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Checking the docket on how expensive it is to do business in Oz

Update below

Australia is a high-cost place to do business, apparently.

I know because I read it in the papers regularly. Tom Albanese, of Rio Tinto, complained this week about the high cost of doing business in Australia. BG Group saying the cost of its Gladstone coal-seam gas project have blown out. The Business Council cited high costs back in April. One of those absurd “business roundtables” the AFR conducts, back in February, was given over to business executives lamenting “we’re becoming a high-cost, low-productivity nation”.

Usually the fault is laid at the blame of the government. Labor was “anti-business”, complained Graham Bradley in February, mainly because of the Fair Work Act. But the carbon tax cops criticism too. Today the head of the AIG complained that the carbon tax was creating uncertainty because, unlike the GST, businesses couldn’t calculate its impacts.

So let’s look at the evidence.

Has the Fair Work Act increased costs for business? Let’s look at the ABS’s unit labour cost index. When the index is above 100, wage pressures are assumed to exist. How has it fared under this government?

So, this is pretty much the only government in 30 years to eliminate wage pressures for business. The only area where the government has failed to curb wage pressures has been in executive remuneration, which continues to relentlessly increase at rates well ahead of inflation.

How about industrial disputes? Let’s have a look at the long-term trend. This is the number of days lost to industrial disputes per thousand employees. There was a much-vaunted spike in disputes in the September quarter last year, mostly driven by aggressive employers, but otherwise the level of disputes remains at historic lows.

What about the business cost that is in the direct control of government, tax? Last year’s budget papers tell us the ratio between company tax to corporate gross operating surplus:

That is, outside mining, the overall tax take from business has fallen as a proportion of gross operating surplus. Plus, there’s the small matter of the corporate tax cut the government wants to introduce, which the Coalition and the Greens are opposing. In fact, this is a low-taxing government compared to its predecessor. Remember the Coalition’s rhetoric about being the party of small government, then have a look at tax revenue as a proportion of GDP and figure out which side of politics taxes less:

What else could the government be doing? Well it could avoid stimulating the rest of the economy so companies in the resources sector such as BG Group that need construction workers and material aren’t competing against the rest of the economy. And, lo and behold, the government is engaged in a massive fiscal contraction even before we get to the issue of a budget surplus for 2012-13.

What about the carbon price? Is that really a major source of uncertainty for business? Innex Willox of the AI Group laments that the impact of the carbon price is harder to calculate than the GST. But the carbon price impact will be small compared to that of the GST. Work done by the CSIRO and AECOM for the Climate Institute shows the price impact from the carbon price will be 0.6%, barely above the impact of Cyclone Yasi last year (0.5%), less than Cyclone Larry (0.8%) and less than a quarter of the impact of the GST (2.5%).  Treasury’s assessment is that the impact will be 0.7%.

That’s the impact on consumers, not businesses, but it gives a clear idea of the scale of impact compared to the GST that Willox believes was so much easier.

The historical data suggests that, when it comes to labour and tax costs, the claim that Australia is becoming more expensive is dead wrong. In fact, it’s the reason why the wage share of national income is currently only just above its historic low of 52%, while the profit share is higher than at any time before 2008. And that’s why capital expenditure is at record levels — nearly 30% of GDP. The business decisions of investors contradicts the claim that we’re driving business away with high costs.

The issue is not so much whether Australian is becoming a more expensive place to do business, as whether Australian business will ever be satisfied or whether it will continue to push for ever more wage cuts and corporate tax cuts at the expense of the rest of us.

Update: The ACTU’s Matt Cowgill says I’ve misused unit labor costs - see comment 2. For a detailed treatment of the issue (esp. minimum wages) see pp.44-54 of the ACTU minimum wage submission linked to above (and here).

53
  • 1
    Jimmy
    Posted Friday, 4 May 2012 at 1:32 pm | Permalink

    Gee if only some this rational fact based analysis hit the MSM!!

