It was wonderful having so many international visitors in Sydney for the Football World Cup, It was wonderful having so many international visitors in Sydney for the Women's Football World Cup, and terrific that the Aussie Dollar just kept dropping relative to pretty much every currency while they were here encouraging spending. Great for the local economy.
The volatility, or weakness, in the currency provides a myriad of other challenges for our multinational community.
On the one hand Australia becomes a less expensive place to run operations as the cost of doing business here appears lower. This is all fabulous if you are a cost centre, which very few Abundium members are.
Acquisitions and investments become less expensive relative to some other markets.
All, of course, when looking at the world through the lens of a global spreadsheet.
The flip of that is:
- $1 of revenue is not worth what it was last week,
- the cost of importing goods or equipment has just got more expensive,
- for those who standardize price around the world a couple of additional points have been added to price points on top of inflation.
- Competing with local companies becomes tougher as they are generally working on a constant state, assuming they have their transportation costs sorted, which by most accounts shipping is actually coming down.
It’s a conundrum and one not helped by an environment in which local and global inflation is still running at higher than desirable levels. Employment is still relatively tight and consumer confidence is under pressure minimising the desire to create uncertainty of changing jobs unless there is significant financial reward, which is pretty certain is not going to be in the corporate budget and not going to be offset by FX fluctuations.
There isn’t a simple answer, but we will explore some thinking at our next Dialogue, September 12th, when we look at the opportunities and constraints of operating in Australia.
my random observation this month
There’s a rather disturbing trend I’ve noticed lately, particularly with politicians. They get asked a question and the default position is to avoid giving a straight answer when it is extremely obvious that it could be a yes/no and there would be no negative consequence of being straightforward. Instead, there’s prevarication, reframing the question, general waffle:
Q: Did you have breakfast this morning? A: Breakfast is an important meal in the day.
Q: But did you have it? A: It’s important to lead a healthy lifestyle and have a balanced diet.
Q: But … A: It’s important for all Australians to realise… blah blah blah.
I don’t understand who is advising them that admitting to having a waffle rather than doing it would increase the respect people have for them.
A salient lesson in communications for everyone about gaining and maintaining credibility with whoever your audience is.
I can be contacted at andrew@abundium.com and welcome any feedback or thoughts.
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