Myer's today announced profit downgrades for their current period, claiming that their January stocktake sales failed to meet their expectations.
They also claimed that this was because they offered similar pricing in November last year, and the consumers concern about rising interest rate rises

What this does prove, is that Myer's whacked its prices up at Christmas.
This type of discretionary pricing is the bane of all Australian consumers today.

This detachment of pricing compared to the actual cost of the goods supplied, is a direct result of changes made to the Trade Practices Act
during the Howard years.

To compounded this problem, changes made to the Workplace Relations Act ensure that a pay rise does not compensate for the rising price of things, caused largely by discretionary fee's, charges and pricing and the general greed of business more than increasing cost's.

Ethical barriers to excessive profit taking (or at least, what we once considered excessive)
have been legalised by edict.

Also I cant remember the last time I, or any other employee in my industry had a pay rise.
I can remember getting tax cuts.

This is when "you," (the taxpayer), fund your own pay rise, instead of your employer increasing your salary, your tax money is being used to keep cost's down for your employer, while your actual wage fails to keep pace with inflation, driven by, or dependant entirely upon, that very same employer/businesses discretion.

In addition your job security probably extends to whether they want you or not, and this can reduced to a day to day proposition, governed by your employers discretion alone.

So, too Myers and others selling non essential items, I expect that you can expect more of the same profit downgrades, because the average battered Australian family consumer doesn't have the money anymore to buy the things that we really don't need, because we are just trying to budget for our elastic fuel bill, our electricity, our mortgages etc .

Perhaps you should consult with your compatriots in the essential services sector and ask them if they are taking their fair whack.

Profits down does not mean no profit. Corporations have gone quite mad in relation to profit margins - Myer still made a big profit maybe not enough to satisfy the shareholders, but the world does not exist to serve shareholders alone. Consumers can no longer fund the excesses of business and they will make wiser and more careful economic choices as costs of other commodities rise.

Perhaps a cut in the millions of dollar salaries paid to the executive body might help with a falling profit margin. I am sure senior executives could learn to budget household expenses with a 50% pay cut. Stop paying models more than $5M per year for representing business and you have another substantial saving. But I suspect that is idealistic, the cuts will be at the customer service end which will in the long term reduce business even more.

I had to wait ages the other day to find a human being in David Jones to serve me, most of the cashier desks were empty and I ended up in a completely different area to be able to make my purchase. People will walk if the service gets too sloppy, even though we have become almost immune to it, there is a fine line.

The cost of housing, energy and fear of rising interest rates will mean variations in spending. Spending on luxuries will and should come last in a household where budgets are managed well and spending does not in the main exceed income.

Perhaps it is a good sign that rampant consumerism is being restrained and there is a shift to sensible approaches to managing personal debt.

There are always shifts and changes in the employment sector, jobs lost in retail will be made up elsewhere like building sector (in response to rebuilding infrastructure due to natural disasters), some in mining and the community and health sector where there is increased demand particularly in medical/affiliated medical, aged care and child care.

It is swings and roundabouts.

The average Aussie battling consumer never walked in the doors of that shop in my view.
And we have always like the sea,had up waves and down, in NSW at least that brand was never other than top end.
The battlers battle some times even in good times.
But selective spending may see some prosper others fail,I feel no pain for Myers.
They do have other shops but the top end may well be the loss maker.

There is a huge problem looming for the retail sector (small end of town) as wages and overall running costs are simply to high and represent to larger portion of turnover.

Wages:
Wages are simply to high for small employers, yet, they are to low for employees to live on. It's a catch 22!

So the end result of increased running costs will be a further shift to the multi national retailer who is able to get better returns on thier employment dollars, which of cause will result in decreased competition. But we did warn you.

They are also the retailers who sell more and more imported goods.

We, the consumers, are signing our own death warrents!

Running costs:
Most leases have a built in annual rental increase. Problem is, most small retailers are experiencing reduced turnovers, which means running costs are getting out of hand as they are representing a larger portion of turnover, which squeezes profit margins.

The effects are reduced standards, essecially in the restaurant industry. When was the last time you thought you received value for money dining out?

It's all because dollars have to be saved somewhere, so food costs suffer resulting in a poorer meal.

Resuarants used to allow a third food cost, now they are approaching the 25% mark.

Remeber, a gourmet pizza is made from flour, water and a few toppings, yet, they commonly sell for up to $25 each but cost around $4 to make.

Now as for pay rises. Many received a $26 per week pay rise this financial year. So I'm not sure what that's about.

the elites..[anyone who earns over a million per year]
believe the poor should serve them..pay all the costs

believe the poor can survive all these new taxes
[that could easilly be removed/replaced by a capital gains tax
death duties tax and a transaction tax]

well the thing is they cant/wont

see we been paying it all on credit cards
paying minimum payments..at ursurous intrest rates

when the credit cards stop...the game is over
inflation is theft from the poor

we been over this time and time again

the wrong people are getting credit
and the wrong people are paying for everything

its funny/sad how the workers pay
is nothing like the ceo's pay
they dont even relate...arnt linked to each other

we can live /survive without bosses
but not without skilled workers

bah
im saying the same things
and nothing ever changes

rehctub you make a good point about wages being too low in some cases to live on but too high for some small businesses.