  • 2
    Peter Ormonde
    Posted Friday, 4 May 2012 at 1:37 pm | Permalink

    Excellent Mr K.

    I await with enthusiasm the avalanche of complaints from these industry groups about the absurd wages being paid to these whining executives in Australia. Seems they get paid for making excuses and blaming everything but themselves.

  • 3
    Posted Friday, 4 May 2012 at 1:43 pm | Permalink

    This is a really good piece, but Keane has misunderstood the index of real unit labour costs (RULCs). RULCs are not like a confidence index or a PMI in which 100 (or 50) represents a balance between positive and negative movements.

    Rather, RULCs represent the average labour cost of producing a unit of ouput, adjusted for inflation (using the GDP deflator). Because RULCs are presented in the National Accounts as index numbers, they need a base period. The index is set to equal 100 in the base period. The series could be re-based and set to equal 100 in any other period.

    The level of the RULC index has no meaning. The RULC index is only used to show the rate (and direction) of change in labour costs.

    Stable RULCs imply that the wages share of national income is stable, whereas falling RULCs imply a falling wages share*. If the real compensation of labour grows at the same pace as labour productivity, then both the wages share and RULCs will remain constant. The falling RULCs (and falling wages share) in the 2000s imply that the growth in the real compensation of labour has lagged behind productivity growth.

    *Note: RULCs are not exactly equivalent to the wages share, as RULCs use gross value added as a denominator, which is broader than the total factor income used as a denominator in wages share calculations. They are nevertheless close to equivalent.

  • 4
    Marion Diamond
    Posted Friday, 4 May 2012 at 1:45 pm | Permalink

    Taxes pay for an infrastructure and a health system, both of which are unavailable in many places where companies do business. In much of Africa, for instance, mining companies employ workers who are HIV positive, and have to provide (admittedly rudimentary) health care for them.

  • 5
    Posted Friday, 4 May 2012 at 1:50 pm | Permalink

    Thanx for this piece, and thanx to Matt Cowgill for clarifying index of real unit labour costs.

    Good afternoon Peter. The right wing trolls seem to avoid pieces that report inconvenient truths, but should they emerge I look forward to reading you play Whac-A-Mole.

  • 6
    swingingvoter
    Posted Friday, 4 May 2012 at 2:01 pm | Permalink

    As evidenced by the second graph the new IR regime and ‘Fair Work Australia’ has presided over an increase in work days lost due to industrial dispute. Whilst historically the disputes are still low, if they were to continue to increase it would be bad news for everyone - right wing trolls and left wing lunies included.

  • 7
    swingingvoter
    Posted Friday, 4 May 2012 at 2:02 pm | Permalink

    1

  • 8
    Posted Friday, 4 May 2012 at 2:11 pm | Permalink

    But as Keane pointed out:

    1 the increase in work days lost due to industrial disputes spiked in September 2011 - it has since fallen;

    2 this was driven by aggressive employers.

    However, I agree that if employers further increased the loss of work days by lock outs and other confrontational tactics it would be worth restricting their scope for these tactics. I suggest that employers not be permitted to take industrial action without a vote of their board if not of their shareholders.

  • 9
    Suzanne Blake
    Posted Friday, 4 May 2012 at 2:22 pm | Permalink

    Bernard,

    The cost of doing business is growing out of control. Take Australia Post for example, they have increased the price of business post by up to 36% in the last 37 months. Thats not the 60c stamp, that the media / public would be all over, but the sneaky items, like parcels, red satchels, express post etc.

    ACCC alseep at the wheel again, and all for more rake for incompetent Swan.

  • 10
    swingingvoter
    Posted Friday, 4 May 2012 at 2:26 pm | Permalink

    The spike was due to the new IR environment that encourages all parties to pursue adversarial tactics to the detriment of genuine enterprise bargaining. To suggest the disputes were driven by agressive employers is bunkum. As my granny is so fond of saying - It takes two to tango.

