For many pharmacies already affected by Australia’s terrible bushfires, there may also be ongoing economic and business impacts, says Frank Sirianni
A recent article suggests the “Economic impact of Australia’s bushfires set to exceed $4.4bn cost of Black Saturday”
The destruction and loss from Australia’s bushfires has been unprecedented and we are deeply saddened by impact on our communities, wildlife, and wilderness. Equally, it is inspiring to see the depth of Australian and international community response and support for those affected. Our thoughts and prayers are with all the people affected by the bushfires and the many firefighters and teams working so hard to defend life and property. It has also been inspiring to see the response from the pharmacy community in these times of need and we thank you for this.
While the fires still burn, and it is obvious that community pharmacies in the affected areas are struggling to cope with the crisis, it seems inappropriate to focus on the financial impact. However, pharmacy and pharmacy owners alike will need to consider the financial impact and give some thought to the recovery.
Economic and Business Impacts
The economic impact on local communities and economies will be widespread. They will also take some time to manifest and be assessed. Assessing the economic impact is difficult, particularly while the fires are still burning and the full extent of the damage remains unknown. But the academic evidence on the economic impact of natural disasters is mixed.
The fires will impact consumer confidence, tourism, and local industries (including farming and any businesses relying on the forests that have been devastated). This comes off an already low consumer confidence base, lengthy drought in many of these areas, as well as a generally sluggish retail and economic climate.
Also, each pharmacy’s impact will be different depending upon the nature of the damage and local economy. Pharmacy is often a big part of the community and medicines will continue to be required (and may increase in demand). Anecdotally, community pharmacy has been counter cyclical and witnesses economic growth in negative economic times.
There are also a number of flow on effects which will arise including the insurance costs, possible changes to Federal and State Government fiscal policies, as well as possible share market effects. Perhaps the holy grail of a Federal Government budget surplus is all but gone!
The social, psychological, and emotional impact of these fires on our communities cannot be under estimated. The human cost on lives and families is unfathomable. Much has been written about this already.
Perversely, one view is that natural disasters, like fires, may promote growth in economic terms. We have already witnessed the extra-ordinary corporate pharmacy productivity in an effort to assist pharmacy to cope with the ongoing crisis. In addition, it is likely that most, if not all of these communities and their housing and infrastructure, will be rebuilt. This will also lead to economic growth.
Unfortunately, many of these natural resources and forests are not accounted for (or valued) in our National Accounts for Australia. As such, in economic terms, the negative impact of the destruction of these resources does not appear in Federal or State Government economic accounts. However, the expenditure, both Government and private, will appear as a positive in our GDP measures.
Many businesses will also see this as an opportunity to improve their assets and build more sustainable structures.
The Australian and international support has been heart felt. No doubt, Australians will visit these areas and provide support. Tourism will return and communities will rebuild.
If you are one of the pharmacies unfortunately impacted by the fires, now is the time to start planning your recovery.
This will be important for your community, your team, and yourself.
Your plan should contemplate a new approach which recognises the fragile situation of your community as well as the need to build a better and sustainable pharmacy business.
There are many mentors and other pharmacy owners you could discuss this with.
Obviously, your first port of call is your usual pharmacy business adviser and hopefully local consultants in your community. They need your support too.
If you need further help consider Pharmacists’ Support Service – 1300 244 910 – and other services like Lifeline.
Medici Capital is offering a free business support service for any pharmacy in a fire affected area. Our focus will be on business recovery strategies suitable to your area. Please call Medici Capital on (03) 9853 7933 for further information.