On the brink: Businesses are struggling to stay afloat without the JobKeeper subsidy, alarming new figures shows
- New research shows businesses are struggling without the JobKeeper subsidy
- Firms are feeling the pinch after government support programs ended in March
- External administrations rose by 24 per cent and credit default spiked 9 per cent
- But it has been confirmed the economy has recovered from last year’s recession
There are early signs some businesses are having trouble staying afloat in the absence of support from the JobKeeper wage subsidy.
New analysis by commercial credit bureau CreditorWatch found business external administrations rose by 24 per cent over the past three months and credit defaults increased by nine per cent.
‘We’ve been saying for some time we won’t be able to get a true picture of the economic health of the nation until federal government stimulus measures, such as JobKeeper, have ended and their impact has stopped artificially propping up some businesses,’ CreditorWatch CEO Patrick Coghlan said.
Businesses are struggling to stay afloat without the JobKeeper subsidy
The JobKeeper scheme ended in March.
He said there were early signs there would be a shake-out of poorly performing businesses over the coming two quarters.
Even so, he said it was not all doom and gloom, with defaults remaining 50 per cent lower than pre-COVID levels.
The Australian Bureau of Statistics will release its latest job payrolls data and a series that has pointed to some job losses since the demise of JobKeeper, although nowhere as bad as some had first feared.
Reserve Bank assistant governor for financial markets Christopher Kent will have the opportunity to provide the central bank’s take on recent and largely positive economic developments when he addresses the KangaNews Debt Capital Markets Summit on Wednesday.
In the past week alone, it was confirmed the economy has fully recovered from last year’s recession by the end of the March quarter, job advertising remains buoyant and is pointing to a further drop in the unemployment rate and business conditions have struck a fresh record high.
New research has shown firms are starting to feel the pinch as government support programs end
However, the weekly ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – eased for a second week in a row with mixed results around the country.
Confidence among Melburnians remained under a cloud due to its COVID-19 lockdown, but Sydneysiders were more upbeat after confidence fell heavily in the previous week.
The monthly Westpac-Melbourne Institute consumer sentiment survey is released on Wednesday.
A women is seen in front of a shop for lease in Sydney in May