Australia’s small business landscape is facing a major shake-up with an ageing ownership profile and increasing numbers of distressed businesses being voluntarily or forcibly wound-up.
Self-employed leaders at the helm of almost 30 per cent (730,000) of Australia’s 2.6 million small businesses* are 50 years or older, with just under half of these business owners (340,000) approaching or already past retirement age.
At the same time the Australian Taxation Office (ATO) and creditors have stepped up their debt recovery actions against failing businesses, leading to increased insolvencies.
According to the ATO, small businesses owe 67 per cent of Australia’s total collectable tax debt of $50 billion – contrasting with public perceptions that businesses at the “top end of town” are the entities avoiding their tax obligations.
Of the 5,400 reports lodged by insolvency practitioners in 2022-23, about 83 per cent related to small businesses.
The convergence of Australia’s ageing small business ownership profile and increasing insolvencies should sound alarm bells for governments and industries, according to national professional services firm RSM Australia.
RSM Australia Partner of Business Advisory in Brisbane Andy Graham said while the Federal Government had provided well-received short-term relief to small businesses through measures such as the instant asset write-off and energy rebates, the upcoming Federal Budget needed to address the long-term sustainability of Australia’s small business sector, and in particular focus on energy supply and supporting innovative entrepreneurs to drive productivity outcomes.
