Middle and other kingdoms sideline former imperial powers
Asia and Latin America are outperforming the developed economies. These developing economies are either the producers of commodities or consumers of those commodities with exponential growth rates. The forecast for India is 8.4% growth in 2011 and 8.3% for China.
These expanding economies require enormous and increasing commodities, firstly energy, secondly minerals, and thirdly food. Producers in this group, such as Brazil, Chile, and Russia (as well Australia and Canada) complement the needs of Indian and Chinese expansion.
What you need, baby I’ve got it
Australia has comparatively easily accessible and cheaply exploited resources to feed the Chinese, and increasingly strong Indian demand – coal, liquefied natural gas (LNG), iron ore, uranium, etc.
Chinese corporations are now leasing huge areas of land in Western Australia to secure mineral resources, no longer satisfied with buying iron ore from Australian mining companies. In this, China is funding the establishment of a port and looking to mine at least 2 billion tonnes of iron ore in Western Australia over the next 25 years.
Australia is living high on the hog on coal exports (70% of China’s current electricity production resource), but there are moves to cleaner energy sources, particularly LNG.
Chevron is developing Barrow Island on the North West Shelf off Western Australia, with a potential LNG capacity sufficient to power a city of 1 million people for 800 years. Chevron says that from the first 30 years this project will provide a projected $64 billion boost to Australia’s GDP and direct and indirect employment of around 10,000 people at peak construction.
Shell is constructing the biggest offshore LNG plant in the world – the size of 6 aircraft carriers, to tap, process and export direct. Shell's upstream investment in Australia would reach some $30 billion over the next 5 years.
Australia currently has around $200 billion worth of LNG projects on the drawing board. The industry aims to triple current production to 60 million tonnes a year by 2020.
What about me? It isn’t fair, I want my share...
Australia has an enviable total rate of unemployment - less than 4.9%, and declining. Unemployment rate in the commodity rich regions of Australia - Western Australia and Northern Territory, has dropped to an all time low of 3.25%.
The average wage in Western Australian mines is $112,000. Western Australian trade unions have signalled that they are looking for a 15-18% increase in wages over the next 5 years.
The big fear then is inflation. The principal task of the Reserve Bank of Australia is to keep the lid on inflation. The principal weapon of the Reserve Bank of Australia is adjusting interest rates.
Increased interest rates fall on all, including businesses and individuals, as home owners and employees, who may not be benefiting from the commodities boom that fuels inflation and pushes up the value of the Australian dollar.
Australian service industries, particularly tourism and hospitality, suffer from a strong Aussie dollar, while employment in manufacturing is projected to continue to shrink, wiping out 170,000 jobs by 2020.
The Government’s response is to re-orient training and skills in the longer term to deal with the restructuring economy, and in the shorter term to bring in more persons skilled in the areas of work for which there are and will be shortfalls.
Boat people - the boat is far from full
The issue of asylum seekers allows politicians to pander to and stimulate xenophobic sentiments of those who do not comfortably understand the restructuring they see around them and are frightened of exclusion by it.
The reality is that this restructuring requires huge imports of labour. This is being effected by a directed migration policy encouraging permanent residents, work sponsored temporary residents, students who can work 20 hours a week, and working holiday makers. This gives Australia between 500-700,000 additional workers every year.
This figure is extremely flexible since there is no limit on working holiday makers.
This sure doesn’t look like Kansas, Toto
The attraction of Oz as a holiday destination for travellers is far from the only factor in bringing in 200,000 + every year.
Working holiday makers are often the subject of the push factor as well. Ireland is looking to export 100,000 working people this year out of a total population of less than 4.5 million. UK figures for working holiday makers to Australia are at about 40,000, France is at 20,000.
For more information contact us (www.hlt.com.au/en/contact) or, for working holiday specific information, our new operation, Travel/Work/Stay-Oz (www.tws-oz.com.au).
The more things change, the more they stay the same
This has never been less true.
Important changes affecting you, your business and your work have taken place over the last 12 + months and more are proposed in the next 12 months.
Working for the man
Recent legislation includes extraordinary changes in the workplace and employment conditions through Fair Work Australia, setting out obligations and rights of employers and employees.
You are what you sell – No, you are what you say you sell
The revamped Trade Practices Act and state legislation in the area of consumer protection, through the unified new Australian Consumer Law impose responsibilities on those in the market, and introduce fines for non-compliance ranging from $66,000 to $1.5 million.
Where you are going depends on where you are
For many businesses location is the key element in turnover, build up of goodwill and ultimately capital gain to be realised on sale of the business. As a lessee, you need to make sure that the location is assured by a lease with the appropriate terms and safeguards.
As a lessor, you need to ensure that you are not saddled with a non-performing tenant or a cost expensive lease.
Legislation relating to commercial leases, including retail leases, is unifying conditions Australia wide, and preventing or inhibiting many charges and costs that lessors seek to impose on lessees.
Contact Hillman Laxon Tobias Lawyers
Feel free to contact us for updates and advice on how these changes can, do and will affect you.
Brian Hillman
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