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The Forum > General Discussion > A rise for the sake of a rise. But can we really affor it.

A rise for the sake of a rise. But can we really affor it.

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Recent comments to a current thread have prompted me to start this one.

We have seen a recent pay rise of $26 per week for low paid workers, which by the way, is pretty much every small business employee.

Now I use the example of a factory with 300 employees making an export product. Unfortunately, not as common as they once were.

Now to pay each worker $26 per week, that amounts to around $400K per year.

Now I am sure you all agree that if one invests a dollar, you are entitled to kame a dollar, Agree?

So, that $400K now becomes $800K, a dollar for staff and a dollar for the boss.

Now we also have the marketing firm, the logistics firm and all others who have an input into getting this product to its destination.

So, add this up and the end product is now $1million dollar dearer to the customer.

But! Will they pay this increase, or simply seek a cheaper alternative.

This is why a pay rise should not be granted simply because life becomes tough.
Posted by rehctub, Wednesday, 21 July 2010 7:06:24 AM
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rehctub,

I know where you're coming from. I mean, peasants these days don't know what tough is, right. They have this thoroughly modern idea that they should be able to pay off a mortgage and buy clothes for their kids...I call it decadence.
Posted by Poirot, Wednesday, 21 July 2010 8:34:40 AM
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I hope all the chicks on your pay role get pregnant. That would blow your mind.
Posted by StG, Wednesday, 21 July 2010 8:46:28 AM
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Dear Poirot.. you do need a smack :) and I'm a-gonna givit you.....

Your sarcasm was misplaced. Rechtub has a very valid point.

My wife just received that rise..and we are very happy about it for now, but I also know that the company she works for was either acquired or partially bought out by a Japanese company.. hmmmmm *thinks*..the products they make could EASILY be made in China... and now I wonder what the directors are saying behind closed doors...and how long my mrs will have a job?

You mention mortgages ? Yep..we all want to be able to pay them, 100% of my wifes pay goes into ours.. and even that isn't quite enough.
Imagine how we would be if that company said one day "Hey.. china is looking pretty good now.... let's re-locate"

Yep.. we would be screwed, so if you give me a choice between $26 a week more, with job security out the window...or the old pay rate with more security.. I'm gonna go for security mate.

I've mentioned b4,..I'm doing contract work with a company which is in the PROCESS of relocating or outsourcing as much of it's processes and parts as it can. (to China)

To give you an idea of just how hard it is to compete with China on a 'level' playing field, (i.e..with no compensatory tarrifs) I know of a product bought from China at less than a dollar and is sold for $5.00.. thoussssssands of them.

So... prepare for the 'end' :) yes.. doom is almost upon us... isn't it weird..once upon a time, if someone said that we would laugh ourselves stupid about it.. but no
Posted by ALGOREisRICH, Wednesday, 21 July 2010 9:55:25 AM
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If the minimum wage doesn't cause unemployment, why not make it $100 an hour?
Posted by Peter Hume, Wednesday, 21 July 2010 12:28:31 PM
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Poirot
Most of the rest of the world is poorer than you and they don't owe you a living.
Posted by Sienna, Wednesday, 21 July 2010 12:34:43 PM
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Greed warps some.
The thought that some should not eat well live well or even hope to leaves me wondering about mankind.
And that we need a low paid group to keep us well is so different than my way that it is beyond my worst night mare economic health before humanity?
Back to the caves then it is what we deserve.
But wait, in truth only the truly lost would support Boazy and rechtubs modern slavery stand.
Posted by Belly, Wednesday, 21 July 2010 4:40:40 PM
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Have you ever thought the minimum wage is too low? It has not kept pace with living costs.

We can't afford not to increase the minimum wage especially when our country is facing issues with housing affordability, rising costs and the privatisation of retirement.

If we live in the 'lucky' country minimum wage earners should be able to receive a living wage as a basic premise. We have to make a choice about what we consider to be humane and fair treatment.

