rehctub: "they are simply supplying a product of a certain quality to a certain market."

Actually, I think you missed my point; their quality used to be such that I was prepared to pay more for it. Now it is such that I wouldn't touch it at any price. Blaming increased labour costs is an excuse for the fact that their quality has gone down hill as has the price they can ask for it. It may also reflect a drop in the market for whitegoods generally, as economic conditions change. I doubt that outsourcing was their only option, but it has become a favoured tool of poor managers everywhere, simply because it means they don't have to actually manage - all they have to do is bean-count

Antisetic, your experience mirrows ours.This is a big dissapointment to us.We try to buy AUSTRALIAN, when we can.Do they try to compensate for paying higher wages by using inferior components? I dont know the answer, business is business, and to see all our manufacturing going overseas to make shareholders happy at the expense of customers isn't what we want to see either.Their advertising budget was high.T.V. Ads. aren't cheap!

anticeptic -I doubt that outsourcing was their only option, but it has become a favoured tool of poor managers everywhere, simply because it means they don't have to actually manage - all they have to do is bean-count

Yes you are right as most businesses out-sourse now where possible due to the lack of incentives they receive for employing staff.

Major supermarkets have many of their shelves stocked by company reps rather than by employees.

You see in our country you get punnished for employing which is why so many businesses now out-sourse their labour.

Although I don't like it either, I can see why they do it with penilies such as 'pay roll tax' for example and, with the thresh-hold now at $1 million it only takes a few hundred employees to take you over the limit.

Wouldn't it be great if our tax system 'rewarded' high level employers, or is this to easy?

rehctub:"in our country you get punnished for employing which is why so many businesses now out-sourse their labour."

I have a small business, which occasionally employs staff, invariably on a casual basis, as I have only an intermittent requirement for the extra labour. I have the choice to either employ directly or to approach one of the labour hire organisations and pay them a (rather exorbitant) margin for the convenience. I choose the former, and I don't have any sense at all of being "punished", and obviously the labour hire companies that employ staff to hire them out don't feel there is any "punishment" either. The principal reason I can see for outsourcing is that it makes the relationship one of business-to-business contracts rather than the mutual obligation implied by an employment contract and a secondary reason is the cost-shifting from the wages budget to some other form of (possibly amortisable) budget. If the cost can be appended to a particular project, it will come straight off the bottom line.

IOW, it is laziness and a wish to avoid responsibility, not any sense of coercion that makes most firms choose outsourcing, as far as I can see. It can hardly be cost-based if the labour hire firm is making a profit, can it?

How do you see firms being "punished"?

How do you see firms being "punished"?

Quite simple, by having to pay payrole tax just because they have empoyed to many staff.

You see out tax system charges a large company additional taxes, I think in the order of 4.5%, and calls this 'pay roll tax'.

Now if this isn't a form of punishing you for a great effort then what else is it?

Common sense would suggest that large employers should be rewarded for employing large numbers of staff. But then, where would common sense fit into the running of our great nation?

I have two retail shops and employ 10 staff. There is no way I will employ enough staff to put myself in the 'pay roll' tax bracket, rather I would up-grade my equipment, mostly imported, and be rewrded by way of 'depriciation' write downs and interest/lease payment deductions.

Now where is the lodgic in this I ask?

They punish us for employing to many staff, yet reward us for increasing the national deficite!

rehctub:"You see out tax system charges a large company additional taxes, I think in the order of 4.5%, and calls this 'pay roll tax'."

I understand that point, yet the labour hire firms seems to have no trouble paying such a tax and tacking on a margin, ending up with a healthy profit. If it is such a punishment, one would expect firms whose business model is entirely based on having lots of employees would be doing poorly. That is not the case. Besides, 4.5% of wages is hardly a large cost burden. In my own case, I can hire casual staff for about $18/hour, or go to a labour hire firm and pay $30 or so, a margin of well over 50%, yet lazy managers continue to use this form of casualised workforce, sometimes in large numbers. One of the major logistics firms I'm somewhat familiar with has up to 50% of its floor staff at one of its depots supplied by Drake on any given day and many of those staff have been there for extended periods. Each is employed to work on a specific client project, which means there is no "complicated" accounting and a lazy manager can simply look at income and outgoings as a whole, with no complex calculation of on-costs, etc.

I suspect that when it was first introduced, payroll tax was specifically intended to encourage inefficient firms to upgrade their plant and modernise their operations rather than simply hiring extra labour if their workload increased. At the time, that would have made good sense. In today's "boom" climate (soon to end) that still makes sense.