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Why small businesses are taking another point of pressure

The Council of Small Business Organisations Australia (COSBOA) notes the Fair Work Commission’s decision to raise the national minimum wage by 5.2% and award minimum wages by 4.6%.

COSBOA CEO Alexi Boyd said that the wage rise would be another point of pressure on small businesses already struggling with increasing input costs.

Ms Boyd said “Many small businesses already pay above the minimum wage, but for those who do pay the minimum wage, this increase will be felt acutely – especially for those who already have debt accumulated from COVID lockdowns.

“Struggling to pay fixed costs is a difficult and stressful situation to be in. It’s really important that small businesses have access to trusted advisers who can work with them to manage the impact of this pay rise.”

Ms Boyd continued “The rise in the minimum wage is part of a pile-on of increased input costs such as superannuation, energy, loan repayments, rent, and wholesale prices. A lot of small businesses are just absorbing the costs. The latest ABS Business Conditions and Sentiments data released in May showed that 48% of businesses weren’t planning on increasing their prices in the next three months because they wanted to retain their customers or couldn’t due to being on fixed price contracts.

“With the news of this minimum wage rise, some businesses will decide to increase their prices, impacting not just consumers but also the small businesses in their supply chains.”

Ms Boyd added “Staff shortages continue to be the number one issue faced by small businesses. It’s holding them back from operating at their full capacity and bringing in the revenue they need to grow and pay higher wages. We need to address this issue as a matter of urgency.”

Source: COSBOA

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