Where is your angst about excessive CEO salaries? Why are minimum wage earners always the punching bag for some of you lot. How dare you consider low wage earners greedy when all they are trying to do is care for their families in the same way as anyone else.

Sheesh...people never cease to amaze me.
Posted by pelican, Wednesday, 21 July 2010 5:21:24 PM
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Wages go up so then costs go up

The more something costs to make here people will just keep buying from overseas.
This will be the destruction of manufacturing.

Just look at the ETU
They call fair work legislation just like workchoices.
It also said that they would not be endorsing labor, but will more than likely go for the greens as they are in bed with labor anyway.

So in effect can the workers actually afford to keep their jobs.
Posted by tapp, Wednesday, 21 July 2010 5:49:54 PM
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The 2010 minimum wage in Australia is $15.00 hr.
The average is;
Tasmania $55,103
South Australia $59,223
Northern Territory $61,771
Victoria $62,748
Queensland $63,866
New South Wales $65,707
Western Australia $70,210
Capital Territory $75,348

Funny how one can't get figures on Public servants pay.
Posted by individual, Wednesday, 21 July 2010 6:30:28 PM
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Every employer thinks he/she is keeping wages cost down in isolation but eventually they must realise that they are cutting back the buying power of their own customers.

Most manufacturers move off-shore - not because they aren't making any profit, but because they aren't making enough profit for themselves.

The original Harvester Decision of 1907 ruled that wages "must be enough to support the wage earner in reasonable and frugal comfort".

In those days there were mainly sole wage earners for each family.

Now both partners typically work yet many still struggle on the minimum wage.

Perhaps Malthus had the right idea in that the poor should not be comforted too much because they were intellectually and genetically inferior and should be left to simply die out.
Posted by wobbles, Thursday, 22 July 2010 1:45:40 AM
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I would have honestly expected a post from the now dead Australian Peoples Party to have taken sides with low income earners.
Tapp are you standing this year? your voters are human too.
And for individual to have stayed on thread.
The thread starts with wages rise for the sake of a rise.
NO low income workers are those without agreements and the cost of living rise has given way to this rise, it is the only way they get a rise for the sake of it is silly!
300 factory workers? from what deep nonexistent place did that come from?
Most employers we are told by rechtub are small business men, with 300 employees?
Another says why not make it $100?
Are we to believe rises in low income wages create unemployment so we should leave them in the gutter?
Thankfully this thread is not Representative of most.
Most still think fair go Aussie is a worth while thought.
Most understand life is short building riches at the costs of a forever poor group is not worth it.
The wages of low income earners drive small business you cannot sell unless you have consumers.
Posted by Belly, Thursday, 22 July 2010 5:03:18 AM
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Well it's good to see some of you understand where I am comming from. As for those who simply hate me, well, that's life, but know this, unless you go around with your head in the sand, you would realise that we are heading south, and that's a fact.

Don't forget, the next round of super is about to hit. Currently 9% and about to go to 12%. Why didn't some of this rise go to super?

I also noted no one commented on the bosses right to make a return on his extra investment. Typicle!

Have you all noticed how many sales are on now. That's becase bosses are hurting to. WARNING! They will only take so much!

Now let's see, small businesses with 300+ minimum wage earners. Arnots, lite & easy, Golden circle, Bunnings, to name just a few. They do exist and they have all paid additional wages.

Now, someone mentioned CEO's pays.

So, if you own a business, you are entitled to a profit, agree?

If your staff get a 5% pay rise, shouldn't you as well?

If not, why not?

And remember, CEO's jobs are out there for the taking. Remember, each and every COE started as a kid in pre-school, just like you and I.

Finnally, this is not about me bashing low paid workers, it's about whether or not you lot can actually see how jobs are created and maintained and where the driving forces behind job creation, retention and job losses come from. I can assure you all, making employing less attractive is not the answer.

For those who work for someone else, just remember, when you leave your front gate and go off to work next time, respect the fact that you are the beneficiary of some elses risk and, that risk can often outweigh gain, with the result being, game over!

