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The Forum > Article Comments > Taking competitive neutrality seriously: my challenge to the Productivity Commission > Comments

Taking competitive neutrality seriously: my challenge to the Productivity Commission : Comments

By Nicholas Gruen, published 13/10/2017

Around the world, finance is a major policy problem driven ultimately by the ease with which insiders can advantage themselves (sometimes illegally, but mostly legally) against outsiders.

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A visiting republican Senator, when a guest on Q+A said and I quote,"at some point complexity always becomes fraud" unquote.

Thus we got ponzi schemes and derivatives and phenomena like more and more of our finite wealth collecting in fewer and fewer hands and as a consequence The Great Depression.

Which we attacked with cogent credible keynesian economics, which eventually forced the economies of the free world into overdrive and ushered in a period of unprecedented prosperity!

Only to have economic dinosaurs, with carved in rock mindsets, fundamentalists like Reagan and Thatcher use disgraced economic trickle down theory, to unwind all the advancement and return to the same failed system.

Only to see history repeat itself! Why?

Because nobody learns the lessons of history or why we were once the third wealthiest nation on the planet and a creditor one at that!

And mostly because we weren't tied to a nonsense and self destructing economic mantra!

At least while we had bipartisan pragmatists at the helm and cooperative capitalism alive and well in the bush. And we did well!

And so well and so cocksure, we started to invest in stuff like derivatives and ponzi schemes all while economic illiterates used public amenity as if it were their own economic bailout ATM.

And so began an era of mindless privatisation and pork barreling on a hitherto unknown scale!?

While the troglytes muttered mindless mantras about the Government having no business in business.

Thus we were sucked into this economic maelstrom, mad hatters tea party economics and the GFC.

And escaped by the skin of our teeth by quite massively growing public debt and privatising what was not nailed down. Helped to some extent by mining boom mark one and two.

Now we confront the energy crisis with dithering indecision and despair as the smart money divests itself of coal assets and with good reason!?

Look who we have at the helm and their alternative!?

And not a single bi partisan pragmatist to be found among them, least of all, Mz. Please ex-plane?
Alan B.
Posted by Alan B., Friday, 13 October 2017 11:54:12 AM
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You cannot pour from an empty cup, unless you're an economist, but particularly one persuaded by the Chicago school of economics and friedman?

The theory of economics is hardly an exact science! And routinely ignores the law of cause and effect as it simply plows on trying to fit square pegs into round holes?

Thus we saw the pragmatic gold standard replaced with promises. And a mechanism that no longer moderated inflation by keeping pace with it.

And artificially enhanced capital gains replacing genuine productivity increases. Even so there are often finite limits to production increases.

One can get more bushels of grain to the acre by cross breeding and timely irrigation and the use of fertilizers. More steel from the steel mill with investment and modernized technology!

And unless more and more of the latter is used. Production increases are suspended or even reversed.

Time and motion studies rendered almost useless because they failed to factor in fatigue. So we overcame that with yet other flawed intellectual concepts with over valued over leveraged assets! Bulging bubbles bound to bust as a substitute for genuine productivity.

Which needs cheap abundant energy and cooperative capitalism to derive or create!

As opposed to to rapid population growth and population driven demand, well ahead of essential infrastructure roll out.

Gone are the days when infrastructure preceded population growth! And a prerequisite to affordable housing!

And where we have witnessed the opposite, tantamount to pouring from an empty cup or selling extremely generous quantities of the Emperor's new clothes!

Challenge whomever, but just empty rhetoric devoid of fundamental truisms, unless backed by workable solutions!

Some of which, will needs must be ideologically and intellectually unpalatable!
Alan B.
Posted by Alan B., Saturday, 14 October 2017 7:36:21 AM
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Competitive neutrality is a nonsense! We have just two choices, compete or vacate the field!

There is no middle ground! And to date we have been superbly successful at vacating the field.

Thus we have seen around 95% of corporate Australia vacate the field and exit Australia, with their H.Q. and therefore, much of their tax liability?

Or just complete industries and or intellectual property or both!

Other nations, the more successful ones, back their best people and their better ideas!

We update their passports and say, the government has no business in business.

One only need look as far as a comprehensively and comparatively successful Singapore and its. Pragmatic post war visionary leader, [if it works adopt and own it,] Lee Kuan Yew.

