The CEO of the Canberra Business Chamber is confident when he says business sentiment in the territory is currently “as bad as ever”.
The Reserve Bank is expected to raise interest rates for the fourth time this year to control inflation, partly due to high fuel prices driven by the war in the Middle East, along with Australia’s tight labor market. At the moment, Canberrans have the highest fuel prices of all Australian capital cities.
Canberra Business Chamber chief executive Greg Harford said businesses felt pressure was mounting when, at the same time, consumers weren’t spending as much.
“The cost of running a business has increased, as has the cost of running a home,” Harford said.
Canberra is currently the most expensive capital in the country for both petrol and diesel. (ABC News: Tahlia Roy)
“There’s interest rates, the cost of gasoline, all of that is really affecting consumers’ disposable income.”
said.
“So a lot of companies are getting less money and that obviously puts real pressure on profitability in some of those areas.”
Retail, hospitality and services are the most affected
Harford said the upcoming expansion of portable long-service leave to the hospitality and retail sector, while benefiting employees, is an example of rising costs that could ultimately be passed on to consumers.
Canberra’s peak business body fears the retail and hospitality sectors will be most vulnerable to rising costs. (ABC News: Elise Pianegonda)
Under the portable long service scheme, casual workers have access to long service entitlements, even if they change employers. Employers register and pay a flat tax on the gross ordinary wages of eligible employees.
Harford also said Canberra commercial property rates had increased about 8 per cent this year.
Greg Harford says business sentiment is the worst he’s seen. (ABC News: Luke Stephenson)
“My real concern is the small businesses that are highly leveraged, have very small margins, are very dependent on customers coming in and spending, and those are the ones that are most at risk in the current situation,” he said.
Pet deliveries continue
Animal shelters across the country have come under pressure as Australians compare living expenses with the cost of companion animals.
The RSPCA says it is common for people to give up their pets to cover daily living costs. (ABC News: Caitlin Maloney)
In the ACT since 2022, the cost of living has been one of the main reasons Canberrans surrendered their pets, according to the RSPCA.
“‘Not being able to pay for care’ was the seventh most common reason for resignation in FY22, but has consistently ranked among the top reasons in more recent years, including the second most common reason over the past two years.” Canberra local RSPCA said.