Budget 2013/14 Northern Territory Economy
Tabled paper 295
Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT
Tabled by David Tollner
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
Department of the Treasury and Finance
82 Retail and Wholesale Trade 2013-14 Budget Drivers of Retail Trade Retail trade is primarily driven by population growth, household disposable income, household saving rates, employment growth, consumer sentiment and interest rates: population growth influences the number of consumers in the market, with a particular impact on retail sales; the level of household disposable income has a direct relationship with retail trade when consumers have more money to spend, retail sales generally increase; household saving rates have an inverse relationship with retail trade: when consumers exhibit a high propensity to save, as has been the case since the onset of the global financial crisis, the disposable income available to spend on retail goods is reduced; employment growth has a direct relationship with retail trade it creates more consumers with disposable income to spend in the retail sector; consumer sentiment strongly influences discretionary spending, particularly for more expensive items and nonessential goods; and interest rates influence consumer behaviour and retail trade through the impact on household disposable income. Retail Activity (inflation adjusted) The ABS reports that in 201112, inflationadjusted retail turnover in the Territory totalled $2.8billion, an increase of $101.4million or 3.8percent from 201011 and substantially stronger than the 2.2percent growth reported nationally. While yearonyear growth in the Territorys retail sector in 201112 was the strongest in threeyears, it remained below the average annual rate of 4.5percent recorded from 200102 to 201112. Sections of the retail industry continue to experience structural change, with a marked increase in online retailing, which allows access to a greater variety of goods often at more competitive prices. In recent years, online shopping by Territorians from overseas retailers has also been supported by the continuing strength of the Australian dollar. The key influences on Territory retail activity in 201112 were: strengthening annual population growth from 0.4percent in 201011 to 1.5percent in 201112; an increase in business confidence following the announcement in January2012 by INPEX and Total of the decision to build the Ichthys liquefied natural gas plant in the Territory; four cuts to the cash rate by the Reserve Bank of Australia, resulting in a cumulative reduction of 125 basis points over the financial year; and oneoff Commonwealth payments to pensioners, families and individuals under the Household Assistance Package aimed at addressing the cost of living impacts of the new carbon pricing arrangements.