Businesses emerge from JobKeeper safety blanket

The majority of South Australian businesses have managed to throw off the safety blanket the JobKeeper subsidy provided throughout much of 2020. But tourism remains the most vulnerable to job losses when the subsidy runs out next week despite last minute government support.

Mar 22, 2021, updated Mar 22, 2021

BDO Business Services Associate Director Eythan Barraclough said many clients relied on JobKeeper when it rolled out in April but no longer required it by the time the first round finished at the end of September.

However, he said the continued absence of international visitors and the stop-start return of interstate travel meant that parts of the tourism industry were still under significant pressure.

“The general trend we saw was a lot of businesses being affected across March, April and into May, but many industries rebounded well after May and were back to normal trading conditions pretty quickly,” Barraclough said.

“It did depend on industry though – where retail struggled initially on the back of local lockdowns and restricted trading, but post May it boomed with the stimulus funds in the economy.

“I also work a lot with real estate clients and they are obviously seeing a really strong market at the moment but there’s definitely still businesses feeling the pinch if they are tourism-related or in a hospitality field although even that’s clawing back with local demand.”

Barraclough said those still on JobKeeper needed to have a good understanding of what their business would look like when the scheme finished at the end of March.

“If they have been using it to keep staff on the books and keep the doors open then you’d have a lot of question marks moving forward,” he said.

“It’s really understanding what your cashflow looks like for your business over a three-to-six-month period based on trading conditions at the moment and really understanding what other support is in place.

“There still are a few incentives around like the SME guarantee scheme, Government training subsidy and JobMaker, with this being one area that all businesses should review their eligbility.

“The tourism industry definitely still has question marks around how things will play out and there’s been some further government support announced in that field in recent days, which I think is definitely needed.”

That government support includes a $1.2 billion federal government scheme to halve the price of almost 800,000 airline tickets.

The 50 per cent discount will apply between April and July to and from 15 regions that normally rely on international visitors, including Adelaide and Kangaroo Island.

The State Government last week announced a third round of travel vouchers, as part of the Great State Voucher program, worth up to $200 each for use on participating hosted tours and experiences across South Australia.

The vouchers, worth $50, $100 and $200, will be launched after the April school holidays in a bid to increase travel during winter and will be available for use across the week and during the July school holidays.

About 500 South Australian operators are expected to register their experiences including shark-cage diving, mountain bike tours and guided food and wine trails.

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In its latest quarterly business survey in January, the Tourism Industry Council South Australia (TiCSA) asked the local industry about the impact on them of JobKeeper ending.

More than 20 per cent said they would be forced to look at making staff redundant while 8 per cent said they would have to consider closing.

TiCSA CEO Shaun de Bruyn said the latest state and federal government assistance packages were positive but it was too early to say how much they would benefit local tourism businesses.

He said tourism had been divided into a two-speed industry.

“We’ve never seen anything like it,” de Bruyn said.

“People who are looking after self-drive South Australians in regional areas most of them are having very strong or record years.

“For those looking after interstate or overseas visitors, it’s either very challenging or flat at best.

“But we are seeing that interstate visitation is slowly building, which is very pleasing and hopefully we will see a level of certainty that will see that level of activity continue to build.”

Another recent TiCSA survey of 200 businesses found 40 per cent reported very strong or record levels of activity, 10 per cent were about where they were normally and 50 per cent were down or hurting badly.

“This is something that has been with us for an industry for 12 months following bushfires and tourism business people have been out there every day trying to find a way to reposition their business so they can be financially sustainable,” de Bruyn said.

“JobKeeper and Cash Flow Boost has been tremendously supportive of many of those struggling businesses and they are adapting and finding new ways to keep themselves sustainable – it’s an ongoing challenge.

“We’ve seen great levels of innovation and everyone’s working very hard to make sure they can get through this period and as the vaccine rolls out, hopefully we’ll just continue to get more and more certainty.”

Meanwhile, Business SA says the end of JobKeeper must be the catalyst to reduce restrictions.

The peak business group is calling on the state government to ease current restrictions to allow for at least a 75 per cent capacity for all constrained businesses, including gyms, personal care, recreation centres, health services, retail and entertainment venues, or enable an equivalent 1 person per 1.5 square metre rule.

 

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