Not as good as unemployment rate suggests
To illustrate, if the fall in hours worked were fully accounted by fewer employed persons than remained in the labour force, the NSW unemployment rate would be in the order of 13 per cent.
About this release: This release summarises ABS data.
Media Releases:
NSW BUSINESSES CAN SEE WAY OUT
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Enquiries: Mark Frost, 0403 965 846 | mark.frost@businessnsw.com
The easing of COVID-19 restrictions in June saw a strong improvement in the labour market with an extra 280,000 persons entering the labour force in June. Hours worked rose 4 per cent in June, but remained 6.8 per cent lower than March.
The national unemployment rate increased to 7.4 per cent (from 7.1 per cent in May and 5.1 per cent before the crisis) while in NSW it crept up to 6.9 per cent (from 6.4 per cent in May and 4.6 per cent before the crisis).
There are 522,000 fewer employed persons in Australia compared to before the crisis (with NSW accounting for 192,000 fewer employed persons).
Note: Employment growth refers to the percentage decline in employed persons compared with the same time in 2019.
State-by-state analysis
Related: Mark Frost - Chief Economist, Business NSW
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Media Releases:
NSW BUSINESSES CAN SEE WAY OUT
APP WILL HELP US GET BACK TO BUSINESS
For further questions on this update, email Thian Thiumsak.
Contact Mark Frost via email, or LinkedIn.
Party like it’s 2017 (or 2014)
What the RBA is saying
What Treasury is saying
What about the big four banks?
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industry codes to limit risks and reopen country
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For further questions or comments, please email Business NSW's Chief Economist, Mark Frost here, or contact him via LinkedIn
State-by-state analysis
Acceleration after lockdown measures
Impacts by industry
Impacts by age
Age/Sex % Change between 14 March and 4 April
(Change since 100th case of COVID-19)
Males -5.8%
Females -5.9%
Aged under 20 -9.9%
Aged 20-29 -8.8%
Aged 30-39 -5.5%
Aged 40-49 -4.3%
Aged 50-59 -3.8%
Aged 60-69 -4.0%
Aged 70+ -9.7%
Potential impacts on unemployment
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Unemployment Figures & Employment Growth graph
Yesterday the ABS released overseas visitor arrivals data for February which showed a 30% drop in visitors to NSW compared to the same time last year. This was mostly attributable to the sharp drop in Chinese visitors during the lunar new year period.
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• The NSW Government has announced a new grant of up to $10,000 for eligible small businesses that did not benefit from previous payroll tax measures (see link). The grant will be funded through the allocation of $750 million into the Small Business Support Fund.
- The grant has been announced as ‘up to $10,000’.
- It is not yet clear whether grant amounts will vary or how they will be determined.
• Business NSW has been advocating for a grant to support businesses that did not benefit from the payroll tax waiver. The grant will be a cash payment and can be used to cover overheads (such as equipment leases or utility bills) as well as financial or legal advice.
• To be eligible, businesses will need to:
- Have between 1-19 employees and a turnover of more than $75,000;
- A payroll below the NSW Govt 2019-20 payroll tax threshold of $900,000;
- Have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020;
- Be highly impacted by the Public Health Order 2020 (Covid-19 Restrictions on Gathering and Movement) issued on 30 March 2020;
- Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice; and
- Provide appropriate documentation upon application.
• The grant is to be modelled on the small business bushfire support grant and businesses will be able to apply through Service NSW within a fortnight (applications open until 1 June 2020).
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For further questions or comments, please email Business NSW's Chief Economist, Mark Frost here, or contact him via LinkedIn
• The Government has announced a $130 billion JobKeeper wage subsidy. Employers must be able to declare a 30 per cent revenue impact to access payments.
• As Business NSW has argued, the wage subsidy is essential to keeping businesses connected with their staff and to avoid large job losses.
• Eligible employers will receive a fortnightly payment of $1,500 to pay to each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer. Every eligible employee must receive at least $1,500 per fortnight, before tax.
• The payment will be administered through the ATO. Businesses can be advised to register their interest for JobKeeper updates on the ATO website.
Employer eligibility
• Eligible employers will be those with annual turnover of less than $1 billion who self-assess that have a reduction in revenue of 30 per cent or more, since 1 March 2020 over a minimum one-month period. Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible.
• Eligible employers include businesses structured through companies, partnerships, trusts and sole traders. Not for profit entities, including charities, will also be eligible.