I have noticed that there has also been a huge rise in commercial rents and the cost to business much higher % wise than in the past. As soon as one link in the chain (landlords, banks, suppliers) gets greedy there is a snowball effect which ultimately impacts the employees, consumers and small business owners in a cycle of greed that eventually can do nothing but implode.

The GFC was evidence of that phenomenon.

thinker2
Define excessive profit.

What are you saying should be the connection, if any, between the price of something and what it cost?

Belly, we agree again.

I have never found any reason to shop at a big name store. A while back, when I needed a new fridge, I did check one of them out, as their sale brochure had landed in my letter box.

Their sale price on the one I wanted, turned out to be almost $300 more than the price at the hole in the wall little retailer, I bought from.

Thinker, job security, why?

If I have a job, I can hire someone to do it. I will usually have to spend quite some effort, time & money training them to do my job. It can take months to make them productive.

My staff can leave me at a weeks notice, & take my training & expertise to a competitor, any time they like.

A competitor, using my expertise may take half of my business, but I am expected to offer the remaining staff "job security".

Why am I expected to offer anyone a job for life, when they can leave on a whim, any time they like? Doesn't seem quite fair to me.

thinker2
Define excessive profit.

Now I don't want this to become a 'staff bashing thread', however, unlike business owners who often take huge risks and place thier nuts on the line, staff risk nothing, yet get hansomly rewarded plus some!

So, if a company invests say 20 billion dollars to make a half a billion in profit, how is that being greedy?

After all, business owners, like any other investor are quite entitled to a decent return on investment, don't you all think?

Now as for staff having the freedom to come and go as they please, well, apparently fairness has no place when it comes to employers being dupted.

It is also one of the many reasons why we have such a skill shortage. Why 'over train' someone who may well become your competitor.

It's not as if you get rewarded for you efforts.

The excessive profit I'm referring too, Rehctub is margins such as 150-200% in retail essentials like clothing for example. Why ?.

And I would think, that it is the search for excessive profit that drives the yo-yo petrol price cycle and the supermarket duopoly.

I know that business people put their lives on the line Rehctub, and would also not want this post to become a business operator bash either.
But I am saying that the trade practices situation in Australia today allows for corporations to rule over the consumer
"and along with that consumer, the small business person" who can have their margins reduced and their ability to employ people curtailed, or even to compete, simply by the preference of their larger supplier, who can increase the pricing fee's and charges at will. Without justification, other than their own best perceived interests.

At the Corporate level this is clearly out of control, the size of their profits are obscene, forget that I said excessive.

Of course increasing imports of goods has also removed our need to manufacture things, therefore we've seen those jobs disappear.

But my underlying point is, "that the living standards of the average Australian have been eroded the most by the corporatization of our economy."

Our richest of the rich (except Richard Pratt) operate with seeming impunity, and given a toothless law environment in which to operate, proceed to do so without effective competition, regulation or enforcement of breaches in law.

Example 1: Downward price pressure placed by supermarkets on milk producers at the cost end by anti competitive pricing is disguised or offset by the profits at the petrol pump, their margins ever increasing.

I think the " fair go " is gone Rehctub. I'd kinda like to see that make a come back.

Well put thinker 2.

What ever happened to win-win. Profits for the retailer, manufacturer, wholesaler; and value for money for the consumer as well as fair pay and working conditions for employees.

Like old Con the Fruiterer used to say "a little bit for him and a little bit for me". The me-me Business School is out of date and we need to get back to honest business principles.

I get a bit tired of hearing derogatory remarks about employees as though their labour has little value in an economy. Labour is just as important if not more than property rights. One's labour is a form of property rights and you don't sell your property for little value just as you don't sell your labour for less than a fair price (in an ideal world). There is something wrong with an economy that fosters growing income disparity resulting in two and three speed economies and a ensuing reduction in living standards for the lowest paid.

Labour is one value in the business chain, it is often the first to be devalued in negotiations through downsizing or pressure to reduce the minimum wage or bring back draconian IR standards. The idea that perhaps 'excessive' profits for each player along the chain of business (not always fairly distributed - think farmers) is the real problem. Greed begets greed whether it be from unreasonable demands from employees right through to executives, CEOs, shareholders and owners.

The penny is dropping but it is taking its goodly time.

Thinker 2, I agree with what you say, or at least most of it.

You do know of cause who caused this anti competitiveness, WE DID!

You see this problem with the big retailers started back in the 80's.

We used to see our towns dotted with small fruit shops, butchers, family run hardware stores, but hey, we wanted more. We wanted cheap goods and, despite the fact that we knew the underlying result would be a monopolised retail sector, we continued to support these big guys more and more.

