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The Forum > Article Comments > Too big to ignore or too big to fail? > Comments

Too big to ignore or too big to fail? : Comments

By Genevieve George, published 12/4/2013

Yesterday saw the launch of the 'Small Business – Too Big to Ignore' campaign at Sydney Olympic park.

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The only business people who are affected by penalty rates are invariably retail outlets, employ mostly women, often at the minimum rate!
And yes, if you are running a restaurant, barely afloat with a 2% margin, penalty rates are the final straw that sends your business broke.
Unaffordable rents, don't help either!
Again if you're a small manufacturer, tourist operator, service provider, its the high AUD, not penalty rates that is the issue!
We would be better served if we simply use our organised voting power, to compel the Govt to do something to draw down the AUD.
AN AUD forced down to 65 cents, would return an economic advantage to exporters.
Increased tourist traffic, many of who would boost the clientele of restaurants and many other retail outlets, who rely on volume not margins, for their very survival.
What we really need and must have NOW, is genuine tax reform!
If all that costly convoluted complexity, lead in the business saddle bag, was removed in favour of a simple single stand alone unavoidable expenditure tax!
An immediate saving of around 7%, would be added to the average bottom line. The simultaneous removal of PAYE, PAYG, fuel excise, payroll tax and the ubiquitous GST, would add around a further 30% plus, to the averaged bottom line; all courtesy of finally addressed, current massive corporate tax avoidance!
Different and direct funding paradigms, would make good any state revenue shortfall, as well as provided significant savings, that could be better spent in coal face service provision etc.
This is the reform we should be chasing, rather than trying to squeeze a few dollars out of the minimal pay packets of women, many of who could be single income parents, doing a hell of a lot tougher than any small business operator!
Whatever happening to progressive Christian conservatives?
Have they all been replaced by Shylock money grubbers, with only attack the wages of the poorest, as their only and incredibly unimaginative response to growing business downturns?
And you talk of a fixed Govt mindset! GEZZ!
Rhrosty.
Posted by Rhrosty, Friday, 12 April 2013 11:27:05 AM
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The key problem is, of course, that there are no politicians who even remotely understand small business. They are all either lawyers or party apparatchiks, whose understanding of business in general - let alone the small variety - is sketchy at best.

Until and unless we can change this, the very best that anyone can hope for is to be ushered into a room, sat down, provided with a cup of tea, and be listened-to politely for twenty minutes. There is no common language, no common understanding, and certainly no common experiences, that the petitioners can rely upon to generate empathy for their cause. The ministerial eyes will glaze over after five minutes, and the gentle nodding that accompanies the rest of the pitch will be easily confused with an incipient doze. Don't laugh. I've been there.

The last minister who even slightly "got it" was John Button, and even he could not get his government interested in the challenges facing small business.

Oh, and while I am here... Rhrosty, this is not an answer.

>>AN AUD forced down to 65 cents, would return an economic advantage to exporters.<<

You would not, I am sure, trust any government with the power required to interfere with our exchange rate to that extent. Sure, they can nibble around the edges a bit, but a change of that magnitude would require a command-and-control government similar to Beijing's.

