Companies going into administration 12% higher than during GFC!

[Brazen]

The stats show what my gut has been feeling for a while, that many firms are struggling at the moment especially with the high dollar and high energy costs- hopefully there is some light at the end of the tunnel or we will continue to lose a lot of companies that have been around for decades.

http://www.dailytelegraph.com.au/bus...-1226599283585

THE carbon tax is contributing to a record number of firms going to the wall with thousands of employees being laid off and companies forced to close factories that have stood for generations.

Soaring energy bills caused by the Government's climate change scheme have been called the "straw that broke the camel's back" by company executives and corporate rescue doctors who are trying to save ailing firms.

New data from the corporate regulator reveals insolvencies have hit a record high over the past 12 months, led by widespread failures in manufacturing and construction, which accounted for almost one-fifth of collapses.

The Australian Securities & Investments Commission reports there were 10,632 company collapses for the 12 months to March 1 - averaging 886 a month - with the number of firms being placed in administration more than 12 per cent higher than during the global financial crisis.


While the high Australian dollar is seen as the main factor behind manufacturing closures, experts say the carbon tax is adding to increasing cost burdens for many firms struggling to stay afloat.

Peter Macks, principal of Adelaide-based insolvency firm Macks Advisory, said the carbon tax was "quite debilitating" for a number of hotel operators who he said had been "struggling for a long time".

"It is very tough operating at a profit," Mr Macks said.

Todd Gammel, a partner with HLB Mann Judd, likened the carbon tax to pulling a leg out from underneath a chair.

"For companies which have exposure to energy, and other factors which are affected by the carbon tax in a significant way, the carbon tax and the costs related to it are having a significant impact on the ability of these companies to continue," Mr Gammel said.

His firm was brought into help rescue Grain Products Australia, which called in the administrators late last year before being liquidated.

Around half of the firm's 68 employees will lose their jobs and GPA's former managing director Rob Lowndes said the carbon tax and other environmental levies had added "significant" costs, of around $500,000 a year.

Mr Lowndes said the company which exported wheat gluten to Japan and other markets had suffered from increased costs for wheat and electricity.

The carbon tax, he said, was not the "primary factor" why GPA went belly-up but it was "certainly an added cost" which was making it hard for manufacturing to survive in Australia.

While the carbon tax adds around 10 per cent to the price of electricity for most families, the impact on many small businesses and energy-intensive firms can be significantly higher.

"There's no doubt the carbon tax is driving higher electricity prices for businesses across the state," said NSW Treasurer Mike Baird. "NSW Treasury analysis for this financial year shows that NSW electricity customers including small businesses and households will be hit with a bill worth an estimated $580 million due to higher power prices as a direct result of this disastrous tax."

Australian Chamber of Commerce and Industry chief economist Greg Evans said: "Rapidly escalating energy prices caused by the carbon tax and other green programs are taking their toll on many Australian businesses.

"In energy reliant industries it is already showing up in job losses, deferred investment and in the worst cases, business closures," Mr Evans said.

"These are the enterprises that are energy reliant, face competition from larger players or overseas, yet received zero compensation from government when the onerous tax was introduced.

"We accept business is under pressure a number of fronts including the impact of a high exchange rate, however what business operators find hard to deal with is deliberate policy actions of government designed to increase the cost of doing business," Mr Evans said.

"It defies logic to adopt a policy which even the Treasury acknowledge will lower our standard of living and be harmful to national productivity.

AMP Capital chief economist Dr Shane Oliver said the carbon tax was contributing to the demise of firms across the economy.

"The mining sector has for so long hidden the truth about how companies are actually doing and the carbon tax is clearly having a toll," he said.Another victim of sluggish trading conditions is Penrice Soda.

The Adelaide-based firm will shut its factory which has made soda ash for the past 70 years in a few months.Guy Roberts, the company's CEO, says up to 70 jobs will be lost, with the firm deciding it will import soda ash used in the production of glass and detergents rather than continuing to make the chemical.

"We are replacing a factory with a shed," he laments.Penrice Soda had negotiated a deal with the Government to reduce its carbon tax bill from $8 million a year to $1 million but Mr Roberts said that was "still effectively the straw that broke the camel's back".

