New research has revealed around three-quarters of Aussie business owners (72%) believe the government’s stimulus packages were essential to their business' survival over the past year, with the majority pointing to JobKeeper as having had the biggest positive impact.
The research, commissioned by online finance information platform Money.com.au, found 69% of the surveyed businesses accepted JobKeeper payments to retain employees, 16% received tax-free payments through the cash flow boost scheme, 14% claimed deductions on eligible asset purchases under the instant asset write-off measure, and just 2% took out finance linked to the SME Guarantee Scheme.
Licensed financial advisor and Money.com.au spokesperson, Helen Baker, voiced some concern over what the findings meant for businesses in the new year.
“With many stimulus packages set to wind down next year, including further cuts to JobKeeper in January, it’s likely that ‘zombie’ businesses who have kept afloat this year due to government incentives will cease to exist next year,” she said.
“It is important for business owners to pivot their offering and service if they are struggling and look for other ways to increase revenue. Reworking relationships with suppliers and clients will be particularly crucial during this time.”
When comparing the states, the greatest proportion of businesses that benefitted from the stimulus were in NSW, with 82% of those surveyed seeing the measures as essential to their survival, followed by 72% of those in Victoria and 58% in Queensland.
Notably, just three 3% of the businesses surveyed said the SME Guarantee Scheme was the most helpful support measure – a trend confirmed with less than 5% of the $40bn scheme having been used to fund loans since its announcement in March.
“Interestingly, the SME Guarantee Scheme had low take up by businesses, despite providing access to additional funding and cheaper credit,” Baker said.
“This may be because business owners viewed loans as too risky this year – with widespread uncertainty due to the global impact of COVID and the recent US election, along with ongoing trade tensions with China. This has forced many industries to look to alternative markets.
“Business loans may prove more useful next year as business owners begin to focus on pivoting and recovering. Once Government assistance is wound back, however, businesses may consider other avenues to access finance.”