It’s Shakespearean Tragedy not Greek…

Firstly, I don’t agree with Government bailing out private enterprise regardless of how big they are, a market only works if bad businesses are allowed to fail.  I made that comment and the following explanation to a friend who had posted this image on Facebook outlining the massive funds injected into the Corporate world as a form of statement that Greece’s demands were reasonable and insignificant in comparison…

Screen Shot 2015-07-07 at 8.18.19 pm

That said, Governments will have entered into bailouts with the bankers outlined on the basis of providing cash and with an expectation of getting their money bank on a short term basis; to be fair I don’t know of the top of my head who and how much has been paid back yet. Lehman Brothers of course failed but they had a net trading profit when they went down so it wasn’t bad management it was cashflow ie a liquidity problem that broke them, they couldn’t get cash because the other banks had a run on their reserves…

I think people are missing the main problem in the Greece situation. Since the 2008 crisis, Greece has had bailouts provided on the basis that they undertake measures to get their economy back on track and despite all the discourse on austerity their economy was showing signs of recovery 5 months ago – that is until Syriza was elected and plunged them back into the depths of recession with their policies. This exact same scenario occurred in 1933 when Franklin Delano Roosevelt was elected on the back of the “New Deal” and plunged the US economy back into the Great Depression.

The point that is being missed is that Greece needs to take action to fix its economy, regardless of whether the current debt is forgiven or multiple generation repayment terms are offered etc; no-one in their right mind is going to give them money if they know nothing has been changed and that they will only have to give more money when the next tranche simply runs out.

So I went and did some research to find out how paying back the corporate bailouts had turned out…   It seems that 951 entities received bailout funds in the USA, to date the US Govt has recovered all the funds bar 9.38% including losses from companies that still failed in spite of the investment. The US Govt will also receive an ongoing dividend from the shares it acquired investing in these firms.

In the same time Greece has struggled to make their meagre repayment schedules and still require another bailout in the magnitude of $380 bn as has been suggested. They want more funds to pay the debt on the debt of the credit card without making structural change in their economy.  It’s massively different investing in someone who won’t help themselves and constantly asking for more money after their last lot went bad and you have no expectation of the next lot of good money being any different.

PrintI can’t see much light at the end of the tunnel for Greece; my personal opinion is that they are best exiting the Eurozone and re-floating the Drachma; they will have to do that or issue IOU’s in the next week if no bailout arrives as they have no liquidity left in their banks now! The consequences of that are likely to be hyperinflation and a need for humanitarian aid until such point as Greece gets control of their monetary policy and restore their economy. The only other alternative is massive injection of bailout, forgiveness of most of the debt (unlikely) and still have to restore their economy.

What is needed to restore their economy?

  1. Massive reduction of pensions and age of attaining a pension.
  2. A restructure of their progressive taxation system to start collecting revenue while maintaining an incentive for investment in enterprise.
  3. A broad based consumption tax to simplify direct taxes and collect revenue from everyone spending in the economy.
  4. Reduce Govt services and allow the private sector to deliver them ie a smaller public service.

The third element is essential because you cannot overtax individuals engaged in enterprise and eliminate the incentive to invest more. ie high taxation will drive expenditure to expense items and minimise taxation so Government still does not collect. You want someone to keep their money if investing in enterprise as that creates growth but if they take the fruit of their labour you want to capture revenue at point of sale. In short, the restructure needs to collect revenue, reduce Government expenditure and encourage growth.

NONE of these requirements are palatable as the Greek economy has sailed along on false pretences for so long it is difficult to accept the necessary change hence the OXI vote on the weekend, but whatever your politics, cold hard reality will ultimately dictate no other option for Greece.

Education is an adjunct not the beginning

We need to invest in education, we need to teach them how to behave, we have to train them to be more productive, spend the money and the assumption is that the results will follow.

Cloud computing,networking and connectivity

I believe in training, I value the benefits of teaching our children and youth and I do not think for one minute that we should not have an education system. When it is presented as the answer for all that ails us however I have a very different perspective from those people.


