Latest / 360 with Katie Woolf / Chamber of Commerce CEO NT Greg Ireland expects spending will remain strong over Christmas despite another interest rate rise

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Chamber of Commerce CEO NT Greg Ireland expects spending will remain strong over Christmas despite another interest rate rise · 360 with Katie Woolf

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  Speaker 1: Well, yesterday we learned the Reserve Bank and raised interest
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  Speaker 1: rates for an eighth straight month, lifting its target by
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  Speaker 1: zero point two five percentage points. As at battles sky
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  Speaker 1: high inflation. Now, the Christmas hike takes the cash rate
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  Speaker 1: to three point one zero percent. It is the highest
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  Speaker 1: level since twenty twelve, adding another seventy five dollars to
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  Speaker 1: a typical mortgage bill. Now joining me on the line
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  Speaker 1: right now is the Sea of the Chamber of Commerce
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  Speaker 1: here in the Northern Territory, Greg Island.
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  Speaker 2: Good morning to you, Greg.
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  Speaker 3: Good morning Katie. I hope you're feeling better today.
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  Speaker 1: I'm struggling through a bit, mate, but I'll get there. Hey,
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  Speaker 1: we know that you know this, the rising of the
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  Speaker 1: interest rates. It's no doubt that it's having an impact
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  Speaker 1: on a lot of people. I know, even in our
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  Speaker 1: household budget. It's certainly it's gone up so much I
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  Speaker 1: guess in the last few months that it has an
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  Speaker 1: impact on everybody. But what do you reckon it means
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  Speaker 1: for businesses ahead of Christmas?
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  Speaker 3: Yeah? LOOKI spot on, Katie. I mean, we've seen eight
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  Speaker 3: consecutive great increases, but it still doesn't seem to be
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  Speaker 3: halting the inflationary pressure that continues to bear on the economy.
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  Speaker 3: So I think this rate rise indicate so we've still
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  Speaker 3: got more to come, and we're certainly not out of
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  Speaker 3: the woods.
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  Speaker 1: And what a local business is saying to you, because
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  Speaker 1: typically this is the time of the year when most
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  Speaker 1: people will get out there, they'll be spending their money.
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  Speaker 1: I reckon a lot of people still will, but at
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  Speaker 1: some point there's going to be a halting you would
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  Speaker 1: think of, you know, of people sort of able just
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  Speaker 1: to spend on going to restaurants, going to shops and
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  Speaker 1: that expendable sort of cash that they may have had
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  Speaker 1: in the past.
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  Speaker 3: Yeah again, spot on, Katie. I mean, given the inflation
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  Speaker 3: is still forecast to grow over the next few months
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  Speaker 3: into the next year, we still think that there will
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  Speaker 3: be strong spending over Christmas. That's really coming off the
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  Speaker 3: back of a couple of things. Firstly, the saving rates
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  Speaker 3: during COVID were unprecedented, never seen before, the amount of
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  Speaker 3: sha that took place, so people do have some cash
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  Speaker 3: reserves typically, but we've also seen wages growth. So the
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  Speaker 3: ABS statistics for the September quarter show that nationally that
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  Speaker 3: wages growth was at two point nine percent, So with
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  Speaker 3: low unemployment and growing wages, people will still still be spending.
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  Speaker 3: But we also have to be aware that we're coming
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  Speaker 3: off the back of significant mortgage pressure with people coming
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  Speaker 3: off fixed rates onto variable rates over the next few months.
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  Speaker 1: And is it in the back of local business minds
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  Speaker 1: at the moment, Greg that you know this, people are
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  Speaker 1: going to be doing it a bit tougher.
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  Speaker 3: It is, and it's certainly tougher on business as well.
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  Speaker 3: All those same ABS statistics show that operating profits for
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  Speaker 3: business declined by twelve point four percent, So wages increase
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  Speaker 3: will contribute to some of that. Just general supply chain
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  Speaker 3: costs be it transport and freight and other activities. Energy
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  Speaker 3: prices are certainly impacting on the business to make their
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  Speaker 3: margins that they require. So it's tough on everybody, and
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  Speaker 3: I think we're going to see that continue for the
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  Speaker 3: next few months.
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  Speaker 1: And taking into account, you know, some of those different
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  Speaker 1: factors that you've just pointed out, have businesses sort of
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  Speaker 1: had to change the way that they would usually do things.
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  Speaker 3: Look wer, business is still very much business as usual,
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  Speaker 3: looking forward to a strong festive season, but maintaining some
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  Speaker 3: concern about what's going to happen in the future, and
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  Speaker 3: what we saw recently with the changes of the legislations,
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  Speaker 3: I think we're going to see business being very cautious
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  Speaker 3: in the future, particularly with employment. Our surveys indicate that
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  Speaker 3: eighty five percent of territory business is very concerned about
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  Speaker 3: these changes and it could lead to some scaling down
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  Speaker 3: of their activities.
