One of the many great things about being the member for Wakehurst is getting to meet so many small business owners across the electorate. They are highly motivated people who have a vision and make things happen. Some run established businesses and have spent years building a reputation and a community of staff. Some are taking the bold step to start a business, test an idea and try to make a dream reality. Some have set up a small business and have ambitions to make it bigger and employ more people. On the northern beaches, there are 32,905 local enterprises that create over 116,000 jobs. When meeting local small business owners, I am so impressed, again and again, by their drive, astuteness and genuine desire to contribute to a thriving local economy. That was certainly the case when I recently met with Scott Koch, who runs Event Hire Services out of a warehouse in Frenchs Forest. His business supplies hire equipment for all types of government, corporate and private events in Greater Sydney and across the State. He explained the current climate in the following terms:

"The rising cost of doing business in NSW is placing unsustainable pressure on small businesses, particularly in the events and hospitality sector. From the increasing payroll tax burdens and the continual rise in Fair Work casual employment rates, to the lack of transparency and monopolistic structure of the iCare insurance system—it's becoming harder each year to keep our heads above water. While we are proud of the work we do and the people we employ, these compounding costs are making it harder to invest in our teams, grow sustainably, and contribute meaningfully to our local community. We need structural change—Each year, we're forced to either pass costs on to our customers or more likely absorb the impact ourselves to remain competitive, which erodes profitability and long-term sustainability."

Scott painted a concerning picture of structurally rising operating business costs. The key costs were business and workers compensation insurance, rent, wages and payroll tax. Feedback like that is consistent across the small and medium businesses I meet and reflects broader statewide challenges. Running a small business is always challenging. The challenges appear to be increasing. This was recently confirmed in the Business NSW quarterly business conditions survey, which reported:

"The resilience of the NSW business community is being tested. Rising insurance and wage costs, skills shortages, a broken workers' compensation system, the AI revolution and an outdated tax system which disincentivises investment and entrepreneurship all weigh heavily on businesses."

The issues I will particularly touch on today are the structure and operation of icare, the New South Wales workers compensation scheme, the static New South Wales payroll tax threshold and the recent defunding of the Business Connect program. Following the Government's announcement that icare insurance premiums could increase by 36 per cent over three years, even for those with no claims against them, nearly half of Business NSW survey respondents reported that they would reduce headcount, and one in five reported that their business would no longer be viable.

Many credible sources, including the Auditor-General of New South Wales, have identified ongoing concerns about icare's performance. These include premium volatility, with employers with no or low claims still experiencing rising premiums; a lack of transparency, with many small businesses reporting difficulty in understanding how premiums are calculated; and limited accountability, with the monopoly structure limiting the ability of employers to seek alternative coverage, even where performance has been unsatisfactory. Larger employers may apply for self-insurer status, but this is not an option for most small and medium enterprises. Without changes, these businesses will continue to face inflexible and opaque pricing in a system with limited avenues for redress. I am pro-business, and I support the reform to our workers compensation scheme to make the scheme sustainable and reduce the impost on small and medium business.

Another cost that impacts many businesses and disincentivises them to invest and grow is payroll tax. I note that our State's payroll tax threshold has remained static at $1.2 million since 2020, despite increases in wages and inflation. Based on current average salaries and, depending on industry, this threshold captures businesses with as few as 10 to 12 full-time equivalent staff. New South Wales now has one of the lowest payroll tax thresholds in Australia, despite having one of the highest payroll tax rates. I understand the Government's fiscal position, but I believe that commencing annual indexation of our payroll rate threshold will, in some way, reduce a disincentive for businesses to hire, upskill and retain staff.

Finally, I express my disappointment about the decision in the New South Wales 2025-26 budget to defund the Business Connect program. Since 2017 this program has offered up to eight hours of tailored, one-on-one advisory sessions each year, covering business planning, marketing, financial management, digital tools and more. On the northern beaches, over 140 businesses have benefited from support through this program. Northern Beaches Council recently passed a motion requesting funding be reinstated to this important program. I urge the New South Wales Government to listen to councils and communities and reverse this short-sighted cut.

08 August 2025, 16:22.

Read the Hansard here