Speaking with my colleague at work, we have constructed a few salient points and thoughts around the next year's outlook. Whilst written with consideration to the Australian market, many of these are relevant to European, American and Asian readers as well.
Petrol
Petrol looks to be heading for AUS$2.00 litre plus. This will place enormous pressure on Rudd's darling "working families" and every other Australian. It will add the same financial strain as an interest rate rise to working Australians.
Food prices will be affected. And there will also be a flow on effect to the cost of building and subsequently housing. So.. with this in mind, we predict a move en-mass to alternative forms of transport when petrol goes above $2.00 a litre. Add to that increases in interest rates and the pinch is on! Therefore, we see pressures on rail, bus and tram infrastructure and an increase in pedal power and smaller vehicle use ie: motorbikes.Potential solutions:
* Sheltered bike-paths are a good idea - easing reliance on cars during bad weather.
* Improving rail infrastructure - why is there no train running with the Mitcham-Frankston freeway. Someone needs to be jailed for that poor decision. Which brings us to Government and ministerial responsibility....! A bigger topic .. we'll come back to that later.
Fallout:
* Inner-city housing costs will increase - rentals;
* Almost all daily living costs will increase leading to inflationary and wage pressure.
Health
Obesity and lack of physical wellbeing (including fittness) is an enormous strain on the medical system; a system itself that is under pressure. Already surgery is restricted when smokers present to hospitals. A major improvement in fitness (both mental and physical) needs to be made for this country to operate optimally. Estimated to cost AUS$3.7 Billion in 2006 (Lynne Pezzullo - Access Economics), obesity is a major problem in this country. This together with mental disorders such as depression and dementia will place increasing burdens on the Australian community. Taxation will be directly affected but the real impact will be on the well-being of carers and the community spirit.
For the next 12 months I see changes ahead for people still on private health insurance. Hospital waiting times will be features as will health costs such as wages and advancing technologies and treatments. A revisit to the PBS and also the Australian-US Free Trade Agreement.
Potential solutions:
* A national emphasis on health and recognition of the cost to both business and the community will encourage businesses, government and ultimately individuals to take this issue more seriously.
* Making preventitive health not just for naturopath-attending tree huggers but for the wider community.
Fallout:
* The health of the Nation.
Social Reform - Governmental
A new Labour Government will be attempting to prove itself responsible economically. Expect little major media about big policies of consequence. Look out for the small things, eg: union wage negotiations, such as the recent push for teacher wage increases and tactical ways of hiding pay rises, such as with special bonus payments on signing agreements and the like.
Any wage pressures will creep up slowly and so to will other changes in areas such as: equal opportunity; aboriginal land rights with mining and stolen generation compensation; family law; civic access to internet; policing of industry and community and defence, both domestic and abroad.
Fallout:
I don't like what I see when labour govenments step in and start infringing on people's rights. Facebook groups saying, please Rudd don't censor the internet concern me...! Which brings us to...
Social Reform - Social Trends in buying
Gen Y is leading the charge on some areas, however Gen X and the Baby Boomers are just as, if not more so, leading the technology charge. This is possibly because they're more frugal with money and will go where costs are less, while at the same time they have the more established highly paid jobs with which to spend the money. (Of course in this sense, some Gen Y'ers are also doing quite well with the labour market being the way it is!) Hense more Australians are moving to buying more items off the internet.
With increased access to the asian manufacturing market, "middle men" (retail stores) are being cut out of the deal. MP3 players, flash drives, data storage devices, LCD TVs etc etc. are all in high demand. Huge mark ups on items produced on mass (it's been said 5% of the retail price is actually the earning of the factory in China) mean that the more "direct" one buys, the cheaper by far the purchase cost.
Generic brands and expected short-term longevity go hand in hand with the modern technology buyer. With new technological developments being released to the consumer market on a regular basis, obsoletion rates are increasing. The TV you purchased will be percieved to be out of date by the time the cheaper component breaks in a generic branded item. Hense, generic branded items have gained higher acceptance rates. Product quality and after sales support have also been let go by consumers in favour of the cheaper item.
There are interesting ramifications regarding the removal or lessening of 'buyers remorse' when purchasing over the net. The bottom line is, people aren't behaving the same way when purchasing over the net, so there are changes in purchase bahaviour
Fallout:
* Identity theft and on-line fraud will increase this year with an increase in consumer movement to internet purchasing.
* Balance of payments (trade) will be impacted with increased imports.
* People will be more likely to spend money on consumables with increased choice but not out with friends and family so much, more at home at their computer.
* Increased social isolation for those who are inclined to avoid social contact, while those who use technology to communicate will reval in showing the latest gizmos to each other.
* People will expect greater choice overall.
* Less buyer’s remorse and increased familiarity leads to greater consumption and spending over the internet.
Stay tuned in for part two...
