1. The Aussie dollar is on the move
The Australian dollar recently dropped to a low of 59.15 US cents – its weakest point since March 20201 , affected by geopolitical uncertainty, lower commodity prices and struggling domestic growth. This shift can affect the cost of doing business internationally. For importers, a weaker dollar means paying more for goods sourced overseas. Exporters, on the other hand, may benefit if demand for their products holds steady. Additionally, a lower exchange rate may encourage consumers to buy locally rather than from overseas retailers, potentially giving local small businesses a welcome boost in sales.
2. Global tariffs are hitting supply chains
New US tariffs – potentially up to 145 per cent on Chinese imports – are shaking up global trade2. While these changes originate offshore, their ripple effects are reaching Australia. Small businesses, particularly in the retail sector and other industries that rely heavily on Chinese imports, could face higher prices or delays from overseas suppliers, especially those tied to Asian manufacturing hubs. Increased freight charges and longer delivery timelines may also add to the pressure. As a result, small businesses may need to consider passing on some of these costs to customers through price increases, or alternatively, look for opportunities to cut expenses elsewhere in their operations. According to CommBank’s post-election analysis,3 Australia - and so Australian small businesses - are well positioned to weather this period of tension between China and the US, but additional cost pressures and logistics complications are worth preparing for.
3. Interest rate cuts may offer relief
With growth slowing, the RBA is expected to cut interest rates from 4.10% – CommBank predicts a cut each quarter for the rest of the year4. Lower rates can ease the pressure on existing loans – and might give you room to invest, expand or hire. Rate cuts are also intended to stimulate consumer spending, which, combined with low unemployment rates (just over 4%)5, may bring a lift in demand for products and services across many sectors.
4. Doing business still costs more
While inflation is easing globally (the RBA expects underlying inflation to return to the 2-3% target range this year6), the cost of doing business hasn’t followed suit. From wages to utilities, small business owners are still feeling the pinch. Rising energy costs and continued supply chain issues are contributing to ongoing price increases across essential goods and services, and price-sensitive customers are likely to still keep an eye on their spending. Additionally, gas prices continue to be a pain point for many small businesses. East-coast gas prices currently sit at around $15-16 gigajoules7, and such costs have a direct knock-on effect for the margins of enterprises across manufacturing, hospitality, and beyond. It's predicted8, however, that the Government will make a concerted effort to minimise increases across electricity and gas markets to help cushion the impact of these growing costs.
5. Election outcome could shift the playing field
With Labor securing a win at the polls – small business owners can expect a continuation, and possible expansion, of the government’s existing policy direction. While neither major party promised sweeping changes for small businesses this election, Labor’s re-election signals the return of initiatives like the $20,000 instant asset write-off for another year9, $150 energy bill relief from 1 July10, and further support for digital infrastructure like the NBN11. At the same time, business owners should prepare for potential shifts in industrial relations and superannuation policy12,13, as well as updates to workplace laws that may bring new compliance obligations. Many of these changes may not be felt overnight, but over time they could impact how small businesses manage costs, invest in growth, and navigate red tape. Staying informed will be key to making the most of new opportunities – and staying resilient through change.
