Sometime today Glenn Stevens will let the cat out of the bag and explain why every Minister is under Kevin’s order to dump on any stray green shoots and talk up Mark Abib’s green jobs. We will be reminded that a year ago, the international financial crisis was unfolding, but had not, at that point, spun out of control.
The global economy will be seen to be making a difficult path towards massive debts after the big end of town was allowed to use taxpayers funds to bail out corporate greed, whilst lending to small and medium business was slammed into reverse so that corporate earnings would look good at the same time as unemployment went through the roof.
Now we will hear months of Malcolm’s debt dirge and Stevens demand that there be no more cash splash while the RBA waits for Government spending on roads, rail and construction projects to hit the banks, despite Gordon Grech’s bleat that Treasury did not help him spend money on his mates at a faster rate.
Smart companies have responded by hanging onto their best sales team and pushing to replace customers’ inventories and taking on part-timers to keep their costs down and their order book up. At the same time they have encouraged admin staff to take a break, work an average of three hours a week less and help these smaller firms clean up their act and reach out to old and valued customers.
Despite an increase in household’s belief that now may be a good time to visit discount stores for the big-ticket items, head for the sales to pick up a few bargains and make some home renovations, there is a changed expectation about personal job security.
Full-time jobs are being replaced by part-time jobs at the fastest rate in almost two decades. In the three months to July, around 74,000 full-time jobs were replaced by part-time ones, the biggest switch since the early 1990s recession.
Deputy Prime Minister Gillard claims that the retention of workers is a victory for industrial cooperation.
“It’s a reflection of the fact that many employers are working cooperatively with employees and trade unions are striking innovative arrangements to keep people attached to work during these difficult days,” she said in Melbourne yesterday. “In past downturns we have seen employers end up making people redundant and then as the economy has turned to growth desperately look for new employees.”
“Employers have learnt from that and are doing everything they can to keep their valuable employees attached to their businesses,” Gillard says.
Employment expert Bruce Chapman from the Australian National University said there was no evidence that workers being taken on in part-time jobs were the same people who had lost their full-time jobs.
“We don’t know whether people are being kept on. We don’t have the evidence,” he said. Bruce argues that the Government has to look to the longer-term impacts of recessions rather than month-by-month variations.
The results across the nation are patchy and the number of long-term unemployed and discouraged workers is growing. Former boom states of Western Australia and Queensland lost 28,400 jobs between them while Victoria and New South Wales gained a total of 51,600 jobs in the past three months.
Gary Morgan says: “The weekly Roy Morgan Consumer Confidence Rating (116.2, down 1.6pts) has fallen for the first time in a month after rising strongly in June and July”.
“Of worry to retailers will be the large fall in those who say ‘now is a good time to buy’ major household items (47%, down 7% – and back to the levels it was at in May this year). The fall suggests that the recent increased retail spending by Australians may now be at an end as the Rudd Government’s stimulus cheques have now been spent!”
“With no more Government handouts for Australians on the way retailers will be keen to see the economy pick up so this Roy Morgan Consumer Confidence ‘indicator’ doesn’t fall again in coming weeks. The latest Roy Morgan unemployment estimate for July showed Australian unemployment virtually unchanged at 7.6% (down 0.2% from June) and similar to today’s latest ABS unemployment estimate – 5.8% (unchanged) – a good sign that the Australian economy remains strong despite the global economic slowdown – though the sleeper remains the total unemployment and under-employment – 1.83 million!”
Under these conditions, smart companies will be encouraging their sales staff to hit the roads and start creating new customers – those that can see Christmas coming and particularly those that are into import substitution and exports into the expanding Asian markets.
Dr Colin Benjamin
Entrepreneurship and Strategic Thinking Consultant
Marshall Place Associates 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 96400099
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