Small and family businesses bearing brunt of cost crisis

WA’s small and family businesses are being squeezed by spiraling costs and staff shortages.

CCIWA’s quarterly Business Confidence report, which surveyed 816 West Australian businesses, found three in four (75%) thought rising costs would be a barrier to their growth in the coming year.

CCIWA Chief Economist, Aaron Morey, said the biggest cost faced by employing businesses was their wages bill, which was made even bigger by WA’s unfair payroll tax system.

“When combined with skyrocketing costs across the economy, WA’s excessive payroll tax is hitting many small and family businesses in the hip pocket,” he said.

“We know that WA pays the highest payroll tax in the country, despite the fact that our state’s finances are the best in the nation. It’s unfair and it needs to change.

“There are around 92,000 businesses in WA that employ people and of those, just over a quarter pay payroll tax.

“There’s not much the State Government can do to tackle inflation driving up costs, but they can offer some relief to businesses by fixing the tax on jobs and success.”

The Business Confidence report also found that seven in 10 WA businesses (69%) said they were struggling to find workers for a particular skillset.

The sector most struggling to fill roles were accommodation (90%), resources (83%) and construction (82%).

Mr Morey said although the skills shortage had eased very slightly over the past year, the labour market in WA was still very tight.

“WA needs more skilled migration to help fill the gaps in our labour market,” he said.

“Without more skilled workers, projects and infrastructure will stall, which has an impact not only on the economy but on the liveability of our state.

“The worker shortage in the construction sector is one of the factors contributing to the housing crisis in WA.”

Despite the challenges, WA businesses were more optimistic about conditions in the short and long term than they were in the three months to September.

Three in ten (32%) said they expected conditions to improve in the next three months, two in five (40%) expect no change, and the remaining three in ten (28%) expected conditions to worsen.

21% of WA businesses expected condition to improve in the next 12 months while 37% believe conditions will soften. 42% expect no change in the next year.

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