The current health of the Western Australian economy is being reflected through the optimism and confidence reported by the state’s small businesses.
The current health of the Western Australian economy is being reflected through the optimism and confidence reported by the state’s small businesses.
A new survey conducted by the Bankwest Curtin Economics Centre captured 1,500 small businesses across WA, with data showing that business owners were weaning themselves off supports including JobKeeper, loan deferrals and lease renegotiations as they headed into 2021.
Almost 40 per cent of WA small businesses were in receipt of JobKeeper during the peak of the pandemic. By December 2020, this had reduced to 16.8 per cent, and only 4 per cent intended to access JobKeeper in the first quarter of 2021.
This illustrates both the importance of JobKeeper and other temporary supports in keeping businesses afloat, but also the resilience of the WA small business sector and its ability to adapt and keep operating.
Additionally, very few WA small businesses planned to access the new government supports announced in the 2020-21 federal budget, which were more focused on encouraging new investment in capital and people.
Only 9.5 per cent of WA businesses intended to access the JobMaker hiring credit, which incentivises businesses to take on additional employees aged 16-35 years by providing up to $200 per week.
But there’s still a healthy appetite for businesses to hire rather than fire, with more than a quarter of small business owners reporting they would be adding more workers to their books in 2021.
Small businesses operating in the arts and recreation, manufacturing, accommodation and food sectors were more likely to have plans to access the JobMaker hiring credit.
A tiny 4.6 per cent of WA small businesses intended to access the temporary loss carry-back scheme, which would allow eligible businesses with less than $5 billion in turnover to carry-back losses to previous financial years.
Just more than 7 per cent of small businesses said they would seek to access the federal government’s temporary full expensing scheme, which gives small businesses the ability to deduct the full cost of new or second-hand assets.
There is a level of uncertainty about accessing the new supports, particularly for the temporary full expensing scheme. Firmer decisions are likely to be made as business owners accumulate more information and weigh up the future outlook against investment and hiring decisions.
For now, the outlook for WA small businesses is incredibly optimistic, given the tumultuous 2020. This doesn’t necessarily mean that every small business in WA has come through unscathed. There are still a number of small businesses struggling to keep their head above water. But it does highlight just how critical these supports were, and for some businesses still are.
• Rebecca Cassells is deputy director, Bankwest Curtin Economics Centre
