City retail on brink

GOVERNMENTS need to act to reduce cost of living pressures to prevent more business closures, a Townsville business consultant and chamber of commerce executive says.

Michael Kopittke, a small business adviser and board member of the Townsville Chamber of Commerce, was commenting on a run of retail business closures in Townsville.

The latest casualty is the Freedom Furniture outlet at Domain Central which is clos- ing at the end of the month after 25 years of trading in Townsville.

Mr Kopittke said the city could not afford to have these types of operations leaving.

He said research by Australian National University showing a fall in living standards in Queensland should be a “very big red flag” for the State Government.

“All three levels of government have to look at the situation in Queensland,” Mr Kopittke said.

“Discretionary spending has dried up because house- hold bills are fast as income.

“Businesses don’t create the economic environment, we have to adapt to it.

“If living standards are dropping in Queensland for the first time since the 1980s, I would suggest that’s a very big red flag to the Queensland Government about the price increases they intend to push through.”

Mr Kopittke said gains in royalties from improved commodity prices could be put in reducing electricity prices.

“While there are many posi- rising twice as tive infrastructure programs over the next three years for Townsville, the elephant in the room is the drying up of discretionary income impacted by all three levels of government,” he said.

He said electricity prices were up more than 20 per cent, rent, workcover and insurance were up 3.5 per cent, the Federal Government had approved a 3.9 per cent increase in private health costs and car registration had increased 4.8 per cent.

In Queensland for the December quarter, retail spending was up 0.1 per cent.

“We are one of the lowest performing states in retail growth in Australia,” Mr Kopittke said. “The State Government has to have a good look at the situation.

“Businesses can promote as much as they like but they are up against the lack of consumer spending and the Federal Government, State Government and council need to recognise the effect of their policies.

“The pendulum has tipped too far and businesses, especially in regional areas with higher unemployment, are being affected.”