Café owner sounds alarm on hospitality crisis ahead of Federal budget
Angela Vithoulkas has been at her Sydney café since 4.30am. By the time the morning rush subsides, she'll have been on her feet for hours. It's the unglamorous reality of running a hospitality business in 2026.
"I am in shock over how much prices have gone up," Vithoulkas told SBS News. "I have to work twice as hard now than I ever used to."
Small Doses is her eighteenth venture across four decades. She's also a former politician and small business advocate. She says conditions have rarely been this difficult. "Since I opened this new business, I've seen prices increase by around 18 per cent across everything that we do. Power bills are going up by $500 a month."
Her experience reflects a sector in serious distress. Australia's hospitality industry which was valued at $100 billion in 2025, is leading all sectors in insolvency rates, with one in ten food and beverage businesses closing in the year to March.
CreditorWatch chief economist Ivan Colhoun identifies two compounding forces. "Two key drivers of insolvencies are interest rates and energy prices. Both are much higher in recent months," he told SBS News. "If that situation is maintained, we're going to see insolvencies continue to rise in the months ahead." The agency's April data shows a growing number of operators falling 60 days or more behind on invoices.
With the federal budget due Tuesday, the Council of Small Business Organisations Australia is pushing for a permanent and expanded instant asset write-off — currently capped at $20,000 for businesses turning over less than $10 million. CEO Skye Cappuccio wants it lifted significantly. "We are also calling on the federal government to increase the threshold to what it was in 2021, which was $150,000," she says.
For Vithoulkas, the stakes are concrete. "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.
Cybersecurity has added another layer of pressure. The average cost of a cyber incident for Australian small businesses has reached $56,000 — up 14 per cent year-on-year. Vithoulkas was hit this week. "My server got hacked and I was offline for three days. I was scared because I have no idea what I've lost," she said. COSBOA is urging the government to maintain funding for the free Cyber Wardens training program in response.
Despite everything, Vithoulkas isn't looking for sympathy from Canberra. "After 40 years in business, I don't need a box of tissues to get through this. I need to sit down and plan."
She has held the line on prices, which keeps regulars coming back daily.
Australia's 2.7 million small businesses employ more than five million people. "Investing in small business owners is investing in Australia's future," Vithoulkas says. "Ignoring us will lead to more unemployment and less prosperity."
Jonathan Jackson, 11th May 2026