So, given that these huge companies also employ lots of people and generate huge amounts of tax for the government, they to (the government) are doing exactly what we did. They are supporting this knowing full well that it will end in tears.

But we were warned, time and time again, yet we continued to allow these guys to gain market share.

Now we want government to fix the problems we caused, while at the same time loose billions in revenue.

It's not so much a case of 'won't happen', it's more a case of 'can't happen'.

Yes Rehctub, it seems that a lot of us posters on OLO are concerned about the same things , it's just that we see the causes differently.

It seems if you scratch around beneath the surface there probably is an Australian identity. An identity that we all commonly possess.
The fair go I mentioned is an intrinsic part of this and your right it is us that has let this slip, but Govt's driven by their own dogma are also responsible for making our country a far less fair place than it once was.

As an employee I would think my life was fuller and my time utilised more purposefully if I could feel loyalty, even affection towards my employers rather than the mistrusting, even confrontational atmosphere we now have in our working lives.

As consumers we have become suspicious and cynical and rightly so, given that consumer protection is all but non-existant compared to previous times. It is ludicrous how our leading pollies and business leaders run with a philosophy of never making an admission, even when they are clearly wrong.

In my parents Australia having the capacity to admit you were wrong, was a leadership credential, now it is perceived as a weakness.

But none the less Rehctub it is reassuring to know that that so many of us are essentially looking for the same outcomes whether we are the employed or employer. A return to consensus perhaps?.

Restoration of our previous system of belief would make me feel a lot better and this has to start at the legal level, for it is our now inadequate laws that create this environment of confrontation, mistrust and suspicion, exactly as they were designed to do, by a govt tainted by it's own twisted ideology. It was all very un Australian and it still is. The other useless side of politics has done nothing to change this and is therefore now equally culpable and too use a vernacular, tarred with the same brush. Bugger.

Much as I don't like big business, & try to avoid it, you go too far with the blame of retailers.

Don't forget the biggest business in the country, even if it is not too businesslike. Government is the main rip off.

I mentioned some time back, in the 60s, on the average wage, I payed 7.25% income tax. Add to that the huge extra take in GST, much higher excise on fuel tobacco & such. Add the hugely increased charges such in council rates, car registration, & other licencing by state governments. Then add the interest rate increases by a reserve bank, run by bankers, & you find why the average punter is much poorer.

When you have a good look, the retailers have nothing on the banking sector, but it's the public sector that's making us poor.

*Example 1: Downward price pressure placed by supermarkets on milk producers at the cost end by anti competitive pricing is disguised or offset by the profits at the petrol pump, their margins ever increasing. *

So you claim, Thinker 2. I have seen no evidence of this. Coles made
it clear, when it dropped the price of milk to 1$ a litre, that it
would not be at growers expense. But supermarkets are dammed if they
do and dammed if they don't, it seems. Milk processors like
National Foods are owned by the Japanese, they have plenty of margin
there to play with.

If you check the Coles annual figures, they work on 3c in the Dollar
as net profit, hardly a rip off, more like value for money to the
consumer. No wonder people flock there. I doubt if Rehctub would
be satisfied with a 3% net margin.

I personally prefer to buy my meat and veg at Coles, for good reasons.
Their meat is better then the local buther for a start. It takes
me about 2 minutes to fill my trolley with what I need in meat,
rather then stand around at the butchers, waiting to be served,
and have it cut and packed.

I am also a Coles shareholder, along with around half a million
other Australians. A large chunk of the rest of Coles is owned
by Super Funds, again benefitting millions of Australians.

Why should I not shop there?

Aldi on the other hand, are owned by a couple of rich Germans,
so that is quite different.

Absolutely Hasbeen,Govt is part of the problem as well. But Corporations have much more power over your small business than in the past, and today there really is no restraint on their behaviour or discouragement for their lack of ethics.

Even lawyers do not have to act according to the instructions of their clients because they have something known as discretionary power in Australia today. I myself was betrayed and stooged disgracefully by the lawyers of my own insurance company in favour of the party I was prosecuting because it saved money for both or either insurer depending upon the outcome.

This collusion obviously was crime, but the ombudsman explained that the discretionary power they now possess allowed them to ignore my instructions. In fact he said "Mr .... changes made to the legal practices act by the Howard Gov't virtually guarantee their BMW's." His words not mine.

The law society found my complaints amusing I think.

Anything digressive,anti social,lacking in forward thinking or vision is, and will be associated in some way with the short term needs of the Corporatasi,and not the citizens of this country or this planet.

In fact instead of giving them more power they should given less by way of regulation. Clearly they can not be trusted.

Todays news, speaks of the nuclear power plant in Sydney concealing accidents and endangering their employees, and that this has gone on for years. A classic example of abuse of power, denial of responsibility and lack of supervision/regulation by Govt of an important and dangerous private installation.