BTW, I no longer employ younger females for that very reason. Nobody helped me raise my kids, there yours not mine. Remember, life is about choices, and I've made mine.
Posted by rehctub, Thursday, 22 July 2010 6:51:32 AM
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I was raised in the war years when my mother saved every paper bag and every piece of string, My father grew all his own vegetables and chopped wood for the fire to keep us warm. Times have changed and I do not expect us to revert to that sort of living standard, but fridges and dishwashers and mobile phones and air conditioning and plasma TVs and cars and computers and ipods and VCRs and fashions and take-away food are all relatively new "must have" items that we got along without as kids. These things cost a lot to buy and run, so I think we should look at our cost of living in a more comparative way.
Posted by snake, Thursday, 22 July 2010 7:31:41 AM
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"If your staff get a 5% pay rise, shouldn't you as well?"

How about "if your employer's profits go up 5%, shouldn't your wages as well?" because that's how these things are determined nationally.
Posted by wobbles, Thursday, 22 July 2010 1:55:16 PM
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wobbles> How about "if your employer's profits go up 5%, shouldn't your wages as well?" because that's how these things are determined nationally.

I couldn't agree more! Only, the word 'are', should be replaced with the words 'should be'.

Now just take a walk though any shopping centre and see the amount of '50% off' sales, or, flick through any catalog and see just how much the employers of small to medium businesses have slashed their margins, just to remain in business.

I for one have always thought that wages should be a percentage of profits.

You have a great month, everyone wins.

Now how much fairer can you get!

I ask again wobbles, would you be happy to invest a dollar for no return?

Or, would you rather invest your dollar knowing you would also make a dollar for yourself?

Now be honnest here!

Now on the other had, had the government not pissed away our money, and some, they could have given every low paid worker a $20 per week, 'tax break' and we would all be happy.

Instead, they make employers pay $26 + compo + super, as they all go up inline with pay increases, then, they take about $6 back in tax.

Which by the way came from the employer.

You can all thank your labor supporters for that one.

Anyway, I think I might semi retire at 50 and go and work for someone else a day or two a week. Sounds good.

Gee, I might even get a pay rise, just for being there!

Let someone else invest thier dollar without a guaranteed return.
Posted by rehctub, Friday, 23 July 2010 6:50:18 AM
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rehctub I can disagree with you without hating you as you wrote earlier. I don't hate you even though I don't understand why you think the way you do.

When one is in business the costs of investment don't just include physical assets like stock and buildings but the cost of labour. That has to be factored in and it is a level playing field for all business in the same sector given the awards are nationally based. Rises in the award are part of the deal just as an employee's obligations are to do their jobs to the best of their ability, be punctual and be committed to the goals of the business eg. providing excellent customer service.
Posted by pelican, Friday, 23 July 2010 10:28:07 AM
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Rechtub get over that nonsense! people who hate you.
I doubt one contributor to OLO ever hated you.
I do not understand you.
You write like a red neck who dislikes the poor, welfare, some pensioners, and your statement about why you no longer employ women is?
Well mate it puts a view of you out there that repels me.
I do not hate you, or dislike you would gladdy have a beer with you but in truth we would not be happy in one anothers company.
See like it or not I think you have no idea just how much of that wage rise keeps shop doors open and kids eating.
No offense but look at the world from a poor mans point of view.
CEO, known to get 20 or even 100 million dollars a year and you get the boots on for this?
Posted by Belly, Friday, 23 July 2010 6:19:30 PM
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I'm paraphrasing someone else here and cannot give them due credit, because I forget who it was.

When the economy is booming, there is concern every time that low paid workers get a pay rise, because it may raise interest rates.

When the economy is lagging, there is concern every time that low paid workers get a pay rise, because it may raise unemployment.

It is hard to imagine any conditions under which these workers could get a pay rise without some people complaining. The same people always seem to have a good reason why they deserve a pay rise.
Posted by benk, Friday, 23 July 2010 9:05:05 PM
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Belly, if you think our tiny population is going to make any real difference, to the big picture, then think again.

