Closing the SME revenue gap
The effectiveness of JobKeeper Payments
Unprecedented not only in its size and scope, but also in the speed with which it has been deployed, JobKeeper is truly a landmark policy initiative. As at 20 May 2020, just six weeks after JobKeeper was first legislated, 759,654 businesses had made claims under the program, generating $8.7 billion in approved payments¹. But has the program been successful in supporting the small businesses most severely impacted by the COVID-19 pandemic?
To find out, we analysed data from the GetCapital SME Sales Index for a critical 18-week period, during which the COVID-19 lockdown was introduced and JobKeeper rolled out. Based on daily transaction data from a representative sample of 4,000 businesses, the Index tracks changes in sales revenue for small and medium enterprises (SMEs) around Australia. Here’s what we found.
Making a real difference for SMEs
Right on target
SME Sales Index: JobKeeper recipients versus others (26 January 2020 = 100)
Closing the revenue gap
Sales revenue plus JobKeeper payments: recipients versus others (26 January 2020 = 100)
Collectively, JobKeeper recipients experienced a 46% decline in revenue between February and April, compared to a decline of just 15% among other businesses. And while revenues for JobKeeper recipients have recovered from their lows, they are still around 30% below pre-pandemic levels, suggesting that the program continues to provide valuable support.
Our data also shows JobKeeper has made a significant difference to the health of recipient businesses. Adding JobKeeper payments to sales revenues, we find that the program has boosted cash inflows by around 15–20%, to as much as 95% of the recipient’s previous revenue – enough to more than close the gap between JobKeeper recipients and others.
Recreation, manufacturing and hospitality the largest beneficiaries
Analysing the distribution of JobKeeper recipients across industries, we again see that the program appears to have been well targeted towards those sectors most severely impacted by the COVID-19 fallout. In our sample, a remarkable 69% of businesses in the Fitness and Recreation Services industry have received JobKeeper payments, compared to just one in three businesses from the Transport, Postal and Warehousing sector, which was classified as an essential service and remained relatively active during the lockdown.
Percentage of businesses receiving JobKeeper by industry, location and business type