1. 56 AGENDA AGENDA 57
Profits of gloom as dollar booms
Industry bearing the brunt RETAIL
AS MAJOR retailers reel
from a surge in online
From Page 55 due to the higher cost of living under manufacturer Cook Asia Pacific in- shopping fuelled by the
‘‘The value of the dollar is keeping the current exchange rate. vested in a new $A30 million manu- strong Aussie dollar, some
our traditional market of Europe and He said two years ago, his facturing facility in Brisbane. small retailers say it is not
America away. . . while driving Aust- $US50,000-a-year scholarship Finance director Mark Muller said all bad news.
ralians off to exotic destinations,’’ he covered tuition and cost of living, but that equated to a cost of $US23 million Creator of Queensland
said. now barely covered his tuition, forcing for its parent company, global com- children’s designer
‘‘When your budget gets blown out him to take out a US loan. pany Cook Medical. clothing brand Tilly &
by 20 per cent and you are a budget ‘‘If I finish my education here I am ‘‘If we would actually do that now it Otto, Kavala Williams said
traveller, (holidaying in Australia) is a looking at going into debt. I am at would be $32 million and in a market a strong dollar had cut her
big decision. $20,000 (debt) now, but it could be where the profit’s just not the same as production costs.
‘‘You are not going to stay as long, closer to $100,000 by the time I’m two years ago,’’ Mr Muller said. Mrs Williams (pictured),
and you are not going to spend as done,’’ he said. ‘‘The cost of our labour in world based in the southeast
much.’’ Queensland’s film industry has also terms has gone up 50 per cent in two Queensland seaside
Tourism Whitsundays CEO Peter taken a battering, with some Indian years,’’ he said. suburb of Redcliffe, said
O’Reilly said international tourists film producers now opting for cheaper ‘‘If we were trying to do that the cost of importing
now had half the money to spend on locations. investment now, we may not get the fabric from the US for her
trips Down Under and were voting Two years after attracting the big- same decision.’’ children’s line had been
with their feet. budget Narnia film, the location is no ‘‘There is not a lot of incentive right slashed by 20 per cent
COMMENT
SUGAR The decline in the backpacking
market had been the most noticeable,
longer proving as attractive for over-
seas productions.
now to increase manufacturing out of
Australia.’’
compared with last year
due to the dollar.
EVERY time the Australian Australian dollar rises, the return which Mr O’Reilly linked to a drop in Gold Coast visual effects company Mr Muller said the soaring cost of ‘‘That is definitely a Terry McCrann
currency rises in value against its to Queensland farmers declines. international students. SMI Photon blamed the strong dollar power and water and lack of govern- positive for me because I
US counterpart, Queensland Queensland Canegrowers chief There are currently 41,500 less for a decision to move its primary ment funding for clinical trials to bring import all my fabrics from
canegrowers can kiss goodbye to
millions of dollars in earnings.
The soaring Aussie dollar has
executive Steve Greenwood said
the Aussie strong dollar was a
huge dampener for an otherwise
international students studying in
Australia, compared with this time last
year, according to Federal Govern-
business to China about a year ago.
‘‘The Australian dollar is virtually at
parity with the US dollar . . . and
new products to market were part of
the problem.
Queensland Treasurer Andrew
the US. The strength of
our dollar has certainly
lowered my production
Battling a
proven to be the achilles heel for
cane farmers, who are now
earning a sweet $450 a tonne for
strong industry.
‘‘For every cent increase in
the dollar, at the moment we are
ment figures.
International student ambassador
for Brisbane Matthew Ram arrived in
looking like it will stay high for a long
time ahead,’’ Photon chief executive
Dale Duguid said in a statement
Fraser said a massive drop in exports
had been most prevalent in the
resources sector, with hard coking coal
costs,’’ she said.
She was already making
savings by importing all
two-speed
exported raw sugar.
The world sugar trade operates
in US dollars, meaning that as the
seeing a reduction of $4.50 per
tonne of sugar,’’ Mr Greenwood
said.
Queensland to study medicine on a
US scholarship two years ago.
But he is now considering leaving
explaining the decision.
