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In the current economic climate, fear and paranoia are gripping the working population. Excessive worrying over losing their jobs is leading to a change in their normal lifestyles as they attempt to compensate for the potential impact to their livelihoods.

Contrarily, former workers already on the unemployment scrapheap are finding that their lives are being reinvigorated. The unemployed status is affording them unlimited freedom in social activities and has allowed them to pursue ventures previous restricted by time constraints.

In fact, the only restriction and negative component of not being employed is the diminished financial capacity. But this perceived negative has presented the opportunity for them to renew their outlook on life and financial prosperity, by learning that having money does not always equal happiness.

We often hear about stories such as the child who is bought an expensive gift, but instead enjoys playing with the box it came in more. Similarly, the recently unemployed are starting to find out that enjoyment can be gained without the need to spend money. Rather than going to concerts, cinemas and amusement parks, they are instead turning to a day out at the beach, playing sports in the park or just plain old hanging out.

However, the luxury of being unemployed is one limited to the western countries. In the third world, being unemployed equates to not being able to put food on the table. But in Australia, the government provides unemployment payments along with a host of other benefits to individuals without jobs.

Lacking the desperation needed to become re-employed quickly, the unemployment period quickly turns into an idle mess. Sleeping in becomes the norm and pounding the pavement to find work is no longer more important as watching Oprah each day.

The unemployee quickly finds comfort in their stress free lifestyle; no longer having to wake up to an alarm clock early in the morning and battle peak hour traffic. The long hard slog each day at work is a distant memory, as are the early retirements to bed each night so they can repeat the same process again and again.

Recently a new phrase was coined to describe this period of pleasure whilst not having a job – Funemployment. With more and more people joining the lengthy job queues, they are realising that the unemployment period is likely to be an extended one. For this reason, viewing the period as funemployment is a refreshing viewpoint as they try and put a positive spin on an otherwise disastrous time.

For those with substantial savings or who receive generous redundancy payments, becoming unemployed has provided the perfect opportunity to spread their wings and head off abroad. Partaking on an international adventure is a common dream for many Australians and slotting it in between jobs is widely considered the best time to undertake the journey.

Overseas travel also doubles as a great resume filler. It is always embarrassing to try and explain the year out of work in a job interview, but for those who went backpacking in that time, having this on the resume will increase their chances of being hired.

Other overseas sojourns that may have otherwise been passed by include the volunteering trips to third world countries. Even local volunteering organisations are experiencing a rise in volunteers, as the jobless look to do something rewarding and fulfilling with their time. This provides them with an important feeling of self-worth and also helps to fill in otherwise idle time.

Gyms are also the beneficiary of an influx of new members. Gone are the days of the traditional corporate types signing up for year memberships and then never getting the time to make use of it. Nowadays, time is not a factor and a loss of a job can be the catalyst behind someone creating the perfect figure they had always desired.

Education institutions are reporting increased volumes of student applications, as people look to make the most of their unemployment and further their skills in a variety of areas. Standard degree holders are seeing this as a great time to complete their masters, while the short-term smaller courses are also seeing a boom in numbers.

Often to satisfy personal interests rather than advancing career options, companies operating leisure activity classes such as scuba-diving, sailing and parachuting are being forced to expand due to an increased demand for their services. It is clear that the motivation to return to studying is not always based on increasing the persons wage pulling power.

Many of the recently unemployed are rediscovering their passion for life by finding out more about what the world has to offer. After being swept into the workforce, often into a position or role they did not enjoy, they are now taking the time to reconsider their priorities in life and what they want to achieve through work aside from just working for an income.

The moments of silent personal deliberation often give birth to the realisation that they were not enjoying the corporate rat race type of lifestyle and were failing to live the kind of life they had originally intended.

It is true that the younger generation haven’t experienced the misery that can be caused by an extended economic downturn and that this may be shaping their present funemployment attitude. With the backing of government financial support, there is a severe lack of urgency in obtaining employment.

