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BUSHFIRES & COVID-19 Positive implications for Australian Business
BUSHFIRES & COVID -19 Positive implications for Australian Business
The bushfires are finally out & COVID-19 has arrived to provide further challenges to us.
General comment in the press and the Stock Market movements suggests that we are in for a recession.
When the bushfires were finally extinguished, at least for the meanwhile, I was firmly of the view that this unfortunate event would fuel a boom to many areas of enterprise & business. So much needs to be restored, re-built, re-fitted , re-furnished & re-equipped.
The mass migration to Australia for the first 25 years following the end of the hostilities of World War 2, created an unprecedented building boom and a demand economy, which provided ready jobs for the new arrivals to our country and opportunity & wealth to Australian business. This self- fuelling economy continued for the 50 years following the end of WW2. This was of course before the advent of globalisation.
Starting in the mid 1990’s Western economies & business started moving labour intensive manufacturing to China in search of greater profits. Their mantra was that labour is too expensive here, we have responsibilities to our shareholders to maximise profits and that this arrangement benefits us all. To a degree, this was a desertion of their social responsibilities to the very people who consume their products. We made China & certain businesses here wealthy, and China has become our most valued trading partner.
The recent building boom of the last decade would have made Australia wealthy, if so many of the imputs which go into building were manufactured here in Australia. In many of the high rise constructions, which have dominated the building boom, the window glass & frames, cladding, bathroom fittings, light fittings, kitchen fittings, electrical fittings are all sourced from China. We missed the chance to enrich ourselves and our economy.
Now comes the twist! If supply lines from China are disrupted by the virus for long enough, we may need to re-start local manufacturing on a major scale. We certainly have the capacity to do so, following the progressive closure of five car manufacturing business, Electrolux, Pacific Bands, steel making in Port Kembla etc . We have the people, know-how & facility.
Australia is currently dependent on imports for more than 90% of its fuel needs. The crude oil comes from the Middle East and is processed at refineries in South Korea, China and Singapore. It is then shipped to Australia as diesel, aviation fuel and petrol. This would appear to be irresponsible & maybe this needs to be brought back home again.
In conclusion, could COVID-19 re-start the Australian economy, as opposed to the recession predictions of the pundits??
Gregory May