Back in business? WA small businesses and the impact of COVID-19
Small businesses have been referred to as the ‘engine room’ for growth – but they are also the engine room for jobs. More than 230,000 small businesses – those with fewer than 20 workers – are operating in Western Australia. They employ half a million workers, and play a critical role in supplying and serving customers and larger businesses across the state’s cities and regions. The impact of COVID-19 has been felt across the economy and business sector, but for small businesses these shocks can be more challenging to deal with, with fewer resources to draw from.
The Bankwest Curtin Economics Centre has captured new data to understand what impact COVID-19 has had on small businesses, whether they have the supports needed to succeed, and how they see the future outlook. One of the strongest take-homes from the 2020 BCEC Small Business Survey was the degree of optimism shown by the small business sector heading into 2021. More than a quarter of small business owners expected to employ additional workers over the first six months of 2021 and only 4 per cent had intentions to apply for JobKeeper - down from almost 50 per cent previously accessing the scheme. However, this could all be quickly unravelled if shutdowns persist, hurting business and consumer confidence and weakening WA’s economic recovery trajectory. Almost 37 per cent of WA small businesses reported revenue losses due to COVID-19 in 2020. For many the revenue impacts were severe with one in four businesses reporting revenue down by more than 25 per cent compared to the same time last year.
There are also a number of ongoing issues that small businesses continue to grapple with, including lower-quality infrastructure – especially in the regions - skills shortages, and not being paid on time for their work. This report calls for action to be taken on late payments, with consideration given to mandatory 30-day payment terms for small businesses.
The report’s findings on the link between late payments and heightened levels of financial and personal stress felt by small business owners lend further support to the case for late payments legislation currently before the Federal Parliament. There is a compelling need to lift the quality of mobile communications and data access to support regional small businesses, especially in the agriculture, accommodation and food services sectors. A strong case exists to simplify regulatory settings as they apply to small businesses, together with a program of skills development, training and support services to upskill micro and non-employing businesses in managing the regulatory system.