Melbourne: the spiritual home of AFL, the W class tram and some of the nation’s most enterprising young law firms. ALB investigates.
There’s talk of a “three speed economy” in the air: resource-driven Queensland and Western Australia leading the national economy, followed by the ex-rustbelt states of Victoria and South Australia and finally the troubled NSW bringing up the rear. Notwithstanding dire predictions over the impact of the proposed resources super profits tax, it is an analysis which makes sense – but if you talk to Melbourne firms, they’re very comfortable that they were in exactly the right place for the GFC and are now in exactly the right place for the recovery.
“Victoria was the least hurt [by the GFC],” says Herbert Geer’s Bill Fazio, who has observed the past year from the three vantage points of his firm’s Melbourne, Sydney and Brisbane offices. “Sydney got the downturn harder and faster, Victoria was the least hurt and Brisbane hurt the most in the end – I think the slowdown in property development in South East Queensland really hurt them and Brisbane had more of a bubble pattern. There was more fear in Sydney at one point. But things are more stable in Victoria – less ups and less downs.” Access Economics has predicted that Victoria’s economy will grow by 2.3% this financial year and 3.4% for the next year – second only to Western Australia and interestingly ahead of Queensland. “It’s feels solid – there’s no rustbelt feeling,” says Fazio. “People are optimistic - they’re not worried about losing their jobs.”
It is always difficult to ascertain incipient economic trends, but there is anecdotal evidence that Australian companies are beginning to look more closely at Victoria – either as a potential growth market for their services, or as a place to relocate core parts of their businesses.
“I’ve had clients tell me that it’s cheaper to do business in Victoria than it is in Sydney. By the time they take into account the taxes they pay and the rent they pay it makes sense to downsize Sydney and upsize Victoria,” says Damian Paul of Macpherson+Kelley (M+K). “I wouldn’t say it’s enough to be a trend, but I’ve heard it a few times from clients – particularly in the manufacturing space. They tend to operate on a fairly low margin and if you only operate on a single digit margin it doesn’t take much for those things to encroach into that bottom line.”
Go to page: 1 2 3 4 5 6