07/10/2010 - 00:00

Retail a by-product, not driver of growth

07/10/2010 - 00:00

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Having assumed a spoiler’s role in the economic debate, retailers act in no-one’s interests but their own.

IT seems retailers have taken on a role perfected by the farming community during the 20th century.

They have become the new whingers of the modern economy, bleating every time governments (or their independent agencies) do anything to stop them selling.

The fact that the complaints baton has been passed on from farmers to retailers may be best illustrated this week. Ironically perhaps, while it made national headlines that shop owners were worried the Reserve Bank of Australia would spoil their Christmas bonanza if it had raised interest rates this week, as expected, we have barely heard a word about hundreds of WA farms facing foreclosure as a result of a disastrous season.

The RBA may not always get its rate changes right, but at the very least it is attempting to act in the national interest. Instead, retailers suggest they ought to be the priority.

This is incredibly rich given they benefitted more than anyone from the massive stimulus spending by the federal government after the global financial crisis.

Retailers have learned that consumer spending is now a politically sensitive measure of the economic performance of the government.

In the simple language of the mainstream, poor retail sales are now portrayed as bad economic management.

So retailers have banded together to voice their dislike of anything that stops their need to convince consumers to spend. This is putting the cart before the horse. Poor retail sales might be a signal of economic issues, but getting consumers to spend more doesn’t solve the underlying problems.

In fact, three-years’ interest-free credit to buy a house full of unnecessary trinkets may well be contributing to the problem.

This squeaky wheel syndrome is similar to what happened with the farming community, which last century used its electoral muscle to consistently shape policies that were inefficient and damaging to the national interest.

Farmers consistently demanded legislation that protected old-fashioned operational and business practices that had reached their use-by date.

The truth is that farmers were trying to protect their communities by influencing economic policy. Independent Queensland Senator Bob Katter is still trying to do it.

At least, though, the farmers had one thing in their favour. They created something, risking their capital and labour to grow products on whose back the nation rode until minerals started to shift that balance.

Retail is a different beast. It relies on other forms of business to succeed before its own success. It still takes capital and labour, but it requires something to be created first.

Like they say, the ones who reap the real bonanza in a gold rush aren’t those mining for gold – they are selling the shovels.

But to continue the analogy, the successful shop owners and innkeepers of Kalgoorlie’s gold rush of the late 19th century were not the driving force behind WA’s economic boom, they were the beneficiaries. The Goldfields water pipeline, for example, wasn’t built to sustain a retail community in the desert. It was an investment in the mining sector from which the whole WA economy, including the shop owners of both Perth and Kalgoorlie, would benefit.

Put more simply, retail is a by-product of other successful economic activity, not an economic engine in its own right.

Spring break

ON my annual pilgrimage to Rottnest this year (actually the second time in 2010) I was again bemused by so many things about this wonderful island that I believe is the jewel in the crown of WA’s tourism destinations – due not only to its character but its proximity to the main urban area.

As a regular visitor, much of what affects my family’s Rottnest experience is different from that of the real traveller. Nevertheless, there are crossovers that are worth mentioning.

For instance, the island’s bike rental operation doesn’t seem to have responded to the competition it now receives from the ferry operator, which hires bikes to passengers. A friend visiting on a day trip took an hour and half to wrestle a bike from the island’s clutches, after enduring three different queues. Upon receiving this rented transportation at around noon, she was told it had to be returned by 3.30pm because the workers return on the 4pm ferry. This is despite there being later boats back to mainland.

Not a great result for a day trip.

The west end was also a disappointment. We discovered that the boardwalks and best viewing platform at the most remote part of the isle were closed off. While tourists can still see much of the dramatic tip of the island, it is disappointing to find a major feature out of bounds.

For the more regular visitors, the chaotic booking system continues to bewilder me, especially when Rottnest authorities have admitted that they are struggling to compete with Bali and other destinations that don’t have Soviet-style accommodation regimes.

By way of example, bookings for the first week of the school holidays next year could not be made until the first day of October this year. Clearly this is someone’s outdated version of fairness.

With many people actually on Rotto for this important date, I found it amusing to hear about those who slept overnight to be there for opening time the next morning. This is like teenagers camping out for a rock concert or newlyweds seeking a rare land release – except it’s grown-ups who have to use part of their holiday to book their next. Ridiculous.

The irony is most in the queue were beaten by someone I know sitting in their chalet with a laptop. Of course, internet booking was also a source of frustration. Not only did the new system crash (no doubt as a result of forcing everyone to book simultaneously), but I know of one exasperated soul who managed to get into the system and fill out the list of tedious and seemingly unnecessary questions (“Do you require Accommodation?” – well, err, obviously) only to find he was timed out and had to start again. Not much help when the starter’s gun has well and truly gone and the race for accommodation is on.

Let’s face it, it’s a silly system based on some misguided concept of egalitarianism which really only treats people like cattle. Other resorts welcome regular customers and treat them with respect, but not our Rotto.

But maybe I should shut up. If the island’s quirky booking system foils a few people then it makes it easier for me to enjoy this remarkable and beautiful place.

• mark.pownall@wabn.com.au

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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