Peter Martin, Crawford School of Public Policy, Australian National University

The Reserve Bank cut interest rates on Tuesday because we aren’t spending or pushing up prices at anything like the rate it would like. And things are even worse than it might have realised.

As the board met in Martin Place in Sydney, in Canberra at 11.30 am the Bureau of Statistics released details of retail spending in April, one month beyond the March quarter figures the bank was using to make its decision.

They show the dollars spent in shops fell in April, slipping 0.1%, notwithstanding weakly growing prices and a more strongly growing population.

The March quarter figures the board was looking at were adjusted for prices. They show that the volume of goods and services bought, but not the amount paid for them, fell in seasonally adjusted terms during the March quarter.

Adjusted for population, the volume bought would have fallen further.

We’ll know more on Wednesday

The Bureau of Statistics will release population-adjusted figures as part of the national accounts on Wednesday.

The figures for the September quarter show that income and spending per person barely grew. The figures for the December quarter show income and spending per person fell.

A second fall in the March quarter will mean two in a row – what some people call a per capita recession.

Even unadjusted for population, economic growth is dismal.

During the September and December quarters the economy grew just 0.3% and 0.2% – an annualised rate of just 1%.

That’s well short of the 2.75% the treasury believes we are capable of, and the lower than normal 2.25% it has forecast for the year to June.

We’ve been doing it by ourselves. As Reserve Bank Governor Philip Lowe said in announcing the rates decision on Tuesday:

The main domestic uncertainty continues to be the outlook for household consumption, which is being affected by a protracted period of low income growth and declining housing prices.

The bank wants both inflation and employment higher, and it wants us to spend more in order to do it. Lower rates should help, although not for everybody.

Lowe acknowledged this in a speech to a Sydney business audience on Tuesday night, but he said households paid two dollars in interest for every one dollar of interest they received. So while rate cuts hurt savers, they benefit borrowers by more, and over time should benefit all households by boosting the economy. They also drive the dollar lower, making Australian businesses more competitive.

Tuesday’s cut should free up an extra A$60 a month for a typical mortgage holder. Another one will free up a total of A$120.

It’s not much, and there’s doubt about whether it will do much, but interest rates are about the only tool the Reserve Bank has.

It is required by its agreement with the government to aim for an inflation rate of between 2% and 3%, “on average, over time”.

Uncomfortably for Governor Lowe, underlying inflation (abstracting from unusual moves which are quickly reversed) has been below 2% ever since he was appointed governor in late 2016.

Explaining his push for higher inflation to a business audience in Sydney on Tuesday night he said that while adherence to the target was intended to be flexible, that flexibility was “not boundless”.

If inflation stays too low for too long, it is possible that inflation expectations move lower – that Australians come to expect sub-2% inflation on an ongoing basis. If this were to happen, it would be harder to achieve the medium term inflation goal. So we need to guard against this possibility.

He is also required to aim for full employment.

He told the business audience that while for some years the bank and others had thought full employment meant an unemployment rate of 5%, the absence of inflation at 5% and the persistence of underemployment (where people wanted more hours) meant it could and should go lower.

Our judgement now is that we can do better than this – that we can sustain an unemployment rate of 4 point something.

Lower interest rates should help by making it easier for businesses to borrow to expand, and giving consumers something in their pockets to buy from them.

If you don’t succeed…

If that doesn’t happen, the bank will cut again.

Tuesday’s statement as good as said so:

The board will continue to monitor developments in the labour market closely and adjust monetary policy to support sustainable growth in the economy and the achievement of the inflation target over time.

Tuesday’s cut and the next will take the bank into uncharted waters, where its so-called cash rate – what it pays to banks to deposit money with it overnight – is close to zero.

As far as can be discerned it has never been that low in the 100+ years the Reserve Bank has been in operation, originally as the Commonwealth Bank of Australia.

Reserve Bank cash rate since 1990

Should inflation still not pick up and employment still not fall as far as it believes it could, it will have to effectively cut its cash rate below zero, forcing cash into the hands of banks by aggressively buying government bonds, giving them little choice but to lend it to households and businesses, in a process known as quantitative easing. It has been done in the United States, Europe, the United Kingdom and Japan, and is by now anything but unconventional.

