CEO MESSAGE – February 2020

Happy New Year to you! Yes, I know that it is February, but we are still formulating our New Year strategy. I hope that you had a great break, and although it has been a difficult time in Australia with bushfires and drought, we are finally getting some of the rain that we long hoped for. I have had the opportunity in the last month or so to reflect on business in Australia and where it is going and I wanted to share some of my observations with you which I believe will be relevant in the next year:

Sensitivity to economic shock

I am aware, more than ever, that there is a heightened sense to any type of economic shock. Although the GDPs in Australia tend to show this, I have noticed in recent years that discretionary expenditure depends very much on how we view our economic future. We are no longer willing to spend indefinitely into the future and as soon as we hear bad news, our first reaction is to always fall back. Over January, I had the opportunity to visit my sister in Canada who works at the largest ski resort in North America. As I like to do, wherever I go, I like to find out how the local economy is going. It seems that even in the best ski resorts in the world, that economy isn’t always booming. I was talking with business owners in Canada and their general sentiment was that it had been a hard year and that there was less discretional expenditure at the ski resorts. This had, in turn, affected those contracted workers at those resorts in many areas and had created some uncertainty. I was interested to hear this because I always believed previously that certain areas in the world were recession proof! However, with uncertainty comes opportunities. I am always encouraging our younger business owners to continue to take opportunities in business. Many factors are aligned to create these opportunities which include the following:

1. An aging population which needs to sell their business
2. The lowest interest rates in living memory
3. Less people in our society willing to take opportunities as they prevent themselves.

It sounds positive, however, the availability of finance to undertake such great endeavours has never been more frugal. Let’s hope that there are more 2^nd-teir lenders and non-banking institutions giving the big banks a run for their money in the future.

Property

As most of you are aware, the last property uplift, which occurred a couple of years ago was conspicuously missing in most of Australia apart from Sydney and Melbourne. This struck me as a very odd phenomenon as although Sydney and Melbourne usually drive property growth, it typically flows onto other markets which, I think we can agree, did not occur a couple of years ago. Perhaps we will see some widespread property increases in all property markets in Australia.

Directors being liable for GST

It has been coming for a long time, but the government has finally moved to make Directors’ liable for GST. This completes the final loop. Directors are now liable for superannuation liability, PAYG liability and GST liability. That is, when you collect money for the government, it is their money so if you do not pay them what is owed, you will be liable personally.

Nevertheless, where there are challenges, there are always opportunities. The WSC Group Team and I look forward to completing the journey with you in 2020. Stay tuned for announcements of upcoming information webinars and events which we will be holding in the coming months. Head to our Upcoming Events Page on our website or follow us on Facebook to keep up dated.