Preliminary results of the South Australian Business Chamber Regional Voice Survey reveal increasing labour costs are the most prevalent issue businesses face in regional South Australia.
Most businesses said labour costs were a constant worry. They also ranked it as the most important issue in the regions.
A lack of skills and labour availability and soaring energy prices were also major concerns.
36% noted wage growth has been the most challenging cost increase in the last year. This has forced businesses to increase prices, passing on costs to consumers.
The wage increases have led to stalled projects, reduced employment, and low profit margins. Some are considering automation of jobs to manage labour costs, a move that may lower the employment prospects of South Australians.
Pertinent to the labour costs is the lack of skilled labour availability.
59% of businesses are experiencing labour shortages. 32% say a lack of highly skilled workers is a challenge.
Some point to a lack of housing and social amenities as the weak link in attracting skilled workers to the region. The available applicants are low-skilled and lack the motivation and financial capability to upskill.
An underlying issue of wage increases is the competition for labour. Some say they are unable to compete with the mining sector who offer attractive wages while some are forced to pay above the award to keep up.
Some businesses are looking offshore and internationally for a skilled workforce.
While skills-training is a remedy for labour shortages, 44% are concerned about the costs of undertaking training. 35% say that there is a lack of local training options.
They cannot afford to pay for training cots, including travel and accommodation. The businesses call for TAFE to solve complexity issues, such as a mismatch between offerings and local needs and longer response times. They propose lower costs and online training options.
While some contended that taxation was unavoidable, they held the view that it was hampering growth. They said that payroll tax was a disincentive to employ people and encouraged unfair competition because other local and interstate competitors do not pay it.
Energy and fuel prices were also putting a strain on business costs with some installing solar to counteract electricity bills.
This year, electricity prices increased by between 20 percent and 25 percent from July 1.
Prior to July 1, the Essential Services Commission of SA revealed that in the 12 months to the end of June 2023, power bills had increased by up to $650 for small businesses in SA.
Most businesses require government support in the improvement of infrastructure, including roads and social infrastructure, such as, hospitals, schools, and childcare facilities.
They say improved roads and ports would improve efficiency and drive tourism growth. Some call for grants to provide incentives to businesses operating in conditions, such as, poor connectivity and no childcare support.
Amid these challenges, 48% of business owners say they are coping, but are working very long hours.
The resilience of regional businesses despite reduced revenue and profitability cannot go unnoticed.
They attribute their grit to hard work. But they are also appreciating the grant funding and local promotional activities, such as the River Revival voucher.
The South Australian Business Chamber Regional Voice Survey collects views from businesses in regional SA. Those views provide insights into issues that they face.
The South Australian Business Chamber uses those insights to champion for better policies and conditions for them.
Let your voice be heard.
