Rebecca Foley co-owns Sprout Artisan Bakery in Brisbane, a business that has operated since 2014 and survived the pandemic. But right now, she is not sure how much longer the numbers will work.
"Almost everything has gone up, ingredients, wages, energy," Foley explained to Nine.com.au. "Our suppliers put up their prices of flour and chocolate by 30 per cent. Obviously the fuel increases in the past few weeks have been pretty intense too."
Foley is not alone. Across Australia, cafe owners, bakers, and restaurant operators are caught in an economic squeeze that threatens the viability of their businesses. Rising supply costs and wage pressures have eroded profit margins for years, but a new federal superannuation rule is about to make the situation worse.
The PayDay Super law, introduced to tackle persistent unpaid superannuation, takes effect on July 1. It will require business owners to pay superannuation at the same time salaries and wages are processed, whether that be weekly, fortnightly, or monthly, instead of the current quarterly arrangement. For many small business owners, this is a critical problem.
"What we used to manage quarterly now becomes a weekly obligation, alongside our payroll," Foley said. "In a bakery business like ours at Sprout, we pay weekly. And revenue can fluctuate day to day."
The scale of concern is significant. Research from global small business platform Xero found that 84 per cent of small business owners worry that late payments from customers and stakeholders might prevent them from meeting the new superannuation obligation. A further 31 per cent expect to dip into their own savings to manage it.
The pressure extends beyond hospitality. Jasmine Gescheit, who runs her own fashion label Jasmine Alexa in Melbourne, has already begun implementing PayDay Super early to avoid a cashflow crisis in July. She describes the broader economic environment as one of "lumpy" cash flow, where retailers and suppliers have slowed their own payment cycles, creating a bottleneck that flows downward through the supply chain.
"All that falls on us at the end of the day," Gescheit said. "But it's just the reality at the moment."
According to Xero Economist Louise Southall, small businesses in Australia are paid on average 6.6 days late, a delay that compounds with new compliance obligations. "Extra pressures like regular superannuation obligations can turn this cashflow pressure into a crisis," Southall noted.
The cost picture is bleak. Foley has resisted raising prices on her takeaway coffee and croissants, even as her input costs have climbed. She remembers when a pastry cost $5; now customers recoil at the $10 price tag. "Every single price decision carries weight," she said.
Both Foley and Gescheit have called on the federal government to provide better education and support for small businesses, particularly when new compliance laws arrive with little notice or guidance. The sentiment reflects a broader frustration: these business owners feel caught between economic forces beyond their control and regulatory changes that compound the pressure at precisely the wrong moment.
For small business owners already managing fragile cashflow, the next few months will test whether they can survive the combination of persistent cost inflation and the new superannuation rules. The outcome matters not just for the owners themselves, but for the thousands of Australians who depend on these businesses for employment.