When I see or hear about a problem, I don’t see lack of education as the foundation for the problem. There are many ignorant academics in the world for example and a lot of educated people who lack commonsense. No amount of education has changed the way these people view the world or modified their behaviour.


If education was the answer


In the 1970’s an 80’s in both government and the police force rampant corruption existed in Queensland. I was at school at that time however talking with many friends much older than myself, none of them considered the community as a whole as ignorant, as uneducated.


The police commissioner Terry Lewis among other policemen as well as ministers of the crown went to jail at the time and one well-known identity Russ Hinze passed away before court proceedings were finalised. No amount of education identified and certainly didn’t prevent this systemic problem.


It is a long bow to draw to claim that education is the solution to developing economies and drag third world countries out of poverty as a consequence. The staring point is setting the conditions for economic development then creating access to harness the benefits of those conditions.


Setting the conditions is all about our governments understanding that the economy operates at the margin and they need to ensure that we low transaction costs associated with regulation, corruption and monopolisation. If they achieve that then we have no unfair or abuses of competitive advantage and consumerism establishes a vibrant, robust and prosperous economy.


Why is access more important than education


Access is what allows people to take advantage of an equal opportunity if established by government doing its job properly; access allows a society to harness their opportunities and reap the rewards from their efforts. The six killer apps of first world economies identified by Niall Ferguson are the key factors that have allowed industrialised economies to flourish.


If we live longer, share information, have smaller families then survival is no longer the imperative, we create a fulfilled life, not just an existence and without going into too much detail… we dispel the Malthusian view on growth, it is not a prerequisite that modern economies require unlimited population growth.


What then is the value of education


In a developed economy, continual improvement in the health and wellbeing of society, the ability to adapt to change in the economic landscape for example are all possible the more we develop our knowledge. This is the most important aspect of having am education system in place. It creates the environment where minds can be developed to seek and create more knowledge.


The second aspect is incentive; tertiary qualified people typically have incomes 75% higher than non-university workers. We want people to forgoe income in their formative years because they contribute so much to society as a consequence of their education, it requires this incentive to make the delayed gratification equation worth their while.


The licence to learn and acquire knowledge from tertiary education also allows society to produce but not limited to, specialists whom we depend upon. This is obvious in the fields of medicine for example but the arts as well as sciences set the conditions for both incentive (enjoyment) and innovation (exploring the possibilities) critical for improved social wellbeing.


You don’t need an education


I know many small business owners educated in “The School of Hard Knocks” who are incredibly successful.


Education has a vital role in our future but it is not what got us to where we are nor will it establish democracy or rule of law in third world economies or transform dictatorships.


The hard work and knowledge of small business owners across the country is the far more important in our economy than education in my opinion, what are your thoughts?



Yours in Successful Small Businesses…

It’s not Black or White in Ferguson

Why are the media and our politicians fomenting the conditions creating the civil unrest in Ferguson Missouri?

Close up shot of piano keyboard

Now, I’m by no means an expert on crowd control or the dynamics of riots, nor do I have a completely informed understanding of the unemployment conditions within the demographics of Ferguson or Brixton where a similar crisis arose in the UK in 2011. I want to make generalisations about these topics in regards to the consequences of what is actually very important here.


If we do not fully inform society with the information that explains who, what, when, where and importantly why a situation has transpired, it exacerbates these problems. Most importantly we need to inform people in a way that does not confuse the message, and this is where the both the press and elected officials could serve us far better if they weren’t so focused on self serving agendas and grandstanding. Rather than pushing buttons for no other reason than to produce great sound bites and headlines wouldn’t it be great if they had the moral fortitude to speak the truth.


“White police officer not prosecuted for killing unarmed black man”


This is typical of the message that we have heard out of Ferguson over the last few days and we have seen emotive interviews both the officer Darren Wilson, and the parents of Michael Brown.


