Canberra businesses struggle as inflation outpaces national average

Casey Johnston, co-owner of a burrito business in Tuggeranong, described a challenging year for her company. “Nobody’s out and about eating and obviously that hurts us,” Johnston stated. She noted a decline in foot traffic and customers, impacting sales significantly compared to previous years. Johnston and her partner are absorbing increased costs for products and rent, choosing not to raise prices for customers. This is impacting their ability to maintain staffing levels.

University of Canberra economics lecturer Dr. John Hawkins attributed rising inflation primarily to global oil prices. Locally, fuel, electricity, childcare, school fees, new housing construction, and furniture are the main contributors, according to the Australian Bureau of Statistics. Dr. Hawkins noted that the ACT’s inflation rate is higher than Sydney and Melbourne, but lower than Hobart, Darwin, and Adelaide.

He also predicts another interest rate increase from the Reserve Bank of Australia, with an 80 percent probability of a 0.25 percent rise. Further increases are expected in December or early next year. The goal of these increases is to curb inflation by slowing down the economy and encouraging saving over spending.

Elanor, a hairdresser, has drastically reduced her discretionary spending, eliminating expenses like coffee outings, vacations, and dining at restaurants. She has observed a decrease in the frequency of hair appointments among her clients. “It is impossible to get ahead at the moment, especially here in Canberra,” Elanor said, reflecting a widespread sentiment about the rising cost of living.