President’s Comments – September 2015

SHOULD WE BE BUILDING CAPACITY DURING TIMES OF DOWNTURN?

The question that leads this article is a very interesting one and in my opinion, said Mr Ron Hay, President of the Whyalla  Chamber of Commerce, I believe it is now the time to do so.

It is a hard pill to swallow in times of economic downturn and financial instability, but the benefits can be far greater, if the right approach is taken.

Mr Hay said, if we invest in infrastructure that either maintains or builds our capacity to deliver goods, services and maintain skills, then this is the time we need to do it, so we are ready for the turnaround in mining, manufacturing, services and retail for example.

Some people have an opinion that manufacturing for example can come in a couple of forms. The first being large scale, mass production and the second, low end niche product. Large scale manufacturing which relies on the production of large quantities to achieve economies of scale is shutting down therefore we need to consider the alternative of low end niche markets, which by  design is generally more profitable and uses new intellectual technology, which over the years Australia has been good at developing.

Mr Hay said, as a nation, we now need to consider this approach, harness the skill sets and form alliances with emerging economies to sell the skill and knowledge base to develop their low end niche production. This sentiment has been express by others when it has been suggested, we “don’t sell the farm with the barn”, but work together to create investment and economic viability for both parties.

It is my view that governments of the day, both state and federal, need to take a long hard look at how this country is suffering from the pressures of commodity prices, closure of our car industry and downstream effects, contracts to build submarines potentially being given to overseas countries, the value of the Australian dollar and so the list might continue.

Mr Hay said, as a nation we are witnessing employment levels dropping considerably across a number of sectors and although the lower dollar value is assisting with exports, it is forcing more increases on imported products, which impacts significantly on our retail sector with higher prices to the consumer. It is my view that business owners are still trying to regain a higher level of confidence from consumers and an appropriate balance has to be struck for everyone, not just the top end of town.

So why should we be investing when the finance world is telling us a much different picture? In my mind some of the reasons are reasonably well known to everyone.  It stimulates the economy, keeps people working and maintains their ability to have a disposable income to return back into the community they live in, said Mr Hay. Of course another important outcome is that the more people employed, the more revenue is collected through taxation and spending for the government.

If we invest now, we also invest in our future through our people and systems said Mr Hay. It means we can maintain our skill base and we can also train them for future outcomes and needs, as well as focus on our internal systems and procedures for example. All of these do take time, money and effort, but the gains in my view, far outweigh not doing anything.

As I said previously, it is a hard pill to swallow, but the smart ones, will move ahead and be prepared, whilst others might look and wonder what just happened.

We are still in for interesting times and we need to continually lobby both state and federal governments and remind them that our regional areas and in particular, South Australia’s regional areas, do contribute a sizable portion of the state’s financial picture and we need to see a return for that as well said Mr Hay.

On a closing note, the Chamber is now heading closer to its Whyalla Business Awards Dinner in October and I would encourage in the first instance, our business community to log onto the awards tab on our website www.wcci.org.au to review our award categories and consider nominating those appropriate persons for the Trainee, Apprentice, Employer, Business Icon or Individual Business Icon awards.

Secondly, the Chamber also invites the public to nominate persons under our new award category, Most Popular Retail Employee, by again accessing our website and following the links.

Mr Hay said, this is a great opportunity to formally recognize those people within our business community for not only the efforts they have put into their employment, but also the community and their personal development, so we look forward to these nominations and also your company at the dinner.

 

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