Responding to the end of JobKeeper on 28 March, CreditorWatch chief economist Harley Dale said the number of businesses accessing the JobKeeper payment has fallen quickly, as our economy has begun to recover.
“The number at the JobKeeper peak in Q2 and Q3 of last year, around 1 million businesses were receiving the payment, but this number had halved by Q4,” Mr Dale said.
“The end of JobKeeper support will be a difficult but necessary transition.
“Yes, jobs will be lost and, yes, businesses will go under — it’s predicted there will be 8,000 insolvent businesses by the end of Q2 this year, but the long-term effects won’t be as severe as first expected.”
Mr Dale’s comments come as the latest ABS Business Conditions and Sentiments Survey showed 46 per cent of businesses expected it to be easy or very easy to meet financial commitments over the next three months, compared to 23 per cent in August.
The proportion of businesses reporting decreased revenue halved over the same period, falling from 41 per cent in August to 22 per cent in March.
The data also revealed a drop in the proportion of businesses using support measures, with less than a third (29 per cent) of businesses accessing support in March compared to almost three-quarters (73 per cent) of businesses in May 2020.
Wage subsidies were the most common support measure accessed in March (21 per cent), with small businesses less likely than medium and large businesses to be accessing this support (20 per cent, compared to 29 per cent and 23 per cent).
Mr Dale said there is still government support for those industries struggling the most, pointing to programs such as the travel and tourism stimulus package, along with extensions and expansions to the SME Loan Guarantee Scheme and Apprenticeship Wage Subsidy.
“These and other policies will still be available for businesses that are viable and need access to finance,” he said.
“The greatest magnitude of uncertainty is that we don’t know how many companies aren’t commercially viable. These businesses are about to be brought to the fore, and recovery never happens in a straight line.”