Have you noticed more empty shopfronts in your suburb? And big chains popping up everywhere, especially in new estates?
Well, you’re onto something.
Small businesses once dominated the Australian landscape but are in decline as the corporate plague continues its spread and absorbs greater chunks of the labour force.
In 2008-09, nearly half (46%) of all Australian private-sector workers were employed by a small business – i.e. organisations with fewer than 20 employees. By 2025, this figure had dropped to 39%.
On the flip side, the percentage of workers in large businesses – organisations with over 200 workers – increased from 29% to 36% of private-sector employment over the same timeframe. People employed by a small business hasn’t fallen in absolute terms; it’s grown from 4.6 to 5.2 million, and of that 1.5 million are sole traders. The decline is in share, as large businesses grow faster.
On current trends, large business is on track to overtake small business as Australia’s predominant private-sector employer segment. As its share of employment grows, so does the influence of the handful of CEOs who run these major corporations.
Corporate concentration
Politicians love talking up ‘growth in small business’. An election campaign photo with a pint at the pub or a local café is worth its weight in gold. But, as usual, this impression skews the facts. Consider this disturbing stat: just 0.2% of businesses generate 44% of total private sector revenue!
By many measures of market competitiveness, Australia skews heavily toward big business. The four-firm concentration ratio (CR4), which measures the share of industry sales captured by a sector’s four largest firms, has risen across much of the Australian economy. Over 30% of industries recorded an increase of more than 5 percentage points between 2007 and 2020. This means more corporate concentration, less competition and fewer choices for workers.
Governments make life hard for small businesses
Voters were long led to believe that the Liberal Party was the best friend of small business and Labor the advocate for workers. Neither are true.
Governments of both colours have overseen the expansion of corporate power at the expense of small business, often through tax settings.
For example, payroll tax. Every state charges a payroll tax once a business’s total wage bill crosses a threshold. Major corporations like Coles and Woolies can absorb the tax, but for small businesses operating on a much smaller scale, the tax can impose a limit to growth.
When South Australia lifted its payroll tax threshold in 2019, businesses visibly rearranged themselves – i.e. “decreased their use of labour” – to fall below the threshold and avoid the tax rate. Economic researchers at the e61 Institute criticised the policy as “a material barrier to firm growth”. Small businesses think twice about the extra hire that might incur a tax they can’t afford.
Multinationals also have the luxury of borrowing money from their offshore entities, charging themselves interest and then writing off that interest on tax. This is why so many multinationals barely pay tax in Australia – a total rort enabled by Labor and the Coalition.
On the ATO’s own transparency data, Santos went 10 years straight without paying a cent of company tax, on almost $47 billion in sales. The oil giant has “hundreds of subsidiaries” with more than a dozen in “known [overseas] tax havens”. And it uses this complicated web to borrow money from itself “for profitshifting and tax minimisation”.
Small businesses don’t have overseas subsidiaries to borrow from. They pay the full tax rate while competing against huge multinationals who do not.
Corporate power is a net negative for democracy
The concentration of corporate power coupled with a cost-of-living crisis has tilted the power balance in favour of employers. When your job is the only thing keeping a roof over your head, you don’t argue with your boss. And when you’re working for one of four companies in your industry, you don’t just lose a job – you lose a sector.
We’re seeing how diminishing worker power is playing out. Bosses are increasingly determining what you can and can’t say openly, and exerting control over aspects of your life beyond the time you spend at work.
We have seen instances of this with regards to the genocide in Palestine, where ‘social media guidelines’ and ‘bringing the company into disrepute’ have become instruments for restricting the free speech of workers (even on their own time).
The situation is made worse by the lack of muscle workers have to push back. Union membership has fallen from 58% of employees in 1975 to 13% today. Among workers aged 20 to 24, it’s just 7%. A whole generation is about to enter a labour market controlled by a few CEOs with no collective strength.
Small businesses don’t fix this because small bosses are necessarily kinder. Plenty aren’t. It fixes it through cold, hard numbers. The more businesses employing people, the less power in the hands of a few CEOs and billionaires. More choice for hardworking Australians means fewer constraints on their free speech. That’s how democracy is supposed to work, right?
