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Between 2015 and 2017 Australia is going to be hit with three unprecedented tsunamis. The three huge storms will fundamentally change the nation and affect middle class salaries over a wide area, the share market (particularly banks and retailers), plus dwelling prices in many places. These are just a few vulnerable points.

Today I will attempt to set out what looks like happening and what employment, business, investment and other strategies you will need to consider in preparing for the three tsunamis.

Clearly this will be an unfolding situation. Today all media outlets are full of just one tsunami – in the motor industry. If anything they have understated its devastation because it will happen around the same time as the vast gas, coal and iron ore construction projects are wound down. As the tens of thousands of white and blue collar workers from mining industry suppliers etc are stood down from these investment projects they will seek jobs elsewhere. 

As they do, they will be hit not only by the motor tsunami but a third tsunami which will rival the first two – in retail. The first two tsunamis were always going to hit retail but by imposing crazy shift allowances, the swing to online trading is going to accelerate. A large numbers of retail workers are going to either have their hours cut back or be retrenched and it will all happen in the 2015-17 period. And guess what? In 2016 it will be an election year.

Australia has never encountered anything like three tsunamis at once in its post-war history. Unfortunately neither Tony Abbott nor Bill Shorten understand the magnitude of the three tsunamis. They soon will – but it’s now too late. They are coming and it’s time for ordinary Australians to prepare for these events and aim for high ground. It’s true the biggest blows will be in Victoria, South Australia, Queensland and Western Australia. But New South Wales will not escape. 

In terms of the effects on Business Spectator readers, the three biggest areas will be executive salaries, the value of businesses and the blows to banks and retailers and their shares.

The main offsetting factor will be the massive Chinese investment in Sydney and Melbourne real estate development.

So here are strategies you should consider (and I invite you to contribute more):

There will be a huge glut of well-qualified and experienced middle managers from mining projects, retailers and those related to automotive. They will include accountants, engineers and people managers. If you are involved in the tsunami industries of mining investment, auto or retail at least consider jumping ship now. In many cases (particularly auto) your retrenchment pay will be so high that you will be forced to stay on to the end. In mining investment you may be on such a high pay level that you also can’t afford to jump early. Save hard and go for a job at Roy Hill if it goes ahead.

If you can jump ship, look for employment in an area that is less vulnerable to the tsunamis and don’t be frightened to take a pay cut.

If you are in a relatively safe area, stay there and try to enhance your position. Do not press hard for pay rises unless you are certain that you are indispensable. In simple terms, next year there are going to be people to replace you who will sell their services for a far lower price than you. And they may be better than you.

The effect on the value of many businesses will be devastating. A large number of the motor parts companies have foolishly signed retrenchment deals that mean that all the equity in the business flows to the workforce rather than the banks or shareholders. The owners will be wiped out but banks will also incur losses. Currently few balance sheets include retrenchment as a contingent liability. The losses the banks will suffer will cause them to be much more cautious lending to businesses that have long-serving employees. Business values will therefore fall.

Be prepared to buy cheap assets (not the staff involved) and rearrange the operation on the basis of a series of independent contracts with minimal conventional employment. Given our rigid industrial relations laws, independent contracting is the way of the future. This will be a very different Australian society.

Most public servants are probably safe but once the reduction of executive and other salaries extends through the community, public servants will be affected. Look for areas of the public service that are less prone to reduction. The public service is the highest tree in the land. Do not take redundancy packages.

Clearly, the three tsunamis will make servicing inflated mortgages very difficult. I spent some time with a person who took his family to Sydney two years ago and lost his new job after a year. He says that there are more jobs in Melbourne than Sydney but that will now change. His wife is the sole breadwinner because she works in the growth industries. They are learning to live with the situation. Parents help. 

Where will there be employment growth? Here is my list, but it is not exhaustive: heath and aged people services; tourism (particularly Chinese tourism); dairy; infrastructure building; security; delivering parcels; clever marketing; picking overseas markets where scale is not important; and accounting. I am sure there are many more.

The three tsunamis will mean that we will see more people find a way to lift their wealth and a much larger group of people on lower incomes. The middle class will be greatly reduced. This has been happening in the United States for some time. The tsunamis mean that we will catch up with the US. Look for work and investment in operations that are supplying the top or bottom income parts of society. The middle class is where the hits will take place. 

Interest rates will fall but the consequent lower dollar will lift inflation, including the price of cars. I think banks are in for a harder time than is currently expected because of the effect the three tsunamis will have in dwelling and business values outside areas of Chinese investment.

And we have to hope that there will not be a fourth tsunami – lower commodity prices – which would devastate our tax revenues.