The good and the bad of starting a business with fewer than 200 employees in the ACT is the focus of a new inquiry being undertaken by a Legislative Assembly committee.
A report by Insolvency Australia revealed the number of businesses going under in Canberra has increased by 64 per cent in the fourth quarter of the financial year.
But the Standing Committee on Economy and Gender and Economic Equality has been hearing stories about the difficulties facing new business owners for years.
“What we’ve been hearing across the board is that businesses have been struggling to establish and grow even before the COVID-19 pandemic,” committee chair Leanne Castley said.
“There’s been a number of previous taskforces and initiatives at this level [in the past] … but those national statistics show that ACT businesses are struggling in some areas.”
The hearing will focus on non-employing, sole trader and micro, small and medium-sized businesses, and the factors which encourage and discourage them to provide their goods and services in the capital.
It will particularly examine what’s impacting women-led businesses, and business’s ability to employ people with disabilities.
“We know a lot of people say ‘red tape’ is an issue, but we want to know exactly what that means,” Ms Castley said.
“We want to understand what the lay of the land looks like.”
The inquiry won’t look into the COVID-19 pandemic’s impact on businesses, which has been examined previously.
However it is also interested in how businesses access government grants, and if they have or haven’t worked.
An extra-long time period has been set aside for business owners to have their voices heard, with written submissions open until 26 January, 2024, and public hearings to be held after that.
“Business owners don’t have the time for stuff like this [among everything else they do] … so we have a nice, long lead-in time to ensure as many businesses as possible can be included,” Ms Castley said.
It’s a move that’s been welcomed in the business sector.
Canberra Business Chamber CEO Greg Harford said he had also been hearing from many small businesses about the challenges they were facing.
“Lots of regulation, perhaps, stops businesses from delivering to their potential, a lot of cost does fall on them that they may not incur in other jurisdictions,” he said.
“Rules and regulation can also drive up cost or get in the way … we’re quite keen to have a wide-ranging conversation about the scope of regulation [in the ACT] and the way that things could be streamlined and harmonised with other jurisdictions.”
Other challenges expressed to the chamber include attracting and retaining staff, rising interest rates, more industrial regulations, and lower foot traffic for hospitality and retail businesses as people continue to work from home.
Mr Harford said while data showed Canberra small businesses had been “remarkably resilient” during the COVID-19 pandemic, this in part was due to the government incentives at the time.
“We’re definitely seeing a big change in the market now, things are getting tougher for business,” he said.
Submissions can be made by emailing LACommitteeEGEE@parliament.act.gov.au with the full terms of reference available through the inquiry’s webpage.