Australian small business costs have risen almost a quarter since 2020, per a new AMP Bank Go index, and marketing is the reflexive first cut when margins tighten. That reflex is expensive, because the businesses that go quiet during a squeeze lose ground they cannot easily win back.
The Take: Australian small business costs are up almost a quarter since 2020, and the reflex when money tightens is to cut marketing first. That reflex is expensive. The businesses that go quiet during a squeeze are the ones that struggle to be found when it lifts.
The squeeze: AMP Bank Go's new Small Business Cost Pressure Index found key costs climbed 24.6% from March 2020 to March 2026, and are on track to reach 27.1% by year end. Insurance is up 51.7%, interest payments 36.3% and wages 20.3%. Australia's 2.7 million small businesses are absorbing most of it through thinner margins and longer hours rather than raising prices. The strain is worst at the smallest end, where the number of micro-businesses with one to four staff has fallen by more than 38,000 since 2021-22.
How much small business insurance costs in Australia have climbed since March 2020
The reflex: When a profit and loss statement gets tight, marketing looks like the safe cut, because its return is slower to see than a wage or a premium. That is the trap. A wage keeps the doors open this month. Marketing is what fills the diary in three. Cut it and the pipeline dries up on a lag, right when you can least afford the drop.
Who wins: The operators who hold their nerve. In a market where 2.7 million businesses are all tightening at once, the few who keep showing up take share cheaply, because their competitors have gone quiet. We score Australian businesses on how well they can see their own marketing, and the ones who cut in a downturn rarely know what they actually switched off.
For Australian operators: Do not cut marketing as a block. Cut the parts you cannot measure and keep the parts you can prove. Before you touch the budget, confirm which channels actually bring enquiries and which just spend. If costs force a reduction, trim frequency rather than presence, so buyers still see you. Protect the cheapest channel you own, your existing customer list, because winning a repeat sale costs a fraction of a new one. Above all, decide the cut from data rather than panic, so you switch off waste and keep the spend that brings the work in.