MVA Bennett like many other businesses, including yours, is experiencing unprecedented cost pressures and this newsletter is to advise our valued clients that whilst we understand no-one wants to experience increased prices, we as a business, need to pass on some of these increases through fee increases of our own.

The Reserve Bank of Australia (RBA) has recently flagged inflation to peak around 7% in the second half of this year. Their target range is 2-3% so interest rates are on the increase as we already know. A normally low-key Phillip Lowe appeared on ABC TV to confirm this and the RBA’s determination to bring down inflation through increased interest rates.

The Fair Work Commission on 15 June, handed down a 5.2% or $40 wage increase to those on the National Minimum Wage.

We are seeing inflationary pressures throughout the world with the UK currently at 9% and USA at 8.6%. Australia is not living in isolation to these impacts.

Practically, we are all aware of the increased costs throughout the building sector regarding materials and labor due to supply and other factors outside our control. On the home front, floods have impacted the cost of living which has caused significant increases notably told in the media in respect to the cost of the humble lettuce.

No industry is immune to this which means that if they are to survive and continue to provide the services or products that their customers rightly expect, they need to look hard at their pricing. As our valued clients, we would expect you to also consider, very seriously, the movement in the costs of inputs to your business. Are these increases sustainable and is it now reasonable to pass some or all these increase onto your customers via price increases to your products or services?

At MVA Bennett, whilst we are not sourcing widgets for inputs into products. Our key input is labor and due to both a scarcity of resources as well as the wages increase within our industry, it is becoming increasingly difficult to reasonably absorb these increases. Increased fees whilst difficult to discuss, will ensure we can continue to support our valued clients and provide the advice they need and expect so they too, can navigate this time of change and uncertainty with us at their side.

We take this opportunity to thank you, as our valued client, for your continued support and good relations and to also offer our services to assist you in reviewing your own costing models to ensure your business is appropriately dealing with your inputs and any potential price increases that may be appropriate.