  • 11
    Michael de Angelos
    Posted Friday, 4 May 2012 at 2:28 pm | Permalink

    Suzanne Blake-if you think it’s costly to do business here, try the UK where I have to once a year (under the Tories although New Labour were similar).

    Good piece BK and we really should see more of this in Fairfax/News which re-cycle press releases as though they are news without any investigation.

    PR companies now knwo if you get your timing right and send a cleaver media release, newspapers & TV news will report it as fact. Do it often enough and the dialogue is created. Ross Gittins was the only journalist I recall who did a proper investigation on the great mining tax advertising scam where even an advertsing campaign was re-cycled as a news story.

  • 12
    Posted Friday, 4 May 2012 at 2:40 pm | Permalink

    @Gavin Moodie and @SwingingVoter,

    The largest cause of the slight increase in days lost in 2011 was a one day strike by employees of the NSW public sector. These employees are covered by State industrial law, not the Fair Work Act. The Act therefore had nothing to do with that part of the increase.

  • 13
    Simon Mansfield
    Posted Friday, 4 May 2012 at 2:42 pm | Permalink

    Yep - all those jobs being slashed - all those jobs being sent overseas - na it’s not happening and the media just makes it up.

    The problem with this article is that it ignore the productivity numbers. If productivity is going down in Australia how can it be that it’s getting cheaper to do business in Australia.

    The high cost of labor in the mining industry and it’s flow on effect to almost all areas of trade labor such as construction is the primary reason productivity is falling.

    Moreover, measured against our trading partners all costs in Australia have gone up since the Aussie dollar became so fashionable.

    Outside of mining - wages are under major pressure and non award rates if anything will be falling in real terms.

    Finally, the big problem facing export exposed businesses is that revenues have been shattered over the past few years and while some business input costs have fallen - such as items imported for local assembly then re exported - local costs have skyrocketed as a percentage of total sales.

    As usual this article is based on total aggregated numbers and treats the nation as a single static unit - when it obviously is made up of thousands of businesses operating in many different sectors all seeing different cost, sale, profit trends.

  • 14
    Posted Friday, 4 May 2012 at 2:55 pm | Permalink

    @Simon Mansfield,

    1) The rate of productivity growth has been falling in Australia since the late 1990s. Work Choices didn’t help, and there is no evidence that Fair Work has hurt.

    2) Wages growth can reduce profits. Wages don’t have much to do with productivity, which is a volume measure (output/input).

    3) You’re right that costs denominated in the Australian dollar have increased relative to those denominated in other currencies. Is that the fault of domestic regulation of any sort, or is it due to a once-in-a-lifetime exogenous shock to the terms of trade leading to dramatic appreciation in the real exchange rate? I’d go with the latter.

    4) No, wages have grown at around their average pace.

    5) You’re right that this article and many others focus on economy-wide aggregates because they’re trying to evaluate the effect of economy-wide regulation.

  • 15
    Posted Friday, 4 May 2012 at 2:57 pm | Permalink

    I should stress than on point 2 (above), I said *can*, not *have*. The profits share is near record highs, etc. etc.

  • 16
    Mike Flanagan
    Posted Friday, 4 May 2012 at 2:59 pm | Permalink

    Simon Mansfield;
    Simon, while you dismiss Bernard’s point on the basis of ‘aggregated numbers’ you use aggregate
    numbers in your argument on the productivity figures.
    It is also relevant to point out that the productivity numbers are influenced by a major minng investment boom. Throughout the period of this investment boom the new mines and projects are not producing while at same time employing large numbers in their development to productive status.

  • 17
    kennethrobinson2
    Posted Friday, 4 May 2012 at 3:32 pm | Permalink

    This is only an excuse to bring in foriegl labour at slave rates!

  • 18
    shepherdmarilyn
    Posted Friday, 4 May 2012 at 3:32 pm | Permalink

    Humans can only produce so much on any given day so the productivity whinje is and always has been ridiculous.

