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Concerns around fiscal cliff laid bare

WA businesses have voiced concerns about their survival following the withdrawal of support under the JobKeeper scheme. In early results from a WA Super-Chamber of Commerce and Industry WA survey of the business community, one third of WA businesses (32%) indicate they are not confident they can survive without JobKeeper in the current economic circumstances.

Labour-intensive industries are most concerned, with 50% of businesses in retail, accommodation and food services like cafes and restaurants ‘not confident’ they could continue without wage subsidies. Capital-intensive industries are significantly better placed, with 94% of construction businesses and 91% of mining businesses confident they can continue operating without financial assistance.

Looking to the regions, concerns about survival prospects were highest for survey respondents in the Kimberley (42%) and South West and Great Southern (41%). Around 33% of respondents in the Mid West, Gascoyne and Pilbara, and Goldfields and Wheatbelt (33%) have concerns about their survival post JobKeeper, while concerns were lowest in Perth and Peel (29%).

These results lay bare the concerns of the business community around the withdrawal of government fiscal support in the coming months.

The most sustainable and effective way to ensure a healthy, vibrant business community is for the Federal and State Governments to undertake meaningful economic reform. CCIWA has provided a comprehensive list of proposals to governments, but the largest priorities are addressing the inflexibilities in the industrial relations system and creating a more competitive tax environment.

Fiscal support measures like JobKeeper cannot continue indefinitely. Ultimately the best thing for the economy in the long run is for businesses to transition off JobKeeper. At the same time, in the short term there is now clear evidence of the need for targeted support for parts of the WA business community. To this end, JobKeeper should be phased out through a reassessment at the end of September, with support temporarily extended for those businesses continuing to suffer significant revenue losses.

Aaron Morey

Chief Economist CCIWA

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