Friday 14 March 2025
BUSINESS ILLAWARRA DEMANDS INSURANCE ACTION, RALLIES FOR SMALL BUSINESS!
Business Illawarra warns that rising insurance costs, skills shortages, and falling consumer spending are still eroding business confidence —despite a slight improvement in sentiment.
Business NSW’s latest quarterly Business Conditions Survey reveals the South Coast and Southern Highlands has improved from -75.0 in Q4 2024 to -54.5 in Q1 2025. While this uplift is encouraging, Business Illawarra Director Coralie McCarthy warns that local businesses remain under pressure, with confidence levels still amongst the lowest in NSW.
“Insurance, rising costs, skills shortages, and red tape are holding businesses back,” Ms. McCarthy said.
“We need to rebuild confidence in our region—it’s been in negative territory for too long.”
The survey found that while falling interest rates have brought some hope, only 54% of businesses in the South Coast and Highlands believe a rate cut would benefit them—compared to 65% across NSW.
INSURANCE COSTS CRIPPLING LOCAL BUSINESS
A staggering one in three NSW businesses have faced insurance premium hikes of 30% or more—and in the South Coast and Highlands, it’s even worse. Nearly one in two local businesses reported the same, far outpacing inflation (2.5% for the year to January).
Even more concerning, a December survey of Business NSW members found that 64% of businesses in NSW are not fully insured against catastrophic events. With the region’s history of bushfires and floods, this is a major economic risk.
“In quiet conversations, business owners tell me they simply can’t afford their insurance premiums,” Ms. McCarthy said. “Many are forced to take the risk—hoping we don’t get hit by another disaster—while working day and night just to stay afloat.”
“People are scared to say it aloud, but the reality is stark: if another major disaster strikes, many businesses won’t survive and families will be left with unmanageable debt, our whole economy will suffer.”
Business Illawarra is calling for urgent action from both state and federal governments to step up and take immediate action to address skyrocketing insurance costs.
“We need real solutions now. If we don’t address this, the fallout will be huge—not just for businesses, but for the entire economy” Ms. McCarthy said.
“Governments must realise they can’t just keep adding taxes, we have the Emergency Services Levy (ESL), stamp duty, GST, payroll tax, income tax… they need to come to the table and work with business to fix this broken insurance system”
COMMUNITIES CAN HELP BY SHOPPPING LOCAL
Beyond government action, Business Illawarra is calling on the community to back local businesses.
“It’s easy to feel powerless, but communities are strongest when they work together,” Ms. McCarthy said.
“From retailers to manufacturers, our region is home to world-class businesses. Every dollar spent locally makes a difference—it keeps jobs in our region, strengthens our economy, and ensures our businesses survive.”
Now is the time to act—shop local, support businesses, and keep our region thriving.
Other key findings from the Business Conditions Survey:
- Business confidence is improving but remains fragile: The NSW Business Confidence Index rose to -44.7 for the March quarter of 2025, the highest reading in almost three years.
- Hiring remains stable but skills shortages remain: 81% of businesses plan to maintain the same headcount or hire additional staff across the state, with businesses in the South Coast and Highlands reporting difficulty accessing skilled workers as a significant barrier to growth.
- Technology investment on the rise: More businesses are investing in technologies like Artificial Intelligence (AI) to boost productivity across the state and this is reflected in the results for the South Coast and Highlands.
- Red tape is a major barrier: Businesses in the Shoalhaven and Southern Highlands reported government red tape a higher burden of business than in other parts of the state, with comments reflecting challenges with Development Applications a critical barrier to doing business.
- Government spending cuts are affecting regional businesses: Reduction in government spending in NSW is impacting sales and profits regionally across multiple sectors.
- Visitor Economy is struggling: The Visitor Economy sector continue to struggle with comments suggesting a downturn in visitor numbers and spend over quarter. This is anticipated to have a direct impact on the retail, hospitality and accommodation sectors but also a flow on impact to the supply chain that supports the industry.
- Key drivers for stronger confidence in 2025 in the South Coast and Highlands: Action to support a reduction in insurance premiums, further interest rate cuts, easier access to skilled workers, improved coordination in promotion of the region and a stronger sentiment to buy locally.
— ENDS —
Media Contact – Coralie McCarthy 0417 431 564
Business Illawarra proudly connects small business to advocate for change. Some local businesses who are happy to support this release with their own business story.
- Brendan Goddard, Macey Insurance Brokers work throughout the Shoalhaven, Illawarra, Southern Highlands and Macarthur – Brendan can talk to you about rising costs of insurance and what change is needed for businesses to survive
- Laurie Stewart – runs a taxi business in the Southern Highlands. He has always run a fleet of 22 taxis, but now can only find enough skilled workers to support half the fleet, despite high demand for the service and high wages. Laurie can talk to you about lack of skilled workers and what it means in his business –
- Joanne Doughton – a small business franchise owner with two stores in Wollongong, Joanne can talk to you about the impacts of online competition and increased tax on small business
About Business Illawarra
Business Illawarra is the region’s peak business organisation; a not-for-profit advocacy group dedicated to the economic development of the Illawarra, including the South Coast and Southern Highlands.