Australia’s self-employment rate has fallen sharply since the early 2000s. This report shows a fall in unincorporated self-employment aligns closely with changing labour market incentives. Unincorporated businesses that employ workers experienced the greatest decline, while solo self-employment fell modestly and the share of company owners grew. The patterns are interpreted as reflecting two broad trends.

Government policy often supports small businesses through lower taxes, lighter labour regulation and grants. Yet this paper finds it is actually young firms that play the most outsized role in economic dynamism in Australia. Using firm-level microdata, the paper draws out this important distinction between firm size and age in firms’ economic contribution, highlighting three...

The New South Wales JobSaver program was a job retention scheme that supported businesses and workers during the 2021 COVID-19 lockdowns by subsidising a proportion of firms’ payroll expenses. But like the federal JobKeeper program, it may have preserved jobs during the lockdown at the cost of poorer future labour market outcomes for the workers...

This report questions whether payroll taxes affect firm growth by examining a recent cut in South Australia’s payroll tax rate for small businesses. The tax cut may have been counterproductive because it introduced a sharp increase in tax rates for firms with payrolls between $1.5m and $1.7m which made it less attractive for firms to...