53 – Coffee, basketball and privatisation. What significance could they have for Australian local government?

Posted by Colin Weatherby                                                                                    1000 words

the barista economy

Image from The Age, 11 March 2015

On the 11 March 2015 there were three articles in the Melbourne Age newspaper on different topics that each held a message of potential relevance for local government.

The first was ‘Welcome to the barista economy. The article is based on a speech by Christopher Kent from the Reserve Bank of Australia (RBA) who looked at changes in household expenditure patterns over the past 30 years.

One thing is clear: we are spending a lot more on ‘services’ than we are on ‘stuff’. The share of household spending on services is up from 53 per cent to 65 per cent of household consumption.

The RBA explains the increased spending on services as a result of cheaper goods because of better productivity and more goods coming from ‘emerging economies’. The world has become better at producing goods and people now have more money to buy services, which in effect is buying time. We can afford to employ someone to perform tasks when our time is better spent on other activities, we don’t have the skills, or it improves our quality of life (e.g. leisure).

The barista connection highlights the growth in service industry jobs. Coffee shops are everywhere. Having a coffee has become part of every outing.

I think that the significance for local government is twofold. Continue reading