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The state of the economy at the street level

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Smurf1976 said:
Or are people who might previously have bought a new car now buying used instead?
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Then market being supply demand, it would be interesting to see the price trend of used cars , and the various segments.
It is a very hard sector to analyse.
Are people buying non expensive ones et reducing amount spent?
Population growth?
Migrants buy extra second hand cars, and 18y old kids..or parents for kids..but otherwise,it is often one bough and one put for sale...
In overall numbers, migrants and population growth add demand, write off in accidents, blown engines and steal and burn reduce the supply.
And if you do not have access to dealers trade-in market/new car sold..hard to draw anything from these numbers imho
 
over9k said:
I'm betting it's this mullok. A lot of cars are bought on finance/loans. Rates have shot up and so have living expenses so borrowing capacity is being pinched in both ways.

I bet if you dug into it you'd see that cars sales on credit/finance have plummeted and cash purchases haven't changed nearly as much.

And new cars are a superior good remember, they're something you buy when you're flush. When money's tight, you hold on to your old one ;)

Remember the golden rule of analytics: The devil's in the details :)
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Looking into the detail from the ABS, it does not look like people are financing less, at least in dollar terms with personal loans for personal loan vehicle financing.
So many new cars these days are bought on Novated leases.
The NALSpA put out a media release that there had been strong growth up until March 2024.
Strong growth in novated leases, particularly for electric cars, is helping boost the number of new car sales in Australia, according to National Automotive Leasing and Salary Packaging Association (NALSPA). New figures from the Federal Chamber of Automotive Industries reveal total new car sales were up 20.9 per cent in February compared with the same period last year. Sales of BEV & PHEV combined made up 14.4 per cent of passenger and SUV vehicle sales (excluding light and heavy commercial vehicles), compared with 9.9 per cent in February 2023, reflecting growing interest in both pure battery and plug-in hybrid vehicles. Meanwhile, NALSPA members have recently reported strong ongoing growth in total novated lease sales. Importantly, electric vehicles are making up between 35 and 40 per cent of all new novated leases and more in some cases.
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1728337630766.png

One can draw many conclusions from the above, all or none of which may be true.
Mick
 
Was at a 2YO birthday party today.
Talking to some of the guests, it seems that in this area (Goulburn Valley, Vic) at least, things are definitely slowing down.
One guy who runs a 13 man electrical business has gone so quiet that he will not be replacing a staff member leaving in a few weeks.
A carpet layer has been so quiet that he is doing a few weeks work in Adelaide to cover expenses.
One of our butchers is closing, he could not sell the business.
The window tinting guy has so little work he is only working three days a week and spending three days a week milking cows.
be interesting in this Tuedsdays town business meeting.
Mick
 
wayneL said:
Business revenue is one thing but expenditure is another. It seems businesses are being squeezed on multiple levels and being choked to death.

View attachment 185639
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A WA mechanic has blamed the “spoilt generation” for the closure of his business, saying young people were dismissing apprenticeships because of low pay while ordering “$50 burgers” on Uber Eats.​

If the unemployment rate was higher, I would agree with him 100%. However, with the labour shortage people can choose what they want and demand higher pay. Who wouldn't.

Though I do agree that there is a problem with how some parents and schools have educated a generation into believing that they are gold and know it all. And now believe that they are hard done by with the cost of a house that must include every luxury known to the world, while at the same time limiting land for property, saving the planet with expensive renewable and regulations which hit everyone with added costs.


WA mechanic says declining interest in trades among new ‘spoilt generation’ to blame amid labour crisis

A WA mechanic has blamed the ‘spoilt generation’ who only order ‘$50 burgers’ on Uber Eats for the closure of his business.

A WA mechanic has blamed the “spoilt generation” for the closure of his business, saying young people were dismissing apprenticeships because of low pay while ordering “$50 burgers” on Uber Eats.

After years of struggling to find apprentices Dave Rawson shut up his North Perth shop The Bike Doctor because he couldn’t find anyone to staff it.

“They’ve been spoilt by my generation. We’ve tried to give our kids a better life than we had. We haven’t let them tough it out and make their own mistakes,” he said.

