Do small businesses in Australia really get a fair go?

The small business landscape in Australia

The Commonwealth Department of Innovation Industry, Science and Research regularly publishes statistics about Australian small businesses[1]. Some of the data makes interesting reading. For instance, did you know:

  • Australia currently has in excess of 2 million small to medium enterprises (SMEs)[2]
  • SMEs, in total, represent more than 99.0% of all trading businesses in Australia
  • SMEs provide in excess of 70.0% of total employment
  • SMEs contribute 57% of the total Australian economy

The importance of small businesses is often underestimated

The above numbers are staggering, but they don’t tell the full story of the important of SMEs. For example, SMEs include by far the broadest possible range of skills and talent of any sector. SMEs also act as the greatest safety release valve in our economy. Most importantly, no other sector provides opportunity and engages such a disparate community, many of whom do not fit conventional norms and who would be considered unfit for employment by government or large corporations[3].

Does government support SMEs in Australia?

Just imagine what would happen if SMEs stopped operating. It is because of this that federal, state and even local politicians always highlight how much they care and help small business. But the reality is actually quite different.

Over the past 20 to 30 years SMEs have been progressively over-loaded with ever increasing compliance and financial burdens which are disproportionate to their size, abilities and resources. Just consider the compliance and cost to a small business of the following legislation implemented during the past 30 years:

  • 1985 Capital Gains Tax (new impost)
  • 1986 Fringe Benefit Tax (new impost)
  • 1992 Superannuation (new impost)
  • 1993 First Federal “unfair dismissal” legislation
  • 2000 GST (new impost eliminating Sales Tax)
  • 2009 Fair Work Australia Act provisions
  • 2011 Latest safety legislation; the most recent changes make company directors personally responsible for all safety matters in the workplace
  • Payroll Tax (state legislations). The most insidious tax, punishing employers for employing people

Add to the above, Superannuation increasing from 9.0% to 12.0%, the likely Carbon Tax or similar, administrative requirements, the new tax amendments making directors personally responsible for PAYG tax and Superannuation. The list goes on. In addition, many SMEs are subject to industry specific compliance requirements. Ask yourselves, who is paying for all this and do we really get any compensation for our enormous investment?

The federal government’s minister responsible for small business is Michaelia Cash. She replaced Brendan O’Connor[4], who rather appropriately was also Minister for Homelessness. It is ironic that neither of them have ever worked for, managed or owned an SME. The current Shadow Minister for Small Business is Madeleine King, also a lawyer. These people don’t understand or much care for small businesses. In fact, the portfolio does not qualify for a cabinet position and it’s usually grouped with a range of other functions unrelated to small business.

A final word

Next time politicians of any persuasion start talking about the “Aussie Fair Go”, just remember that aren’t referring to Australian small businesses. So as a small business, why not make yourself heard and contact your local political representatives to remind them that SMEs actually do count and they are a backbone of the economy.



[1]Brendan O’Connor was Minister for Housing, Homelessness and Small Business.

[2]Source, “Key Statistics Australian Small Business”, Australian Government Department of Innovation Industry, Science and Research.

[3]SME – Small and Medium Enterprise

[4]Unfit in this context does not mean that they lack talent or cannot work. It means that they are unemployable because of age, lack of specific formal skills, personality traits, independent character, health concerns, etc.