Don’t shoot the messenger


I don’t want anyone for an instant to think I am cold and heartless, that this incident is just a blip that is irrelevant and move on people…. the loss of any life is a tragedy regardless of the circumstances, the parents of Michael Brown must be under immense stress from the public scrutiny they are subjected to, and Officer Wilson will suffer personally from the traumatic event he was a part of.


The observation that I have of the situation in Missouri is that there is a deliberate “Race” card being played and I for one don’t see any positive outcomes against racial discrimination as a consequence of that and more importantly I don’t believe that it is the real reason for the tragedy that has taken place.


If you sit down and look at the actual evidence presented to the Grand Jury, two things are clear; eyewitness testimony is clearly contradictory whether deliberate or from human fallibility (do some of the mind tests online to observe this for yourself) and even the most well intentioned person could believe something is true that just did not happen. The second aspect is that forensic analysis of physical evidence is objective and the evidence presented to the Grand Jury was incontrovertible.


So what is the actual message that should have been presented

“Police officer assaulted by violent suspect fatally shoots him while attempting to make arrest .”


There was no race consideration involved in this incident, I feel sorry for the parents who have lost a son who they say would never hurt anyone. The facts are though that Michael Brown assaulted a store owner during a robbery, he was shot the first time by a policeman who while trapped in his drivers seat being assaulted was able to draw his weapon and shoot his assailant. Michael Browns blood was on the trouser legs of Officer Wilson and the inside of the police vehicle.


There was a bullet lodged in the armrest of the car and all three autopsies agree on the first and last bullets entering Michael Brown’s body. The first could only have occurred as he was leaning inside the vehicle assaulting Officer Wilson and was on his hand. The last was a fatal injury outside on the street.


As a community we charge our police services to arrest and remove dangerous people, Officer Wilson was obligated not to walk away from the danger he was in but to do his job and pursue apprehend and arrest the man he suspected of conducting a robbery and who had just assaulted him.


Brown ran away a distance of about 150 yards which is where his blood was found, he turned around and was found fatally shot around 25 yards closer to the police vehicle. The eyewitness testimony differs remarkably at this point; it is obvious from the physical evidence that Brown was approaching Officer Wilson when he shot him. The only conclusion from this that we should accept as a society is that a violent suspect did not get on the ground when challenged by an armed officer. He continued to approach the officer and as a consequence he was shot.


If not race… what is the real message


President Obama was correct in his observation that there is a deep mistrust in these communities between police and black people. I believe that he did a disservice to these communities when he played the race card and said that it is because of past racial discrimination.


Yes, there is a well-documented history of the Ku Klux Klan, slavery and a long-standing general superiority complex of the white man. I certainly don’t dispute that; I just don’t think it serves any useful purpose to dwell of the sins of the father and certainly not at a political tool to connect to a select demographic in your electorate.


Stability in society is created when citizens have a prosperous society where they stand to lose more than they hope to gain from civil unrest. Both in Ferguson and in Brixton three years ago, it was not just black people rioting, when there are high levels of unemployment through economic difficulties, people are prone to rioting if there is a spark not handled well.



Some of the history of Brixton and the riots there show that race was not the predominant factor in who did and did not riot in many areas, it was largely the disaffected regardless of race that was the issue.


Becoming informed is our own responsibility but it is very dangerous when the media and officials provide irrelevant information that distracts us…



Yours in Successful Small Businesses…


Why is the Gender Gap important…

At the risk of being accused of being a misogynist or a troglodyte I’m going to put myself out there on this issue.

Hunger and poverty

I often challenge whether we are asking of ourselves the right questions, are we living in a paradigm based on ignorance, apathy, idleness or all three in our own little patch of dirt that we live on. It’s easy to be head down backside up making a living for our family especially in small business, so much so that we feel we don’t have time to dwell on the bigger issues.


It is in this environment that I’ll put two observations on the table; we actually do have time for the bigger issues, we just need to make informed decisions on what they actually are and why they are so important that we do make the time. The second observation is that people with either time on their hands or vested interests are often the voices we hear, the ones making the most noise about issues such as both gender and income gaps.


