Yahoo Finance 'Confronting' cost of living fight puts Aussies in 'crisis'
The Australian Chamber of Commerce has revealed how many businesses are considering closing for good.
A "confronting" statistic has revealed how Aussie small businesses are battling the cost of living crisis and industry red tape. The Australian Chamber of Commerce has spoken with hundreds of business owners across the country and found many are worried they will soon have to close their doors for good.
More than 45 per cent of respondents said skyrocketing costs, excessive bureaucracy and new rules like the "right to disconnect" have caused them to consider shutting up shop forever. Chamber CEO Andrew McKellar told The Daily Telegraph a "crisis" is looming.
"It is dire,” he said. “There are a range of different factors hurting small business, but the red-tape burden – tax compliance, payroll and all those things that occur in the background – have been cited by small business as key factors."
RELATED
Three major mistakes Aussie small businesses 'can’t afford to make' in the new financial year
'Astounding' revelation about Australian mint amid cashless push: 'This is crazy'
Boomers lashed over $500 travel bill: ‘Squandering inheritance’
He referenced the Closing Loopholes legislation that passed earlier this year, which includes the "right to disconnect" rules, criminalising wage underpayments, changes to how a casual employee is classed, labour hire changes, and many others.
But McKellar said the raft of new rules "amounts to closing a noose" around the necks of many small businesses who are fighting to stay alive.
The Chamber's research found 6 per cent of businesses across the country were spending more than 20 hours a week complying with red tape and more than 90 per cent said bureaucracy was having an impact on the way they want to run their operation.
While the national rate of businesses considering closing down sat at 45 per cent, it jumped up to 57 per cent just in rural and regional areas of the country.
Cost of living squeezing businesses of every cent
Connie Black, who runs the Ciao Cafe and Cakes shop in Queanbeyan, Queensland told 7News that small businesses are struggling with what to pass on to the customer and what to cop.
She explained how the recent bird flu outbreak has caused one of her cafe's most essential items to explode in cost.
"Eggs recently jumped $26 for a box, like, that's ridiculous," she said. "How do you pass that on? You can't just pass it on all the time."
The cost-of-living crisis has also caused Aussies to hold onto their cash.
Beauty salon April Brodie told the ABC she noticed fewer customers coming in as they can't afford regular appointments.
"You know when people would come [every] four weeks, maybe they will come eight weeks now, or they'll stretch things out to three months," she said. "People will often say to you, 'I just can't afford it, you know we've just got extra bills, I can't afford it'."
Credit reporting firm illion recently found food services businesses were, on average, 18 days late in paying invoices, while construction firms and retail businesses were two weeks late.
These small business owners are now also grappling with an increase in the minimum wage, which kicked in at the start of July.
Anne Nalder, from the Small Business Association of Australia, said the next few months could be dire.
"It's very, very difficult to justify that [minimum wage] increase at this stage of the economic cycle," she told Today.
"[Small business owners] have not only their mortgages, but they've got to find money to pay their staff and when you increase wages, you also increase the contribution to super and all those other added costs."
Get the latest Yahoo Finance news - follow us on Facebook, LinkedIn and Instagram.