    The fact is that our big business people want slave labour.

  • 19
    shanghai
    Posted Friday, 4 May 2012 at 3:45 pm | Permalink

    Companies work better in anarchy - no rules to worry about, you provide your own security, and you get slaves.
    It worked for the European expansion in Asia and the New World and it still works across the globe.
    For first world countries it’s a bit trickier but it’s getting there.

  • 20
    Simon Mansfield
    Posted Friday, 4 May 2012 at 3:57 pm | Permalink

    Matt - I wasn’t suggesting regulation was the cause of higher costs in Australia. The Aussie dollar has been a central problem for many businesses - along with the high cost of material inputs and real estate costs.

    As to productivity - BK and GD have trotted this issue out regularly as a stick to hit business with. Calling them lazy, lacking in innovation and whatever this week’s anti-business sledge might be.

    Today’s article is just another take on the same theme. Due to the green/left nature of the Crikey readership it plays well to the peanut gallery and reinforces the prevailing prejudices of many Crikey readers who have an inbuilt bias against business.

    Statistics hide all sorts of trends in the local economy. Many businesses that are exported exposed have actually become much more efficient - but as revenues in local dollar terms have fallen so much it’s hard to see the productivity improvements.

    Of course many of these businesses now employ a lot less people and have used improved IT processes among many actions to reduce local costs and remain in Australia as operational businesses.

    But when the mining boom ends in the next 18 months or so and the dollar corrects back below 90 cents - we could well see a very quick improvement in a whole slew of businesses. The trick is to keep as many of these businesses going for a bit longer and hope they are still around when the dollar does correct.

    If it wasn’t for the feral opposition the government would have a lot more room to move - but given Labor is facing annihilation it might as well damn the torpedoes and do what needs to be done to defend the national interest and to hell with Abbott and his fifth columnist mates at Lies Ltd.

  • 21
    bluepoppy
    Posted Friday, 4 May 2012 at 4:01 pm | Permalink

    This article does not surprise. Thanks BK.

    It was one of the biggest furphies during the WorkChoices era another period when industrial disputes had been at an all-time low. The greed is coming from the top down in a trickle down effect. Businesses could all make lots more money if we introduced slavery back into the mix - that would fix it. No doubt these weary hard-done-by CEOs would find something else to complain about - like high tax rates - easily fixed by doing the offshore thingy Google is doing as per the other Crikey article today.

    At least in the US Warren Buffet had the gumption to admit his secretary and cleaner paid more tax than he did.

    While companies are legally bound by obligations to shareholders first, the madness will continue. The whole out-for-ourselves economic system has to change into a -little-bit-for-me-little-bit-for him alternative.

    Movements like Occupy don’t come out of nothing.

  • 22
    Simon Mansfield
    Posted Friday, 4 May 2012 at 4:08 pm | Permalink

    Maybe the comments engine could flag the words that need moderating - it would sure improve the productivity of the comments thread.

  • 23
    Peter Ormonde
    Posted Friday, 4 May 2012 at 4:11 pm | Permalink

    OOOOh noooo Simon. If we knew that we would avoid using them and then there would be no reason to have a moderator-bot would there? Can’t have that now can we?

    Why sensible people are leaving commenting on Crikey in droves. Just silly.

  • 24
    Observation
    Posted Friday, 4 May 2012 at 4:15 pm | Permalink

    Maybe if the banks reduced their business loan interest rates it would more affordable.

    I would be interested to see what the ratio and trends of what type of businesses are now in Australia. What is the growth industries and exports beside mining? What is the trend in types of jobs we are all getting?

  • 25
    Jimmy
    Posted Friday, 4 May 2012 at 4:39 pm | Permalink

    Simon Mansfield - While not saying that jobs aren’t being lost and that it isn’t a bad thing but when the media focus on 500 jobs here or a thousand jobs there being lost they are overblowing the issue when you consider what percentage of the total workforce thsoe 500 or 1000 jobs actually are. Plus you don’t hear about the jobs benig created as much as you do about a job being lost.

