Latest / 360 with Katie Woolf / Chamber of Commerce NT CEO Greg Ireland expects discretionary spending will tighten up after the latest RBA rate rise, with flow on effects to local businesses

Transcript

Chamber of Commerce NT CEO Greg Ireland expects discretionary spending will tighten up after the latest RBA rate rise, with flow on effects to local businesses · 360 with Katie Woolf

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  Speaker 1: Yesterday we learned that interest rates have increased by another
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  Speaker 1: quarter of eight percent, jumping to their highest level since
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  Speaker 1: twenty thirteen. So the RBA has lifted rates for the
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  Speaker 1: seventh month in a row, with the official cash rate
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  Speaker 1: jumping twenty five basis points to two point eight five percent,
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  Speaker 1: So homeowners with an average mortgage of seven hundred and
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  Speaker 1: fifty thousand dollars will be slugged up to or about
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  Speaker 1: one hundred dollars extra on their monthly repayments. The Reserve
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  Speaker 1: Bank is hoping that its latest move will help to
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  Speaker 1: ease those consumer prices, but as things stand, inflation is
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  Speaker 1: still expected to peak at about eight percent by the.
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  Speaker 2: End of the year.
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  Speaker 1: So what are the impacts in this well with this
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  Speaker 1: rate rise? What are they going to have? What are
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  Speaker 1: those impacts going to have when it comes to consumer
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  Speaker 1: spending and on local business here in the Northern Territory Well.
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  Speaker 1: Joining me on the line is the CEO of the
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  Speaker 1: Chamber of Commerce, Greg Island. Good morning to you, Greg.
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  Speaker 3: Good morning, Katie, Good morning everyone.
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  Speaker 1: Now, Greg, there is no doubt that this increase is
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  Speaker 1: going to have an impact on a lot of people.
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  Speaker 1: Is it having an impact though on small business when
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  Speaker 1: it comes to spending.
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  Speaker 3: Look, certainly is Katie, the fact that increased inflation hits
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  Speaker 3: everyone in the back pocket, consumers as well as business,
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  Speaker 3: so it has a flow on effect absolutely through the
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  Speaker 3: general economy. I think we can consider ourselves a little
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  Speaker 3: bit lucky that the rate increases is just a quarter
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  Speaker 3: of a percent at this point in time. There's several
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  Speaker 3: forecasters thinking it was likely to be more. But I
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  Speaker 3: think we can rest assured that in months to come,
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  Speaker 3: those rache will continue to write.
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  Speaker 1: Yeah, And this is the worry, isn't it? For so
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  Speaker 1: many of us right around the nation and indeed around
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  Speaker 1: the territory. It's not just your mortgage rates, but cost
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  Speaker 1: of living in other areas. And I guess what it
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  Speaker 1: sometimes means is that if you're not able to pay
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  Speaker 1: your bills as easily as what you usually would be,
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  Speaker 1: you don't spend as much money when you're head out
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  Speaker 1: and about.
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  Speaker 3: That's absolutely the Katie. As we all know, discretionary spending
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  Speaker 3: is the first thing that ceases, and that means maybe
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  Speaker 3: you're not out at a restaurant or the movies, or
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  Speaker 3: just making that purchase down to local Bunnings or wherever,
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  Speaker 3: So that will certainly have a flow on effect to
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  Speaker 3: the retail environment as people tighten their belts in that
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  Speaker 3: regard as the cost of living does increase. But also
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  Speaker 3: the same thing happens to business itself. It has loans
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  Speaker 3: and nets to service and they've generally gone up, and
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  Speaker 3: that potentially means increasing the cost of goods, which adds
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  Speaker 3: to that inflation rise that we're talking about. So it
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  Speaker 3: is a bit of a vicious circle there. But I
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  Speaker 3: think from a territory perspective, we're coming off a off
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  Speaker 3: the back of a very good dry season, so let's
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  Speaker 3: hope that we can keep a little bit of momentum up.
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  Speaker 3: We see some tourists through our green season, and that'll
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  Speaker 3: help us get by well.
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  Speaker 1: And that's the thing. It is a bit of a
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  Speaker 1: like right now is traditionally a slower time.
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  Speaker 2: As you've said, it's.
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  Speaker 1: The green season.
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  Speaker 2: It's also a little bit warmer with the build up,
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  Speaker 2: and I think we've all been feeling but how have
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  Speaker 2: things been going for recent you know, for businesses in
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  Speaker 2: recent weeks, Like you said, we've had a really you know,
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  Speaker 2: bumper dry season, But how has it been over the
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  Speaker 2: last few weeks.
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  Speaker 3: And certainly showing signs of slowing down as those temperatures increase,
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  Speaker 3: and I guess that's only natural. But feedback has still
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  Speaker 3: been relatively positive that there are still tourists getting around
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  Speaker 3: town and we're making the most of that opportunity. Or
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  Speaker 3: saw another great, big white boat park down at the
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  Speaker 3: wharf the other day, so you know, that just means
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  Speaker 3: more people getting around town and that's good for business
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  Speaker 3: and good for everybody.
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  Speaker 1: Greg, I know, one of the nation's most awarded mortgage brokers,
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  Speaker 1: believes that borrowers do need to rain in there spending
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  Speaker 1: this Christmas to help to fight inflation. So basically saying
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  Speaker 1: if we want interest rates to go down, then all
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  Speaker 1: we need to do. We all need to do our
