7,606 decrease in the number of businesses in Victoria, says ABS report

At 30 June 2023 there were 2,589,873 actively trading businesses in the Australian economy.

The Counts of Australia Businesses, including Entries and Exits data released by the Australian Bureau of Statistics (ABS) shows how new businesses have declined from 2021 levels in various states.

At 30 June 2023 there were 2,589,873 actively trading businesses in the Australian economy. In 2022-23 there was a: 0.8% or 19,973 increase in the number of businesses; 15.8% entry rate, with 406,365 entries; and 15.0% exit rate, with 386,392 exits.

The ABS data shows that in 2023 there were 22,796 more business exits in Victoria when compared to 2021, which was greater than any other state or territory.

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  • New South Wales (+13,342)
  • Queensland (+7,610) 
  • Western Australia (+4,466)
  • South Australia (+3,421)
  • Tasmania (+671)
  • Australian Capital Territory (+604)
  • Northern Territory (+297)
  • Victoria (-13,326)
Image: Lachlan Clark, Research Fellow at the IPA (Source: IPA)

Lachlan Clark, Research Fellow at the the Institute of Public Affairs (IPA), said in a statement that their analysis of “ABS data confirms Victoria is closed for business.”

“Victoria is the biggest loser as the only state in the nation to experience a decline in new business startups over the past three years, no doubt set to get worse due the catastrophic failure of the state government’s energy policies.” 

Mr Clark adds:

“You can hardly blame would-be business operators thinking twice about starting a business in Victoria given the monumental economic mismanagement of the Victorian state government.”

Image: Annual percent change in businesses by industry division, 2022-23 (Source: ABS)

According to the ABS, in 2022-23 the three industries with the largest percentage increase in Australian businesses were:

  • Health Care and Social Assistance (increase of 6.1% to 185,260 businesses)
  • Financial and Insurance Services (increase of 2.7% to 123,266 businesses)
  • Transport, Postal and Warehousing (increase of 2.4% to 218,662 businesses)

Recently, Victoria’s Premier Jacinta Allan announced the state’s “first all-electric bus depot is home to the largest fleet of zero-emissions buses in the state.”

Experts at IPA says that this record is set to only get worse as businesses across Victoria brace for further system-wide blackouts on the back of the state government’s failed energy policies, which include a constitutional ban on gas exploration and an unachievable 95% renewables target by 2035.

Image: Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra (Source: LinkedIn)

Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra declared:

“If we start to question the availability of energy in a reliable and affordable sense, that will be the nail in the coffin for some businesses. They’ll make the decision to move out of Victoria, and we’ll be poorer for it.”

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The industries with the largest percentage decrease in Australian businesses in 2022-23 were:

  • Administrative and Support Services (decrease of 1.6% to 120,630 businesses)
  • Retail Trade (decrease of 1.4% to 155,755 businesses)

Previous IPA research on the growth of red tape and regulation across all states and territories found that regulation in Victoria has grown faster than anywhere else in the country.

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