Category: Business

Worker shortages “across all industries” are severely impacting many Sunshine Coast businesses, forcing temporary closures, exhausting owners and frustrating customers.

While the ongoing fallout from the pandemic shares part of the blame, the fingers are being pointed at other underlying contributing factors.

More affordable, convenient housing for workers is emerging as the key missing link to the problem that’s affecting large and small businesses.

Federal Treasurer Jim Chalmers hosted a local jobs forum in the new Maroochydore CBD on Thursday at the Holiday Inn Express and Suites, bringing together key stakeholders (more on this below).

It comes as mum-and-dad business owners like Eric and Francoise Pernoud work themselves to the bone to keep their patisserie café open and maintain the high standards customers have come to expect.

The Pernouds are desperate to find a barista and a kitchen staffer for their popular La Maison du Patissier at Meridan Plains and are at breaking point.

The kitchen staff member is needed to help Mr Pernoud make the breads, croissants and other baked goods, and the weekend barista is required Fridays and Saturdays from 7am to about 4pm, and Sundays 7am to 3pm.

For weeks, the Pernouds have advertised in the shop, by word of mouth, with flyers and on social media, to no avail.

The situation has become “critical” at the business they opened in March, 2018.

They have even resorted to phoning other cafes in the hope that their baristas can fill the required shifts and take some of the pressure off.

But as Mrs Pernoud laments: “Unfortunately, they are in the same boat as us. Everyone is looking for staff.”

In a Facebook post on July 27, she wrote: “Every weekend I am anxious with Eric being so exhausted, he will collapse”.

“Since we have no barista this coming Friday, we have to close for this day,” Mrs Pernoud said this week.

“We considered opening but people would abuse us if we can’t make them coffee.

“We have a client that works night shift at a well-known restaurant that is feeling so sorry for us that she will help us until the end of September, or until we find a barista.

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“Eric is working seven days a week and he is exhausted.

“As for me, over the years I had multiple serious health issues so any kind of stress nowadays will make me sick.

“My body is exhausted but my mind is also.

“My husband and I are perfectionists and to not be able to do what we want because we’re short staffed is not acceptable. So, we put a lot of pressure on ourselves.”

While visiting Maroochydore, the federal treasurer Dr Chalmers urged people to put forward their ideas to fix the problems affecting businesses so places like the Coast could reach their potential.

“There won’t be unanimous agreement around all of the ideas put forward by unions or business or others but there is an opportunity for us to find common ground on issues around skills, perhaps migration, issues around enterprise bargaining,” he said.

“Our aspiration here is a good, well-trained, enthusiastic worker for every business that needs one and a good, well-paid, secure job for every Australian that wants one.”

Do you have an opinion to share? Submit a Letter to the Editor with your name and suburb at Sunshine Coast News via: [email protected]

Caloundra Chamber of Commerce CEO Brady Sullivan said the worker shortage had been a “significant issue” for the region “across all industries” during the past year.

The chamber recently held a lunch with major Coast employers, representing more than 5,000 jobs in the region, with indications larger companies were facing similar workforce shortages to small and family businesses.

Mr Sullivan said traditions and hospitality staff such as chefs were particularly in demand, with a lack of affordable housing compounding the issue.

In the 2022 March quarter, the unemployment rate on the Sunshine Coast was 4 per cent.

“It’s the lowest unemployment we’ve had for a very long time and our youth unemployment has come down drastically as well,” Mr Sullivan said.

Mr Sullivan said one significant factor that had altered the local workforce was big changes in the types of businesses and jobs.

“Historically, it used to be ‘Come and live at the Coast, we’ll pay you $20,000 less and you’ve got to pour beers, work in retail or be a chippie,’ he said.

“Now the conversation is that the depth and breadth of opportunity on the Sunshine Coast has grown so much.

“We’ve have start-up tech companies such as GreaseBoss and Helimods, who export products globally but we also have a lot of new businesses moving into the region who see their market as broader than the Sunshine Coast.

“The number of jobs and types of jobs here are drastically different to even 10 years ago.

“Because of the workforce shortage, this means the employee has the power in the relationship.

“They have more power to say, ‘This is what I want to do and this is how much I want to be paid’.”

Mr Sullivan warned that positions would remain unfilled without more affordable housing.

“We can’t say, ‘Hey, we’ve got heaps of jobs here, come on up and live on the Coast and take these jobs’ if they’ve got nowhere to live.

“An 18 to 25-year-old who’s vastly under-represented on the Coast in terms of workforce percentage can’t pay $6-800 a week for a house.

“So, we need to think – is it a two-bed, one bathroom unit that’s $300 a week that’s affordable for them?

“That’s probably the biggest thing that we can do as a region.”

