Australia: The future foretold

As we know the world is teetering on the edge of recession. There are structural issues in all our trading partners. What does this mean for Australia and more importantly, WA?

Let me tell you about my breakfast today when I heard the Australian notables, Kim Beasley, John Hewson, Kerry O’Brien, Rob Bentley and Eva Skira speak about Australian economic conditions and what can be expected in the near and medium term.

They spoke about the budget, the election, the USA and the rest of the world. And the impact on us in all of this.  I won’t talk about the budget. There is plenty of excellent commentary on many news sites and websites.

The worldview commentary of John Hewson, and the view on the US of Kim Beasley is worthy of note.

As we know the world is teetering on the edge of recession. There are structural issues in all our trading partners. In Australia some sectors may gain from this situation but the majority will find it challenging. The extent either way will depend on both the political resilience and fortitude of the incoming Prime Minister, and the adaptability of our businesses and people. All speakers seemed to agree that the heads of both major parties did not exude resilience and fortitude, but maybe that will change in the coming weeks.

If Mr Trump becomes President our US relationship will become strained. I had not realised that Australia ranks 8th in the list of partners the US has. Mr Trump’s isolationist policy including his desire to withdraw from NATO and ANZUS, and mend fences with Mr Putin will cause defence budgets including our own to soar, an impost that could lever many countries over the edge.

But maybe Mr Trump will be the catalyst for the first female President.

The message: The next few years will be challenging.

The room was surveyed on a number of issues, two are of note:

The future prospects of Western Australia

Of the 800 attendees, or around 700 who voted, 66% predicted the future in WA will be the same or better than it is now.

As you can see above, this does not accord with the viewpoints of Mr Hewson and Mr Beazley. We in WA are always contrarian so the 66%, and I am counted in that number, are probably right (fingers crossed).

15% GST.

The majority want a GST at 15%.

 Now if you are against this, I suggest you skip this bit and go straight to my challenge (at the end).

I support a GST of 15%. It will quickly get us out of deficit and reduce government costs. Government finance will likely be cheaper. It will allow the nation to invest in the important things: Innovation, infrastructure, education, research, healthcare, and technology, those things that will set up the future for us and generations following. Such investment will make true the Jobs and Growth mantra of the Turnbull government

Granted, for the PM it could be a political bomb … but not if the sales pitch is right. The Howard-Costello government managed to get it through. It was hard, but they did it. From Zero to 10%. The new PM only needs to increase it 5%.

Some facts and ideas for the sales pitch:

GST started in 2000 when interest rates were 8%. They are now around 3%. Unemployment in 2000 was 7.35%, compared to 5.7% now. Now is better.

We want following generations to be well off, and worry that our children will be unable to buy a house. But that won’t be an issue. When we lose competitiveness all housing prices will drop as people flee to more prosperous countries.

New Zealand has a GST rate of 15%. Its government is in surplus. Christchurch has been substantially rebuilt since its devastating earthquake in February 2011.

Compare this to the Black Saturday fires of 2009. Work is still outstanding even after 7 years.

In New Zealand, the cash available from the GST enabled the fast rebuild of a whole city without skimping.

Cash gives options. Australia has no cheap cash. New Zealand has cheap cash.

GST will be hard for us now, but every year we are in deficit and not nation building is taking many a year from our children. They deserve better. They deserve a country built on the important things, and ready to meet any challenge set to it.

Having an increased GST will need to come with offsets of course, maybe for a few years until its factored into normal living. But it will give us the funds to increase the pension and unemployment benefits, both of which are currently at rates below the poverty line. We can’t have our most vulnerable people living below the poverty line. We are egalitarian. Let us remain so.

Why take our children’s future away? Why make the vulnerable live in compromised situations? Why force people out of their township because there are insufficient funds for a rebuild?     The GST is not a panacea, we still need strong leadership, but it will provide the funds to build a strong nation.

My challenge to you today: Uncover a strategy or two to be contrarian and implement them well. Become agile and meet the challenges that the future holds and prove the 66% right.

(and if you believe in a 15% GST, demand the government show some backbone).

Jennifer is a strategy implementation coach who helps leaders turn their strategies into results.

She assists executives and business owners to achieve goals such as improved profit, productivity, leadership skills, business value. Her services are Business and Executive Coaching, Group Facilitation, Strategic Planning, and advising on Board Governance.

 To find out how she can help you, call +61 439 520 182 or email.