Are their any beneficiaries of this behaviour other than for the private owners of the plant?. No there isn't. I don't care how fat their bank accounts are and don't think supporting their obvious dishonesty and lack of accountibility and supporting their profitability has any upside for me and my family or any other taxpaying citizen.

If you can think of the upside Hasbeen could you let me know.

Of course Yabby the real reason for not squeezing farmers margins, is because there isn't any more fat left for them to squeeze.
They already have their suppliers of milk nailed to the wall. Many of them would simply find something else to do.

3c margin (declared) is relative to the size of the overall profit figure per annum. When you look at these numbers, these businesses are making too much money. Their profits are needlessly large and their social contribution absent. The social effects of their behaviour is the problem.

Pricing good quality food out of the reach of the less fortunate for example, causes the less fortunate and their family's to eat the less than good food, with lifelong consequences.

Eliminating the local butcher with predatory pricing is not romantic Yabby. And I disagree ," the meat supplied by my local butcher is far superior to the product offered by my local supermarket adjacent, and the service also ".

They have been trying to get rid of him for years, so they can increase their margins and sell rubbish as well in a monopoly.
Tawdry is what this is Yabby, not honourable or defendable even if you are shareholder.

Petrol pricing should be the subject of a whole post of its own. But it has probably been done to death Yabby. Nothing is more obvious than collusion.

A collusive corporatized Australian economy now exists. And all they have to do get their own way is to conduct $million dollar advertising campaigns designed to sway public opinion, and support oppositions, too any representative Gov't that stands in their way.

Abbott proposes that the mining tax is a tax on the people. Of course it isn't.
It is actually the people collecting tax for a change, from the multinational exploiters of our resources, instead of paying it.
Scare campaigns tell us of the economic ramifications of having more of their money, in our tin. Basically, just a thinly veiled threat.

Power and money, just for the sake of it, to my way of thinking Yabby, is not a romantic notion.

thinker 2
You haven't answered either question and are just ventilating irrational prejudices. If you answer my questions, I will prove your argument to be irrational. Please DEFINE (not exemplify) excessive profit, and state what should be the relation between cost and profit - on which your entire argument depends.

You ASSUME that income above costs is immoral. But everyone, including all workers, aims for income above costs, otherwise what would be the point? And everyone, including all workers, charges what the market will bear, in other words what other people AGREE to pay.

Corporations have NO POWER. No-one has a gun at his head forcing him to buy clothing or anything else. The only advantage any corporation has is if people PREFER to buy their goods.

The predominance of corporations in the market place is caused by government. This is because, the more taxes and regulations there are, the more on-costs to business, and the more on-costs there are, the more small businesses are driven to the wall. Large businesses have an unequal advantages because of the economies of scale.

Pelican constantly complains about the unfairness of corporate predomination but it is precisely the policies she is in favour of that are causing it.

In calling for a return to how it used to be, the leftists forget that how it used to be was a lot less government, and as usual they are blaming business for their own greed and ignorance.

What is really obscene is the greed of those who think the starting point is that everyone else's freedom should be illegalised, and then permitting only what they think would be to their advantage.

*A classic example of abuse of power, denial of responsibility and lack of supervision/regulation by Govt of an important and dangerous private installation.*

Err Thinker 2, if you do your homework, I think you will find that
the Govt actually owns the Sydney nuclear power plant.

*When you look at these numbers, these businesses are making too much money*

3c in the $ is too much money?. Compared to what? I remind you
that Coles was nearly taken over by the Americans. Luckily
Australian mums and dads backed Wesfarmers in keeping it Australian,
with millions of Australians benefitting from the profits. Including
you, Thinker 2. Corporations pay alot of tax and many do a great job
at delivering great value to customers and employing millions.
Customers clearly vote with their wallets and go there, every single
day. So most Australians would disagree with you.

*Pricing good quality food out of the reach of the less fortunate for example, causes the less fortunate and their family's to eat the less than good food, with lifelong consequences.*

Hang on there. Don't shoot the messenger. Supermarkets price food
depending on what it costs them to buy, plus expenses. You will find
that many junk foods, are in fact some of the most expensive per kg.

Don't blame supermarkets if some people insist on buying junk foods
and ignore cheap and healthy foods.

Given that the poor shove billions of $ down the pokies, don't blame
supermarkets, if people make poor decisions.

*Eliminating the local butcher with predatory pricing is not romantic Yabby*

You make my point for me, Thinker 2. If supermarkets charge too much
you complain, if they don't charge enough, you complain. Peter
Hume has a point. Sounds to me like you are on an emotive rant,
wishing to complain!

Hardly rational but go ahead, get it off your chest and feel better.
A cup of tea and a good lie down helps too. Failing that, try a glass
of good Aussie wine :)

Hi Peter.

Sorry for not replying earlier .

Firstly the question I am posing, specifically in economic terms is,
" that if we consider our current level of profits acceptable as a measure to conduct and maintain a successful business, should we not then consider that increasing costs, should be the only determinate factor, that can or should be passed on to the consumer wherever possible, as a base acceptable notion ?."

