Government data reveals sole trader registrations are on the rise in 2014, while private company registrations have slipped for the first time since 2008.
Sole trader registrations made up 57% of all new businesses registered for the year ending May according to Australian Business Number statistics from business.gov.au, reports News Corp.
This figure is the highest in years, and is beaten only by 2007 when 58% of new ABN registrations were for sole traders.
Across the capitals, Sydney is leading in the sole trader stakes with 1152 new registrations, trailed by Melbourne on 672.
On a state-by-state basis the gap is more in line with population, with NSW on 44,402 and Victoria sitting at 37,906.
While Western Australia is blitzing South Australia and the Northern Territory with state totals of 15,922, 8731 and 1170 new registrants respectively, there have been only 273 new sole trader registrations in Perth, compared to 225 in Adelaide and 147 in Darwin.
Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany the rise in sole traders could be linked to economic worries.
“It’s a confidence thing, when people are so unconfident about the economy they will think more about running their own business,” says Strong.
“Perhaps there are people who have been retrenched, but I think it’s a confidence thing,” says Strong. “It could be the budget, although small business in the main didn’t have much to complain about.”
Federal Small Business Minister Bruce Billson told news.com.au the increase in sole trader registrations is linked to the change of government, while opposition spokesperson Bernie Ripoll said he was concerned government cuts to small business programs could discourage startups.