"It's a million dollar hit to our business overall. You can argue that the carbon tax pushed us into the red I would argue that the carbon tax contributed materially to the loss in the first half," he said.

In February, Prime Minister Julia Gillard was quizzed about Penrice Soda's decision to close its factory, and said the carbon tax impact was "very, very, very, very modest indeed".

An angry Mr Roberts said he feels "let down" by Ms Gillard's comments."Whether you agree with the policy or not, the timing is excruciatingly poor," he added.

Campbell Jaski, a partner at PPB Advisory and head of its Resources Group, said the carbon tax "has definitely added an additional layer of cost and burden".

The carbon tax - and mining tax - were also showing up as "sovereign risk" issues in discussions with foreign investors.

"It's on the minds of investors - whether it is hedge funds, or Chinese investors looking for resource opportunities, it's always a comment that is made in terms of Australia's sovereign risk profile," Mr Jaski said.

A spokesman for Industry Minister Greg Combet, who is also the Climate Change Minister, said the government was "acutely conscious of the pressures on parts of Australian manufacturing ... due mainly to the high value of the dollar and intense competition on world markets.

"That is why the Government has announced its $1 billion Jobs Plan which will deliver more work for local firms on major projects and stronger protection for manufacturers from goods being unfairly dumped into Australia by foreign producers.

"The government is using carbon price revenue to assist manufacturers to reduce energy costs and become more competitive by investing in energy efficient."

[xisled]

It is only going to get worse, from what I have been told.

IMO the Gov is setting us up for a huge recession.

[jpblue1000]

What do you mean the government is setting us up for a huge recession. As far as I can see we have been in recession since 2008-9 and the impacts of the so called GFC hit. Some stimulus packages and the so called 'mining boom' delayed the effects in some sectors. The issues contributing to the GFC were largely external and practically unmanageable by our small economy and any government that may have been in power. Most recessions were set to happen by government decisions and social factors years before the actual so called 'event'
But that entire article only talks about investors, business, growth and profit. nowhere does it take into account the true cost of all this just mentioned. Modern western economics, the economics of growth, discount the land, the support systems for the raw material as free. without air or water we cannot dig for minerals, or manufacture cars or build houses. yet the act of digging, making and building all contribute to the degradation of those base support systems.
When and who should be paying for the negative contribution our economies of growth place on the planet. should our children's children? our great grandparents? neither of who exists so it falls to us. A user pays economy, where if the user pays they tend to use less! which is exactly what is being seen here. And before you complain about taxes and what do they get spent on, remember you also complain that the taxes collected are not being spent on your particular agenda, better roads, better health, better, bigger faster!
So how much is actually being spent on repairing the damage not only of today but of yesterday? Its an imposition but who's going to pay! I believe the user. An the article alludes to the carbon tax being the major factor while not actually stating it, its name is used in many paragraphs like propaganda, From what I can see the carbon tax accounts for near 10 percent of the cost, the real recent cost increases (2005-2010 +40%) comes from replacing aging infrastructure and retail customer service
before you get on your high horses, I have witnessed and noted a discernible degradation of the environment I live in, the impact my community is having on its own society, its economy and its environment (im not talking C02 either).

JP

[flappist]

Business people tend to be leaders and fighters and often just do not lay down when they probably should.
Many of those who were severely hurt under the GFC and have been hanging on by the skin of their teeth have finally run out of money and the banks or ATO have snotted them.
Up here where I am we have had devistation seveal times in all the major cities in the last couple of years and the roll on effect of money not being spent can be catastrophic to local businesses who fold sacking their workers who can't spend money.....

But there is a way that YOU and I mean ALL of you can help. It involves looking at the big picture and actually putting something ahead of your own short term interests.

1) Buy things that are made in Australia even if they are dearer than imported stuff.
2) Buy things retail in Australia even if you can get it cheaper on the net from overseas.
3) Employ local tradies or labourers where ever possible and if you are on a P&C or controlling group insist that they do the same.
4) Help others when you can, even an hour or two doing a bit of cleanup has a great effect both physically and morally.
5) Talk up Australia and the economy not down. POSITIVE ATTITUDE.