Governor Lowe would prefer the government to pull its weight by cutting tax and boosting spending, especially on infrastructure, and by policies that make Australia more productive.

He said so on Tuesday night

the best approach to delivering lower unemployment and a stronger economy is through structural policies that support firms expanding, investing, innovating and employing people. As we ease monetary policy, it is in the country’s interest that other policy options are considered too.

Treasurer Josh Frydenberg gets it.

He pointed out on Tuesday that the yet-to-be-approved tax offsets in the budget will give Australians on up to A$126,000 a cash bonus of up to A$1,080 when they submit this year’s tax return, far more than the rate cut.

His biggest concern, and the biggest concern of the governor, might be that they don’t spend it. Another concern would be that the banks don’t pass the rate cut on.

The ANZ has said it will only cut mortgage rates by 0.18 points instead of the full 0.25, a decision Frydenberg said “let down” customers. Westpac has cut by only 0.20 points. The National Australia and Commonwealth banks have passed on the cut in full.

On Tuesday night in Sydney Governor Lowe addressed the question of whether the banks should have passed on the full cut head on:

My usual practice in answering this question has been to explain that there are a range of other factors that influence mortgage pricing, and then say “it all depends”.

Today, though, I would like to break with my usual practice and provide a clearer answer. And that is: Yes. There has been a substantial reduction in the cost of banks raising funds in wholesale markets. Average rates on retail deposits have also come down.

This means that the lower cash rate should be fully passed through into standard variable mortgage rates. Full pass-through would also mean that the economy receives the full benefit of today’s policy decision.

The Governor is concerned that, for their own reasons, lenders such as ANZ and Westpac are forcing him to cut rates lower than he should and making an already difficult job harder.

If he has to cut further he will, but with the cash rate at just 1.25%, he would dearly love not to have to.

Read more: Cutting interest rates is just the start. It’s about to become much, much easier to borrow

Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Fed up of going to the same workplace every day? Has your career stagnated to the point that you dread Monday mornings and feel deflated every time you think about work? You shouldn’t carry on like this and the start of a new year represents the perfect opportunity to do something about it.

There are so many ways that you can adapt the direction that your career is going in. It might not even be a large scale change that you need, maybe you just need a little side-step into a role that you would get more satisfaction from. Either way, if you don’t do something about it now, you may never take the leap and never discover that a happier working life exists.

How to plan a career change 

If you don’t already know what area you want to move into then you need to do some research. What are your main skills? What do you enjoy doing most? Where in the career market do good opportunities exist?

Do the Research

There are lots of analytical tools that you can use to help define a career path that suits you down to the ground. Use LinkedIn and other career resources like Indeed, Jobsite and Monster to find out jobs are currently out there that you would like and find out the key skills and experience those roles are looking for.

Boost your skills 

Once you’ve found out the key skills required, if you haven’t got some of those skills then you can always try to acquire them, don’t just give up hope if you’re a few skills short. Whether it’s a course that you need to study or some online tutorials to get an in depth understanding of a subject, there are loads of free resources or free trials out there like Lynda.com. You can also sometimes find discounts for online courses and other types of training and resources on sites like 7coupons.in to help fill some of those skills gaps.

Have Confidence 

The statistics show that women are less likely to apply for jobs than men of a similar skillset. Men are more inclined to try to ‘wing it’ or hope that once they have started a job they can build the required skills up. You need to have confidence in yourself and your own ability and work on boosting your own self-esteem.

Refresh and Customise Your CV 

It may sound like a given but if you upload your old CV without checking it over then you could be ruling yourself out without even realising it. When you apply for your ideal job, you should customize your CV so that it shows good examples and experience of the key skills and experience that they are asking for. If you applied for a job a few months ago that required completely different skills then it is a bad idea to re-use the same CV.

Hone your Interviewing Skills 

It goes without saying that you need to put effort into interview preparation but the more you practice, the more you will be able to provide relevant examples for interviews.

Small businesses may not find accounting services or professional financial advisors a viable option. However, with the benefits they provide and the long-term money saving tips they can give your business, it would be silly not to hire a professional to help you steer your business in the right direction. If you don’t have professional accounting services, consider hiring one immediately, otherwise, there are multiple reasons why your venture could fail.

