Global Political Shifts and Incumbency Effects

The year to date has been dominated by the turmoil of the incoming US Presidency of Donald Trump which unsurprisingly created an unforeseen benefit to known incumbents, while having adverse consequences for tough talking conservatives that subsequently fell out of favour across Europe, Canada and of course Australia.

Domestic Policy Outlook

This is probably the most far-reaching impact for our business environment right now. We now have a big spending Federal government, on the back of cash strapped States (other than WA), that could pass an agenda that was not canvassed in the lead up to the election.

Regulatory and Taxation Direction

With the support of the Greens, we suspect big business is in their sights with super profit levies and taxes, while all businesses will be burdened with increasingly complex award conditions, higher costs, and more compliance regimes – all while Governments fail to achieve productivity improvements within their vast bureaucracies and infrastructure projects – and the upcoming economic round table is rapidly morphing into taxation reform agenda.

The bottom line is we appear to be in a sustained period of uncertainty, flat-lined productivity improvements, and an unsympathetic regulatory and taxation environment for businesses.

Signals to Watch: Taxes, Super and Workplace Settings

Superfund tax on unrealised profits with no offset with future losses, the immediate payment of super guarantee levies tied to PAYG, and significant increases in land tax imposts on business premises and properties provide some insight into what lies ahead. Additionally there is the possible right of employees to work from home two days a week in Victoria.

Bright Spots and Positive Momentum

Despite this outlook, which is widely shared by our clients, there is positive momentum in several areas.

Onshoring, Manufacturing and Tourism Trends

We are seeing the onshoring of supply chains and improving sales across a number of more traditional manufacturing and fabrication industries in addition to solid improvements in regional tourism against the slowdown experienced over the last two years. Mainstream tourism has also seen some major surges on the back of events such as the Lions tour, with city-based hotel occupancies at sustained high levels despite the increased number of rooms available.

Opportunity Mindset: Entrepreneurial Growth and Acquisitions

We are seeing the current “mood” of business to be a really good opportunity for clients and those that are entrepreneurial and seeking growth. The climate lends itself to measured acquisitions as expectations tend to be more realistic.

Stand Out with Outbound Activity and Clear Positioning

In the current climate, lifting outbound activity will also have your business standing out from your competitors with the potential of providing a higher return on your investment than would normally be achieved.

The key is to know what your competitive advantage is and the best way to identify that is to ask “why do people buy from your business?”

While you may be able to answer that – asking your customers directly can help to uncover the hidden nuances that drive their decision making – and identify where your investment should be focused in terms of messaging, industries and markets.

What Support Can Look Like

Clients that have lifted their activity, sometimes through assistance from us, have achieved consistent improvements in sales, referrals and profitability. Depending on the size of the business, and the complexity of the products and services, this assistance can be as simple as a desk-top discussion discovery session and advice, or involve a more thorough assessment of the business’s competitive advantage that involves an internal stakeholder assessment and rating followed by customer validatory research and interviews.

The AI Opportunity, and a Caution

Probably the most talked about opportunity is emerging through the use of Artificial Intelligence (AI). As one of our Partners highlighted recently, it took Covid 13-months to reach a 100 million people, but it only took two months for ChatGPT.

And therein lies a very important warning - don’t put anything sensitive on free AI platforms – and ensure your staff don’t either!!

Applying AI to What You Already Do

The emergence of AI tools however is a real opportunity for a large number of businesses, and when guiding clients, we emphasize that the real benefits come from applying AI to tasks or processes you already undertake or have sound knowledge of. Here are just two examples of simple, but highly effective applications:

Example 1: Automating Compliance and Permits

An established plumbing business that specialises in emergency jobs such as blocked sewers has set up a sequence of instructions using the subscribed version of ChatGPT. When a job is required to encroach onto public infrastructure like footpaths and roadways the Chat GPT instructions prepare the management plans, permit applications for approved and automated payment in the few minutes it takes to enter the address, scope of work and times. The firm assisted with the structure of the instructions which were quickly refined and enhanced by the client through trial and error.

Example 2: Meeting Capture and Minutes with CoPilot

A financial services firm that now uses licensed CoPilot to record all meetings, summarise key points and produce the minutes, saving hours of administrative time for each meeting, particularly client meetings. Clients need to be asked if they are happy for the meetings to be recorded, which is now a standard question before proceeding with any internal or external meeting. Once again nem helped the firm by demonstrating the application and guided them through the initial trials.

Within this setting there has been a significant uplift in businesses willingness to assess new technology platforms to improve efficiencies, drive down costs and improve customer services.

Where Consultants Continue to Add Value

And with regard to consulting, as we recently highlighted on our website, AI can access an incredible amount of information and provide checklists and steps to achieving what you want to achieve in your business in record time. It is a great tool to assess the quality of a consultant’s research, but it cannot help you to implement, assess and pivot around obstacles or help you to identify your hidden potential!

Author: John McKinstry, Managing Partner nem Australasia.

18th of August 2025

This article is based on research and opinion available in the public domain.

Business Environment Insights August 2025