The new financial year started with no relief on the cost of running a business in Victoria. If you were hoping the numbers would ease off, they won’t. So the sensible move is to take tighter control of your own, because that’s the part you can actually change.
Here’s where things stand, and what we’d suggest you do about it.
The pressure is real, and it isn’t easing
The 2026-27 state budget gave no payroll tax relief. The metropolitan rate stays at 4.85%, and Victoria continues to lean heavily on land tax and property-related taxes. If you own or lease premises, that flows through to what you pay either directly or in your rent.
At the same time, Victorian CPI is forecast at around 3.5% for the year, while real economic growth sits near 1.5%. Read those two figures together and the problem is clear: your costs are rising more than twice as fast as the economy is growing. Wages, stock, rent, insurance and utilities keep climbing, and demand stays soft while households watch their own budgets.
That combination squeezes margins. Waiting for it to improve isn’t a plan. Getting a firmer grip on your numbers is.
Know your real margins first
You can’t protect a margin you haven’t measured. Plenty of owners know their total revenue and their bank balance, but couldn’t tell you the gross margin on each product, service or job. That’s the number that matters right now.
Work out what each line of your business actually earns after the direct costs of delivering it. You’ll often find one or two areas quietly running at close to break-even once wages and materials are counted properly. Those are the ones to fix or drop.
Review your pricing, then review it again
When costs rise and you hold your prices, you absorb the increase and your margin shrinks. Many businesses haven’t moved prices in a year or more, which means they’re selling 2026 work at 2024 prices.
Look at your prices against your current costs, not the costs you had when you last set them. A modest, well-explained increase on the right lines usually holds better than owners fear, especially when the value is clear. If a full increase feels risky, start with your lowest-margin items where the case is strongest.
Watch budget against actual, every month
Set a budget for the year, then compare it to what actually happened, month by month. That comparison is where the useful information lives. A cost that’s drifted 15% over budget shows up in the monthly review while you can still do something about it, not in next year’s tax return when it’s too late.
This is the habit that separates owners who feel in control from those who feel at the mercy of their bank balance. It doesn’t need to be complicated. It needs to be regular.
Forecast your cash flow, don’t just hope it holds
Profit and cash aren’t the same thing, and in a tight year the gap between them can catch you out. A profitable business can still run short of cash if customers pay slowly, stock ties up money, or a tax bill lands in a quiet month.
A rolling cash flow forecast shows you what’s coming before it arrives. That’s how you spot the tight month in advance and plan for it, rather than scrambling when the account runs low. Regular cash flow health checks are one of the simplest ways to take the stress out of a hard year.
Cut the waste you’ve stopped noticing
Costs creep. Subscriptions you no longer use, a supplier who’s crept up on price while a cheaper option sits next door, stock that moves too slowly, overtime that’s become a habit rather than a need. None of these feel large on their own. Added together across a year, they’re often the difference between a thin margin and a comfortable one.
Go through your expenses line by line once a quarter and ask whether each one still earns its place. Keep what drives revenue. Trim what doesn’t.
Where we come in
None of this works as a one-off. It works when the numbers stay in front of you and someone helps you read them.
That’s the job we do. We sit down with you regularly, run health checks on your cash flow, set a budget you can actually work to, and go through it against your real results each month or quarter. When something moves the wrong way, you hear about it early, while there’s still time to act. The result is fewer surprises and a business that keeps funding the life you want it to, even in a year like this one.
If margins are feeling tight, let’s look at your numbers together. Book a free first consultation or call us on 1300 226 722.
This article is general information, not personal advice. Please talk to us about your own situation before acting on anything here.
This article is part of our complete 2026-27 guide to small business tax in Australia.
