Fuel, utilities and interest rates have emerged as the three biggest cost pressures facing Australian SMEs heading into the new financial year, with fuel overtaking all other concerns following the rollback of fuel excise relief.
According to the latest MYOB Business Monitor, 51 per cent of SMEs identified fuel as a major source of financial pressure, ahead of utilities (44 per cent) and interest rates (37 per cent). The annual survey of 1000 SMEs found the cost of fuel has more than doubled as a business concern from 25 per cent in November last year.
The findings come as the federal government’s temporary fuel excise relief began to be phased out on July 1, with the discount halved from 32 cents per litre to about 16 cents per litre. The full excise rate will return on August 2.
MYOB’s analysis of anonymised transaction data found total fuel operating expenses rose 26.9 per cent year on year in April, despite the temporary excise reduction introduced at the start of the month.
Almost two-thirds (63.8 per cent) of businesses spent more on fuel than they did a year earlier, while average fuel transaction costs increased 21.1 per cent.
“Australian SMEs are facing rising fuel costs and mounting supply uncertainty, and it’s impacting their margins and their confidence,” said MYOB CEO Paul Robson.
“The data shows fuel is now the single biggest pressure point, and that pressure is being felt by small businesses across the board.”
Robson said businesses in transport, logistics, trades, manufacturing and regional communities were likely to be hardest hit, as fuel remains an essential operating expense.
“While the scaled removal of fuel excise relief will give SMEs a little more room to plan, many will still need to absorb rising costs and avoid sharper short-term shocks, especially at a time when broader economic uncertainty is still weighing on business confidence.”
- Further reading: How the emergency fuel order will impact businesses.