Now I am sure many of you don't think this affects you as you are a student or public servant or in a union or whatever but remember that many of those living like crap in USA and Europe were once students, public servants or in a union as when the money runs out the schools close, the public servants are laid off an the union members will not have a workplace or bosses to complain about.

It is important to understand that all of the events that happen are like a huge grindstone applied to you.

Some are worn away until there is nothing of value left.
Others are sharpened up to be even better than they were before.

What happens to you really just depends on what you are made of..........

[302 XC]

Originally Posted by flappist

Business people tend to be leaders and fighters and often just do not lay down when they probably should.
Many of those who were severely hurt under the GFC and have been hanging on by the skin of their teeth have finally run out of money and the banks or ATO have snotted them.
Up here where I am we have had devistation seveal times in all the major cities in the last couple of years and the roll on effect of money not being spent can be catastrophic to local businesses who fold sacking their workers who can't spend money.....

But there is a way that YOU and I mean ALL of you can help. It involves looking at the big picture and actually putting something ahead of your own short term interests.

1) Buy things that are made in Australia even if they are dearer than imported stuff.
2) Buy things retail in Australia even if you can get it cheaper on the net from overseas.
3) Employ local tradies or labourers where ever possible and if you are on a P&C or controlling group insist that they do the same.
4) Help others when you can, even an hour or two doing a bit of cleanup has a great effect both physically and morally.
5) Talk up Australia and the economy not down. POSITIVE ATTITUDE.

Now I am sure many of you don't think this affects you as you are a student or public servant or in a union or whatever but remember that many of those living like crap in USA and Europe were once students, public servants or in a union as when the money runs out the schools close, the public servants are laid off an the union members will not have a workplace or bosses to complain about.

It is important to understand that all of the events that happen are like a huge grindstone applied to you.

Some are worn away until there is nothing of value left.
Others are sharpened up to be even better than they were before.

What happens to you really just depends on what you are made of..........

Too true ....
But at the end of the day , many people don't have much expendable income to pay perhaps a premium for an aussie made product
Then the other flip is many O/S companies, businesses can import a finished product cheaper than the core product costs to manufacture in Australia
Its the same old "Floggin the dead horse" that's been around for years
The writing has been on the wall for aussie industries for ,what nearly a good decade or more, yet no one can see it , they keep supporting the cheap import shops for clothes, furniture,appliances, tools, even food, yet many places in this country are throwing away near perfect quality products by the tonnes

[flappist]

Originally Posted by 302 XC

Too true ....
But at the end of the day , many people don't have much expendable income to pay perhaps a premium for an aussie made product
Then the other flip is many O/S companies, businesses can import a finished product cheaper than the core product costs to manufacture in Australia
Its the same old "Floggin the dead horse" that's been around for years
The writing has been on the wall for aussie industries for ,what nearly a good decade or more, yet no one can see it , they keep supporting the cheap import shops for clothes, furniture,appliances, tools, even food, yet many places in this country are throwing away near perfect quality products by the tonnes

Yes but the people without the "expendable income" tend to forget where their money comes from and it the place where the money comes from runs out then they are stuffed.

In simple terms, no jobs, no dole and no ausstudy means no imports regardless of how cheap they are.

Do you really think that places like Greece or Portugal etc. end up like they are purely by accident?

[Ibanezteve]

I have to commend Gillard for actually thinking beyond her four year term. It's something that all pollies should do!

[2011G6E]

Apparently it's caused a huge cost increase for hotels and accommodation services too (they're pretty energy intensive).

But don't worry about the huge increase in running costs for businesses of all sorts...they surely won't pass the increased cost of doing business on to consumers...after all, the government promised they won't...right?

This is why Gillard and her cronies laughed right after the carbon tax came in and said "Look, the sky didn't fall, prices didn't rise!! hahaha!".

That's the trick...business said you had to wait for the costs to flow on fully...of course nothing happened straight away...no one expected it to.
However, now we are seeing the results starting to appear, and sooner or later the businesses that can pass on costs, will start to pass on costs. Some businesses can't easily pass on costs, so they fold. The ones that can, will. And soon.

