Late payments are adding to the financial strain on West Australian small businesses from the COVID-19 pandemic, a report has found.
The Bankwest Curtin Economic Centre report found more than a third of small businesses reported revenue losses last year.
But optimism is considerably higher for 2021, with roughly the same number of firms expecting revenue to increase as the state’s economic recovery continues.
BCEC director Alan Duncan says almost a quarter of small businesses had reported receiving payments from larger firms that were at least 30 days late, placing additional stress on owners and restricting their ability to operate.
“This report calls for action to address the ongoing issue of late payments for WA small business owners who have already experienced a challenging 12 months due to the COVID-19 pandemic,” Professor Duncan said on February 5.
“Mandated payment terms should be considered to improve this issue and increase the success of WA’s small business operators.”
Federal parliament is considering legislation which aims to ensure small businesses are paid on time.
With much of WA plunged into lockdown this week to curb a COVID-19 outbreak, BCEC deputy director Rebecca Cassells warned such responses could dent business confidence.
“What we do know is that support measures such as JobKeeper, the ATO cash-flow boost and payroll tax relief were reported as being most helpful for small business owners during the 2020 COVID-19 lockdowns,” Associate Professor Cassells said.
“These are important supports and give small businesses the ability to maintain operations and pay workers and other costs without any revenue coming in due to closures.”
The report found there were more than 230,000 small businesses operating in WA, contributing about $50 billion each year to the state economy.
About a quarter of the firms expect to hire additional staff in the first six months of 2021.
