Helen Shao runs a wellness clinic in Sydney’s north and like many small business owners, is starting to feel the pinch as spending slows.
“Many people cannot afford to pay for treatments now,” says Ms Shao, 61.
“In the past, clients probably saw me on a regular basis once a week and then now they probably see me once a month.
“So, income wise it is taking a huge toll.”
Ms Shao adapted her business to survive the pandemic, selling a range of health-related products online and the income helped to balance a downturn in bookings for face-to-face treatment.
This year, she and her 300 regular clients are struggling with rising costs and higher interest rates.
Helen Shao with John Newcombe, in her Sydney clinic. Credit: SBS / Sandra Fulloon
“Because of my background, surviving tough times, I have had to think hard about how to change my business and keep going.”
Ms Shao grew up during China’s cultural revolution, living with her family in Tianjin in northern China, 120 kilometres south-east of Beijing.
“My mum was a primary school teacher, and my father was a civil engineer. Then in 1966, Chairman Mao closed schools and universities,” she says.
“My parents were educated, so they were sent to a re-education camp during the day, when I was only five or six years old.”
It was a challenging and lonely time, as Ms Shao describes in Wake up to Happiness her as yet unpublished autobiography.
“My life fell into a catastrophic heap. During the day my mother thought it best to lock me in the house with strict instructions to stay indoors,” Ms Shao writes.
“My family were considered ‘filthy capitalists’ by the authorities. Because of this, my parents feared for my safety should I stray outside.”
Years later, Ms Shao went on to university to study pure mathematics, and then became a lecturer at Tianjin University of Finance and Economics.
‘Tank Man’ faces off with the PLA in Tiananmen Square. Source: AAP
“We were protesting about the freedom of speech and also we were protesting about economic reforms,” she says.
“We thought we were doing the right thing. When you are in your 20s you just think you can change the world.”
Instead, Ms Shao’s life changed forever that day. The Chinese Government turned its tanks and soldiers on up to one million protesters. Hundreds died and thousands were injured in the crackdown.
Looking back, Ms Shao considers herself lucky to have survived at all.
“I saw a vast number of people running around and saying ‘run, run, run, run’. So I just turn around and ran with them.
“Next thing I woke up, basically lying in the gutter and covered with blood. I still don’t know whether it was gunshot wounds, but I still have a hole on my head.”
Ms Shao says she still struggles with memories of two teenage students who died in her arms.
“The guilt I have carried with me. I have other people's blood on my hands. And I feel the need to do something and contribute.”
On December 27, 1989, Ms Shao left China fearing possible imprisonment, torture or even death for being involved in the Tiananmen Square demonstration. She arrived in Australia on a student visa and was soon granted political refugee status.
She was among 42,000 Chinese nationals offered asylum by then Prime Minister, Bob Hawke.
However, Ms Shao left behind her husband and one-year-old son – a decision that haunts her still.
“I am still not really sure I did the right thing. I still regret it and feel guilty even though he is now 35 and living in Sydney and has given me two wonderful grandkids. I feel like I still failed as a mother.”
In Canberra, Ms Shao joined other Chinese exiles, sharing a small unfurnished flat. She had soon spent the $60 she arrived with and in desperation, resorted to collecting food scraps from waste bins.
“In the evening, after the shops closed, we went to the rubbish bins searching for food. It is really, really painful to remember,” she says wiping tears from her eyes.
“And even now I think about people struggling to survive especially in this economic situation, and I feel for them.”
Ms Shao’s empathy is well placed. As living costs soar, demand for food relief is also rising.
Many Australians are also cutting back on discretionary spending, impacting businesses according to credit reporting agency CreditorWatch.
“Wallets are being closed. There's less spending from consumers and businesses. And as a result, businesses are definitely starting to hurt,” says Patrick Coghlan, CEO of CreditorWatch.
The February Business Risk Index reports that external administrations jumped by 46 per cent from January to February. And Mr Coghlan says the food and beverage industry is most at risk.
“Any industry that is reliant on discretionary spending, particularly food and beverage, restaurant, bars, hotel accommodation, and also the arts and recreation, has certainly seen an increase in their probability of default, the likelihood of businesses within that industry failing.
“And ultimately there is less consumer and businesses spending. Or, if people are spending money, they are spending less of it when they go out for dinner.”
Helen Shao with her client and landlord, John Newcombe (right) Credit: SBS / Sandra Fulloon
“Well of course, this body has been through a lot. So, it needs some attention,” says Mr Newcombe.
“It is hard to find someone who can pinpoint a problem, but we have had good success,” he says.
Over the past few years, a friendship has also formed.
“John is my client, friend, confidant and landlord. And John has helped me a lot with my business,” says Ms Shao.
Transformation by Helen is surviving. However, many of Australia’s 2.4 million small businesses are fighting an uphill battle.
“Business owners are obviously struggling with labour shortages, increased cost of materials, inflation, and interest rates,” says CreditorWatch’s Patrick Coghlan.
“The last thing they need to deal with is slow payments from their customers. However, unfortunately that is what we are seeing - payments are definitely slowing.”
While insolvencies have not yet reached pre-COVID levels, Mr Coghlan predicts a further 20 per cent rise in coming months.
Business location plays a part, he says, with some areas still recovering from higher pandemic and lockdown losses.
“Five out of 10 of our riskiest geographic areas at the moment land in Western Sydney. And it will only get worse as the interest rate rises continue to bite.
“The majority of people will come off fixed interest rates in the second half of the year, and that is when we expect to see even less money in the bank accounts of Australian businesses and consumers.
With that bearish economic outlook for winter and beyond, entrepreneur Helen Shao has this advice.
“Things are very tough. But it is important to remain grateful.
“I look at myself and my life. I'm still here. I spend time with my grandkids and I am lucky to live in this beautiful country.
“So I cannot be anything else but grateful.”
