RISING costs are hindering the growth of Western Australian businesses and in some cases prompting business owners to move their operations overseas.
RISING costs are hindering the growth of Western Australian businesses and in some cases prompting business owners to move their operations overseas.
These are some of the preliminary findings of the ‘Cost of Doing Business’ survey, being run by the Chamber of Commerce and Industry WA and WA Business News. The survey is still under way.
From the initial responses, 92 per cent of about 100 businesses say their total costs are ‘higher or ‘much higher’ over the past 12 months. Only a very small percentage says costs are lower.
In some cases, the jump in costs has been extreme. Two respondents in the services sector said their costs had risen by more than 300 per cent over a five-year period, while four other respondents said their costs were up by 100 per cent or more over this period.
The survey indicates that most local businesses have been unable to pass on their higher costs, at least in full.
More than three-quarters of respondents said rising costs were having a negative (58 per cent) or very negative (20 per cent) impact on their profits. Similarly, more than two-thirds of respondents said higher costs had a negative (36 per cent) or very negative (32 per cent) impact on their expansion plans.
When asked about the contributors to their higher costs, labour expenses were foremost.
This includes wage costs, selected by 86 per cent of the respondents, and ‘other’ labour costs, such as bonuses, occupational health and safety requirements and workers compensation, which were picked by 47 per cent of respondents.
The survey, which is open to the end of the month, will feed into the CCI’s ‘Cost of Doing Business’ research paper. Its aim is to get a better understanding of the costs facing businesses in WA, and to seek changes in government policy and business practices to deliver a better outcome.
The launch of the survey follows a number of studies that show WA rates poorly in terms of reducing the red tape burden on business.
Strong growth in resources investment and engineering construction has also placed cost pressure on the wider business community.
Businesses are invited to contribute by going to www.businesscost.com.au/survey to complete the online survey.
