Must admit I am a little surprised at the sudden upturn in the economy.

Was it not only three plus months ago that we were undergoing the largest economic downturn since the great depression.

Demand was sliding, unemployment was going to rise, low interest rates due to low inflation expectations, housing prices falling, stockmarket on a freefall, debt out of control and then suddenly everything appears to be pretty rosy.

Has anything actually changed? My humble opinion is no. Why?

- Demand still rising slightly mainly due to access to debt, helped by a little stimulus - thanks Kevin and well done for avoiding that recession.

- My understanding of the definition of unemployment is that it only kicks in for those working less than 12 hours per week. Not only have many workers’ hours been cut in the last 6-12 months but I reckon many of those middle management workers who were lucky enough to cop a redundancy still aren’t standing in the dole queue.

- Interest rates are on the rise. The RBA in their wisdom state that inflation is above acceptable levels and hence textbook monetory policy says to raise interest rates to calm things down. Hello folks have a look beyond the numbers and perhaps see why your ‘basket of goods’ is getting a little more expensive. We have the most ridiculous duopoly in the 2 major supermarkets Coles and Woolies which was quantified by a report over the last few days which stated grocery prices had increased 41% since 2002 (Imagine how many consultants it took to find that out). Petrol prices up, gaming up yet strangely enough no real pressure on wages which is actually one of the main reasons to raise interest rates when inflation rises. Honestly.

- Housing prices are starting to rise in a few areas. Helped a little bit by the dash for the first home owners grant. Construction sector also going pretty well thanks to more of Kev’s stimuli. Both props ending very shortly so should be interesting to see how the market goes.  In fairness there is a bit of a shortage of housing as our population grows. One thing for housing prices to go up due to an increasing population and another to determine where everyone is actually going to work in 20 years. Any ideas Kev, Julia or shoud I read the 2020 summit paper more closely.

- Great to see the stockmarket rise back to the levels it was nearly 12 months ago. Obviously massive multiples on company earnings is justified. Things surely have to get better, in fact fifteen to twenty times better. We have a lot riding on the value of superannuation to help ease the burden of the ageing population so go the All Ords. And well done JBWere for sponsoring the Masters and having a couple of your senior execs have a round with Tiger. I am sure those people who paid you your large commissions when having to sell at a huge loss over the past 12 months would at least be happy to see their hard earned money well spent.

- Debt has been reigned in a little thanks to a few government bailouts mainly o/s. Apart from that debt is still alive and well and is a sleeping giant. The sooner something serious is done (by all concerned) the better.

So things are looking good. A little cynical yes. My advice;

- Do something good for those around you and even those you dont know

- INNOVATE at work, at home and wherever else you choose to spend your time

- Buy BHP shares.

Why, because it Just Makes Sense.

This is a good initiative and it will be interesting to see who does and who doesn’t sign up to have the Carbon Footprint of their product shown on their label.

Whilst I understand the need for import/export to maintain a healthy economy here in Australia, wouldn’t it be nice to see some pressure back on the major retailers to purchase local where possible. It would also be nice to see them not screw local suppliers (ie farmers) but that is a whole different story.

It is also really important if they are to introduce labelling that the measurement process is consistent and transparent.

Carbon Footprint Labelling Headed to Australia - G Online

The Sydney Theatre Company, through a combination of public and private funding, is to embark on a extensive program of energy and water saving through initiatives including the installation of 2000 solar panels.

This is a great initiative, but when will the Government really get serious about solar and provide some incentive for businesses large and small to introduce similar measures.

There is little doubt that with the lack of spending on infrastructure upgrades across Australia over recent times there is a real chance of widespread blackouts in the near future.

The Australian Academy of Technological Sciences and Engineering (ATSE) has released a statement explaining this.

So stock up on some candles and hope that the ‘powers’ that be make the correct decisions.

Blackouts Inevitable Without Tech Boost

The more you look into the Government’s proposed Carbon Pollution Reduction Scheme (CPRS) and the approach they have taken to date the more the mechanics of the scheme and potential pitfalls become apparent.

So far the Government have released a green paper and white paper outlining how the CPRS may operate. They have also release a medium term target of a 5 to 15% reduction on 2000 levels by 2020 somewhat setting a ‘cap’ on potential emissions reduction. The Government also launched a mass media advertising campaign telling the general public that they are proposing to launch the CPRS in 2010.

Now we have the Government launching an inquiry (we did - seems to have been canned for now) into the merits of an emissions trading scheme. I understand that we have unprecedented economic conditions but as The Australian article - ‘We Need to Start Emissions Debate’ suggests shouldn’t we have looked at this before?