“A lot of young people say they don’t have money but if you have a look at their bank statements and they pay $50 to get a hamburger delivered and all this sort of stuff. That’s where your money’s going.

“You just can’t save money when you blow it like that.”

Across four decades in business, Mr Rawson estimated he’s had just a dozen apprentices.

He said while some had lasted years, others had lasted weeks and none had had the appetite to remain in the sector.

“Once they get the job, they’re as happy as Larry. But within three to six months, they’re dragging their lip around the workshop. Some people expect too much,” he said.

He said that money appears to be the key factor driving the lack of interest — but the problems started with schooling and then compounded by the thriving mining sector.

“It’s a multifaceted problem. It just breaks my heart. Part of the problem is our education system doesn’t promote trades as an alternative for kids leaving school,” Mr Rawson said.

“They’re all encouraged to go to university. But they come out with $100,000 of debt, a piece of paper, no job, and no experience.

“Mining is a very attractive job for young people, because they can go straight into the big bucks. Our industry has always suffered from having a problem getting good people in the workshop.”

But what do those on the receiving end of Mr Rawson’s wrath think?

Kiara Derschow, 22, said she had previously considered a meat processing trade but was put off by horror stories from friends who undertook apprenticeships.

From bullying and poor treatment by bosses to underpayment and unsustainable wages, she said she opted to stay working in retail.

Bianca Russell, 22, echoed her concerns and hit back it was a generational problem.

“You can’t live off that. If they complain about not having enough money, it’s because they get like $14 an hour,” Ms Russell said.

“Another one of my mates who was an apprentice, he got treated severely by his boss. It really turned me off going into an apprenticeship.”


Ms Derschow also hit back at criticisms of how generation Z spent their money, saying it was unhelpful.

She also suggested that a lot of young people might prioritise short-term gratification over saving for a house because the Great Australian Dream seemed out-of-reach regardless of how savvy they were with their money.

“It’s always been a thing you hear that ‘kids don’t want to work these days’ but it’s not true. We do and we actually have to do a lot more work to get ahead,” Ms Derschow said.

“And it isn’t really your business what people spend their money on.”

For heavy diesel mechanic apprentice Connor Gale, 21, while he has found passion in his trade, he agreed it was common for young people in his sector to drop out before they finish training.

He blamed the cost-of-living crisis and the reality that there are a growing number of options to make a good wage faster.

“The customer service advisers make more than the mechanics on bonuses. So, the way they look at it is , why would you sacrifice four years on crap pay when you could go straight into a service adviser role,” Mr Gale said.


“Also, everything’s increasing but your pay stays the same. My other mate who is a mechanic, he’s 27 and battling to pay rent and just living costs because he’s on $700 a week.”

But it’s not just pay putting youngsters off.

School nurse Daisee Johnston, 23, and student personal trainer Kristen De Florencas, 24, say they didn’t consider apprentices because of stereotypes that trades were for men.

They also suggested, anecdotally, that gen Z’s weren’t driven by money and were in fact turning away from traditional apprenticeships due to increasing expectations around work-life balance, flexibility and autonomy.

“We want to make a difference and help people as much as we can and the money will sort itself out,” Ms De Florencas said.

Ms Johnston said people were increasingly seeking out careers that align to their values, which they perceived as meaningful work that contributed to something larger than themselves.

“There were still stereotypes about it being a man’s job. I think that’s what I was brought up with,” she said.

“But I feel like our generation is very different minded. I’ve always wanted to help people. So, I don’t actually care at the end of the day.”

But the lack of interest isn’t just anecdotal.

Motor Trade Association of WA chief executive Stephen Moir said the State’s motor industry was facing a significant shortage of 3500 skilled tradespeople. Nationally, there were 35,000 technician gaps to fill.

“It’s disappointing that the construction industry gets all the focus. They say, ‘we can’t build houses’, well we might not be able to fix cars pretty soon if we keep going,” Mr Moir said.

He added that the COVID pandemic had prompted the “great resignation”, leaving behind an ageing demographic of business owners.

“Most business owners in the automotive industry are above 50,” Mr Moir said.

“A lot of those people are saying, ‘you know what, I can’t get staff, I can’t cope with all the work, and there’s so much work out there’ so they’re just shutting up shop, which is a bit of a worry.”

