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A small business industry body says rising minimum wages and bonuses are just another additional cost business owners will face, amid rising commodity prices. basic necessities, including fuel, transport and goods.
“There are actually not a lot of costs going down for small businesses,” said Alexi Boyd, chief executive of the Council of Small Business Organizations Australia.
“ABS data indicates that 43% [of small businesses] recorded an increase in its operating expenses in the last reporting period, compared to 22% last year. So we are seeing a massive increase in input costs,” she said.
Boyd said many companies were already paying higher wages than granted but were struggling to cope with labor shortages, with some companies hiring people who didn’t show up afterwards.
“That’s why we’re seeing a contraction in the small business economy: people don’t operate on Sundays, people don’t provide meals on site; they are only open for takeout,” she said.
She said many businesses were unwilling or unable to pass on increased costs to customers, forcing owners to work around the clock in some cases to maintain business.
“There’s a boom going on right now, and we call it a profitless boom, because there are a lot of small businesses that aren’t able to take advantage of the money that’s flowing through the economy. They can’t offer the same level of goods and services as before because of input costs, or they just can’t convince workers to keep their doors open,” she said.
What small businesses need is structural reform, Boyd said, which includes reforms to make it easier for businesses to comply with industrial relations regulations and good technical support for that.
“There needs to be a mature, good look at what the future of small business looks like in the next one to two years,” she said.