The state of the economy at the street level

[qldfrog]

@Dona Ferentes So will this mean in the future for substandard product from China????

why substandard? You mean like your iphone or TV?
Cheaper if the importer wishes too, substandard if the importer decides to sell crap too, but more importantly maybe unavailable, delayed by months, unable to be customised and at the bottom of the priority
ah well, slums do not need custom triple layers glass panes..

 

[divs4ever]

@Dona Ferentes So will this mean in the future for substandard product from China????

if you pay the big bucks ( or gold bars ) i bet China can make some mighty fine stuff , but currently importers want to pay peanuts , so they get monkey crap ( but really cheap so the margins are great )

much the same for India , pay for quality and someone will try to make it for you ( remember we used to do the same thing to Japan before they wised up )

 

[Smurf1976]

Australia’s largest glass maker and only maker of architectural glass, Oceania Glass, has been placed in administration less than a year after successfully arguing China and Thailand were dumping cheap glass into the Australian market.

I'll take an educated guess that the cost of energy was almost certainly a factor here too.

Glass is pretty energy-intensive to make, it's a significant cost input.

 

[divs4ever]

I'll take an educated guess that the cost of energy was almost certainly a factor here too.

Glass is pretty energy-intensive to make, it's a significant cost input.

maybe the newer stuff , but they were making glass objects several centuries ago or was that more than 2000 years back ?

say the 1600's you still had coal and ( primitive ) blast furnaces

however several glass-making techniques have changed

 

[Smurf1976]

maybe the newer stuff , but they were making glass objects several centuries ago or was that more than 2000 years back ?

That would still have been energy-intensive. The heat to melt it has to come from somewhere.

The detail would've been very different back then but the basic concept remains. There's heat required in the process, and Australia's an expensive place to do that these days.

 

[sptrawler]

That would still have been energy-intensive. The heat to melt it has to come from somewhere.

The detail would've been very different back then but the basic concept remains. There's heat required in the process, and Australia's an expensive place to do that these days.

Yes radiant heat from burning fossil fuel, is extremely efficient when it comes to heat transfer, replicating that with renewables will not be easy in some processes.

 

[divs4ever]

That would still have been energy-intensive. The heat to melt it has to come from somewhere.

The detail would've been very different back then but the basic concept remains. There's heat required in the process, and Australia's an expensive place to do that these days.

we have plenty of coal , for instance NST has a Maules Creek size resource sitting inconveniently over a gold resource , goodness knows how much more we have if we were to look hard

what Australia DID do , was to make coal difficult and complicated to extract and use ( in Australia ) ( and expensive as well )

 

[qldfrog]

That would still have been energy-intensive. The heat to melt it has to come from somewhere.

The detail would've been very different back then but the basic concept remains. There's heat required in the process, and Australia's an expensive place to do that these days.

It is an expensive place to heat, to cool, to have workers,to buy or build ,maintain a factory,storage,office,farm,mine.
Operate any type of business
If you compete with basically anywhere else OS, you are screwed .
To survive or thrive, you need an edge which is now restricted to:
+Low skilled underpaid backpackers or student workforce
+Your competition is purely local/national: restaurant/ fast food, local tourism within limits, parking ,fresh food with quarantine restrictions etc
+Australia is the only provider of a specific thingy
+Brand power. A weak advantage that one
"Chinese is sxt","Australia made..owned" hum
+Leverage taxpayers money and trade restrictions/regulations: FMG green projects,dei state apps or recycling program, health industry protected market, NDIS, defence supplier, and all BS jobs: pool and safety/electric cable inspection etc
So:
Manufacturing? A challenge you can not win
Even heavy bulky stuff like cement / iron bar and here glass where you could imagine transport a serious barrier to o/s entrants are challenging
We even buy empty bottles and boxes..containers shipped across continents full of empty bottles but the problem is belching cows, DV and pretend racial discrimination...

