One-third of Australian businesses struggle to pay bills

Revenue fell for nearly 41 per cent of Australian businesses last month. Picture: Shutterstock
Revenue fell for nearly 41 per cent of Australian businesses last month. Picture: Shutterstock

Over one-third of Australian businesses say they expect to struggle paying bills, according to data released by the Australian Bureau of Statistics on Thursday.

Of the 1202 responding businesses, 35 per cent said they would find it difficult or very difficult to pay their bills.

Small and medium businesses were much more likely to report they were struggling to meet financial commitments, with 35 per cent of small businesses and 33 per cent of medium businesses reporting those struggles compared to 18 per cent of large businesses.

The industries hardest hit were hospitality, transport and warehousing, arts and recreation.

71 per cent of accommodation and food services, 56 per cent of transport, postal and warehousing businesses, and 43 per cent of arts and recreation businesses reported facing difficulties.

While revenue fell for nearly 41 per cent of businesses last month, operating costs increased for 22 per cent. Business owners do not expect relief, with 28 per cent of respondents saying they expect further falls in revenue next month.

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Uncertainty has led businesses to cancel or decrease their planned investments into new machinery, equipment and property.

These investments into the business are referred to as planned capital expenditure.

The survey found that 23 per cent of businesses had decreased or cancelled their planned capital expenditure, compared to three months earlier.

"[56 per cent of] businesses reported that their decisions related to expenditure on capital were significantly influenced by uncertainty about the future state of the economy, and [40 per cent of businesses cited] future expected customer demand for their products or services," ABS head of industry statistics John Shepherd said.

Other cited reasons for cancelling or decreasing planned capital expenditure included government support measures (36 per cent), access to the business's own funds (33 per cent) and current demand for products and services (33 per cent).

This data was collected between August 12 and 19, and is a part of a suite of research into the economic impacts of the COVID-19 pandemic.

This story One-third of Australian businesses struggle to pay bills first appeared on The Canberra Times.

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