To apply for the La Maison du Patissier positions, message the cafe on social media or email [email protected].

Australia’s apparent cul de sac of a property market looks like it’s having a bit of a winter renaissance, with new data showing a handy surge in auctions and listings, as more homes stay on the market, longer.

With glamor cities like Hobart hitting record listing volumes (the Tassie capital is up 70% on last year) it’s a lot more of a buyers’ game out there, with CoreLogic seeing auction activity on the rise across Australia’s combined capitals.

And according to PropTrack economist Angus Moore, the total stock of properties listed for is almost up 5% compared to July last year.

“While winter is typically seasonally quieter, (this) is the largest year-on-year increase since 2010,” he said.

While Moore reckons that’s in part due to the boom in available stock for sale – and properties taking longer to sell – it’s also partly driven by last year’s capital city lockdowns.

“Sydney recorded its largest year-on-year increase in total stock available on record, with total listings up 30.7% this year compared to the lockdown-affected levels in July 2021.”

The stock of properties listed for sale in Sydney and Canberra is around 5% above the prior decade average, and around 2% below in Melbourne, according to PropTrack.

“Selling conditions have begun to temper from their very strong levels earlier in the year, while the measurements of buyer demand have declined off their high levels, it is taking longer to sell homes.

“The wave of new supply coming to market over the first half of the year, particularly in Sydney, Melbourne, and Canberra, has lifted the stock available on market and helped make conditions a bit less competitive for buyers,” Moore added.

More houses, less cost

Aussie home prices are falling now across most cities after the mad pandemic growth topped multi-decade highs in 2021.

With the Reserve Bank of Australia (RBA) raising interest rates like a loon over the course of 2022, borrowing capacity for prospective buyers is being swiftly curtailed, which is in turn putting downward pressure on prices in the near-term.

Auction this:

After dropping sharply the previous week, capital cities are expecting a mini-auction boom with 1,646 capital city homes scheduled to go under the hammer, CoreLogic predicts.

While auction volumes are up 11.9% compared to the previous week (1,471), this week’s auction numbers are still -14.0% below the recent high recorded two weeks prior (1,913) and -9.7% below the number of auctions held this time last year (1,822).

“Further out, fundamental drivers of demand remain strong, with unemployment low, wages growth expected to pick up over this year, and international migration returning,” Moore says.

“As we look towards the spring selling season, activity in property markets around the country is expected to pick up over the next few months in line with the typical seasonal peak in activity.”

Check it out, Christian’s bullies:

• Melbourne (+10% YoY), Perth (+4.6% YoY), Darwin (+14.4% YoY) and Canberra (+24.8%YoY) also experienced increases in the total number of properties listed for sale in July.

• Options remain more limited in Brisbane and Adelaide, where total stock is more than a quarter and a third below pre-pandemic levels, respectively.

• New listings nationally were down 12.2% month-on-month in July, though it was a busier month than the same time last year, with new listings up 6.5% year-on-year.

• All capital cities saw new listings down in July compared to June, which is typical for the winter period.

• New listings in regional areas were also quieter in July, down 11.4% month-on-month.

Even so, it was busier than is typical for the middle of winter, with new listings up 3.2% year-on-year regionally.

And this week we’re also doing a special on everyone’s favorite capital city:

Hobart – capital of the Apple Island state of Tasmania, sits nestled and comfy on the River Derwent, and on the new listings front, Hobart is down around 13.5% for July as the property market went about its business through the usually quiet winter period.

That said, from fashionable Salamanca Place, and its old sandstone warehouses hosting galleries and cafes to nearby Battery Point, with its historic narrow lanes and colonial-era cottages, conditions are way, way busier than last year. Actually they’re hot, with new listings up 25.1% year-on-year.

With 1,270m-high kunanyi/Mt Wellington, with sweeping views, plus hiking and cycling trails its backdrop, the stronger-than-typical winter so far has given buyers more to choose from in Hobart than has been the case for much of the past couple of years.

The total stock of properties available for sale in Hobart increased 0.8% month-on-month and was 70% higher than at the same time last year – the largest ever year-on-year increase on record in any city. Boom.

Peter Farquhar’s regional Tassie was up slightly too in the month (2.4% month-on-month), which brought them up 5.3% higher year-on-year.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) had a very strong day and raced notably higher. The benchmark index rose 1.1% to 7,071 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to fail

The Australian share market looks set to end the week in the red following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 19 points or 0.3% lower this morning. In the United States, the Dow Jones rose 0.1%, the S&P 500 dropped 0.1%, and the Nasdaq tumbled 0.6%.