 

[farmerge]

It is an expensive place to heat, to cool, to have workers,to buy or build ,maintain a factory,storage,office,farm,mine.
Operate any type of business
If you compete with basically anywhere else OS, you are screwed .
To survive or thrive, you need an edge which is now restricted to:
+Low skilled underpaid backpackers or student workforce
+Your competition is purely local/national: restaurant/ fast food, local tourism within limits, parking ,fresh food with quarantine restrictions etc
+Australia is the only provider of a specific thingy
+Brand power. A weak advantage that one
"Chinese is sxt","Australia made..owned" hum
+Leverage taxpayers money and trade restrictions/regulations: FMG green projects,dei state apps or recycling program, health industry protected market, NDIS, defence supplier, and all BS jobs: pool and safety/electric cable inspection etc
So:
Manufacturing? A challenge you can not win
Even heavy bulky stuff like cement / iron bar and here glass where you could imagine transport a serious barrier to o/s entrants are challenging
We even buy empty bottles and boxes..containers shipped across continents full of empty bottles but the problem is belching cows, DV and pretend racial discrimination...

@qldfrog Perhaps we could bottle the farts from our cattle and export it as a green and clean product.
What use it would have is anyone's guess.

 

[wayneL]

@qldfrog Perhaps we could bottle the farts from our cattle and export it as a green and clean product.
What use it would have is anyone's guess.

There is a more copious source of noxious hot gases, ie parliament house. I'm all for that, so long as the tanker trucks carry the appropriate "dangerous goods" placards.

 

[farmerge]

There is a more copious source of noxious hot gases, ie parliament house. I'm all for that, so long as the tanker trucks carry the appropriate "dangerous goods" placards.

@wayneL Best the noxious gases generated by those in Parliament House is best kept there.
No need to inflict that on an unsuspecting public.

 

[JohnDe]

Bricks and mortar business costs are too high, more will turn to online stores.

Land tax, council rates, water rates, electricity, insurance, maintenance cost, all keep going up. While customers disposable incomes keep dropping. And our socialist governments can't see it.

 

[Bellcose]

The good ol' house and contents insurance issue raises it's ugly head yet again.

OK the Breakdown in percentage increases for each (combined policy). All figures rounded.

Building up by 10%
Contents up by 37%
Combined up by 15%

Now here is the really interesting bit. The coverage for contents.

Dollar value covered up by 5%.

 

[divs4ever]

@qldfrog Perhaps we could bottle the farts from our cattle and export it as a green and clean product.
What use it would have is anyone's guess.

make fertilizer ?? ( that seems to be one important use for LNG and methane )

would be kind of ironic wouldn't it ?

 

[qldfrog]

The good ol' house and contents insurance issue raises it's ugly head yet again.

OK the Breakdown in percentage increases for each (combined policy). All figures rounded.

Building up by 10%
Contents up by 37%
Combined up by 15%

Now here is the really interesting bit. The coverage for contents.

Dollar value covered up by 5%.

More theft?
Floods and fire, hail would affect building and maybe content but not just content?

 

[farmerge]

The good ol' house and contents insurance issue raises it's ugly head yet again.

OK the Breakdown in percentage increases for each (combined policy). All figures rounded.

Building up by 10%
Contents up by 37%
Combined up by 15%

Now here is the really interesting bit. The coverage for contents.

Dollar value covered up by 5%.

We recently received our Farm Pack Renewal for the coming year.
I was a bit surprised by the increase as it was less than I had anticipated. We had a $100,000 claim from the tornado that hit us in January last year and the increase was under 1k.
Our policy cover the 2 houses, contents, sheds with some listed items, generators, solar panels, fencing, some of the machinery and some odds and sods all packaged. Though each is a separate entity it is all under one banner.
And only last week we have another moderate claim going in for the recent fire probably around 5-6k

 

[JohnDe]

The good ol' house and contents insurance issue raises it's ugly head yet again.

OK the Breakdown in percentage increases for each (combined policy). All figures rounded.

Building up by 10%
Contents up by 37%
Combined up by 15%

Now here is the really interesting bit. The coverage for contents.

Dollar value covered up by 5%.

We will see the data soon.

