- Tradies and consultants in NSW are the most confident in Australia - but QLD and WA still struggling
- "Lockdown-like" consumer hesitancy is having a negative impact on sole traders, with reports of cancelled contracts
- Latest Sole Trader Pulse by specialist accountancy service Hnry and Resolve Strategic tracks the sentiment, views and experiences of Australia's 1.5 million sole traders
Monday, 14 March 2022 – Australia's sole traders are moving past the bulk of the economic damage and uncertainty wreaked by COVID-19 with new data showing confidence is on the rise.
But the Delta and Omicron waves have come at the cost of mental health, as excessive red tape and expensive - and time consuming - tax filings as well as a burdensome tax rate present additional headaches for sole traders.
The Hnry Sole Trader Pulse, conducted in the first week of March, recorded a 13% boost in sole trader sentiment compared with October, a period when the nation was still contending with border closures, on the cusp of the Omicron outbreak and a further wave of long lockdowns lay ahead.
Sole traders in NSW reported a 22.5% in overall sentiment, indicating that the NSW Government's decision to press ahead with opening up as well as a falling or steady rate of Covid cases are having a positive effect on business optimism.
This compares to a 17% increase in Victoria and a 9% increase in Queensland.
Conducted by Resolve Strategic between 28 February and 6 March, the Hnry Sole Trader Pulse is Australia's only regular and reliable survey of independent earners with an ABN, such as tradies, freelancers, and consultants. The research is carried out on behalf of fintech Hnry, Australasia's largest and fastest-growing digital accountancy service catering expressly to sole traders.
The rise in reported confidence for the nation's independent earners – a fast growing and crucial sector of the national economy – was juxtaposed by less rosy news.
The survey also found that:
· More QLD and WA sole traders rated the economy as poor rather than good;
· Creatives and gig economy workers say they are still going backwards financially with 60% of gig workers and 36% of creative freelancers rating their business performance as poor last quarter;
· This is affecting their mental health with one in three gig workers rating it as poor;
· "Lockdown-like" consumer hesitancy is having a negative impact on sole traders.
· More than 50% said they had clients "cancel or defer work due to Omicron" and 53% of respondents rated current business conditions in the period as "similar to being in lockdown"
Sole traders also reported they find doing their taxes and BAS filings burdensome – spending an average of six hours a week and $300+ a month on managing their tax admin and financial admin.
Sole traders have a clear message and request of the Government ahead of the Federal Budget on 29 March is for a simplified tax system; encourage and support training and; lower income taxes.
Karan Anand, Head of Hnry Australia, said:
"We are pleased to launch the results second survey of the Hnry Sole Trader Pulse and the outlook for plucky self-employed Australians is increasingly more confident, but the sector is not without its challenges," Mr Anand said.
"The Pulse tracks provides a valuable economic snapshot of a diverse cross section of Australia's self-employed which has previously largely been an underrepresented cohort.
"We know that recovery will be uneven and sole traders should be supported by both governments and the community as they look to brighter days. In particular, reducing red tape, and making tax easier are two things our respondents were united upon.
"We know through our work at Hnry that once financial administration becomes far easier, so too does the burden lessen on the sole trader, leaving them more time to pursue their professional passions.
"We also know Australia's sole traders possess the know-how and the drive to propel themselves to overcome challenges in their everyday operations," Mr Anand said.
"The things that have always been attractive about the sole trader life - freedom, work/life balance, self-starting and self-reliance - remain so.
"If small businesses are the backbone of the economy, sole traders are the backbone of the small business sector. Some 1.5 million Australians classify their primary occupation as "self-employed", with total estimated earnings of around $90 billion a year. The number of sole traders is currently growing at a rate of 50,000 per annum."
