In this show I ask Ian Rodrigues whose company specializes in taxation, business and financial Services as well as wealth management, how he believes Australia is travelling economically on the world stage, what the indicators are on Australia’s economical well-being and what impact be believes the Government pressure on foreign buyers will have on the property market

Transcript:

Kevin:  I want to introduce you to a new guest. He’s going to be a regular to the show, too. Ian Rodrigues is a director of Bishop Collins Group. He’s a chartered accountant specialized in taxation and superannuation.

By way of introduction, Bishop Collins Group are experts in taxation, business and financial services, as well as wealth management, and in fact, on behalf of investors manage somewhere between $70 and $80 million worth of property.

Ian, welcome to the show. I look forward to your contribution.

Ian:  Thanks, Kevin. It’s good to be here with the listeners, too.

Kevin:  I want to ask you the first question. It’s bit of an overreaching question, I guess, about your view on how Australia is traveling economically on the world stage right now.

Ian:  Yes, Kevin, I think for a lot of the listeners – and ourselves – there’s so much information out there that we’re bombarded with on an hourly, if not daily, basis about the economy, and so much information, much of it conflicting. Many, many views from economists.

There was always a good old joke, back in the university days, about economists, about assuming things and all that. A lot of those predictions are sometimes based on very academic or difficult models. Predicting simple things, like what will happen with rates or exchange rates, there’s a range of views about all of that.

So, whenever I’m looking at the Australian economy, I strip it right back to the really, really basic stuff when we’re looking at an economy. There are some very basic leading indicators and the metrics that you look at that pretty quickly tell you what sort of shape the economy is in.

Kevin:  What are the indicators that you look for to measure the Australian economy and how well we’re going?

Ian:  The key one that I’m always watching is business confidence. There are a couple of surveys of business confidence. And that’s a leading indicator, because it’s telling you where the economy is likely to be in the future.

Our politicians know deep down that to get an economy moving, you can’t just tax it more and you can’t just talk it up. You can’t do those things. Businesspeople have to be making investment decisions, and they will only make that when they’re feeling confident.

Now, when you keep changing the rules or threatening to change the rules… The point I’ve made even about simple things like negative gearing, we’ve had so much oxygen wasted on what the changes should or could be and all of that. But there hasn’t actually been a change to negative gearing for a very, very long time, but it makes people very nervous about making investment decisions because of the uncertainty.

The same thing applies to business. If you keep changing the rules and creating uncertainty, businesspeople will sit back and wait until they’re confident to make big investment decisions – buying capital things, employing more staff. And when they do those things, when businesspeople make decisions, it’s what drives the economy.

Kevin:  Just your view now on the likely impact of what’s happening overseas, with America and the machinations there with China and so on. How much of an impact do you think that will have on Australia and our economy?

Ian:  I think it all does have an impact. It’s probably very hard to measure very directly how much that is. But I think, again, it’s one of those confidence things. Whether you have particular world leaders in place and whether they’re pushing us down dangerous paths and all that comes into the equation, but it’s probably been the case for many,