Amid the bustling morning activity at a lively café in Sydney’s northern suburbs, freshly baked muffins are neatly arranged behind glass displays. Angela Vithoulkas, a small business proprietor, is already immersed in the long hours of her day.
Her latest venture, Small Doses café, presents Vithoulkas, a seasoned entrepreneur, with the challenges of making a profit in the year 2026.
“I’m astounded at how much prices have surged,” she shares with SBS News.
“The effort I put in now is double what it used to be. My day starts at 4:30 in the morning and often ends around 5 in the evening, six days a week,” she explains.
This marks Vithoulkas’ eighteenth business endeavor, and as a former politician and advocate for small businesses, she acknowledges the current economic climate is particularly demanding.
“Since launching this business, I’ve witnessed an 18 percent increase in costs for everything we do. Our power bills alone have risen by $500 a month, despite my best efforts to conserve energy,” she notes.
Australia’s hospitality industry was valued at $100 billion in 2025, but is already experiencing record-high business failures, leading all other sectors in insolvencies.
One in 10 food and beverage businesses closed their doors in the year to March.
As the Albanese government prepares to hand down its fifth budget, tax relief and moves to reduce red tape are forecast. Treasurer Jim Chalmers aims to save businesses money and boost productivity.
However, small business owners like Vithoulkas will also be watching closely for any relief on rising energy costs, interest rates and broader operating pressures, measures that might ease the strain on already tight margins.
Small businesses under pressure as costs rise
The latest interest rate rise was another blow for Australia’s 2.7 million small business owners, many of whom carry hefty business loans.
Ivan Colhoun, chief economist at credit reporting agency CreditorWatch, says: “Two key drivers of insolvencies are interest rates and energy prices. Both are much higher in recent months.
“If that situation is maintained, we’re going to see insolvencies continue to rise in the months ahead,” he tells SBS News.
According to the April data from CreditorWatch, a growing number of food and beverage companies are up to 60 days behind in paying their invoices.
“We are seeing an increase in credit inquiries, particularly about food and beverage companies,” Colhoun says.
Industry calls for more support in federal budget
The industry peak representative body, Council of Small Business Organisations Australia (COSBOA), is seeking more support for small businesses.
As well as making the instant asset write-off permanent, COSBOA has urged the government to increase the threshold in Tuesday’s budget. It covers tax deductions of up to $20,000 for eligible purchases.
The scheme currently allows small businesses with an aggregated turnover of less than $10 million to deduct the cost of eligible assets such as equipment and tools, rather than depreciating them over time. It is available for assets first used or installed, ready for use, between 1 July 2025 and 30 June 2026.
COSBOA CEO Skye Cappuccio says: “We are also calling on the federal government to increase the threshold to what it was in 2021, which was $150,000.”
The instant asset write-off is a proven measure to support small businesses to invest in their own growth.
Vithoulkas welcomes COSBOA’s proposal.
“I need a new commercial fridge that costs around $80,000. An increase in the write-off would mean that, instead of depreciating, I could claim it on tax,” she says.
“Raising the write-off threshold would also give business owners a chance to assess what they’re going to upgrade and how they’re going to do it.”
There are other threats facing owner-operators.
The average self-reported cost of a cyber incident for Australian small businesses has risen to $56,000, up 14 per cent on the previous year, according to the latest Australian Signals Directorate’s Annual Cyber Threat Report.
Vithoulkas is among those affected.
“My server got hacked this week, and I was offline for three days. I was scared because I have no idea what I’ve lost. I don’t know if I’m ever going to get it back, and I don’t know what’s been interfered with,” she says.
Cappuccio hopes the government continues to fund the Cyber Wardens program, which offers free short courses for small business operators.
“Cyber Wardens is a really important program, supporting small businesses to increase their cyber awareness and their cybersecurity at a time when that really matters,” she says. “We are calling on the government to continue their investment.”
Vithoulkas says upskilling has been a constant throughout her decades running businesses, after growing up in a family of entrepreneurial Greek migrants.
“My parents arrived in Australia, separately, in the 50s and 60s. They were small business owners as well. So that’s where I learned to work long hours and step up for a challenge,” she says.
Despite the headwinds, Vithoulkas isn’t looking for a handout in the 12 May federal budget.
“After 40 years in business, I don’t need a box of tissues to get through this,” she says.
“I need to sit down and plan. How can my menu improve to become more profitable? Where else can I save costs? And how can I grow the business?”
Vithoulkas is also reluctant to pass on costs to customers.
“I think people do expect prices of things like coffee to go up in line with interest rate rises, inflation, global conflicts, fuel supply shortages,” says regular customer Lutfi Hady.
“However, these guys have been good at keeping their prices stable, so I am here every day.”
Vithoulkas also makes a point of greeting most customers by name before taking their orders.
“That really goes a long way, keeping a personal connection with people,” Hady says.
It’s just a few of the reasons that, over the past 40 years, Vithoulkas has run so many successful businesses.
She says a strong small-business sector is vital to Australia’s economic growth.
Australia has been built on the back of small business. There are 2.7 million now operating, and they employ more than five million people.
“So, investing in small business owners is investing in Australia’s future. Ignoring us will lead to more unemployment and less prosperity,” she says.
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