Australia cannot build the economic resilience, domestic capabilities and secure supply chains needed in an increasingly uncertain strategic environment without a strong and growing small-business sector. Yet our national approach to small business risks overlooking a fundamental question: are we making it easier for businesses to employ people, invest and grow?
Australia recorded a net increase of 85,130 actively trading businesses in 2025–26. Almost 98 percent of that net increase came from businesses without employees.
According to the Australian Bureau of Statistics, while non-employing businesses increased by 83,105 over the year, the number of employing businesses increased by just 2,025. The same data shows a net movement of 28,127 surviving businesses from employing to non-employing.
These figures don’t explain why businesses stopped employing, or whether existing employers expanded their workforces. But they should prompt a serious discussion about what it takes to build an employing business in Australia.
The transition from working for yourself to employing others matters. Employing businesses create jobs, train workers and apprentices, and invest in productive capacity. They form the supply chains that larger businesses, major projects and governments rely on.
I come at this as a regional small-business owner and consultant with experience in senior roles across government, universities and policy. What strikes me is the gap between how support is designed and how businesses experience it.
Australia’s first National Small Business Strategy commits governments to improving the operating environment and supporting businesses to grow. It provides for cooperation through small-business ministers’ meetings while preserving jurisdictions’ own strategies and priorities.
But businesses don’t experience government action as a collection of strategies and programs. They experience the cumulative operating environment that those policies create.
Payroll, tax, insurance, workers’ compensation, employment law, licensing, reporting, cybersecurity and industry regulation do not sit in separate portfolios for business owners. Neither do rising energy, freight, materials and wage costs. They all arrive in the same business and, often, on the same desk.
Together, these demands shape whether an owner has the time, cash flow and confidence to employ another worker, purchase equipment or compete for larger contracts. Expansion often requires additional spending and responsibilities before it generates additional revenue.
Even if individual policies are reasonable, their cumulative effects can be difficult. The Productivity Commission has described accumulated regulation as creating regulatory hairballs, noting that fixed compliance costs can become a competitive advantage for larger firms.
September’s working holiday visa changes illustrate the tension. The government argues that lower migration will give housing supply time to catch up. Yet industry representatives in Far North Queensland and Western Australia warn of consequences for construction, agriculture and tourism. Tourism Council WA identifies Exmouth, Broome and Kununurra as particularly exposed. These concerns don’t settle the migration debate, but they test whether the commitment to small-business growth influences decisions outside the small-business portfolio.
Access to governments and support also carries costs that are unevenly distributed. Regional business owners often need to travel to meet decisionmakers, attend industry events or build professional networks. That means expenses and time away from the business. Proximity also enables repeated contact, making relationships, information and opportunities easier to access over time.
Access to expertise presents another barrier. Preparing grant applications, developing business cases or meeting procurement requirements takes time and specialist knowledge. An owner may have a viable investment proposal but lack affordable advice to pursue it. Support can therefore be easiest to access for businesses already equipped to navigate the system.
The government isn’t ignoring small businesses, as demonstrated by existing strategies, grants and advisory programs. The question is whether their design accounts for owners’ circumstances, capabilities and ambitions.
As a female founder building a business from regional Australia, I see the limits of support that is geographically accessible but poorly matched to commercial needs. A locally delivered workshop may help, but it cannot replace specialist expertise when a business needs it.
The government cannot provide bespoke advice to every business. But programs should give owners a meaningful say in the support they need and, where practical, a choice of suitably qualified providers. Evaluation should examine whether support enables owners to make decisions and implement changes, rather than simply counting participation.
In regional economies, the consequences extend beyond individual firms. Local businesses provide employment, train apprentices and supply the goods and services communities depend on. Smaller markets and workforce constraints make growth harder; losing an employer or supplier can leave fewer alternatives.
Expansion must make commercial sense, supported by demand, sound management and a willingness to take risks.
The National Small Business Strategy commits governments to making growth easier. That commitment needs to influence decisions beyond small-business programs. Small-business ministers should use the strategy to challenge policies that work against its objectives and seek changes through existing government processes. They should report on which barriers have been addressed and which remain.
Owners experience the combined effects of government decisions. The value of a national strategy is in getting governments to address those effects together. Its success should be evident in the conditions businesses face when they decide whether to employ, invest and grow.
Leave a comment