• Jobs & Services Australia

Coronavirus crisis has had staggering impact on Australian businesses and employees.


Coronavirus crisis has had staggering impact on Australian businesses, data reveals

Two-thirds report hit to revenue, one in 10 pause trading altogether, and 70% in hospitality sector forced to reduce staff hours.


The Covid-19 pandemic has forced a staggering 70% of businesses in the hospitality sector to reduce the hours of their staff and 43% to either sack workers or place them on unpaid leave, new data shows.


The Australian Bureau of Statistics has released new data showing the pandemic’s impact on business, based on a survey of 3,000 companies in the days after the government’s tough social distancing restrictions were announced on 29 March.


Two-thirds of businesses across all sectors reported taking a hit to revenue or cash flow due to Covid-19.

Roughly the same number reported they had suffered decreased demand.

Two in five businesses said they had changed how they delivered goods or services, one-third said they had renegotiated their leases, and one in four had deferred loan repayments.

About one in 10 said they had paused trading altogether. In 70% of cases, this was due to Covid-19.


The disruptions to Australian workers were vast.


Almost half of the businesses still trading reported making some sort of change to their workforce in the past two weeks due to Covid-19, including either temporary reductions or increases in work hours, a change of work location, or placing staff on leave.


Reduced work hours were reported by 25% of businesses with 19 employees or fewer, 41% of those with 20-199 workers, and 34% of those with 200 or more employees.


Nowhere was the impact more apparent than in the hospitality sector.

About 78% of accommodation and food services businesses had made changes to their workforce, including 70% that temporarily reduced work hours.


About 43% said they had placed staff on unpaid leave, including standing them down, and 29% said they had put staff on paid leave.


The sector accounts for about 8% of Australia’s jobs.


The numbers, while not unexpected, paint a stark picture of Covid-19’s impact on Australian business.


The United Workers Union and its hospitality arm Hospo Voice are campaigning for the government’s Jobkeeper package to be extended to all hospitality workers. Individuals on temporary visas or casuals who have not been with the same employer for 12 months are currently not eligible.


“Covid-19 doesn’t discriminate, neither should the government’s Jobkeeper package or any other income support program. It must extend to all workers, no one should be left behind,” Tim Kennedy, national secretary, said.

On Monday Westpac economists warned Australian gross domestic product would contract by 8.5% in the June quarter, followed by a 0.6% contraction in the September quarter.

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“Overall, the economy is expected to contract by 5% through the 2020 year,” Bill Evans, Westpac’s chief economist, said.


“All else being equal, these growth forecasts would be consistent with the unemployment rate peaking at 17% in the June quarter and settling around 9% by year’s end.”


Westpac economists predicted the impact of Covid-19 would be particularly severe in New South Wales and Victoria, due to their reliance on tourism and international students.


NSW was predicted to record its first recession since 1990-91 and Victoria was facing a significant downturn and would be unlikely to “to stave off what is shaping as a big hit from the outbreak of Covid”, particularly due to its reliance on tourism.


The ABS data also shows dramatic changes in the healthcare and social assistance sector workforce. About 63% of businesses made changes to the workforce because of Covid-19, including 44% which reported they had reduced work hours of staff, 42% which said they had changed the location of their staff, and 17% which had placed staff on unpaid leave.

About 9% of healthcare or social assistance businesses said they had temporarily increased work hours.



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