Australia’s economic conditions are predicted by some to take a downward turn in 2013, meaning employers large and small are growing anxious about an economic slump and the potential for China’s growth to go into reverse. In retail, the growing trend for US stores to welcome Australian online shoppers with lower prices, free shipping and wider inventory is proving to be high competition for Australian retailers. There is also the productivity issue, relevant in all parts of the domestic economy, which requires more innovative solutions if we want to encourage growth.
What’s on the cards?
It is hoped that the Reserve Bank of Australia will commit to stability and a clear cut in interest rates, this follows the recent cut of .25 pc down to 3% on the 5th December, sparked by fears of a deteriorating economy; this rate has not been this low since 2009. Many major banking institutions are revising their forecasts and predicting as much as a 25 basis point cut for each 2013 quarter, bringing rates down to 2% by the end of next year in an effort to try to ignite the current below-trend growth in the mining economy.
At close to 5%, unemployment rates are lower than in most other advanced countries, however, the ANZ job index shows eight straight months of falls as well as a drop in job advertisements in the resource dependant states. Macquarie Bank’s Brian Redican predicts unemployment to rise to 6.5% in 2013 with little strength in the resources sector.
Economic Growth Rates
This year Australia is predicted to record GDP growth of 2.9% but 2013 sees this fall to 2.1%; compared to 1.3% and 1.7% respectively for other advanced economies. This is a relatively strong growth prediction, but alongside it comes a wealth of potential hurdles and complexities for businesses.
What can business do to prepare?
With 2013 being an election year, things may become more politically difficult, nevertheless, the focus should still remain on productivity to ensure that Australia keeps pace with the global competition.
When reviewing and planning for the New Year, remember that it is up to business owners to create their own bright futures, encourage innovation and improve productivity through innovative thinking. Yet the reality is, while small business owners may start the year with high expectations and hopes of what they will achieve over the coming year, the day-to-day activities of running a small business take precedence over the big picture.
Here’s a rundown of the top 3 points to bear in mind when preparing for 2013:
1. Review your compliance obligations:
This is crucial to success in business, ensuring you are up to date with any recent changes in legislation as well as anticipating any changes that are on the horizon. For example, understanding the changes to severance payment laws since the 2009 Fair Work Act, which introduced certain redundancy pay conditions to the NES. These changes have the potential to make significant impacts on businesses if they are ignored or overlooked and many employers are still unaware of the requirements. Compliance will avoid potential fines and mitigate risks; plus outsourcing time-heavy or complex elements of the business can allow more focus on the all-important big picture.
2. Implement flexible hours:
When driving up productivity, this is the first port of call and rights to flexible working arrangements are also part of the NES. For example, flexible hours can help with retention of staff on maternity leave, encourage higher employee morale and engagement, plus it allows employers to get more out their working hours by taking advantage of their most productive times of day.
3. Identify processes:
Put some processes in place. This will prepare businesses for growth without impacts on productivity. It also allows for shared task responsibility, frees up more time compared to manual processes, avoids the problem of “specialist knowledge” being limited to single employees and can help to identify operational weak spots.
The environment for business competition is now a global one, to measure up in the international market there is no room for limited productivity. Hindrance can stem from a lack of supervision over factors that can be very easily controlled with good management and compliance. Whilst Australia fared comparatively well in 2012, it is important to work towards creating the best possible position in 2013, so that if a downturn does occur, businesses are fully prepared.