1.      A Business Plan with No Professional Outlook

Running a business without a decent business plan in place is like driving a vehicle with your eyes closed – it just isn’t going to work unless you’re lucky. A business plan can give you a sense of direction as to where your business is heading and it’s also a good indicator to tell you how far you’ve come.

A professional business plan is the difference between a business being a success or a failure. Accounts and financial planners have the expertise in this field, so it’s important you hire one to keep your business running on a solid foundation.

2.      Fines for Poorly Kept Financial Records

Often, it’s the fees that the government charges businesses who fail in keeping their financial records in order that can send a business down under. Unexpected fines can push a business straight down the fiscal crisis spiral, so utilizing good bookkeeping skills from top accounting professionals is always a wise choice.

3.      Less Money Saved on Tax Repayments

While accountant fees can often be off-putting, they will save you money in the long run. Accountants know taxes like the back of their hands, and they are the people who will save your business money every year while taking a small cut for themselves. Many public accountants and financial planners hold a bachelors degree in accounting, so they know the score when it comes to submitting your returns to save you money every year.

4.      A Lack of Professional Business Advice

Accountants and financial planners with an accounting degree online will have a great deal of knowledge in the field your business serves. If you don’t have a business advisor, accountant, or financial planner at your disposal, you’re likely not going to have the business experience to take your venture forward.

5.      No Professional Cashflow Monitoring

One of the most important tasks that need to be undertaken regularly is the monitoring of the cash flow of a business. It’s something that’s often overlooked by small business owners because they feel their profits are going to keep them in decent shape for the foreseeable future. Poorly monitored cash flow will spell the end for your business, so make sure you get professional help.

Accountancy and financial planning fees can be eye watering. However, running a business into the ground because of poorly managed financial affairs will prove to be even more eye watering. If you want to take your business further, it’s important you have the right advice and the right professionals at your side so you know you’re going to have help in steering your business in the right direction.

Have you ever thought about enrolling in an online MBA program? It’s a course many people who want to advance their business career complete every year and for many good reasons. Below are some of the main benefits of an MBA program.

1. You Become a Better Business Person

One of the main reasons why you should get your MBA online is the fact that you become a better business person. Each online MBA course is created by a range of different business experts who show you how to plan, how to organize, how to manage and much more. With these skills, you can work in and run a business in a much more professional and efficient way.

2. You Can Apply for More Senior Business Roles

When you complete an MBA program, you can apply for a wide range of senior MBA careers that would not be accessible without this type of qualification. An MBA is a desired qualification in many public organizations and private companies, or you could use your newfound skills in your own business. Whichever career path you choose, an MBA will ensure that your working conditions and employment terms will improve greatly and you can have a much better lifestyle than you would otherwise have.

3. It’s a More Flexible Way to Obtain an MBA

Completing a traditional classroom based MBA course is not always a practical solution for students. You may have other commitments, which means it’s impossible to combine your studies with your current lifestyle.

However, when you start an online MBA course, you are able to study in a much more flexible way. You can study from any location where you have a Wi-Fi connection and you can also study at times that suit you.

4. You Increase Your Business Network

As mentioned earlier, a wide range of business experts contribute to each MBA course and these people can become extremely important business contacts and mentors once you graduate. The students on the same course as you could also become important contacts and they could even become business partners or associates after you complete your MBA. These are important connections that would be difficult to establish in other ways.

5. An Online MBA is a More Affordable Option

The rewards you get from completing an MBA can be huge. However, this type of course can be expensive, especially if you attend a college or university in person. Many students have a limited budget and this means a business qualification like this is out of their reach.

With an online MBA, the tuition fees are usually less than they are for a traditional classroom based course and you also avoid many of the other costs associated with this way of studying.

Every business owner and individual who wants to enter the business world should consider enrolling in an online MBA course. It’s a much more flexible and affordable way to obtain this type of valuable qualification and it is definitely the type of course you should consider completing.

If you’re a budding entrepreneur and this is your first venture, you are bound to commit some mistakes. However, there are some common errors that most new entrepreneurs make that can be easily avoided. In this article, we’re going to look some of the main reasons why so many new startups fail and we’ll also look at the alternatives so that your small business does not fail.

No Market for the Idea

Many startups have a great idea but they lack a good plan for getting the idea to market. This has prompted many new entrepreneurs to go back to school, with many deciding to get an MBA online from institutions such as Villanova University.