[jpblue1000]

which is what business is, income over expenses equals profit, if input costs (expenses) go up either income (prices) go up to match or profit falls. When prices go up (because drop in profits is not acceptable to shareholders) the USER pays the user her being a consumer. Don't like the price don't use it or reduce your use...electricity too expensive use less, or compromise on something else, the future is subsidising our cheap electricity, we shouldn't complain too much!
I acknowledge this works fine for middle classes, which I'll assume is anyone with Internet access. those below the poverty line is another story, but the rest of us can either help you up at the expense of something else or trample you down for better roads or higher speed internet or our ability to purchase heated towel racks...

JP

[ryeman]

A quote fm the Telegraph..!!
Now would that be anti Gillard I wonder.....??

[Ibanezteve]

Originally Posted by ryeman

A quote fm the Telegraph..!!
Now would that be anti Gillard I wonder.....??

The Gillard bashing in the media is a joke. But then again the people who run these media outlets also think earning $150,000 p.a. is poor.... Joke!

[TMC]

Australia lacks true internal competition. We're a capitalist economy full of monopolies with foreign shareholders.

Here in the west, if I don't like what Alintagas charge me for gas, I can't go anywhere else. If I don't like what Western Power charge me for electricity, I can't go anywhere else, because there is no other electricity provider, or gas provider.

The carbon tax was meant to provide some sort of natural economic force on energy providers to provide a cleaner form of energy production. Without competition, this will never happen. If a monopolised energy company gets another tax, they just pass it on to the consumer. The shareholders would want nothing less. In fact the confusion of new tax provides an opportunity to up prices beyond what the tax really is. So the net effect on the environment is zero, or even it could drive some companies who are struggling, to resort to some underhanded environmentally damaging means of production.

The carbon tax can not work without enough competition within the energy production market place. It would have been better if government introduced new legislation to reduce carbon output like they do on the car industry. If you don't wish to produce to the new government regulations, you don't even have a product to sell. But, the government don't wish to make those sort of decisions. They leave that for the monopolised market to sort out.

[2011G6E]

Well maybe they wouldn't bash the poor widdle soft girly if she didn't give us so much reason to hate her with every fibre of our being...

The nasty fact about private industry is this: they exist only for one reason...to return profits, ever increasing ones, to shareholders...nothing more, nothing less. They don't care about employment, they don't care about social issues, they don't care about keeping costs to consumers at a minimum.

This is why a tiny country like ours should have all major services run by the government, and if it breaks even, that should be enough. We have less people than some large overseas cities.
If privatisation is the best way to run things, then why does everyone avoid the issue and oppose privatising the post office? Easy: do you honestly think you would pay the same 60 cents to post a letter across town as across the country if it was a private business?

[Ibanezteve]

That's exactly what they want you to think. What has she done that's been so bad? Any idea put before govt. gets instantly rejected by the opposition anyway, so she has been able to do nothing for ppl to get angry at anyway?

[pottery beige]

Originally Posted by Ibanezteve

That's exactly what they want you to think. What has she done that's been so bad? Any idea put before govt. gets instantly rejected by the opposition anyway, so she has been able to do nothing for ppl to get angry at anyway?

is that you Tim..

[Full Noise]

Originally Posted by pottery beige

is that you Tim..

Well he does drive a Territory, although, badly as the bollard out the front of the lodge will testify to, so it could be him.

You never know who’s on AFF these days. G'day Tim.

[mik]

Originally Posted by Ibanezteve

That's exactly what they want you to think. What has she done that's been so bad? Any idea put before govt. gets instantly rejected by the opposition anyway, so she has been able to do nothing for ppl to get angry at anyway?

you don`t watch the news???

[Ibanezteve]

Originally Posted by mik

you don`t watch the news???

Yeah I do... I'm still sure exactly what you mean? Has been some sort of atrocity that I've missed?

