Small businesses around the country are increasingly realising what the impact is likely to be on their livelihood when the Federal Government’s JobKeeper stops in just seven weeks.
The January Sensis Business Index is showing increasing distress about the loss of the lifeline that saved hundreds of thousands of businesses from going under due to the Covid-19 lockdowns.
The survey is of 1,000 small business owners/managers across all states and across 10 business sectors. It was conducted by data insights platform Glow in the last week of January. 22% of the businesses surveyed had 50 employees or more and 53% of businesses had been operating for more than 10 years.
The survey showed that over the past three months, those owners saying the loss of JobKeeper will have a major impact on their business has grown from 29% in November, to 31% in December and now 39% in January.
A further 51% of business owners said it will have a moderate impact with just 10% saying it will make no difference.
“We can see over just three months that the attitude of business owners has changed,” said Sensis CEO John Allan. “Despite a growing chorus of voices asking the Federal Government to keep JobKeeper in place for certain industries it doesn’t look like the Government will change its mind and that will put a lot of these businesses under pressure to survive”.
Mr Allan said the survey showed businesses in Western Australia had a major change with the December figure of 12% saying the loss of JobKeeper would have a major impact jumping to an astonishing 56% in January.
“Since taking the survey in January, where 56% of small-medium businesses felt the loss of JobKeeper would have a major impact, Perth has gone into a five-day lockdown and new restrictions have been introduced in Victoria. This is likely to exacerbate the loss of business confidence in both states and dent the performance of the local economy. Whilst WA’s impact is risen considerably there has also been a jump in NSW moving from 33% in December to 45% in the same period.”
In November, 18% of business owners said the loss of JobKeeper would make no difference. That is now down to 10% overall and in Western Australia and the ACT it is just 4%.
Looking at specific industries, of the 10 surveyed only two sectors saw a decrease:
· The Construction sector went from 27% of businesses in December to 25% in January
· The Hospitality sector, surprisingly, dropped quite considerably from 37% in December to 21% in January
Conversely, there were some big jumps:
· 60% of Transport owners said the loss of JobKeeper would have a major impact up from just 25% in November and 35% in December
· Finance and Insurance has nearly doubled from 30% in November to 59% in January
· Health and Community Services from 24% in December to 36% in January
· Manufacturing from 21% to 35%.
Mr Allan said the biggest surprise was in the Retail sector which had gone from 42% in December and crept up to 43% in January.
Mr Allan said he believed many businesses will turn to the JobMaker program which offers payments to businesses that increase their headcounts. “There is $200 per week available for employees aged 16 to 29 and up to $100 a week for employees aged 30 to 35. It adds up to $10,400 or $5,200 annually which will be a significant amount for some businesses.” Small business can begin claiming this week.
About the January Sensis Business Index
The Sensis Business Index is Australia’s longest running survey of its kind having been established in 1995. The January 2021 SBI involved 1,000 business owners/managers.
23% have 1 to 2 employees, 28% have 5 to 19 employees, 16% have 20 to 49 employees with 22% having 50 employees or more.
8% have been in business for 1 to 2 years, 19% 3 to 5 years, 19% 6 to 10 years and 53% of businesses had been operating for more than 10 years.
14% of respondents were aged 30 or under, 23% aged 31-40, 27% aged 41 to 50, 16% 51 to 60 and 20% 60 and over.
The survey was conducted by data insights platform Glow.
Ten industries were covered:
· Health & Community Services
· Cultural and Recreational Services
· Communications, Property and Business Services
· Retail trade
· Finance and Insurance