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After multiple interest rate rises, regional business owners are being forced to choose between absorbing the costs or passing it onto their customers.
Nick and Amanda Kuhn say it is a "fine balancing act" to juggle rising business expenses and keeping prices affordable for consumers. Queensland businesses say they are being forced to push up prices for customers as they battle to cover increasing expenses.
They are warning that repeated interest rate hikes and a recent ban on card surcharges will put pressure on small operations. An economics expert says the tougher conditions and higher prices could stretch until 2028. Nick and Amanda Kuhn run an organic egg business in the rural town of Tiaro, about 220 kilometres north of Brisbane. The pair say their family-run operation has been struggling to slow the "snowball effect" of rising costs.
"There comes a point where you just can't keep wearing the cost because you're wearing so much but you can't keep charging more for your product," Mr Kuhn said. A recent report from Business Chamber Queensland found confidence in the economy was at its lowest level since the Global Financial Crisis.
It found 95 per cent of businesses were feeling an impact of higher fuel prices, with at least 60 per cent reporting higher costs from freight, transport and cashflow issues.for the fourth time this year on Wednesday, pushing rates to their highest level since 2011, at 4.6 per cent.
"It's harder to service loans. It's harder to get new loans if you want equipment or other things," he said. Businesses have now been banned from adding a surcharge to card payments, which Mr Kuhn said helped cover expenses including petrol and wages.
"It's going to cost us a couple of thousand dollars to wear that, it's less profit for the business," he said. Christopher Hall has been forced to raise the price of his honey products for the first time in a decade to stay afloat. Hervey Bay honey producer Christopher Hall was also grappling with whether to increase the price of his raw honey buckets to $16 per kilogram.
"In the previous 10 years we've just absorbed the increased costs because it's important to maintain honey as cheap as I possibly can," Mr Hall said. Mr Hall said the extra revenue would cover rising petrol prices and growing cost of plastic containers, which is up by nearly 40 per cent this year. CQ University regional economics development professor John Rolfe said it could take up to 18 months for this week's interest rate hike to "wash through the system".
Professor Rolfe said businesses needed to make calculated spending decisions to ensure they can survive. Professor John Rolfe says it could take 18 months for the interest rate rises to "wash through the system".
"Governments are under pressure to not spend as much to try and get inflation down," he said. "We have had to increase prices to stay afloat but small producers do make the world go round," he said. Email address
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