    SB - How many times are you going to try to use the increase in Australia Post costs to prove some ridiculous point. One cost, which wouldn’t be a significant expense in most businesses does not an argument make, especially when you are arguing against the figures provided by BK.
    And if you don’t like the price Australia post are charging change providers, there are plenty of other people who deliver parcels.

  • 26
    Meski
    Posted Friday, 4 May 2012 at 5:15 pm | Permalink

    @SB, Jimmy: I’m less than impressed with AP vs the other carriers, mostly because of their lax delivery. For instance, I get parcels delivered to work, which has a delivery in manned during business hours, and yet, AP manage to find it unattended… If you don’t want to do parcel delivery, AP, then don’t pretend to be in the business.

    @BluePoppy: No, movements like Occupy come out of a sense of entitlement.

  • 27
    swingingvoter
    Posted Friday, 4 May 2012 at 5:25 pm | Permalink

    Observation - the growth industries are service industries with Health and Education right near the top. These industries have faced wage push at times, and it is these industries that the Commonwealth and State governments fund recurrently to a large degree. It is not just business that is trying to contain wage cost. (or to put it in the language of the loopy left pea nut gallery,it is not just business that would like to see more ‘slavery’)

  • 28
    Michael
    Posted Friday, 4 May 2012 at 5:35 pm | Permalink

    BERNARD
    You’re traveling down the same path as the Global Warmists, trying to explain the inexplicable.
    Business is great in Oz, households are thriving, the climate is warming, the waters are rising & like Nero, you fiddle.
    You are an utter fool mate & the only one who doesn’t see that is YOU!

  • 29
    Mark out West
    Posted Friday, 4 May 2012 at 5:36 pm | Permalink

    How many of the right wing luminaries would like a 20% reduction in wages.

    Then watch house and land prices drop, mortgage defaults skyrocket and the housing sector collapse.
    It always seems that the Hansenites have these jingoistic answer to what is wrong with Australia and resort to a Chinese wall mentality.
    If we had a real mining tax that could properly iron out some of the creases of the extraordinary terms of trade in resources then we could compensate struggling industries.
    If the mining sector slowed and the dollar dropped them we may have a happy balance.

    The right wing will always bleet about how it is so tough for them ably support by a majority of press (there are very few journalists out there but right wing commentators who hide behind the true journalists legacy).

  • 30
    Mal White
    Posted Friday, 4 May 2012 at 6:52 pm | Permalink

    In my experience there has been an explosion of regulatory requirements that have to be met to get projects going in Australia. Having three levels of often uncooperative governments has not helped.
    There also seems to have been a cultural change in many workplaces with duty of care and fear of litigation reducing initiative and any risk taking, even for minor issues. Now, elaborate and often inflexible procedures are all the fashion. It can be difficult to get people to make decisions if it may create some sort of liability issue.
    There is no doubt that health, safety and environmental outcomes have improved.
    I also have no doubt that the compounding effects of increased requirements, whether created by govt or business, mean that business costs will keep ballooning, as will consumer costs such as rates, power, water, insurances etc..

  • 31
    mundi mundi
    Posted Friday, 4 May 2012 at 7:39 pm | Permalink

    I think the author is a bit out of his depth here. None of these graphs have anything to do with the cost of doing buisness.

    How can tax recipients as a percent of GDP be steady, while the governments budget as a percent of GDP has continuously raised? This is because not all payments to the government count as ‘taxes’. If you have to buy a permit, or a forced to buy a government ‘service’ this is not a tax, yet its still a cost to a company. Try start a bank you will be down millions to the governments before you even lose a single cent in tax.

