Sticky situation as super changes stretch small firms
Rising costs and cash flow pressures could force thousands of small business owners to turn to personal savings to comply with new retirement rules.
The changes, scheduled for July 1, require employers to pay employees pension benefits along with their salaries.
But there are warnings that this could make or break small businesses, as war in the Middle East and other costs hit business owners’ pockets.
A survey of 500 small firms found nearly a third (31 per cent) expected to spend their personal savings to comply with the new rules.
Five in six businesses said paying their pension more frequently would put pressure on their cash flow.
More than half of businesses surveyed by Xero said delayed customer payments, which cost them more than $15,000 on average last year, were the biggest challenge they face in managing ongoing cash flow.
In the current system, employers generally pay quarterly contributions.
Lolly store owner Rachel Turner, among nine in 10 businesses surveyed, says the changes have given stability to her young staff.
But after miraculously surviving the pandemic thanks to his daughter’s ingenuity, teething problems await as he and others enter another difficult, financially dark period.
The idea of posting videos showing the candy-making process prompted Sticky’s millions of followers, including pop singer Billie Eilish, to flock to the store’s social media.
“When COVID hit, foot traffic went down and we almost went bankrupt,” Ms Turner told AAP from The Rocks, a tourist attraction in central Sydney.
Sticky now faces rising costs as the fuel crisis ripples through the supply chain.
“Candy is more expensive, jars are more expensive, packaging is more expensive; everything is going to be more expensive,” he said.
Australian Small Business Association chief executive Anne Nalder said the super impact would be immediate across a range of sectors.
“We have a one-size-fits-all capital cap and whether you’re a big BHP or a small operator, the same rules apply and it doesn’t work. It never has and it never will,” he told AAP on Monday.
“We should have learned lessons from the pandemic, but we did not learn any lessons.”
Several transport and haulage unions have also jointly called on the government to allow emergency powers to cope with rising fuel prices.
“Businesses are inevitably in danger of collapse… because there are major retailers and other customers refusing to pay their fair share due to skyrocketing fuel costs,” Transport Workers Union secretary Michael Kaine said.
The Australian Taxation Office estimates $6.25 billion worth of pensions are unpaid, according to the latest financial year data.
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