ACT small businesses face financial strain from rising operational costs

## Squeezed Margins and Soaring Overhead Costs Local businesses are confronting a severe double-hit of rising overheads and a steep drop in customer foot traffic. According to Canberra Business Chamber CEO Greg Harford, the cost of running a business has climbed just as household expenses peak, severely limiting consumers’ disposable income. “You’ve got interest rates, the cost of petrol, all of that’s really biting consumers’ disposable income,” Mr. Harford said, noting that reduced spending means less revenue coming through the door for local operators. Commercial property rates in the ACT have jumped about 8 per cent this year, compounding financial stress for heavily indebted small businesses operating on razor-thin margins. Upcoming labor changes—such as the expansion of portable long service leave to the retail and hospitality sectors—will introduce additional employer levies, which businesses may ultimately pass on to consumers. ## Retail, Hospitality, and Pet Surrenders Feel the Pinch The retail and hospitality sectors remain the most vulnerable to these escalating financial pressures. Small enterprises reliant on immediate customer spending face severe profitability risks as household budgets tighten across the territory. This financial squeeze extends well beyond the commercial sector and into family homes. Animal shelters across Australia report ongoing strain as owners weigh daily living expenses against the cost of companion animals. Local figures from the RSPCA show that the cost of living has become a primary driver for pet surrenders in the ACT since 2022. While “unable to afford care” ranked as the seventh most common surrender reason in the 2022 financial year, it has consistently placed among the highest reasons for pet surrenders in more recent years, including being the second most common reason for the past two years.

## Frequently Asked Questions

Why is Canberra business sentiment currently so low?

According to Canberra Business Chamber CEO Greg Harford, business sentiment is severely depressed due to a combination of rising operational expenses, an 8 per cent increase in commercial property rates, high fuel prices, and constrained consumer disposable income.

Which sectors are most at risk in the ACT?

Retail and hospitality businesses are identified as the most vulnerable, particularly small enterprises that carry heavy debt loads and rely on immediate customer foot traffic.

How are rising living costs affecting local animal shelters?

The RSPCA reports that financial strain has made affordability a leading cause of pet surrenders in the ACT, shifting from the seventh most common reason in 2022 to the second most common reason over the past two years.