As has been shown in the European Union’s Emission Trading Scheme there is potential for significant price volatility for carbon ‘permits’. The problem here is that if the price drops below a certain level then there is really no incentive for Companies to reduce emissions. That is the cost of the permits are potentially less than what it would cost to implement emissions reduction initiatives. This, combined with the enormous resources required to administer such a scheme really makes me a little nervous as to how effective it may be.

We also need to focus on what we are really trying to achieve here. My understanding is that the objective is to reduce carbon emissions and thus avoid ‘dangerous climate change’. Given Australia’s two main sources of emissions are stationary energy (mainly coal generated electricity) and agriculture in the absence of many of us converting to a vegan lifestyle the best solution is reduce electricity/energy consumption and increase our use of renewable energy.

If this is the objective then how about we not try and over complicate things and put a simple ‘price’ on carbon. More and more a Carbon Tax looks like the most effective way to achieve this.

Left and Right Agree on Carbon Tax provides a good insight into potential pitfalls of the CPRS and how a carbon tax can actually encourage ALL big pollluters to reduce their emissions.

Economist Warns of Dire Consequences of Emissions Scheme

The bushfires that have ravaged parts of Victoria this week have created tragic circumstances not seen in this Country before. The worst natural disaster in Australia’s history with estimations of 300 lives lost, 1800 homes destroyed and thousand of lives changed forever.

The outpouring of support from individuals, businesses and celebrities has been quite staggering. Current calculations have approximately $75 million dollars pledged. Like always, the Red Cross have been exceptional in managing this process.

I do hope, however, that the plights of many Australians in need on a daily basis are not forgotten. If anything perhaps bringing together the community as this tragedy has inadvertantly done will make us more conscious of supporting those around us.

It is estimated that over 100,000 people spend every night without a roof over their heads. Not to mention the thousands of individuals and families living below the poverty line for a variety of reasons. The job losses we are absolutely certain of facing over the coming months will mean these hardships reach a scale not experienced by the majority of the population.

I am assuming those Companies that have so generously donated enormous amounts of cash have not and will not be laying anyone off in the near future.

I thank every individual and organisation who have donated money to the bushfire appeal, however please keep in mind those who continue to need help daily yet are rarely recognised in the mainstream media.

It is times like these that we all must support those around us like we have supported the victims in Victoria. The levels of support are symbolic of what can be achieved.

I hate to be cynical but do we really need a “telethon” to get corporate Australia pledging to the levels seen over the past few days. And please do not feel the need to run TV ads to tell people that your company will be donating money. Maybe use the money spent on the ads to add to your donation?

To individuals, business and celebrities; Remember the feeling when you decided that you wanted to help over the past week.

Hold that thought. 

It is what makes us great and it just makes sense.

Smith Family

Youth Off The Streets

If anyone has travelled recently between Sydney/Melbourne/Brisbane you surely would have noticed a few things.

One is that no matter how long the cabbies have to wait in the queue we still have to wait in line for a ridiculuous amount of time before we can get a taxi. Might seem like a small thing but surely somebody can work out how to fix this (especially in Sydney).

Secondly and more importantly (with no disrespect to the cabbies) most domestic flights these days, particularly between the cities mentioned above, are delayed. I am sure somebody has statistics to prove me otherwise but I think most of you will know what I am talking about.

There are simply too many planes in the sky and we do not have the resources (or possibly space) to support it.

A sincere thankyou to Virgin Blue in particular for making air travel affordable but what this has done (certainly not blaming Virgin) is made it (or making it) almost unmanageable to book a flight between the 3 main destinations in Australia and be reasonably sure you will get there on time.

The very simple solution is to build a fast train network between the main capital cities.

More than ever we need a major infrastructure initiative in Australia. Yes it will cost a lot of money but probably no less than the Government looks like it will spend in the near future on propping up retail spend.

I also think given the right proposal you would have many an astute private investor wanting a piece of the pie.

We are not talking about a Simpsons style monorail but a genuine solution to what are growing issues within our economy.

It is nice to see from the link above that it is at least on the Government’s agenda but I really think the idea of a fast train out of Sydney deserves to be more of a priority. Surely it just makes sense.

The value of innovation is not restricted to business and given the current times innovation within your community can have a hugely positive effect. I also think the term ‘community’ will grow significantly in prominence over the coming months as many take a bit of a reality check and focus on what is important and what can be changed.

The article below talks about this, and whilst it is from the US I think the similarity in terms of opportunities for local community based innovation can be taken on board wherever you are.

Also if you have a community based event or project you would like to share please send us an email.

Community based innovation will boost economy

Whatever your views Rupert has done pretty well for himself and I think he may have a point here.

http://bigpond.com/news/business/content/20081207/2439960.asp

Not likely to happen here soon but how much fun would it be.

http://www.myfootballclub.co.uk/