New South Wales has experienced a significant outflow of businesses in recent years, with many operators relocating to Queensland amid rising operational costs and tax pressures. Between 2017 and 2025, approximately 6,000 businesses left New South Wales, one of Australia’s most expensive states, according to an analysis of Australian Bureau of Statistics data by Business NSW. During the same period, Victoria also recorded a net loss of businesses but at about half the rate of New South Wales. In contrast, Queensland saw a net influx of more than 8,500 businesses.

Business NSW chief executive Daniel Hunter described Queensland as increasingly attractive to businesses due to lower costs and a more supportive environment for investment and growth. Hunter highlighted that companies moving north could save around 23 percent on general business insurance and called on the New South Wales government to abolish the Emergency Services Levy (ESL) to help close the gap.

A recent report from Business NSW revealed business confidence in New South Wales has fallen to its lowest level on record. The state was rated as the least affordable in Australia and registered the country’s second-lowest rate of business investment. Hunter also advocated for payroll tax relief, calling for the rate to drop below 5 percent from its current 5.45 percent and for the tax-free threshold to be increased to at least $1.5 million, with further reductions proposed for regional businesses.

The New South Wales government disputed the notion of a business exodus, stating that the total number of businesses in the state has grown by 157,000 since 2017 and that insolvencies have decreased by 6 percent over the past year. A government spokesman acknowledged the Emergency Services Levy to be “unfair, inefficient and unsustainable” and said reforms to address the issue were under parliamentary consideration, requiring bipartisan support.

Opposition Leader Kellie Sloane has pledged to reduce payroll tax to 4.75 percent for businesses with a total payroll under $10 million and to raise the payroll tax-free threshold to $1.5 million, positioning these measures as essential for economic recovery.

Local business operators point to multiple challenges. Restaurateur Henry Tadevosian, who owns Anais Taste of Persia in Norwest, expressed significant concern over recent cost increases. He reported a 300 percent rise in insurance premiums over the past year and cited changes requiring employers to pay superannuation with every pay cycle as additional financial burdens. Tadevosian also noted a marked decrease in customer spending, reflecting broader cost-of-living pressures.

In response, the state government emphasized ongoing support for small businesses, including efforts to reduce regulatory burdens and the reintroduction of a free business advisory service. However, the opposition criticized the government for lacking a coherent economic vision to address the mounting challenges faced by New South Wales businesses.