A woman in a gift store

As businesses in WA emerge battered and bruised from one storm, another is quickly brewing

As the retail and hospitality industry in Western Australia emerge battered and bruised by one storm, another is soon on the way.

COVID-19 cases and restrictions in the state are dwindling as the virus begins to become an afterthought for many.

But now the businesses that have survived the past two years face an uphill battle against the rising cost of living – which some measures are felt especially in the west.

Among them is Dylan Weiner, who has owned his vegetarian restaurant just off the Beaufort Street strip in Mt Lawley for over a decade.

“Everything is going up. Oil is going up, tomatoes are going up, apples are going up,” he said.

“It’s trying to lower prices to keep customers happy too.

“So it’s just a really big juggling act.”

Gift shop owner worried about future

News from a Big interest rate hike earlier this weekand the expectation of more on the horizon, puts significant strain on people’s already overstretched budgets.

According to federal treasurer Jim Chalmers, the average new mortgage in Perth is worth about $471,000, meaning payments will increase by about $128 a month.

Combined with rising inflation, which was 7.6 percent in WA at last count, the money left over after paying rent or mortgages is buying less and less.

And that makes Beth Taylor concerned about whether customers are still happy to splurge at her Maylands gift shop.

“You must have the supplies… [you’ve] you have to feed children and take care of yourself before you come and buy really nice things, that’s what we are most concerned with.”

Difficulty doing business

Aaron Morey, chief economist at the Chamber of Commerce and Industry, said companies are describing the current situation as a “profitless boom.”

“The difficulties of doing business have never been greater,” he said.

“We have a lot of businesses in this state where revenues are rising, but costs are skyrocketing.

Retailers could be hit hard by the rate hike, Morey predicts.ABC News: Nicolas Perpitch

“So these rate hikes will only increase that pressure on those small businesses in particular.”

Mr Morey said the pain would only increase as rates continue to rise.

“A lot of households have built up those savings buffers and that will help protect them, especially with their higher mortgage payments,” he said.

“But that could come at the expense of some of that retail spending.”

Call for more household support

When Prime Minister Mark McGowan handed over his budget last month, he emphasized: two key measures to tackle livelihood pressures: A $400 credit on household electricity bills and increases in household costs and expenses that were below inflation.

But in the wake of rising interest rates, shadow treasurer Steve Thomas yesterday accused McGowan of being “addicted to his economic reputation.”

†[The government] They certainly have huge surpluses, but they don’t use it for the people, for the benefit of business or for the benefit of households,” he said.

A Transperth bus passing through the city.
The government says Transperth rates have been frozen to help with household costs.ABC news: Hugh Sando

dr. Thomas called on the government to consider freezing household money and expenses, estimated to cost less than $200 million.

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