Businesses bracing for revenue crunch

Highlighting the scale of the hit to the economy from the COVID-19 response, 72 per cent of firms surveyed by the Australian Bureau of Statistics anticipate reduced cash flow in the next eight weeks and 69 per cent expect a fall in demand for their goods and services.

The survey results came as it was revealed that in the first week of the operation of the superannuation early access scheme more than $1.3 billion was paid out to people applying for the financial top-up.

The Australian Prudential Regulation Authority said that in the week to April 26 super funds received 665,310 early access applications and processed 162,879, with the average pay-out worth $8002.

Many of those applying are likely to come from the hospitality, accommodation, entertainment, manufacturing, education and construction sectors, which expect to be hardest hit by the downturn.

The ABS has found that 88 per cent of education, training, accommodation and food businesses bracing for their cash flow to fall in the next eight weeks, along with 84 per cent of arts and recreation service providers, 77 per cent of construction firms and 75 per cent of manufacturers.

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Reflecting this widespread impact, 61 per cent of employers said they had, or intend to, apply for the JobKeeper wage subsidy scheme.

More than 800,000 businesses have applied to join the program, and the ABS found those trading in the accommodation, food, construction, administration services, education, retail and manufacturing sectors were most likely to seek the support.

The scheme was set up to encourage employers to keep as many jobs as possible on their books during the downturn.

Close to half of the 2014 businesses surveyed by the ABS reported that the announcement of JobKeeper had influenced their decision to hold on to staff, particularly for those in the hospitality, construction and manufacturing sectors.

The result lends support to government claims that the unemployment rate would be much higher but for the JobKeeper program.

Treasury has forecast the unemployment rate to reach 10 per cent in the June quarter, and the government has said it would have risen to 15 per cent without the $130 billion wage subsidy program.