From the Principal’s Desk – Fabbro Talks (October 2023)
Welcome to the October edition of our Newsletter.
September has been a hot and dry month, which is never a good thing for our many agribusiness clients. As our farmers gear up for harvest, as always, there will be winners and losers. I am hoping weather conditions remain favourable for all of our farmers and that yields and prices are as high as possible for them.
The economy continues to show the effects of higher interest rates, with many families and businesses feeling the pressure of increasing costs. A recent spate of building contractors falling into liquidation will be leaving many projects and individuals in difficult positions. The massively increased cost of construction in Australia is an indictment on successive governments and the Reserve Bank of Australia. To spend the better part of forty years telling kids to go to Uni and do little to nothing to facilitate career paths into trades is seeing a severe shortage of the skills required to undertake housing construction.
The Reserve Bank failing to ‘tap the breaks’ when house prices were screaming in 2020 and 2021 and instead signal low interest rates to 2024, was an appalling lack of judgement. The Liberals offering home builder grants of up to $40,000.00 in 2020 also artificially drove demand and therefore price. A further injection now of $10BN for new housing will undoubtedly result in demand causing construction prices to rise further. Couple that with roaring immigration, housing costs and therefore also house prices can only really go one way.
If all of this feeds into further interest rate rises, things could start to get quite difficult in the economy.
By this time next month, we will know if the referendum for a “Voice” to Parliament has succeeded or failed. If it succeeds, the news cycle will be consumed by the debate around the shape of the legislation to give effect to the Constitutional change.
A major distraction from the issues facing the economy and our Nation more broadly, is not something I am keen to see continue. I’m not sure what the Government has done of any great significance in the last six months other than focus on the Voice debate.
One thing that has been released by government is their “White Paper” into employment in Australia. This at least has some recommendations at addressing the skills shortages in the trades areas in offering fee-free places in VET and TAFE courses. Changing the school curriculum, attitudes and culture to facilitate and encourage students down that pathway is necessary to build the number of students heading into trades.
Notably, one recommendation falling from the White Paper is to allow pensioners to earn up to $11,800 before their pension is affected. This is a significant increase and will come into operation in January next year if the supporting legislation is passed. The next generation is keen to keep us all working as long as possible to ensure they don’t have to carry the burden, and for those who have worked hard and built up a ‘nest egg’ to independently support their retirement, they will want to be getting their hands on that as well!
Oh well, I guess I’ll just have to keep working then!
We have a short article on some aspects of the White Paper in this month’s newsletter, as well as articles on identifying the signs of business distress that mean help is needed and farm succession planning, as well as some tax changes that may advantage you.
If you have any questions or concerns in areas where we may be able to assist, feel free to give us a call. As we say… we’re here to help!
For information on the range of commercial legal advice and services that we provide, head to:
Michael Fabbro
Practice Principal
Ezra Legal
