Home' Scoop : Scoop 55 Autumn 2011 Contents SCOOP Autumn 2011 25
o one can deny the benefits of the
resources industry. We are the lucky
state in the lucky country. While
other economies have g one into
meltdown, WA steamrolls ahead with an enviable
CCI-forecasted growth rate of five per cent.
WA oil and gas workers are the best paid in
the world. The industry sees tradespeople paid
in excess of $200,000, unskilled labourers more
than $120,000, secretaries $70,000 and cleaners
$80,000. As long as the resource industry can
afford to pay, it’s all g ood, right?
Well, not exactly. For the rest of the community,
business, g overnment and workers not on the
gravy train – including the retailers and ser vice
providers you need to r un your life – things are
not so great. Compared to ten years ago, for many
West Australians, life is tougher than ever.
The problem is infrastructure and people; we
simply don’t have enough to sustain our growing
economy. Our communities are competing for
rental space, homes, hotels, ser vices, contractors,
tradespeople and other workers.
And it’s not a fair competition at all. For mining
and oil and gas, with $182 billion worth of projects
in play, nothing is too expensive. For the rest of
the economy on finite budg ets, resources and staff
grow scarce, and the cost of running a business
skyrockets, along with the cost of living.
Ten years ago we talked about restaurants having
‘Sydney prices’. A three-bedroom, two-bathroom
house and land package 15 minutes down the
freeway went for $75,000. Perth was a blue-collar
workers’ paradise. We used to be awed by the stars’
$3 million dollar Miami homes on TV. In 2011, that
money might just buy you a block in Cottesloe!
Today, Perth is becoming one of the most
expensive cities in the world. Much-needed expats
are leaving, saying that while they love the place,
it’s simply too expensive to make a life here.
Businesses targeting a cash-rich market simply
put their prices up. West Australians earning big
salaries have the money to pay. For everyone else,
it’s the perfect storm! A credit-cr unching GFC and
cost-inflating resource boom combined to leave a
large portion of the public with no discretionary
funds to spend and businesses with no margin.
Pre-GFC we were swimming in cash. Low-doc
loans allowed us to cash in on 80 per cent of the
inflated value of our homes. Banks called us to
offer higher credit limits. Now there is no such
thing as a low-doc loan.
New lending laws even force mortgage lenders
to take into consideration the number of children
a borrower has. As a friend said to me recently:
“I would buy a car or a boat, sign the papers and
then call my broker to take care of the finance, no
questions asked. Now there’s no hope.”
The challenges don’t end there. Post-boom is
always a tough time for retail. Everyone already
has a lot of new stuff. Try selling a new boat in
the current market when the same boat, two years
old, is being offloaded at half price. Then there is
Links Archive Scoop 54 Summer 2010 Scoop 56 Winter 2011 Navigation Previous Page Next Page