Not Enough Cash Flow

Insufficient cash flow kills many businesses. Growing too fast on the expectation that earnings will catch up causes a number of startups and even mature businesses to fail; startups are more prone to expanding too fast in response to capital infusions from investors and loans, whereas established businesses are more likely to grow too fast with a debt fueled acquisition or expansion that ends up costing more than they expected. A Fractl study found that around a third of startups in Silicon Valley failed because they either couldn’t get initial funding or ran out of cash.

Debt often affects small businesses, and people sometimes go through extreme means to inject new cash into their venture. People quit their jobs and live off credit cards to focus on developing their idea instead of working on the project on weekends and evenings. They take on personal debt like mortgaging a house to fund the initial startup and have no margin when they hit the first speed bump. Financing to fund the business and then using personal assets to try to keep it going when the project is sinking leads the entrepreneur to lose everything when they can’t keep throwing money into the failing project.

Arrogance

Arrogance causes a number of startups to fail. Refusing to use a network or advisors to avoid mistakes and basing decisions for launch on a founder’s hunch instead of data driven market timing were factors in around 10% of startup failures. Bad product designs sometimes made worse by inventors unwilling to change the product to fit customer expectations or business requirements contribute to a similar number of failures.

Many companies create a product or service and discover after launch that they need to change the product to fit a shifting market, alter a distribution model for economic reasons, or change because someone else has come to market with a better version of their product. Refusing to pivot was found to be responsible for around 7% of startup failures by CB Insights, while pivots gone wrong killed twice as many startups.

If you manage to steer away from the mistakes in this article, you will significantly improve your chances of your startup being a success. Assuming you know best and acting on that belief without the data driven decisions necessary to business success kill many startups. Picking a business model you can’t follow through on kills many businesses, while growing too fast without managing cash flow kills even many established businesses. Also, not having the competence to create a solid business plan kills many businesses as well, hence why it would be wise to at least consider getting a post graduate education or checking some of the many online MBA learning resources available to new entrepreneurs.

Top universities are making their distance learning programs available to more students. Online degrees are making it possible for many to pursue the degree of their choice without leaving their career or relocating closer to the university of their choice. We’ve even covered some of the most interesting online degrees you can pursue today.

To successfully complete the online course, however, there are a few things to prepare. We are going to take a closer look at how you can prepare for your first online degree in this article.

Choosing the Right Degree to Pursue

The first thing you need to do is choose the right degree to pursue. Top names such as the University of Maryland now offer online MBA options, as well as many other degrees to choose from. You can either go for a degree that will help support your career or one in a field you really like. The latter is often the better way to go simply because you will be able to stay motivated throughout the course easily.

Next, you need to understand the course requirements and see if you can meet them without a problem. When you want to pursue an MBA degree online, for example, there are a series of online MBA questions that you can ask yourself – and find answers to – before you know for sure that the course is for you.

Making a Schedule

Just because online programs offer more flexibility to students, it doesn’t mean you should take the programs lightly. Taking an online degree can be a bit more challenging than completing an offline course. You are required to allocate enough time for studying and setting your own schedules.

As long as you can allocate at least an hour every day for studying, you should be able to complete the course without any hassle. Make sure you schedule your study times properly and that you stick to the schedule no matter what. It is easy to get tempted by other activities and abandon that pre-allocated time altogether; this is exactly the kind of thing you should never do.

Lastly, make sure you can also keep up with course assignments and exams. You can’t study for an exam the night before; not when you’re trying to get good grades and graduate from the online program with a valuable degree.

Get Familiar with the Resources

The best online programs are conducted through the universities’ online learning platforms. These platforms offer anything from course materials to access to lecturers and fellow students. You can also stream classes and other videos to make learning a lot easier.

Before you start your course, spend some time getting familiar with the online learning platform. Don’t forget to also introduce yourself to the lecturers so that you can ask questions easily whenever you run into problems with the course. Lastly, make sure you have the right tools for completing the online course.

Make these preparations and you won’t have to worry about the challenges you will face as you pursue an online degree. You’ll be able to complete the course in as little as 12 months and boost your career to a whole new level.

For most adults and people who are already in the workforce, pursuing a post graduate education is simply not an option. Traditional learning has many caveats that nearly makes it impossible for people with tight schedules to further their education.

