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Business hit hard by rises

HIKES in interest rates and the price of petrol look certain to send some small businesses reeling.

Within twenty-four hours, interest rates rose 0.5 per cent and an increase in petrol excise of about 0.65 cents per litre saw prices jump nearly ten cents a litre.

However, what really drove the petrol price up was the oil companies’ removal of discount price support to WA petrol retailers.

There are no mechanisms in WA Government legislation that allow petrol prices to be capped.

Main price watching body, the Australian Competition and Con-sumer Commission, has no say in the fuel price.

The Federal Government has opted for a market driven petrol price which helps maximise prices for Australian produced oil.

Small Business Development Corporation managing director George Etrelezis said, of the two, the petrol price hike was likely to hurt small businesses most.

“If there is one element that affects every small business in this State, it is the price of fuel,” he said.

“It is one of the most inflationary pressures in the economy. It’s going to tack on to the price of deliveries to WA’s regions.

“However, from 1 July, the price of fuel to regional centres should come down and businesses should be able to claim input tax credits on their fuel bills.”

Mr Etrelezis said the interest rate hike also added to the bottom line cost of many small businesses.

“Many small businesses are in a borrowing situation. If they are not, the interest rate rise adds to other costs such as vehicle costs.

“With the GST coming, a rise in interest rates was not what small business wanted.”

WA Retailers Association chief executive Martin Dempsey said the double slug to small businesses showed Australia had neither a bull nor bear market.

“We’re more of a frightened animal market at the moment,” Mr Dempsey said.

“Prices surveillance is a joke. The hikes, particularly in the petrol price, are costing small retailers their already small profit margins.

“The fears of prices getting out of control now have a firm precedent,” he said.

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