As the coronavirus has taken hold, the world has pretty much shut down with people being implored to avoid non-essential travel and practise social distancing. The side effect of course is that numerous industries have been hard hit by this, particularly the music and entertainment industry. In just the past couple of weeks live music has come to a grinding halt as gigs were initially cancelled out of concern for spreading the virus, then because of caps on the amount of people that could be in one place at a certain time, to now Government-enforced closures of a variety of "non-essential" places of business where people congregate, meaning the pubs and venues that host gigs are now lying dormant.
The Federal Government is doing its part to try and keep the economy alive with various stimulus measures, but the amount of information is overwhelming, from coronavirus supplements to PAYG instalments to Business Activity Statements. But what elements are particularly relevant to the music business? Tom Harris, Managing Director of music and entertainment business management and accounting services specialist White Sky, recognises the trials facing those in the industry right now.
"The challenge all businesses face is to survive the next six months - and come out the other side with a foundation that they can rebuild upon," Harris tells The Music.
Just how these recently announced measures help businesses particular to this industry though will vary depending on the outlet.
"The challenge all businesses face is to survive the next six months - and come out the other side with a foundation that they can rebuild upon."
"Retail outlets can move their business online to keep revenue coming in. Some of parts of this stimulus will help those sorts of businesses, especially those with staff costs," Harris says.
"Music venues that don’t make any revenue without a live show are in big trouble. These measures might help them deal with the immediate cash problems, but I can’t imagine many will survive more than a few months without any revenue."
While some Government measures sound like they will be a real help to business - for example, providing up to $100,000 tax free to employers (with a minimum payment of $20,000) to eligible small and medium sized businesses (including not for profits) that employ workers and have a turnover of less than $50 million will be eligible - it’s not the Government giving businesses up to $100,000 right now, cash in hand, to get through the next however long. The payment will be facilitated through a credit on the business’ activity statements from 28 April.
"It seems like this stimulus package is aimed at two groups. Individuals who have lost their job or who are already on benefits, and businesses that have enough cash in the bank, or reliable ongoing revenue, to survive," Harris outlines.
"Music venues that don’t make any revenue without a live show are in big trouble."
"Music businesses that have had all their income taken away need a lot more help than this."
The Government will also establish the Coronavirus SME Guarantee Scheme, which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the coronavirus. Under the scheme, the Government will guarantee 50% of new loans issued by eligible lenders to SMEs. The hope is this will enhance lenders’ willingness and ability to provide credit. Short story - if you need a loan to get through in the current climate, it should be easier to get. Is that a route that affected businesses should take to try and get through?
"The difficult thing about taking a loan is the uncertainty around how long this ban on live music will last," Harris explains.
"In normal circumstances, a business applying for a loan would have a detailed budget showing how they planned to build a profitable business. But the risk now is what happens if you spend all that money and there’s still no live music? Then your business is still failed, but now you’re in even more debt than you would’ve been."
LISTEN: With COVID-19 Shutting Down Australia, What’s Next For The Music Industry?
But it's not just businesses that these stimulus measures are aimed at, there is help for individuals too. For example, individuals affected by the coronavirus crisis can receive a temporary ‘coronavirus supplement’ at a rate of $550 per fortnight for six months. This will be available to existing and new recipients of Newstart, JobSeeker Payments, Youth Allowance, Parenting Payments, Farm Household Allowance and Special Benefit. Sole traders and casual workers who are currently earning less than $1,075 a fortnight will be eligible to receive this supplement also.
"This particular benefit will be helpful for music industry workers who lose their job," Harris states. "Already we’re hearing stories about touring companies, management companies, venues, etc, having to let staff go because the next six months' income has been ripped from under them. Many of those staff will now need to apply for unemployment benefits, and this supplement will effectively double the money they’d have otherwise received.
"The fact that this is also extended to Sole Traders means many musicians and crew members who have also had their livelihood taken away without notice will have a bit more money to get by on while the industry works through this."
So it looks like that although the future might look bleak for musos not playing gigs and attendant crew, venue staff and all involved in said gigs, worst case scenario if you find yourself going cap in hand to the Government, you will be getting a little bit more.
Another avenue for individuals in a scenario to keep them in cash is if your that financial situation has been affected by the coronavirus crisis, you will be able to access up to $10,000 of their superannuation before 30 June and a further $10,000 after 1 July. But, again while it sounds great that you can tap into your nest egg to access some extra dollars, how much super do you think a young touring musician would have? Or someone that works casual shifts pulling beers at gigs?
"This benefit isn’t really designed for young people without super. It’s aimed at families where the major bread winner has lost his or her job and they need more than Newstart and the ‘coronavirus supplement’ to cover their cost of living," Harris says. "It’s not a bad idea for some, but it’s also very dangerous as it means people are taking money out of their retirement fund. And at a time when their fund is at it’s lowest value. I see this as an absolute last resort."
"No industry could survive that. It’s nuts!"
But while some aspects may offer a little relief to those in the music industry, none of these measures seem enough to ride out this period of uncertainty for the music industry.
"There’s clearly more that needs to be done to save the industry," Harris says.
"Live music and events have effectively been told they have to stop trading for an unknown period of time, with virtually no warning. No industry could survive that. It’s nuts!
"The government needs to look at the live music industry as a stand-alone issue like tourism and airlines. The stimulus packages so far announced are fantastic, but they’re very general, designed for people and businesses in all industries. Once the dust settles from this initial panic people will start to focus on the recovery.
"The peak music bodies such as the AAM (Association of Artist Managers) and AMIN (Australian Music Industry Network) are working on this already. They’re talking with government and educating them on how our industry works. There’s no silver bullet. It’s a complex problem with many layers.
"What the music industry looks like on the other side of this nightmare is anyone’s guess. But it’s clear now that it’s not going to just pick up where it left off without some serious help from government."
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