Oil prices charge higher

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a good day after oil prices strengthened overnight. According to Bloomberg, the WTI crude oil price is up 2.5% to US$94.22 a barrel and the Brent crude oil price is up 2.2% to US$99.58 a barrel. Traders were buying oil after the IEA increased its 2022 demand growth forecast.

ResMed results

the ResMed Inc. (ASX: RMD) share price will be one to watch on Friday. This morning the medical device company is releasing its fourth quarter and full year results. In respect to its full year result, the market is expecting ResMed to report a profit after tax of US$825.6 million for the 12 months ended 30 June.

gold price falls

Gold miners such as Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a subdued finish to the week after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.6% to US$1,802.60 an ounce. Traders were selling gold amid the prospect of more rate hikes by the US Federal Reserve even though there are signs that inflation is peaking.

IAG results

the Insurance Australia Group Ltd (ASX: IAG) share price could be on the move today. This morning the insurance giant is scheduled to release its full year results. According to CommSec, the market is expecting the company to report a full year net profit after tax of $248 million. From this, IAG has been tipped to pay a final dividend of 3.1 cents per share.

The dust on the massive Woodside deal only settled 74 days ago, but already Henry has steered BHP into another M&A maelstrom via an $8.3 billion bid for copper, gold and nickel producer OZ Minerals.

The offer was vigorously rejected this week by an OZ board that was convinced the $25 per share offer seriously undervalued the long-term opportunity that could come by combining the two companies’ copper mines in South Australia and nickel assets in Western Australia.

But few think the matter ended with that rejection.

“There are no sureties here, but you would think that [$25 bid] was the opening except for BHP if they were seriously considering OZ Minerals, which they obviously are,” said Blackmore Capital chief investment officer Marcus Bogdan.

Blackmore’s blended Australian equities fund owns both BHP and OZ shares.

Bogdan said he was pleased to see BHP acting opportunistically amid a slump in copper prices and the share prices of copper producers.

But he would be happy for BHP to spend more on a higher bid for OZ.

“I am not sure it needs a three in it [an offer priced above $30 per share] but it certainly needs to be materially above where it is today,” he said.

“We don’t have a definitive price on it, but it is certainly higher than the $25.”

‘Sharp focus’ on critical areas

Power is floating at the best of times and that was reinforced to Henry when he assumed the role of chief executive on January 1, 2020 and immediately had his first year in the job hijacked by the pandemic.

The word filtering out of BHP through 2020 was that Henry was frustrated by the situation; Melbourne’s strict lockdowns served as an apt metaphor for the way his plan to reinvent BHP had been put on hold by the immediate priority of managing a global workforce through a health crisis.

A disciple of thorough, data-driven process, Henry would buckle at the suggestion that an earthly emotion like frustration could influence strategy at a huge multinational like BHP.

But in February, Henry said the pandemic had left him with a “sharp focus on the critical few things, and getting them done super quickly.”

“As a big organization, too often we’ve failed into trying to do lots of things in parallel over a longer timeframe,” he said then.

“I’m a big believer that you should do fewer things, but get them done more quickly, then move on to the next few things.”

An extraordinary boom in iron ore and coking coal prices over the past three years has left BHP’s balance sheet in rude health, meaning Henry can move as quickly as he likes on deals.

Unification of the corporate structure also means BHP will find it easier to offer scrip when acquiring.

Two and a half years in, the Henry era is clearly about decarbonising BHP’s portfolio and gaining more exposure to the commodities that will thrive in a future focused on electrification and environmental sustainability.

Simplistically, the OZ bid is on-strategy because it would provide BHP with more copper and nickel; two metals that are expected to enjoy strong demand as the world urbanises, buys more household appliances and tries to decarbonise through electric vehicles, batteries and other means.

On closer inspection, it’s also about solving two problems; BHP doesn’t dig up enough nickel ore to run its Kalgoorlie nickel smelter at full capacity and buying OZ would give it extra volumes through the West Musgrave nickel, copper and cobalt project, which is ready to be turned into a mine costing more than $1 billion.

Aside from volume, West Musgrave’s ore contains the right balance of magnesium and iron that the Kalgoorlie smelter needs to run well; a chemistry conundrum that has increasingly occupied BHP’s nickel division in recent years as the profile of its ore has gradually changed through depletion.

Another effort to make Olympic Dam work

The other puzzle that BHP could solve by acquiring OZ – and the biggest motivation behind the deal – lies at South Australia’s Olympic Dam.

There are many reasons why Olympic Dam has been a difficult mine for BHP and delivered close to zero return on capital employed (ROCE) since it was obtained via the acquisition of Western Mining Corporation 17 years ago.

High uranium levels are the first challenge; state, federal and international governments have strict rules about the transport of radioactive materials such as uranium.

