Regional businesses in South Australia are experiencing increases in labour costs with most citing wage hikes as a significant challenge.
Preliminary findings of the South Australian Business Chamber Regional Voice Survey show a majority of businesses say labour costs are a top concern. Respondents are also concerned about increased energy costs and lack of highly skilled workers in the region.
In June 2023, the Fair Work Commission introduced an increase to the minimum wage and awards of 5.75%, at the same time as an increase in superannuation to 12% by 2025.
National wages grew by 1.3% in the three months to 30 September. The Australian Bureau of Statistics also noted a 4% wage increase annually, an all-time high since March 2009.
Nigel Mack, Operations Manager at Middleton Tavern Bistro on the Fleurieu, said wage increases are a constant challenge for regional business.
“Wage growth in comparison to the price we place on products to remain competitive is becoming more difficult. We can’t keep on increasing prices as much as wages go up.”
The regional business owner also said the pub has been forced to restructure by hiring less skilled staff.
Like Nigel, most businesses have expressed concern over labour shortages in the South Australian Business Chamber Regional Voice Survey. A lack of highly skilled workers is the most prominent labour market challenge experienced by businesses.
Kendall Crowe, the South Australian Business Chamber’s General Manager of Policy, Advocacy and International Services says “Labour costs can be due to a range of reasons including increases to award rates, superannuation contributions and inflationary pressures.
“We also know that in regional areas severe skills and labour shortages drive up labour costs as businesses offer higher wages and incentives to attract staff.
“When developing new policies, all levels of government — local, state, and federal – must remember that businesses can only afford so much. New legislation and regulations should not keep costing business more time or money. They are already strained by increased wages, energy costs, interest rates and labour shortages,” she said.
Company tax rates and Payroll tax are also deemed by regional business owners to be limiting their growth.
Against the backdrop of these challenges, a majority of regional businesses are not optimistic in the performance of South Australia’s economy in the next 6 months with 34% of regional businesses indicating a slightly weaker performance.
Through the Regional Voice Survey, the South Australian Business Chamber collects views from regional business operators to champion for conditions and policies that are fairer to businesses in across the state.
Results shared in this article are preliminary and may not be reflective of the final findings.
Respond to the survey here.
