Canberra Small Business Owners Face Perfect Storm of Rising Costs

Small businesses in Canberra, Australia's capital city, are struggling due to rising costs and declining consumer spending. The Reserve Bank of Australia is set to raise interest rates for the third time this year next week in an effort to curb inflation.

According to Greg Harford, chief executive of the Canberra Business Chamber, business sentiment in the Australian Capital Territory is at its worst ever. He said that businesses are facing increasing borrowing costs, fuel prices, and other operating expenses, while households are cutting back on spending.

The most vulnerable sectors are retail, hospitality, and services, with small companies having high debt burdens, narrow margins, and dependence on customer traffic facing the greatest risk. Additionally, the planned extension of the portable long service leave scheme to hospitality and retail workers may add another cost factor for employers.

Commercial property charges in Canberra have risen by about 8% this year, and the city has the highest prices among Australian capitals for both petrol and diesel fuel. The rising living costs are also affecting pet owners, with animal shelters across Australia reporting an increase in companion animals being surrendered due to financial difficulties.