The COVID-19 Impact on Australian Indigenous Businesses

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Table of Contents

Introduction
Business Impacts
Economic Discrepancies
Conclusion
Bibliography
Footnotes

Introduction

COVID-19 has had a significant impact on individuals, communities, and businesses. Indigenous Australian businesses were particularly affected by the pandemic due to the uniqueness of their business models and the products and services they offer. For example, most of their enterprises exhibit the community’s culture, making tourists their most extensive customer base. The pandemic limited the movement of tourists, which significantly reduced the customer base for Indigenous Australian businesses. Despite their unique business models, products, and services, the pandemic did not spare the Australian Indigenous-owned enterprises. Further analysis will reveal the main businesses impacted, the primary industries in which this community is involved, the outbreak’s impact on these sectors, and the challenges posed by these effects.

Business Impacts

Australian indigenous people work in ranches, while others have set up small firms. Indigenous Australian businesses are among the fastest-growing sectors.¹ Some of the enterprises that indigenous people in Australia participate in are freight transport, construction, cleaning services, carpentry, creative arts, and other domestic or personal services². According to statistics, almost thirty percent of the workforce is in the most affected industries and businesses, with the majority being businesses owned by the Australian indigenous people³. These industries and businesses are either owned by Indigenous Australians or employ a significant number of staff members from this community. The firms were forced to digitize their operations and services to reach a wider audience using technological tools like social media.

Automation was expensive and introduced new ways of business operations, which was challenging to implement because it required numerous financial resources and human skills. Indigenous Australian-owned businesses reduced operation hours, retrenched staff members, and in some instances, closed down their premises in accordance with health lockdown measures.⁴ These measures have led to low production and, subsequently, low revenues. According to statistics, 82% of Indigenous businesses experienced a sales drop by 70% at the start of COVID-19.⁵ The pandemic forced indigenous industries and enterprises to reduce their staff, resulting in a high unemployment rate. This reduction of employees was necessary because there was reduced cash flow in these businesses, which could not cater for the maintenance of expenses of paying all the employees and its operations.

Indigenous businesses have been facing numerous difficulties from the impacts of the COVID-19 pandemic. Recovery efforts from the pandemic have been unsuccessful, mainly due to the unprecedented nature of business disruption. The industries have faced financial constraints from the low cash flow experienced due to the lockdown.⁶ Companies had to withdraw their superannuation funds to survive the COVID-19 period. These industries have also experienced challenges in digitizing functions and services due to the significant financial investments required to achieve automation. Some indigenous businesses have had difficulties and face multiple barriers when accessing support from national programs.

Economic Discrepancies

Throughout the COVID-19 pandemic, there have been economic discrepancies between indigenous and non-indigenous people. Indigenous Australians earn a lower average income from employment and private sectors than non-indigenous Australians.⁷ The difference in wage and salary rates creates an enormous financial gap between the two populations. The economic discrepancies have limited Indigenous Australians’ ability to participate in meaningful business operations while immersing most people in an unending cycle of poverty. Colonialism is one of the reasons for the financial discrepancy between indigenous and non-indigenous Australians. The colonizers stripped the indigenous Australians of their land and used it for other purposes like residences and businesses.⁸ The colonialists felt that the grounds the Indigenous people occupied were underutilized and had little economic value.

However, in taking away the land, the colonizers took away the native peoples’ heritage and wealth. Depriving Indigenous Australians of their land has contributed to the community’s increasing poverty levels. Indigenous Australians consider land a sign of wealth and power, and taking it away from them is a deprivation of their cultural heritage and economic power. Another reason for this difference is the high level of unemployment among indigenous Australians.⁹ Indigenous Australians mostly live in rural areas, working on ranches and farms. They are paid less than non-indigenous Australians, contributing to this financial gap. Living in rural areas, the indigenous people do not receive a quality education, and even after reaching a certain level of education, they have fewer employment opportunities.

