NSW businesses have hit the brakes on hiring, with more planning to cut staff than expand, as confidence falls to record lows.

Business NSW’s latest Business Conditions Survey reveals a sharp deterioration across the state, driven by weaker demand, rising costs and global uncertainty.

Confidence has fallen for a third consecutive quarter to –78.0, below the September 2021 lockdown trough of –75.5.

Hiring intentions have also turned negative, with 29 per cent of businesses expecting to reduce staff over the next three months, compared with just eight per cent planning to hire – the weakest result since February 2023.

Business NSW CEO Daniel Hunter said the results were a wake-up call ahead of the State Budget.

"NSW is the best state in Australia to do business – the challenge is keeping it that way,” he said.

"Workers' compensation reform showed governments can take practical steps to reduce business costs. The next priorities must be payroll tax relief, scrapping the Emergency Services Levy and continuing to cut red tape for small businesses seeking government work."

Mr Hunter said businesses have major concerns about proposed federal tax reforms, including capital gains tax settings and discretionary trust arrangements.

He said the changes risk undermining investment, succession planning and long-term growth.

“The last thing businesses need is additional tax uncertainty when confidence is already at record lows,” Mr Hunter said.

Taxes, levies and government charges are now the top cost concern for businesses, overtaking insurance for the first time.

The survey also shows widespread impacts from global oil price shocks linked to conflict in the Middle East, with 96 per cent of businesses reporting effects across fuel, freight, supply chains and demand.

Financial pressure is also intensifying, with nearly half of businesses reporting reduced income, more than a third drawing on savings, and almost one in five considering permanent closure.

With the NSW State Budget due on 23 June, Business NSW is calling for:

• payroll tax relief, including a cut in the rate from 5.45 per cent to below 5 per cent and an increase in the threshold above $1.2 million
• scrapping the Emergency Services Levy, which adds at least 23 per cent to general business insurance premiums
• further procurement reform to reduce red tape and improve SME access to government contracts, with SME tender reforms needed to pass Parliament this year
• a stronger Business Connect 2.0 program, with funding doubled to $20 million per year, and
• a fairer share of federal GST revenue for NSW. 

About Business NSW 

Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826. We represent almost 50,000 businesses.

MEDIA CONTACT: BEN PIKE – 0429 993 822