Author: Peter O'Connor

A working career within marketing from financial services to a family restaurant business. Now focused on the issues of importance to myself and family to improve the health of the environment in which we live

Localised Spending HIDDEN Pot of Gold

Make a difference – Every $100 spent with local business will add $175 to your Local economy supporting your family, friends and your local community.

There are many reasons to spend with and support local businesses - keeping them operational for continued use, competition, employment & purchasing in your local community...how about

Every $100 you spend in a local business boosts your local economy by $175

Today I want discussion on an often overlooked or underestimated feature of local economies.

How can spending $100 with your Local Business impact your local community (Family, Friends, Neighbours) by $175?

Consider the 4 different types of expenditure where we spend our income.

  • Local economy - local business who create their own products or manufacture them from predominately locally sourced purchases employing locally where required.
  • National retailers who source their products nationally. Includes national on-line purchases
  • International retailers who substantially source their products globaly. Includes International on-line purchases
  • Your Future Fund where you are paying off a mortgage (equity you can use at a later date), adding to investments in retirement planning or Superannuation for later use. Savings for a rainy day.
With some retailers it is not easy to establish if their corporate base is National or International however the origins of their products should be easily assessed. In addition some purchasers may utilise a retailer who offers both Nationally & Internationally sourced products but only purchase nationally sourced.

The more you know about your Retailers, Suppliers and their products the more accurate you can construct your spending model and the contribution to the economy. For my purposes I have constructed the following contribution averages that applies to me.

 

My Purchase estimates is 5% Local Business, 50% Corporate (National Products), 18% Corporate (International Products) & 27% Future Fund of Mortgage payment & Retirement funds.
My Contribution to the Local Economy from local business purchases is $5687.50 ($2437.50 Pot of Gold above the original spend of $3250). This is calculated on the basis that Local Business appreciates the benefit of local purchases and will spend 50% of their income on local purchases

With a review of my purchasing options to supporting local businesses I can realistically increase local purchases to 28% of my income reducing Corporate National products to 30% & Corporate International products to 15%

 

 

 

 

The power of my spending has increased from $69,753 to $80,405 thanks to the ripple effect of spending in my Local Economy

The Pot of Gold to the Local Economy is now $13,650 on top of my original spend of $18,200. There is an additional estimate $4095 added to the Local Economy from the Local content of purchases in the other expenditure types. (see below for further information on my estimates)

The contribution to the Local Economy lifts from $11,090 to $35,945 assisting my family, my friends, my neighbours within this community.

The Federal Government knows only too well that by injecting money by way of Tax cuts, a Cash bonus and/or spending into Australia (its local economy) the ripple affect boosts the economy; similarly, the State Governments will boost the its Local Economy with infrastructure spending. It is up to the local community to boost its local economy through purchasing; and the rewards are well worth it.

There are a number of other reasons to shop local with many small business also committed to care for the product and the environment (leading by example) and we will address these in a later Blog

 Apart from the allocation of spending which is clearly indicated in the tables – I have included the following estimates regarding contribution to the Economies

Local Economy

The Local Economy after the initial allocation (eg. Table2) $18,200 gets 50%* of that spending back in the local community (Business & Personal spend) $9,100 repeating to a third level $4550 (total contribution $31850). The Local Economy also gets 5% from the spend in the other 3 categories to account for local employee / business involvement eg Retail outlet
*50% spend is based on the knowledge small local business understand the importance of spending in the local community

National Economy

Receives 65% of the Corporation (National Product) spend to take into consideration the acquisition of National Products and other National Business Spend, 20% of the Corporate (International Product) spend to take into consideration their National Business spend and 5% from the spend into Your Future Fund to take into consideration their National Business spend.

Australian Produce (1)

Global Economy

Receives 30% of the Corporation (National Product) spend to take into consideration the International Business Spend, 75% of the Corporate (International Product) spend to take into consideration that the majority of their spend is International.

Future Fund

Your Future Fund contribution is 90% of your Future Fund spend as it has minimal impact on either of the domestic economies after the allocation of the 5% to both to allow for Local & National Business needs including employment

 

Everyone’s purchasing scenario will be a little different. If you have reasonable confidence in your knowledge of spending and/or contributions you could tailor your own table to better represent you.

