Still wondering about the actual impacts of COVID19 on Australian businesses? Interested to see some recent statistics and data around JobKeeper? Keen to compare your own business actions to that of the rest of Australia?
If so, then this article is for you. The ABS has recently released some data and statistics on how COVID 19 has impacted Australian businesses. Here’s some of this data:
GDP (Gross Domestic Product)
For the second quarter of 2020, Australia’s Gross Domestic Product contracted 7.0 per cent from March 2020 and contracted 6.3 per cent from June 2019. This represents the largest fall in quarterly GDP since records began in 1959.
JobKeeper data
The JobKeeper Payment is one of the largest fiscal and labour market interventions in Australia’s economic history. JobKeeper had three objectives: supporting business and job survival, preserving the employment relationship, and providing needed income support.
Take up
- In July 2020, there were 942,555 organisations who had their JobKeeper applications processed. This number covered around 3.5 million individuals.
Industries most impacted
- Most applications: came from businesses in the Construction industry and the Professional, scientific and technical services sectors
- Most likely to apply: businesses in the Accommodation and Food services industry (over 50% of businesses in this sector applied for JobKeeper.
Location of applications
The highest number of applications for JobKeeper has come from:
- Sydney CBD (10,992 as at the end of July)
- Melbourne CBD (7303 as at the end of July)
- Liverpool, Casula and Mt Pritchard NSW (4295 as at the end of July)
- Hoppers Crossing, Tarneit and Truganina VIC (4202 as at the end of July)
- Dandenong VIC (3884 as at the end of July).
Reasons for not registering for JobKeeper
Inability to meet eligibility criteria has been the most common reason that businesses did not register for JobKeeper:
- 8% of small businesses reported insufficient cash flow to continue paying staff before JobKeeper payments commenced
- 7% of small businesses did not register due to difficulty in understanding the eligibility criteria.
Influencing business decisions
Just under half of all businesses said that the announcement of JobKeeper influenced their employment decisions, with businesses in the accommodation and food services industry being the most influenced.
Take up of other support measures
Australian businesses have also taken up a range of other supper measures, but in comparison to JobKeeper, these numbers have been much lower:
Property rents or leases
- 19 per cent of businesses reported having renegotiated property rent or lease arrangements
Deferred loan repayments
16 per cent of businesses reported that they had deferred loan repayments (over 216,000 small business loans were deferred – the total value being $55 billion as at 31 July 2020). In October, the ABS reported that 7 per cent of businesses reported they were deferring loan repayment, with businesses in the Accommodation and food services sector being the most likely to report they were deferring loan repayments (31 per cent).
Other Government support measures
- 38 per cent of businesses reported that they had accessed other government support measures.
Anticipated business actions when support measures are withdrawn
The survey conducted by the ABS (week ending 23 July 2020) found that, of the businesses currently accessing business support measures such as JobKeeper, they expect to take the following actions when the support measures are withdrawn:
- Defer or cancel investment plans – 16 per cent
- Change quantity of orders of inputs – 14 per cent
- Reduce their workforce – 13 per cent
- Change product or services options – 12 per cent
- Seek additional funds – 11 per cent
- Close the business – 10 per cent
- Change payment terms with customers or suppliers – 10 per cent
- Increase prices – 8 per cent
The survey also found that businesses in the Accommodation and food services sector are the most likely to expect to cut the size of their workforce or close after business support measures are withdrawn.