While the motor industry might be struggling to fill roles WA Training Minister Simone McGurk said West Aussies were taking up other apprenticeships and traineeships in “record levels”.

“Apprenticeships are currently more than seventy percent higher compared to at the start of the pandemic,” she said.

“WA also hit a new record of over 153,800 publicly-funded vocational course enrolments in 2023 — driven largely by our government’s strong investment in TAFEs and through our initiatives like fee-free and low-fee training.

“But we’re not taking it for granted. We know businesses want workers, and we’re doing absolutely everything we can to attract more trainees and apprentices into training – so we can get more boots on the ground.”

The construction and electrical sectors have seen significant growth in apprenticeship commencements, with increases of 8.3 per cent, 3.1 per cent respectively.

Ms McGurk said there was a range of free and practical support to assist employers having difficulty attracting and retaining apprentices.

And she disagreed with Mr Rawson, who believed parents and teachers were increasing pressuring children to become doctors, lawyers, or accountants.

“The perception of TAFE and training is changing — it’s no longer considered a Plan B to university,” Ms McGurk said.

“Apprentices can ‘earn while they learn’ and go on to get secure, well-paying jobs in a range of industries, without being saddled with a HECS debt.

“There has never been a better time to get into training.”
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Smurf1976 said:
No I meant was the comment prompted by a specific occurrence? :)
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too many potentials this time

a new Government in Japan could be a biggie , and maybe not even wrecking the yen carry trade , just reducing imports drastically

could the EU panic and go back to negative bond rates

and then you have sanctions and a potential full-on trade war ( or several of them )

too many nations with huge debt and trade deficits , Australia will either have to be a patsy lender ( extend unwise credit lines to customers ) or be entangled by the defaults elsewhere
 
in late 2019 i was expecting a liquidity crunch/credit freeze , instead a virus was blamed , while another virus is less likely even that can't be ruled out as a weaponized distraction
 
Smurf1976 said:
Prompted by anything specific?
Click to expand...
Yesterday passengers attitude in my return trip to Australia.
A bunch of mostly older brits, german and i am sure some French heading to see grandchildren,children who i can only compare to my Chinese flying passengers orderly behaviours in my FIFO days.
No etiquette, hostess having to give up bringing the trolley thru in face of the hords standing in the alley to reach toilets.
Us aussies are actually pretty civil vs this bunch, and i repeat older 60s ..was shocking..
😂
Maybe just wrong roll of dice.
While most things were expensive in Europe and people have it hard on numbers, i did not see it being gloomy.
They are used to, and their wealth is crawling but not falling.
Will compare with home in coming days
 
Is it any wonder why businesses employ less people, reduce services, increase costs, and close up?

Taxes. levies, rates, and energy costs are making it tough for many businesses to stay open and increasing mental health issues. No wonder everyone wants a government job.

Payroll tax is a levy calculated on wages paid to employees. Simone says there are many key issues with payroll tax. “It’s not a tax that takes into account whether your business made a profit or not that year,” she says. “It’s just a tax that’s, basically, you pay your staff this many dollars, so you pay the government this many dollars.” ​
“So you’ve got these small family businesses who are just out there doing the best that they can in what is a cost-of-doing-business crisis, as much as there is a cost-of-living crisis.”​
As a result of this, Simone says they’ve “reduced [their] headcount significantly”. They used to employ “close to 70 people”, now they employ 40.​

‘Cost-of-doing-business crisis’: hospo owners call for payroll tax reform
Hospitality owners say payroll tax reform would help them stay afloat as small businesses reduce staff and try to keep their doors open.

When I sit down to chat with Simone Douglas, co-owner of The Duke of Brunswick Hotel and The Port Admiral Hotel, my first question is “what is your experience with payroll tax?”

She replies: “Beyond it being the bane of my existence?”

Yes, I guess. Beyond that.

For context, Simone and partner/fellow co-owner Alex Fairgrieve took on The Port Admiral Hotel 18 months ago, after it had gone into liquidation.

Simone says they “took some advice at the time about whether or not [they were] in danger of all of [their] businesses being grouped together for payroll tax purposes”, also considering Simone owns digital marketing firm AOK.

