Almost one in ten businesses say they only have enough cash to last another month, amid calls from business groups for more targeted support beyond the scheduled September cut-off of the JobKeeker payment.
An Australian Bureau of Statistics survey on the impact of COVID-19 on businesses revealed that just shy of 30 per cent of firms estimated that their cash reserves would support fewer than three months of operation under current circumstances.
Eight per cent said they had the cash to support their operations under current conditions for just one more month.
The ABS survey, conducted over the week from June 8, also showed two thirds of businesses in June reported a decrease in revenue compared to a year earlier, while one in three of those had suffered a hit to turnover of more than 50 per cent.
The results came as business groups told the Senate’s COVID-19 inquiry that further targeted support after the JobKeeper program ended in September would be needed to save many businesses.
Appearing in front of a Senate committee into the government’s response to the COVID-19 pandemic, Australian Industry Group CEO Innes Willox said “we can’t continue on with JobKeeper indefinitely because it’s just not economically viable”.
“But at the same time there are going to be parts of the economy which require continued support,” Mr Willox said.
The AiG boss said JobKeeper was a program to keep connectivity between firms and their workers, “it’s not really about growth as such, and we need to find ways to stimulate investment competitiveness and fairness in the economy to get it going again”.
Business Council of Australia president Tim Reed said a “very targeted stepping down of JobKeeper is warranted”, and said that all businesses which might still be eligible for the wage subsidy beyond September should have to requalify for the revenue test.
“We also think there should be a careful examination of overpayments to individuals,” Mr Reed said – referring to the part-time and casual workers which under the wage subsidy scheme have actually enjoyed a boost to their income during the crisis.
The ABS survey showed that the education and training industry had the highest proportion of businesses reporting a fall in income at 87 per cent.
This was followed by the accommodation and food services sector, at 84 per cent, while 78 per cent of firms in the arts and recreation and administrative and support services sectors said their revenue had dropped as a result of COVID.
The business group leaders – which also included Australian Chamber of Commerce’s James Pearson and Council of Small Business Organisations Australia’s Peter Strong – all advocated for some of the $550 per fortnight COVID-19 boost to Jobseeker payments to remain beyond the September expiry.
Mr Reed said that the welfare payment before the crisis was “inadequate” and that post-September “Jobseeker should be a lot higher than before”.
The crisis has thrown hundreds of thousands out of work, and Mr Reed said the newly unemployed should be “in a mental place where they can pursue work and get the training they need, and to do that you need the money to survive”.
He said over the past two decades the dole payment had dropped from 90 per cent of the aged pension to 65 per cent, and argued a payment of somewhere between 75-90 per cent would be more appropriate. Based on the maximum $860 fortnightly payment for a single pensioner, that suggests Jobseeker would need to rise from $550 a fortnight to between $645 and $775 – an increase of 17-40 per cent.