John Linton
I suppose it's inevitable that when you return from a week spent somewhere close to the equator you notice that the Sydney temperatures seem much colder than when you left. So too does the 'economic press' - at least in terms of general 'signs'.
I read the Weekend Financial Review more closely than I would normally do over the weekend and noticed a brief article on page 16 of the AFR commenting on deteriorating payment terms by 'big businesses' to their smaller suppliers. In summary the article offered the following data from Dun & Bradstreet:
1) Average invoice payment time increased in Q1 2008 to 55.8 days - the highest level since 2001
2) Businesses with more than 500 employees took an average of 62.7 days to pay invoices
3) Payment time has increased 5.6 days in Q1 2008 compared to Q4 2007
4) The increase in invoice payment time from Q1 2007 to Q4 2007 was 3.8 days
You don't have to be a financial genius to realise that many small companies are being hurt very badly by larger companies significantly impacting their cash flow.
Fortunately for Exetel we have corporate customers who don't fall in to these pernicious categories and, when I checked, we only had two corporate customers who hadn't paid their April invoices within the trading terms of 15 - 21 days (unsurprisingly a bank and one of the top three global accounting practices). However I can fully understand the difficulties that non-payment on time by our corporate customers would incur.
Today's IT news had a piece on the ongoing decline of IT jobs for the third successive month:
http://www.itwire.com/content/view/18037/50/
and other comments about the continuing conservative attitude of companies regarding new projects and more rapidly winding down current projects earlier than planned:
"The IT&T sector fell again last month by 1.92%, bringing its fall to 9.73% in 3 months."
and
"Recent news that big four bank Westpac is planning to send more of its functions offshore will augur ill for IT&T, according to Olivier, as well as the embattled Financial Services and Banking sector which itself has fallen 11% over the past 3 months."
While all of this was easily forecastable from November 2007 it is still a bit of a shock to realise that all these signs are exactly the same as they were prior to the last two major downturns in the Australian economy which resulted in very, very painful results and a lot of hardship for a lot of people.
According to the various economic commentators there is now no guarantee that the RBA won't again raise interest rates either in May or shortly thereafter which would see even more distress in the house/unit owning section of the communities around Australia and make it even tougher for people with maxed out credit cards.
Then there is the current 'treasurer' and 'prime minister' telling everyone they can get to listen to them that next weeks budget "will contain some very tough decisions". Apparently these tough decisions are necessary because "the government wants a solid budget surplus to protect Australians from any overseas events".
The contempt this statement shows for the Australian electorate is breath taking. They assume that everyone has forgotten (never knew?) that the previous government not only produced 11 consecutive budget surpluses that completely paid back the gigantic debts of the last Labor government but that the current financial year (courtesy of the last Costello budget) will be the 12th consecutive surplus - and a very large surplus at that.
Nice to return to Alice in Wonderland country - or more accurately - "Kevin in Blunderland"
....it's hard to believe that a majority of Australians actually voted for this vacuous clown.