Why business closures in the bush have risen in 2019?
BUSINESSES in regional NSW remain the hardest hit when it comes to operating a business.
That's been the finding of the Business Conditions Survey, released by the state's peak business body, the NSW Business Chamber today.
"While this survey reveals some signs of stabilisation compared to previous quarters, business conditions remain challenging across the state," the NSW Business Chamber's Mid North Coast Regional Manager, Kellon Beard said.
"Like the rest of Australia, NSW's growth potential is hampered by relatively weak household demand.
He said the survey showed industries such as construction, retail and food services have been among the weakest.
"Record low interest rates, a more competitive exchange rate and income tax cuts may eventually boost growth, however business conditions remain subdued and are clearly being affected by the drought and concerns with respect to international trade," he said.
The survey found the drought has taken an immeasurable toll on the state's economy.
"It's no surprise that the Far West and New England areas recorded the lowest results as they are dealing with the crippling drought and the impacts that it is having on the entire supply chain," Mr Beard said.
"Here in the Mid North Coast region, the survey indicated that the economy has slowed from previous reports.
"The chamber is again calling on all levels of government to recognise the plight and challenges of drought affected areas of regional NSW.
"We need measures and initiatives to address immediate water requirements, but also investment in measures that ensure greater water security and economic sustainability for the future.
More broadly speaking, the Australian Securities and Investments Commission in June stated the number of companies entering external administration increased by 11% last year.
The Australian Bureau of Statistics has found that more than 60% of small business stop their operation within the first three years of their start-up journey, but more recently long established businesses have also caught up by economic downturn.
Therefore, the Business Chamber is pressing the State Government to deliver regional NSW it's fair share of the slush fund from the poles and wires privatisation.
"The Chamber has advocated that the full 30% of funds raised from the long-term leasing of the poles and wires and promised to be spent in regional areas actually happens and, in fact, is expedited to bring jobs and economic stability to the regions," Mr Beard said.
"Energy costs also remain a concern for many businesses with elevated electricity and gas bills continuing to squeeze margins and reduce the capacity to invest in capital and other resources that would assist in increasing productivity and output.
"The cost of energy for businesses is one of the reasons the NSW Business Chamber is so pleased to partner with the Australian Government on the recently launch Business Energy Advice Program (BEAP), which helps businesses find a better energy deal, and then uses real time data to advise on best practice energy efficiency.
"NSW is an economy that depends on small business so we need to heed the warnings from those on the frontline."