I guess Peter, my motivation is a simple wish for a more social economy.
One where the living standards of the masses (if you will) is not in decline.

Secondly, I am saying," that the regulatory and workplace environments created by changes in law during the Howard years,
have not necessarily taken Australia forward in this area." And that since then, a more socially un-healthly relationship environment
exists particularly between employees and their employers .

Employees here today, are focussed upon their individual goals in the absence of a collective identity.
Employers in turn complain of skills draining from their grasp to their opposition after training such people.

Loyalty requires leadership. Leadership survives on loyalty. Catch 22.

I think we can still prevent this decline in opportunity, liberty and social equality.

I think RE-Regulating for it, (the fair go I mean) would be a good start,

Is that a rant ?.

Hey Rehctub, I must tell you I was an entertainer for 30 odd years and I held a restaurant residency for 10 years during that time.
The restaurant tripled in size in that 10 years.

Ahh the good old days, when businesses had useful tax benefits for long lunches. (haha)

I stand corrected there Yabby.

I definitely used the wrong example, but could even this be, a case of Gov't mimic-ing business, in a poorly regulated environment.

T2>>As an employee I would think my life was fuller and my time utilised more purposefully if I could feel loyalty, even affection towards my employers rather than the mistrusting, even confrontational atmosphere we now have in our working lives.

Well you can blame unfair dismissal for that one. Nothing will ever be the same again.

I have staff without a licence, then my business gained an order which required delivery. I can't change this employee with one who has a licence. Why? My business needs have changed.

Now as for excessive profits, many people make the mistake of reading the profit and not what it took to make that profit.

The worker makes the best profit, always has. It costs about $100 per week to go to work and they get paid $1000. There are few buisinesses that make these (x10) returns on investment, if any.

Hasbeen, Since the 60's we have, single mother payment, family assistance, baby bonus, paid super, parental leave and a dwindling PAYG tax income, to name just a few. Who do you think pays for these!

Yabby, don't tell me you fell for that 3% crap. Most of their prices are down by 10 to 20%, yet, they don't run at a loss. That's a myth!

So, if they do still make 3%, then their suppliers have worn the brunt of their discounting. Don't you think!

BTW, if you discount by just 10%, you have to sell 1.5 times the amount just to make the same profit. That's assumming you have no increased expenses.

Have their sales increased by 50 to 70%?

Have their costs remained unchanged?

I doubt it. That 3% is a joke!

Workers don't make profits. They get paid for their labour - they are not a charity for business to utilise as required.

Certainly there are many jobs that are overpaid and the oncosts make it difficult for employers and ultimately consumers. But the overpaid jobs are not represented in the lower income streams. It is the middle-high end wages pushing up the low end wages so that those on minimum (or near to) wages can afford to survive and participate in the economy.

The real problem is at the top end not the bottom despite the furphies being pushed by business unions.

*Yabby, don't tell me you fell for that 3% crap. Most of their prices are down by 10 to 20%, yet, they don't run at a loss. That's a myth!*

Let me put it to you this way, Rehctub. The figures of public
companies like Woolies and Coles are public information, they
being public companies. Analysts rip them to bits and examine
the claims made. Auditors audit the books. CEOs are regularly
grilled on these figures.

The claim by Coles to work on 3% of overall turnover, is over all
products sold, not just meat. There are many things which influence
that figure, from the cost of rent to logistics and more efficient
running of the business. Coles turnover is indeed increasing,
as customers return and the business is turned around. The new
management team are starting to make a big difference, consumers
benefit.

The 3% figure is commonly mentioned by management. Are you claiming
that management are defrauding the public and shareholders? Have
you ever bothered to read their annual report

The example you cite regarding the licence Rehctub, seems like a perfectly reasonable reason for needing to replace that employee. Would that dismissal be deemed unfair?.

If the existing employee was given opportunity to get a licence, then this might be a perfectly good reason for that employee to feel loyalty towards their employer.

Industrial relations laws have for the most part tried to find a balance. Workchoices tipped the balance, and had it remained intact it would have resulted in bottom feeders being the most successful in business, not leaders. Trouble is, it is still mostly intact, (at least in our mindset), the previous era of co-operation all but forgotten.

The idea that a dismissal in some cases, can be unfair is perfectly reasonable. Sadly this type of legislation is needed
to deter the very same bottom feeders from succeeding in business.

I agree with your scepticism about declared corporate margins Rehctub. It's the unnecessary and ever increasing size of their of their annual profits that disturb me.

The collusion aspect of my post have remained largely ignored but I still contend that there is at least, what you would think was indicators of such, in petrol pricing alone.

The consumers are feeling the brunt of this

Yabby, I am not disputing whether or not they make just 3%. What I am suggesting is that given the fact that this was their figure, pre-the past years or so of discounting wars', how on earth can their profits remain at 3%, given the huge discounts they have offered in the past year or so.

