JobKeeper helps 84 percent of businesses stay afloat through lockdown

Research from MYOB reveals the JobKeeper program as a lifeline for small businesses, allowing the majority to continue trading despite significant barriers.
A special COVID-19 edition of MYOB’s long-running Business Monitor has found 84 percent of small business owners that were eligible for the JobKeeper program said the subsidy allowed them to continue trading.

Australian small business owners also believe that the government has done a good job, with 71 percent saying the Australian government’s response is better than that of the United States, and 68 percent said it’s better than the United Kingdom’s.

The Business Monitor surveyed more than 1,000 Australian small to medium enterprises (SMEs) between April and May, at the height of the pandemic. It highlights the impact COVID-19 has had on small businesses around Australia and across industries including financial, agriculture, trades, transport, retail and hospitality.

The sudden and brutal impact of COVID-19 has seen four in ten business owners say their business is in hibernation for six months, with a further 24% reporting that their business has or will need to permanently shut down.

The research also found:

• 68 percent said revenue is down due to the impact of COVID-19
• 1 in 5 small businesses were very unprepared for the pandemic to hit
• 26% of small businesses said the impact of the epidemic will last at least a year or two
• 1 in 4 respondents think the Australian government responded better to the pandemic than New Zealand
• Of those businesses that were eligible for the JobKeeper program, 84% of small businesses said JobKeeper will allow their business to keep running
• 24% said their business has or will have to permanently close

“The impact of COVID on the small business sector is hard to overstate, as evidenced by the data,” said MYOB Economist Jon Manning.

“Some small business owners believe their recovery will take only a few months while others are expecting it to take years.

“93 percent of small business owners have told us they have seen a reduction in work due to the pandemic. Over the next three to six months, 52 percent of respondents say they expect their revenue to decrease by 20 percent or more,” he said.

Divide in SME fortunes set to widen

Manning also discussed how business owners are likely to face a wide variety of prospects as the full economic impact of COVID-19 continues to be felt.

“When it comes to projecting how businesses will come out of the pandemic, the outlook is split based on demographics and by industry.

“By industry, we can see 35 percent of transport, postal and warehousing industry believe the disruption will impact their business for up to six months’ time whereas 24 percent of the retail and hospitality industry believe it will take between one and two years for their business to bounce back,” he added.

One way to help businesses bounce back faster will be to continue to support contactless payments, suggested Manning.

“Contactless payments will speed up the circulation of money through the economy, improving business’ cash flow along the way and the bigger the transaction value, the bigger the benefit.

“As life gets back to normal and Australia starts to rebuild the economy, the shape of the recovery will differ from industry to industry.

“Businesses will bounce back faster if they continue to drive contactless payments to manage cash flow and get paid quicker.”