Welcome to the first Cash.com.au business bulletin. We are passionate about bringing you the news that affects your business in the industries that keep Australia moving. We’ll be keeping you up to date with the economic stories of the week as they develop and letting you know how we can help steer your business through these turbulent times. This week we’ll be focusing on three of the nations biggest industries: Transport, agriculture and construction.
Amid the coronavirus epidemic Australia’s transport industry are essential in keeping the country moving. Affecting the transport industry this week are increased inspections in NSW and news of a proposed income smoothing scheme.
NSW police double up on truck compliance blitz
The NSW police are ramping up the inspection of heavy vehicles, with 175 trucks stopped at the Pine Creek Heavy Vehicle Inspection Station this week. Amongst the checks included:
- 100 random drug tests, resulting in three positive tests
- 140 infringements for work diary, load restraints and fail to enter
- Six fatigue charges
- 25 engine control module downloads with three instances of non-compliance, resulting in defects issued.
NSW police noted that the majority of heavy vehicle drivers were complying with fatigue and vehicle standards.
ALRTA calls for income smoothing scheme
The recent economic downturn has called for the induction of an “income smoothing scheme” for truck drivers – similar to the Farm Management Deposit Scheme available to primary producers. Under the FMDS, primary producers can make tax-deductible deposits in ‘good years’ that can be withdrawn and taxed in later years.
ALRTA believes that a similar scheme for the Rural Transport industry could similarly assist eligible road transport businesses become more resilient, reducing need for direct government assistance.
Given that the proposal is largely based on the existing FMDS, it might be possible to make provisions for a small-scale pilot in the 2020-21 Federal Budget.
The biggest news to affect the AG industry now are the rising trade tensions with China. Earlier this week China announced that they will cease buying Australian beef as well as new tariffs on Barley.
Beef with China
Amid calls for an enquiry into the origins of the Coronavirus China has announced that it has banned the import of beef from four major Australian Beef producers.
The ban follows breaches in export protocols and are similar to a ban that occurred in July 2017 – making the link between coronavirus enquiry and the bans debatable.
Conspiracies aside – what does it actually mean for the beef industry?
It could mean to a loss of jobs in the long term, while in the short-term beef producers will be looking for new markets for their beef.
For primary producers it means they may need to hold their stock that is currently ready to slaughter. If the ban persists a drop in beef prices could inflict a further blow to the industry.
China has also announced an 80% tariff on Australian Barley in response to cheap Australian barley hurting their domestic market.
For Australian farmers this makes it unviable to sell their barley to the Chinese market. Since the announcement of the tariff the price of barley has dropped 20 – 30 %
This puts barley producers in a similar position to beef producers. Either cop the lower prices or fid a new market.
Meanwhile, the local availability of cheap barley could see it replacing wheat as the food of choice in feedlots.
This week the effects of coronavirus are still dominating the headlines. The coronavirus pandemic has slowed growth in the private sector, calling for government action to stimulate the industry with public projects
Commercial construction sector set to face decline
In the wake up the coronavirus pandemic, the commercial construction sector is looking to decline by 15.7% in 20/21 and 11.5% in 21/22. The lockdown has decimated private sector demand and demand is not predicted to rise as restrictions ease.
Master builders is calling for government action to develop a COVID19 action plan for the building and construction industry to address the looming crisis. On recommendation is to bring forward maintenance on government buildings.
Some experts are calling for an increase in social housing development. This will have a two-fold effect for Australians – it will help ease rental pressure for low income Australians as well as stimulate the local jobs market. The taller a building gets the more demand for imported components. Therefore, a focus on single or double storey dwellings will be most beneficial for local industries.
Victorian government to stimulate construction industry
The Victorian government has announced a $2.7 billion Building Works blitz that is predicted to create 3700 jobs. The package will provide jobs for painters, plasterers, gardeners, plumbers, electricians, carpenters and more.
At the core of the package is a $1.18 billion investment into education infrastructure
Recyclable “archimats” to revolutionise construction industry
Researchers from Monash University are pioneering a breakthrough recyclable material whose many applications have the potential to revolutionise the construction industry.
Archimats are ‘architectured’ materials that have an organised intertwined or interlocking inner architecture that can be engineered to have superior strength, a high tolerance to damage and good thermal insulation compared with other conventional composite materials such as concrete.
Its proposed uses include:
- In the construction industry to reduce the use of concrete and cut carbon dioxide emissions associated with its production;
- To build or rebuild in arid or disaster-affected zones. This includes rapidly deployable and removable structures in danger areas, such as a town or city impacted by fire, for first responders and displaced citizens;
- In extra-terrestrial and space construction. The European Space Agency is already considering this type of architectured material for the construction of a lunar base; and
- In smart toys and games, such as 2D and 3D puzzles.
A further benefit of archimats is the ease of assembly and disassembly it provides a structure, as well as the nearly full recyclability of the elements involved.
Our brokers are specialists in the transport, agriculture and construction industries. If you are looking for a loan to grow your business, drop us a line and find out how we can help find the right finance for you