Without Production Our Economy Has No Seduction

Without Production Our Economy Has No Seduction

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The Australian economy today, is missing a key ingredient  – productivity! The big problem lies in identifying just why productivity is on a downward spiral. The search for answers is both compelling and perplexing, considering  that our Federal Government (Fort Fumble) spends half a billion dollars a year on consultants (not to be confused with public servants) – Labor spending billions on advice. This is a record spend which identifies how little the Gillard Government knows about economic management.

So how does Australia seduce businesses again – and remove the productivity condom?  I read last night with interest, the HSBC Downunder digest which had a close critique of Australia’s productivity challenges.

  • Productivity growth has been weak in recent years, and this has lowered Australia’s potential growth rate.
  • Our estimates suggest potential growth was 3.50 – 3.75% per annum for 2000 to 2005, but it is closer to 2.50 – 2.75%
  • Without a pick-up in productivity, Australia will probably have to accept lower GDP growth, higher unemployment and higher interest rates.

BUY PRINT

 

“At the outset, we need to keep in mind that Australia’s overall position is strong, particularly relative to the rest of the developed world. This reflects a number of factors, Australia has strong links to Asia, a huge mining investment boom, a government with low debt, inflation on target, rates at around neutral and a responsive central bank.”

Business Spectator ran a great story when Karen Maley interviewed Saul Eslake – Eslake ponders a productivity pickle. This argument is certainly not helped with Australia’s dirty electricity rip – off and Australians paying some of the highest household electricity prices in the world (yet their electricity is by far the most polluting) and we aren’t even paying a carbon tax – yet!

The combination of all these factors identifies that our economy tipped to grow at sluggish pace. This should not be seen as a negative given many businesses are re- calibrating their models. The question is, are they moving their respective businesses in the right direction?

In 2005, I tipped that within twelve years David Jones and Myer would no longer exist in Australia. They will simply close operations and the big American operations will fill their space. Online metamorphosis on the double – Boston Consulting Group (BCG) has produced a report on the impact of the Internet on the global economy. BCG says the impact of the Internet is getting bigger everywhere, off an already enormous base. It expects the Internet economy in the developed G20 nations to grow by eight per cent a year over the next five years, outpacing almost every traditional economic sector. Now that is powerful.

Sorry but I can’t agree with WA,NSW, and Queensland to lead rebound in residential construction from 2013:BIS Shrapnel. Can somebody please email me a prediction that was ever correct?  How on earth can such a prediction see the light of day when construction carnage: more than 80 firms collapse in a month as building industries suffer through 2012.

Following on from the recent property trail reporting that a Beauty Point waterfront recently sold for $20.000 million – Bankers are supposedly bailing, but Mosman’s Mandolong House reputedly sells for a bullish $18 million.

Monitoring real estate markets is not that hard – just watch your weekly market barometer where in Mosman the number of houses available significantly reduced from 144 last Friday to 130 this Friday. Mosman is a fortunate suburb that rates presently at number 10 in Australia (and climbing higher.) I predict this time next year it will be sitting at number six or five.

Yes we have houses with negative equity on the increase although I can’t see the Federal government must decide if housing industry warrants a handout in May budget they would need to spend another few hundred thousand dollars on consultancy fees to reach a decision on that.

MOSMAN – 2088

• Number of houses on the market last week– 144
• Number of houses on the market this week – 130
• Number of apartments on the market last week – 114
• Number of apartments on the market this week – 108

CREMORNE – 2090

• Number of houses on the market last week– 17
• Number of houses on the market this week – 16
• Number of apartments on the market last week – 24
• Number of apartments on the market this week – 27

NEUTRAL BAY – 2089

• Number of houses on the market last week – 19
• Number of houses on the market this week – 18
• Number of apartments on the market last week – 64
• Number of apartments on the market this week – 57

Source: Domain Property Monitors

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate –

For this week’s open for inspections –

Just 2.65 per cent of Mosman properties are on the market although it is disconcerting that we have a Federal Government that is not the least concerned with market machinations.

Easily explained with Albanese, 10 others breach rule on grants – pork-barrelling is alive and well in the Australian Labor Party. What they should focus on is Australian housing market just a jobs crisis away from collapse.

With businesses struggling I can’t see how productivity will turn around when we are all about to embrace a Carbon Tax.

History shows that when politicians start pork-barrelling, their business model is facing collapse.

We can only hope that it is not contagious.

As for Fairfax Media, your changes in Saturday Domain will only kill print advertising. Print is dying (see Boston Report above) and Fairfax management is fast processing this demise. A history of great journalists which has been sold out to developers’ dollars.  Buyers now have to search Mosman properties in two different sections – hardly user friendly.

Cheers ^__^

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