Veterinary industry trends during economic uncertainty
At the end of September the rules for businesses applying to get Job Keeper payments from the government will change, and it will be a lot harder to qualify. The new changed Job Keeper rules have been called Job Keeper 2.0 just in case you come across the terminology somewhere (Yes, the pre-October version was called Job Keeper 1).
And as its at version 2.0, we can expect the government to apply some additional rules after September.
Broadly, the rules will still require businesses to show a 30% drop in revenue when compared to similar periods in the previous year, but importantly, with Job Keeper 2.0 you will no longer be allowed to project or estimate a drop in revenue. Also, the periods looked at will be actual and completed financial quarters (3 months) vs Job Keeper 1 that allowed you to estimate a single month using only the information of a part month.
Very few of the clinics we deal with actually qualified for Job Keeper 1, so it stands to reason that we expect hardly any veterinary practices to manage to qualify for Job Keeper 2.0 because the qualification criteria will be more stringent.
Whilst you may find yourself rolling your eyes and thinking that the veterinary profession has yet again got a bad deal, it’s actually quite the opposite – veterinary clinics are doing financially very well over the COVID-19 crisis and are in fact very busy.
Our monitoring of the profession has indicated significant increased growth in veterinary sales during this year, and it’s not just our data that is showing this. The Illion survey which monitors credit card spending of 250,000 Australian consumers is showing an astounding growth in the ‘pet industry’. Just to put into context the extent of this growth, ‘pet care’ spending increased by 40% at the end of August whilst Alcohol and Tobacco only increased by 22%. The only categories higher than Pet Care were food delivery, online gambling, health services and furniture.
So short of unfortunate circumstances for specific clinics, most of you will be unlikely candidates for Job Keeper 2.0 rebates.
For those of you using Profitdiagnostix to monitor your business on a weekly basis, you will know that we have a ‘Job Keepers Dashboard’ – we are now going to change this dashboard to reflect the changes in Job Keepers 2.0.