All over Australia we are being bombarded with bad news. And nowhere is that bad news more intense than in my home city of Melbourne. So today, let me cast forward and look at some of the good things that may arise from this crisis.
But I warn that some readers may see my “good things“ in a different light.
So here we go:
• Last night I listened to Bill Gates explaining that he believed that by 2021 – just five months away – we will have much better antiviral drugs to curb the impact of COVID-19 and that vaccines will have been developed.
And the competition for vaccines will become intense as 2021 proceeds, so prices will come down. We are able to develop vaccines in record time because computerisation and artificial intelligence have accelerated the process. And what we have learned will insulate us from another COVID-19 style virus for years to come.
• There is an exciting rush to develop new technology to improve the way we undertake a vast number of tasks. There will be a lot of technology crashes because some of the new ideas will fail, but overall the technology will deliver a considerable improvement in the standard of living of our children and grandchildren.
• Australian society will be enriched by a flood of Hong Kong migrants. That flood has already started but is, of course, curbed by flight restrictions and the fact that our second city is in lockdown.
Many will not see this is good news but I believe it will enrich the society and we could become one of the few countries in the world that does not face an ageing population quagmire. The productivity of these newcomers and their need for goods and services will help provide the wealth we will need to get through. We solved the post-war debt burden partly by migration and we can do it again.
• We are going to change the way we shop. Yes, we will continue to go to bricks and mortar stores, but where appropriate, we will replace much of that shopping with online purchases. And enormous delivery network working flexibly will be developed.
• Thanks to the foresight of Dick Pratt, his father, and now his son Anthony, Visy will lead us into much greater recycling, which will help provide the materials, needed for this revolution. And the Pratts are doing same thing in the US.
• Not only are we among the global leaders in recycling but our ASX has as its major company a global leader in pharmaceuticals and vaccine production. The US sharemarket is led by the Microsoft generation, but we have CSL at the top of our tree. The fact that CSL and Visy are based in Melbourne provides inspiration for the currently besieged city.
• We have finally discovered that employment generation will come via small and medium sized enterprises. And out of a crisis we will speed up the payments, lend on cash flow, make equity backing easier, introduce workable unfair contracts legislation, and hopefully elect politicians who will stand up to the Australian Taxation Office and concentrate their attention on raising revenue rather than pursuing social agendas. If we do the above, the jobs will come. And never again will the ATO be allowed to destroy our research efforts.
• We are going to re-look at our base assets which include wonderful agriculture and mining industries. Using technology we will develop a smarter agriculture that will use less water and use energy very differently. And we will be a lot more efficient in mining.
• Similarly we are going to look at our energy industries differently. We will be very conscious of carbon but given our debt, we will need to use low-carbon energy intelligently. We may become a regional solar energy provider. New and safer nuclear energy technology is back in the agenda
• Australia manufacturing has been bedevilled by the tyranny of scale but modern technology enables manufacturing in Australia to be economic in small lots. Hopefully our government will introduce world class investment incentives to enable us to participate in this revolution and drive investment in new technologies, research agriculture and energy.
• We move from a society we were besotted by dividends to one where dividends are important but so is investment and growth. We are seeing a change in attitude among big superannuation funds and in investment houses like Australian Foundation.
• Work patterns will be much more flexible and that will allow greater decentralisation of the work force.
• Many of the above changes will be driven by the fact that for the foreseeable future interest rates will be low.
• We will need to increase our production of dwellings to stop prices rising. Currently production held back by crazy state government policies led by New South Wales and Victoria. Hopefully debt levels will mean they won’t be able to afford their past mistakes .
• My greatest concern in that the China disputes will trigger military conflict and we are unprepared because we did not see it coming.
But for the moment let’s put defence aside. I am sure, you will come up with even better good news. Currently the stock market is boosted by the excess of money sloshing around the system but longer term something like the above needs take place to justify and increase share price levels.
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