Wealthiest Australians turning away from business ownership, a new CEDA data insight shows

Australia's entrepreneurial base is shrinking, and the decline is sharpest among the very households best financially placed to start a business, according to a new data insights set from the Committee for Economic Development of Australia (CEDA).

The analysis, Bricks, not businesses, finds the share of working-age Australians in the wealthiest 20 per cent of households who run a business with employees has fallen from 13.8 per cent in 2002 to just 9.8 per cent in 2022. Over the same period, the share of this group holding at least one investment property rose by 8.1 percentage points.

The trend is also reflected in where wealth is held. Among the wealthiest households, the proportion of total wealth tied to business ownership fell from 11.0 per cent in 2002 to 4.4 per cent in 2022, while the share tied to investment property (excluding the family home) rose from 10.2 per cent to 14.2 per cent.

Some have raised concerns about the effect of falling prices given the increasing concentration of wealth held in housing. However, the data insights argue these concerns are overstated. Even accounting for recent falls, national dwelling prices remain more than double their 2010 level. CEDA Economist Daniel Beadle said the findings point to a policy system that has, for decades, made property investment more attractive than starting a business.

“The Australians most financially equipped to take a risk on a new business are doing so less, with more of their wealth concentrated in property,” Mr Beadle said.

“That's not a coincidence. It's the predictable result of a tax and policy system that rewards passive investment in existing property over the kind of productive risk-taking that creates new businesses, new jobs and a more dynamic economy.”

The analysis shows settings such as the capital gains discount and negative gearing had systematically favoured property over business investment, while support for small and young businesses had not kept pace.

In fact, small business capital gains concessions have been stuck at the same turnover and asset thresholds since 2007, even though prices have risen by around 64 per cent since then. 

It finds the 2026-27 federal budget and subsequent policies make meaningful progress in rebalancing these incentives. Changes to negative gearing and the capital gains discount sit alongside new supports for small and young businesses, including a permanent $20,000 instant asset write-off and a new loss refundability measure for early-stage start-ups. 

“These changes are a genuine step in the right direction. Removing some of the long-standing advantages enjoyed by property investors, while improving conditions for people starting a business, is exactly the kind of rebalancing we need,” Mr Beadle said.

However, Mr Beadle cautioned that tax settings alone would not be enough to revive Australia's entrepreneurial base, highlighting that CEDA will be closely watching moves announced in the federal budget to reduce regulatory burden.

“Businesses consistently tell us that regulation is one of the biggest handbrakes on getting started and growing. In some cities, opening something as simple as a café can mean working through more than 30 separate council steps before you've sold a single coffee.”

ENDS

For enquiries contact
Lisa Harmer
Media and Government Relations Lead
0436 379 688
Lisa.harmer@ceda.com.au