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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