    The unit labor cost index is missleading because it does not take into account entitlements earned. The unit cost for 9-5 labor has gone down, the unit cost for non 9 to 5 labor has exploded and is at an index of over 250, yet he conviently ignores this graph.

    Low working days lost per thousand employees proves nothing. If minimum wage and entitlements increase, of course industrial action will decrease, not to mention that under the current fair work act, any industrial action apart from complete shut down is not possible by the employer. The government have basically made industrial action illegal - for both sides. This doesn’t magically make it cheaper to run a buisness or even suggest that new laws are making a more stable economy - it just forces the bucket to be kicked along - ensuring that when companies do go down - they will go down in flames quickly.

    The GOS graph is flat. There are only 2 points in the latest down trend. This is not staistically significant to indicate anything.

  • 32
    Arnold Cheeseman
    Posted Friday, 4 May 2012 at 8:37 pm | Permalink

    @ Suzanne Blake…

    LOL!

  • 33
    Annitsa Amistad
    Posted Friday, 4 May 2012 at 9:25 pm | Permalink

    The unit cost for 9-5 labor has gone down, the unit cost for non 9 to 5 labor has exploded and is at an index of over 250, yet he conviently ignores this graph.”

    Good on you for pointing out non-labor cost but you need to tell us the index of over 250 start from when. How much is the increase since Labor took office four and a half years ago? You also miss what Mr Keane said “while the profit share is higher than at any time before 2008. And that’s why capital expenditure is at record levels — nearly 30% of GDP. The business decisions of investors contradicts the claim that we’re driving business away with high costs.”

    I would like Mr Keane to break down the 30% of GDP into a few industry groups though to see who is doing well.

    Boring economics, no Slippery news today.

  • 34
    Steve777
    Posted Friday, 4 May 2012 at 10:16 pm | Permalink

    Businesses organise labour and capital to generate profits. That’s capitalism and it mostly works pretty well as long as the interests of all parties to production are in reasonable balance. The owners of capital want to sell their product or service for as much as they can, pay as little as possible for inputs, including labour, and pay as little tax as possible, preferably none. Left to themselves, capital owners would dump their waste products in the air or the nearest body of water. Meanwhile, labour wants its wants its share and historically has had to organise to look after its interests. After all, who else is going to?

    The endless calls by business leaders for ‘reform’ should be seen in light of the sort of analysis in this article, i.e. these calls are for the most part self-interested bleating. To coin a phrase, the owners of capital have never had it so good. I’ve always favoured labour over capital in the never ending struggle for the good things in life. The owners of capital are quite good at looking after themselves and need no help from governments or taxpayers.

    Of course calls for ‘reform’ will continue until sweatshops and child labour have been reintroduced. But of course they have - in Asia.

  • 35
    Bobalot
    Posted Saturday, 5 May 2012 at 12:34 pm | Permalink

    @ JIMMY

    I doubt Suzanne Blake actually owns a business. She would need to understand basic mathematics.

    An increase of one business cost (and a minor cost to most businesses) is not sufficient evidence of a general increase in the cost of doing business.

  • 36
    Mike Flanagan
    Posted Saturday, 5 May 2012 at 1:27 pm | Permalink

    Bobalot;
    I doubt it actually exists. I suspect it is a malware computer programme from its’ repetitive use of phrases

  • 37
    Mal White
    Posted Saturday, 5 May 2012 at 2:17 pm | Permalink

    @STEVE777

    You have a very simplistic view of the division between capital and labour that would not have been out of place in a 1950s Communist Party manifesto.

    …labour wants its wants its share and historically has had to organise to look after its interests. After all, who else is going to?” How about the individual, or is that not allowed? I know of many people who ask for and get high salaries all on their own.

    …the owners of capital have never had it so good.” In some cases this is true, in other cases many are struggling,: ask the car industry how their suppliers are holding up.

    Believe it or not it a very complex world out there that defies simple labels and assumptions. Your claim that people wanting reforms to wont stop until “..sweatshops and child labour have been reintroduced” is just plain absurd.