Olympic Dam’s high uranium content forces BHP to fully process the ore right through to the end of the energy-intensive process that makes red sheets of metal, about one square meter in size.

Most other copper miners, including OZ, have less uranium in their geology so can transport and export their copper as a gray concentrate that looks like soil.

OZ’s concentrate is an intermediate product and so requires far less processing; the Adelaide company’s customers do the smelting of the concentrate to turn it into pure metal.

Uranium is not the only challenge; the orebody at Olympic Dam is enormous but very deep underground and the copper occurs inconsistently throughout it, which is the opposite of what mining companies prefer.

Bringing the high-grade concentrate from OZ’s two nearby mines and blending it with the stuff BHP digs up at Olympic Dam would enable BHP to deliver a more consistent and predictable product into its smelter and refinery.

The blended product would also likely contain more copper than BHP sometimes puts into the system; the same volumes of a higher grade feedstock would derive more copper out the back end of Olympic Dam.

“Often times, when people think about growth, it’s all around growth in production. Now, growing production is a big lever, but really we should be thinking about growth as being growth in value, ”said Henry in February, when talking about his attitude from him to M&A.

‘Single point failures’

Other challenges at Olympic Dam are man made; Western Mining built infrastructure befitting a mid-tier miner.

BHP would have done it very differently if it had built the mine.

The mine design, where the capacity of the mine is roughly the same as the capacity of the refinery and the smelter, means that if one part of the system fails or underperforms, the whole system underperforms.

In that sense, Olympic Dam runs more like an integrated steel mill than a mine; there is “just in time” delivery from one part to the next unless it struggles.

Insiders refer to this as Olympic Dam’s series of “single point failures”.

If BHP had access to extra copper concentrate volumes from OZ, the smelter and refinery at Olympic Dam would be the bottleneck in the system; a much better scenario than the mine being the bottleneck.

BHP could fix Olympic Dam’s “single point failure” problem by building new mine shafts, concentrators, smelters and refineries, but it would be expensive; we can reasonably deduce that spending $8.3 billion buying OZ is the cheaper option.

There might also be productivity benefits at the two OZ mines – Prominent Hill and Carrapateena – if paired with Olympic Dam’s smelter and refinery.

OZ must mine selectively to avoid patches of ore that contain high levels of uranium because its regulators and customers won’t tolerate transportation of a concentrate with high uranium levels.

There have been numerous occasions in the past decade when a batch of ore from Prominent Hill was processed at Olympic Dam because it contained higher than normal levels of uranium.

Many believe uranium will become a bigger issue for OZ as its mines get older, the easiest bits of the resource have already been cherry-picked.

A full combination with BHP would reduce the need for Prominent Hill and Carrapateena to be mined selectively to avoid uranium, and that would probably deliver a productivity benefit and extend mine life.

OZ and BHP have talked on numerous occasions over the years about establishing a regular offtake agreement for OZ’s concentrate to be processed at Olympic Dam.

OZ has traditionally been reluctant to become too reliant on its big neighbor, and transactions have been sporadic.

If a merger can’t be struck, a deal for BHP to buy more of OZ’s concentrate could be a consolation prize.

“I think it makes strategic sense for BHP as it de-weights its exposure to iron ore and brings in a commodity that will become a more significant part of the portfolio,” says Bogdan.

“You want to be exposed to those metals that are going to be beneficiaries of decarbonisation and both copper and nickel form a key part of that.

“I think this transition that we are seeing is probably one of the most significant themes of the next decade.”

winners and losers

All these factors have given job candidates the upper hand. Employers will need to be the ‘whole package’ for their pick of top talent as the cost of living continues to rise and frequent unsolicited messages from recruiters on LinkedIn become a common experience across the workforce. In this context, the “old tools” of promotions and money don’t talk as loudly as they used to, says McEwan.

“What if you were using a different set of tools?” he asked, pointing to more reasonable workloads and better work-life balance. Companies like Atlassian, known for its ‘TEAM Anywhere’ policy and approach to the environment, aren’t struggling for talent to the same degree other companies are, he added.

“It’s that radical flexibility that people really want.”

But the proactive strategy of poaching is one that generally benefits bigger employers, according to Indeed career coach Sally McKibbin.

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“Unfortunately it’s often smaller organizations that fall victim to talent poaching as they may find it difficult to compete with larger organizations when it comes to enticing salaries, career development opportunities and various other perks and benefits that large organizations can offer,” she said.

Recruiters are enjoying high demand for their services, while some organizations choosing to handle the poaching themselves are compiling “internal databases” of employees at rival firms, McKibbin said.

Workers might find themselves taking part in the hunting process. “Employee referrals can be a brilliant source of identifying targets,” she said.

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