(03) 9020 2905Funny thing about recessions. They tend not to happen often enough, or for long enough, to learn valuable lessons from them.
Once a generation isn’t regularly enough to get used to them, let alone to really get to enjoy them.
They might happen once when you’re 20. And then you don’t get another one until you’re nearly 40. That’s a lifetime. In my case, two careers, two children, a dozen changes of address and a year of overseas travel.
If we were to go searching through libraries, we’d find newspaper articles or books that describe how our grandparents, or great grandparents, thrived through the big one – the Great Depression.
By all accounts, it wasn’t all bad. There were some upsides. It was a time when families came closer together. You got to know your neighbours. There was sense of community.
But there’s a limit to how much of this can be stomached. Not everyone wants to get closer to these people. Especially some of my neighbours.
If your mother was Roseanne Barr, or your neighbour is one of the Grumpy Old Men, then being in these people’s back pockets is probably about as appealing as going through puberty again. And I know how crazy some neighbours can be.
Still, for most people, it probably doesn’t yet feel like a recession because it’s early in the cycle. Comparatively few people have lost their jobs. Unemployment is still only 5.2 per cent nationally, up from 3.9 per cent a year ago, but still well below the long-term average.
Hey, most people have still got their jobs and with interest rates so low, are probably thinking: “What recession?”
But the signs are there (and some of them stick out like Scott Baio’s – Chachi’s – cheesy pick up lines in Happy Days).
Here are some clear indicators that we’ve entered a recession.
- Our Australian Constitutional right to “chuck a sickie” is under threat. Suddenly, we want to be good employees. Absenteeism is down 15 per cent on last year, according to Direct Health Solutions, out of fear of redundancy. You’ve got loads of sick leave entitlements, you’ve got gastro so bad you get nervous even seeing the dunny door in the closed position, but you’re still dragging yourself into the office to show dedication.
- Shared housing is making a meback. Either with your friends, or, if you feel particularly regressive, your parents. You’re prepared to accept the pain that mum’s early morning vacuuming causes your hangover in order to cut your own living costs.
- The saying “the rich get richer and the poor get poorer” is temporarily untrue. The properties of the rich are being smashed, while the lower end is being largely insulated by government handouts.
- The number of Australian billionaires is shrinking. Some people worth 10 or 11 digits of wealth just 18 months ago are being talked about as if they’re scratching to pull together enough dough to buy a counter lunch. Eg, Babcock & Brown ex-chief Phil Green and James Packer has apparently lost $3 billion.
- Being a tighta—e (subs: if unacceptable, ‘tightwad’) is cool again. People are bragging to each other and on radio about how little they spent achieving something.
- Bargain hunting is gaining traction: My very polite father-in-law called a Queensland hotel and said: “Look, do you want me to stay at your place or not?” and got 20 per cent knocked off the rack rate.
- Marketing spin … seen Foxtel’s latest ads? They are challenging consumers to believe that pay-TV, previously considered a luxury, is now actually a must-have item to “save” money during a recession. Audacious.
- Begging bowl #1: Governments admit that we know how to spend our money better than they do. They’re handing back billions they’ve taken off us and asking us to spend it NOW!
- Begging bowl #2: David Jones pleads you to spend that government handout at their store via full-page ads. And they reintroduce their common-man slogan: “It costs no more to hop at David Jones”.
- The Government decides to cut immigration 12 months after unemployment has started rising.
- Private schools are taking out insurance to protect themselves against parents not being able to pay exhorbitant school fees.
If you’re under 40 now, you’ll probably get the chance to watch another reasonable recession or two in your lifetime.
Find something enjoyable in this one to pass on to the next generation.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal financial adviser with Castellan Financial Consulting. Contact Bruce: bruce@debtman.com.au