COVID-19 has been a cataclysmic event for Australian SMEs. For a small segment, mostly those with e-commerce or digital businesses, it has been a boom. But for the majority, it has been a bust, with invoicing predominantly in decline across most industries since the pandemic began; a decrease of 20% to baseline according to MYOB anonymised data from 9 September.
Small and medium sized businesses (SMEs) are a significant employer of 4.7 million Australians (44%) and a major GDP contributor (57%), effectively making them Australia’s largest private sector group.
- Over 60% of SMEs are satisfied with the Federal Government’s handling of COVID-19 from both an economic (62%) and health perspective (65%).
- Around two in five SMEs surveyed accessed JobKeeper 1.0 and 38% expected to access the revised JobKeeper 2.0.
- Of those who received JobKeeper it has allowed and will allow around 82% of businesses to continue trading when there was at least some doubt as to whether this was possible.
- Three in five SMEs (61%) said it would be at least six months before they would recover to pre-COVID levels. 75% of businesses employing 100 people or more feel confident this Budget will deliver benefits.
- This drops to 28% for sole traders and 39% for micro businesses employing between 1-4 people.
- The top measures SMEs want to see in the Budget are a lowering of the company tax rate (31%), cutting red tape (26%), and more support for training and apprentices (24%).
The Morrison Government’s assistance to small businesses through JobKeeper and JobSeeker has provided a much-needed lifeline for many small businesses, with 42% of small businesses surveyed having accessed JobKeeper. Of those, 82% said their business was able to keep operating because of it. Driving a post-COVID economic recovery presents a once in a generation opportunity for the Federal Government – and all governments – to make changes that will significantly benefit Australia’s SMEs.
This Budget must instill confidence for small business owners, many of whom believe recovery is still 6-12 months away. Confidence that there will be a COVIDSafe level of normal that they can predict so that they can reinvest in their businesses and make sound decisions for their own livelihoods. Post-COVID, SME survival and success are economic imperatives for Australia. Future job creation does not sit with the largest companies.
It sits with the small business that becomes medium-sized; with every two to five new employees a SME recruits. It is for this reason, that SMEs hold the key to Australia’s job growth opportunity.