Regional Australian Small Businesses Face Rising Costs, Labour Shortages and Housing Crisis

A new COSBOA and CommBank‑backed report finds that 87% of regional Australian small businesses have seen operating expenses rise over the past year, while 73% report a drop in profit. Only 18% expect profit to improve in the next 12 months. Hiring is increasingly difficult, with 87% of firms reporting trouble filling roles, especially in skilled trades. More than half of owners rate local housing access as poor, a factor that hampers recruitment, and 37% cite fuel costs as a major pressure. Stress levels are high, with 77% of owners experiencing business‑related anxiety.

At the same time, analysts warn of a growing bearish sentiment across Australian equities. Persistent high interest rates, a fragile property market and possible changes to capital gains tax and negative gearing are expected to dampen growth. Yarra Capital’s Dion Hershan criticised recent budget policies as “confidence destroying” and highlighted short‑interest in the nation’s four major banks. ANZ CEO Nuno Matos echoed concerns about stagnant per‑person growth. Despite the gloom, Hershan identified opportunities in software firms such as Xero, Seek and Carsales, as well as in energy and mining companies, while urging caution on retailers and real‑estate trusts.