THE Canberra Business Chamber is calling on the ACT government to urgently address the high rate of business closures in Canberra.
According to the chamber, the ACT has the lowest long-term business survival rate in the country. Only 62.5 per cent of ACT startups will continue operating after five years, which is below the national average of 65.1 per cent, chamber CEO Graham Catt said.
To prevent these closures, Mr Catt said the government needs to fund critical sector research and deliver a detailed strategic plan for business growth
He made the call to the government as part of the chamber's 2021-22 ACT Budget submission yesterday (June 15).
The submission called on Chief Minister Andrew Barr to allocate funding for a regular survey of the local business community and economic conditions, similar to the work done in the UK by the Open University.
The lack of meaningful data around the underlying issues threatening the long-term survival of the territory’s small to medium-sized businesses presented a significant barrier to economic recovery in the ACT, he said.
“During the peak of covid, it was to be expected that business closures would occur, but even before the pandemic, we had a trend of unusually high failure rates compared with the rest of Australia, Mr Catt said.
"This shows no sign of reversing, and unless we have a strong understanding of the impediments to running sustainable businesses, and the policy measures in place to address them, exit rates will continue to grow.”
Mr Catt said the ACT government’s "Jobs & Economic Recovery Plan" acknowledged the leading role the private sector would play in jobs growth in the ACT, but to achieve the plan’s projected 250,000 jobs by 2025, high-quality data, along with a business growth strategy addressing sector targets, future skills and labour demand, and the development of educational and training facilities was essential.
“Planning ahead is critical if we want to achieve business and jobs growth,” Mr Catt said.
“We hear time and again from our members that skills and labour shortages are threatening their livelihoods and this is just one of the issues that needs to be urgently addressed through a combination of clever strategy and compelling sector data.”
Mr Catt said about 98 per cent of territory companies were small or micro-sized.
“They are the backbone of the ACT. The only way to stop the closure rate is to have a clear plan for the future — to understand what the problems are, and have the policies in place to fix them,” he said.
Who can be trusted?
In a world of spin and confusion, there’s never been a more important time to support independent journalism in Canberra.
If you trust our work online and want to enforce the power of independent voices, I invite you to make a small contribution.
Every dollar of support is invested back into our journalism to help keep citynews.com.au strong and free.
Ian Meikle, editor