While Wednesday’s numbers are likely to show a continued slowing in living costs for employee households as well, it will also likely show this group continues to record the highest quarterly rises.​

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Food costs have risen by 14 per cent, housing by 15 per cent, health by 12 per cent and insurance and financial services (including mortgage interest costs) by 93.2 per cent. Those with a sizeable mortgage would have paid anywhere up to an additional $50,000.​

Living cost index is likely to show ongoing pain for middle Australia

Another day of reckoning will arrive for the government on Wednesday when the official living standards index is expected to show how much middle Australia continues to be belted.

Economists may not pay too much attention to the ABS living-cost indexes but politicians do.

And you can bet the Opposition will seize on their release for one obvious reason.

Unlike the Consumer Price Index, the LCIs measure how much the cost of living goes up or down for different groups of people.

It can be expected that the overall trend across five indexes will show a moderating of the decline in living standards, with government handouts helping offset cost-of-living rises more generally.

But unlike the CPI, the ABS living-cost indexes include mortgage costs.

For younger and older Australians, it is likely to show the cost-of-living rises easing further, which is good news. But this is largely because older Australians are more likely to have paid off their mortgages, if they had one, and younger Australians less likely to have one yet.

Of the five indexes – which also cover welfare recipients, self-funded retirees, other government transfer payment recipients and aged pensioners – it is the employee household index that is the most relevant to the political contest. This is middle Australia – middle-aged, middle-income earners. This is not only where the cost-of-living pain will be revealed to be greatest, it is also the political crunch point.

The December quarter showed cost of living running well ahead of inflation for this group. It is likely to do so again on Wednesday.

The Albanese government continues to argue the untestable case that people would have been $7200 worse off if the Coalition had been in power. But it won’t be able to escape the reality of how much damage has been inflicted over the past three years under its watch.

While Wednesday’s numbers are likely to show a continued slowing in living costs for employee households as well, it will also likely show this group continues to record the highest quarterly rises.

In other words, the relative pain for those voters who will be most critical to the outcome of the election, is the most acute.

The Opposition’s assessment of these indexes over the past two and half years show “working household” living costs have already increased by 18.9 per cent.

Food costs have risen by 14 per cent, housing by 15 per cent, health by 12 per cent and insurance and financial services (including mortgage interest costs) by 93.2 per cent. Those with a sizeable mortgage would have paid anywhere up to an additional $50,000.

Wednesday’s data needs to be weighed against the next round of wages growth numbers in a couple of weeks to get a clearer picture.

Economists Chris Richardson and Saul Eslake say that, while economists are looking at inflation through CPI, politicians are more likely than economists to focus on the cost-of-living index to see where the genuine pain in the community resides.

In that sense, it may be a closer reflection of reality. And it’s a reality that seems to be lost on the government as it seeks to claim a victory over inflation. “It won’t only be that living standards have dropped but also they have dropped more for middle Australia,” Richardson says. “And that’s relevant because that’s typically where elections are won or lost.”

While cost of living was always going to dominate the first parliamentary question time of the year on Tuesday, as it will again on Wednesday with these latest datasets, the politics didn’t necessarily go the Opposition’s way.

Tuesday was a wake-up call to Peter Dutton that he is now firmly in the policy spotlight as the alternative prime minister, with the Liberal leader forced into a defensive position over tax breaks for small business lunches.

It should have come as no surprise that Jim Chalmers would eventually get the Treasury to cost the Coalition policy, which has been released without any final numbers around it.

Liberal polling may be showing that it is a policy tracking well for Dutton, but it is a policy that essentially narrowcasts to the Liberal small business base.

Labor sees it as a prism through which it can broadcast the politics of resentment.

This may not work in the end for Albanese and Chalmers, as the class-envy card plays primarily to Labor’s own base, but it has provided the government a rare short-term diversion from the main political game.

More Coverage

 

[Bellcose]

More theft?
Floods and fire, hail would affect building and maybe content but not just content?

