Talal Almardoud is frying eggs in the kitchen of his Syrian restaurant in Sydney’s west. It's not a meal for customers, his breakfast buffet is now closed due to rising costs and lack of staff.
Instead, he is cooking for his 6-year-old son, Masbah. Mr Almardoud says cutting opening hours was the best option.
“We had an increase in all kinds of prices and expenses, especially business bills," he tells SBS.
“There's a lack of employees to hire and the wages that we have to pay are also more expensive."
According to the Australian Bureau of Statistics, the labour shortage impacting retail trade is worsening.
New figures released this week reveal a sharp rise in retail trade vacancies, up by 14.4 per cent since May this year to 46-thousand vacancies in August.
To cope, many business owners including Mr Almardoud have cut trading hours which in turn leads to lower revenues.
Talal Almardoud with a platter of Syrian food Credit: SBS / Emma Kellaway
The voyage by boat from Indonesia almost cost his life.
“I came by sea and I faced death at sea, when our boat [capsized] I almost died,” he says.
Initially, he ran a successful catering business called Syrian Kitchen.
Then in May last year he opened Damascus Restaurant in Sydney's Bass Hill, celebrating the cuisine of his homeland.
However, the timing wasn't good. One month later a long COVID lockdown was imposed. Like many restaurant and cafe owners, he was forced to pivot to take-away only.
As a temporary visa holder, Mr Almardoud was also unable to access government benefits.
Now rising costs are eating into profit margins adding to his financial worries.
“Because of the increasing prices, I struggled to pay rent last month and I don’t know how I am going to pay my rent this month,” the 42-year-old says.
These worries are shared by small business owners across Australia. Many are struggling to cope with higher fuel costs, rising interest rates and soaring inflation.
This week, the Australian Bureau of Statistics monthly CPI indicator recorded inflation at 6.8 per cent in the 12 months to August. Fuel rose by 15 per cent, while fruit and vegetable prices soared by 18.6 per cent.
The number of small business owners unable to pay their bills is also rising, according to Australia’s leading commercial credit reporting bureau, CreditorWatch.
“A leading indicator of coming insolvency is trade payment defaults, and they are surging up 53 per cent year on year,” CEO Patrick Coghlan says.
“A trade payment default is a creditor registering a default against a customer who hasn’t paid their bill. So it’s an important indicator showing that more businesses are not paying their invoices.”
He says businesses at highest risk are based in south-east Queensland and western Sydney, which have higher-than-average rates of personal insolvency and lower-than-average incomes.
Certain industries are also at higher risk of default over the next 12 months.
“Those industries are food and beverage services, arts and recreation, and also education and training,” Mr Coghlan says.
Charles Lethbridge is a partner at Sydney legal firm Atwood Marshall Lawyers, and says many of the current financial pressures are a by-product of the pandemic.
“Measures put in place by the federal government during the pandemic are now being phased out, with the effect that bankruptcies and liquidations are on the rise,” he says.
Adding to the pressure, the ATO (Australian Taxation Office) has ended its two-year freeze on penalty notices, and is expected to vigorously pursue around $69 billion in unpaid taxes.
Alexi Boyd CEO of COSBOA Credit: Supplied COSBOA
"Seek help from trusted advisors and talk to professional associations, because they will have experienced this in other ways and can offer the right advice and support.
"It's also really important that small business owners think of their mental health first. Beyond Blue has a fantastic program called New Access, which is run by small businesses for small businesses.
"So get good advice about how to see your way out of this really difficult situation.”
Mr Almardoud at work in his restaurant Credit: SBS / Emma Kellaway
“If things keep going the way they are I will be forced to shut down my business and look for another job to pay the late rent and the costs that have piled up,” he says.