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  Speaker 1: bit to help reduce inflation, including raining in spending where possible.
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  Speaker 1: But Greg, that would indeed have a big impact, you
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  Speaker 1: know on territory businesses, wouldn't it if everybody's raining it
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  Speaker 1: right in iver Christmas time?
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  Speaker 3: Look, it certainly will, and I guess there's a bit
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  Speaker 3: of moderation required there. We saw the efforts of supporting
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  Speaker 3: local business during COVID. We know where near that particular situation,
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  Speaker 3: people will continue to enjoy the opportunities they have to
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  Speaker 3: mingle and engage with local business in the territory over Christmas,
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  Speaker 3: I'm sure, but you'll certainly see a tightening of belts
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  Speaker 3: and that will progressively impact us as these interest rates
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  Speaker 3: do keep rising. They are forecasting eight to nine percent
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  Speaker 3: CPI increases, so that is a few more points above
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  Speaker 3: where we're at now.
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  Speaker 1: I mean, what would you say to territories this morning.
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  Speaker 1: I know that everybody's pretty concerned about about their spending
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  Speaker 1: and making sure that they're doing things sensibly, but we
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  Speaker 1: do still want things ticking over. Don't we want businesses
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  Speaker 1: to be supported?
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  Speaker 3: Yeah? Absolutely, I think moderation is the key word there,
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  Speaker 3: Katie Keeper, balance on what you're doing. Don't stop spending
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  Speaker 3: because that will hurt the local business community and we
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  Speaker 3: all need them to be surviving and keeping on ticking.
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  Speaker 3: We're at a crisis point by any stretch of the
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  Speaker 3: imagination yet, but be aware of contributing into that general
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  Speaker 3: circular economy.
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  Speaker 1: How are things going at the moment when it comes
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  Speaker 1: to the workforce shortage. I know that Brendan O'Connor, the
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  Speaker 1: federal minister, was in town over the weekend. Any good
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  Speaker 1: news for the northern territory.
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  Speaker 3: Yeah, look, there's a couple of shoots on the tree,
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  Speaker 3: so to speak, Katie that we met with Minister O'Connor
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  Speaker 3: over the weekend and have the opportunity to have that conversation.
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  Speaker 3: There is a strong focus on building resilience in the
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  Speaker 3: workforce and that includes activities particularly on the migration side
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  Speaker 3: of things. So the Chamber is part of an arrangement
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  Speaker 3: with Master Builders and also the Minerals Council is looking
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  Speaker 3: to starting some overseas recruitment drives from next calendar year.
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  Speaker 3: That'll see very active overseas looking to actively recruit for
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  Speaker 3: territory businesses. So there'll be some upsides coming. It's just
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  Speaker 3: a matter of again keeping everything heading in the right
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  Speaker 3: direction as we head towards the twenty thirty forty billion
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  Speaker 3: dollar economy.
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  Speaker 2: Yeah.
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  Speaker 1: Right, So how many staff are sort of looking for
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  Speaker 1: through that campaign and how quickly could they get started.
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  Speaker 3: Well, there'll be people in country from early next year
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  Speaker 3: and then they'll be actively looking. There'll be a staged
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  Speaker 3: approach to that particular program, but in the short to
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  Speaker 3: medium term, two hundred and fifty to five hundred people
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  Speaker 3: potentially pushing up towards one thousand over the course of
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  Speaker 3: the program, so pretty significant activity in that space for
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  Speaker 3: territory business.
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  Speaker 1: Yeah right, it does sound that way, and Greg, I
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  Speaker 1: know that. You know, there's been quite a massive investment
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  Speaker 1: we heard last week of course through the federal budget.
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  Speaker 1: When it comes to infrastructure spending here in the territory,
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  Speaker 1: there are still some concerns so when it comes to
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  Speaker 1: trying to make sure that we've got the workforce to
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  Speaker 1: carry out some of that work, you know, is that
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  Speaker 1: something that the Chamber is keeping an eye on too, Lork.
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  Speaker 3: Absolutely, we're very keen to make sure that everyone's got
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  Speaker 3: access to resources that they can. It's going to be challenging,
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  Speaker 3: but we'll keep working in that direction.
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  Speaker 1: Hey, Greg, before I let you go, I know that
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  Speaker 1: crime has been something everybody's been keeping a really close
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  Speaker 1: eye on. You know, it's always sort of there in
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  Speaker 1: the background. How things going from your perspective and the
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  Speaker 1: feedback that you're receiving from local businesses.
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  Speaker 3: Yeah, Look, it's certainly still a very high on everyone's
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  Speaker 3: frustration list. We've seen the formation of a committee down
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  Speaker 3: in our Springs. It's got a very strong focus on that.
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  Speaker 3: Meeting number two for that committee is today and I'm
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  Speaker 3: hopeful that we'll start to see some real flow and
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  Speaker 3: effects in terms of positive outcome. So certainly watch this space.
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  Speaker 3: We'll keep as active as we can.
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  Speaker 1: Yeah right, we'll keep an eye on that too. Keen
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  Speaker 1: to find out how that second meeting goes today. Well,
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  Speaker 1: Greg Ireland from the Chamber of Commerce, the CEO. Always
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  Speaker 1: good to catch up with you. I appreciate your time
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  Speaker 1: this morning.
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  Speaker 3: Thanks very much, Katie, Thank you