The COVID-19 crisis has taken a heavy toll on the nation’s entrepreneurial class, with new research revealing more than four in five self-employed Australians had taken a significant hit to their income as a result of the pandemic.
The Australian National University analysis, based on a survey undertaken in the second half of April, showed the hit to the self-employed was similar to the wider workforce, but that they had lost more work hours than employees and suffered a larger blow to earnings.
About 5 per cent of those to respond said the coronavirus had eliminated their profits completely. More than a fifth said their business income had been reduced to its lowest point ever, and a further fifth said that COVID-19 has reduced their profits “substantially”.
Only 8 per cent of the self-employed reported a positive effect on profits, alongside 10 per cent who reported no effect.
ANU director of the Centre for Social Research Matthew Gray said this meant “almost half of the self-employed population in Australia feel that COVID-19 has already had at least a substantial effect on their profits”.
There was a sharp increase in the number of self-employed who were struggling to make ends meet. The proportion of business owners finding it difficult or very difficult to manage on their income jumped from 29 per cent in February, to 36 per cent in April.
In contrast, the percentage of employees finding it harder to cope financially actually fell — from 23 per cent to 19 per cent — as government handouts boosted earnings for some lower paid workers. Reflecting this, the self-employed are almost three times as likely to have accessed retirement savings or superannuation early compared to employees, the study revealed.
Treasury figures show that sole traders comprise 41 per cent of the 878,000 JobKeeper registrations, with another 38 per cent companies, and the rest trusts or partnerships.
As Victorian Premier Daniel Andrews announced on Sunday that pubs would reopen from June 1 — following similar measures in other states and territories — the ANU research underlined the desperate need among business owners for restrictions to be lifted: in late April a third of respondents said they would not be able to survive two more months of shutdowns.
“They are very concerned about the viability of their businesses,” Professor Gray said, noting that this group often “have their houses on the line”.