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JobKeeper wind-up hits business confidence: Business NSW

Adrian Flores
Adrian Flores
15 April 2021 1 minute readShare
JobKeeper wind-up hits business confidence

Business confidence in New South Wales fell in the first quarter of this year, with one-third of businesses that received JobKeeper saying they may have to temporarily or permanently close their business, according to a study from Business NSW.

The latest Business Conditions Survey, conducted throughout March, showed that more businesses viewed the economy as getting weaker (39 per cent) than viewed it as getting stronger (29 per cent).

Business NSW chief executive Nola Watson said the data from both businesses in metropolitan and regional areas is concerning but not totally unexpected.

“Given a decline in conditions, an increasing number of businesses are looking to scale back capacity, with 40 per cent of businesses prioritising downsizing in the March 2021 quarter compared to 30 per cent in the previous quarter,” Ms Watson said.

“For many businesses, 2021 will be about regrouping and re-establishing their customer base and staff capabilities.

“Tighter restrictions and higher costs make it more difficult to stay afloat, with solvency becoming less manageable for 32 per cent of businesses, 10 per cent higher than the last quarter of 2020.”

Many key cost indexes increased from the previous quarter as support programs continued to unwind, the survey found.

The wages and benefits and other staffing-related costs index continued to rise, with almost half (50 per cent and 47 per cent, respectively) of respondents reporting that these costs were becoming less affordable.

“About one-third of businesses who received JobKeeper believe they may have to close their business, either on a temporary or permanent basis, when the full benefits of the program cease,” Ms Watson said.

“Interestingly, this survey shows that businesses have not embraced JobMaker, with only 1 per cent of respondents saying they had used the scheme.

“The government should review the JobMaker program to understand why it hasn’t hit the mark and reinvest any unspent funds in supporting demand-driven initiatives that we know work, such as the recently extended and expanded Boosting Apprenticeship Commencements initiative.”

JobKeeper wind-up hits business confidence: Business NSW
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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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