Small Business Owners Struggle as Profits Dwindle, Costs Soar in Australia

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The recently published “Small Business Matters” report by the Australian Small Business Ombudsman highlights that many small business owners now earn less than their employees, a concerning trend that has raised alarm bells among industry experts.

The report shows that 43% of small businesses operate at zero profit, the worst since 2012. Even more notable, about 75% of small business owners earn less than the average Australian worker’s wage despite working longer hours.

Phillip Di Bella, the owner of the Coffee Commune and a seasoned veteran in the hospitality sector with 34 years of experience, expressed his concern about the unprecedented rise in the cost of business operations. 

“This is the first time I’ve seen everything go up at once — interest rates, utilities, gas, wages, insurance, everything’s gone up,” Mr Di Bella said.

One particularly burdensome regulation highlighted in the report is the restriction on 457 Visa holders, limiting their work hours to 24 per week. This has exacerbated the ongoing struggle to find sufficient workers, a challenge that small businesses were already grappling with.

Chewie Choo, the owner of Mitch and Antler café, shared how new regulations slashed hours for his skilled employees, aggravating the ongoing shortage among business owners.

Simon Bayley, Grenof’s proprietor, recounted earning less than his employees for a substantial part of his 25-year business tenure. Bayley criticised the tax system, asserting that prosperous years brought disproportionate taxes and expansion obstacles.

Small Business Minister Julie Collins recognised small business owners’ challenges and underscored the government’s dedication to assisting them. She outlined energy bill aid, cash flow support, and cybersecurity enhancement.

“We are delivering for small businesses right across Australia with new measures, helping them to bounce back from challenges and improve their long-term resilience,” Ms Collins said.

In conclusion, the disturbing findings of the “Small Business Matters” report shed light on the precarious state of small businesses in Australia.

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