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Minimum Wage increase adds to “perfect storm” facing SMEs, says COSBOA

The Council of Small Business Organisations of Australia (COSBOA) has today warned that the announced minimum wage increase of 5.75 percent will add to the cost of doing business at a time when small businesses can least afford it.

COSBOA CEO, Luke Achterstraat said, “Small businesses across Australia are experiencing a tough operating environment and were struggling to absorb costs.” Australian small businesses are facing a perfect storm of cost pressures across energy, insurance, rent, supply chain, and of course the spectre of rising interest rates – today’s decision represents another pressure point in that mix.”

“We are deeply concerned about the increasing cost of doing business and that small business owners, including individuals and family businesses, are finding it increasingly tough to make ends meet; Acute labour shortages have already driven up the cost of employing people, with market forces generating higher wage rates across the economy. Meanwhile, the minimum wage increases do not easily translate to higher earnings for these business owners. Small business owners are currently working for a low return.”

Mr Achterstraat reiterated today’s announcement will have a cascading effect as it changes all the pay scales throughout over 100 industry awards and classifications, coupled with the superannuation guarantee increase of 0.5 per cent. “This represents a significant increase in employment costs, and additionally businesses then pay, payroll tax and workers’ compensation insurance on top of the total remuneration paid.

” Mr Achterstraat said that ongoing challenges facing the small business sector meant further government relief and support would be required. “The small business sector employs 6.8 million Australians, just under half of the total employed workforce. This is why the ongoing success of small businesses is vital for the continued prosperity and well-being of the Australian community.” “With the small business sector facing increasing costs across the board, it is vital that the Federal Government continue to provide support and fit-for-purpose policy settings.”

SBW24
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Also read: Crowd-sourced funding: what’s involved and why it’s taking off

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