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Dick Smith attacks "Growth Madness"

The following is an extract from an article in today's - the original Australian news blog site:

When the Productivity Commission releases its inquiry into the state of Australia's retail industry today, the news is expected to be dire.

Yesterday, horrendous ABS retail figures for June showed a 0.1% slump in shopping for June, despite the usual winter pick-up driven by southern state denizens rushing to buy coats and umbrellas. The year-on-year growth number was just 1.4%, far from the usual 5 or 6%.

The solution to the doom and gloom isn't clear cut. If only consumers could get their mojo back, market economists maintain, Australia would be back on the golden road to prosperity. The lack of spending is equated not to structural factors or the two-speed economy, but a anti-consumption mental illness.

But amid all the renewed talk of shopping strikes, US recession and Australians' eagerness to pay off their credit cards on time, the "prosperity without growth" crowd is beginning to arc up. The usual suspects are urging the nation to step off the fraying GDP conveyor belt championed by every Labor leader since the Accord and reject the growth imperative outright.

Forty years ago the Club of Rome warned that world population, industrialisation, pollution, food production and resource depletion would all rub up against an expanding economy in its Malthusian 'Limits to Growth' tome. Peak Oil has also started to re-emerge as an issue, forty years after it too was identified.

Now, media-savvy ex-electronics retailer turned cream cheese king Dick Smith reckons he has the answer, blasting out a press release this morning telling retailers to "get used to" sagging bottom lines and embrace the gleaming alternative. "We can have a fantastic free enterprise system which is not based on exponential growth in the use of resources and energy, but we have to plan for it", Smith explains.

“What we are doing at the present time is complete madness and our economy will end up hitting a wall or going over a cliff."

Smith reckons there are "still plenty of profits to be made but they won’t come from endless growth in consumption – they will come from smarter management creating efficiencies and saving waste. Yes, this will certainly ‘sort out the men from the boys’, however it’s all possible,” he reckons.

Pressed on his plans, the entrepreneur says he's talking about reducing working hours -- and immigration, which according to the Productivity Commission makes up half of all new growth, to reduce demand. And he says some leading retail figures agree.

"A senior exec at Woolworths told me 'you are absolutely right' this madness of growth from more people and more consumption can't last, we need to become smarter at making more money."

You may ask why I have deviated from local politics? The answer is simple - when I spot items that you may not otherwise have access to, and which are relevant to this district, I will reprint and acknowledge. This item just seems too important to let pass, no matter what you may think of the mercurial retailer. He carries huge weight over the ditch, and his growth message resonates on this Peninsula.

It is time everyone associated with promoting the virtues of this place began to realise that the party is over.  Brian Sharp's response to my criticism in today's Penisula Press is a perfect example of the 'head in the sand' attitude common amongst developers and their cohorts. Never mind Blueprints and other 'Pie in the Sky' documents - growth is and will remain static for a very long time, and anyone who believes otherwise is dreaming. Blaming the Council for this situation borders on the ridiculous.

It may be an appropriate time for our Council and everyone whose existence is tied to growth in this district to take a long hard look at at the likely consequences of a 'non-growth' scenario, and plan accordingly.

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Reader Comments (2)

The inclusion of the "Growth Madness" segment is indeed useful Bill.
It seems to me that any economy predicated on a cycle of constant growth must, at some stage, come to an end. It does not take too much to imagine that the Coromandel Peninsula has a finite capacity to absorb new residents and so stimulate new opportunities for growth and expansion. There are only so many sites for marina's and coastal developments.
Resident's have clearly indicated that they are unwilling to consider alternative industries (mining and timber processing) and have 'grave reservations' about the expansion of others (aquacutlure). With these sorts of self-imposed constraints, combined with the very limited capacity for increased population and urban expansion (Thames being an excellent case - failing reclaimation how does the town achieve significant new land for urban growth?) the time is very rapidly approaching where citizens need to understand that what we have is all we can have. The 'peak-oil' scenario is another good example of the impending nature of the (potential) arbitrary imposition of limits.
It is interesting to note that the Thames transition town team are struggling to cope with this very concept; i.e. life after oil. We need to seriously contemplate how we are to survive as communitieis if business growth is severely limited or (worse case) halted.
Not that we need another example, but the current internation economic situation might lead us down the path of negative growth, so there are opportunities for us to understand the cause and immediate affect of business stagnation.
Regional collaboration is something we ought to start planning for and factoring in to plans. Perhaps the resumption of a ferry service to Auckland and the reconstruction of rail to Hamilton and the development of a rail link to Auckland ought to be on the agenda. In the 1850's iwi were great producers of significant amounts of food for Auckland. Now is the time for us to consider, as communities and as a region, how we can develop revenue streams that are labour intensive that capitalise of absolute needs (like food, clothing and shelter) to develop sustainable revenue streams for static growth populations. Of course this assumes we are willing to consider and / or implement a zero or limitied population growth strategy or at least a controlled growth strategy that is linked to communities ability to generate additiional revenue, business or work avenues.
This is the kind of serious leadership we need to start seeing from TCDC and regional council bodies. It doesn't take a rocket scientist to understand that we cannot continue in the way we always have. It will be a brave councillor who suggests a moritorium on residential development for the Coromandel Peninsula and introduces the notion of developing a stragegy for non-growth business and community sustainability.
Maybe we just need to be happy what what we have now; to start changing our expectations. Gosh, there's an idea.

August 7, 2011 | Unregistered CommenterRussell

Spot on Russell - you have put your finger fair and square on exactly what we are facing right here in Thames. Thanks.

August 7, 2011 | Registered CommenterBill Barclay

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