A COUNTRY LIVING ON THE EDGE - 1/05/2007
Last week, Prime Minister John Howard said that it is likely that farmers in the Murray-Darling Basin will have no or little water the coming irrigation year. "It is very serious, we should all pray for rain".
Treasurer, Peter Costello has previously warned "the drought could drive farm production into recession'. It seems that only a booming mining sector and continuing consumer spending are propping up the Australian economy.
Meanwhile the reality is that Australia is overburdened with massive foreign debt in the private sector. (through the banks) This is more than 150% of our G.D.P. and would be extremely dangerous in the event of an economic shock.
Financially we are all struggling with:
- High Interest Rates (highest since 1994)
- Growing Household Debt (over 1% per month)
- Increasing Fuel Costs
- Larger Home Mortgages (average loan has doubled in 10 years)
- Aussie Dollar Gaining Value (devaluing exports)
- Less Fulltime Employment
- Rising Inflation
- Successive Droughts (the full impact is yet to be felt)
- Increasing Cost Of Living (less spend able income)
Economists are now telling us that it may take just one event to push us into a recession.
Overseas it could be escalating violence or war, shortages of fuel, or a larger natural disaster that could turn the world economy on its head. At home it could be the accumulative effect of the successive droughts and the unserviceable amount of debt in the economy.
All privately owned businesses need to have a good look at the way they write up their invoices, statements, contracts of business and terms of trade, quotations etc. These documents should beused to protect them against slow payers, give time limits for complaints, retention of title, and the recovery of costs, expenses and interest incurred.
NOW is the time to hand over any accounts that are 90 days overdue.
Your business is NOT there to absorb the cost of interest and inflation as debtors fraudulently extend your terms of trade!