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The leading accounting organization, CPA Australia, has cautioned that the recent increase in interest rates is set to intensify the financial strain on both households and businesses, especially those heavily dependent on fuel.
Gavan Ord, a spokesperson for the organization, highlighted the critical nature of fuel, stating, “Fuel is not a luxury—it’s essential. When prices surge, expenses immediately follow suit, leaving little room to maneuver.”
Ord further explained that for numerous small enterprises, fuel has become one of their most significant and unpredictable costs. Coupled with rising interest rates and steady inflation, the situation is becoming increasingly dire.
“We’re seeing households cut back on spending, businesses losing their sense of optimism, yet expenses continue to climb,” he noted.
“The latest rate hike brings new challenges at a time when many were hoping to catch a break,” Ord added.
“Borrowers who might have believed last month’s rate rise was a one off will be deeply disappointed – at the same time as fuel, food and energy bills continue to climb,” Ord said.
He warned households to brace for higher prices as small businesses run out of wiggle room on their bottom line.
“Every trip, delivery and service call now costs more,” he said.
“Businesses can’t absorb these increases indefinitely, and many are running out of options.
“When costs rise this sharply and this quickly, prices at the checkout inevitably follow.
“Many small businesses will be forced to pass on higher costs, while others will delay investment, reduce services or scale back employment.”