our economy. The urgency and importance of addressing these weak links has radically shifted and many decisions and discussions have been brought forward. KPMG expect to see a previously unimaginable boost to the simultaneous transformation of industries and society. The following key themes provide context to the changing environment that makes up our New Reality:
- Ways of working remotely will radically shape our relationship with work.
- Digital commerce – pre-crisis models will not be enough to survive.
- Supply chains will be local, agile, and smart.
- Building resilience will become a core competency for organisations and Governments.
- There will be greater investment in environment and climate change.
- Mounting debt drives new regulation and accelerates digitisation.
- The rise of the local first approach.
Our businesses and industry are at different stages on the path to recovery. The key for all of us to imagine our new reality and look for opportunities to thrive in the months and years ahead.