Workers in small businesses have experienced their heaviest job losses since early April, while the gap between the public and private sector continues, according to analysis released today by free market think tank the Institute of Public Affairs.
The analysis, based on Australian Bureau of Statistics data, shows that in just one week between 26 September and 3 October, employment in small businesses fell by 95,300, employment in medium businesses fell by 27,700, while employment in big businesses grew by 6,600.
The sharp decline in small business employment was felt across the country, with declines in each state and territory.
“The lockdown-induced destruction of small business is a tragedy for mainstream Australia and the Australian way of life,” said Cian Hussey, Research Fellow at the IPA.
“This is a small business, private sector recession.”
“The decline of small businesses is continuing even as restrictions ease. The legacy of the lockdown restrictions will be an economy dominated by large conglomerates with local communities being stripped of the small businesses that are integral to their character.”
“Small businesses are the backbone of the economy and the heart of communities. Small business owners embody the Australian way of life, they are hardworking, take risks, create prosperity for others and have a stake in the success of their local community.”
“Lockdowns have disfigured the Australian economy and the Australian way of life. Small businesses and their workers continue to suffer while bureaucrats maintain harsh, disproportionate, hope-destroying lockdown measures,” said Mr Hussey.
Further analysis by the IPA has found that while 563,000 jobs have been lost in the private sector since 14 March, 20,200 jobs have been added in the public sector. This is Australia’s K-shaped recession, where bureaucrats and big businesses flourish while the broader private sector and small businesses suffer all the net job losses.
“Australia’s ‘K-shaped’ recession shows we are living in two Australias with wealthy, protected bureaucrats who are flourishing, and those in the productive, private part of the economy who are getting smashed,” said Mr Hussey.
“Bureaucrats and unelected health officials have not incurred any of the costs of their reckless lockdown measures, yet they decide when and how the private sector workforce can go back to work.”
“Both the Commonwealth and state governments must commit to backing small business and entrepreneurial Australians. This means cutting red tape and reducing taxes, both of which place disproportionate burdens on small business,” said Mr Hussey.
Previous IPA research has highlighted the long-term impacts of lockdown measures, which have left state economies disfigured even after they are lifted.
Note: Small businesses are defined as those with fewer than 20 employees, medium businesses are defined as those with between 20 and 199 employees, and big businesses are defined as those with 200 or more employees.