This generation is not willing to accept the reality of the Australian workplace environment, which often requires multi-skilling and the ability to take whatever job is on offer. Indeed, this is the mentality promoted by Centrelink, as they encourage jobseekers to apply in a wide variety of fields.

Unfortunately this mentality has not caught on as yet, with second and third rate jobs still being perceived as untenable. To switch from a corporate world position to one behind the McDonalds counter serving food would be seen as a disgrace by their peers. Pride still reigns as king in their minds, as they hold out for another flash job rather than taking the next available offer for work.

As long as Centrelink and government assistance remains, funemployment will continue to become a part of Australian culture. Not that it is overly detrimental to the economy or individuals, but rather a short term experience that many of us will go through. When times are tough, why not put a better spin on the situation and have some funemployment time?

Adam Roth

The Australian government has recently flagged new laws aimed at eliminating the dodgy loan sharks. It is a term used to describe unethical money lenders, but in reality the lenders deemed to be loan sharks are operating far from this accusation.

The new laws would give the Australian government the power to regulate all consumer credit nationwide. Previously, the responsibility rested with the states and territories, but the government has suggested that their regulations failed to put an end to dodgy lending practices and hence needed them to step in with a harder stance of the issue.

The announcement was made by Superannuation and Corporate Law Minister Nick Sherry and has been given the tick of approval by the Council of Australian Governments (COAG). In a clear attack on payday lenders, Mr. Sherry has ridiculed the previous regulations and blamed them for allowing certain lenders to take advantage of people borrowing small amounts and those in desperate need of cash.

Payday lending is a term coined to describe to short term lending practices, where the loan duration is normally until the next applicants next pay day. Generally the loans supply the cash necessary to cover payments for rent, phone bills, power bills or car repayments for which the borrower is generally in desperate need and already behind on the payments.

In reality, payday lenders fill a crucial gap in the lending market, providing funds for the population segment otherwise discarded by the banks and traditional lenders. They have been unfairly targeted and it seems to be a witch hunt with a distinct lack of evidence supporting the case against them.

The proposed regulation changes are not limited to payday lenders, with the Federal government’s powers being extended to cover mortgage products, mortgage brokers, personal loans, credit cards, plus other non-bank lenders and margin loans. Although COAG has assumed responsibility for the national takeover of these areas of lending, the switch is expected to take place a couple of years to implement, with the regulatory agency most likely to be selected for the role being ASIC (Australian Securities and Investments Commission).

Consumer debt is a major problem in Australia and the changes are a slapstick measure designed to give the appearance that the government are tackling the issue. Judging from Mr. Sherry’s and other senior officials comments, more than likely, any new regulations implemented will strengthen the major banks market dominance and hinder the operations of the small players.

Payday lenders are an easy target for the government. The high interest rates and large proportion of fees on their lending products allow for easy manipulation of the reality behind their lending practices. Percentage-wise, the proportion of fees and interest that are stacked on the loan can easily be portrayed as excessive when compared to bank products, but any such accusations fail when performing a true apples for apples comparison.

Using an example of a small $200 loan, the establishment fee may be $30 and interest payments may be $5 per week. The truth of the matter is that the fees are small and manageable; totalling just $40 if the debt is repaid within two weeks. Unfortunately the brilliant mathematicians in the government office love to twist the situation and promote the fact that the $30 establishment fee equates to 15% of the loan and the $5 per week interest is the equivalent of a 130% interest rate.

Comparing this to the fees on a $5,000 personal loan, where the $99 application fee is roughly 2% of the loan amount, with annual interest of around 10%, the charges for the payday products seem excessive. The loan amount and duration are at such polar opposites that a comparison of this manner is totally inappropriate. If the personal loan was matched against a housing loan, the same discrepancies would show, but of course the government won’t detail those figures.

The fact remains that the payday lenders have similar operating costs to banks, with office rents and staff wages to pay. A similar amount of time is taken to provide the customer with the loan and complete the necessary documentation, so a $30 fee is definitely reasonable. The interest reflects the loan duration and processing times, with a charge of just $5 per week not over the top by any stretch of the imagination.

