SA small business survival rates ‘too low’

South Australia's Small Business Minister, Jane Lomax-Smith, said yesterday that too many of the state's small businesses are failing and survival rates must improve. With 96 per cent of the state's companies classed as “small”, their performance is going to have a big impact on SA's overall economy, she said. She promised to try to remove impediments for SA's 78,000 small businesses, such as resistance to investment in SA, access to capital, setting-up costs, cash flow, employment, compliance and the costs of doing business.

Business SA said that the costs of doing business in the state outweigh those in other states, with payroll tax the major disincentive. Payroll tax in SA stands at 5.67 per cent, with a threshold of $504,000, compared with Queensland, which has the lowest payroll tax at 4.8 per cent and a threshold of $850,000. Business SA's CEO Peter Vaughan said that the cost of doing business in SA is critical to attracting investment. He listed other issues such as staffing costs, liability insurance, an untrained workforce, electricity costs, a limited market and the “inflation of superannuation contributions”.

Euan Miller, GM of the Business Enterprise Centre of SA, said that most small businesses fail within five years. We help 1,200 people start businesses every year, he said, and on top of that we talk another 1,200 out of it. A further 1,200 start up anyway despite our advising against it.

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