We’re living in unprecedented times good people.
After decades of consistent economic (GDP) growth, the mining boom, immigration boom, education boom, tourism boom & real estate booms in different states at different times all creating sharp surges in aggregate demand for goods & services for a while, we’re now seeing worrying contractions in many of these sectors, all of them significant wealth generators for Australians.
Now, the COVID-19 pandemic wasn’t necessarily the cause of the contractions, but it has certainly multiplied the effect on small business, many times over.
Interestingly, and quite encouragingly, the Morrison Government has clearly set aside their Party’s long-held ideological views on the most effective policy to stimulate aggregate demand, being Milton Friedman’s monetarism, revolving around the use of interest rate policy to manage inflation, and re-embraced John Maynard Keynes’s interventionist fiscal policy, designed to address or prevent economic recessions, and which was the dominant policy employed by our Commonwealth Government for more than thirty years after World War 2.
Clearly, the politics of managing the economy is no longer about right or left. It’s about right or wrong. And that’s good news for small businesses.
In the short to medium term, with cross-border travel restrictions likely to be in place for quite a while, the most important indicator of success for this new interventionist policy will be:
“Does it give the private sector the confidence it needs to invest?”
If it doesn’t, then it may as well be welfare.
When Government spends into the ‘real’ economy as they’re now doing and assuming they get it right, the public spending should then be followed by:
- private sector investment to pursue growth opportunities (capex),
- which creates jobs and the opportunity to increase economic output (producing more of the goods and services people want at a price they’re happy to pay),
- which then causes the economy to grow (GDP),
- causing businesses and individuals to prosper (GDP Per Capita),
- creating the taxation revenue to repay the original spending and the capital for further investment by the private sector.
That’s the theory, and there’s plenty of evidence of its success in practice fifty years ago or more, but will it work in today’s globalised economy?
The Morrison Government’s infrastructure investment program (JobMaker) promises to deliver road, rail & air transport infrastructure to Western Sydney, but do the projects that have been announced create that exciting investment opportunity for your business, giving you hope for the future?
Is the JobMaker hiring credit , intended to create jobs for the newly-unemployed–skilled-or-semi-skilled workers aged 16-35, enough incentive for you to take them on?
Do your employees have the skills you need to grow the business in the ‘new normal’ (JobTrainer)?
Or do you already have that visionary plan for the future, but the red and/or green tape makes it impossible to execute?
It’s critical that Government gets this right so WE NEED YOUR HELP to take Western Sydney’s unique perspective to both sides of politics and ensure that we keep their agenda aligned with yours.
Cumberland Business Chamber has joined forces with other chambers across our region to form the Chamber Alliance of Western Sydney (CAWS) with the intention of becoming Government’s first point of contact for advocacy on the things that matter most to Western Sydney business. Things you won’t necessarily pick up during day trips in the COMCAR to Badgerys Creek for photo opportunities.
To this end, we’ve created a survey with specific questions for businesses from all sectors in each chamber’s geographical area, the insights from which we aim to use to establish a baseline for our advocacy program.
It should take you no more than five minutes to complete. Your views matter. Our mission is to ensure they’re heard.
Contributed by: Scott Baker Secretary, Cumberland Business Chamber