What the government also fails to consider is the type of clientele attracted to these lending products. Generally the customers have multiple loan defaults, no steady jobs, show signs of drug abuse and are the type of characters you wouldn’t lend money to even if they were your own family.

Nevertheless, they are in desperate need of cash. Be it to prevent their phone from being disconnected or car from being repossessed, a true need has arisen for a small short-term loan. Shunned by the banks and rejected by family and friends, these people have nobody else to turn to. Rather than being loan sharks, payday lenders are in many cases people with high moral standards looking to assist their fellow human beings.

There is no doubt the payday lenders are filling a need in the marketplace, with their customers having nowhere else to turn for financial assistance. The risk of them never being paid back their money is extremely high, and the fees and interest go part of the way towards covering the frequent non-payment of loans.

Mr. Sherry has accused payday lenders of being loan sharks and exploiting people in desperate circumstances. But as we have already detailed, the financial rewards are low and very reasonable considering the risk involved in lending to these people. If they are made to suffer by the introduction of strict regulations, there is only one alternative for people to meet their financial needs – crime.

Much worse for consumers are the traps set by the buy-now-pay-later schemes. The lure of an interest free period catches many consumers unaware. Rare is the case where the big ticket item is actually paid off before the interest kicks in, with most people not making any payments at all during the interest free period. Once it’s over, monthly fees appear from nowhere and the interest rate can often be around 30%.

Using an example of a $5,000 interest free loan for a furniture set where the principle remains unpaid after the interest free period expires, a 30% interest rate equates to annual interest of $1,500 dollars. At this point it becomes very hard to actually pay off the loan since the interest payments are so high.

It is a trap that catches many consumers unaware, but is unlikely to face much regulation since the practices have the backing of major lenders in Australia. In typical government style, the small players will be targeted and pushed out of the lending market, while the real loan sharks – the major lenders, will be supported and allowed to exploit Australians.

THE WORLD IS MOVING FORWARD

The world is moving forward at a rapid pace, with all available technologies seamlessly being integrated into our daily lives through commerce and a number of other means. Gone are the days of receiving your pay in a brown paper bag or having the milkman deliver the milk each morning.

In today’s world, wages are sent electronically and bank accounts are accessed through internet banking. Withdrawing money from the bank at a teller has become a thing of the past, with ATM’s taking over this role. Daily news is being sought from the internet, rending newspapers increasingly outdated. The electronic revolution is here.

As technology constantly reaches new heights, businesses are quick to implement technological solutions to keep ahead of new competitors. Major supermarkets now offer an online ordering and delivery service for groceries. Innovations like this would have been considered outrageous twenty or thirty years ago, but are now becoming standard practice.

Other markets to make the transition to online operations include the job and insurance markets. To reduce costs, insurance companies have removed the need to visit their offices and spend time with their staff members completing insurance application forms. Tasks such as these have now been moved online, as the customer can now complete any necessary application forms from the company’s website.

Newspapers are becoming obsolete as a source of finding employment in addition to sourcing news articles, as the internet allows jobseekers to narrow the advertisements by set criteria and minimise the time it takes to locate suitable jobs. Applying for jobs over the internet often takes just the click of a button or two, eliminating the need for a series of costly phone calls.

As much as the technological switch has been made to satisfy consumer demand and provide a competitive edge in the market, another critical factor has been the ability to reduce operating expenses.

Many industries, such as those involved in manufacturing, previously needed a large workforce to operate their production lines. The staff members have been replaced by machines, as the running costs are lower than the wage equivalent and they don’t have to worry about the machines taking sickies.

MOTOR INDUSTRY LAGGING BEHIND

Surprisingly, there are still fragments of the commercial market yet to embrace the technological changes which are rapidly being introduced in the other markets. One such industry still lagging behind in the dark ages is the motor vehicle industry.

The motor vehicle industry still operates under the same platform as it did decades ago, with the showroom and car salesmen. The only form of technology being implemented is in the motor vehicles themselves, or with external offerings of finance and insurance.

