$5k monthly energy bills ‘killing’ small business

The price of gas and electricity and major increases in rent and wages has created a perfect storm for Sydney’s small businesses. Chris Bowen has blamed ‘a decade of neglect under the Liberals.’

Energy prices are crippling small businesses in Sydney- as they struggle to stay afloat in a perfect storm of skyrocketing bills and plummeting consumer spend.

It comes as new data reveals almost 4,000 businesses have gone into administration this financial year – including hundreds of cafes, restaurants and retail shopfronts.

The growing cost of gas and electricity – plus major increases in wages, rent and insurance – has resulted in businesses reducing staff numbers and operating hours. Many have been forced to slash the income they take home to their family.

With the Albanese Government under fire for breaking an election promise to reduce power bills for ‘families and businesses by $275 a year’ by 2025, The Saturday Telegraph has spoken with multiple businesses who say their energy costs have doubled in just two years.

David Weng, the owner of a dry-cleaner at Gordon has just been forced to pay $3,826 for his December gas bill. That had increased from $2,000 in November.

Gordon dry cleaner David Weng has just received a monthly gas bill for almost $4,000, which is ‘killing’ his business. Picture: Supplied

Mr Weng, who has run the business with his wife Mary for 14 years said: ‘it’s shocking. It’s killing us. It really spoils my business. If you are running like that - there is no way you can keep going.’

The whopping monthly charge to a Sydney dry cleaner is further proof of the state’s ongoing energy shortages. NSW does not have a local gas supply, with exhaustive works continuing for Santos to begin drilling at Narrabri.

NSW Energy Minister Penny Sharpe urged small businesses to take action ‘through the Energy Made Easy website.’

‘They may be able to reduce their bills straight away’ Ms Sharpe said.

In the heart of the Parramatta CBD, a well-known restaurant’s gas and electricity bills have doubled and are approaching $7,000 a month.

Mama and Papas owner John Chammas told this masthead: ‘there’s no way we can reduce our energy use. You can’t turn your fridges off. We need the air conditioning. You can’t switch the lights off when we have customers.’

John Chammas, owner of Mama and Papas restaurant in Parramatta, is now paying $7,000 a month for electricity and gas. Picture: Julian Andrews

Mr Chammas said his growing costs, including substantial wage increases, had forced him to ‘cut 25 to 30 per cent of our workers’ and it was ‘almost impossible’ to pass onto his customer.

‘You go to the city… you don’t mind paying $50 for a pasta if you’ve got a water view in front of you. (But) that’s too much in Parramatta’ he said.

Meanwhile only 100 metres up the road on Parramatta’s Church Street, the owners of Lichaa Menswear conceded they now go on a payment plan for their energy bills.

‘Electricity is through the roof. It’s about double what I paid a few years ago. I can’t keep up’ Anthony Lichaa said.

It is a similar story at Ace’s Seafood Takeaway at Ermington, where the owner reacted strongly when asked about his power costs.

‘Electricity’s huge mate… it’s HUGE’ George Daher told this masthead.

‘We’re paying $15,000 a quarter. No one sees that (cost). There’s nothing you can do’ Mr Daher said.

George Daher pays $15,000 a quarter for electricity. He owns Aces Seafood in Ermington. Picture: Julian Andrews

The crippling bills hurting Sydney’s business community were put to Chris Bowen on Friday afternoon. A spokesperson for the Federal Energy Minister blamed ‘a decade of neglect under the Liberals’ but acknowledged ‘energy prices for small businesses are too high.’

‘We have delivered $650 in energy bill relief to small businesses’ the spokesperson said.

In Penrith, Jess Jenkins runs three venues, including the popular bar and cafe Mr Watkins, where energy costs a combined $4,000 a month - a figure which has doubled in a matter of years.

The annual cost of power, Ms Jenkins said, prevented them from ‘putting money back into the business, hiring more staff and upgrading things.’

She also said it was a reality for small business owners to now be working longer hours in their venue to keep costs down: ‘you don’t have a choice… we’re often cleaning bathrooms, scrubbing things. Hospitality the profit margin is so small. We’re working really hard for the turnover that we do get.’

Jess Jenkins, owner of Mr Watkins Bar at Penrith pictured with staff, said her ‘spend per head is down’. Picture: John Appleyard

Ms Jenkins also noted that household pressures, including family mortgages, meant people weren’t spending as much in store.

‘People used to do two or three coffees a day, they are definitely down to one. Spend per head is down. People are a lot more aware of what their budget is’ Ms Jenkins said.

These consumer are also occurring at Drummoyne’s Espresso 2047. Owner-operator John Christopoulos notes: ‘the frequency of purchase has changed. A lot of people who would buy a coffee every day now buy it every second day, or three times a week. It puts a big onus on us as operators to keep prices competitive... so people can come more regularly.’

New data, released by the Australian Securities and Investment Commission (ASIC) on Wednesday, revealed 611 accommodation and food service businesses went into administration since July 1.

A total of 3,985 businesses across NSW went into administration in the financial year to date.

Portraits of Phil Barbaro and staff in his cafe Avenue on Chifley in the CBD. Pics by Julian Andrews.

In the CBD at the Avenue on Chifley cafe, Phil Barbaro gave a dire warning for the future of the industry.

‘I’m pulling money out of what we made in December just to survive January. The cost of everything has gone up. We can’t pass that cost on or we’d be deemed to be too expensive.’

What does he take home to his family?

‘Nothing. That’s the honest truth. A salary if we’re lucky’ Mr Barbaro said.