However, with recent advancements in online education, a wide variety of new degrees are available to students. And the number of degrees available keep increasing, with sometimes interesting courses that were once relegated to brick and mortar institutions. In this article, we’re going to explore five unusual degrees that are available online.

Bachelor Degree in Aeronautics

A growing number of industries are searching for graduate level aeronautics students to fill a variety of pilot positions. The program was initially created to fill the demand of the army and regional airlines who needed their certified pilots to complete purely academic courses. Courses include multi-engine theory, aviation weather and high speed aeronautics.

Bachelor in Integrative Health

With the recent advent of holistic and natural healthcare alternatives, there has been a growing demand for certified professionals in this area. Unfortunately, not a lot of traditional colleges offer this option. This program is especially good for those who didn’t have the qualifications to complete an administrative health degree. People with a degree in integrative health can fill jobs as educators in various healthcare facilities who will steer patients towards alternative healthcare options.

Online Master’s in Engineering

While most people think that acquiring a valid engineering degree from an online institution is nearly impossible, this couldn’t be further from the truth. Colleges like the University of California, Riverside, offer a variety of engineering classes that can be taken almost entirely online. Their master of science in engineering and master of engineering management not only gives students the basic tools to work in engineering, but also gives them the business savoir faire to coordinate projects that demand advanced knowledge of engineering principles and work as managers across many engineering fields.

Masters in Packaging Science

While packaging doesn’t seem like a particularly cutting edge field, there is a significant demand in this industry with very few qualified students to fill this need. Many online universities offer packaging courses where students will learn the ins and outs of tamper proofing, product specific packaging, packaging permeability and more.

Bachelor in Economic Crime Investigation

This degree is particularly suited for people who are interested in statistics and have a certain interest in finance. Students who follow this program will learn how to decipher financial documents and investigate Ponzi schemes, money laundering cases and fraud. This program combines criminal justice, mathematics and sociology among other things to give students a skill set that will allow them to fill a variety of jobs in law enforcement.

If you’re looking for a good degree that will allow you to get an edge on the competition and seek jobs that are in need of qualified students, consider these career alternatives. Not only will they increase your chances of finding a job straight out of college, they might steer you towards a vocation you didn’t even know existed.

When you think about branding your small business what generally comes to mind is online tools that can get your name out there. However, what if you have a physical location, a presence within your local market? You will want to do more than online marketing, although that is a very big part of what you will do. There are tools to help you brand your business that you can use on a local level and some you will use online. If you are looking for foot traffic, try a healthy mix of local and online marketing for optimum results.

What’s In a Name?

Actually, when it comes to a business, everything’s in a name. On a local level you may be able to determine if there are other businesses around that have your name or a name close enough to warrant maybe changing yours up a bit – or at least your slogan. If you can’t change your name, make your slogan a huge part of your advertising. If it is an online endeavour, then you will probably need a tool like Name Check. This is best used when thinking of a name for your company but if it’s too late and you already have a name, check to see what the competition for that name is doing and alter your marketing to make your brand stand apart. Incorporating that slogan will work nicely here.

Local Branding Tools

In all the excitement over online marketing, many local businesses forget that there are local tools they can use to help build brand too. One innovative idea that many small businesses have begun using is really a blast from the past. If you do a lot of local business where invoices or work orders are used as part of your process, custom rubber stamps with your logo incorporated into the design are a sure-fire way to gain recognition.

Use bright ink and on every outbound piece of paper that crosses your desk, use your stamp in a visible location. It could be a logo icon, your company name and the words “Thank You!” etched into the stamp. There was a time when every business used custom rubber stamps to get their name out there and for local businesses, this is something that should be brought back. Remember – everything’s in a name and you want them to remember yours.

Sponsor Charity Drives

Another thing you can do to build brand on a local level is to sponsor charity drives or events. If you are the main sponsor you will get free advertising on many radio and television stations that give a certain amount of air time free to charities trying to raise funds. This time is often a tax write off for their station and in an effort to build community relations they offer free publicity for local fundraising events. Sponsor at least two events in a year and watch how quickly your name gets out there where it counts. That would be with the locals.

So remember, although online marketing is going to get you quick visibility in the search engines, you are also reaching out on a local level. By stamping each piece of correspondence, bill or invoice that comes across your desk you will be getting your name out there. Sometimes you need a perfect blend of the old and the new but when it comes to branding, you need every trick in the book.