Possibly. Whenever I've heard of the impact of these events, I have noticed the amount of household goods which are now landfill. Like most why the increase is only a guess and a chance to whine about insurance companies. We tend to forget, or maybe not even know, behind insurance is those companies have to incur reinsurance costs. If those particular companies jack up the prices due to reappraisal of risk it's passed on to us. Not saying there maybe some gouging. I get that but it's not all down to gouging. All households subside via insurance losses incurred in Queensland, SA and other places even overseas. There is some interesting stuff on the APRA website about that aspect.

Years ago around the mid 2000's the matter of re-insurance came up during a discussion I was having with an FP who was also an economist. She said it was termed environmental economics and that without re-insurance society would likely grind to a halt. Baffled me until she explained very few companies from the small to large ones could not afford to take on the entire risk if things went pear shaped. Think of a small restaurant and a customer sues them or a worker is injured. They'd be bankrupt very quickly. Then multiply that across the industry and various other organisations and different type of risk - medical negligence. She implied we'd all be stuffed and that is where re-insurance comes into play to spread the cost of insuring the risks. If found the discussion very interesting.

 

[JohnDe]

Director Tom Kiing has agreed to step into an executive role to oversee the transition and identify and implement cost savings for the e-commerce business. ​

​

Maggie Beer Holdings, the ASX-listed commercial arm of the famous cook’s food creations, has warned soaring costs are eating into profit, forcing the company to cut costs and undertake a strategic review.​

​

Rising costs at the same time of a cost-of-living crisis has crippled Maggie Beer Holdings’ sales and earnings for the last number of years, and a new focus on slashing costs would see some job losses.​

Maggie Beer foods is facing rising costs​

Retailer Maggie Beer is struggling with rising costs. Picture: Jack Fenby/TWAM

This will see some job losses among executives and head office and a move to simplify its operations that include the Maggie Beer brands, e-commerce sales and its food hamper business bought back in 2021.

Shares in Maggie Beer have fallen 90 per cent since 2022 to underline the poor investor sentiment around the stock which once promised to fill the nation’s supermarkets and pantries at home with Maggie Beer branded products, like quince paste and pate, banking on the success and love Australians have for the popular TV cook.

However, a series of missteps, poor trading conditions and a pullback in consumer spending, especially on some premium and gourmet foods, has crunched sales and profits for the publicly listed Maggie Beer Holdings, with current management now concerned about spiralling costs.

In a trading update to the market on Wednesday, chairman Sue Thomas said increased sales for the first half had been offset by ongoing operating costs, with the board now forced to act to rein in the cost of doing business.

“Whilst we are pleased with the positive sales results to 31 December 2024, the trading period has only reinforced the board’s view that our cost of doing business remains too high. Whilst some cost increases are driven by factors outside of our direct control, the board review has highlighted that we can and need to materially cut our cost of doing business.”

The trading update reported that sales for the December half would be up by between 5.5 per cent and 6 per cent, while earnings from continuing operations would be down by 7 per cent to 8 per cent. It would end the half with roughly $11m in cash.

Rising costs at the same time of a cost-of-living crisis has crippled Maggie Beer Holdings’ sales and earnings for the last number of years, and a new focus on slashing costs would see some job losses.

“Addressing those costs is the first stage of returning the company to consistent profitability,” Ms Thomas said.

“In the second-half, Maggie Beer Holdings will therefore simplify its operations and administration through streamlining its structure, reducing senior executive roles and head office headcount.”

As part of a restructure, divisional heads will be appointed to its hampers e-commerce operations and Maggie Beer products, with each responsible for cost management, profit and strategy, reporting directly to the board, Ms Thomas said.

Maggie Beer Holdings directors would also take a more hands-on approach to reviving the company’s fortunes. Director Tom Kiing has agreed to step into an executive role to oversee the transition and identify and implement cost savings for the e-commerce business. He will also head the search for a future head of this division. Recently appointed Director Mark Lindh will lead the search to recruit the head of Maggie Beer products and will assist in running the business in the interim.

The company also said the sale process for its Paris Creek Farms division was progressing, and a number of interested parties are currently in the data room.

 

[Bellcose]

Floods and fire, hail would affect building and maybe content but not just content?

No economy no matter what street you are on. Hmm, wonder which other towns or areas of towns will end up that way.