- 30,000 small businesses vanish since 2007
- Leaders blame red tape, credit availability
- "Don't employ anybody - you'll get fined eventually"
- Government: Move to cut small business red tape
SMALL shops are still badly wounded from the global financial crisis, with exclusive analysis for news.com.au showing that more than 30,000 of the most vulnerable small businesses disappeared between the 2007 and 2010 elections.
In some localities as many as 1000 of the smallest small operators - called micro enterprises - simply vanished, taking with them up to 4000 jobs from neighbourhoods.
An analysis of research presented by the Parliamentary Library in Canberra shows there were 528,669 small businesses employing one to four staff just before the 2007 election.
Just before last year's election, the number of those businesses fell to 497,141.
That meant 31,528 of the smaller operators closed their doors, shutting down from 30,000 to 126,000 employment opportunities.
Are you a small business owner affected by this? Email us at news@news.com.au and tell us your story.
It is the first time Australian Bureau of Statistics data has been available to track the fate of small businesses nationally and locally.
Small business leaders blame the brutal decline on difficulty in getting credit, the tough red tape obligations and the burden of unpaid work for the government such as collection of superannuation contributions.
"It's in crisis, and the anger of people out there is palpable,'' said Peter Strong, CEO of the National Independent Retailers Association and a director of the Council of Small Business of Australia.
"And the fact that we've gone backwards in the number of businesses is the indicator of that.''
Mr Strong today called for a national strategy to rescue the sector.
Destroyed
After the Budget, Ken Phillips, director of the Independent Contractors of Australia, which says it represents 1.1 million small business operators, accused the Government of “moving to destroy independent contractors".
“And the term 'destroy' is not overstating the development," he said in an attack on red tape obligations for small business.
Analysis of the Parliamentary Library research shows there was an increase in the number of micro enterprises in only 13 of the 150 House of Representatives seats, meaning there were falls in more than 90 per cent of electorates.
The federal seat of Brisbane lost 1040 small businesses employing one to four staff. Opposition Leader Tony Abbott's seat of Warringah lost 950.
North Sydney, held by shadow treasurer Joe Hockey, lost 747 micro businesses.
The story was only slightly better for businesses employing five to 19 staff.
Under siege
Nationally, these businesses increased from 227,883 to 233,832 - a numerical increase of three per cent over three years during a period when economic growth was around three per cent a year.
Bruce Bilson, the Opposition spokesman on small business, said the sector was under siege.
"The global financial crisis was particularly harsh on micro businesses where they didn't have the depth of balance sheet or the deep pockets to engage in heroic discounting just to to keep the doors open.
"And with that kind of heavy discounting mentality going on, a small business chasing that kind of business strategy has a use by date that's not too far away.
"They have far more stringent controls placed on finance. And as you know finance is the oxygen for these businesses.''
No relief
Treasurer Wayne Swan singled out small business in his Budget last week, outlining measures to allow swift $5000 write-offs of investments in work vehicles, and a $700 million reduction in tax instalment payments for the coming financial year, plus an early taste of proposed company tax cuts.
Mr Swan last month confirmed the credit problems when he said: "Many small and medium businesses are under pressure from greater borrowing costs and reduced access to credit.''
A report by the NSW Business Chamber found that the credit crunch of the global financial crisis had not eased for small business during Australia's relatively rapid recovery.
"Unfortunately, it appears that banks are reluctant to to move away from the high levels of risk aversion adopted during the height of the crisis, and consequently small businesses continue to suffer,'' it said.
Mr Strong said the burden of red tape and compliance were a constant problem for small business, and that one sign the sector was being ignored was the failure of Climate Change Minister Greg Combet to mention it in his speech on carbon pricing last month.
"My advice to anybody (in small business) is don't employ anybody. You will get fined eventually,'' said Mr Strong.
"But then you can go back through (such other issues as) paid parental leave, back to superannuation.''
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