If only to understand the absolute garbage, inherent in, "the government has no business in business," duck/responsibility shoving risible rubbish!

It's not the productivity commision that needs challenging here but putrefying policy!

And is the daughter of dogma and ideology!

If you would reduce overall tax imposts on commerce, then you need to first tax middlemen profit takers and their passed on cascading imposts, out of the game!

Then make tax, a fixed percentile of all income, minus any write downs write offs or exclusions.

This would allow a automatically collected PAYG system to take predominance and the accepted norm. Minus any tax compliance costs, which average around 7%, could go back to the bottom line.

Given an unavoidable tax rate of 15%? The effective tax impost would therefor be, around 8%!

Finally, productivity improvements are only now available with much much lower energy costs. Say a 1.98 cents PKH as the median, coupled to lower debt carriage!
Alan B.
Posted by Alan B., Sunday, 15 October 2017 9:51:46 AM
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Productivity is coupled to incentive and efficiency!

Where do you incorporate both?

I would argue, in cooperative capitalism and co-ops encouraged to compete in a global market! Rather than with each other or other Australians.

Moreover, allow pragmatic cooperation to underpin all production and manufacture and wherever possible? From single industrial estates, rather than far flung states, per se.

Manufacture needs Fiat like rationalisation and all components and assembly emanating from a single industrial estate?

And all government needs to stop shooting itself in our own economic foot with nonsense matras, like the government has no business in business!


Imagine this scenario.

Tomorrow morning the mass media has ads plastered all over it, advertising for former automotive employees and executives etc. Who wish to become part of a government sponsored financed and facilitated, right hand drive electric car/station wagon/ute manufacturing co-op! With a guaranteed, industry comparable wage during startup/assembly line construction phase!?

As opposed to just vacating the field.

Others, [former coal company and power company employees,] to own and operate a number of nuclear power plants, based on, walk away safe, molten salt thorium?

After all, it's the only clean, safe, cheaper than coal, cost effective choice that beckons the pragmatists as the essential, cost effective, safe, reliable, carbon free, unsubsidised baseload energy source!?

That both beckons and could be rolled out in around seven years as mass produced ready to go, modules.

Others invited and tasked with building and operating refineries that convert coal, and or, seawater, into diesel and or, jet fuel? Other ideas beckon but word limits, limit!

If foreigners see sovereign risk for them? Well they ought have just two choices! Beat em or join em!

Free market capitalism, inevitably and absolutely, incorporates venture capital risk and competition, at its very cornerstone!

If you can't stand the heat, stay out of the kitchen!

We've had enough, tail wagging the dog, [err, government,] captive market monopolies masquerading as free and fair competition, surely? Alan B.
Posted by Alan B., Sunday, 15 October 2017 11:16:06 AM
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Demonstrability, productivity gains are absolutely connected to AFFORDABLE, RELIABLE AND ABUNDANT ENERGY!

So what did we do?

Well we sold of as much of our opius gas as we could! Because it wasn't nailed down!

And continued apace to import billions worth of sulfur laden fuel from foreigners. Even when most of our transport options do nearly as well on CNG, with the added benefit of a 40% reduced carbon emission!

The genius who got that done as part of our trade deals, a mental giant beyond compare, surely? And cash strapped and massively mismanaged, living beyond our means, governments, followed suit!

And to the point where we could become the largest exporter of LNG in the world, even as we get down to just weeks of reserve in domestic fuel?

I suppose we should blame the productivity commission's and their advice for that parlous state of affairs also? Even as the same highly flawed thinking, want to protect coal based energy?

When we absolutely need to usher in walk away safe clean cheap, carbon free, nuclear energy!

If only to give our entrepreneurs and cooperative capitalism not only a chance to perform and shine? But claw back our patently purloined economic sovereignty!

The only thing prevarication has achieved, is to make our alleged leaders look weak and diabolically indecisive!

Or plainly, please ex-plane, plane as the nose on your face, plane dumb!

And at a point in time, when the only game in town is bold new initiatives and decisive action!?

Back your own judgement with the courage of conviction or get out of the way of those who still can! And not an either or!

And not a place for diabolical dithering! Tick, tock, tick, tock!
Alan B.
Posted by Alan B., Monday, 16 October 2017 9:59:09 AM
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