Presidents Comments April 2015

The economy, Tax Reform, interest rates, superannuation and the value of the Australian dollar, have been very much at the front of economic discussion and comment over the last few months and this is going to continue said Mr Ron Hay, President of the Whyalla Chamber.

Economists are welcoming at this point, both the value of the Australian dollar, which is providing financial benefit for our manufacturing and export industries, through the exchange rate and secondly lower interest rates, which should encourage investment.

Tourism is doing well, with people coming to Australia on the back of the lower dollar and share markets are going well, with investors welcoming good dividends from their investment portfolios, in a majority of cases, said Mr Hay. So the economists seem to be very positive at the moment.

At a recent function, hosted by the Chamber in conjunction with Bank SA, Hans Kunnen, Chief Economist for the St George Group, delivered a presentation to support the above and there were no arguments from anyone who attended.

Mr Hay said, at the moment we are witnessing a downturn in commodity prices, especially iron ore, workforce reductions due to the shrinking of manufacturing and the effect on downstream industries for example and a continued amount of comment about further interest rate reductions and moving the value of our dollar downwards to make our exports more competitive.

The issue I see here, is that we have stopped talking about the two speed economy and the fact that our imports are on the upward trend in terms of cost and retailers over the last few months have experienced increased cost of goods, in an already tight market place, said Mr Hay.

My concern is that we are dealing with a number of factors, such as interest rates, dollar values, increased household costs and reductions in disposable incomes for individuals and families.

Mr Hay said it is his view, that retailers (but not all) are currently in a position, where margins are shrinking, ‘sales’ are now the expectation of the buying public and sectors of the hospitality industry are struggling in certain instances with the cost of operating over weekends versus income generated.

My view is that we need to have regard for all sectors of our economy, so that we maintain forward movement and employment within what is regarded as the largest employer nationally, retail and services.

Our governments of the day should spend more time creating employment through infrastructure and capital projects for example, which in turn will provide money back into all areas of our economy, including income to them, through taxation and GST on sales, said Mr Hay.

Economies need to grow, whether it is national, state or local and this only takes place, when you look at it from above, not when you just look at specifics and try to manipulate its operation.

Locally said Mr Hay, we have been through major changes over the last few months in our employment situation, however it is more important now, that as a consumer we purchase locally or ask our retailers if they can get a product for example that you do not see, said Mr Hay. This way, we maintain our employment within the retail and service sector.

Whyalla is a resilient community and we are here for the long term.

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