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  Speaker 1: There does sort of seem to be a lot at
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  Speaker 1: the moment that is impacting businesses.
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  Speaker 2: You know, you talk about those ir laws, you talk.
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  Speaker 1: About even even the interest rate and the impact that
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  Speaker 1: it has in terms of people spending. You know, there's
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  Speaker 1: and even then the transport costs and the other costs
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  Speaker 1: that are on the rise.
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  Speaker 2: It must be pretty tough trying to run a business.
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  Speaker 1: And I know that we're so resilient here in the territory,
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  Speaker 1: but it does seem as though it's been been a
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  Speaker 1: pretty hard year for a lot of people.
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  Speaker 3: Yeah, it's been a better year compared to COVID. But
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  Speaker 3: what this does is our own confidence and business needs
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  Speaker 3: confidence to reinvest, So that is one of the key
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  Speaker 3: challenges that we're going to face moving forward. Interest rates,
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  Speaker 3: I think you're going to continue to climb probably another
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  Speaker 3: half to three quarters of a percent in the foreseeable future.
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  Speaker 3: So that will continue to slow the inflation, which means
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  Speaker 3: less spending, which means less than the economy circulating around.
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  Speaker 1: But I guess you know, at the end of the day,
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  Speaker 1: we all still do need to eat, We all still
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  Speaker 1: do want to get out there and buy Christmas presents
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  Speaker 1: and that kind of thing.
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  Speaker 2: And so it is really a matter of trying to
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  Speaker 2: support local too, isn't it.
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  Speaker 3: Yeah. Absolutely, we always advocate for supporting local business. It
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  Speaker 3: keeps the economy ticking over. Discretionary spending is always the
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  Speaker 3: first thing that goes. But Christmas presents are discretionary, are they?
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  Speaker 2: That's right?
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  Speaker 1: Hey you Greg keen to get your take as well
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  Speaker 1: on the situation at the moment with the ship lift.
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  Speaker 1: I know that Western Australian builder Cloff they've been tasked
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  Speaker 1: with the job obviously of building this major infrastructure with BMD,
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  Speaker 1: they've been placed into voluntary administration. What do you reckon
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  Speaker 1: this means for the project?
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  Speaker 3: Yeah, it's a tough one, Katie. It's we We had
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  Speaker 3: a bit of a chat about it yesterday and the
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  Speaker 3: single word that und it up was messy. I think
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  Speaker 3: it's going to give a very very messy waiting to
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  Speaker 3: see how government reacts. They're obviously watching this situation with
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  Speaker 3: considerable concern. It's a major project, it's a major enabler
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  Speaker 3: for business into the future. We need it to continue.
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  Speaker 3: But I think it's going to.
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  Speaker 1: Get messy, Yeah, because I would imagine you know, I'm
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  Speaker 1: certainly not an expert in major projects, but I'll imagine this.
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  Speaker 1: You know that obviously the job had been tended for
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  Speaker 1: a certain amount of money.
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  Speaker 2: Now with that sort.
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  Speaker 1: Of falling through with this contractor then you'd have to
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  Speaker 1: go back through the tender process.
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  Speaker 2: Would that be a correct sort of assumption to make?
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  Speaker 3: Really is going to depend on the outcome of the
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  Speaker 3: administration side of things. A voluntary administration doesn't mean that
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  Speaker 3: business is closing, but it does mean it's at as
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  Speaker 3: management to take it over by others. It can continue
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  Speaker 3: and if it's financially buyablind to do so. So again,
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  Speaker 3: there's a heap of discussions that have to take place
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  Speaker 3: before that decision is reached, and government is on the
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  Speaker 3: end of that sort of waiting game as well. So
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  Speaker 3: we'll get back to the word messy.
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  Speaker 1: Yeah, it does sound like it's going to be messy
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  Speaker 1: and potentially delayed further.
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  Speaker 3: Yeah, that's the concerning part. We've already seen considerable delays
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  Speaker 3: and we know that there's some serious time pressure with
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  Speaker 3: respect to other aging infrastructure, so we will certainly be
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  Speaker 3: watching with interest.
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  Speaker 1: Yeah, I reckon we all will be well. Greg Island,
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  Speaker 1: the CEO of the NT Chamber of Commerce. Always good
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  Speaker 1: to catch up with you. Not sure if we'll get
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  Speaker 1: to speak to you again before Christmas. If we don't,
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  Speaker 1: have a great Christmas, and thanks so very much for
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  Speaker 1: all your input throughout.
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  Speaker 3: The year, No problem all you two. Katie, thank you.
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  Speaker 1: It is just twenty three minutes after nine o'clock that
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  Speaker 1: number if you'd like to call through this morning, eight
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  Speaker 1: nine