‘Real pinch’: Why Toowoomba businesses are bunkering down

Concerning consumer data has revealed the rising costs of living are causing consumers to tighten their purse strings with several Toowoomba businesses listed for sale or closing down.

Toowoomba Deputy Mayor Geoff McDonald and Mayor Paul Antonio look over the council's annual report.

As inflation, mortgage stress and rent continues to rise, many business owners across Southeast Queensland have been forced to call it quits on their livelihoods, by making drastic changes, selling or shutting up shop completely.

Toowoomba Chamber of Commerce executive officer Lucas Wegener said there were a number of factors influencing the rising trend.

“(Businesses listed for sale or closures) is something we will start to see more,” Mr Wegener said.

“The skills shortage and housing shortage are pressures local businesses are dealing with currently because we can’t attract people to work here.

“Pair that with rises in interest rates, power, transport and business compliance costs and profit margins getting trimmer and this has become a real pinch point for businesses.”

Lucas Wegener, executive officer Toowoomba Chamber of Commerce

Mr Wegener said hospitality was one of the hardest hit sectors which had inspired the Chamber to propose its Autumn Feast event.

He said the manufacturing industry was also struggling due to the rise in operational costs and “Toowoomba being overlooked” as a destination for mass production.

With families forced to tighten the purse strings due to the mounting cost of living pressures, Mr Wegener encouraged residents to keep their money as local as possible by choosing to support small businesses rather than go online.

While Mr Wegener believes there are no simple solutions for the multi-layered issue, he said all levels of government needed to make running a business more “palatable”.

“Those different groups are responsible for those pressure points and can make doing business in the Toowoomba region quite difficult,” Mr Wegener said.

“We saw businesses start to struggle during Covid-19 when they were unable to trade due to restrictions put in place so they were already pushed to their limit.

“These added concerns are now driving them to the wall or forcing them to move on out of business.”

It comes after financial comparison site Finder revealed four in five Australians had reduced their spending and were now in “survival mode”.

The report showed 43 per cent of consumers were most worried about not being able to afford food – a significant increase from 23 per cent in March 2021.

Groceries, fuel and energy costs were also reported as the highest financial challenges.

Toowoomba charities are also feeling the pinch with Hope For Our Children spokeswoman Selena Protheroe opening up about the charity’s growing risk of closure.

Ms Protheroe said while demand for services and assistance was higher than ever, a reduction in community donations had left the charity which helps vulnerable children, in a dire position.

“Our shelves are totally empty,” she said.

“In the past six months especially we have noticed the donations have really dropped off and I imagine it’s because families are really struggling with the rising cost of living.

“I understand it’s hard for everybody right now but for us to help these children we really do need the community to continue supporting us.”

Selena Protheroe of Hope for Our Children. Picture: Kevin Farmer

On March 29, the Toowoomba Regional Council revealed it had adopted an amended budget for the 2022/23 financial year after forecasting a reduced surplus.

Finance and business strategy chair Councillor Geoff McDonald said the new findings indicated the challenges of the economic climate.

“When we adopted the Budget back in June we originally forecast a deficit of about $5.8 million,” he said.

“In October last year a reforecast indicated we were looking at a surplus of almost $3.5 million and this has now been revised to a surplus of about $730,000.”

Cr McDonald said inflation over the past year had also impacted materials and services.

“An example of this is the additional $1.32 million we’ve had to account for to support the increases in prices of fuel and parts,” he said.

Selena Protheroe (centre) of Hope for Our Children with foster mums (from left) Ingrid, Jodie and Dominique. Picture: Kevin Farmer

“We’ve also had to account for an additional $800,000 as part of our waste collection contracts which is also due to the increasing price of fuel.

“This is more than $2.1 million over a six-month period, which underlines how much the cost of living continues to increase for our residents and Council.”

Cr McDonald said early rate payments made by residents had assisted, as well as the community’s use of facilities.

“With cost price rises continuing to fluctuate, it’s crucial for Council to stay within its key financial sustainability measures which are monitored by the State Government,” he said.

“Our credit rating of sound with a neutral outlook will be challenged over the coming 10 years with so many large multi-generational projects on our books that puts our position under pressure, however at this stage there is no indication our position will change in the short term.”

TRC revealed the amendment at a special meeting on March 29.