My suggestion would be that they have made huge cuts to costs. Staff, outgoings and suppliers. So, who has worn the brunt of their discounting?

pelican, I was simply using this as an example. However, when one refers to 'excessive profits', these comments must be substantiated as profits are simply a return on investment and this is why I used the staff example, as staff often complain about profits, yet invest next to nothing to make their profits, which, by the way, are a return on their investment, time and skills.

T2. This actually happend to me. I was advised by my federation that it would be illegal for me to terminate this empoloyee simply because my business needs had changed.

Simply another example of the crap we employers have to deal with.

Of cause, if he did not like the changes, he could simply leave. Go figure!

*My suggestion would be that they have made huge cuts to costs. Staff, outgoings and suppliers. So, who has worn the brunt of their discounting?*

Rehctub, in an organisation of that size, there tends to be huge
waste. Great management is largely about identifying that waste
and introducing more efficient, less wasteful systems. What you
pay your staff is less critical. What they actually do all day, how
they do it etc, is far more critical. Pass those savings on to your
customers and you will invariably land up with even more satisfied
customers and increasing turnover.

*Workchoices tipped the balance, and had it remained intact it would have resulted in bottom feeders being the most successful in business, not leaders.*

Nonsense, Thinker 2. It is not the lowest paid staff that make
a business money, but the most talented. Staff can damage machinery.
Staff can scare away customers. Smart employers understand this
difference and reward their best staff, for they are often the
most valuable asset a business can have. It pays to look after them.

If you don't understand those kind of facts, perhaps its one of the reasons
why you are not running your own business anymore. There is more
to running a great business, then many an employee will ever
understand, that is why so many fail

I have read and absorbed yours posts Yabby, Rehctub and pelican and appreciated them,
Peter Hume didn't respond to my proposition regarding excessive margins. I was hoping he would.

I have to admit Rehctub, that your employment example does show the excessive nature of he extremes, but it would still have been silly of your employee to refuse to get a licence, if given the opportunity to do so.? Wouldn't it.?

However the subject matter of my post was really about the battered consumer experience
that masquerades as service and delivery of such in Australia today. Service is about trust.
This was something that was intrinsically Australian regarding transactions in our once more regulated economy.

The fair go , should be re-instituted in order that the standard of living for most people doesn't continues to decline in real terms. And that the ability to participate in the economy at the bottom end (as pelican said) doesn't disappear altogether.

Power to distort democracy increases when fewer people have actual power. Real power and economic power are the same thing in the real world.

I simply do not understand why it isn't appropriate to have a set of basic understandings
for participation when it comes to the master/servant relationships in peoples lives.

The market alone, should not and cannot be the only driver in a civilised society.

Thinker2
Sorry; busy.

No it’s not a rant.

But it’s a double standard based on logical fallacies.

For example:
" that if we consider our current level of profits acceptable as a measure to conduct and maintain a successful business, should we not then consider that increasing costs, should be the only determinate factor, that can or should be passed on to the consumer wherever possible, as a base acceptable notion ?."

Who are “we”?
Who are “our”?
Are they the same people?
Are you assuming that all property is owned in common?
If so, what justifies that?
If not, why are non-owners of profits regarded as having an ownership interest in them?

You still haven’t defined excessive profits, and it’s not clear what you’re arguing. Are you saying excessive profits are profits above current-level profits? Why? What justifies current-level profits? If the measure of what’s legitimate is *costs*, then why should *any* profit be considered legitimate?

“I guess Peter, my motivation is a simple wish for a more social economy.”

This pre-supposes that the economy would be more social, if the government were to intervene so as to ensure that profits are not excessive. But you haven’t yet shown why any given measure of profits is justified or excessive, nor taken account of the *negative* consequences of any intervention. So you have not yet justified your assumption that the interventions you favour would be more social rather than less.

Since market transactions are based on consent, and government transactions are based on coercion, you are essentially assuming that social co-operation based on coercion is more “social” and mutually beneficial than social co-operation based on freedom and consent.

But you can’t just assume it; you need to prove it. Otherwise your argument is “it is more social for co-operation to be based on violence than on consent BECAUSE it’s more social for co-operation to be based on violence than on consent.” It’s illogical.

Similarly, you assume that there is an irreconcilable conflict of interest between participants in a market economy. But you need to prove it, that is, you need to eliminate the possibility that people’s relations are mutually beneficial.

“Power to distort democracy increases when fewer people have actual power. Real power and economic power are the same thing in the real world.”

Your interventions would result in a lot *fewer* people deciding the values that everyone else should live by.

You have not established that economic actors have *power*. Governments have guns; retailers don’t. You are in favour of less power to the people and greater inequality.

I simply do not understand why it isn't appropriate to have a set of basic understandings
for participation when it comes to the master/servant relationships in peoples lives.

You are ignoring the negative consequences of the master/servant relationship involved between government and its subjects.

