Over the last week, both the ABS and the ACCC have released data which has helped to illuminate the plight of Australian small businesses in the current COVID-19 environment.
ABS figures published on 27 August revealed a significant portion of Australian small businesses are still seriously struggling, with more than a third (35%) expecting to find it difficult to meet their financial commitments over the next three months; this figure is almost twice what is evidenced across large businesses (18%).
“41% of businesses reported that revenue had fallen over the last month and 22% had an increase in operating expenses,” added ABS head of industry statistics John Shepherd.
“In addition, 28% of businesses expected a decrease in revenue over the next month.”
In response, small businesses have been changing their approach to expenditure on capital over recent months.
“Almost a quarter of businesses (23%) reported they had decreased or cancelled their actual or planned capital expenditure compared to three months earlier,” said Shepherd.
“Businesses reported that their decisions related to expenditure on capital were significantly influenced by uncertainty about the future state of the economy (59%), and future expected customer demand for their products or services (40%).”
Meanwhile, the ACCC reported that COVID-19 related issues affecting small businesses saw the number of enquiries they received in the first half of the year increase 42% from the previous six month period.
Between January and June, businesses getting in contact with the ACCC were most likely reporting false and misleading conduct, asking about their obligations to consumers during the COVID-19 pandemic or raising concerns about consumer guarantees.
“Around half of all the COVID-19 related contacts the ACCC received to the end of June came from small businesses in the travel, healthcare and medical supplies, fitness, and event management sectors,” said ACCC deputy chair Mick Keogh.
“The impact of the pandemic on small businesses has been enormous and we have re-prioritised our work and resources to help businesses and consumers work through many of the issues.
“Operating a small business is challenging enough in the good times and given the current crisis that so many businesses are facing, it’s important they can easily access information about their protections and obligations under the Australian Consumer Law.”