‘Tougher now than in Covid’: QLD businesses being hit in cost-of-living pain

The cost of living is biting so hard now that some businesses are finding it tougher now than during Covid, due in part to people cutting back on discretionary spending.

The cost of living is biting so hard now that some businesses are finding it tougher now than during Covid.

Horizons Motel in Mermaid Beach manager Kim Hollow said people cutting back on holidays, as well as skyrocketing bills, meant tighter margins than during the pandemic.

The Reserve Bank hiked rates 10 months in a row since April last year, before giving relief to homeowners and small businesses by holding steady on Tuesday.

The move was welcomed by Finance Minister Katy Gallagher, but Opposition treasury spokesman Angus Taylor said inflation was still far too high.

Horizons Motel manager Kim Hollow. Picture: Nigel Hallett

Kim Hollow said there was about a 45 per cent occupancy rate in the first quarter of the year, compared to 80 per cent during the same period in 2022 and 64 per cent in 2021.

“The situation now compared to when we were in the middle of Covid has deteriorated,” he said.

“There’s also been a significant jump in power bills. It was up 33 per cent in just one quarter.”

Mr Hollow said people were cutting back on discretionary spending like holidays, or taking shorter stays.

Accommodation Association interim CEO Michael Johnson said some areas were holding up well, but he expected to see more of an impact in the second half of the year.

“There’s a watching brief on what happens in the second half of the year, when it starts to pinch on discretionary spending,” he said.

Mr Johnson said there had been a return to normality, after pent up demand during Covid saw an increase in Australians travelling domestically, but there had yet to be a strong improvement from the international market.

Finance Minister Katy Gallagher said the RBA’s decision to pause rate rises was welcome and followed signs that inflation had “likely passed its peak”.

“But we know that it will remain higher than we like for longer than we like,” Senator Gallagher said.

“That’s why addressing inflation was a key priority in the October budget … I think that’s why we’ve also focused on those sensible cost of living relief measures we can provide without adding to the inflationary problems.”

Opposition treasury spokesman Angus Taylor. Picture: Martin Ollman/Getty Images

Opposition treasury spokesman Angus Taylor said inflation was far too high and urged Labor against a “big-spending budget” in May.

“It is essential the government do everything it can to put downward pressure on inflation and interest rates and that means controlling its spending in the upcoming budget and targeting a balanced budget,” Mr Taylor said.

“Australian families are having to make difficult decisions to manage their budgets – the government must do the same.”

Federal economics committee deputy chair and LNP MP Garth Hamilton said people were hurting and the weekly grocery shop was still on the rise.

“To avoid more rate rises we need to see fiscal policy that goes beyond just restraint,” he said.

Originally published as ‘Tougher now than in Covid’: QLD businesses being hit in cost-of-living pain