Retail spending in NT falls against national trend, despite eased rules, as VIC shutdown hits GST yet again

Retail spending fell in the Territory in June despite the NT having some of the most relaxed coronavirus restrictions in the country — a statistical anomaly unlike anywhere else in the nation.

RETAIL spending fell in the Territory in June despite the NT having some of the most relaxed coronavirus restrictions in the country — a statistical anomaly unlike anywhere else in the nation.

Economists have confirmed Victoria’s second, harsher shutdown to quell the spread of coronavirus will hit the NT’s own finances, particularly through the GST.

MORE:

NT’s budget blowout could get worse due to ‘bold’ assumptions on where Australia will land

Record decline in Australia’s retail spend to hit NT due to dramatic reduction in GST revenue pool

5000 Territorians vanish from workforce as unemployment rate falls

Nationwide retail trade continued to recover in June from a historic 17.6 per cent plunge in April followed by an equally unprecedented 17 per cent bounce in May.

But in the Territory, despite nearly all restrictions being eased mid-June and Darwin being bolstered by the first round of the council’s myDarwin voucher, retail spending fell 4.9 per cent in June.

The NT was the only jurisdiction where retail spending fell. The amount of spending in the NT fell $14.1m between May and June.

Economist Saul Eslake said this could be due to a number of factors, including unemployment and a lack of population growth, which is a driver of retail spend.

“The NT’s civilian population, those working age 15 and up, decreased by 0.02 per cent in June,” he said.

“Which sounds trivial but it compares to a 0.6 per cent increase as a whole (country).”

Civilian populations had increased in Tasmania and the ACT by 0.55 per cent.

Victoria’s tough shutdown, is expected to hit the NT in two ways; a wider fall in consumer confidence and a spending dip in a state that accounts for a quarter of Australia’s economy.

Mr Eslake said the NT government would have to revise how much it expected to be wiped from the GST revenue, though he would be “surprised” if it was as high as $200m on top of the $609m the Territory already thought it would lose due to COVID-19.

ANZ research economist Catherine Birch said Victoria’s shutdown would mean a slower recovery for the nation, with households and businesses in other states and territories likely to be more cautious with their spending.

She said the commonwealth would likely provide more assistance sooner, while state revenues would have to rejig fiscal outlooks.