Re: Companies going into administration 12% higher than during GFC!
re Dick Smith:

1. he made his fortune selling imported electronics

now he wants people to buy Australian made and owned

2. He has children and grandchildren

now he claims we need to limit our population


Dick Smith made his fortune employing 1000's of Aussies and promoting Australia world wide as being the great country that it is.

The only reason he wants to limit the population as far I know is that he is worried about the standard of living decreasing due to overpopulation.

[jpblue1000]

Originally Posted by mik

you don`t watch the news???

Im not a labor voter, but given the governments slight majority I cant deny they have been effective in passing legislation. There has been significant amounts of policy acted upon and laws created, we individually may not agree with them all, believe in them all or want any of them, but they are doing the job asked of them by the majority of the public on the last election day.
I assume the 'news' you watch is probably one of the channels owned by the mining magnates!
I use inverted commas around news as I find the quality of factual reporting in mainstream 'news' channels to be heavily biased and lightly disguised opinion pieces.

JP

[mik]

Originally Posted by jpblue1000

Im not a labor voter, but given the governments slight majority I cant deny they have been effective in passing legislation. There has been significant amounts of policy acted upon and laws created, we individually may not agree with them all, believe in them all or want any of them, but they are doing the job asked of them by the majority of the public on the last election day.
I assume the 'news' you watch is probably one of the channels owned by the mining magnates!
I use inverted commas around news as I find the quality of factual reporting in mainstream 'news' channels to be heavily biased and lightly disguised opinion pieces.

JP

No i`m not really an affiliate of any particular channel, but as an oldish fart and pensioner and a bit of a news junky that has a bit of time to look at quite a few channels and evaluate different media, it`s plain to see you can find bias going either way if you open your eyes, i don`t want to create waves so i`ll contain myself, but personally i think the criticism is warranted, and i can`t wait for the status quo to change if you get my drift.
PS, does quickly passing legislation that is poor count?? i don`t think it does, and i will leave it there..

[Franco Cozzo]

The only Australian made clothing I have us my AMWU one given to me by my Union.

Where can you actually buy Australian made clothing from? Everything is China/Bangladesh these days.

I remember when we shipped out our ambulance furniture to manufactured in China and all the quality problems we had, Ambulance Victoria was only concerned on price and our board of investors, profit. Our QA guy tried to push spending more and getting it manufactured here in Australia, but its fallen on deaf ears, Ambulance Victoria would have none of it.

Even the Government doesn't buy Australian, how sad.

[flappist]

Originally Posted by Big Damo

The only Australian made clothing I have us my AMWU one given to me by my Union.

Where can you actually buy Australian made clothing from? Everything is China/Bangladesh these days.

Seriously?

You can use google to find the most esoteric bit of information about some weird and wonderful car bit but you cannot type the words "Australian made clothing directory".........

[Franco Cozzo]

Originally Posted by flappist

Seriously?

You can use google to find the most esoteric bit of information about some weird and wonderful car bit but you cannot type the words "Australian made clothing directory".........

I've been searching since you mentioned that and really its pretty difficult to find anything my style of clothes.

I just want some damn t-shirts with different prints, 90% of what I can find is plain colour t-shirts, and some camo cargo pants (which are hard as hell to find anyway these days), I think I need to go back in time to about 1996 to find those still.

And none of that slim fit BS, it doesn't suit fat bastards like me.

They also don't seem to make boots, I don't want these odd designer "hand crafted" sneakers, give me something leather, lace up with steel toes, thats what I wear. The only ones I know of are Redback, do they still make their boots in Australia?

Not only that, you can't go into the shops and buy something Australian made it seems, I drive 50 minutes to my closest shopping center and even the Jeep store with its $50 T-shirts are made in China, not even USA.

What about an Australian made tie and dress shirt? So far I've found Ganton.

Where can I buy Australian made power tools?

What about hand tools? Sidcrome's best spanners came out of their Australian factories years ago, their new stuff is cheap Chinese crap with the Australian made price tag. A few of the older guys at work have Sidcrome stuff that came out of their Heidelburg factory and even by todays standards it seems like some good quality stuff.

There just doesn't seem to be much of a textiles industry anymore, and manufacturing is heading down the same path, how long have us manufacturing workers have left?

