COVID sees profits plummet for self-employed Australians

More than four-in-five self-employed Australians say their profits have taken a significant hit because of COVID-19, new analysis from ANU shows. 

The analysis of a recent survey of more than 3100 Australians was led by Professor Matthew Gray and Professor Nicholas Biddle from the ANU Centre for Social Research and Methods. 

“More than four-in-five self-employed Australians in our survey reported a negative effect on their profits,” Professor Gray said. 

“For many of these people, the loss was quite large. About one-in-20 (5.1 per cent) said that the coronavirus had eliminated their profits completely, 21.6 per cent said it had been reduced to its lowest point ever and 21.9 per cent said that COVID-19 has reduced their profits substantially.  

“That is, almost half of the self-employed population in Australia feel that COVID-19 has already had at least a substantial effect on their profits.” 

The survey also found almost one-third (31.6 per cent) of self-employed Australians don’t think their businesses are economically viable in the next two months if current economic trends continue. 

“This increased to two-in-five (40.1 per cent), when self-employed Australians were asked if they thought their businesses were economically viable in the next six months,” Professor Gray said. 

The survey also shows self-employed Australians have lost more work hours than other Australians because of COVID-19 (9.3 hours per week for the self-employed compared to 3.1 hours for employees) and have lost more income ($66.70 more than other employees per week). The self-employed are almost three-times as likely to have accessed retirement savings or superannuation early compared to employees.

“Clearly, self-employed Australians are really feeling the heat when it comes to the economic impact of COVID-19,” Professor Gray said. 

“Our survey shows this is also causing significant distress and taking a toll on their mental health. 

“We need to think hard about how we can make sure these many hard working Australians, who not only give a great deal to our economy but also our society and communities, can be looked after during and after this pandemic.” 

The analysis is available from the ANU Centre for Social Research and Methods website.