Confidence amongst Australia’s sole traders is on the rise despite the impact of lockdowns and cancelled contracts, according to new research by specialist accounting solution, Hnry.
The findings from the latest Hnry Sole Trader Pulse reveal the views and experiences of the nation’s sole traders. The latest data suggests the majority of sole traders are making tentative steps out of COVID uncertainty and business confidence is on the rise.
According to Hnry there has been a 13 per cent 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.
COVID uncertainty impacts sole trader mental health
While business confidence may be on the rise, the impact of extended lockdowns, cancelled contracts and economic uncertainty has seen many sole traders struggle with mental health.
One in three elf-employed reported their mental health as poor, as the burdens of the Delta and Omicron waves impacted.
Sole trader confidence varies state by state
Sole trader optimism also hinged on location. Sole traders in NSW reported a 22.5 per cent rise in overall sentiment, compared to a 17 per cent increase in Victoria and 9 per cent in Queensland.
The findings suggest the NSW Government’s decision to reopen despite Omicron, as well as a falling or steady rate of COVID cases, are having a positive effect on business optimism.
While sole trader sentiment seems to have shifted as COVID moves from a pandemic to endemic, the majority of self-employed are still feeling the impact of a slowed economy.
Soloists in WA and QLD described the economy as poor. While “lockdown-like” consumer hesitancy is having a negative impact. More than 50 per cent of soloists said they had clients “cancel or defer work due to Omicron” and 53 per cent of respondents rated current business conditions in the period as “similar to being in lockdown”.
Times are tough for creatives
While the pendulum may be swinging to positive, creatives and gig economy workers say they are still going backwards financially, with 60 per cent of gig workers and 36 per cent of creative freelancers rating their business performance as poor last quarter.
The self-employed 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 uniquely challenged
Karan Anand, Head of Hnry Australia, said the outlook for self-employed Australians is increasingly more confident, but the sector is not without its challenges.
“The Pulse provides a valuable economic snapshot of a diverse cross-section of Australia’s self-employed, which has previously largely been an underrepresented cohort.
Anand praised sole traders for their ability to overcome challenges but suggested more could be done to assist the self-employed in recovering from the impacts of the pandemic.
“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,” Anand said.
“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. And the number of sole traders is currently growing at a rate of 50,000 per annum.”
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