THE high dollar is ravaging the competitiveness of Australian business. Global consulting firm KPMG reports that Australia has become the second most expensive place to do business among the major economies, behind Japan.

In its survey of global business costs, Competitive Alternatives, KPMG finds that since 2010, costs have risen more in Australia than in any other country. Most of that is due to the sharp rise of the Australian dollar against the US dollar, which has pushed up costs in every area.

Sydney is now the fifth most expensive place to do business, more expensive than New York.

Of the 113 cities surveyed, Melbourne is now the ninth most expensive place to do business, across areas ranging from manufacturing to back office services and research and development.

Sydney is now the fifth most expensive place to do business, more expensive than New York. Among the 54 big cities in the survey, only Tokyo and Osaka put more strain on corporate profitability.