  • 38
    Peter Ormonde
    Posted Saturday, 5 May 2012 at 2:30 pm | Permalink

    Mal

    Believe it or not it a very complex world out there that defies simple labels and assumptions. Your claim that people wanting reforms to wont stop until “..sweatshops and child labour have been reintroduced” is just plain absurd.”

    You know that. I know that. I suspect Steve knows that. Our local “capitalist class” on the other hand seems terminally bolted to fulfilling their historical marxian mission - of cutting taxes, red tape, wages, fair work laws, awards … all the usual culprits that stop them being rich through their brilliance and hard work.

    I am still waiting for any of our “entrepeneurs” to suggest some serious social and economic strategies that don’t fall back on the tried and trusted axioms of naked self interest and increasing their share of the pie.

    We need to make marxism more relevant to our modern social relations don’t you reckon? I look forward to a “dictatorship of the sub-contractor” myself.

  • 39
    Peter Ormonde
    Posted Saturday, 5 May 2012 at 2:32 pm | Permalink

    Oh dear … I must be really sinful at the moment … again Sister Mary Moderator has swooped on what looks like an superficially innocuous. Too many frightened libel lawyers stalk the halls of the Crikey Convent. Enemies of free and open discussion at the best of times.

  • 40
    drsmithy
    Posted Saturday, 5 May 2012 at 2:51 pm | Permalink

    Humans can only produce so much on any given day so the productivity whinje is and always has been ridiculous

    A human working today (generally) produces far more than they did, say, a hundred years ago thanks to improvements in education, technology, processes, safety, etc.

    Our car industry, for example, is woefully unproductive in terms of how many cars are produced per hour of labour. This remains true whether you’re comparing to workers being paid relatively poorly in Thailand and Eastern Europe, or workers being paid relatively well in Germany or Japan.

    With that said, while there is merit to the productivity argument, it *is* mostly used in an attempt to simply reduce input costs (ie: labour) rather than improve output volumes (ie: efficiency).

  • 41
    Jackol
    Posted Saturday, 5 May 2012 at 3:30 pm | Permalink

    Mundi Mundi writes some nonsense:

    How can tax recipients as a percent of GDP be steady, while the governments budget as a percent of GDP has continuously raised?

    It has continuously raised has it? Where are the figures for that? I’d be fairly confident that you’re just making this up. Government expenditure did increase to cover the GFC, but it has been falling since then.

    This is because not all payments to the government count as ‘taxes’. If you have to buy a permit, or a forced to buy a government ‘service’ this is not a tax, yet its still a cost to a company. Try start a bank you will be down millions to the governments before you even lose a single cent in tax.

    You have no idea what the figures include or exclude. To work that out you’d have to go back to the original ABS stats, and I believe that they include all Federal government revenue; I could be wrong, but you’ll have to provide a reference to show that.

    Fundamentally, government revenue fell off a cliff during the GFC and hasn’t recovered to anywhere near pre-GFC levels; it has very little to do with government policy, it has been a structural change related to the essential de-leveraging being undertaken by both consumers and businesses (or to put it another way, the pre-GFC economy was distorted by an unsustainable debt expansion that should not be used as a reference point for “normality” by anyone).

    There is a lot going on, but the stats don’t bear out the contention that the cost of doing business in Australia has gone up in any way that is controllable by the government (the exchange rate is basically out of their hands).

    Additionally the “productivity trolls” are out in force again - productivity is GDP per hour worked - paying people less does not improve productivity; it may improve profitability, but if you start off by saying “productivity has been falling and therefore X and Y and Z”, you need to understand what productivity, as it is measured by the ABS, actually means. It is patently obvious that most business spokespeople either do not know what affects productivity, or they figure they can get away with slogans about productivity on the assumption that the general public is too uninformed to work out that the business representatives are gilding the lily.