As I have said before, with fewer of us working and paying 'positive taxes' as each generation goes on, our future lies outside of our own shores and, it is these customers that are most at risk when you make our businesses anti competetive.

I saw a story a while ago about an 'IT' company outsourcing work to Signapore.

Now for the cost of one exec staff member here, this guy was able to hire an entire office of staff over there, on call, 7 days a week.

Now I axcept that we can't compete with that, but, I often wonder how many of the labels found on Australian made products are actually still designed and printed here. Food for thought hey. Remember, there was a time when the answer to this would have been 100%.

All I am saying is that increasing wages simply because people are 'doing it tough' is not a long term solution, but rather, a short term fix. For some!

Now as for my comment on employing women, sorry if I offended, but, it is simply yet another potential disruption to business that many, not just me, will look to avoid.

Just watch the numbers over the next year or two and we will see wether I have a point.
Posted by rehctub, Friday, 23 July 2010 9:12:56 PM
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I understand your point, rehctub: that increases in pays for low income earners may make jobs difficult to sustain. What's the solution, though?

The reality is that the cost of living (in my case, anyway) has risen by more than $26.00 a week over the past 12 months alone.

Working on actual figures (rounded down) from my cashbook:

$20.00 a week more for rent
$6.00 a week more for petrol
$5.00 a week more for electricity (representing a 50% increase over 12 months)
$2.00 a week more for private health cover (a luxury, I know)

Groceries are difficult to track as they fluctuate so much - but the up-trends usually outweigh the down-trends. Even without groceries, though, that's an increase of $33.00 per week. I'm not a low income earner, but I still do it tough. The reality is that these people aren't getting a rise for the sake of a rise - they are getting a rise so their quality of life doesn't backslide as much as it otherwise would.

What, then, is the solution? The payrise is certainly a band-aid, and one that perpetuates the problem. But I don't see an alternative at this point in time.
Posted by Otokonoko, Friday, 23 July 2010 10:00:50 PM
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Rechtub: an employee working in a butcher's shop paid a percentage of the profits??

There are far too many disadvantages unfairness and negatives for employees if this became the reality and I daresay your employees would not be turning up for work to perform the hard tasks of slaughtering and preparing the meat in order to market, during the quiet weeks.
Posted by we are unique, Friday, 23 July 2010 10:19:33 PM
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Over the last decades I've worked as an employee, as a Contractor and also as a Pty Ltd Company.

The biggest difference I found was that there were very significant tax advantages that were simply unavailable to me as an employee.

The other thing I noticed was how many employers see their staff as a financial liability instead of an asset and treat them accordingly.

As much as some employers would like to go back to the days of slavery, if your customers don't get paid enough money how can they afford to buy what you're selling?
Posted by wobbles, Saturday, 24 July 2010 12:23:51 AM
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You and I are very different people rechtub.
I could never think like you do.
However I truly discount much of what you say.
Surely you do not understand just what you say?
Australian capitalism is different than say American.
Some want to pretend it is not so but we have and both sides support safety nets.
Health education welfare the list is not short.
Yes different subject but some miss use it, some squander it,some hide behind it and make little effort to self support, not all or most some.
From federation we have made changes that still support our system.
We, most of us, want it that way, that $26 is oil it remains only fleetingly in those pockets it buys snags in you shop it buys school books it is spent.
rechtub can you truly be so focused on middle class wealth you blind your self to the reality's of commerce.
I am glad bloke not to think like you, you get a board of your own in my room.
On election night and before I am using your thread as evidence some conservatives truly are wanting a rich mans Australia.
PS I remove names but not words from posts.
Posted by Belly, Saturday, 24 July 2010 6:11:11 AM
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Otokonoko, I appreciate your understanding and I wholey agree with what you say. Cost of almost everything has gone up, even 'tolls', which effects many on thier daily travels to and from work. But, grocorries have actually fallen, so to have white goods.

