More than nine out of every ten business in Australia are small businesses. They account for 33% of Australia’s GDP and employ over 40 percent of Australia’s workforce. Deposit Power is one such business. Despite small businesses significant contribution to the Australian economy, it is the least assisted sector of the economy with only 15% of then receiving any form of government assistance compared to 57% of large businesses.
With the impact of COVID-19 on the Australian economy, many of these small businesses have for the first time turned to the Federal Government for assistance, primarily in the form of Job Keeper which enables businesses to retain employees via a government subsidy of $1,500 a fortnight per employee.
The government support through Job Keeper along with the doubling in the Job Seeker payment are due to cease at the end of September. There are fears of what will happen to business and employees once the financial support stops, fears that are echoed by the Reserve Bank Governor Philip Lowe.
The government has made reassurances that the support will not simply cease but will instead be put into more direct endeavours versus the blunt instrument that wage subsidies are providing at present.
There is already a conga line of industries lining up to argue their case for direct government support, with the tourism industry and construction industry being two prominent ones. Both of these industries are directly reliant on one key ingredient that the tap has effectively been turned off on – foreign overseas travel which includes tourists and new immigrants, the former supporting the Australian tourism industry and the latter the construction industry via demand for new homes.
The challenge for the government is twofold. Firstly, deciding where to direct such funds post September. And secondly, avoiding a culture of dependency which will erode our historical entrepreneurial economy and the people willing to take a risk to back themselves and their future success. Afterall, Australia has proven itself to be a country where entrepreneurial risk takers, are winners.