ACT has the lowest business survival rate, ABS shows

Data from the Australian Bureau of Statistics has shown only 62.5 per cent of businesses that were operating in the territory in June 2018 are still in operation.

This was the lowest of the states and territories but the national average survival rate was only 65 per cent.

In June 2018 there were 27,519 businesses in the territory and only 17,192 of those still exist.

The highest survival rate was in Tasmania at 68.4 per cent. The second lowest survival rate was in Queensland at 64.3 per cent.

While the survival rate of businesses was low in the ACT, the number of businesses in the territory grew by 7.7 per cent over the past year.

This was the second highest of all jurisdictions. Victoria was the highest with a 10.9 per cent growth.

The number of businesses in the ACT increased by 2419 to 33,918.

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Business Minister Tara Cheyne said the ABS figures showed the territory was an attractive place to start a business and the growth showed the strength in the economy.

Ms Cheyne was asked about the survival rate figures in budget estimates on Thursday afternoon. She said this could be reflective of the innovation in the ACT.

"It is easy to look at survival or business exits as a negative but I think we are very aware in the ACT and we encourage an environment of innovation, of trying new things and doesn't necessarily mean that every business will survive," she said.

"It may well be that the business ends and that same proprietor begins another business soon after."

Opposition business spokeswoman Leanne Castley questioned whether the growth figure mattered when the survival rate was so low.

"I don't understand when you speak, it's almost like we don't expect businesses to survive is almost a positive because 'don't worry we've got more being created'," Ms Castley said.

Opening in July 2021, "with a bang", Braddon restaurant Corella has felt every twist and turn of the last year.

"This year has been a bit of a funny one," said one of the owners, Brady Scholes.

"January and February were almost non-existent for us, and then March was pretty good, and then sort of this whole winter has been quite quiet.

"A lot of businesses around the Australia have had to shut because of the last two years ... just don't take little places for granted because they might not be there for a long time."

Australian Hospitality Association ACT general manager Anthony Brierley said it wasn't typical for business owners whose first venture failed to try again.

"When people are burnt they're burnt, but when people go well, they often reinvest in Canberra and expand and employ more people and offer more goods and services," he said.

The trends observed "had been relatively common for the past couple of years".

"Canberra can be a really good place to start a business, it just means we've got more work to do because Canberra isn't always the best place to run a business," he said.

While other states and territories have a high barrier to entry into the hospitality market, that isn't the case in the ACT, Mr Brierley said.

"You can spend hundreds of thousands of dollars on the fit-out, training staff and getting ready to trade ... and then someone can replicate your business model two doors down and there goes half your trade," he said.

Canberra Business Chamber president Graham Catt said the data showed clearly that the ACT needs to do more to ensure new businesses survive.

"It is exciting to see a lot of start-ups, but these closures represent a huge amount of lost money, energy, and jobs," Mr Catt said in a statement.

"The message is clear - that the ACT needs to get much better at supporting small businesses to ensure their long-term survival."

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