Now you think it's tough for the average punter. Business pay huge increases in just about everything and, most are producing smaller profits at present.

I believe China recognises our problems moving forward and, they are trying to buy up our prime farming land in Tasmania.

Our food producers have been hit hard by changes to IR laws, not just the $26 a week pay rise. They are becomming anti competetive as we speak. Chinas solution, buy the land and grow your own. This is happening righ under our noses and we do nothing.

Your comment>>I understand your point, rehctub: that increases in pays for low income earners may make jobs difficult to sustain. What's the solution, though?

Cut thier un-neccesserry spending. They all struggle yet many have a plasma and a moble.

Stop wasting billions (governments) on failed projects.

Redirect the billions wasted on detainees.

Send food to starving nations, not dollars.

Stop wefare being spent on gambling, grog and cigs.

Stop rewarding non-working people for simply having kids. Employed people pay huge child care fees, while non-workers pay stuff all.

Remove the barriers between workers and employees. Many workers want to work for X. Many employers are happy to pay X + a bonus. The gov and the unions prevent that. 1970's IR laws, welcome back.

There's a start.
Posted by rehctub, Saturday, 24 July 2010 6:40:52 AM
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Awwww poor rehtclub.
Anyone would think that someone put a gun in his mouth and forced him to be a small business proprietor. If you dont like it and think the minimum wage slaves are so much better off why dont you sell up and get one of those jobs for yourself. Change places with one of your workers if they are so wonderfully happy and you are so miserable. Im sure they would jump at the chance to be your boss for a change.
If your business cant afford to pay the going rate then perhaps youre not the great businessman you think you are.

The real problem is that "free trade" is really just "exploit Chinese workers so we can buy cheap tvs" but we fell for it. How can we ever compete with their conditions of slavery and low wages unless we acquiesce to the likes of retclub and join our Chinese comrades in their low paid serfdom. Or we fight to get proper pay and conditions (and an end to the cheap tvs) for chinese and other developing world workers the same as we did for ourselves once upon a time.
Then Australian companies may be able to compete and provide the work (and wages) people need to survive (and pay rehtclubs prices).
Posted by mikk, Saturday, 24 July 2010 7:35:29 AM
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It is your thread rechtub and it was about a wage rise for low income earners.
Now it forgets the wealth you have told us you have made in your working life.
It however targets anything from costs of boat people tax avoiders and, seemingly poor people.
Butch you just have to live with the understanding few, very few share your opinions.
Rather than throwing words like those who hate me around you should consider this.
Are your rights to think as you wish any stronger than those who oppose yours?
Posted by Belly, Saturday, 24 July 2010 1:13:41 PM
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"Cut thier un-neccesserry spending. They all struggle yet many have a plasma and a moble."

You speak about low income earners as though they are something you stepped in walking down the street.

I really don't think you realise how you sound sometimes rehctub.

Still we can always let 'them' eat cake. Hang on cake is a luxury - what about dried bread and water, that's what the poorly paid in China are probably eating so others can enjoy cheap goods.
Posted by pelican, Saturday, 24 July 2010 2:30:29 PM
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pelican,

On the contrary, rehctub sees himself as a member of the squirarchy (new money) - he can't possibly be expected to empathise with the proletariat and their diabolical demands for his largesse.
Posted by Poirot, Saturday, 24 July 2010 6:50:07 PM
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Well you can all throw mud at me if you like, but it doesn't stick.

BTW, I have never underpaid my workers, but, if my wage bill goes up and not my profits, I will cut hours/jobs. It's called, running a business.

Now I will work for someone else in the not to distant future, but at least I will know first hand just how tough the boss is doing it if it's a smaller shop in a centre.

Also, the majority of small businesses (retail) make les today than they did ten years ago, and that's a fact.

Now it's all well and good to suggest one 'gets out'. Boy, if it were only that simple, many would.

Now I am simply trying to warn you all that unless we address these issues, my kids, your kids, everyones kids will suffer big time.

