BHP has announced it will be reducing the amount of time it takes to pay its suppliers to thirty (30) days:
This has a number of significant, positive impacts on its supply chain in the Mackay region. The effects will be felt across hundreds of firms in the region.
Earlier this year Lytton Advisory did analysis on the impacts of extended payment terms for the Resource Industry Network, which included some modelling of different effects. Details of the report are publicly available:
Last month I introduced day two of the 2018 PNG Investment Conference in Brisbane. This included an overview of some key PNG infrastructure sectors and an observation that the country needed to increase its infrastructure spending.
The Economic Society of Australia recently polled a number of senior economists on its National Economic Panel, posing the following question:
“As interest rates are at low levels by historical standards, federal and state governments, despite their public debt levels, should be borrowing more than they currently are to invest in infrastructure”.
Just over 70% of respondents either agree or strongly agree, and on a confidence-weighted basis, 75% agree or strongly agree. This is a rare consensus.
It is worth reading the individual responses. This strong consensus is backed by a requirement for solid cost-benefit analysis, case-by-case consideration of projects and a recognition that any infrastructure spending is not automatically a ‘good thing’.
Do you think we should increase public debt now to invest in infrastructure?
Very pleased to see PNG and Australia have signed an Agency Support Arrangement for the PNG Department of Transport this month. I led an earlier Agency Capacity Diagnostic of the Department for the PNG Transport Sector Support Program.
“These diagnostics are undertaken by independent consultants and provide the agency management with objective assessments of capacity, including through the identification of existing strengths and skills gaps. The diagnostics also provide recommendations for addressing agency needs. TSSP then works closely with the Australian High Commission and agency heads to develop programs of structured capacity support to improve performance and address identified priority capacity gaps. This is formalised through Agency Support Arrangements (ASAs) which detail the multi-year frameworks for funded activities to bridge some of the gaps highlighted by the diagnostics.” (Source: TSSP website)
A great outcome which also included a lot of hard work from senior officers in the Department, the Transport Sector Support Program and at the Australian High Commission.
[Link to article]
A great collaboration with the Department of Transport and Main Roads and Aurecon.
Lytton Advisory prepared cost benefit analysis modelling of this active transport infrastructure program for TMR, drawing on great research and analysis undertaken by the project team.
Queenslanders will continue to benefit from TMR’s engagement in developing further active transport infrastructure.
Many thanks to all who contributed to this.
Very pleased to see that my colleagues at Queensland Department of Transport and Main Roads and Aurecon will be presenting our analysis on the economic benefits of cycling infrastructure at the National Traffic and Transport Conference of AITPM in mid-August. The abstract is available here:
Image: Southbank, Brisbane. Source: Brisbane Tourism.
Clear thinking is a prerequisite for good economics. This leads to improved decision making, and that creates better outcomes.
The next time someone claims to be making an economic decision or proposes an economic course of action; dissect their claim or assertion. You do not need to be an economist to do that. There are five simple signs for good economic decision making:
- Decision to be made is articulated
- Available choices are considered
- Measurable objectives are described
- Input variables are identified
- Relationship between variables is determined
Without these famous five, the risk is the economic decision may be dead on arrival.