Parameters for planning #1: the 50% rule

Following my forecast for the financial year '09-'10 yesterday, here is an initial data point for you to keep in mind when making plans for the future. Plan for a 50% reduction in available funds for whatever you intend to do within the next eighteen months…

• 50% reduction in personal income
• 50% reduction in gross takings for your business
• 50% reduction in funding available for government department operations at Federal, Local and State levels

These reductions will take place through business contraction, budget cuts, reduced returns on investments and later, inflation. For those of us on what are for now fixed incomes such as Social Security benefits, expect your income to be reduced over a slightly longer term by the same amount through inflation. Ditto those on award rates paid by the government: police, teachers and other public servants. Why? Some straws in the wind from todays ABC News…
Share market gamble may cost Gosford Council millions
Recession will be a wrecking ball on revenue: Swan

How can we deal with this? Watch this space!