Local country pubs are feeling the firsthand effects of the Reserve Bank of Australia lifting its interest rates for the first time in over a decade, however they hope they will be short-lived.
Earlier this month the central bank raised its cash rate target from the record low 0.10% it had hovered at during the depths of the COVID-19 pandemic to 0.35%.
Pines Hotel licensee Lynton Cram said he expects an initial period of uncertainty before people hopefully revert to their normal ways.
“When it was first announced, people got a negative feeling straightaway and the first thing they cut back on when they need extra money for their repayments is the local pub,” he said.
“I think the interest rates affect the younger married couples who have overcommitted to properties above their income the most.
“There is so much work around that if people get into dire straits they can always get a second job.
“If individuals have not over committed I do not think the interest rate will make too much of a difference.”
Mr Cram has owned the Pines Hotel at Tarpeena for 31 years, so he saw the effects of the last interest rase rise in 2010 which he said was worse.
Mr Cram said the uncertainty created by COVID-19 and interest rates definitely had affected business.
“I think if COVID-19 was in full swing and interest rates went up at the same time we would be in a world of trouble,” he said.
“People have been locked up with COVID-19 for so long they are getting out which covers some of the loss from the interest rate rise.
“COVID-19 density restrictions hit us especially hard.
“We have a lot of walk-ins and patrons simply would not come in because they thought they would not get a seat due to the spacing requirements.
“Borders closing also affected business, but we are starting to see those customers come back.
“I am starting to see the light at the end of the tunnel, we just had to ride out the storm.
“Interest rates will not change but I think people will get used to it and change some other things before heading back to their local pub.”