Being a boss is a thankless task and it’s almost part of the job that your employees hate you as it gives them something to unite and bond over. One of the things that many people claim they are uncomfortable with at work is surveillance, whether it’s in an office or with engineers. There are right ways to go about surveillance that means you can keep an eye on how things are proceeding without making your staff uncomfortable.

Internet History

You obviously don’t want your employees spending all their time on Facebook when they are supposed to be making you money, however on lunch breaks they are entitled to and so it makes checking their internet history an unnecessary form of privacy invasion. I would make it a policy to only check an employee’s internet usage if you have a serious reason and have it on good authority that they might be wasting company time.

Vehicle Whereabouts

In a similar way to the internet history section, if you have a fleet based business, where you have engineers, etc., out in the field, it can be tempting to track their whereabouts with tech from companies like MyFleet fleet tracking to ensure that they are going to where they are supposed to be. This fleet tracking technology is essential; however only check it when you have probable cause. It’s also important to never jump to conclusions and to give employees some leeway and always allow employees to defend themselves before taking action. Having tracking software, even if you don’t use it, will mean that employees are aware and will probably not abuse their position of being out and about under their own steam. This means that the trackers can be logged onto only if someone is severely underperforming in their role.

Personal Correspondence

Somehow it is legal to read personal emails and texts that have been sent and received on company hardware. I implore any employee to never go through this stuff as it is a complete invasion of privacy. If employees are worried about this then they should stick to personal devices, but I’m sure we’ve all sent emails from work before on our lunch break. I can’t believe that this is legal, but it is and so if you have a reason to doubt your employee and wonder if they are spending a lot of time dealing with personal stuff, then make sure you speak to them first and let them know your concerns and that you will be keeping an eye on things from now on. I would never check their personal stuff without warning them first; it’s just good manners and doing it this way will retain the employee/employer trust that is of paramount importance to the success of a business.

The most important thing is to not abuse your positon as the boss and to ensure that your staff are happy and content in their positons, without the need to fear that you will be watching and listening in on them wherever they go and whatever they do.

Every business owner needs all the help they can get. The latest business systems have the potential to make life easier for you and everyone involved in your company. Below are some of the business systems that will make your organization more efficient, more productive and ultimately more profitable.

Payroll and Accounting

The financial health of your business will decide how successful your company becomes. However, the accounts departments of some businesses are hectic and disorganized places and this can cause a lot of problems. By investing in one of the many different types of payroll and accounting systems that are available, you can take control of the finances of your business and focus on its more productive aspects.

Business Critical Documents Software

When you are trying to generate new business, you want your organization to appear as professional as possible. One example of a system that allows you to easily and quickly produce business critical documents that can be used for a wide range of purposes is Qorus. These systems, which you can access at qorusdocs.com, can also be used and modified by multiple users, making them an extremely powerful and effective way to deal with a wide range of business documents.

Customer Management Systems

Today’s businesses understand how important it is to deal with previous, current and future customers in a professional manner. The data produced from the interactions with these people can be invaluable. This data has the potential to help you plan better and make more informed decisions. This is why more and more organizations are installing Customer Management Systems that can have a huge impact on every area of a business, based on the customer data they store.

Business Analytics Systems

Efficient businesses record every event that takes place in their business. They do this by using a range of different analytics systems. These systems can record all of the activities that take place on each of your business systems, as well as your websites and other online assets. Once again, you can plan more effectively and understand every aspect of your business, based on the information stored on these analytics systems.

Knowledge Base Software

The phrase ‘Knowledge is power’ is particularly true when it comes to running a more productive business. Setting up a knowledge base that contains all of the processes and information about your business is vital. Each employee should then be given the appropriate access to this knowledge base, so that they become more independent and can work on their own initiative.

Helpdesk Software

It’s vital that you deal with all of your customers in a professional way. This is why helpdesk software systems are so important. They allow your staff to record every interaction with customers, monitor customer activity and report on a wide range of customer related activities.

Modern business owners are in the fortunate position of having a wide range of business productivity systems to choose from. The systems mentioned above are the main business systems that will make your life much easier and allow everyone in your business to focus on providing excellent service to your customers.