Decline in number of business owners as more people attracted to security of permanent employment BUSINESS owners are a dying species, victims of ten years of economic growth, a Productivity Commission report shows. A staff working paper on "Forms of Work in Australia" concludes business owner numbers have been falling dramatically over the decade to 2011, attracted by the security of permanent employment. The mining boom has been a big driver in the shift. While the number of unincorporated business owners has shrunk by 3 per cent over those 10 years, permanent employee numbers have grown 3 per cent. But the number of business owners in the mining states of Western Australia, Queensland and Northern Territory has shrunk 4.7 per cent compared to the non-mining fall of only 2.4 per cent, according to the paper. "The fact that increases in the prevalence of permanent employees and declines for OMUEs (owners-managers of unincorporated entities) were much larger in the mining states suggests that changes at a national level (for example, in tax settings, business regulation and superannuation rules) were not the main driver of observed prevalence changes," the report by Anthony Shomos, Erin Turnerand Lou Will says. More buoyant economic conditions and confidence in the mining states promoted growth in employee numbers, exacerbated by those states coming off a low base, it says. The results suggest that workers became less likely to establish unincorporated enterprises (at least as their main source of employment) and more likely to work for someone else, over the decade. In an election year where both sides are courting small business, the analysis may let both off the hook in terms of blame, laying it squarely at the feet of a healthier economy. But Independent Contractors Australia executive director Ken Phillips said the Productivity Commission analysis failed to account for a rise in public service numbers as a national influence. "Also, businesses are still recovering from the global financial crisis and that's putting people out of business left, right and centre," he said. And while the Australian Taxation Office gave businesses a break during the GFC, they are now aggressively pursuing debt recovery and superannuation guarantee compliance. So there are a few factors they appear to have left out of their analysis.