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Canberra has nation's worst business survival rates

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Small businesses in the ACT have the nation's lowest survival rate, and a survey shows more than three quarters of business owners expect conditions to worsen.

The insular ACT economy, slow tender times and fears for finding a buyer for their operation were just some of the worries of Canberra's small business owners at the Business Crisis Summit on Wednesday.

About 190 people from 130 businesses and community organisations attended the ACT & Region Chamber of Commerce and Industry event at Ainslie, sharing ideas on how to reverse the business survival rates.

Chamber chief executive Andrew Blyth said the city's next century would be a ''private sector century'', but a chamber survey showed businesses had largely pessimistic views about the next year.

''We've got the lowest business survival rates in the nation, and in the last 12 months we have seen a 40 per cent increase in liquidations and the chamber itself has seen a sixfold increase in phone calls to its workplace relations hotline seeking advice about downsizing,'' he said.

The survey found 78 per cent of the businesses responding believed the ACT economy would be somewhat or much weaker in the next 12 months. About 55 per cent predicted the same for the national economy.


More than half of the 60 businesses who responded to the question said their profitability was down from six to 12 months ago, with about 45 per cent expecting their profit position to be worse next year.

Mr Blyth - supported by conclusions from many of the summit's small group sessions - said the removal of red tape and simplifying tax and employment laws were essential.

''Small business needs to be treated differently to large business, particularly when it comes to compliance and the steps they need to take, there's example after example of duplication of paperwork that does seem unnecessary,'' he said.

Australian Chamber of Commerce and Industry chief economist Greg Evans said different indicators pointed to below-trend growth for the 2013-14 financial year.

''There is no doubt there is a crisis of confidence and sentiment levels are poor - business sentiment levels and consumer confidence,'' he said.

Rene Sedlmaier, owner of Fyshwick communications company Sedcom, told the crowd about the difficult decision to cut two of his six workers since Easter after reduced spending from his clients.

''Probably the hardest thing I've had to do in business is let two people go who were performing,'' he said.

Mr Sedlmaier called for a shift from monthly to quarterly business tax payments.

Economic Development Minister Andrew Barr told The Canberra Times the government was taking significant steps to support businesses in Canberra, including through nation-leading tax reform and removing red tape.

''Last year the ACT government abolished commercial land tax, lowered payroll tax and began phasing out insurance tax and stamp duty,'' he said.

Mr Barr said the Red Tape Reduction Panel was identifying regulations which imposed unnecessary burdens or costs, with the abolishment of motor vehicle registration tickets, providing for e-lodgement of rental bonds and introduction of a red-tape reporting website among early reforms.

A law passed on Tuesday also means a range of businesses, including real estate agencies, motor vehicle repairers and travel agents, can now apply for new licences every three years instead of annually.

Mr Barr said that despite higher than average failure rates - 40 per cent of businesses that started in 2008 were not operating four years later - during 2011-12 there was a net increase of 403 ACT businesses.

''This represents an increase in trading businesses of 1.6 per cent, which was the highest of all states/territories and four times the national change of 0.4 per cent,'' he said.