Payroll tax is a levy calculated on wages paid to employees.

“They said that based on the different shareholdings we had, that we would be fine. But it turns out that we weren’t,” Simone says.

“So we probably made that decision to take on that business and risk a significant amount of capital, being first-generation family business owners.

“We wouldn’t have made that decision had we known that we were going to cop a $3000 a month payroll tax bill just for that venue.”

Simone says “they grouped all of [their] businesses together” and “sent [them] a back tax bill for the previous year” which “pretty much wiped out [their] profit for the 22/23 year across the board”.

“So that all got paid to Revenue SA,” she says.

Port-Admiral-hotel.jpg
The Port Admiral Hotel. This picture: Angus Kiley.

Simone says there are many key issues with payroll tax.

“It’s not a tax that takes into account whether your business made a profit or not that year,” she says.

“It’s just a tax that’s, basically, you pay your staff this many dollars, so you pay the government this many dollars.”

Businesses with wages above $1.5 million are required to pay payroll tax. Simone says “hospitality wages have gone up by close to 25 per cent”, and yet “there’s been no increase in that threshold”. The last time the payroll tax threshold was increased was in January 2019.

“The Treasurer is currently enjoying a boon or a bonus thanks to what I would call bracket creep,” she says.

“So you’ve got these small family businesses who are just out there doing the best that they can in what is a cost-of-doing-business crisis, as much as there is a cost-of-living crisis.”

The effects​

As a result of this, Simone says they’ve “reduced [their] headcount significantly”. They used to employ “close to 70 people”, now they employ 40.

“The business has to make different decisions based on whether or not you can afford to run with that extra staffing, or afford to take on that person that needs training, as opposed to someone that’s experienced,” Simone says.

“It also creates a challenge with a lack of level playing field too. So if you’ve got, you know, for argument’s sake, The Prince Albert Hotel is just down the street from us. They’re probably not paying payroll tax, which means that their baseline, they’re paying five per cent less for their labour than we are, basically.

“Which means that they can afford to have greater flexibility in their pricing models.

“So again, that small family business bracket, you know, we’re not the worst of the world, but we’re incurring those same kinds of costs, but we don’t have the bargaining power, nor do we want to then screw down our local suppliers on their raw ingredient pricing.

“Because at the end of the day, we got into business to create a great space for people to come and enjoy and the grouping rules in particular were designed to catch a big corporate – so none of our businesses in and of themselves qualify to have to pay payroll tax, all of our payrolls are well below the threshold individually.”

What business owners want to see​

Simone says most business owners are “calling for an increase to the threshold in line with the labour growth that has happened”.

“You’re going to see more and more businesses otherwise getting caught in that bracket creep,” she says.

“If you look at hospitality in particular, it’s one of the fastest closing industries in the nation right now in terms of the amount of businesses going into administration or liquidation.

“I think the government needs to do a better job and come up with some different tax policy that supports that small to medium sector and actually continues to create jobs instead of killing them off.

“Because you’re not really left with much of an option these days.”

Simone says other policies that could be put in place are “12-month exemptions on new headcount” and paying payroll tax after an “EBIT test – earnings before interest and tax”.

“You’ve got a significant investment of time and resources and training to get that person up to speed,” she says on the 12-month payroll tax exemptions.

“I also think that when you are taking on trainees and apprentices, in an industry where we have a skills shortage in hospitality in particular, those trainees and apprentices should be exempt because they’re not fully fledged employees.

“We’re investing and paying for their training. We’re paying them to go to training – none of which we begrudge, we’re happy to do it – but again, we’re bearing costs on both sides.”

e-closing-James-Bodroghy-credit-Claudia-Dichiera-5.jpg
James Bodroghy, owner of The Cooks Pantry which closed at the end of October. This picture: Claudia Dichiera.

The Cooks Pantry – which recently closed due to cost-of-living and personal reasons – say, similar to during Covid times, payroll tax could be “stopped”.

Jo Bodroghy of The Cooks Pantry says: “if it could be done through Covid, it should be able to be done for a term to see how much of a difference that could make”.

“They basically let businesses not pay their payroll tax for a few months and it really, really made a difference,” she says.

