Skip to main content

Edition 356 – Sunburnt & Rested

Happy New Year! May it be a prosperous one for you, your family and everyone else that operates within your orbit.

As I choose to do this time each year, here’s my expectation as to what will play out in 2023.

  1. Wage Increases – we’ve seen inflation skyrocketing and interest rates tagging along for the ride. My guess is that demands for wage rises are not far behind. Expect 10% as a minimum and up to 20% in some cases.
  2. Bank Finance – will get tight. The big four banks control lending in the small business space. As their risk criteria tightens, so will their willingness to lend to small businesses that are not making decent profits.
  3. The Tax Office – will hunt down, without fear or favour, any business that falls behind on their tax debts. The foot was off the pedal in terms of tax collections from 2020 into 2022 as the economy went through, then exited the pandemic. The gloves are now off.
  4. Work from home – is here to stay, in a modified form. My guess is that most employers will demand a presence in the office for at least part of the week. There will be some careful negotiation required between employer and employee around what’s best for everyone.
  5. Inflexibility – by individuals who want to remain working from home full time will, ultimately, lead to employers determining whether that role can be offshored, for up to 50% of the price they’re paying employees now. Previously, outsourcing on lower to mid level tasks has occurred in business. The upper echelons are next.
  6. Labour constraints – will continue until immigration numbers return to pre-pandemic levels and overseas students return to Australia in the numbers they previously were.
  7. Data hacks – will become more prevalent. Small and family businesses will be targeted because of a combination of the sensitive information they retain AND their inability (or unwillingness) to pay for top level IT support. This will send some businesses over the edge.
  8. Tradespersons – will fast become the new wealthy. As a growing country, we need people to build things. Until the education sector realises that a trade is as good, if not better, than a university degree, we are limiting the growth of our country and the opportunities of thousands of good people.
  9. Supply chain disruptions – will continue.
  10. Regional security – will become an even bigger talking point in 2023 than it was in 2022. Expect the QUAD meeting in Sydney, mid year, to put pressure on Australia to dramatically improve our presence in, and support of, Pacific nations.
  11. Clean energy transition – will stall.  As energy prices continue to skyrocket (impacted mainly by international factors), the demand for renewables will escalate. However, the infrastructure needed to support the transition to clean energy is nowhere near the level it needs to be to support consumer demand and government mandates. A re-think will be necessary on the pathway to “net zero”.
  12. Large corporate collapses – will adversely impact small and family business suppliers and contractors. There will be some significant flow on effects of some collapses as too many small and family businesses have a large proportion of their eggs in the one basket.

 I’d love to hear your feedback as to what you see on the horizon for 2023. It’s going to be a fabulous year.

This Week’s Tip

“Business will always be a challenge. It’s all about where you see the opportunity,
then planning for it.”