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Hnry Sole Trader Pulse reveals economic headwinds

The Hnry Sole Trader Pulse revealed a whopping $28 billion in productivity is lost from the sole trader economy each year, due to time spent on tax and financial admin.

Tuesday, 28 June 2022 – Rocketing inflation and higher interest rates, which are leading to rising prices including sky-high fuel costs, have begun to stunt the growth prospects of the nation’s 1.5 million tradies.

A nationwide survey of self-employed people in Australia, the Hnry Sole Trader Pulse - the only such index to measure the sentiment of the self-employed - has found 72% of sole traders say they are paying more for goods and services than they were three months ago. Sixty-one per cent say high fuel prices are having a direct impact on their business.

As a consequence, most sole traders (68%) are actively seeking to cut business costs and are avoiding taking on any more debt (82%).

In spite of the fraught economic outlook, morale among independent earners remains relatively resilient. More than half report a rise in income over the past three months, whereas fewer than a quarter say it has declined compared to the previous quarter.

Commenting on the survey results, Karan Anand, Hnry Australia Managing Director, said:

“Winter is coming for Australia’s sole traders. The negative conditions that are immediately recognisable to everyday households in terms of highest cost of living and pressure on business are really starting to make themselves felt.

“What is remarkable, however, the latest set of results of the Hnry Sole Trader Pulse is the clear willingness of this key driver of the economic engine room of Australia - that is the 1.5 million sole traders in the country - to brace for rocky conditions while still maintaining a positive outlook.

“This speaks to one of the consistent reasons we hear why most sole traders choose to go into business for themselves: the ability to choose their own future, working conditions and lifestyle. Some of 63% of respondents say they made a conscious decision to become sole traders. They are self-starters. That’s admirable.”

$28 Billion in Lost Productivity

To compound matters, sole traders are losing the opportunity to become more productive and make even more money by having to spend the equivalent of a day a week managing their financial and tax affairs.

According to the Hnry Sole Trader Pulse, sole traders are spending an average of seven hours a week attending to their finances – above and beyond their dealings with accountants, bookkeepers and tax agents. For tradies the figure is [8] hours a week; for health workers it is [10] hours a week.

Mr Anand said:

“It’s astonishing. Sole traders are wasting some 12 million hours a week dealing with admin. That doesn’t just represent lost income, it’s a major loss to the economy – the equivalent of $20 billion a year.

“Australia can ill afford for its sole traders to enter what promises to be an uncertain period without appropriate support to help the sector unlock its full potential. Targeted cost of living relief; a well-thought-out and executed solution to supply chain issues that have been hampering fledgling businesses from succeeding; and ongoing support for measures to address the mental health of gig workers would go a long way towards helping the sector.

“It’s also why Hnry exists: to give back those hours spent on admin and tax to sole traders so they can get on with doing what they do best - following their passion, building their business, and driving economic growth.”

The Hnry Sole Trader Pulse is Australia’s only regular, comprehensive regular snapshot of self-employed people in Australia, such as tradies, freelancers, and consultants.

Some 1.5 million Australians classify their primary occupation as “self-employed”, with total estimated earnings of around $90 billion a year. The number of sole traders is currently growing at a rate of 50,000 per annum.

The latest Hnry Sole Trader Pulse was conducted by Resolve Strategic between 13-17 June. The research is carried out on behalf of the award-winning fintech Hnry, Australasia’s largest and fastest-growing digital accountancy service catering expressly to sole traders.

Hnry recently won the People’s Choice Award at the 2022 FinTech Australia Finnie Awards.

About the Hnry Sole Trader Pulse

The survey was commissioned by Hnry and undertaken by Resolve Strategic to measure the sentiment, views and experiences of sole traders in Australia. In June 2022, Resolve Strategic conducted an online quantitative survey, interviewing 500 sole traders with an ABN including contractors, consultants, freelancers, gig economy workers and tradies. The survey is nationally representative.

About Hnry

Hnry is an all-in-one digital accountancy service designed expressly for independent earners such as contractors, freelancers, tradies and the self-employed. Hnry takes care of all the financial admin, including invoicing, expenses, payments, taxes and filings, enabling sole traders to get on with the job rather than having to worry about tax and compliance.

Founded by James and Claire Fuller, the company launched in New Zealand in 2017, expanding into Australia in 2020. A $15m capital raise earlier this year is spearheading Hnry’s growth in Australia, supported by the appointment of Karan Anand as Managing Director of Hnry Australia.

Hnry won the People’s Choice Award at the 2022 FinTech Australia Finnie Awards and Supporting Gold at the 2020 Wellington Gold Awards in New Zealand.

DISCLAIMER: The information on our website is for general educational purposes only. It doesn't cover all situations and circumstances, and shouldn't be taken as direct tax advice. If you're looking for specific help with your taxes, join Hnry and our team of experts can provide you with assistance tailored to your business needs.

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