Experienced businessman Robert Millner warns the nation’s economy is not as healthy as the latest figures, and some economists, would have you believe.
As Mr Millner announced half year earnings for two companies he chairs – Brickworks and Washington H Soul Pattinson, he said workers living outside of capital city centres were doing it tough.
The outer suburbs of Melbourne and Sydney were full of empty shops, the number of retrenchments nationwide are increasing, and high grocery, fuel and electricity bills were biting, he said.
Business – especially small business – was being hit by high cost structures, such as generous worker entitlements, penalty rates and red tape, he added.
Mr Millner dismissed upbeat assessments of the economy – which have led most economists to alter their interest rate forecasts, with many now expecting the next move to be a rise.
“I don’t know where some of these so-called experts get their confidence from to put interest rates up,” he told AAP.
“It is all right if you walk around the CBD seeing everybody drinking coffee .. if you get out in the suburbs and see how the working class man is living – some of our brick plant employees – they are doing it tough.
“I am concerned and everybody in business should be concerned.
“The dollar has also snuck up again above 92 US cents this morning … it does not help an exporting country if it doesn’t have agriculture and mining commodities.”
Brickworks, Australia’s largest brick and tiles maker, made a net profit of $56.3 million in the six months to January 31, a small rise on $56.1 million in the same period a year earlier.
Excluding one-off gains related to its major stake in Mr Millner’s investment firm Soul Pattison, profit dropped 4.5 per cent to $53.4 million.
The company expects a recovery in house construction activity to drive significant earnings growth in its building products operations in the second half of its fiscal year.
But that is off a low base due to a decade-long building slump in NSW, and Mr Millner said Brickworks’ building products nationally are currently earning less money than they were in NSW alone in 2003.
House and land affordability was the main problem, he said.
“However we are starting to see orders that are nearly double what we are selling every day, which is a good indicator,” Mr Millner said.
Soul Pattinson, a diversified investment firm, made a half year net profit of $73.7 million, down slightly as weak coal prices hurt revenue from its investment in New Hope Coal.
Brickworks shares gained 11 cents to $14.26, and Soul Pattinson shares dropped six cents to $15.04.