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JobKeeper has wrapped up — what’s next for businesses?

Adrian Flores
Adrian Flores
29 March 2021 2 minute readShare
JobKeeper wrapped up

Now that the popular JobKeeper scheme that has helped keep many Australian businesses afloat during the coronavirus crisis reached its end on Sunday, many business owners will be wondering where to from here.

Last week, the Treasury predicted that up to 150,000 people could be out of work following the conclusion of the JobKeeper scheme.

However, ABS stats showing a better-than-expected business outlook has led CreditorWatch chief economist Harley Dale to say that the end of JobKeeper support “will be a difficult but necessary transition”.

Despite the transition, Mr Dale said there is still government support, particularly for industries still struggling such as tourism, construction, hospitality and brick-and-mortar retailers.

“We have the travel and tourism stimulus package, along with extensions and expansions to the SME Loan Guarantee Scheme and Apprenticeship Wage Subsidy,” Mr Dale said.

“These and other policies will still be available for businesses that are viable and need access to finance.”

Businesses at risk of insolvency urged to act fast

Struggling businesses as risk of insolvency have been advised by an advisory group that they should sell assets they no longer require to free up cash flow and avoid insolvency.

Hilco Global chief executive Adam Scharer said that while he doesn’t think there will be an insolvency cliff as many are predicting, he is still expecting levels of insolvency not seen in the last five years.

“The businesses that survive will be the ones that get ahead of the curve and act early to successfully navigate the challenges around restructuring, refinancing and monetising any non-core assets or business units,” Mr Scharer said.

“Where valuations were once limited to basic plant and machinery items, we can now value a much wider range of asset classes including receivables, inventory, intellectual property, brands. The valuation of a wider range of assets helps clients access a wider range of funding options.”

SMEs still uncertain despite improved confidence

Despite the better business outlook, many businesses remain uncertain about their road to recovery.

A ScotPac survey asked 1,253 small businesses about their strategies for recovery and growth in 2021.

Two-thirds of small businesses (65 per cent) said they will make changes to the structure of their business in 2021, in order to recover from the pandemic or to take advantage of opportunities.

According to the survey, other signs of SME concern about recovery include one in four SMEs being unsure about how to recover and almost one in four having cash flow issues after being declined from a lending product.

Further, one in five SMEs is having to cut costs to replace stimulus funds, almost one in five said they will make arrangements with the ATO to manage their cash flow, while one in six will replace stimulus funds by using working capital finance.

ScotPac chief executive Jon Sutton said any move to restructure includes looking at other ways to fund their businesses.

“I believe business owners are on the right track with this intention, because to be in a position for recovery and growth, it’s essential to have adequate funding in place,” Mr Sutton said.

JobKeeper has wrapped up — what’s next for businesses?
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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