Rising costs, fuel prices and bushfire-related closures are pushing regional Victoria’s small businesses to the brink, with owners saying they are struggling to stay open.
The Reserve Bank raised interest rates by 0.25 percent on March 17, adding to the pressure on already struggling businesses.
Since then, some workers say fewer people are going out and spending more.
In the south-west Victorian town of Timboon, along the Great Ocean Road, Schulz Organic Creamery and Cafe has “hit the ground running”.
The company said that, after two years of drought and rising costs, it needed more tourists than ever, as local support alone was no longer enough.
“Our family cafe will fail if we don’t do something about it,” said the social media video.
“Now we need tourists to survive.“
The company’s general manager, Jessica Beer, said several Great Ocean Road locations were being “hit from many different angles”.
Jessica Beer said small businesses face “many problems, requiring many solutions”. (Credit: Jessica Beer)
“We had local fires, which reduced foot traffic and tourism significantly,” he said.
“The current challenge we’re all facing right now is fuel prices – we may see a drop in travel.”
He said the consequences are far-reaching, especially for a business that runs a cafe near a farm, where diesel and transport costs are significant.
“We just got a 22 percent immediate increase in our packages,”
he said.
Ms Beer says it is also difficult for the new residents, who have lost their shifts.
Downsizing
In Kyneton, Little Swallow Cafe has announced it has made six staff redundant and reduced opening hours due to financial pressure.
“Sadly, cafe food sales have suffered since the oil supply crisis and interest rate hikes,” the post reads.
“If the RBA wanted to reduce discretionary spending then it has done better.
Little Swallow cafe owner Daniel Richards has had to cut business hours to stay afloat. (ABC Central Victoria: Tyrone Dalton)
“To the four RBA board members who voted against the latest rate hike, thank you for trying.
“Of the five who voted for it, now you need to get your head out of ***, come down from your ivory tower, and ask what’s going on in the real world.
“To the six employees we had to let go, we are very sorry and appreciate everything you have done for the business.“
Trying to stay afloat
Bob Robertson, who runs Mount Tarrengower Maldon General Store in Central Victoria, says his business is different from its origins as a bookshop.
However, it was still struggling.
Bob Robertson has adapted and diversified his business to stay afloat. (Credit: Bob Robertson )
“I’m contributing from my savings to keep me going … it’s been one thing after another,” Mr Robertson said.
“The recovery from COVID was very slow and the economy has also been slow for the past few years, and now the prices of petrol are reducing the number of people coming to Maldon.“
Bob Robertson said fewer tourists were visiting Maldon because of rising fuel prices. (Credit: Bob Robertson )
He said even the small price is being reconsidered.
“People will come in, and kids will pick out two books for two dollars, and [parents] which says ‘not today’.”
Federal support
On Wednesday, Small Business Minister Anne Aly announced support measures for small businesses, admitting “the fallout from the war economy in the Middle East affects everyone”.
These measures include temporary concessions from the Australian Taxation Office for businesses unable to meet tax obligations due to fuel supply issues.
Other compliance and debt collection actions will also be suspended.
The release of the loan obligation will be extended for another 10 years, with the aim of improving access to loans.
The Business Council of Australia has been contacted for comment.
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