“There’s obviously a sort of cap on where a small business starts and not and there’s always been these grades where they’re considered ‘if you’re on this level or not’.

“I don’t feel it’s that hard for them to see [the struggles] without the big companies making a benefit from it.

“I just think that it is…so obvious that a lot of good small businesses are just saying ‘it’s just too hard’, and if it maybe was that extra there that you had, it would probably make a bit of a difference.”

The South Australian Business Chamber has been calling for a payroll tax reform for months now.

In March the Chamber recommended lifting the payroll tax threshold from $1.5 million to $2.1 million, receiving a discount of 50 per cent on the tax for businesses operating in South Australia, and relaxing the restrictions for small businesses in their first 12 months.

“When the reward for creating jobs, saving a struggling business or adding to the complexity of the state’s economy is a large tax bill, the problems with this tax are clear,” South Australian Business Chamber CEO Andrew Kay told InDaily in March.

When discussing the effects of payroll tax in March with Sam Worrall-Thompson – director of EMBR Hospitality, who co-owns Dolly, Fettle, Bar Lune, Don’s Deli, Oliveti and Spread – he told CityMag “you get punished for growth”.

“It’s f***ed. It’s like 100 grand a year that we didn’t know about two years ago,” he told us.

Will the state government step in?​

Treasurer Stephen Mullighan says payroll tax cuts “are not being considered”.

“SA has the second highest exemption threshold of $1.5 million in wages and one of the lowest standard tax rates at 4.95 per cent,” he says.

“After surcharge levies in other jurisdictions are considered, South Australia has the lowest standard top payroll tax rate.”

Instead, he says the Malinauskas Labor Government is providing other support for the sector through “round two of the Economic Recovery Fund, which provides grants to small businesses to purchase equipment that will reduce their energy costs”, and “significant investment in major events [like Liv Golf, Gather Round and more] to drive demand in the hospitality sector”.

Mullighan also says that $14 million for the Business Events Fund – which, according to the website, is “designed to deliver conversion of new business in situations where Australia is bidding against international competitors for the right to host the business event”, will support “more events during the winter months”.

Mullighan says there’s “$6.5 million over four years for the government’s Small Business Strategy” and “$2.3 billion over five years to address skills shortages in the economy”.

“While rising costs and slowing demand are putting pressure on South Australian hospitality businesses, through the year, retail turnover in cafes, restaurants and takeaway food services grew by 2.2 per cent in South Australia, according to the ABS,” he says.
Click to expand...
 
qldfrog said:
Yesterday passengers attitude in my return trip to Australia.
A bunch of mostly older brits, german and i am sure some French heading to see grandchildren,children who i can only compare to my Chinese flying passengers orderly behaviours in my FIFO days.
No etiquette, hostess having to give up bringing the trolley thru in face of the hords standing in the alley to reach toilets.
Us aussies are actually pretty civil vs this bunch, and i repeat older 60s ..was shocking..
😂
Maybe just wrong roll of dice.
While most things were expensive in Europe and people have it hard on numbers, i did not see it being gloomy.
They are used to, and their wealth is crawling but not falling.
Will compare with home in coming days
Click to expand...
visiting , or checking out the migration potential , i doubt i would like to be anywhere the EU ( or UK ) this ( Northern ) winter

( might be cheaper to stay in Oz than pay the heating bills )
 
JohnDe said:
Is it any wonder why businesses employ less people, reduce services, increase costs, and close up?

Taxes. levies, rates, and energy costs are making it tough for many businesses to stay open and increasing mental health issues. No wonder everyone wants a government job.

Payroll tax is a levy calculated on wages paid to employees. Simone says there are many key issues with payroll tax. “It’s not a tax that takes into account whether your business made a profit or not that year,” she says. “It’s just a tax that’s, basically, you pay your staff this many dollars, so you pay the government this many dollars.” ​
“So you’ve got these small family businesses who are just out there doing the best that they can in what is a cost-of-doing-business crisis, as much as there is a cost-of-living crisis.”​
As a result of this, Simone says they’ve “reduced [their] headcount significantly”. They used to employ “close to 70 people”, now they employ 40.​
Click to expand...
Nothing new there. I paid payroll tax for 30 years.
 

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