Monday, May 16, 2022

Lockdown ravaged small businesses and left the economy dominated by big corporations

According to an analysis by the Institute of Public Affairs (IPA), the lockdown has disproportionately affected workers in small businesses as compared to larger ones.

Analysis Australian Bureau of Statistics (ABS) unemployment figures It was found that between June 26 and July 17, 420,000 jobs were lost—or 20,000 a day.

The New South Wales (NSW) jobs sector was hit hardest, with 200,000 small business workers, 64,000 medium-sized businessmen and 12,000 large businessmen losing their jobs over a three-week period.

“Lockdown measures have a much bigger impact on small businesses than on larger businesses,” said IPA research fellow Kurt Wallace. “Every time a lockdown is imposed, the effect is the same: thousands of small business workers are thrown out of work, while those working for large corporates are far more likely to keep their jobs.”

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A man is seen walking behind a lease sign on a building in Melbourne, Australia on June 8, 2021. (you image/James Ross)

Furthermore, the IPA argues that unrelenting lockdowns mean that large groups will dominate the economy as local communities lose their small businesses.

“The lockdown has the same effect as an aggressive form of asset stripping, where all capital is taken away from small businesses and re-directed towards large corporates,” Wallace said.

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The Reserve Bank of Australia (RBA) drew similar conclusions in March when it said the experience of businesses in lockdown was “quite uneven”.

“Small businesses were nearly twice as likely to decline 50 percent or more than large businesses,” said the RBA’s assistant governor. Christopher Kent said.

Kent said much of the difference reflects the fact that some of the most affected industries, such as cafes, restaurants and entertainment, are small businesses.

The IPA said there were some factors that caused small businesses to be disproportionately hit by the lockdown. For example, they are less likely to be able to accommodate remote work, are able to withstand longer periods of low income, and are more likely to have difficulty obtaining outside funding.

Yug Times Photos
Yug Times Photos
A “Store Closed” sign is seen at the window of a business in the CBD in Brisbane, Australia on January 11, 2021. (You image/Albert Perez)

July ABS data revealed the unemployment rate fell to 4.6 percent, the lowest in 12 years. However, this was driven by a decreased participation rate and high unemployment.

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“Normally, when the unemployment rate hits a 12-year low, it would be a cause for celebration, but not today because millions of our fellow Australians are in lockdown,” Treasurer Josh Frydenberg said. said on 19 August. “Today’s numbers reflect the impact of the lockdown … New South Wales employed 230,000 people but at zero hours.”

To help small businesses access more funding, Friedenberg announced They were detailing the eligibility for the SME Recovery Loan Scheme.

Small and medium businesses will now be eligible to receive government assistance in the March quarter without getting a jobkeeper or for a flood-affected business.

This means that SMEs dealing with the economic impacts of COVID-19 and whose turnover is less than $250 million will be able to access loans of up to $5 million for tenors of up to 10 years. The government will also give 80 percent loan guarantee.

Rebecca Zhu

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This News Originally From – The Epoch Times

Nation World News Desk
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