Along with the airline industry, the motor trade has been struggling for a number of years. Record numbers of closures of manufacturing plants have been seen in recent times, as well as the bankruptcy of a number of leading car manufacturers. A fresh approach is needed to reinvigorate the industry and provide a platform for a return to profitable trading.

Part of their problem has been the stubbornness to embrace an online solution for their businesses, instead preferring to persist with the old methods, which no longer perform adequately in the new millennium. Realising that traditional sales and operation methods are unsuitable in today’s market will be the first step on the road to recovery.

Customers these days are much more demanding in their vehicle requirements, no longer willing to be satisfied with whatever stock is left on the lot. Customers are much more willing to wait for a car of a particular colour to be manufactured, rather than choose a different colour car which can be driven away the same day, leading to most dealerships having a large percentage of custom ordered cars at present.

The customers are crying out for an online ordering solution, providing an alternative to the traditional dealership lot and the nuisance of haggling with car salesmen. The negotiation tactics and discrimination by some salesmen paint the industry in a bad light and have contributed to the negative perception of car yard purchasing.

TIME TO CHANGE

Never has the time been riper for a manufacturer to make the transition to an online purchase platform. Apart from the customer satisfaction aspect, the cost cutting benefit is enormous. Presently, the costs involved to stock cars in a car lot are severely affecting the ability of most car yards to turn a profit.

With land values appreciating tremendously over the last decade, providing the platform for operations is proving to be expensive. Add to that the cost of purchasing the cars from the manufacturers, insurance costs, staffing costs for the lengthy hierarchy of salesmen, managers, managers of managers etc, as well as cleaners, car detailers, transporters, licensing and other office staff, finance and insurance staff; the operating costs keep stacking on top of each other.

The car dealerships are clearly overwhelmed by these expenses and could eliminate them all with a website for customers to order from. The customer would be able to select the colour and style of their choice, as well as choosing which options they desire. Cars’ becoming overpriced from excessive options is a major problem at present, with options such as seat warmers and electronic seat belt warnings considered unnecessary and annoying by many consumers.

There are a few roles undertaken by the car dealerships that could be considered as necessary for the physical outlet to remain in place. But after careful thought, it is plain to see that these can be outsourced and pave the way for the traditional bricks and mortar dealership to become a thing of the past.

Servicing, recalls and warranties can be outsourced to one of the leading chains of automotive repairers. They already perform much of this work for customers who are looking to stay away from the normally expensive dealer servicing centres. It may even be possible to switch the licensing responsibilities to one of these major service centres to alleviate that dilemma as well.

Lastly, the customer will always want to test-drive the product before purchasing. This problem can be overcome by setting up a number of mobile test-drive centres. They can operate from a different location each day, be it shopping centres or local parks. In theory, it should result in a boost in sales, as the salesmen can actively promote the vehicles and seek customers, rather than sitting idle in the showroom waiting for someone to turn up.

Of course, the cost of the car will be thoroughly reduced as the overheads will be slashed. Price is always a major consideration for the customer and if a vehicle is offered online at a substantial discount to the normal showroom price, customers are sure to flock to the online sales platform and allow the car manufacturers to once again be in the black.

The first four months of 2009 has seen Australia’s housing prices rise by an average of 2.9%. The figures are in stark contrast to the falls seen in other international property markets this year, and have raised many questions as to why the Australian property market is bucking the trend.

Housing markets all around the world have experienced losses in the last 12 months. No property market has been immune to the value reductions, with even Australia suffering a small loss last year. But we did not come close to seeing the gigantic drops in the two major world property markets of the US and UK, who suffered with losses of around 20%.

The Australian market was primarily brought down by the falls at the higher end of the market. The properties in the top 20% in terms of price have continued to drop in 2009. In fact these houses were responsible for keeping the overall price rises at modest levels, since their dramatic drop in value was offset by a rise in the lower 80% of properties ordered by price. Read the rest of this entry »