Be very careful what you wish for.
Posted by Pericles, Friday, 12 April 2013 11:46:59 AM
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Footnote: A single expenditure tax set at a painless 4.8% would collect around a 100 billion more tax dollars PA, address the current structural deficit, create significant ongoing surpluses and allow significant infrastructure shortfalls to finally be addressed, without needing to borrow!
Meaning, more funding would become available for small business, at more favourable rates.
And it would not be hurt by the improved economic activity/stimulation, infrastructure roll-outs, would also provide.
The single stand alone tax rate could be microscopically adjusted up or down, to alone and much more immediately; and effectively, control inflation or stagnation.
Meaning, interest rates could then be progressively lowered until the AUD hit around 65 cents.
It's not a question of can't; given, can't died in a cornfield over a century ago!
Rhrosty.
Posted by Rhrosty, Friday, 12 April 2013 11:47:33 AM
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Good post, Pericles.
The essential problem with our 'representatives' is they simply aren't.
Who the hell are they talking to when they make comments like "people on $250k are struggling" and "miners on $140k aren't rich" when the average household income for the whole country is only around $65k?
Our pollies truly live in a world of their own, where the 'basic' (back bencher's) wage is $180k.
Hey Rhosty, I don't think too many people would vote for imported fuel to go up by 35%, or around $2. a litre at the pump.
And fancy not opening on public holidays and weekends! They could have those days off.
I wonder what we could call that...
Posted by Grim, Saturday, 13 April 2013 8:04:49 AM
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Grim: How do you figure the removal of fuel excise would result in a price rise of 35%? Given the excise component is currently 58 cents, the amended price would come back to parity.
Further, the reduction of around 37% in total of commercial tax burdens, as a central theme of genuine reform, should largely negate any domestic price rise, caused by reducing the AUD by around 35%.
We have copious natural gas, and the recent Woodside decision has made a huge reserve available for domestic consumption.
Woodside's decision ought to mean they lose that lease, which should now go to any other entity, say Aussie firm Santos, willing to develop it as solely domestic fuel.
There isn't a vehicle currently plying our roads or rail lines, that can't run on CNG.
Or,passing NG through a simple catalytic process, knocks a few hydrogen atoms off, leaving liquid methanol, a perfect high octane substitute for petrol or, av-gas!
Our own sweet light crude leaves the ground as a virtually ready to use diesel, needing only a little insitu chill filtering, to produce a superior non refined diesel!
Removing the refining process and the foreign supplier, should mean we can supply ourselves from our own resources, for just a fraction of current retail prices.
Shell's recent activities, ought to provide us with enough economic reason, to completely divorce ourselves from any dependency on foreign fuel supplies.
What we need is a national pipeline or lines.
I'll warrant, we could afford the same, if we could just pocket the 15 plus billions plus PA. we currently shell out for fully imported, highly refined foreign oil.
The Govt ought to buy the shell refinery, as an off budget investment, and then use the distribution business it would also acquire, to market the aforementioned alternatives, and at prices no foreign based supplier could compete with.
I mean it's not like we need to import energy at premium prices, when we really ought to use the natural resources we OWN to set our economy up! A 65 cent AUD, would assist that outcome!
Rhrosty.
Posted by Rhrosty, Saturday, 13 April 2013 11:23:34 AM
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Grim: What would happen to fuel prices, if we the people placed a commercial boycott, on BP products?
They'd react by reducing prices, to get back market share and cash flows, wouldn't they?
What would happen in that event, if we the people then boycotted all Shell products and business premises? They'd do the same! Ditto Caltex!
Having forced all to reduce their prices, what would be the likely outcome of a repeat the same organised business boycotts?
More price reductions or one or more major players simply deserting our market?
This will never ever happen here!
Apathetic Australians simply whine, know all the reasons it can't be done, tug the forelock, or roll over and beg for a tummy rub?
They won't even organise as voting blocks, to compel desirable change via the ballot box, the only other place, where they exercise, nation changing policy paradigms, let alone organise a commercial boycott?
Instead, the usual outcome with dissatisfaction, with Govt imposed/allowed outcomes, is a group of complete dunderheads, voicing their intention to boycott the ballot box, or virtually their only other source of real power, in a free market democracy!
I don't know why I bother!
Rhrosty.
Posted by Rhrosty, Saturday, 13 April 2013 11:54:03 AM
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G'day Rhrosty,
Reducing the purchasing power of the dollar to 65c is effectively raising the cost of imports by 35c in every dollar.
While I agree with many of your points (including and most especially "it will never happen here!"), making the country as a whole 35% poorer (comparatively) doesn't strike me as an ideal solution.
Posted by Grim, Saturday, 13 April 2013 1:00:09 PM
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Here the author is seeking some modest achievable reforms, at least as a start point to serious discussion - some greater freedom in hiring and firing and an easing-off of penalty rate provisions for small business (and maybe some wages flexibility - lower penalties, but enabling flexible 'bonuses' perhaps) - and these go ignored.
Some simple IR reform just too hard, eh? Too smacking of Work Choices for any to take seriously? Got to hold on to all the so-very-hard-won conditions and resist any nibbling away at the edges, even if it means the ship goes down for want of a nail? Sensible?

We apparently have the highest minimum (and possibly average) 'real' wages in the developed world, but we can't afford a little justifiable trimming.
Not too clever for our own good I don't suppose?

Rather than considering achievable meaningful reform, Rhrosty wants a revolution - total overhaul of taxation, abandoning of the 'floating' dollar (as if our international trading partners would allow it - see Chinese Yuan issue), and go it solo on fuel. Woodside can't make the numbers work for James Price but our illustrious Aus government could turn it into a 'Golden Goose'? Especially in our Union-driven IR system of wages and conditions = a Goose for the Unions to pluck.

Boycott away Rhrosty, and see business shut down for the duration.

Maybe your tax overhaul could work Rhrosty (via expenditure tax), with businesses paying it on all purchases and on wages/salaries, and then everyone along the line paying for purchases and services, a bit like GST eh? And around the money goes, with gov't taking its cut all along the stream, but no deductions.
So, cut purchasing costs, increase prices on sales, maximise profits and minimise tax?

When we become energy and fuel self-sufficient, maybe a 65 cent dollar could be a goer, but until then?
Higher import costs would not amuse small business or the average consumer.
When the U.S. and EU dig themselves out of their 'holes' the $A will steady back in accordance with, hopefully, genuine open-market forces.
Posted by Saltpetre, Sunday, 14 April 2013 4:42:49 PM
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"We apparently have the highest minimum (and possibly average) 'real' wages in the developed world, but we can't afford a little justifiable trimming."
Yes, I remember the papers -and K. Rudd- crowing about a report that claimed Australia had the highest minimum wage -As A Percentage OF the Median Wage- in the World.
The other -and more honest- way of spinning that would be to point out that 50% of Australians make buggrall more than the minimum wage.
The most telling statistic is the difference between the "median" (that which 50% of us make less than) and the "average" (total wage pool divided by number of wage earners).
Currently the median is around $40k, while the average is around $70k; dragged upward by the likes of our hard working and self sacrificing "Representatives".
Posted by Grim, Monday, 15 April 2013 7:58:34 AM
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