A message from the Managing Director
Strategic Priorities 2022/23
It’s that time of the year we begin to review our strategic direction and begin the process of developing an Annual Budget.
As we move from the uncertainty around the pandemic, we are confronted with the possibility of a world war, ever changing climate, a booming housing market and inflation about to rise – I think the notion of “business as usual “is an historical concept!
We have completely reviewed the business throughout the pandemic moving many of our services to a digital format and will continue this with the revision and extension of our IT Digital First Strategy.
We have introduced a new management system Project Works to integrate and facilitate more efficient administration and service delivery – the staff have done a magnificent job transitioning to the new system as have the Associates entering daily timesheets!
The buzz words “adaptable, flexible” have certainly been truisms as we digitised our offerings, Associates adapted to the home offices and staff relocated to home – if we had planned this it probably would have taken a decade.
Another truism – sometimes we move a decade in week!
The strategic priorities for 2022/23 across the Business Plan include:
Business Development
- Develop National Marketing Campaign for Budget 2022/23.
- Product Investment Program – 2023 Budget.
- Formalise Practice Lead roles in FY2022/23.
- Implement Shareholder transition strategy.
Resources
- Associate Strategy – Ongoing recruitment of key Associates
- Succession Plan – Implement transition plan
- Staff resourcing, development, and training
Corporate Governance
- Ongoing implementation of the Digital First IT strategy
- Quality Assurance Framework and System
- Document Management system
- Internal Audit program
Business Support
- Develop Project Management system – Resource allocation and delivery.
Budget 2022/23
The RBA (Statement of Monetary Policy February 2022) is forecast GDP to have grown by 5% per cent over 2021, and to grow by around 4.25% over 2022 and 2 per cent over 2023.
Participation in the labour force is forecast to be at a historically high level over 2022/23 supported by the strength in labour market conditions.
The unemployment rate is forecast to decline to around 3.75% in the second half of 2022.By mid-2022, strong demand for labour is expected to translate into a lower unemployment rate, as well as a declining rate of underemployment as firms boost hours of their existing staff to meet demand. We are forecasting greater Placement demand for our Associates in 2022/23.
Wages growth is forecast to continue to pick up gradually. In the near term, remaining wage freezes are expected to unwind, but most employers in the Bank’s liaison program are not expecting wages growth to move beyond the 2% to 3% per cent range this year.
Inflation is expected to be around 2.75% by the end of 2022/23.
Risks in the economy are the ongoing pandemic- a key near-term uncertainty for the domestic economy is the way firms and households navigate the challenges from the Omicron wave of infections.
Also, a slower trajectory for the economy could eventuate due to a combination of heightened health-related risk aversion from damaging Omicron outbreak or the emergence of a new variant.
It is plausible that both demand and supply would be negatively affected as a result of a more challenging health situation that leads to a temporary reintroduction of activity restrictions and/or self-imposed restraint by individuals.
The direct impact on Council revenue is the impact of rate capping (or in NSW rate pegging) where State governments via their respective Local Government Ministers assign the maximum rate cap.
The rate cap is the maximum a Council’s rate revenue can increase in the financial year inclusive of supplementary valuation revenue. For 2022/23 the rate cap in Victoria has been set at 1.75% by the Essential Services Commission. For the first time, the rate peg in NSW for 2022/23 will include a population factor that varies for each council in NSW depending on how fast its population is growing. IPART has set the 2022/23 rate peg for each council at between 0.7% and 5.0%, depending on its population factor.
Finally, Councils are also attempting to “catch up “on overdue statutory requirements and to recruit staff into key areas. Many of our Councils are experiencing staff shortfalls and skill deficits in key areas.
We to are experiencing difficulty in recruiting Associates particularly in NSW and QLD, though in recent weeks we have interviewed 10 prospective and have 26 prospects in the system.
The Board has adopted revenue, expenditure Budget assumptions for 2022/23.
We will now commence the development of our National Marketing Plan which drives company revenue and directs our efforts across our six key areas Service Planning, Financial Management, Asset Management Contract and Project Management and Placements.
Product Development 2022/23
The Product Development priority for 2022/23 is the development of the Virtual Asset Office (VAO). We will also continue ongoing development of our financial products including Long Term Financial Plan (LTFP), Service Cost Evaluation Model, (SCEM), Asset Renewal Demand Calculator (ARDC) and Capital Works Evaluator (CWE).
These products continue to be in demand.
Conclusion
The Business Plan 2022/23 is presented for Board consideration and continues to support the ongoing development of the CT Management Group. Key outcomes in 2022/23 include:
- Establish Virtual Asset Office to provide a regional bureau service option for rural/regional Councils.
- Continue digitisation of the business including Project Works reporting and Associate and client portals.
- Implement all of the proposed business strategies.
- Increase company revenue particularly in NSW, Tasmania, and Queensland.
- Improve efficiency of company systems and processes.
- Achieve external Quality Assurance accreditation.
- Maintain a highly satisfied workforce and Associate team.
Finally, if any of you think of an area that CT Management Group could be active please contact me and discuss.