The confidence trick
It is a key responsibility of business to help promote confidence in our economy. With the current political uncertainty and rapid change in the political landscape – such as that seen in the recent Queensland State elections – it’s easy to be distracted by the political environment.
Yet business must look past these factors and seek growth, returns and opportunity for shareholders regardless of this climate.
The United States is an example of an economy that has looked beyond the Democrat vs Republican divide to get on with the business of doing business. In fact, the US economy is currently one of the bright lights in the global world.
It boasts a relatively cheap dollar, access to affordable energy supplies, access to flexible labour markets, a strong supply of liquidity, and a sizeable domestic population.
Australian also ticks many of these boxes; we certainly have access to funding and liquidity. We have access and proximity to one of the biggest markets in the world: Asia. We’re working on achieving greater labour flexibility through the Workplace Relations Framework investigation currently being conducted by the Productivity Commission. And we have three further advantages which I’d like to highlight.
The first is an Australian dollar that represents better value for exporters. With the signing of FreeTrade Agreements with China, Korea and Japan, we now have heightened access to these markets. They are experiencing the biggest spurt in middle class growth of anywhere in the world.
Second, and in spite of discussions around sovereign risk, Australia remains a premium destination for investment and supply of liquidity. Our ability to attract investment is thus very strong.
On that theme, it’s instructive that within the past two weeks, a Japanese State Owned Enterprise chose an Australian company, Toll Holdings, as the target for its first foray into sizeable offshore acquisition territory. We have the benefits of a stable political and legal system, and a dynamic, highly functioning competitive market.
Third, Australia is an innovative country and our enrepreneurs have some great ideas. Yet we still need to find better ways to take those ideas to market. KPMG is helping on that front through its support of a growing innovation ecosystem.
We should not underestimate the current challenges facing business; in uncertain times it’s not easy to hold an optimistic perspective. Yet if we keep looking inward we won’t move forward.
At KPMG, we encourage our clients to find opportunity in the face of adversity and to do this within strong risk and governance frameworks. This is both the challenge and secret of success: maintaining confidence regardless of the times.
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