In a year of firsts, another occurs today with the historic 2020-21 State Budget being handed down in November, 18 weeks out from the end of the financial year.
Not immune from the economic impact of the COVID-19 pandemic, the delayed State Budget if anything carries even more weight than usual.
Federal and State Government stimulus measures have been a critical life support for the South Australian business community in the wake of the devastating virus.
The JobKeeper scheme has in particular played a major role in maintaining business confidence.
According to Business SA’s recently released September quarter Survey of Business Expectations, powered by William Buck, 66 per cent of respondents said they received the first tranche of the wage subsidy and 35 per cent now remain on JobKeeper 2.0.
These figures are even higher for the hardest hit sectors in the tourism and events industries, who remain acutely impacted by ongoing Government restrictions.
Many businesses that rely on interstate and overseas tourists, operate hospitality venues geared around being able to stand and drink, and almost all businesses in the events supply chain are still acutely impacted, and likely to remain so for some time yet.
Business SA’s survey found 54 per cent, or one in two of these businesses in the hardest hit sectors, are relying on JobKeeper 2.0 payments to survive.
Revenues for heavily impacted businesses are also in stark contrast when compared to the majority of other SA businesses who have returned to pre-COVID levels of trade or higher, in the September quarter.
For example, the survey found 37 per cent of businesses in the hardest hit sectors are forecasting revenue to be down more than 50 per cent on pre-COVID levels by the end of December, compared to only 13 per cent of businesses outside those hardest hit sectors.
While business confidence skyrocketed in the September quarter to 95.3 points, the highest index since March 2019, we can’t celebrate just yet.
That’s because we are the Festival State, and we need our tourism and events sectors thriving because they have flow-on benefits to so many additional businesses across the State. In the City of Adelaide, which has been hit hard by COVID-19, a lack of office workers and the cancellation of major events, this is even more acute. This is why Business SA echoes the Premier’s call for everyone, including the public service, to get back to their offices asap.
This is also why Business SA has been strongly advocating for the State Government to provide additional cash flow support to businesses in the hardest hit sectors, as well as new funding to attract a major city-based tourism event. Funding for regional events, including business events will also help.
Also on our State Budget 2020 wish list is a start on major long-term infrastructure projects, which can set a direction for South Australia’s growth, including regional highway duplications.
Business SA would like to see additional incentives to compliment the valuable federal apprentice and trainee support, such as payroll tax relief and incentives to encourage SMEs to hire STEM PhD graduates.
Budget Day has finally come. Whether our State’s economy remains divided, is in the Government’s hands.