“Australia’s tradition as an asset-owning democracy is under threat from the ongoing concentration of economic power in fewer hands,” said Cian Hussey, Research Fellow at the Institute of Public Affairs.
Today, the Institute of Public Affairs released new research investigating Australia’s changing economic structure as measured by an analysis of national income. The analysis finds:
- Between 2019 and 2024, the corporate share of national income increased by 7.5 per cent while the family business and self-employed share dropped by 20 per cent.
- The corporate share increased from 26.5 per cent to 28.5 per cent of total national income, while the share for family businesses and the self-employed decreased from 8.75 per cent to 7 per cent.
- The foregone income lost by family businesses and the self-employed from 2020 to 2023 was $149 billion due to their decline in their share of national income.
- Between 2020 and 2023, workers lost $215 billion in foregone compensation due to the relative decline in their share of national income.
“We are seeing a decline of family run businesses and self-employment, with income and economic power increasingly being concentrated among large corporates,” Mr Hussey said.
“The long-running trend is clear: small, family-run businesses and the self-employed are being squeezed while large corporates become more and more entrenched.”
“This undermines the system of democratic capitalism we have long enjoyed, where ownership of businesses, homes, and wealth could be widespread and gives the broadest range of people a stake in their communities and in the future of the country,” Mr Hussey said.
Previous IPA research found that the share of national income accruing to family-run and small businesses declined from 26 per cent in 1960, to just 9 per cent in 2019. The latest findings reinforce the long-term difficulties small business face in an oppressive regulatory environment.
“We are increasingly seeing this traditional, aspirational model being undermined by policies that favour less ownership amongst ordinary Australians,” Mr Hussey said.
“The growing red tape burden and net zero energy policies have driven up the cost of doing business, which drive out small family firms and self-employed entrepreneurs, while giving a competitive advantage to large corporates who can absorb the additional compliance cost.”
“Australia needs to course correct to see wider ownership and participation in the economy and ensure wealth and power is not siphoned away from ordinary families and toward corporate boards and foreign investors,” Mr Hussey said.
To download the IPA’s research, click here.