For exporters, the exchange rate has
frozen any expansion plans.
exports falling by $1.8 billion over the
March quarter.
her fabrics at a third of the
local price and by selling
online.
economy
for home halfway through the course Two years ago, medical equipment fraserk@qnp.newsltd.com.au OUR dollar is headed higher. Only
another shock global meltdown will
stop it.
TOURISM FILM It will certainly go through the
$US1.10 it just failed to reach a few
THE SUN is shining and skies a number of seats on their sailing TWO years after luring the weeks ago.
clear blue, but tourism operators boats would be booked two $150 million Narnia blockbuster At some point it will probably hit
in the Whitsundays are weeks out from departure date. to our shores, big-budget film $US1.20. Indeed, if the China boom
desperately awaiting the usual But today, those same boats, producers are far from beating continues, it could quite possibly
rush of tourists. which take groups of up to 25 down the door. reach the all-time record just shy of
Tourism providers on the people, are empty two to three The embattled Queensland film $US1.50 of the early 1970s.
doorstep to the Great Barrier Reef days out from departure date. industry is struggling to attract And in future it could come right
say not only has the strong dollar Ms Shaw said regular bookings big films, with Gold Coast-based back to parity with the greenback.
made the destination less of their sailing trips by production company boss George That’s what a floating currency does
attractive for overseas visitors international students had also Vasiliadas saying there is a low and will ‘‘do more of’’ in an increa-
from the United Kingdom and the dried up. chance of repeating the success singly volatile world.
US, it was also sending droves of She said price-cutting in the soon with the dollar so strong. Indeed, it was only US63¢ barely
domestic holidayers to cheaper industry had added to the ‘‘With the big-budget films, I two years ago, after being almost at
locations overseas, such as Bali. damage. can’t see them coming in a hurry,’’ parity the year before. So is it just a
This time last year, Whitsunday ‘‘Just in the last two days we he said. ‘‘A lot of these offshore case of riding out the high dollar for
Sailing Adventures marketing have had to lay off our rep down productions will have two to our manufacturers, tourism
director Gabby Shaw said half the in Sydney,’’ she said. three countries as an option operators and the like?
where they’d like to film.’’ For some, yes; for many, no. This
time, it really is different.
The production lines that are
closed down won’t be re-opened
with a lower dollar. They will have
disappeared to China and into
EXPORT history. But the foreign tourists will
STUDENTS FOR Brisbane manufacturer Allan
come back with a lower dollar and
the growing prosperity in Asia
WHEN University of Queensland business Morrison, managing director of creating more of them.
student Mowd Hassan chose to study in BSD Robotics, a surging dollar can Our wine, education and similar
Australia two years ago, affordability was a only bring bad news. industries sit somewhere in the
key part of the decision. With 98 per cent of goods middle. If they can ride out the high
Compared with other study destinations produced at BSD Robotic’s Acacia dollar, they can prosper when and if
of a similarly high standard, Australia was Ridge factory exported, a slight a lower dollar returns.
the less expensive option. increase in the dollar creates a Indeed, those that really add
But today’s less favourable exchange huge impact on its international value will survive even in a
rate has taken its toll on Mr Hassan, whose competitiveness. permanently high-dollar world. But
parents are now having to send more A few months ago the it will be much tougher and demand
money to cover his living costs than when company, which manufactures real value to foreign customers.
he began his studies last year. laboratory instruments, was That’s one of the three things that
‘‘It has increased tremendously,’’ he said. forced to offer prices to make this high-dollar future
‘‘My parents have to send me 900 distributors in Australian dollars different. We have never had a
ringgit ($247) just to get (text) books. rather than US dollars, as a buffer mining boom as big – creating a
‘‘It has been a taxing time for me in against an unfavourable dramatic, permanent ‘‘two-speed
terms of my study and cost of living over exchange rate. This meant economy’’.
here. I think it is really expensive here.’’ passing on some of the pain to The second is the internet.
Mr Hassan, who is on a Malaysian distributors and customers. Consumers here can access cheap
government scholarship, shares a house in ‘‘There is absolutely no doubt foreign prices directly, bypassing
the university suburb of St Lucia with six that it has been a problem,’’ Mr local retailers.
other people. Morrison said. The third is the decline of the US
This year the rent increased by $50. He and ultimately also the mighty
said the rising cost of fruit and vegetables greenback. We don’t want to sink
had also made it harder to make ends meet. with it.
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