There's a spring in the economy but it needs the cash under the bed
Now the battle is back in the loungeroom as we flick through the online download options. But with screens everywhere, even in our pockets, disgruntled family members can always spend up on the family budget and download their own choices to watch in their room, or anywhere else. However, the online options do not allow us to build an attractive bookshelf library.
senior executive at Nine Network told me years ago about his visit to Kerry Packer's country retreat at Scone. There on the shelf behind Kerry's desk were his four favourite DVDs: The Godfather, The Godfather II, The Godfather III and Zulu. The last one got in only because Francis Ford Coppola never made a Godfather IV.
Remember The Godfather? When it looked like trouble was brewing, the boys "went to the mattresses" - apparently an old Italian reference to seeking safety in wartime.
In recent years, people have been going to the mattresses in droves with their earnings. Charlie's father remembers the days when we brought our hard-earned money home in a brown envelope that was immediately handed over to mum for housekeeping. But the overtime cash was conveniently put into a second one and that was dad's beer money. And if any pounds, shillings or pence were left over, Charlie's father would slip it under the mattress because he trusted his wife more than the bank.
"How times have changed," Louise mutters.
It's time for all of us to reach under the mattress and start spending. And the recent rise in business confidence should get us going. It's now at its highest for two years, up from minus 3 per cent to plus 6 per cent, and a clear sign of the expectation of a change of government.
This week's consumer confidence figures have followed suit and, if it continues, next year could be a recovery year across the board, including advertising spending, now forecast at a lamentably low 1 per cent. It may be too early to count on it, but it's the best sign we've had for a while. Australia, as we've said for a long time, is in a very good position compared with the rest of the world. It's just that over the past two or three years, people have simply gone to the mattresses.
The days of the $10-billion cash splash after the global financial crisis hit and just before Christmas are behind us. Sure it triggered a rush on the pokies and flat screen TVs, and kept the economy moving so we didn't slide into recession, but it was a "oncer" and the underlying mood did not change.
For some time, we have been forecasting an increase in advertising spending in the period between now and Christmas. If we encourage people to believe in themselves, we could have the best Christmas for three years.
Unemployment is not at a disastrous level compared with 2007 as the crisis was approaching. Bank interest rates are at a record low. It's time for confidence to return. My researcher Louise is thinking of borrowing to buy a place on the Daintree River, and Charlie is getting keen to invest in strip shopping centres. - retail out the front and six residential storeys above.
But that's all too complex for me. I'm sticking with the digital world. Media possibilities have never been more exciting. Newspapers are still struggling but they are starting to adapt to the digital environment, which is going to spawn more innovations than we have ever dreamed of.
The main thing is that we now enter a period when people start to spend some of their savings and disposable weekly income, which is higher than most of the world. If that happens, and we don't get a government that frightens everyone before Christmas, we can all wake up to a bright new year.
Harold Mitchell is an executive director of Aegis.
Frequently Asked Questions about this Article…
The phrase is used as a metaphor for people hoarding cash and staying cautious with spending — keeping money 'under the mattress' rather than putting it back into the economy. The article says Australians have been saving heavily in recent years, delaying a broader consumer-driven recovery.
Yes — the article notes business confidence is at its highest level in two years, rising from minus 3% to plus 6%, which the author sees as a sign the market expects a change of government and growing willingness to invest and spend.
Consumer confidence has followed the improvement in business sentiment, and if the trend continues the author suggests next year could be a recovery year across sectors — including advertising — though he cautions it may be too early to be certain.
Advertising spending is currently forecast at a very low 1%, but the article argues that if people regain confidence and start spending between now and Christmas, advertising could pick up and help fuel a stronger economy.
The article points out bank interest rates are at record lows and unemployment is not at the dangerous levels seen in 2007, creating conditions that could encourage borrowing and investment if consumer confidence returns.
The author mentions colleagues considering property plays — buying a place on the Daintree River or investing in strip shopping centres — but he personally prefers the digital media space, saying media possibilities are very exciting as newspapers and other outlets adapt to digital.
The article argues the digital environment is spawning more innovation than before, newspapers are adapting to online models, and the broader shift to digital consumption makes media and digital businesses an attractive area to watch for investors.
Very important — the article links rising business confidence to expectations of a change of government and warns that a government that 'frightens everyone' before key spending periods could derail the return of consumer confidence and slow the recovery.
Call 1300 880 160
Start a chat
Schedule a call