Is the asking the question why they are not improving the right question. Based on the observation the gender gap is not getting any closer and the income gap is even getting wider?


Lessons learnt


Interesting that in the same day, two separate statements on the status of women in society were released…. One from Turkish President Recep Tayyip Erdogan who has said women cannot be treated as equal to men, and has accused feminists of rejecting motherhood.


“You cannot put women and men on an equal footing,” he told a meeting in Istanbul. “It is against nature.”


The other is a report by the Workplace Gender Equality Agency which states that Women are under-represented in management positions, paid 24 per cent less than men. The new study has found that women make up just a quarter of those employed in the key management positions of Australian companies.


As well as an under-representation of women in management positions, the findings revealed the average full-time earnings of men were almost 25 per cent more. One-third of Australia’s workforce was included in the data, with more than 11,000 employers reporting to the Workplace Gender Equality Agency (WGEA) on more than 4 million employees.


The most important thing I ever learnt in the Army was to ask “So What”. The military abbreviates everything to make it easy to remember, not to dumb it down, as some commentators like to believe. Put simply like this it could be interpreted as a statement of indifference, the actual meaning is; Review the implications and possible reactions that may take place when you implement your plan, evaluate the consequences if you do not adjust and determine on that basis the best plan to execute. The beauty of this approach is to test the validity of your plans and to consider higher levels of actions that may otherwise have been ignored.


On this basis, I am actually going to ask the question, not why is the gap not closing, but…


Is equality important or even an issue?


When government starts imposing conditions on the market, it always creates unintended consequences at the margins. This is my biggest fear with an imposed approach by government to create equality of outcomes. Even more than this, examples like Gail Kelly show that based on merit, females can and do rise to the top positions in organisations.


Do we want equal numbers in top roles, I think this is a nonsensical question to begin with, it goes from the sublime to the ridiculous to suggest that we should employ throughout an organisation gender and by extension cultural rations based on the demographics of society. Common sense says that we should engage people in roles based on merit.


More important questions how do we eradicate domestic violence.

How do we create equal opportunities in society.

When will no child live in poverty.

How do we minimise the environmental impact of mankind

What will we have to do to prevent children dying from water borne disease

Malaria, Polio… the list goes on.


The question is a false first world question


When you look at the issues that are really important around the world, I think that an approach to create equality cannot solve them. To find answers to the biggest problems we need the best and brightest rewarded for their efforts to find answers i.e. we need the right incentive in the market to do this.


Busy people in small business know how the world works, while they don’t think they have the time to solve the problems of the world the truth is that they are the most important ones who will.


Until we stop worrying about what other people have, why I have a self-limiting millstone around my neck that stops me getting g ahead, so long as we believe that others control our destiny you can never be everything you want to be,


The reality is that in this country while not perfect we certainly have a far more level playing field from which to become successful than most other nations. If we focus on the real question, how do we set the conditions that create incentive and as an intended consequence – prosperity, then we can and will solve all the other really important issues that matter to mankind.


Yours in Successful Small Businesses…

Anecdotal experience does not an informed opinion make

How often do we hear the words “in my experience” and then get a bombarded with someone’s opinion stated as if it is fact.

stethoscope and medicines

I hear this often when I’m speaking as the topics I cover are confronting and a challenge to preconceived ideas that our upbringing and other life experiences have conditioned us to believe are a reflection of what is true. Albert Einstein made many very true observations among them;


Reality is merely an illusion, albeit a very persistent one.


The challenge in an economic debate is that there cannot be a scientific trial to determine who is right and who is wrong. The economy does not have any example where we can establish a control. Every aspect of the economy is inextricably intertwined; this is the main problem with macro policy…


Without a control there is nothing against which to measure the effect of decisions and influences placed or created in an economy. Also, an intention to influence the whole economy cannot be implemented. Any one of the 150 politicians or even the Departments under ministers portfolios in Canberra cannot fully understand the impact on 24 million Australians in their every day lives.


