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Welcome To 'Your Advantage' Newsletter # 12 Incentives, Customer Focus and Another Election - Search Long and Hard! At the risk of sounding repetitive, now that another Federal Election is behind us, let's review where things went off the rails and where opportunity for change lies. We all now know business confidence is at it's highest level in a decade and and PM and Treasurer are basking in the sun. So why is it that the Labor State Premiers couldn't bring home the bacon? Only a few months ago, Labor supporters expected Mark Latham to coast to power on a platform of "new federalism" built on coast to coast success in the State Elections. That's all history now. Now that Mark Latham survived the loss he, like his State counterparts, will be under scrutiny. While there are different causes in each State, there is a common theme: They have failed to understand their customers ie to confront labor movement and have done precious little to upgrade services and infrastructure in energy, transport, schools and hospitals. Union membership means Labor movement and in NSW Mr Carr is losing support in respect to his handling of basic services. In adddition, he can't even get the trains to run on time due mainly to poor and oudated work practices. In Brisbane, Mr Beattie has the State's decrepit power facility to deal with while Mr Bracks has changed his mind and implemented tolls on the Frankston Highway. In addition, reports of supressing workplace practice report recommendations and increasing penalties for breaches gave the Union movement cause to celebrate. Here in South Australia, we ban smoking (a legal substance!) and cave into Union pressure on shop trading on major holidays. Perhaps we can attribute Labor State successes to good management at the local level, but when it's all said and done, we trust Howard on National Security and managing the big economy. With the Libs now with control in both Houses, they should be able to implement significant reforms. Hopefully they will take up some of our State's most pressing problems, that is our water situation with the Murray and the difficulties in retaining and attracting back our kids through appropriate job opportunities here. Industrial relations and reducing pockets of Union influence could result in some productivity gains in areas like transport. They could encourage wider use of individual contracts and Small Business would welcome enhanced rights for contractors and exemptions/watering down of unfair dismissal laws etc. Hopefully this Government's next few years will be a period of positive change and an opportunity to put a proper distance between themselves and the Unions, make policy strictly on it's metits and manage their services for the benefit of customers, not employees and Unions. For further discussion on Incentives & Social Responsibility see Why Incentives & Responsibility Make For a Better SA Society | |||||||||||||||||||||||||||||||
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We are pleased to advise our website has a new and improved search feature to enable you to find topics and articles of interest quickly. Just type in a word or topic and click "Search". We have also added a new section called "Strategic Insight". This is a quarterly overview of financial Australian and International Markets. In keeping with the Christmas spirit, please contact our new Client Relations Manager, Nikki Everitt, to collect free tips on how to manage your cash flow (from last month) and also the "Margin and Discount Analyser featured in our article "Price Advantage". Finally, it's that time again. May we take this opportunity on behalf of our Team at Advantage One, to wish you and your family a festive season full of great times and great company and have a prosperous New Year.
This newsletter will provide you with a wide range of business related news and information, useful knowledge, profile some of our team members, introduce some of our clients and keep you informed of upcoming seminars and events. We value your feedback so don't be backward in coming forward! Feel free to send suggestions, comments or your opinions to info@advantageone.com.au. |
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Article of Interest- The Tax System's Simple: You're Screwed (This article has been re printed from a recent column of the Australian Financial Review-Peter Ruehl) If you live in Australia and have a decent job, you pay too much in taxes. You needed to be told that like you need to be told rap music sounds like Mike Tyson trying to regurgitate the West Side Story soundtrack. But if you want to have lower taxes - especially the income variety - you have two big hurdles, one from the left and the other from the right. On the left you've got outfits like the Australian Council of Social Service (Acoss), which argues that Australian taxes are actually too low. Acoss did this just the other day. You can set your clock by them. They use OECD figures to back this up, but using OECD figures on a lot of things is like asking Hilary Duff to explain Alan Greenspan. On the right, you've got outfits like - whoops! - the Howard government. Both in Australia, and with the Bush administration in the US, we've moved into this weirdo era of big government conservatism. It's sort of like if the left in both countries had decided to jail single welfare mothers and get into the stockmarket. In Australia, government size has grown steadily since John Howard became Prime Minister and his pre-election giveaways were a big step in the Swedish meatball category. Last August, Howard told The Sydney Morning Herald: "I think we've been very generous in relation to tax. You never say never in this business, but I think it is fair to assume we have done quite a lot on tax." GENEROUS? This government snorks up more than 30 per cent of the country's productive wealth. It's got a tax system that's incomprehensible unless you've got law and accounting degrees and do a lot of drugs. The latter are most important because they help you pretend you've figured it out. The system also seems to inbreed every year, which would explain both its logic and its expansion. But the result is simple: the average Australian gets screwed out of four months of his or her salary annually. But Howard is saying, if you're looking for any more tax reform (like we've had so much already), go to the Cayman Islands. He's about as committed to it as Ivana Trump is to square dancing. Anyway, when the left and right agree on anything, watch out. The last time this happened, we ended up with Jimmy Carter. But let's get back to comparisons. In his recent paper written for the Centre for Independent Studies, Peter Burn points out that, yes, Australia stacks up pretty well in terms of taxes among OECD countries - if all you're doing is counting countries. The trouble is, most of them are European, so it's like counting polyester pants at a Barry Manilow concert. Most of these countries are small, and these suckers tax the way Imelda Marcos shops. Burn put a bar graph together for his paper ranking all OECD countries in terms of their share of total taxation compared with the GDP. The first 17 are all Europeans, including such economic powerhouses as Luxenbourg (42 per cent of GDP goes to taxes). At the very top, and this is going to come as a complete shock, is ....Sweden! About 51 per cent of its GDP is eaten in taxes with the other 49 per cent, I guess, consisting of Volvo spare parts. If achieving nuclear disarmament were as easy as it is to get Swedes to pay taxes, we'd have world peace before you could say Bob Geldof. Of those 17, the first nine are all taxing at levels of more than 40 per cent. It's not until you get to the Czech Republic that it goes lower. They've seen what a great job government does when you hand it all your money. At the bottom, you've got Ireland, the United States, Japan, Korea and Mexico - all well under 30 per cent of GDP. Australia falls just below Poland and ahead of Turkey in the rankings. Burn's point is that Australia may look good if you average all the OECD countries but not so good, or just average, if you judge it against the big boys. And the big boys are the ones you compete and want to do business with. It's not as though Luxembourg is going to keep the Australian wool trade overheated. If you rely on a high income-tax base, Burn says, you're going to be at a "competitive disadvantage". Beating Sweden and Norway in this area isn't exactly something to boast about. Source: The Australian Financial Review, Peter Ruehl Other new articles and information recently listed: |
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