Nearly half of all Australian small businesses have faced the prospect of shutting down in the past year, according to newly released findings of an industry survey of the sector.

Small businesses “in crisis”

The Australia Chamber of Commerce and Industry’s (ACCI) 2024 survey on conditions faced by the small businesses found that 45 per cent of owners have considered closing during the past 12 months. Furthermore, 40 per cent said that their profits were falling.

ACCI chief executive officer Andrew McKellar said that small businesses were in crisis and being forgotten by legislators and regulators.

“Small businesses are the backbone of our economy. However, our new survey shows the dire conditions they face they and are often a second thought when it comes to policy making, legislation and regulations,” Mr McKellar said.

Red tape the biggest challenge

Overwhelmingly, small businesses identified red tape as one of their key challenges with 82 per cent saying that it was having a major or moderate impact on their business.

The cost of compliance was the greatest expense facing small businesses after costs related to skills shortages, the survey found. The survey found that 50 per cent of small businesses were spending more time and money on regulatory compliance than they were a year ago.

“Small businesses need more consideration from governments, especially when they decide to change rules and regulations. Governments tend to be very good at introducing new regulations but not so good at explaining those changes,” Mr McKellar added.

Industrial Relations laws a looming threath

Mr McKellar also flagged the federal government’s changes to IR laws as a potential problem area.

“We have yet to see the full impact of the government’s industrial relations laws flow through, but small businesses are very worried about the potential for unions to interfere with their decision-making,” he said.

The full findings of the survey can be found here.