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Business groups have demanded the government cap any increase to the minimum wage at two per cent, in a bid to bring down inflation and avoid worsening unemployment.
Smaller companies struggling to stay afloat say they've been left 'short-changed' in the federal government's third budget.
"Small business at the moment is being strangled by rising red tape and increased input costs," Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry said.
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"They can't afford to be paying over the odds in terms of wages," he said.
Sweet Pea & Poppy Chocolate, an artisan treat shop in Murrumbateman, north of Canberra, is one of many small businesses feeling the pinch.
"Cost pressures are front and centre of everybody's mind at the moment," business owner Yasmin Coe said.
They claimed their costs increased by 30 per cent this year thanks to rising energy and transport bills, coupled with global cocoa supply chain issues.
"This has stifled supply but also forced up prices so that's become an extra challenge for us to navigate," Coe said.
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This year's budget includes $640 million to support small businesses including power bill rebates and an extension to the instant asset write-off.
"Small businesses weren't left out in the cold entirely, but they certainly weren't front and centre in this budget," Luke Achterstraat, the chief executive of the Council of Small Business Organisations Australia said.
Michele O'Neil, President of the Australian Council of Trade Unions criticised any suggestion of capping the minimum wage.
"How greedy are these big business lobby groups?" she said.
"It's unfair and it's insulting to low paid workers in Australia."
Treasurer Jim Chalmers defended the budget's contribution to small businesses while speaking in Queensland today.
"We know people are doing it tough and that's why so much of what we handed down on Tuesday night is about supporting small businesses and people doing it tough," he said.
"The cost of living relief in the budget is on top of, not instead of decent pay for working people."
