Rising living costs put additional pressure on struggling businesses


Federal and state governments are being urged to seriously consider aiding SMEs that are struggling with rising business costs in the wake of the COVID-19 pandemic.

The call was made by Employsure in the wake of the recent televised Leaders Debate, where Prime Minister Scott Morrison stated, “Our plan delivers another one point three million jobs. Four hundred thousand more small businesses. Investments in the skills and infrastructure that Australians need to grow.”

Employsure CEO, David Price reacted to this pronouncement with a question, “What about already existing businesses?”

The Australian Bureau of Statistics (ABS) has revealed that 57 per cent of all businesses across the country have seen an increase in costs over the past three months, with 52 per cent making the sacrifice of not passing these costs onto consumers.

In particular, the price of automotive fuel rose by 11 per cent, with the ongoing Ukraine crisis being a significant factor. Education and Training was also hit hard, with a 6.4 per cent increase in the cost of tertiary education. Health, Safety and Legal compliance costs have increased as well over the past two years, which is something SMEs have learned to bare in order to remain in business. In effect, the increases affected the operational expenses. of SMEs already struggling because of the ongoing pandemic.

And while the opportunity for new business was created between 2020- 2021, there remains a 12.0 per cent exit rate, or 277 674 exits from the sector, according to ABS statistics.

“The best protection you have against rising cost of living is your job and having security in your job and being in a growing economy where you have more choices,” Scott Morrison said during the debate. “A job is what gives Australian’s security to deal with rising costs and rising pressures on interest rates which as a result of the Australian economy, springing back to life and leading the world.”

On a more positive note, the employment rates among SMEs continue to rise. On this point, Employsure has reminded aspiring governments that one of the best ways to ensure the employment rates keep climbing is to look after the businesses and jobs already in existence.