Nearly a quarter of hospitality businesses say they’ll have to close once the government pulls out coronavirus support measures.
And 28 per cent of hospitality and 21 per cent of arts and recreation businesses anticipate having to sack at least some of their staff.
The Australian Bureau of Statistics data comes as Treasury officials say they expect more Victorian businesses to stay reliant on wage subsidies than if the virus hadn’t resurged in the state.
Treasury head Steven Kennedy says the deterioration in Victoria’s health and economic situation underscores the high level of uncertainty for his officials and government as they make decisions about the future of programs.
“We now think at least 75 per cent of Victorian firms will stay on JobKeeper … maybe that number will turn out to actually be even a bit higher,” he told a Senate committee hearing on Thursday.
That means more than 171,000 businesses still needing the wage subsidy.
Prime Minister Scott Morrison wasn’t surprised, saying estimates made even a few weeks ago were being very quickly overtaken by events.
“Decisions taken by other states can also impact that result as well,” he told reporters in Canberra, citing Queensland’s decision to extend travel bans to Sydneysiders.
“That’s why we’ve been so cautious not rushing to longer-term (budget) scenarios.”
The ABS found more than two in five businesses are using support measures including wage subsidies and government boosts to cashflow.
Across all sectors, one in 10 said once these supports were removed, they would have to close with one in eight expected to cut jobs.
Treasury is thinking carefully about what measures give the biggest “jobs payback”.
Dr Kennedy pointed to incentives for businesses to invest but acknowledged owners needed confidence in the health situation before they would be inclined to take those up.
The government’s priority, beyond addressing the health crisis, was to bring the unemployment rate down.
It’s expected to peak at 9.25 per cent by December.
“You have to calibrate that fiscal response to get as large an impact as you can but just simply throwing more and more money at it won’t necessarily drive it down,” he said, noting never before had so much government money been spent in just two quarters.
He expects government debt to go higher than the forecast $850 billion.