Just to set the scene, I am not talking about the next large bubble, like a housing bubble or a stock market bubble. I am talking about the next small Australian / Queensland / local bubble. Having said that, housing bubbles are regional but still outside the realms of this discussion.
I am talking about smaller bubbles. Readers will remember the great drought that Australia was in a few years back. According to some pundits, global warming (sorry – climate change) was going to dry out the country and some people were heading for their underground bunkers with 10,000 cans of baked beans and bottles of Evian at the ready.
Things looked so bad that local councils decided that we should stop watering our gardens, washing our cars and should recycle every last drop that we could. We apparently needed to collect every drop because we did not know where the next drop was coming from. Things got so bad that the people in charge decided that it was a good idea to give rebates on the cost in installing water tanks.
Enter into the scene at a fast charge – the Water Tank Installer. These business would handle your every need water tank-wise and business in the industry was so brisk that anyone who had ever seen a water tank wanted to become a water tank installer.
The water tank business was saturated. But many of these installers had no business experience – stock became hard to get as orders exceeded supply – some installation was not done well – and many of these installers were simply cowboys in the industry looking for an easy dollar. Established businesses had to somehow compete in a completely new business environment.
Then the unthinkable happened. It rained, and kept on raining. We all figured out where the next drop came from – the same place that all the other drops came from – and the demise of our civilization was averted. Within a very short time the people in charge decided that they did not need to provide funds for water tanks rebates and the general population decided it did not need water tanks anymore – since they had to foot the entire bill. The water tank bubble burst.
The industry went down the drain – with hardly a gurgle. And the insolvency industry rode that wave. [Let the metaphors continue.]
The next seemingly bright idea was home insulation to fight climate change, and the government offered rebates to people wanting to install insulation into their homes. Insulation is a great idea – my home is full of it. But the offer of free money from the government created the next industry to be in.
Did you ever wonder what happened to the out of business water tank installers? They were probably installing insulation at this time. Enter the cowboys into the industry – some of whom had their young children in ceiling cavities installing the stuff for them – putting nails through water pipes and electrical cables – and ‘livening up’ a few houses along the way. The industry became saturated with people, many of who had no idea what they were doing, and established well run businesses had to compete with these cowboys. Then the inevitable happened.
The government ended its rebate system and people stopped getting insulation because they would have to pay the full amount themselves. The next step in this saga is the liquidation of the many installers (good and bad) who now have nothing to install. That bubble has now burst.
What will the next small bubble be? What is the next government rebate on?