Your entire argument depends on ASSUMING that government has a moral and economic superiority over consensual transactions.

It doesn’t; or at least, you haven’t even begun to PROVE IT yet.

So the double standard is that you are essentially arguing “I’m ethically allowed to use violence against others to get what I want; but others aren’t allowed to use violence against me to get what I want.”

The logical fallacy is to assume what is in issue.

So if what you are ASSUMING WITHOUT PROVING is incorrect, as I have shown, it follows that what you are in favour of is not a MORE social economy, but a LESS.

Please answer my questions about what, if anything, justifies profit.

@yabby

I just love your Statement "Given that the poor shove billions of $ down the pokies, don't blamesupermarkets, if people make poor decisions" You have hit the problem right on the Head!

Who are the biggest poker machine owners in the Country?

Its either Wollies followed by Coles.. or the other way around.

Also , your comment about better Meat from Coles is pure Rubbish.. Its' the waiting you don't obviously like.. to which you aviod by buying lesser quality Meat and Vegies elsewhere.

You deserve what you buy, Coles Shareholder !

*Who are the biggest poker machine owners in the Country?*

Aspley, yes indeed, both Coles and Woolies own a number of pubs
and clubs. Which has absolutaly nothing to do with the price of
groceries. They both run liquor divisions, the pokies were around
for a long time before they got involved in owning them.

But if people are going to complain that the poor have no money
to buy groceries, why don't they ban the pokies? Its the poor after
all, shoving billions down those machines each year.

*Also , your comment about better Meat from Coles is pure Rubbish*

It is? As it happens, our local butcher doesen't impress me.
The poor bloke probably can't help it, his suppliers are limited.
Coles and Woolies can take their pick of the best livestock and
commonly do. The meat which I buy each week is actually pretty good
and has improved a great deal, since Wesfarmers took over Coles.

Hi Peter, thanks for your response on this subject.

Firstly, I don't make any economic assumptions PH.

Throughout history there has always been, (in any formal social structure), the haves and the have nots. This I believe an indisputable fact.

The have nots constitute the majority of people as a natural occurrence of any political system. If democracy is to be considered a certifiably real political system or concept, the interests of the majority are to be taken in to account, apparently.

If we are to justify fair profits as based upon the WC Fields principal of "never giving a sucker an even break", then we need to temper this thought process with some basic principals understood by all participants.

I simply asked the question "if we consider our current level of profits acceptable as a measure, to conduct and maintain a successful business: should we not then consider that increasing costs should be the only determinate factor, that can or should be passed on to the consumer wherever possible, as a base acceptable notion" ?.

I would suggest that with your silence Peter to this specific question, is because you would not believe this is a fair question to ask ?. Am I right?.

And as for the non profit owners as you refer to them, they are the majority of participants in the productivity of "our" democratic nation.
For them the question would be "why are my living standards in decline, whilst the big end of town are enjoying the fruits of my labour". e.g. unnecessary increasing profit margins/bonuses.
The GFC and the bailouts by taxpayers is no better demonstration of the investment that the non profit owners have at stake PH.

If the Gov't isn't moral or representative, then "I am assuming" that we can vote for another one.

You also propose that I assume/accuse "irreconcilable conflict of interest between participants in a market economy".

On the contrary I'm suggesting that both would benefit from common understandings.

As for the proposition that the difference between Govt and a Retail store, is that the govt has guns, is something I am also assuming that we shouldn't have to consider in our economic modelling Peter.

“I don't make any economic assumptions.”
Yes you do. Any human action involving choice among scarce resources involves economics, whose principles apply whether or not you understand them.

You assume that:
1. there is such a thing as fair or unfair profits
2. profit margins are increasing unnecessarily
3. there are two mutually antagonistic economic classes of persons: the haves and the have-nots
4. it is fair and would be more physically productive to resolve that conflict by aggressive violence

“I would suggest that with your silence Peter to this specific question, is because you would not believe this is a fair question to ask ?. Am I right?.”
I wasn’t silent on it. I answered it with my questions which were intended to find out what you mean because it’s not clear
1. who is the “we” you refer to
2. who is the “our” you refer to
3. why “current level of profits” are justified.

So it’s not that you’re *not* making economic assumptions. It’s that you’re making false economic assumptions that you are unaware of.

“As for the proposition that the difference between Govt and a Retail store, is that the govt has guns, is something I am also assuming that we shouldn't have to consider in our economic modelling Peter.”

Why not?

You’re facing two basic problems – to show that
A. existing profit levels are excessive and the result is unfair to the consumers
B. government intervention could produce a fairer result.

The problem with A. is that you have to define excessive profits, which you haven’t done yet. You are trying to define it as profits above “current level” or normal profits. But this assumes that current level or normal profits are justified. But what are normal profits? And why are current level profits justified? If profits are not justified, then current level profits are not justified. But if profits are justified, then why not does the same justification apply to profits above that level?

