Tom Willis is an award-winning marketing leader and Co-founder of Lawpath. Tom’s journey journey includes steering several entrepreneurial projects and addressing the unique challenges faced by small businesses. As the Chief Marketing Officer at Lawpath, Tom has been pivotal in shaping the company’s marketing strategy and business growth.
On 26 August, the Australian Bureau of Statistics (ABS) released its latest Business Entries and Exits data. It shows Australia as having 2,729,648 actively trading businesses, marking a 2.5 % increase (or 66,650 more businesses) over the previous year.
These figures are already being quoted in Parliament, dissected in research papers, and splashed across headlines as the official state of entrepreneurship in Australia. But appearances deceive. Our widely accepted 2.7 million business count rests on a narrow definition of “active” that excludes millions of enterprises. The smallest and newest ventures, from sole traders and freelancers to side hustlers and emerging startups, are absent from the official tally.
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The Numbers We Rely On Are Flawed
The ABS currently claims that there are around 2.6 million “active” businesses in Australia. This figure is universally accepted across government and business communities as the official of our business landscape. But here’s the catch: it’s based on a definition that only counts businesses registered for GST and regularly lodging Business Activity Statements (BAS).
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“Businesses are defined to be engaging in productive activity where they have a Goods and Services Tax (GST) role and are actively remitting GST through Business Activity Statements (BAS).”
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That definition instantly excludes a huge slice of real, functioning businesses. Sole traders earning under $75,000 a year, freelancers and consultants who invoice clients directly, side hustlers selling online after hours, and ABN holders who are legally trading but not at the GST threshold – none of them exist in the ABS dataset.
These operators aren’t marginal or hypothetical. They are designers, tradies, PTs, e-commerce sellers, consultants, gig economy workers and thousands of others who generate real income and serve real customers. Yet to policymakers, researchers, and investors relying on ABS data, they are invisible.
The Scale of the Blind Spot
Lawpath’s analysis of Australian Business Register (ABR) data reveals a very different picture. Instead of 2.6 million businesses, there are close to nine million active ABNs across the country.
Even if you apply a conservative filter and assume that only 1.5-2 million of these additional ABNs are generating revenue, that’s still a vast entrepreneurial engine that doesn’t show up in official counts.
The implications are significant. Even at a modest average turnover of $20,000–$25,000, the activity from micro-enterprises and overlooked ABNs could represent tens of billions of dollars in annual output. This “hidden economy” is effectively the size of a small Australian state, yet it remains invisible in the official counts that policymakers and commentators rely on.
By undercounting these businesses, we are underestimating the scale of our economy and misallocating resources. If they don’t get counted, they don’t get considered in funding, policy, or support.
Why This Matters
When the ABS releases its Business Entries and Exits report on 26 August, the commentary will focus on whether the number of “active” businesses is rising or falling. Politicians will cite the data to show that confidence is up or down. Analysts will debate the implications for employment, growth, and investment.
But here’s what won’t be said: the majority of new businesses being created today—those not registered for GST—will be excluded from the official narrative.
Lawpath’s own Business Index shows that more than 75% of new businesses formed in the past year did not register for GST. That means three out of every four entrepreneurs who took the leap are absent from the very statistics designed to measure them.
A Broken Way of Counting Businesses
The way we currently count businesses is broken. It is stuck in an old industrial mindset where only GST-remitting, BAS-lodging companies “count.” That approach might have made sense twenty years ago. It doesn’t now.
Today, entrepreneurship is fluid. Many people start with a side hustle before scaling. They might consult part-time, sell online, or test a service before committing to full-time operations. These businesses may not register for GST on day one, but they are real businesses nonetheless.
Other countries take a broader view. The UK counts both VAT-registered firms and millions of micro-businesses below the threshold. New Zealand includes enterprises with as little as NZ$30,000 turnover or more than three employees. Canada sets its GST bar at C$30,000 and supplements this with income-tax data.
Australia’s narrow lens means the majority of new ventures never appear in the numbers, leaving policymakers, economists, and investors to work with only part of the picture.
Why It Matters
This isn’t just a question of semantics, it has real consequences. Funding programs often target “active” businesses. Economic analysis shapes where grants and incentives go. Media narratives influence how Australians view entrepreneurship. If the majority of small businesses are excluded from the count, they are excluded from opportunity.
For policymakers, this means underestimating the true scale of small business. For investors, it means missing the early signals of where new industries are forming. For the entrepreneurs themselves, it means being invisible in the very systems designed to support them.
The Lawpath Business Index
To address this gap, we created the Lawpath Business Index – a tool that blends official datasets with real-time insights from thousands of businesses registering through our platform every month.
The Index tracks how many new ABNs and companies are created, where growth is happening across states and industries, and who the new entrepreneurs are. It highlights surges in fast-growing sectors like health and wellness, creative services, and e-commerce. It reveals growth pockets in regional areas that rarely get attention. And it captures the impact of policy changes and economic conditions on entrepreneurial activity in real time.
By looking beyond GST registration, the Index shows an unfiltered, more complete picture of Australia’s entrepreneurial landscape.
Final Word
The official data will tell one story about Australian business. But the real story is far bigger. Millions of entrepreneurs are already building the next wave of innovation, jobs, and growth – yet they remain invisible to the statistics.
The Lawpath Business Index is designed to correct this distortion. By recognising every entrepreneur who takes the leap – whether they’re remitting GST or not – we can finally start to understand the true scale of Australia’s business landscape.
Until we count them properly, we will continue to underestimate the ambition, diversity, and impact of Australian entrepreneurs. And that’s a mistake we can no longer afford to make.
About the Author
Tom Willis is the Co-Founder and CMO of Lawpath.
