Alice’s heart of commerce battles slump

By ERWIN CHLANDA

 

Not all is well in the beating heart of industry and commerce, Alice’s Industrial Area, according to its big players and small.

 

Some spoke to me on the record, most of them on a no names, no pack drill basis.

 

One says the streets and lanes to the many tradies’ sheds used to be busy for hours after normal knock-off with people working overtime.

 

These days there is not much of a sign of that.

 

An engineering firm reports the worst first quarter of any calendar year in its quite long history: “We had no income. We’re spending only as much as we absolutely have to.”

 

The operators of a fast food shop, serving mostly Industrial Area workers, shut up shop.

 

Utes have been heading north with one-man-band businesses looking for opportunities from the Impex boom in Darwin, says the manager of a tools and equipment business, or they are heading for the mines.

 

A tradie client has told him times are “the worst in 20 years.”

 

The manager runs a highly specialised service, honed over two decades during which branches in Darwin and interstate were created, which makes tough times more manageable.

 

But he, too, says the present slump is “hitting us harder than previously.

 

“Maybe it’s a flow-on from the national downturn.”

 

The Territory Alliance, managing the Federally funded IHANT bush housing program, has left town. Its job is finished.

 

Spending patterns have changed with the Territory funded shires which are spending less than the gaggle of Federally funded small councils they replaced, says the manager.

 

“Trade from the community councils has protected us for many years.

 

“Alice is not a manufacturing place. It’s a supply centre.

 

Local benefits from the only two major construction projects recently – Bunnings and the hospital extensions – were slim, he says: the hardware giant uses mostly its own construction crew wherever it builds a new store, and the hospital job went interstate, although locals were engaged for the fit-out. Bunnings have said they will create many local jobs when trading starts in June.

 

Chris Douglas, from Work Wear, has a view from a great vantage point, selling clothing and items with logo embroideries on them, to a great number of local firms: “It’s a little bit tighter than it normally is,” she says.

 

“Not much happening, little action around town.”

 

The recession that hit “down south” 12 months ago is just starting to bite, she says.

 

“We were insulated by Federal money spent on Aboriginal housing” – spending that’s pretty well finished now.

 

Suzanne Bitar from Taps, Tubs and Tiles takes a glass half full view: trade sales may be down but years of high housing prices have motivated locals to spend money on the house they have, rather than upgrading.

 

Kitchen and bathroom items are in demand, stimulated in part by Alice Water Smart rebates on water-conserving items such as toilets and showers.

 

Her showroom staff has been increased from 1.5 positions to two.

 

Printer Max Kleiner, of Asprint, a local business for more than three decades, and competing against a firm from Darwin, says he is in a dog-eat-dog environment, with turnover being 20% down on last year.

 

He observes a “lack of activities in town. Industrial customers are less active, have less less money to spend.

 

“People left town, there are four or five houses for sale in Cromwell Drive,” says Mr Kleiner.

 

“It’s unusual, but it may just be retirees moving away.”

 

What’s on the horizon?

 

The 100 new residential blocks in Kilgariff may turn the town around.

 

The tools and equipment business manager says the lower prices for that land announced by Chief Minister Adam Giles – $160,000 to $180,000 – sounds a lot better than close to $300,000 in Mt Johns Valley.

 

On the other hand, the Fly-in, Fly-out contingent may grow further than it already has.

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6 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Mark Fitzgerald
    Posted May 31, 2013 at 4:21 pm

    Hal Duell – “Bridges are falling down and schools and other essential services are either partially closing or shutting down altogether in the USA.” Are you off your rocker?? The bridges fell down because oversize vehicles ran into the structures, while essential services are being held up due the Senate and its pork barreling, holding up supply – a bit like Mal Function (Malcolm Fraser), who managed to sack a duly elected government in 1975.

    Let’s peel back the touchy-feely veneer of some of the misguided responses and call it like it is – Alice Springs dying because the only major resource it seems to want to cling to, is Government handouts.

    Tourism used to be a major earner, but when people don’t feel safe AND they are being ripped off, well they spend their dollar where they feel it’s appreciated.

    The cattle industry was a major contributor until that became all too hard, due to environmental and the Land Rights malarkey.

    Mineral and fossil fuel exploration and development were booming for a while, but like the cattle industry, the do-gooders and royalty wreckers scared most of the players off.

    Someone please tell me I’m wrong – my birthplace is dying and yet it seems to be that someone i.e. the government, needs to fix it – which will never happen.

    Alice Springs needs to re-invent itself to be self sufficient, lest it fall into the same routine as generations of the town’s welfare recipients, who are quite able to put their hand out, rather than putting their hand up.

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  2. Hal Duell
    Posted May 31, 2013 at 10:55 am

    What if the big money we have become accustomed to has run out? What if it is simply no longer there?
    The turbo capitalism that was driving the western world for the past few decades went aground a few years ago. We spent our savings and then borrowed heavily to ride that storm, but the time to pay the piper is fast approaching.
    Europe is going into receivership.
    Bridges are falling down and schools and other essential services are either partially closing or shutting down altogether in the USA.
    And here? If China is pulling her head in as some are saying, does anyone think the money being spruiked in Canberra these days has any relationship to the actual amount in, or coming into, the coffers?
    I sometimes think we have a tiger by the tail, and where that ride will take us is an unfolding story. It might prove to be OK, but then again it might not be real pretty at all.