Employee eligibility
• Full time and part time employees, including stood down employees, would be eligible to receive the JobKeeper Payment. Where a casual employee has been with their employer for at least the previous 12 months they will also be eligible for the Payment. An employee will only be eligible to receive this payment from one employer.
• Eligible employees include Australian residents, New Zealand citizens in Australia who hold a subclass 444 special category visa, and migrants who are eligible for JobSeeker Payment or Youth Allowance (Other).
• Self-employed individuals are also eligible to receive the JobKeeper Payment.
How to receive the payment?
• Eligible businesses will be able to apply for the payment online and can register their interest for JobKeeper updates on the ATO website.
• The program will commence today, 30 March 2020, with the first payments to be received by eligible businesses in the first week of May as monthly arrears from the ATO. Eligible businesses can begin distributing the JobKeeper payment immediately and will be reimbursed from the first week of May.
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For further questions or comments, please email Business NSW's Chief Economist, Mark Frost here, or contact him via LinkedIn
26 March, 2020
• The ABS has released results from a survey of 3,000 businesses conducted between 16-23 March.
• The P&A will analyse results from Business NSW’s Business Conditions Survey (which contains a more comprehensive set of questions on COVID-19 impacts) once it closes later this week.
Incidence of Adverse Business Impacts
• Approximately half of Australian businesses (49%) had experienced an adverse impact as a result of COVID-19 during the previous two weeks and 86% of businesses expected to be impacted in future months.
Over three quarters of businesses in Accommodation & food services (78%) reported that they had experienced adverse business impacts in the previous two weeks and 96% anticipated impacts over the coming months.
By contrast, businesses in Professional, scientific & technical services (21%), Electricity, gas and water supply (34%) and businesses in Mining (37%) were the least likely to have been adversely impacted by COVID-19 in the previous two weeks.
Nature of Business Impacts
• A reduction in local demand was the most common impact reported for the previous two weeks (82%) and was also the most common impact expected in coming months (81%). Of impacted businesses, over a third had experienced staff shortages (36%) and 59% expected to experience staff shortages in coming months.
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For further questions or comments, please email Business NSW's Chief Economist, Mark Frost here, or contact him via LinkedIn
24 March, 2020
• The Policy and Advocacy team has continued to engage with businesses following the announcement of the upgraded Commonwealth package announced on Sunday. This note updates on some key areas of confusion and uncertainty.
PAYG subsidies: who gets it?
• The Government announced a 100 per cent PAYG subsidy for employers. The policy was announced as supporting business cash flow by up to $100,000. This is the maximum amount businesses can receive.
• Businesses will receive the rebate automatically as a credit on their BAS statement. No payments will be transferred to businesses. Businesses must have a turnover of under $50 million to be eligible.
Small business banking package
• We are monitoring business experiences with the package of measures announced by the banks.
• There have also been enquiries as to whether these hardship measures will be expanded to residential loans. It is unclear at this stage however some banks have announced residential loan support measures.
Rent support
• Support to cover rent is a major concern. So far there have been no major government announcements targeted to facilitate rent relief.
• It is understood that governments are considering options. It is unclear at this stage what future support might be announced.
How long will the lockdown go for?
• This is unclear and will depend on Australia’s overarching strategy. The Prime Minister has suggested measures must be in place for at least 6 months and possibly more.
• There are increasing calls for Australia to adopt more aggressive lockdown measures that can start to be eased once transmission rates are lowered. While this model would require more drastic measures (such as closing all non essential businesses), it might facilitate greater certainty and a shorter lockdown period (though no strategy has certain outcomes).
• These issues need to be considered carefully by the experts.
Information and advice
• We are aware of widespread confusion and lack of official information to support businesses. This includes industry specific information related to combatting coronavirus as well as what types of support measures are available.
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20 March, 2020
• The RBA has announced a cut to the cash rate to 0.25%, quantitative easing, and other interventions in financial markets to support SME lending.
• The RBA Governor will address the media at 4pm today.
• Measures include (see link above):
- Cash rate cut to 0.25% (from 0.5%)
- A target for the yield on 3-year Australian Government bonds of around 0.25 per cent
- A $90bn term funding facility for the banking system, with particular support for credit to small and medium-sized businesses
- Exchange settlement balances at the RBA will be remunerated at 10 basis points, rather than zero as would have been the case under the previous arrangements
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