Small businesses are doing it tough due to a raft of taxes and levies placed on them by the ACT Government. Photo: Michelle Kroll.
The growing cost of ‘doing business’ in Canberra is leading some small to medium business owners to consider moving across the border.
One-third of respondents to a recent Canberra Business Chamber survey revealed it was more difficult to operate in the ACT, and chamber CEO Greg Harford said some had considered taking their business elsewhere.
He said red tape, a lack of customer focus and urgency from ACT Government agencies were hitting businesses hard, especially those in the trade, hospitality and retail sectors.
“Key issues identified [in the survey] included higher payroll taxes, workers compensation costs and rates that don’t apply elsewhere, as well as significant delays in planning and development approvals,” he said.
Mr Harford said portable long-service leave arrangements, difficulty accessing local procurement opportunities, and extra costs from various ACT-specific regulations added to business stress.
“All the costs are going up, and when you couple that with the difficulty businesses are having finding staff and the downturn in the economy, which has impacted spending, it’s proving a real challenge just to keep the doors open,” he said.
“The biggest direct impact of these costs is businesses being forced to reduce their overheads, which unfortunately can mean downsizing, reducing staff hours and downsizing to smaller offices.
“We are seeing some businesses looking at the cost of doing business in Canberra – especially at the larger end of town – and questioning whether they should be relocating to Queanbeyan or Jerrabomberra in order to operate more efficiently.
“There are real drawcards to operating in NSW, and I think the ACT needs to be careful that it has policies in place so we don’t see a drift of business and workers over the border.”
Mr Harford said some business owners were barely drawing a minimum wage out of their own business, while others had mortgaged their homes just to keep their businesses afloat, which was impacting both their lifestyle and their mental wellbeing.
Chamber chair and MV Law managing partner Archie Tsirimokos said the message the ACT Government was sending was that “business can just do more – no matter what happens”.
“The burden on small business is massive as it is, and now all these other things they have to be across and deal with means business owners are being forced to work harder and work longer for less reward,” he said.
“We’re talking about a bunch of ordinary people that are doing things like running cafes and restaurants and providing services. They’ve got borrowings, they’re trying to look after their employees, and they’re taking risks just to keep the doors open, yet the ACT Government is saying, ‘That’s ok, but you need to do more’.
“I’m struggling to understand this approach from the government, which seems to be the new norm.”
Chamber chair and MV Law managing partner Archie Tsirimokos is calling for the ACT Government to do more to help struggling small businesses in Canberra. Photo: Michelle Kroll.
Mr Tsirimokos said the costs could also prevent big businesses from investing in Canberra.
“One of the big things on the agenda is for developers of residential properties to be responsible for defects down the track. If the risk becomes so unreasonable, then people just won’t do developments like affordable housing and build-to-rent properties in Canberra,” he explained.
“The government is the biggest supplier of land in the ACT, yet it is starting to impose these obstacles that make Canberra unattractive for business.
“The ACT’s planning framework is also a challenge. Every single developer that deals with the government in relation to planning says it takes forever. They’re not delivering. Culturally, within the ACT public service, there’s not a ‘can-do’ attitude. There’s no accountability.”
He said the way the government dealt with businesses and imposed taxes and levies was “particularly aggressive”.
“There’s an attitude of ‘collect as much as you can and keep finding ways to get more money out of these people’,” he said.
“It has come to the point where the government has lost perspective about what it is trying to achieve and business people have had enough. They’re hurting big-time. And they’re saying, ‘I don’t want to do business in this town anymore’.”
With the survey indicating less than two-thirds of businesses met their targets in the first quarter of the financial year and only 43 per cent of businesses reporting feeling positive about the present business situation, the chamber is calling for the ACT Government to step up and support local businesses.
“The chamber wants Canberra to be the greatest place in Australia to do business, so we encourage the government to look at the taxes, charges and levies they have in place, as well as the regulatory regime in order to attract, not deter, business,” Mr Tsirimokos said.
“Looking at things like reducing payroll tax and workers’ compensation costs, and ensuring the bureaucracy, including the Planning Authority, has a ‘can do’ attitude would be a really good start.”
Mr Harford said the Canberra community could show its support for small businesses and continue creating jobs by getting back to shopping local, rather than online.
“It’s really easy to say Canberra is a public service town, but nearly two-thirds of jobs here are private businesses,” he said.
“The private sector creates vitality in the city and provides goods and services that allow us to live our lives here.
“We need to be helping these businesses to grow and thrive in our community.”
Original Article published by Katrina Condie on Riotact.
