Concerned by what she considers a “poor business climate” in the ACT, deputy opposition leader Leanne Castley, Shadow Minister for Business, has called on the ACT Government to report on its measures to support businesses.
“The climate for businesses in the ACT under Labor has deteriorated, and the government is not helping,” Ms Castley said.
Business minister Tara Cheyne, however, said that the Canberra Liberals’ motion was “superfluous and pessimistic”: the ACT economy and business environment were in a “very positive position”, and the ACT Government had a “good track record in delivering responsible economic policy”.
Business investment is plummeting, according to the 2022-23 State Statistical Bulletin figures published by the Parliamentary Library last month. The ACT was the only jurisdiction where business investment fell into the negative (by 9.5 per cent – 10.2 per cent lower than any other jurisdiction), whereas other mainland jurisdictions had an average 7.2 per cent increase.
Nevertheless, the same report showed that Canberra’s economy led the nation in earnings ($2,021 per week), lowest unemployment (3.2 per cent), retail growth (13.1 per cent), and gross state product (4.3 per cent growth).
Ms Castley pointed to a Canberra Business Chamber survey that showed only 36 per cent of Canberra businesses expect to grow this year. Ms Cheyne noted, however, that was “a relatively minor shift”, a drop from 43 per cent, and that a third of businesses felt positive about current conditions.
Ms Cheyne acknowledged that ACT businesses were concerned by reduced customer demand; global uncertainty; the increased cost of doing business; attracting and retaining staff; and the federal government’s decision to reduce expenditure on contractors by more than $500 billion in 2022-23, which disproportionately affected the ACT economy. She said the ACT Government was working on those factors that were within its scope, “reflecting our commitment to improving the business climate”.
Corporate insolvencies jumped almost by half (to 85 in the half year to 31 December 2023, up from 57 the previous financial year), according to the Australian Securities and Investments Commission, Ms Castley observed. Yesterday, Project Coordination, an award-winning, 49-year-old building company, entered administration.
Ms Cheyne said there were fewer insolvencies than before COVID, but agreed that insolvencies had increased in the last six months. She said these increases were “marginal and restricted to a small number of sectors”. The minister attributed insolvencies to a reduction in stimulus measures that kept businesses afloat during the pandemic; challenging economic conditions; and a shift in debt collection policy by major banks and the Australian Taxation Office.
Ms Castley will call upon the government to outline measures it will take to support business in the ACT, alongside actions to ensure that ACT services are responding to small business enquiries.”
Last year, the ACT Government released its 2023–2026 small business strategy, designed to “support a dynamic and thriving small business community”. It brings together government initiatives and programs, and sets out targeted actions the government will undertake over the next three years.
“Unfortunately, this strategy is failing, with recent indicators showing a lack of confidence in business conditions,” Ms Castley said.
One priority, she noted, is to “improve the business experience when dealing with government”, and that businesses want to “tell their story once”.
For instance, Ms Castley, said, the most recent Canberra Business Chamber 2024-2025 budget submission called on the government to make it easier for business to deal with the ACT Government. “The focus should be on outcomes, not compliance processes, and officials need to be more accessible by ensuring that phones are answered, calls are returned and emails are sent from named individuals,” the Chamber had said.
The ACT Legislative Assembly is conducting an inquiry into Micro, Small, and Medium Businesses, reporting on ACT Government initiatives, taskforces, programs and budgets that assist Canberra businesses, Ms Cheyne said.