Did you know that recent job applications, mainly clerical, have exceeded 400 applicants. That's 400+ people that are either unemployed at present or unstable or unhappy or unsecure in thier present job.

Now that's scary, considering we apparently only have 5% unemployment. Don't you think?

Many suggest we have dodged a bullet (recession) I say that perhaps it hasn't been fired yet!

I suggest you lot brace yourselves for the recession we have not yet had, as I think it is comming and we will only have our selves and our wastefull governments to blame.
Posted by rehctub, Saturday, 24 July 2010 9:27:03 PM
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rechtub I too do not think you know just what you are saying.
The mud you claim we throw at you is a self harm thing, you have done it your self in just about every thread you post in.
If we,at a time both sides say we are near full employment,are heading for a recession I do not think $26 did it.
And is not the reason for shops doing it hard rents costs and tax are nothing if people cannot buy.
Room always exists for welfare and workplace reform, but not introducing starvation as a way of population control or tax savings.
In truth your views as stated here are gems for my mob, frightens children that stuff.
Posted by Belly, Sunday, 25 July 2010 5:36:09 AM
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Well, I think it's run its course so I would like to make this simple statement.

A rise, for the sake of a rise could well be the rise that breaks the camels back, esspecially in considering we have the increase for super around the corner as well.

And remember, every business expense comes from gross profits and, if gross profits don't go up, then this expense has to come from 'net profits', or, the bosses pocket.

Now remember, we in small business are 'risk takers', often taking huge risks. So, if the risks become to high, then we may well stop taking that risk.

Then what!
Posted by rehctub, Tuesday, 27 July 2010 6:40:03 AM
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I can not let the statement above go unchallenged.
The rise was never for the sake of a rise.
It was for low income earners and some who are not on an EBA.
And to compensate for not getting a rise last year due to the GFC.
Small business men are not forced to Gamble, rechtub ,no doubt worked hard for it but tells us of wealth he has due to investments.
If rechtub no longer gambles his shops will find an owner, people eat.
Those who work , who only have their time and efforts to sell, need to eat.
That cash is spent not hoarded and it in its self is giving returns to small business.
To ignore this, hoping richer people will buy the cheaper cuts ,is unfortunate.
Health and wellbeing of the consumer, ability to consume is a platform of commerce.
The big bad lower income earner is no enemy of small business I am content to restate my view rechtub you have little understanding of the real world.
Posted by Belly, Tuesday, 27 July 2010 6:02:41 PM
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Belly, I have a very good understanding of the 'real world' as you put it.

I also fully understand that low income earners are good customers as they, unlike high income earners, tend to spend every cent every week just to live.

But! What the government should be doing is supporting low income earners so they can continue to be customers of all businesses, while at the same time removing the financial burden from employers so they can continue to employ and make profits for themselves. Remember, many small business owners are also very low income earners and simply can't afford higher wages. Jobs are at risk as a result.

Now we can achieve this by simply STOPPING THE WASTE. Billions wasted, more billions required to fix the stuff-ups.

Prior to the labor government everyone had a job (who wanted one) and more importantly, they felt secure. Now they don't.

The main reason they don't is due to poor business performance.

Now if we cannel this waste back into stimulating peoples spending (on food) not cigs, grog or gambling, everyone will be happy.

This can be achieved with a special 'debit card' for 'essensials only' spending.

There is no denying the cost of living has increased. Labors answer is to burdon small business and the miners. Why! Because they (labor), through thier gross incompitence, have caused this mess and now want someone else to pay for it!

I say again, you (governments) can't make gross stuff-ups and expect someone else to pay for it,(a rise for the sake of a rise, a mining tax) as ultimately, everyone will loose.

I know a guy with three restuarants and 54 staff.

The change to W/end pay rates and the recent rise takes $180,000 per year from his back pocket, or, 5 staff. He chose, 5 staff!

Not sure if they have found another job yet.

It's simply a 'no brainer'.

Well done madam PM!
Posted by rehctub, Wednesday, 28 July 2010 6:34:21 AM
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