The sooner we have elections the better. We can then get on to looking to the future, implementing the buried innovation and research and development strategies and exploring some of the options in the long forgotten Rudd Futures Summit. The last couple of years have been characterised by high hopes for a new government and dashed expectations that a change of government makes any difference as we still will be electing a bunch of pollies.
It is time for smart companies to focus on running their business and leave ruining the country to the Treasury theorists who are following the path of economic theorists rather than the realities of consumer expectations. As the nation ponders the imposition of a super profits tax on the fortunes of our mining magnates and the unions look to recovering lost wage increases, the fundamental concern is going to be an inflationary surge and paying off the GFC stimulus packages around the world.
Australia has lived off the sheep’s back, run a quarry/farm economy and for a short period sold shonky education and visas to international students who had enough money to fly here rather than support the people smugglers in the hope of getting permanent residency. Small business has benefited from these overall economic trends as consumption growth has continued to rise faster than inflation if you exclude the compulsory saving systems that have been built into our taxation schemes.
Australian consumers have now become convinced that the great big financial crisis of the past couple of years was a figment of Wayne’s way of managing boom and bust economics. Their real fear, now, is not job losses but an attack on their superannuation funds and the risk that they may end up on a pension rather than on a great big fat payout to cover the cost of their overseas retirement tour. If the big miners are not able to make super profits, they argue, then they will not be able to pay super dividends and will not keep the value of their houses rising.
As indicated in earlier columns, central banks and private investors are not convinced that we are over the worst impacts of the GFC, doubting that it is safe to believe their stock brokers and so-called independent financial advisors. Gold has hit record high levels and bond prices have been coming down as people stare at the various threats to economic stability and pull their funds out of the pool.
Even Ben Bernanke was saying last week: “I don’t fully understand movements in the gold price” as investors lose confidence in paper money and the Chinese government considers pulling up its stake in the US economy and begins considering a take over of the Aussie economy. Don’t be surprised to see consumers cutting back their luxury spending, interstate and overseas travel but spending more on home renovations and paying off their mortgages.
What this means for smart companies is a renewed pressure to narrow the range of products and services that rely upon high discretionary spending and increase the value component that derives from extended customer relations marketing. At the same time it suggests that there will an increase in both self-funded and angel investors looking to get into start up companies that have identified emerging new niche markets, technology applications and ways to assist large companies to become more productive.
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Dr Colin Benjamin is an entrepreneurship and strategic thinking consultant at Marshall Place Associates which offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.
Email dr.colinbenjamin@marshallplace.com.au
Contact: CEO Dr Jane Shelton, Phone +61 3 9640 0099
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
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