Australian Business Number registrations grew exponentially last year, likely due to the rise in sharing economy services such as Foodora, Deliveroo, Airtasker and Uber, but also a renewed push by the federal government for Australia to become an innovation nation.
That’s according to Australian business and domain name registration service Veromo.com, which has analysed data released by the government showing a massive 36 per cent increase in Australian Business Number registrations during 2016 when compared to the year prior.
Meanwhile, Australian Company Number registrations slowed in growth. Year-on-year growth for ACN registrations for the seven years prior to last year has typically been between 3 and 10 per cent, but only grew by 1 per cent in 2016 to reach 244,795 registrations. For the seven years prior to last year, ABN growth has been between -6 per cent and 8 per cent.
“Last year was a huge year for Australian Business Number registrations, with 883,740 ABNs registered,” said Veromo.com co-founder and director Luscheyne Mellon.
“That’s a massive 36 per cent increase on 2015 and also a record in growth for the past decade, with previous years only showing ABN growth of between -7 and 8 per cent.”
What is behind this surge in ABN growth?
Ms Mellon attributed some of the spike in ABN growth to the rise of sharing economy services in Australia and the move away in some industries from full-time and part-time work to contracting.
Ms Mellon added that another likely factor for the rise was a direction issued by the Australian Taxation Office in 2015 to sharing economy workers and Uber drivers, which stated that they needed to register for an ABN to participate. Further, the recent push and advertising campaign by the federal government to embrace the “Ideas Boom” was also a likely factor, Ms Mellon said.
“When you drill down to the month-by-month figures, you see that July, August, September and October 2016 accounted for the most number of registrations over the period,” Ms Mellon said.
“At first we thought the spike in registrations in the second half of 2016 might have been unrelated to the federal election held in July and Malcolm Turnbull’s innovation nation push. But when we looked back at 2015 for the same period, we noticed there was only a spike in July, which is the start of the new financial year; it quickly fizzled out after the new financial year.
“In 2016, however, registrations continued to grow beyond July.”
Top suburbs for business creation
Veromo.com has also revealed the top suburbs for business creation in 2016.
While Sydney, Melbourne and Brisbane’s CBD came in up top (in that order), places like Werribee and Hoppers Crossing in Victoria, Toowoomba in Queensland, and Liverpool in NSW emerged as hotspots for ABN and Australian Company Number registrations in 2016.
Surfers Paradise in Queensland, Dandenong in Victoria, and Surry Hills in NSW also ranked highly for ABN and ACN registrations, with Surry Hills fast becoming the home for many of New South Wale’s technology startups in particular, including Veromo.com itself.
Ms Mellon said NSW was still easily leading Victoria for all forms of business registration combined, although she said the gap between the two states was closing.
“NSW appears to have many more larger companies (almost double), but only just beats Victoria for individual/sole trader entities (larger by 15 per cent),” Ms Mellon said.
“This outlines the different business environments and cultures between the states and cities. Sydney is the global and financial hub of Australia, with a higher concentration of large, multinational corporations,” she said.
“Industries that are concentrated in Sydney include financial services, lawyers, banks, insurance, engineering and all other conglomerates.
“Melbourne on the other hand is the cultural hub of Australia – an environment which is more conducive to small businesses supporting artists, restaurants, cafes and freelancers.”