{"id":511130,"date":"2026-03-01T05:17:10","date_gmt":"2026-03-01T05:17:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/511130\/"},"modified":"2026-03-01T05:17:10","modified_gmt":"2026-03-01T05:17:10","slug":"bank-boss-warns-australia-in-race-to-the-bottom-as-small-businesses-under-stress","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/511130\/","title":{"rendered":"Bank boss warns Australia in ‘race to the bottom’ as small businesses under stress"},"content":{"rendered":"\n

There\u2019s a part of the cost\u2011of\u2011living crunch<\/a> we don\u2019t talk about enough. What it\u2019s doing to small business.<\/p>\n

The Australian Small Business and Family Enterprise Ombudsman summed up the past year plainly: rising input costs, squeezed margins, heavier regulation, supply chain stress, and changing consumer behaviour. Small businesses are wearing all of it<\/a>, all at once.<\/p>\n

Speak to any small business owner<\/a> and you\u2019ll hear the same thing. It\u2019s not one big problem, it\u2019s ten smaller ones, all rising together. Wages. Rent. Power. Insurance. Loan repayments. And the question that sits in the gut before the doors even open: will customers who are stretched still come in today?<\/p>\n

RELATED<\/p>\n

For many owners, every day feels like a negotiation, with customers, suppliers, landlords, and lenders just to keep the lights on.<\/p>\n

That\u2019s the part most people don\u2019t see.<\/p>\n

Small business doesn\u2019t have the buying power of big corporates. They can\u2019t demand better terms. They can\u2019t spread costs across massive volumes. They can\u2019t absorb shocks with deep pockets and teams of specialists.<\/p>\n

And small businesses aren\u2019t only competing with each other. Too often, they\u2019re at the mercy of the big end of town.<\/p>\n

We\u2019ve seen it play out recently with social media platforms. Small businesses waking up to find accounts they rely on locked or suspended. Operations effectively halted overnight, with no human to call and no clear path to appeal. One decision inside a giant system wiping out small business shopfronts overnight.<\/p>\n

RELATED: Aussie hotel owners reveal ‘insane’ $48K cost behind alarming small businesses trend<\/a><\/p>\n

\"Pete Pete Dillon and husband Jigs Liwanag have been running Hotel Canberra in Ballarat for four years but say costs are getting out of control. \u00b7 Supplied <\/p>\n

It\u2019s a similar story with online shopping. By the end of this decade, global online retailers are expected to control half of Australia’s retail market. This growth won\u2019t come from nowhere, but our smallest local businesses. We worry about \u201cAI slop\u201d, but we should also worry about online slop \u2013 a race to the cheapest click. I enjoy nothing more than having a yarn as I buy my morning coffee or pick out a gift from a market stall, which can\u2019t be replicated by an algorithm.<\/p>\n

Then there\u2019s banking, which is closer to home for me. I\u2019ve worked in this industry for many years. I\u2019m proud of parts of what we do. But I\u2019m also frustrated by how often small businesses are let down. Take merchant fees for instance \u2013 the costs are complex, opaque, and almost impossible for a small operator to challenge, and a lot to swallow \u2013 in order to survive they need to reluctantly pass on the costs to their customers through surcharges.<\/p>\n

Story Continues <\/p>\n

It\u2019s David versus Goliath most days. No safety net. Just someone behind a counter, in a ute, or at a kitchen table at 10pm trying to make the numbers work.<\/p>\n

That\u2019s why our bargain culture has a hidden cost.<\/p>\n

In a cost\u2011of\u2011living squeeze, consumers shop around. We chase deals. We ask for discounts. We compare price. We go online to retailers who can deliver the same thing today, cheaper. That behaviour is understandable.<\/p>\n

But when price becomes the only thing that matters, small business simply can\u2019t compete.<\/p>\n

RELATED: Young Aussie reveals sad reason why small businesses are failing<\/a><\/p>\n

Large corporates can negotiate cheaper supply, spread costs, and squeeze terms. A small operator can only cut so far before they cut into quality, staff hours, or their own pay. After that, they don\u2019t bounce back. They close their doors.<\/p>\n

And when a small business fails, it\u2019s not just a shopfront that disappears. It\u2019s local jobs. Local families. Apprenticeships. Sponsorship of the local footy club. The familiar faces that make a suburb feel like a community.<\/p>\n

Small businesses offer something big systems can\u2019t replicate \u2013 they know your coffee order, your dog\u2019s name, and greet you like a regular, not a transaction. But there\u2019s only so much that small businesses can smile through.<\/p>\n

So what can we do, without pretending households aren\u2019t doing it tough too?<\/p>\n

One thing we can all do is aim our bargaining where the power and margins actually sit.<\/p>\n

Push hard on the big players who can take it. Re-negotiate with your bank on rates. Challenge your telco and insurer. Cancel the subscriptions that crept up quietly that you\u2019re not even using. If you\u2019re going to squeeze someone, squeeze the organisations built to absorb it.<\/p>\n

And when it comes to small business, support them in ways that genuinely help. Pay on time. Leave a review. Recommend them. Deliberately choose local.<\/p>\n

That\u2019s what voting with your wallet can look like right now. Not just chasing the cheapest price, but choosing the kind of economy we want to live in.<\/p>\n

Small business owners are resilient. Many will adapt and find a way through this cost\u2011of\u2011living crisis. But many won\u2019t.<\/p>\n

If we want an Australia where our local shops and communities thrive, we can\u2019t treat small business as just another price point.<\/p>\n

John Arnott is Director AMP Bank GO and has more than 20 years of experience in the retail and business banking space.<\/p>\n

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