The economy is in a precarious situation. Below are the high level areas of concern about the current economic and business conditions.
High consumer debt levels and low wage growth
Diminishing consumer and business confidence and conditions
Increasing input costs for businesses (labour, physical materials, commodities)
Diminishing customer spending will reduce business income
Rising finance and interest rate costs reduce business income and growth
Rising insolvencies, zombie businesses, unable to service debt, can’t raise more
Global macro issues, supply side inflation, supply chain issues, kinetic conflict, equity/bond market declines, currency volatility, US technical recession
Property values declining and impacting funding options
If you want to learn more about these points please get in touch.ng
funding options
Here are some other business, property and tax news for you and your team to take in:
Demand rises for CBD offices
ATO cracking down on tax cheats
Auto bodies embrace EV transition
Business credit applications fall 2%
Read more below.
Demand for CBD office space has been growing, despite the numbers at first glance suggesting otherwise.
Australia's CBD vacancy rate in the six months to July was 12.0%, compared to 11.3% in the previous half-year, according to the Property Council of Australia (PCA).
The city-by-city figures were:
Canberra 8.6% higher than pre-pandemic
Sydney 10.1% higher
Melbourne 12.9% higher
Brisbane 14.0% lower
Adelaide 14.2% lower
Perth 15.8% higher
The PCA said tenant demand for CBD office space has been increasing – but that the amount of office space coming onto the market has been growing at an even faster rate, which has been pushing up the vacancy rate. The supply of office space across Australia's capital cities has been above the historical average in four of the last five half-yearly reporting periods. New supply is forecast to remain above-average in the next reporting period, before falling to below-average levels in 2023 and 2024. Want to expand? Call me for a loan
The Australian Taxation Office has warned businesses it is using tip-offs from members of the public to crack down on the shadow economy.
The ATO said it had received 43,000 tip-offs about black economy behaviour in the last financial year, with the most common reports being for businesses:
Demanding cash from customers
Paying workers in cash
Making sales but not declaring them
The industries that received the most tip-offs were:
Building and construction
Hairdressing and beauty services
Cafés and restaurants
Road freight transport
Management advice and related consulting services
ATO assistant commissioner Peter Holt said it's not just businesses the ATO is watching. "We know that many customers also demand to pay in cash and ask for discounts to avoid paying tax, and we also know that many workers are demanding cash, especially where there is a shortage of labour," he said. "Our message is — regardless of which party is driving the behaviour — it's illegal and we're on to it."
Australia's peak national and state automotive organisations have reached agreement about how to electrify the country's fleet of cars, trucks and other vehicles.
The organisations agreed to a series of principles, including:
Embracing the electrification of the Australian motor vehicle fleet
Maintaining the repair and efficiency of the legacy internal combustion engine fleet
Opposing bans that limit consumer choice
Supporting the federal government to develop an electrification transition strategy
Ensuring government targets are consistent, realistic and evidence-based
Mandating CO2 targets (not electric vehicle targets)
Electric vehicle sales have been growing rapidly, but still represent just a tiny fraction of the vehicle market, according to data from the Electric Vehicle Council. Sales of plug-in electric vehicles tripled from 6,900 in 2020 to 20,665 in 2021. But that increased the electric vehicle market share to only 2.0%, from 0.8%. Contact me if you need a company car
Business credit demand has fallen year-on-year, according to the Equifax Quarterly Commercial Insights report for the June quarter. The number of business loan applications actually rose 2.0%, however, trade credit applications fell 2.3% and asset finance applications fell 9.1%. As a result, overall business credit applications fell 2.0%, which was the first decline in five quarters. Equifax's general manager of commercial and property services, Scott Mason, said business credit demand was relatively strong in April and May, before falling away in June. "This could reflect decreasing business confidence in the face of rising rates and inflation, and may be a forerunner to lower demand in Q3," he said. Speaking about the significant drop in asset finance applications, Mr Mason said this was the first year since 2019 that businesses haven't had access to the instant asset write-off. "As a result, many businesses likely purchased assets over the past two years that don't need to be replaced or upgraded, and the fall in applications this quarter reflects this," he said. I can help you get a business loan