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Increased Costs of Living - Who Pays!

 

The increased Costs of Living – Who Pays? A complex and complexing question – the answer!

Ultimately, we all pay in some way. 

Whether you are the Producer, Grower, Deliverer or Consumer, in the current economic environment, we all attract increased cost of living expenses.

These are conditions we haven't seen in over 30years in Australia. For most Businesses this will be the first time having to address inflationary pressures.

Blame it on inflation! In economic terms, 'inflation is the increase in the general price level of goods and services in our economy, which equates to the cost of how much it costs to live'.

Inflation is reducing our money purchasing power as we face these increased costs for everyday necessities. Items such as fruit and vegetables, healthcare, medications, energy, utilities and housing rent or mortgage payments. Many budgets are stretched! 

Lurking in the background

is the threat of further rate increases proposed by the Reserve Bank to help cool the economy. Mortgagees are affected and with higher interest rates it is more expensive for businesses to borrow money, leading to a decrease in investment and economic growth.

The cost of living in Australia is rising – quickly – and it's expected to keep rising through 2023. We had 8 cash rate hikes (from 0.1% to 3.1%) in 2022, and the latest quarterly inflation figure was 7.8%. This is the highest it has been since 1990 (source Finder.com.au).

As Consumers, we are caught up in the mix experiencing;

  • rising costs in supermarkets
  • purchasing everyday essentials
  • increased rents 
  • increased interest rates and mortgage repayments 

Critically if you are a small Business you are seeking answers on how to remain viable and be competitive while still providing products at reasonable prices. It’s challenging!  .

Very likely you are struggling;

with increasing operating costs. You are facing supply and delivery expenses, rising energy prices, labour shortages and wages that see profit margins shrinking. Add to this mix, as prices rise, consumers may curb their spending, which can decrease demand for products or services and reduce revenue. Further, International factors are disrupting trade and supply chains.

According to data from the ABS, in June 2022, 46% of all Businesses experienced increases in their operating expenses with more than 41% facing supply chain disruptions. 

What to do to stay in Business!

Smart Businesses are exploring various solutions, including ways of cutting costs and improving profitability.

Click here to find the solutions