Small Biz Survival: Alarming Cost of Doing Business Down Under

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In a striking revelation, nearly 1.25 million small businesses in Australia teeter on the brink of collapse as increasing living costs gnaw away their profit margins.

During a recent senate hearing on Australia's cost-of-living crisis, Council of Small Business Organisations Australia (COSBOA) director, Adele Sutton, spotlighted the precarious state of the nation’s small enterprises.

Addressing the hearing, chaired by Liberal senator Jane Hume, Ms. Sutton noted that 49 per cent of 2.5 million small businesses are either barely breaking even or running at a loss. She emphasized that when a business fails to break even, the burden primarily shifts onto the owner, often compelling them to dip into personal savings to keep operations afloat. The hearing included notable participants like Australian Restaurant and Cafe Association CEO Wes Lambert and Restaurant and Catering Australia CEO Suresh Manickam.

Sutton attributed this worrisome trend to an unpredictable mix of rising energy costs, burdensome regulatory frameworks, and intricate changes in industrial relations. Remarkably, she highlighted that wage growth has not proportionality matched productivity, fanning the flames of economic strain.

Offering further insights into the cost-of-living turmoil, Suresh Manickam pointed out that the crisis is predominantly driven by four elements: escalating energy prices, heightened interest rates, surging labor costs, and sluggish productivity. Manickam lamented that cafe and restaurant owners are particularly besieged by the government’s convoluted changes in industrial relations laws, resulting in what he described as "IR fatigue."

"These modifications are causing a fundamental and progressively adverse impact," Manickam conveyed, stressing the critical need for energy stability and government intervention to ensure an enduring, sustainable energy infrastructure. While business owners appreciated the government’s recent energy rebate, Manickam insisted that it provided minimal relief. "It’s not even a sugar hit," he remarked, suggesting that more substantial measures are necessary to alleviate the financial pressure on small businesses.

This transformative discussion was originally reported by NewsWire, where the pressing challenges confronting Australia's small business sector were brought to fore, demanding urgent attention and solutions.

Published:Saturday, 17th Aug 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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Knowledgebase

Private Mortgage Insurance (PMI):
A type of insurance that a borrower might be required to purchase as a condition of a conventional mortgage loan, if the down payment is less than 20% of the property value.