Both major parties are zeroing-in on Trump’s tariffs and cost of living relief this election – yet continue to leave a critical item off the political agenda.
Sole traders – who represent 10% of our workforce.
Australia’s 1.6 million independent earners have always been lumped into the ‘small business’ category. But when ‘small’ can mean up to 200 employees under SME definitions, it’s no surprise that political attention skews toward the larger end of the spectrum. That leaves a huge number of workers feeling forgotten – from the tradie who fixed your fence, to the nurse at your local clinic, or that freelance wedding photographer – even though they make up over 60% of small businesses.
The Federal Budget has offered little support for the self-employed and the Coalition has merely tabled a business lunch tax deduction, so it isn’t surprising sole traders are hungry for more. With Australians heading to the polls in few weeks, can either party really afford to continue ignoring a sector contributing $104bn to our GDP every year?
Start with the majority
If either party wants to be the real champion of small businesses, they need to address their sole trader majority – and look at the facts.
We speak to self-employed Australians every day and poll a representative cohort each quarter to track pressures, opportunities and sentiment across the workforce. When we recently asked which policies would make the biggest difference this election, three clear takeouts emerged – and they’re all within reach.
1. Incentivise this essential sector
Sole trading is a vital lifeline for the economy. In times of growth or pressure, it gives industries the flexibility to respond fast – mobilising skilled contractors, from tradies to locum doctors, without the delays of big business.
But to ensure industries can readily tap this critical resource, the government must incentivise independent earning and remove some of the financial barriers that prevent more from going solo.
Lower income tax rates for high-demand and high-skilled industries – such as healthcare and construction – would make these fields more attractive to work in and drive supply. As the most flexible part of our workforce, contractors would be the first to fill these holes.
Several other OECD countries have successfully addressed critical skills shortage by segmenting under-served sectors through similar tax incentives – with 62% of those polled in favour of Australia doing the same.
2. Plug the gaps
Where sole trading directly fuels our economy, it also pays personal dividends – 64% say they feel satisfied in their work and 60% report a good work-life balance. Yet the other side of the coin is an irregular income, no sick leave or employer-paid super, leaving sole traders more vulnerable to economic instability – disproportionately feeling the impact of everything from Cyclone Alfred to a potential international trade war.
The government has the tools to create a more stable foundation for this sector to ensure it remains strong and steady. A national income protection scheme to cover illness or injury would provide a backstop to keep sole traders from falling through the cracks (favoured by 82% of sole traders).
Plus, 77% of sole traders back a reduction in the superannuation tax rate from 15% to 10% for the self-employed. With 54% of sole traders pausing their super contributions in Q1 this year to help make ends meet, this change could be critical in helping them avoid mortgaging their tomorrows.
3. Take sole traders seriously
The conflation of small businesses and sole traders is leaving our independent workforce on the margins – with only a quarter (24%) feeling well-represented by policymakers ahead of the election.
If Canberra wants to back the engine room of the economy, then it needs to acknowledge the unique shape of that engine. Creating a dedicated Minister for Small Business & Sole Traders – a title change supported by 61% of sole traders – would send a clear signal that this sector matters.
Bringing sole traders into the fold will also spur political parties to optimise policies that actually work for them and avoid misguided initiatives like business lunch tax deductions – which more than half (56%) of sole traders feel would make little or no difference.
It’s time to back the backbone of our economy
Sole traders’ demand for change follows a rough economic landscape marked by ongoing inflation and soaring costs. Yet true to form, they’ve adapted – with 75% cutting costs, 66% embracing new technologies, and 49% diversifying their businesses to continue to thrive.
But resilience shouldn’t be mistaken for invincibility. Imagine what this sector could achieve with real support? This looks like incentivising vital sectors, more superannuation support and giving sole traders a seat at the table – initiatives that many other OECD countries already have in place.
This election, both parties have a clear choice: continue sidelining the majority of small businesses or commit to policies that unlock the full potential of the workers keeping our industries flexible and responsive.
Sole traders have shown up for the economy. Now it’s time the government showed up for them.
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