Closing the SME revenue gap


Key findings

  • Around 40% of small and medium enterprises (SMEs) received JobKeeper payments in April and May.
  • The payments appear to have been well targeted, largely going to businesses whose revenues had fallen substantially in comparison to their peers, and which operate in severely affected sectors of the economy.
  • They have provided a sizeable boost to the financial health of recipients, lifting cash inflows by 15–20%.
  • However, sole traders and partnerships are notably less likely to have received payments than companies, raising concerns that some businesses may have missed out.

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

Around 40% of the businesses in our sample had received JobKeeper payments before 15 June 2020, with the bulk of payments flowing through from early May. Comparing the Index for JobKeeper recipients with other businesses, we see that the program has indeed been well targeted, largely going to those businesses most in need.
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.

¹Australian Government Treasury, JobKeeper Update, 22 May 2020.

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.
Uneven impact
Percentage of businesses receiving JobKeeper by industry, location and business type

Interestingly, around 40% of Construction businesses have also made successful JobKeeper claims, with cautious clients putting projects on hold, despite the sector’s status as an essential service. That’s around the same proportion as Retail Trade – further confirmation that retailers have weathered the crisis better than expected.

Comparing businesses in the regions to those in metropolitan centres, we find that metro businesses were around seven percentage points more likely to claim JobKeeper than their regional peers. As well as providing welcome evidence that the impact in the regions was less severe than originally feared, this reflects the higher concentration of Accommodation and Food Services businesses in metropolitan areas, and of Transport businesses in the regions.

Less easily explained is the 11 percentage point gap between incorporated businesses, 45% of which have claimed JobKeeper, and partnerships and sole traders, only 34% of which have done so. While some smaller businesses run by sole traders may have proven unexpectedly resilient during the crisis, this finding does raise the possibility that some sole traders may have been unsuccessful in accessing JobKeeper payments or unaware that they could do so – suggesting there may be one aspect of the program that could potentially be improved.

About the data

The Shift SME Sales Index is calculated by analysing daily credit transactions from a representative sample of SMEs around the country, varied by size, industry, and location. Baselined to the start of the crisis, the Index is based on six months of average sales.

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