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  3. Ian Sharp
    Posted May 30, 2013 at 2:01 pm

    Whoops, my bad. The “silly comment” comment applies to me. Just went for a bike ride with the dog, good opportunity to think.
    Maybe I should have checked the state by state figures before I had my say. Just did so, took my own advice and looked up the ABS figures for the national accounts, State “final demand” stats, not quite the same as gross product but close enough.
    And the lady mentioned in Erwin’s story who made the “recession down south” comment had good grounds: SA, Victoria and Tassie did experience negative growth over the last year, the SA economy shrunk by 0.1% over the year, and the unemployment rate was 5.8, slightly above the national figure.
    If not technically a recession it is at least a noticeable downturn.
    So I apologise for my “silly comment” remark, not so silly after all. Victoria declined by 0.3, and poor old Tassie by 4.7% over the year. By contrast, the NT unemployment the lowest in the nation at 4.5% (although we all know that figure includes counting people on CDEP as “employed” and therefore ignores reality).
    Once again I apologise for my “silly comment” line, I should have checked more thoroughly before I decided to respond. I can only take some comfort that I’m right in saying the nation is not in recession, and that Eddy McGuire has made a bigger mistake than me this week.

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  4. Ian Sharp
    Posted May 29, 2013 at 7:32 pm

    Thanks for your predictable comments Steve. You and I come at things from different viewpoints as always.
    Recession and structural change are economics terms that have pretty clear meanings which you either don’t know, or choose to ignore.
    Recession is defined as two successive quarters of negative growth in GDP, and we haven’t had one for over twenty years, thanks to good economic policies since the Hawke Government was elected in 1983 and began a series of important micro-economic reforms by floating the dollar.
    As for the “Labor propaganda machine”?
    Hardly, the ABS (Australian Bureau Of Statistics) shows economic growth running at about 3% p.a., inflation is within the RBA’s target band (2-3% p.a.), and the unemployment rate is 5.5%, not far above what we think is its “natural rate” (ie the lowest rate we can sustain without causing inflation).
    We are nowhere near a recession, try a negative growth rate and unemployment of 12%, even you would notice that Steve, that would be a recession.
    As for the reference to the “Gillard pamphlet”, Labor can be proud of having brought the country through the GFC with strong growth, low inflation and an unemployment rate in the low to mid 5% range. Which is what MP Martin Ferguson said today in his retirement speech (after being praised by Tony Abbott as “a great Australian”).
    As for structural change, why don’t you watch the movie Other Peoples Money with Danny Devito and Gregory Peck?
    Without structural change our economy becomes uncompetitive and out of sync with consumer demand. Otherwise you finish up as the last, best manufacturer of buggy whips (see the movie).
    Creative destruction, that’s what cleanses and adjusts the business sector in a capitalist economy. You want free markets Steve? You want profits as reward for businesses taking risks? Then you have to take the rough with the smooth.
    That doesn’t make it easier on small businesses in a town like Alice doing it tough. But it doesn’t help anyone when you have someone making inaccurate and inane references to “recessions down south”.
    There is no recession, however much you might like one in an election year.

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  5. Steve Brown
    Posted May 29, 2013 at 5:52 pm

    @ Ian. Since when is closing a business’s doors because costs are greater than income called restructuring?
    I think it’s called closing down isn’t it?
    It represents shrinkage in the economy and the jobs that go aren’t relocated they are gone! Pretty easy to sit on the sidelines as an insulated public employee and wonder what business is complaining about isn’t it Ian?
    Just put your head back in the Gillard re-election pamphlet, let the world go by and pretend nothing is happening. Unfortunately for Alice our own economy is currently experiencing its quietest moment in 20 years or more, although I know it’s worse here than elsewhere exacerbated by lack of land, bureaucratic red tape and tourism numbers affected by the high dollar.
    There is also a very definite downturn in the wider economy. We are hearing from many tradies calling to enquire about work that things are getting really tough work wise, in our cities.
    Twelve months ago there wasn’t a spare tradie in the country, let alone one that rang to enquire about work, so take with a grain of salt the rosy picture on the state of our economy being put about by the Labor propaganda machine.
    This is a pretty tough moment to be in business. The good news for Alice though is that there is quite a lot of exciting development opportunities coming up. Put that together with a pretty friendly budget considering the times, some land release and better times shouldn’t be too far away.
    In the meantime we’ve got to buckle down and hang on. I particularly feel for those small local businesses facing the double whammy of the downturn and massively increased competition that will be created by the opening of the new Bunnings store which unfortunately is going to create almost the perfect storm of hardship for many small local businesses until we can get some growth underway.
    So, come on Government, keep the pressure on, kick aside the Labor created red tape and make things happen as quickly as possible particularly land release at Kilgariff.
    It is essential to have available quantities of land to facilitate upcoming projects and to lessen the risk of further development in FIFO.

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  6. Ian Sharp
    Posted May 29, 2013 at 11:47 am

    Recession? Really? Australian economy still doing well, a lot of restructuring going on, like the Ford closure, but that is a market economy for you, creative destruction. Alice and NT economies are so small and dependent on government programs they will always be volatile. Tourism is also volatile. But recession down south? Sorry, silly comment.

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