Another building company bit the dust yesterday and given the importance of construction to an economy’s growth, you have to wonder how the foundations of our economy are right now. You also have to wonder if the Albanese Government is piling a lot onto business owners and managers at a time when they’re coping with a hell of a lot of curve balls. More on that later. As I write this, I’m wondering if PM Albo will do a Bob Hawke, and Treasurer Jim Chalmers will do a Keating, and juggle their links to unions and their reliance on business to create a job-sustaining economy?
Back to the NSW building company, Elderton Homes, which has gone into administration, naming a host of issues to explain its demise.
News.com.au says the company released a statement that said: “This has been a difficult decision and a result of several factors, not limited to but including:
• a global health pandemic.
• economic conditions.
"The impact of these events continue today.”
And the statement went further to add:
• record level rainfall.
• substantial price increases on building materials.
• supply chain challenges.
• labour shortages.
And let me add others that didn’t get a run but are hurting businesses like Elderton and other operations that could end up like them — broke and busted:
• record rising interest rates, which blow out costs.
• honouring fixed price contracts.
• council obstacles.
• exploding energy and fuel costs.
• rising wages, set to go higher with Workplace Minister Tony Burke introducing across-sector wage rises and other crackdowns on how workers are paid.
• Visa rules that make it hard for overseas workers to stay here for longer periods of time.
• Work-from-home demands from workers.
• The 7% plus inflation rate that’s blowing out business costs, which hurt businesses that can’t easily pass on price rises.
In August, this is what the RBA said about our future growth: “GDP is forecast to grow by 3¼ per cent over 2022, 1¾ per cent over 2023 and 1¾ per cent over 2024. These forecasts are lower than three months…”.
So we have a slowing economy ahead and it looks like our leaders have to come up with some enlightened leadership, which Hawke and Keating were able to do in their early days of running the country in the 1980s. Albo and Chalmers need to slow down with their union-friendly policies and think about what they can do to keep businesses employing workers.
If they ignore the pressure on business now, they might end up with a jobless problem that won’t look great on their CVs come election time.
Before the recent election, Albo pulled off a good speech to a Business Sydney audience where he asked us to recall the achievements of the Hawke-Keating teams and wanted us to think that he could be like them and not other leaders who might have been seen as business unfriendly.
I’m impressed with Jim Chalmers so far, and as he’ll have to wear any bad economic results for the economy over the next three years, I suspect he’d like his colleagues like Tony Burke to ease up on his business bashing, but it's time Albo showed us he wasn’t spinning a line to get elected.