  • 42
    Mal White
    Posted Saturday, 5 May 2012 at 4:14 pm | Permalink

    @Peter Ormonde

    Perhaps Peter the reason why Cri.key uses a useless computer program to act as moderator is because, due to high business costs, they are unable to afford a human.

  • 43
    Peter Ormonde
    Posted Saturday, 5 May 2012 at 5:15 pm | Permalink

    Mal,

    Not fair blaming a dumb machine - it’s only doing what it’s told. The worst moderation system of any website I’ve ever encountered … so easily offended, so precious and timid… directed by a nervous bunch of lawyers and a frightened proprietor.

    Convinced me anyway. Pity actually BK finally writes something decent and the discussion is restricted to Soozy Bleak’s mindless ranting - which apparently isn’t a problem at all as far as Cr*key is concerned.

  • 44
    drsmithy
    Posted Saturday, 5 May 2012 at 6:10 pm | Permalink

    How about the individual, or is that not allowed? I know of many people who ask for and get high salaries all on their own.

    Very, *very* few individuals have much bargaining power on their own.

    Even many that ostensibly do are really relying on a group for their success (eg: groups of executives all sitting on each other’s boards of directors, politicians voting for their own payrises).

    In some cases this is true, in other cases many are struggling,: ask the car industry how their suppliers are holding up.

    As a block, the victory of capital over labour has been so comprehensive and complete, it’s laughable to even suggest a different outcome. Globalisation is great for capital and disastrous for workers who inevitably end up in a race to the bottom. Individual outliers (like, say, the enormous over-capacity present in the car industry causing its problems) don’t change the trend.

    Believe it or not it a very complex world out there that defies simple labels and assumptions. Your claim that people wanting reforms to wont stop until “..sweatshops and child labour have been reintroduced” is just plain absurd.

    The trend in America - a country most politicians and, it seems, a sizeable chunk of the people in this country are desperate to emulate - is pointing towards this.

  • 45
    Suzanne Blake
    Posted Saturday, 5 May 2012 at 6:52 pm | Permalink

    In any case business confidence and jobs growth will come after the election, when everyone regains confidence and the markets stability.

  • 46
    drsmithy
    Posted Saturday, 5 May 2012 at 6:59 pm | Permalink

    In any case business confidence and jobs growth will come after the election, when everyone regains confidence and the markets stability.

    Rest assured that people are not going to regain confidence, nor the markets stability, until long after the next election (and probably the one after that).

  • 47
    Suzanne Blake
    Posted Saturday, 5 May 2012 at 7:01 pm | Permalink

    @ drsmithy

    Perhaps you are right, after the watermelon Greens are wiped out in a double dissolution

  • 48
    Peter Ormonde
    Posted Saturday, 5 May 2012 at 7:06 pm | Permalink

    Bleak…

    What … business confidence will resume with the election of the inept Joe Benedict (after Chifley) Hockey and the evil papist clown Tony (after Saint Anthony) Abbott? This is what business wants?

    Will Abbott slash the cost of stamps - no! Will Hockey bring down the dollar to protect our jobs - no! What will they do? Who knows - who cares - but hey the proper people will be back in the government benches again. The rich have paid enough! It’s time to slug the old, the sick and the unemployed.

    But it might see you shut up and stop your endless whining - a small price for the nation to pay I reckon.

  • 49
    drsmithy
    Posted Saturday, 5 May 2012 at 7:13 pm | Permalink

    Perhaps you are right, after the watermelon Greens are wiped out in a double dissolution

    Both Liberals and Labor follow the same demonstrably broken neoliberal playbook, which at its core aims to do nothing more than impoverish society to further enrich the wealthy. It will produce the same outcome here as it has in the other countries using it. So, until that changes, we’re just kicking the can down the street.

  • 50
    Suzanne Blake
    Posted Saturday, 5 May 2012 at 7:22 pm | Permalink

    @ drsmithy

    As long as the can is full of watermelons, fine by me.

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