Survey shows almost half of Australian businesses consider closing over red tape, soaring expenses

The Albanese government has been urged to step in after a poll revealed almost half of small business owners have considered shutting shop.

A national survey has found more than 45 per cent of small business owners have considered closing down as soaring expenses, red tape and “thought bubble” new rules such as “right to disconnect” push managers to the brink.

Should that be reflected across the wider community, it would mean the closure of more than one million businesses and more than two million jobs would be lost.

The compliance burden had increased so significantly in the past year that some small business owners claimed they had had to hire extra staff to manage, the inaugural Australian Chamber of Commerce and Industry survey found.

Among the almost 400 businesses surveyed, about six per cent claimed they were spending more than 20 hours a week complying with red tape.

Describing the results as “confronting”, Chamber chief executive officer Andrew McKellar urged the Albanese government to address what he described as a looming “crisis”.

A survey showed more than 45 per cent of small business owners have considered closing down.

While small businesses had been struggling for some time with soaring expenses, the new industrial relations laws – including the “Greens thought bubble right to disconnect laws” – had pushed many to the tipping point.

Mr McKellar said one way to help ease the strain was for the government to exempt small business from the new rules.

Australian Chamber of Commerce and Industry CEO Andrew McKellar.

“We are not far away from a crisis. It is dire,” he told The Sunday Telegraph.

“There are a range of different factors hurting small business, but the red-tape burden – tax compliance, payroll and all those things that occur in the background – have been cited by small business as key factors.

“Small businesses are spending more and more time trying to meet these requirements, which are increasing. And then you have right-to-disconnect come out of left-field – a thought bubble from the Greens that was passed in parliament in a single day.

The government says this is all about closing loopholes, but for small businesses it amounts to closing a noose.”

The small business conditions survey was conducted in April. The figures do not take into account business owners who had already walked away.

In regional areas, the statistics were worse with 57 per cent of surveyed business owners declaring they had considered leaving.

More than 90 per cent of business owners claimed “red tape” was having an impact on their operations.

Right to disconnect rules will take effect for small business employers in August next year.