Conclusion

The onset of the COVID-19 pandemic brought numerous challenges to the Indigenous Australian businesses. Many Indigenous people in Australia rely on the informal markets for economic growth, including tourism, handicrafts, and other casual and formal industries that were adversely affected by the pandemic. Although the government has developed support agencies to protect the Indigenous communities’ economic welfare, they did not foresee the pandemic. As a result, the businesses were ill-prepared for the economic impact of COVID-19, which exacerbated the adverse financial outcomes on the indigenous communities. The effects were further aggravated by the fact that Indigenous Australians have always been economically disadvantaged due to discrepancies arising from colonization. The analysis revealed that Indigenous Australian businesses faced unprecedented economic challenges during the pandemic due to their distinctive products and services. Therefore, it is evident that the government should design support agencies for cushioning such businesses from the challenges of a pandemic.

Bibliography

Dinku, Yonatan, Boyd Hunter, and Francis Markham. “How Might COVID-19 Affect the Indigenous Labour Market? Australian Journal of Labour Economics 23, no. 2 (2020): 189-210.

Goha, Ahmed, Kenechukwu Mezue, Paul Edwards, Kristofer Madu, Dainia Baugh, Edwin E. Tulloch-Reid, Felix Nunura, Chyke A. Doubeni, and Ernest Madu. “Indigenous People and the COVID-19 Pandemic: The Tip of an Iceberg of Social and Economic Inequities.” Journal of Epidemiology and Community Health 75, no. 2 (2021): 207-208.

Markham, Francis, and Diane Smith. “Indigenous Australians and the COVID-19 Crisis: Perspectives on Public Policy.” Center for Aboriginal Economic Policy Research ANU College of Arts & Social Sciences 1, (2020): 1-33.

Moodie, Nikki, James Ward, Patricia Dudgeon, Karen Adams, Jon Altman, Dawn Casey, Kyllie Cripps et al. “Roadmap to Recovery: Reporting on a Research Taskforce Supporting Indigenous Responses to COVID‐19 in Australia.” Australian Journal of Social Issues 56, no. 1 (2021): 4-16.

O’Sullivan, Dominic, Mubarak Rahamathulla, and Manohar Pawar. “The Impact and Implications of COVID-19: An Australian Perspective.” The International Journal of Community and Social Development 2, no. 2 (2020): 134-151.

Taylor John, Regional Change in the Economic Status of Indigenous Australians, 1986-91. (Canberra: Centre for Aboriginal Economic Policy Research (CAEPR), 2018), 1-92.

Footnotes

Markham, Francis, and Diane Smith. “Indigenous Australians and the COVID 19 Crisis: Perspectives on Public Policy.” Center for Aboriginal Economic Policy Research ANU College of Arts & Social Sciences 1, (2020): 3.
Taylor John, Regional Change in the Economic Status of Indigenous Australians, 1986-91. (Canberra: Centre for Aboriginal Economic Policy Research (CAEPR), 2018, 4.
O’Sullivan, Dominic, Mubarak Rahamathulla, and Manohar Pawar. “The Impact and Implications of COVID-19: An Australian Perspective.” The International Journal of Community and Social Development 2, no. 2 (2020): 134.
Taylor John, Regional Change in the Economic Status of Indigenous Australians, 1986-91. (Canberra: Centre for Aboriginal Economic Policy Research (CAEPR), 2018, 8.
Dinku, Yonatan, Boyd Hunter, and Francis Markham. “How Might COVID-19 Affect the Indigenous Labour Market? Australian Journal of Labour Economics 23, no. 2 (2020): 190.
O’Sullivan, Dominic, Mubarak Rahamathulla, and Manohar Pawar. “The Impact and Implications of COVID-19: An Australian Perspective.” The International Journal of Community and Social Development 2, no. 2 (2020): 134.
Moodie, Nikki, James Ward, Patricia Dudgeon, Karen Adams, Jon Altman, Dawn Casey, Kyllie Cripps et al. “Roadmap to Recovery: Reporting on a Research Taskforce Supporting Indigenous Responses to COVID‐19 in Australia.” Australian Journal of Social Issues 56, no. 1 (2021): 4.
Taylor John, Regional Change in the Economic Status of Indigenous Australians, 1986-91. (Canberra: Centre for Aboriginal Economic Policy Research (CAEPR), 2018, 38.
O’Sullivan, Dominic, Mubarak Rahamathulla, and Manohar Pawar. “The Impact and Implications of COVID-19: An Australian Perspective.” The International Journal of Community and Social Development 2, no. 2 (2020): 138.

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The COVID-19 Impact on Australian Indigenous Businesses

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