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More than a third of Canberra businesses operating in 2016 are no longer trading, the lowest “survival rate” in the nation over that period, according to new figures. The Australian Bureau of Statistics data also showed the ACT’s nation-leading business growth rate slowed considerably in the past financial year, prompting the industry’s peak body to urge the Barr government to do more to help the private sector lead Canberra’s pandemic recovery. The Canberra Business Chamber is now calling for a fresh debate on possible alternatives to the government’s tax reform program, which is set to see commercial property owners stung with 3.75 per cent annual rate increase from next financial year. “We need to be making it as easy as we can to start and grow a business,” the chamber’s chief executive, Graham Catt, said. The ACT government said it continued to “monitor business conditions” and would consider adjusting the type and level of support as needed. It remained upbeat about the ACT’s private sector, pointing out that the near 18 per cent net increase in the number of businesses in Canberra over the past four years represented the highest rate of growth in the country. The ABS on Tuesday published business growth figures for the past financial year, a period which included the coronavirus-induced lockdown. More than 4870 new businesses started operating in 2019-20, which was the highest “entry rate” of any state or territory. The ACT also had the highest proportion of businesses (13.7 per cent, or 4111) which closed in the 12-month period. The net increase of 817 businesses brought the ACT’s total to 30,858 as of June 30. The high rate of “churn” in Canberra’s business sector is not new. The ACT has led the nation on that metric each year since at least 2016. The ABS also looked at the “survival rate” of businesses in each jurisdiction over the past four financial years. It showed just 62 per cent of the 26,180 business which were operating in the ACT at June 2016 were still trading in June 2020, the lowest “survival rate” in the country. The rate of survival for new businesses over that period was even lower, at 53 per cent, although four other jurisdictions recorded a worse result. Mr Catt said a number of factors contributed to the ACT’s rate of business collapse, including the territory’s relatively high proportion of small and “micro” operations – which were more vulnerable to early failure than big companies. An ACT government spokeswoman said business entry and exit rates tended be higher in the territory because of the size of the economy and Canberra’s “different industry structure”. The spokeswoman argued the survival rate was “broadly consistent” with the national average of 65.1 per cent. Mr Catt was particularly concerned about Canberra’s business growth rate, which had dropped from a nation-leading 5.2 per cent in 2018-19 to 2.7 per cent last financial year. He said a return to the booming rate of business growth from two years ago was needed to spur a private sector-led recovery to the pandemic. He said the ACT government could do more to support the sector, including being open to a re-think of its 20-year tax reform program. Without calling for any specific changes, or a halt to the existing program, Mr Catt said the government should speak with industry about what other options might be available to raise revenue. “What we really want to see is some engagement on this issue,” he said. “It has been clearly pointed out that this [commercial rates] is a pain point … so is there an opportunity to discuss alternate ideas and different models? “I think it needs to be explored.” The government spokeswoman said a number of emergency supports remained available to businesses and commercial property owners, including payroll tax waivers. The spokeswoman said as the pandemic recovery continued, the government would “look for more opportunities to make it easier for businesses to open and grow”.
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More than a third of Canberra businesses operating in 2016 are no longer trading, the lowest “survival rate” in the nation over that period, according to new figures.
The Australian Bureau of Statistics data also showed the ACT’s nation-leading business growth rate slowed considerably in the past financial year, prompting the industry’s peak body to urge the Barr government to do more to help the private sector lead Canberra’s pandemic recovery.
The Canberra Business Chamber is now calling for a fresh debate on possible alternatives to the government’s tax reform program, which is set to see commercial property owners stung with 3.75 per cent annual rate increase from next financial year.
“We need to be making it as easy as we can to start and grow a business,” the chamber’s chief executive, Graham Catt, said.
The ACT government said it continued to “monitor business conditions” and would consider adjusting the type and level of support as needed.
It remained upbeat about the ACT’s private sector, pointing out that the near 18 per cent net increase in the number of businesses in Canberra over the past four years represented the highest rate of growth in the country.
The ABS on Tuesday published business growth figures for the past financial year, a period which included the coronavirus-induced lockdown.
More than 4870 new businesses started operating in 2019-20, which was the highest “entry rate” of any state or territory.
The ACT also had the highest proportion of businesses (13.7 per cent, or 4111) which closed in the 12-month period.
The net increase of 817 businesses brought the ACT’s total to 30,858 as of June 30.
The high rate of “churn” in Canberra’s business sector is not new. The ACT has led the nation on that metric each year since at least 2016.
The ABS also looked at the “survival rate” of businesses in each jurisdiction over the past four financial years.
It showed just 62 per cent of the 26,180 business which were operating in the ACT at June 2016 were still trading in June 2020, the lowest “survival rate” in the country.
The rate of survival for new businesses over that period was even lower, at 53 per cent, although four other jurisdictions recorded a worse result.
Mr Catt said a number of factors contributed to the ACT’s rate of business collapse, including the territory’s relatively high proportion of small and “micro” operations – which were more vulnerable to early failure than big companies.
An ACT government spokeswoman said business entry and exit rates tended be higher in the territory because of the size of the economy and Canberra’s “different industry structure”.
The spokeswoman argued the survival rate was “broadly consistent” with the national average of 65.1 per cent.
Mr Catt was particularly concerned about Canberra’s business growth rate, which had dropped from a nation-leading 5.2 per cent in 2018-19 to 2.7 per cent last financial year.
He said a return to the booming rate of business growth from two years ago was needed to spur a private sector-led recovery to the pandemic. He said the ACT government could do more to support the sector, including being open to a re-think of its 20-year tax reform program.
Without calling for any specific changes, or a halt to the existing program, Mr Catt said the government should speak with industry about what other options might be available to raise revenue.
“What we really want to see is some engagement on this issue,” he said. “It has been clearly pointed out that this [commercial rates] is a pain point … so is there an opportunity to discuss alternate ideas and different models?
“I think it needs to be explored.”
The government spokeswoman said a number of emergency supports remained available to businesses and commercial property owners, including payroll tax waivers.
The spokeswoman said as the pandemic recovery continued, the government would “look for more opportunities to make it easier for businesses to open and grow”.
