Andrew Charlton: A Popular Misconception

Andrew Charlton is an economist and served as a senior advisor to Kevin Rudd, the former Prime Minister of Australia. He is also the author of two books: Fair Trade for All, which he co-authored with Joseph Stiglitz, and Ozonomics. “The most popular misconception in economics and politics is that if the economy is humming along, the government must be doing a good job,” he has written. “It must be a capable economic manager and its policies must be working.”

This is not necessarily so, he wrote in a summary of Ozonomics published in Centrepiece. Rather, this is an assumption that politicians promote during good economic times. “The idea that they hold the fortune of the nation in the palm of their hands appeals to them, and they want the public to take the strong economy as evidence of their skill and omnipotence.”

The media is part of the equation, he says, because of its tendency to simplify with heroes to give credit to when all is well, and villains to blame when it isn’t.

In reality, he argues, politicians have much less control over the economy than they let on. “Certainly, there can be policy successes and policy failures, but more often than not the condition of the economy is determined by factors outside the control of politicians.”

Claims about the state of the economy made by any government, he says, should be thoroughly scrutinized, because what the public believes about its wealth influences decisions made about the future.

Dr. Andrew Charlton holds a doctorate in economics from Oxford University, and has worked for the London School of Economics and the United Nations.

Visit https://andrewcharltonau.wordpress.com/  to know more about Andrew Charlton.

Andrew Charlton: New Opportunities

Andrew Charlton is a co-founder and Director at AlphaBeta, a strategy advising business that serves clients across Australia and Asia.

He and some of his colleagues have traveled to China in September 2015 to find out how the changes in its economy will affect Australia, China’s biggest trade partner. They met with dozens of business leaders and government officials and soon determined they were asking the wrong question. What they really need to find out, he said, is how Australia can adapt to make sure it continues to profit, even as China’s economy changes.

“We continue to believe that China’s economy will slow further,” he wrote in a report prepared after the China trip. “But, for Australian businesses, more important than how fast China grows, is the question of where it grows?” China’s economy, he said, is not just slowing down. “It’s changing lanes. To make the most of new circumstances, Australia will have to change as well.”

The trip confirmed what he and his AlphaBeta colleagues had already determined. The present economic situation in China presents growth problems for Australia that could last as long as ten years. The good news is that Australia can act to take advantage of new opportunities that come with the changes.

Andrew Charlton was a Senior Economic Advisor to former Australian Prime Minister Kevin Rudd. He is an Oxford-educated economist who received his doctorate as a Rhodes Scholar. He is one of the few Australian economists to anticipate the slowing in China’s economy and its impact on commodity prices, questioning as early as 2011 whether China would be able to sustain its double-digit economic growth rates.

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Andrew Charlton's Experience with Coles

Coles Liquor is benefiting from more focus on the problem division, says Wesfarmers CEO Richard Goyder.

Wesfarmers stated that Coles’ same store food and liquor revenuewas up 3.5 per cent in the third quarter, after correcting for the inclusion of New Year’s Eve in the prior period and the timing of the Easter holiday.

Online trade paper, The Shout, reported that with the liquor business stripped out, Coles’ food increased a stronger 3.9 per cent for the period, but Goydersaid he was not troubled by this discrepancy.

“I’m not too worried about the drag on sales growth, because some of the sales we’ve been having in liquor haven’t been particularly profitable sales,” Goyder said.

“I’m not as concerned with that as I am improving fundamentally the profit of the liquor business.”

Overall sales for the third quarter were $6.7 billion, up 3.9 per cent on the last year. Food and liquor revenue were up 4.7 % to $21.7 bn for the year to date.

“[The Liquor business is] about 10 % of Coles’ sales and half of that in terms of profit,” Goyder said.

“Ultimately we’d want it to be carrying its weight so the profitability’s got to be improved, that’s through stronger stores, improved mix, better pricing.”

“It’s getting more attention at the moment... and we’re making some steady progress, I think Andrew Charlton and the team are doing some very good work on it.”