The ACT recorded the weakest business growth rate of any mainland jurisdiction in 2024–25, according to new Australian Bureau of Statistics figures.
Nationally, business numbers rose by 2.5 per cent, but in the ACT growth was 1.9 per cent — ahead only of Tasmania.
The ACT’s business entry rate of 17.4 per cent was above the national average of 16.4 per cent, but its exit rate was the highest in the country at 15.1 per cent, compared with 13.9 per cent nationally.
The ABS data shows 6,335 new business entries in the ACT during the year (lower than 6,591 in 2021-22), but 5,469 exits (up from 4,438 in 2021-22).
That left a net increase of 679 businesses, well below recent years: almost half the 1,214 businesses added in 2023-24, 1,289 in 2022-23, and less than a third of the 2,311 in 2021-22.
Opposition leader Leanne Castley MLA said the figures confirmed it was becoming harder to run a business in Canberra, due to 25 new and higher taxes, rates, rising insurance premiums, and energy costs.
“There’s strong growth rate of businesses across the country which is fantastic, but the reality is that more and more ACT businesses are not surviving,” Ms Castley said.
Shadow business minister James Milligan MLA warned that some firms were already relocating interstate, particularly in the building and construction sector.
“There is a real risk that businesses that can operate in other jurisdictions will take their businesses out of Canberra,” Mr Milligan said.
The ACT Government emphasised longer-term growth, noting that the number of businesses in the territory had risen by more than 5,400 over the past four years to reach nearly 37,000.
A spokesperson said this represented the fastest compound growth rate in the country at 4.1 per cent, above the national average of 3.2 per cent. This was underpinned by continued GDP growth, record employment, rising real wages, and the fastest business growth in Australia, the spokesperson said.
Government programs such as Access Canberra’s Business Assist Team and the Canberra Business Advice and Support Service support business longevity and help Canberra’s businesses operate and grow, the spokesperson said.
“The ACT Government is committed to ensuring Canberra remains an attractive place to do business,” the spokesperson said.
“The ACT Government understands the significant contribution local businesses make to the economy. Private enterprises represent a critical part of the ACT’s diverse economy and are a driver of our economic performance, our community’s wellbeing and a significant employer.”
Canberra Business Chamber CEO Greg Harford said the latest statistics confirmed the business environment was “challenging”: only half the Chamber’s members expect to make a profit this year.
Mr Harford said businesses faced pressures from the cost of doing business (including insurance, wages, rates, rents, and payroll tax); labour shortages; economic conditions; and disruption in the city centre.
“The Canberra Business Chamber wants to be the greatest place in Australia, but is concerned about the failure rate that we are seeing,” Mr Harford said.
Fiona Carrick: Light rail to Tuggeranong
Independent MLA Fiona Carrick has called on the ACT Government to clarify how it intends to future-proof Athllon Drive for a potential extension of the light rail network from Woden to Tuggeranong.
The Government has lodged a Development Application (DA) to duplicate Athllon Drive one of Canberra’s key north-south transport corridors. Although Labor’s policy is to deliver light rail to Tuggeranong, the DA proposes new bus stops, but does not reserve space for the light rail line down the middle of Athllon Drive.
Ms Carrick warned that the omission risked saddling taxpayers with higher costs later. She said that if Athllon Drive had to be moved to make space for light rail, it could involve significant additional expense. An alternative option — running the tracks along the side of the road — would introduce extra traffic signals at intersections, inconveniencing commuters and residents.
The government said its focus remained on completing light rail from Civic to Woden.
Planning for later extensions, such as Woden to Tuggeranong, has not yet begun, making it unfeasible to include preparatory work in the Athllon Drive duplication project. However, it would be able to accommodate a light rail network connection.
City infrastructure works
Walking paths and cycle lanes on London Circuit between Constitution Avenue and Edinburgh Avenue will open this weekend following completion of the Raising London Circuit project.
Another 120 parking bays in the City Hill car park will reopen later this week.
Work continues on the western side of London Circuit, between Commonwealth Avenue and Edinburgh Avenue, as part of Light Rail Stage 2A.
Site establishment and early works for the new lyric theatre at the northern end of the Canberra Theatre Centre will begin in mid-October. The theatre will be built on the site of the current Theatre Lane car park, which will close, as hoarding and site sheds are installed. Accessible and permit parking will be relocated.
More than 5,000 car parking spaces remain available across the city. Free parking is offered at public car parks Wednesday to Sunday evenings from 5:30 pm. An extra 280 spaces have opened in the new Nangari Street car park.
