“Years of reckless government policies like net zero, rising energy costs, and red tape have smashed small business and shifted economic power increasingly towards big business and smothering entrepreneurialism,” said Cian Hussey, Research Fellow at the Institute of Public Affairs.
New research released today shows that the number of small businesses (employing between one and 19 people) in Australia has declined in each of the past three completed financial years. The analysis finds:
- Ther has been a net loss of nearly 33,500 small employing businesses since June 2022.
- In 2024-25, the negative business environment spread to medium-sized employers with counts of all categories of businesses employing less than 200 people declining.
“Economic power is increasingly being shifted away from family businesses and entrepreneurial young Australians and toward large corporates and foreign-based multinationals. This has been a deliberate economic strategy of our political and bureaucratic elites,” said Mr Hussey.
“This is not only bad for our economy, but corrosive to our society and our way of life. Australia is supposed to be a country where you can start a small business and have a chance at creating some success for yourself and your family by working hard. But increasingly this is out of reach. Our political class heap costs and pressures upon small business with little regard to the effect.”
The IPA analysis, based on data from the Australian Bureau of Statistics, builds on previous research which found that 400,000 businesses were never created between 2005 and 2019 as a result of Australia’s growing red tape burden.
“Australia now has a small business crisis on two fronts: fewer new businesses are created as governments have destroyed the entrepreneurial spirit, and more businesses are closing, strangled in growing red tape and cost burdens.”
The analysis also highlights data from the Australian Securities and Investments Commission showing a spike in corporate insolvencies after the Albanese government was first elected in May 2022. In 2025, some 14,649 companies became insolvent. In February 2026 alone 1,260 companies became insolvent.
“Small businesses have been smashed in recent years. In the months leading up to the Iran war, thousands of Australian businesses became insolvent. With sky-rocketing fuel prices and the prospect of fuel rationing, along with broader supply chain pressures, things are only going to get worse for small businesses in the coming weeks and months. Until governments adopt radical policies to slash the costs of running a small business, we are going to see even further entrenchment of economic power among large corporates and multinationals,” said Mr Hussey
Related IPA research can be found here.
