With a week to go, Australian consumers have generally decided that this election is a horserace that is going to be potentially won by a nose by parties that are on the nose.
Most voters do not believe that there is anything much between moving forward and cutting back the waste in terms of any significant impact on their post-poll lives. Neither side of the house is willing to say what they will do if the current international bad news requires yet another dose of stimulus.
The Government is only beginning to admit that most of last year’s stimulus funds were talk-it-up promises rather than expenditures and are planning to prop up the economy with the leftovers and underspends that are much more dramatic than the waste on shonks that characterised the State Government mismanagement of forward estimates.
Supporters of both political parties feel that we are heading for a hung Parliament with the Greens holding the balance of power in the Senate, so they are confident that they will get the goodies and not have to put up with the baddies.
The Opposition has indicated that it doesn’t trust the Government (surprise, surprise) so we won’t be told where the $30 billion in funding cuts are going to come from. As Joe Hockey is keen to point out, Australia needs to prepare for post-poll devastation and he is trying to talk down the rise in consumer confidence that has been the pattern of the first three weeks. Rising consumer sentiment does not necessarily support either side but does indicate personalities rather than policies remain the key to the final count.
Talk of a return to a double dip recession and a fall in global economic growth should be supporting the Coalition’s case for caution as much as the Government’s caution about return to surplus in the next three years. The Greek Economy is in a far worse state than even it imagined. The Obama administration is going to have to continue the Bush high-end tax subsidies in a devastating employment market where economic growth is a jobless recovery. The European economies are sluggish and do not look like generating markets that would keep China in double-digit development.
The electorate, however, clearly does not accept any return to a gloom and doom perspective and will go to the polls with a higher than average expectation that the good times are well on their way back. Gary Morgan reports that “Consumer Confidence has jumped 4.8 points to 129.0 after the RBA decided to leave interest rates unchanged at 4.5% last week.
This is the best result for this indicator for two and a half years (February 2008) since before the Global Financial Crisis hit. There have also been strong rises in the two indicators that look at consumers expectations of the next 12 months with 43% (up 2%) of Australians expecting to be ‘better off financially’ in a year’s time and 42% (up 2%) expecting the Australian economy to have ‘good times’ over the next 12 months.
Australians are convinced that whoever wins the election, their personal financial situation will get better, with 34% (up 4%) saying they’re ‘better off financially’ than a year ago and only 25% (down 7%) saying they’re ‘worse off financially’.
Smart companies will prepare two contingency plans for their operations in the rest of the financial year. If we have a Gillard government they will cut their costs of doing business, expect to pay more for their labour, find ways to benefit from small business capital expenditures that improve productivity and employ more part-time specialist sales and support staff.
If we have a hung Parliament they will not only do all of the above but they will trim their expectations in the domestic market and hope to find export sales to fill their order books in the face of a couple of years of domestic downturns.
If we have an Abbott government it will be vital to recruit and train committed team members, retain close ties with the best customers and conserve capital until we know how we will stop the waste.
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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
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