The problem with B. is that the consumers of government have even less protection because:
o Paying retailers is voluntary; paying government is under threat of imprisonment
o The laws against fraud and deceptive conduct apply only to trade and commerce; they do not apply to politics and government
o It is a criminal offence for retailers to use force to exclude competition; but not for government
o Consumers of retails services get a COMPLETE VETO on EVERY SINGLE TRANSACTION; consumers of government get one 22-millionth of a say only once every three years in which all decisions are bundled with no way to distinguish them
o The electoral process provides NO WAY OF KNOWING whether the majority are in fact in favour of any given decision
o The government is by definition a monopoly of armed force, which it uses to exclude competition.

Therefore it is completely invalid to assume that government – of all people – are able to provide greater consumer protection when government themselves are more monopolistic and fraudulent and less representative of the consumers in every way.

To get to square one you need to:
o Say what justifies profit at all
o Define excessive profit
o Prove why they are unfair – why the justification of profit doesn’t apply any more
o Define the haves and have-nots
o Prove that government is not a legal monopoly of force
o Prove that a complete and binding say on EVERY SINGLE TRANSACTION EVERY DAY is less representative of the consumer than one 22-millionth of a non-binding say once every every three years
o Prove that the Trade Practices Act law against misleading and deceptive conduct applies to politicians and bureaucrats
o Prove that the law against fraud, as it applies to retailers’ advertising, applies equally to politicians in election campaigns
o Prove that aggressive violence is ethically superior to consensual freedom.

The interventions you suggest would be less fair and would make everyone poorer – in short, they would have the *opposite* effect to what you intend.

5 Ways Hi-Tech Retailers Are Secretly Screwing You
http://www.cracked.com/article_19022_5-ways-hi-tech-retailers-are-secretly-screwing-you.html

Amazon has to take the prize for douchiest price-discrepancy scheme. Back in 2000, it launched what it called a "price test."

Amazon would analyze your previous purchases
and start charging you *what it thought you would be willing to pay, not what the item was actually priced at.

Customers discovered that if they cleared their cookies, they'd often find the same item available for less than it was offered for when they were signed in.

Thanks OUG for your informative link, it just goes to show how many more ways business has invented to short change the consumer.

The onus is not upon myself to prove anything PH as the process to which I am referring is a fact of life.

I'm talking about the powerful dealing with the powerless, it is also a fact of life PH and there has always been a requirement in a democracy for Gov't to act on behalf of it's people.

You seem to be advocating that the powerful should regulate themselves Peter. This is recipe for disaster in the long run. And history proves my assertions correct.

Show me a case PH where business, given a free reign, has acted out of anything other than it's own perceived self interest and I'll quantify excess profit for you, if I haven't already done so in your eyes. Let's not get weighed down in diversions.

The we for example is us, all of us, including those to which we look too for leadership.

The two richest Rhinehardt and Fortescue are currently having a two way battle for richest person spot. How does this have a positive affect on my life. PH It doesn't, it is irrelevant.

Just as postulating about whether I'm making assumptions or not is irrelevant.

I ask that the previous regulatory framework enjoyed in this country be restored in order that we progress to a fairer Australia. Because my own life is becoming less fair minute by minute. Seeing that I am just an ordinary guy I expect that others have also noticed this growing imbalance of power and influence.

Our current Trade Practices and Industrial Relations Acts have encouraged Corporate domination of our economy. Our essential services now longer belong to us and none of the predicted benefits have materialised.

Competition has not created lower prices, but it has created profits margins way beyond the gazetted inflation figures. Commercial in confidence laws will ensure that the truth will not be known anyway PH., but attempting to quell discussion about it is not useful.

P.S OUG Im dumping all the cookies on my computer as we speak.

thinker 2
You still haven't defined excess profit on which your entire argument depends. You still haven't said why any profit is justified, and therefore have failed to show how your argument could be anything other than illogical. Your definition of "us" as "all of us" is laughably stupidly inadequate. You have failed to distinguish the 'we' who are to decide from the 'our' who own the profits. Your assumption that government represents the people better than they represent themselves completely fails to deal with the irrefutable reason showing that it doesn't.

What you've said is illogical, evasive and dishonest. You are unable to defend your own argument and merely fall back to assuming what is in issue, and asserting that you don't have to prove anything.

It is you who are suggesting that the powerful should regulate themselves.

You are in favour of a *less* social economy, *greater* privileges for the powerful, *greater* impoverishment of the masses - and when the illogical and falsity of your own arguments is pointed out, instead of doing the intellectually honest thing and re-thinking your ignorant anti-social opinions, you just adopt the schoolyard tactic of putting your fingers in your ears and arguing "It is because it is. I am right because I am right."

I have proved your arguments to be irrational, and you have not either defended your argument or refuted mine.

Ok Peter, excessive profit is when, the profit owner decides to increase their margin when the buyer or mark is a softer or less knowledgeable/informed target even though this is not an essential requirement to the success of the profit owner concerned.

This is clearly not anti-social.