The Council of Small Business Organisations Australia has reminded the government that Australia’s small businesses will be the ones footing the bill for higher wage costs.
COSBOA CEO Luke Achterstraat said small businesses were the largest private sector employer in the country and much more consideration should be given to their operating environment.
“Small businesses are facing a cost crisis across energy, rent, insurance and input costs. Today’s decision of a 3.5% increase, which is above the current rate of inflation, will have ramifications for our small business engine room, many of whom are struggling to make a profit on already razor-thin margins.
“For every dollar increase in the award rate, employers also face higher levels of workers’ compensation, payroll tax and of course, another legislated increase in the superannuation guarantee from 1 July.”
There is a limit, said Mr Achterstraat, to how much small businesses could pass on these costs, meaning owners likely bear the brunt.
“This decision will affect more than 100 different industry awards and a multitude of different role classifications. Many owners will need to personally absorb these higher costs, unable to pass on any further price rises to consumers.”
COSBOA maintains the government must recognise who is footing the bill and emphasise the focus should be on sustainable wage growth linked to productivity.
“Ultimately, someone needs to pay here, and overwhelmingly that will be small businesses.
“The irony here is that our industrial relations system continues to be a drag on productivity, and that is bad for workers and businesses.”
Mr Achterstraat said the new Minister for Workplace Relations must make productivity the primary focus.
“We have repeatedly warned that higher wages without higher productivity is a disaster waiting to happen.
“To ensure that our children don’t endure a lower standard of living than us, we need to boost productivity – our workplace settings have a direct impact on this outcome.
“We need to see less complexity, more certainty and a user-friendly approach that encourages small businesses to hire, grow and reward staff,” insisted Achterstraat.
For more on giving small businesses a Fair Go, visit: cosboa.org.au