If you want to buy an Australian car, what choices do you have?

Falcon
Territory
Commodore

These two assembled here:

Aurion
Cruze

You don't have much of a choice there unless you want one particular small car, one SUV and 3 large sedans.

[Keepleft]

Have concern with the global financial situation, expect at the very least a 'correction' (or gasp, a fiat re-set and this would mean very much trouble) in the markets of the global financial system.

What Cyprus depositors have had done to them is appalling and Tuesday we will begin to see how EU markets feel about that. They *should* have opted out of the Euro in my view.
http://theeconomiccollapseblog.com/a...-it-everywhere

http://www.cnbc.com/id/100562036



But, this is a car forum, so discovered this:-

With the collapse of Europe's auto market, and the channel-stuffing that is rife in every car manufacturer in the world, it is no surprise that at the end of their brief lease periods, European cars (Audi in this case) are being led to this 'graveyard' in Germany (70 miles north of Munich). This car park of chaos is full of nearly-new cars meant for destruction so as never to enter the car market as a cheap alternative and to maintain a high-priced spare parts market. It seems the Keynesian profligacy or digging a hole to fill it in has progressed in the 21st century to building a car and crushing that car as the engine of growth for our economies

http://www.zerohedge.com/news/2013-0...an-cars-go-die

:-) Cash for clunkers!~ I expect Zerohedge have this wrong, I hope....

[ute83]

Originally Posted by Big Damo

They also don't seem to make boots, I don't want these odd designer "hand crafted" sneakers, give me something leather, lace up with steel toes, thats what I wear. The only ones I know of are Redback, do they still make their boots in Australia?

Redback, Mongrel and Rossi boots are all made here.

[mik]

Originally Posted by Big Damo

I've been searching since you mentioned that and really its pretty difficult to find anything my style of clothes.

I just want some damn t-shirts with different prints, 90% of what I can find is plain colour t-shirts, and some camo cargo pants (which are hard as hell to find anyway these days), I think I need to go back in time to about 1996 to find those still.

And none of that slim fit BS, it doesn't suit fat bastards like me.

They also don't seem to make boots, I don't want these odd designer "hand crafted" sneakers, give me something leather, lace up with steel toes, thats what I wear. The only ones I know of are Redback, do they still make their boots in Australia?

Not only that, you can't go into the shops and buy something Australian made it seems, I drive 50 minutes to my closest shopping center and even the Jeep store with its $50 T-shirts are made in China, not even USA.

What about an Australian made tie and dress shirt? So far I've found Ganton.

Where can I buy Australian made power tools?

What about hand tools? Sidcrome's best spanners came out of their Australian factories years ago, their new stuff is cheap Chinese crap with the Australian made price tag. A few of the older guys at work have Sidcrome stuff that came out of their Heidelburg factory and even by todays standards it seems like some good quality stuff.

There just doesn't seem to be much of a textiles industry anymore, and manufacturing is heading down the same path, how long have us manufacturing workers have left?

If you want to buy an Australian car, what choices do you have?

Falcon
Territory
Commodore

These two assembled here:

Aurion
Cruze

You don't have much of a choice there unless you want one particular small car, one SUV and 3 large sedans.

you will find much less in the way of ozzy textiles these days Big-Damo, much of the of the industry has succumbed to the the cheap imports, it started going down hill in the late 70`s.

[Ibanezteve]

I'm all for supporting Aussie industries, and do so whenever I can. The problem is that when they start making good money they move everything offshore to try and push their profit margins even further! Gone are the days of guys like of Dick Smith, who claimed he would change his name if Dick Smiths was ever sold to an overseas company.

[xxx000]

re Dick Smith:

1. he made his fortune selling imported electronics

now he wants people to buy Australian made and owned

2. He has children and grandchildren

now he claims we need to limit our population

re The Daily Telegraph: it's the print media version of talk back radio. When push comes to shove it'll support the Libs regardless

[flappist]

Keep off the party politics please

[flappist]

Originally Posted by flappist

Keep off the party politics please

I am at a loss as to how to make this more clear.

From this point on, any pro or anti party political comments will attract a warning.