The Natural Disasters May Affect You
The recent spate of natural disasters in Queensland, New South Wales, Victoria, South Australia and Western Australia, (floods, cyclone and severe winds) will have some impact on the business outlook for the remainder of the 2011 calendar year. Natural disasters will have an incredible effect on the building industry as the building industry sets about repairing what nature has destroyed. This will lead to higher skills shortages, particularly for tradespeople. This is likely to lead to increased pressure on the government to allow higher levels of skilled migration into Australia.
The government has announced a disaster tax to commence from 1 July 2011. Economists are now indicating inflation is stronger than what was first thought and there is an expectation that interest rates are just about at their peak levels. There are some expectations that a “stinker of a budget” will be announced by the government on the 10 May 2011. The other debate that will ultimately affect SMEs is the government’s announcement of a carbon tax to be introduced in approximately 12 months time.
What does all this mean to SMEs? There will be strong pressure for skilled labour, particularly in the building industry. Inflation is forcing up prices of many key components within a business, therefore businesses should be continually reviewing selling prices so as to maintain the margin relationship between costs and selling prices. Businesses which achieve product differentiation are more likely to be successful.
As we approach the end of the financial year, it is an opportune time to review all aspects of your business’ operations and to perform a business health check.
If you would like to have discussions with us relative to a review of your business, please do not hesitate to contact us.