Businesses in the far north region of South Australia are reeling from an increase in wages and competition for labour due to a lack of skilled workers.
Preliminary results of the South Australian Business Chamber Regional Voice survey indicate most businesses consider labour costs, availability of skilled workers and energy costs to be the most pressing issues.
Council rates and operations are also a concern.
Company tax rates, council rates and payroll tax are restricting the growth of businesses with some saying they have been forced to downsize their roster and cut shifts.
Businesses are reporting specifically that payroll tax has reduced profitability considering skills shortages have caused wage increases.
One survey respondent says “the payroll tax system allows larger companies to tear at the underbelly of our business, as we believe they do not report revenue earnings in South Australia” only paying tax to their home states. They said this causes unfair competition in the region.
Richard Billings, Managing Director of RT Diesel, a heavy-vehicle-mechanical-servicing company based in Whyalla, says payroll tax has been their biggest problem since the business qualified to pay it a year ago.
“Payroll tax takes an enormous proportion of our income as it ties itself to wages regardless of profits. This inhibits us from employing new staff, leaves less money for training and stifles our ability to continue investing in the youth of the area”.
Richard says he would hire four more apprentices if it wasn’t for payroll tax.
This assertion is against the backdrop of high wage growth and especially in the industry that RT Diesel specialises in.
46% of businesses said wage increases were the most challenging cost. Some survey respondents noted they are forced to pay above the award to keep up with the mining companies who pay high wages.
Other businesses are contemplating moving out of the region because they can’t afford market wage growth. They note the cost of labour is crippling small businesses.
Meanwhile, 61% of businesses are experiencing labour shortages. They say while skilled labour is hard to find, the salary expectations of skilled applicants do not match what businesses can offer.
The South Australian Business Chamber Regional Voice Survey collects views from businesses in regional SA. Those views form the South Australian Business Chamber’s Policy and Advocacy agenda.
As a business, let your voice be heard.
