I have recently been asked what I believe is in store for the local Newcastle and Australian economy for 2011 and beyond.

Christmas and the New Year are but distant memories for most and the Australian economy is still, to steal a famous line from the PM, “Moving Forward”. Our national economy is maintaining reasonable growth expectations for the next couple of years. National unemployment remains low with demand for skilled workers in the construction and mining industry running at record levels.

Recent Australian and worldwide natural disasters have thrown some uncertainty into a promising start to the 2011 business year. The world has experienced flood, earthquake and tsunami with the full economic impact of these yet to flow through to the world and the Australian economy.

As a business owner what do I need to be concentrating on for the remainder of 2011? Here are a few tips that I believe will help you get through the coming months and ease some of the uncertainty that is present in the Australian and world economy.

• Closely monitor cash flow, your bank overdraft and business and personnel borrowings. The four major banks are still keeping a tight hold on the business finance sector. We don’t expect to see a change in bank lending policies for small business for the 2011 year. Keeping your banker happy is a very important tip for all business owners.
• The Australian Tax Office has substantially changed its approach to debt collection. It has become harder to deal with and requires formal payment arrangements on all outstanding business and personnel tax debt. Small business owners need to be aware of this change in attitude by the ATO and plan to pay tax debt on time.
• Business operating costs continue to rise rapidly. Be mindful of what it costs to operate your business on a daily, weekly and monthly basis. Carefully monitor these costs and ensure that price increases don’t seriously impact your businesses profit performance.
• Engage with your customers. Regularly speak with them, keep them informed of what is happening in your business and what products and services you have on offer. The more you talk with them the better you will understand what is happening in their world and the better you are able to assist them.

The May 2011 Federal Budget is expected to be tough with the Labor government already promising to get back in surplus by 2013. There will be government spending cuts and there could be an increase in taxation to achieve a surplus. We will keep you posted on any tax changes if and when it happens.

Finally, there was some interesting news with a change of NSW government. Newcastle now has its first ever Liberal member which is matched by a massive swing of almost 25% in Charlestown and a Liberal candidate taking the once Labor strong hold seat of Swansea. I hope this historic turn of events marks the start of making the Hunter region an area where there are marginal electorates - at both State and Federal levels.

I look forward to watching this space to see if a changed political flavour can provide the region with some much needed government assistance.

Ross