A small business industry body said the increase in the minimum and award wages was just another added cost business owners will have to face, amid rising prices for essentials, including fuel, transport and goods.

“There’s actually not many costs that are going down for small businesses,” Alexi Boyd, chief executive of the Council of Small Business Organisations Australia said.

“ABS data says 43 per cent [of small businesses] had an increase in operating expenses in the latest reporting period, compared with 22 per cent last year. So, we’re seeing a massive increase to input costs,” she said.

Boyd said many businesses were already paying above award wages but were struggling to cope with worker shortages, with some businesses hiring people who then fail to show up.

“That’s why we’re seeing a contraction of the small business economy: people not operating on Sundays, people not offering eat-in; they’re open takeaway only,” she said.

She said many businesses were either unwilling or unable to pass on increased costs to customers, leading to owners working around the clock in some cases to keep their business going.

“There is a boom at the moment, and we call it a profitless boom, because there are lots of small businesses who are not able to take advantage of the money that’s flowing around the economy. They can’t offer the same level of goods and services they have previously because of the input costs, or they simply can’t get the workers to keep their doors open,” she said.

What small business needs is structural reform, Boyd said, which includes reforms to make it easier for businesses to be compliant with industrial relations regulations and good technical support for that.

“There needs to be a mature and good look at what the future of small business looks like in the next one to two years,” she said.