Updated: May 14, 2020
In 1991, a high marking, goal kicking kid swaggered in to the storied Faculty of Commerce at the University of Melbourne. A run at the Hawks was cut short when Russell Greene put his arm around 71kg of pure power and plunged a dagger in my T.W. Sherrin, "Kid, you're just not that good." Flat as a tack, I slunk off Glenferrie Oval and made my way to Ace Hi Riding Ranch for the 'O week' Commerce Camp. One door closed and broke my nose, another opened. Who needs AFL, when you've got real money to make? I was hook, line and sinker in the idea that I was amongst the smartest and brightest in the 'Big V'. I was going to be rich. I didn't know how, but I could feel it in my bones. All I needed was a degree. How hard can it be? Turns out, there's a bit to it. Add a degree of difficulty by inserting Naughton's Hotel. It was there that I liked to do most of my thinking. OK some thinking, mostly drinking. Microeconomics turned out to be my first fail. I should have paid more attention to the trade at Naughton's instead of photocopying my old Carey mate's (thanks Wisey) very good lecture notes. The science and mathematics of economics still escapes me, but after 24 years of owning hotels, I reckon I can explain the gist of it. Maybe my time at Naughton's was not wasted after all?
2020 Hospo Microeconomics 101 1. How will your customers behave in a post COVID-19 world? My guess? They will be much more wary of spending their 'hard earned'. 2. Your customers will choose to spend to maximize their happiness or “utility,” subject to how much they have left in the credit card. Whilst people will want to be happy, many are maxed out. 3. Write a recipe to minimise cost and maximise production profit. We need serious help. I have my head in the cook books. 4. Supply and demand determines price in a competitive market. If demand goes down and supply is constant, what happens to price? It goes down and that's all we need. If you subscribe to the above, we are staring at armageddon. Our only chance of survival is to change cost structures and protect our pricing models. We need to start fighting now. Don't be lured into the ambush. Getting open won't help us, it'll just give ScoMo and The Premiers a cheap beer drinking media grab.
So doomsday 'preppers', what will save us? 1. Get rid of FBT and Payroll Tax, 2. Talk to your landlord, 3. Talk to your suppliers, 4. Get rid of penalty rates. If nothing is done, unemployment will spike again when JobKeepers runs out. There is no room for political bias. Industrial reform is essential.
Talk to your local MP. They are there to represent you. If material changes are not made, I might have to strap the boots on.