John Linton
....or worst of the recession to come?.....does anyone really have any idea in the Australian government or media about what is happening anywhere in the world including here?
I read this yesterday:
http://business.theage.com.au/business/more-job-cuts-on-cards-say-employers-survey-20090623-cvfj.html
among many similar articles today and over the past 18 months and remain puzzled as to what to make of it. As far as I can see (assuming you're not a share market investor or work for a mine recently closed by BHP or a clothing factory closed by PBG or similar) then no-one in Australia has felt any 'financial pain' from the "GFC" and many people are their share of $A23 billion (or whatever the real figure is) better off over the past few months.
Annette thinks that it is simply a concerted attempt by "the government" to make positive statements about how well everything is going and that "we have past the worst" and it only gets better from here on the basis that everyone sold their shares in a panic that drove itself and that banks around the world got their fingers burned and persuaded the US and UK governments to provide their re-capitalisation. I remain unable to determine whether there are going to be 'bad times' in Australia or not - my current view is that 9 months in to the widely predicted 'panic and despair' I see nothing but business as usual in the tiny interfaces to Australia's commercial processes in which we are involved. In fact business remains very strong for us and we'll finish up the year in a few days time with record progress in every part of our business endeavours.
So when I read things like:
"Although many employers expect to axe staff, the numbers they expect to cut are smaller"
and:
"Telstra this week moved to freeze executive pay and to limit pay rises for many of it staff on individual agreements ...... Commonwealth Bank and Wesfarmers have also moved to freeze executive pay."
I think to myself that they must be seeing the future very differently to what I see - but I understand they have far more information and are far more knowledgeable. I would freeze Exetel's executives salaries but that isn't possible - I can't remember when I or any other Exetel "executive" got a pay rise but I think it was July 1st 2005 so our salaries seem to have been frozen for at least four years.
I would "axe" personnel, even in the "lesser numbers" cited in the article; except I don't see how that's possible as the business volumes increase each month and we have actually hired 25% more personnel in Australia since March and roughly the same percentage in Sri Lanka. The "union representatives" would also be pleased to know that Exetel continues to increase it's current employees remuneration at the rates and frequencies that have always applied - always far higher than "inflation" increases.
On the flights to and from Sri Lanka we made in February and again in May of this year there seemed to be no sign of the 'travel downturn' with even the "premium cabins" (which are meant to be devastated by the GFC) being, as far as we could see actually fuller than they were on our previous three trips. Similarly when we flew to Melbourne recently we were lucky to be able to get a seat on any of the flights we checked. So while I see the massive losses that say British Airways have recently announced the flights to and from and within Australia I have flown on seem to indicate that the flying business here is in a different 'world economy'.
While I have used 'light hearted' phrasing to address the article's very serious points of view I understand that any loss of jobs in Australia are to be regretted and any reduction in business volumes will eventually 'hurt' a majority of people. What I don't see is how any 'slowing' of anything is going to affect Exetel. I'm in the very last stages of finalising what I think are going to be the objectives for Exetel in the imminent new financial year which, as far a I can see, will finish up planning for a slightly faster rate of growth than we have achieved this year - much closer to 30% than the mid 20s we will achieve in FY2009. Any way I look at the figures the growth has remained constantly increasing month on month over the past 9 months and remains very strong in June which is always a 'slower' month - at least comparatively.
Personally I go with the broad thrust of the views expressed by Elizabeth Knight yesterday in this:
http://business.smh.com.au/business/predictions-of-sharemarket-shangrila-may-be-overstated-20090623-cvcu.html
in that Australia hasn't been affected yet (other than the share market losses) but business wont be that good for another 18 months or so. I don't see anything negative affecting Exetel - we are the beneficiaries of our hard won efficiencies in these sorts of circumstances - and I can't see how the majority of the larger communications companies will be negatively affected either except that a la Telstra they may have to slow down the over paying of their management levels and, Heaven forbid, maybe 'let' some the dronier drones 'go'. Perhaps the only major threat posed by the problems in the USA is the potential end of the "automotive industry" in this country which would pose some very serious problems for a large number of people especially in South Australia and Victoria (and Geelong). That may be something that produces a very different scenario.
Annette may be correct - 'we' talked the share market down and called it a financial crisis but no one was actually affected and 'we' should talk the share market back up and pretend that whatever the 'GFC' was for other countries it never happened here. Exetel will continue to make our tiny contribution to talking up the economy and on top of the $A2 million of purchases we have made in the last quarter of this year on buying the NSW floor space and the commissioning of a new PoP in Tasmania and the ongoing employment of additional people rather than being one of those employers "axing" staff.