There is still a lot of uncertainty in business circles all around Australia, as to what is going to happen during 2014. Unfortunately, we will probably not know the key political decisions of the Abbott government, until the Federal Budget is delivered in May 2014. On the bright side, it appears that the Chinese market will continue to perform strongly and there will be continual growth throughout most of Asia.
At its February 2014 meeting, the Reserve Bank decided to keep interest rates at 2.5%, and the general expectations are that interest rates will not go any lower and will start to rise later in the year.
The Personal Property Securities Act (PPSA) has become fully operational from the 31st January 2014. Unfortunately, there were very little official promotions or education programs for SME businesses on how the Personal Property Securities Register (PPSR) will operate. This has already proved very costly for some businesses, which have lost out in court cases, mainly against liquidators and receivers. Please visit our website or read our February 2014 Business eNews as we have included further articles on the PPSR. If you are uncertain of what impact this new legislation would make on your business, please contact us or your legal advisers, so that a full review can be undertaken of your circumstances, and an appropriate system can be developed, to assist you in the decisions that will need to be made on whether to register a security interest on the PPSR.
It is interesting to evaluate economists’ forecasts on what might occur in 2014. In summary, economists are arguing that the government should substantially increase the GST charge to around 18%, as a means of reducing the government’s deficit. It will be interesting to see what happens in the May 2014 Budget.
Economic Forecasts for 2014 calendar year focuses around the following:
- Real economic growth – 3.2%
- CPI growth and inflation – 2.9%
- Federal budget deficit to be around $30B
- Reserve Bank of Australia Cash Rate – 3%
- Exchange rate – US$/AUS$ around .85c
As always, cashflow management will be very important. This includes the monitoring of debtors, stock, work in progress and abiding by bank covenants on any loans or financing which have been negotiated with banks and other financial institutions.
Now is a great time to be preparing business plans and budgets for 2014. If you would like our assistance on any aspect of your business deliberation, please do not hesitate to contact us.
