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Australia's "service economy" and the future

Discussion in 'Business, Investment and Economics' started by greggles, Jun 29, 2020.

  1. greggles

    greggles I'll be back!

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    The COVID-19 pandemic has revealed a lot of unfortunate realities about the state of Australia's domestic economy in 2020.

    Now that we are all interested in "buying local" to boost the local economy the search is on to find goods that are actually produced locally in Australia from 100% Australian ingredients.

    Good luck with that!

    Australia is now a "service economy" and has been for quite some time. Manufacturing in Australia peaked in the 1960s at 25% of GDP, and has since dropped below 10%.

    Our high wages have effectively made manufacturing goods here from local materials more expensive than importing similar goods from Asia. Entire industries such as textiles and car manufacturing have disappeared almost entirely. We have a vast land mass but import more of our food than ever.

    But service jobs are starting to disappear too, all at the low end. Automatic checkouts, robots picking orders in warehouses. Companies are cutting costs by getting rid of humans where they can. At the same time, the cost of a university education is increasing dramatically.

    Now that it seems that we have priced ourselves out of the global labour market, can we really continue to grow into the future as a service economy? Or are we rushing headlong into a serious employment crisis? COVID-19 has crippled the tourism, entertainment, and hospitality industries and we are suddenly on a knife's edge within a matter of months.

    Have we all been fooling ourselves? What is the future for Australia's domestic economy?
     
    Skate, qldfrog, Faramir and 6 others like this.
  2. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    Good post Greggles.

    The future does look scary.

    However, robots can be used in low wage countries also, and in effect lowers their advantage.

    I think we have advantages in many fields. We should exploit these.

    For instance we should be keeping some of our gas and selling it cheap, lowering energy costs that way.
    We should be providing some protection against imports and avoid selling off our assets (including ports). We have a stable society. We have a good democratic system. We have pretty good infrastructure.

    I am sure we could do OK but at present our mindset is a bit average.
     
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  3. jbocker

    jbocker

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    Excellent subject. This is something we really need to discuss. To pick up on one point
    I would suggest that this may be due to the broadening of our 'tastes' for different culinary offerings and skills. We have moved a long way from meat and two veges, and we also grow a much wider range of produce. Don't under estimate our potential here. What we need to fear is retaining ownership.
    We have plenty of food potential as an industry..
    https://www.australianmanufacturing...a-produces-enough-food-for-75-million-people#
     
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  4. greggles

    greggles I'll be back!

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    No, it's staples. Rice, fish, vegetables. Check the frozen fish at Aldi, the home brand rice and canned vegetables. For some reason it's cheaper to farm fish in Vietnam, process it there and ship it frozen to Australia than it is to farm it here.

    The next time you are at the supermarket look at where everything is manufactured. You will be shocked.
     
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  5. sptrawler

    sptrawler

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  6. jbocker

    jbocker

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    Absolutely agree. We need to look for Australian and if it is not there, ask for Australian. You will have to pay more, we need to focus NOT on price. More people need to ask for it. To borrow some famous lyrics from John Farnham...

    You're the voice, try and understand it
    Make a noise and make it clear
    Oh, whoa
    We're not gonna sit in silence
    We're not gonna live with fear
    Oh, whoa


    AND what boils my chops, it is not using the staffed check out. People say they want more employment yet queue up for self check out while a lot of check out stations are not staffed.

    Another is catching local produce and shipping it overseas to get packaged, then ship it back to buy.
     
    Faramir likes this.
  7. Smurf1976

    Smurf1976

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    Frozen vegetables are one example.

    You can buy the Chinese vegetables processed in NZ and which says "made in NZ" on the bag - technically correct since the bag probably was made there.

    Or you could buy 100% Australian grown and processed.

    Yes I choose the latter.

    If you consider the range of climate we have in Australia well between the states we can grow just about everything really so no need to be importing food, all we need to do is move things around between the states. :2twocents
     
  8. greggles

    greggles I'll be back!

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    This is where we should be innovating. Better, more advanced food production methods. Tax breaks for anyone who grows food, irrespective of the size of the business. There are plenty of small players out there operating in niche food markets.

    What we need is a federal government with vision. A government that looks past the next election and can start reshaping the Australian economy post COVID-19. We need to rely less on other countries and produce more here. Self sufficiency should be our goal so if something like this happens again our economy won't fall off the edge of a cliff. We need to be more economically resilient. COVID-19 has shown that we have a long way to go.
     
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  9. pubski

    pubski

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    Top posts guys. Wish more Aussies would feel that way. Asian clients definitely appreciate our fruit and veg as well as meat/seafood. So much so that they are prepared to pay a premium over their local produce. They know the difference. From what I've seen at a typical grocery store checkout, most of us still don't.
     
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  10. SirRumpole

    SirRumpole

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  11. qldfrog

    qldfrog

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    100%
    I try to always use staffed checkout but getting harder and harder
    Canned corn: China or Thailand..in Australia..really..so Edgell as last provider.asparagus...Peru vs China, but why not domestic.
    Gerkhins..running away from Indian grown, but last try for domestic was not successful..double price and a single choice...
    And this is with Aussie brand names
    I still allow myself to NZ products, kind of brotherhood .a.Italia for tomato based products.
    Fish: always check, rice, etc
    We have lost everything but food, let's at least keep that..
     
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  12. SirRumpole

    SirRumpole

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  13. qldfrog

    qldfrog

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  14. PZ99

    PZ99 ( ͡° ͜ʖ ͡°)

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    I think it all comes down to better education and upskilling.

    Manufacturing in the US was largely replaced by IT. But that won't happen here unless we invest in the relevant training required. Automatic checkouts and robots need constant servicing and upgrading.
     
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  15. jbocker

    jbocker

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    That's if you can find and afford a training spot, its full of imports learning inglish maffermattics and inginearing. Robots will have a lifespan equal to warranty period then ditch and buy a new one. Or maybe lock in a fixed venue service agreement.
     
  16. PZ99

    PZ99 ( ͡° ͜ʖ ͡°)

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    Yep, training from investment. Robots need servicing and software upgrades through their lifespan.

    Australia has a skills shortage of software developers and IT business / systems anal-lists :)
     
  17. PZ99

    PZ99 ( ͡° ͜ʖ ͡°)

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    One example > Amazon reveals plan to build huge robot warehouse in Western Sydney.

    https://www.abc.net.au/news/2020-06...-robotic-warehouse-in-western-sydney/12406406

    Minister for Jobs, Investment, Tourism and Western Sydney Stuart Ayres said the jobs on offer were "not the traditional warehouse jobs we've seen in the past".

    "We are creating new opportunities for technicians, computer engineers, computer programmers and bringing more smart jobs to where people live here in Western Sydney."

    Amazon has opened more than 50 robotics fulfilment centres around the world but this will be the first in Australia.

    It will incorporate the company's latest robotics systems where robots move shelves to workers therefore reducing the amount of walking employees have to do and improving processing times
     
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  18. Dona Ferentes

    Dona Ferentes

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    robotics fulfilment centres ... the Ludovico technique?
     
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