Businesses in Queensland are expressing concerns that they must raise prices for their customers in order to manage rising expenses. They are cautioning that ongoing interest rate increases and a recent prohibition on card surcharges will strain smaller enterprises.
An economist predicts that these challenging economic conditions and elevated prices may persist until 2028.
Nick and Amanda Kuhn operate an organic egg farm in Tiaro, a rural locality situated approximately 220 kilometers north of Brisbane. They report that their family-owned business is finding it difficult to mitigate the compounding effects of escalating costs.
“At some point, you can no longer absorb the expenses because they accumulate, and you can’t continuously raise your prices,” Mr. Kuhn explained. “It’s a delicate balancing act.”
A recent survey conducted by Business Chamber Queensland revealed that business confidence is at its lowest point since the Global Financial Crisis. The survey indicated that 95 percent of enterprises are feeling the impact of increased fuel prices, with over 60 percent citing rising costs related to freight, transportation, and cash flow challenges.
On Wednesday, interest rates were raised for the fourth time this year, reaching 4.6 percent—the highest level since 2011. Mr. Kuhn noted that his mortgage payments have surged by approximately $1,000 each month due to these hikes. “It’s becoming increasingly difficult to manage loan repayments. Securing new loans for equipment or other necessities has also become more challenging,” he remarked.
Additionally, businesses are now prohibited from imposing surcharges on card transactions, a practice that previously helped cover costs such as fuel and wages. “This change will result in a financial burden of a few thousand dollars for us, leading to decreased profits,” he stated, indicating that customers should expect a price increase on egg cartons.
Christopher Hall, a honey producer from Hervey Bay, is also contemplating raising the price of his raw honey buckets to $16 per kilogram. “In the past decade, we absorbed rising costs because it was crucial to keep honey affordable,” Mr. Hall shared. “However, that is no longer feasible.” He explained that the additional revenue would help offset increasing fuel prices and the nearly 40 percent rise in the cost of plastic containers this year.
John Rolfe, a professor of regional economics at CQ University, mentioned that the effects of this week’s interest rate increase may take up to 18 months to fully manifest in the economy. He advised businesses to make strategic spending decisions to ensure their survival. “It’s wise to consider cost-cutting measures early to avoid being caught off guard,” he suggested.
Despite the ongoing challenges, Professor Rolfe cautioned that relief is not on the horizon. “Governments face pressure to reduce spending as a means of curbing inflation,” he noted.
Nevertheless, Mr. Hall remains optimistic about his business’s ability to persevere. “We have had to raise prices to remain viable, but small producers are essential to the economy,” he asserted.