 

 

Message me if you would like a working copy of my table

Would love to hear from any small business that would like their Journey to sustainability to be highlighted in future posts
Peter O'Connor
Journey to Sustainability
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Purchase with Purpose to reduce carbon footprint

3 considerations when looking at my Salmon purchase

To purchase with purpose can have a beneficial effect not only on the environment but local business and its community. Take today’s simple task of purchasing some salmon steaks for lunch on a beautiful summer day.

Option 1 – I could pop into Woolworths, Coles or Aldi and look to buy some relatively cheaper priced Atlantic Salmon from Norway or prepackaged Tassal / Huon Atlantic Salmon from Tasmania. From Norway is obviously quite costly from a transport situation into Australia plus apart from local transport and retail costs the product costs are leaving our shores for Norway. The Tasmanian bred Atlantic Salmon would I assume be forwarded to a centralised holding facility and then road transported to the local store. The total purchase costings would be shared between local transport & retail and cost of goods remaining in Australia ie Tasmania

Option 2 – Our local fish market at Stocklands Shellharbour which also operates as a co-op purchasing local produce as well as bringing additional stock from Australia and Imported. They also stock the Tassal / Huon Atlantic Salmon. The transports costs would be similar to the first option although the transport may have slight variation depending on travel route. The total purchase costings would be shared between local transport & retail and cost of goods remaining in Australia ie Tasmania

Option 3 – Purchasing local Australian Salmon from the local Fish markets. Purchasing local is always better as there is a minimal amount of transport costs and the entire product cost stays in the local area from fisherman to fish markets (Paddock/Ocean to plate). Australian salmon is not similar to Atlantic Salmon as the species is more closely aligned to the Perch family

It is very easy to underestimate the economic benefits of purchasing locally produced. The cost of the product going back to local communities can see the money be circulated 4 – 5 times when consider that the monies spent by Fisherman in local business which is then passed by them through profit and wages to other locals who then purchase again etc

Unfortunately in this exercise the local Fish markets did not have any locally caught salmon so my decision to purchase the Tasmainian based Atlantic salmon from the Fish market at Stocklands Shellharbour is my best decision as I know that by supporting their business now they have a commitment to buying local and supporting the local communities and the sustainability of the Industry

Our salads and dressing is made from locally sauced product so all in all I am extremely happy with this outcome. 

With todays technologies it is an interesting observation that the research required to make these decisions took less than 25% of the time it took to write this post

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1 Why we must look at Sustainability

By Peter O'Connor

Why must we look at Sustainability?

A. For our Families  

I am a Baby Boomer and whilst I see many jokes out there about spending our kids inheritance the truth of the matter is – we have. I am not talking financial assets as we have provided well enough for our families in the skills we pass on for them to duplicate or exceed our own personal achievement. I have come to grips with the reality we have overspent the one crucial asset necessary to maintain our existence – Planet Earth.

This wonderful planet, when I was born, could meet the demand of human existence and replenish it’s resources for future years. I am no scientist however there is enough consensus out there that this is no longer the case. Our level of usage of the planet’s resources cannot be replenished and we are eroding it’s ability to provide for future generations.

We can take the first step and reduce the usage rate to show that our lifestyle can be altered to one that will sustain our planet for future generations.

During my research on who is doing what I have reached a number on conclusions that I intend to follow up:

  1. There are a number of what I would call self-opinionated  groups who believe there views on such matters as animal welfare, methane, chemicals etc that believe by following their beliefs will alter the course. The reluctance to accept and quite often ridicule other’s viewpoint is damaging to any move to sustainability. Everybody who makes a move towards sustainability should be praised and supported
  2. There are no absolutes in the quest for Sustainability. If you believe some decisions you are making are harmful to our sustainability – review, investigate options, make a decision to reduce to a minimum (immediate or over-time). If enough people did this the result would be significant
  3. A lot of information available is slanted for particular agendas. Unbiased  information is not readily available
  4. The move to a more Sustainable lifestyle needs to be a whole of life review from what we want to what we need. What we dispose of or reuse at home to our purchase with purpose decisions and greater society views on our fellow man. To have many living in poverty is a restriction on our move to sustainability
Much of my spare time going forward will be concentrated on putting out considerations and information for review to assist myself to remain active with it and assist others who wish to follow a similar journey. I invite any to join my blog, provide your journey information and we may be able to assist others to follow 
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