This is the reality of the economy; it exists in every consumers take on the value they receive when they make a purchase.


So why am I right then…


Truth is, I know I’m not! Seeing we are in the mode of throwing out famous quotations today, here’s one I like from Winston Churchill;


“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.…”


A free market protected from unfair or abuse of competitive advantage where government has minimal to no influence on the market but high responsibility for the protection of freedoms i.e. capitalism, is the same as democracy. It has flaws and inequities in outcomes but the truth is that it is most certainly the reason why mankind is where we are today.


You can interpret that comment negatively looking around the world at the problems which exist today but macro data, the closest we can get to a true scientific study of economics clearly shows that globally man is better off today than at any other time in recorded history.


The Simplest explanation is the usually right


Occam’s razor is a problem solving principle, which states that in the absence of proven fact, the theory with the least amount of assumptions will usually be the correct interpretation of reality.


This is the problem with economic theory and why I take issue with so many academics. They interpret a micro-sample, which they think tends to confirm their opinions and present conclusions as facts. Often, when you look at their analysis you will find an inordinate amount of assumptions, which can be challenged, and this is the basis on which I apply Occam’s razor to economics.


When we allow consumers to determine what they want to buy based only on determination of value at the margins and not on the basis of government policy skewing what products or services are available on the market we have the least amount of assumptions at play in the economy and the best chance of creating an economy which can flourish now and more importantly be able to cope with external negative influence in the future.


Another example of being fully informed


Alternate medicine is another example of where being fully informed and the least amount of assumptions should also apply. Personably I believe that there is a lot we can learn from alternate treatments; we should not however ignore scientific fact and put blind faith in them.


The Economist magazines, Why homeopathy is nonsense article is good reading and looks at the importance of knowledge in decision making and not making outrageous assumptions.


“VISIT any health shop and you are likely to see them: packages of homeopathic remedies claiming to cure whatever ails you, from coughs and fever to insomnia and asthma. Flip the package of medicine, however, and you may be confused by the listed ingredients. Some claim to contain crushed bees, stinging nettles and even arsenic, as well as sugars such as lactose and sucrose. Americans spend some $3 billion a year on homeopathic medicines. What are they thinking?


The history of homeopathy—literally, “similar suffering”—dates to the late 18th century. Samuel Hahnemann, a German doctor, was unimpressed by contemporary medicine, with good reason. Doctors used leeches to let blood and hot plasters to bring on blisters, which were then drained. In 1790 Hahnemann developed a fever that transformed his career. After swallowing powder from the bark of a cinchona tree, he saw his temperature rise. Cinchona bark contains quinine, which was already known to treat malaria. Hahnemann considered the facts: cinchona seemed to give him a fever; fever is a symptom of malaria; and cinchona treats malaria.


He then made an acrobatic leap of logic: medicines bring on the same symptoms in healthy people as they cure in sick ones. Find a substance that induces an illness and it might treat that illness in another…


The full article and a few more from The Economist


Why homeopathy is nonsense (March 2014)

A homeopathic remedy is recalled—for containing medicine (March 2014)
Alternative therapies are increasingly mainstream (Dec 2012)
Why the placebo effect can occasionally be effective (May 2011)



Do you have an experience to share


The least amount of regulation, the least amount of government involvement, the least amount of bureaucracy, the least amount of announcement and decisions by politicians is what my understanding of the best way to set conditions that lead to success is.


On this basis, mistakes that are made are made at the coalface, in the margins where the person making them suffers the consequence and changes their behaviour. In the example of alternate medicine it is usually the indivdial not society as a whole that suffers if they chose a different path to conventional wisdom. As a generalisation, better decisions are made when the individual feels the pain responsible for the decision that is why I believe it is a better economic model.


Have you come across an example where someone has blind faith in their opinions based on assumptions that you know are flawed or are so difficult to achieve that they couldn’t possibly be happen?


Let me know if you do…


Yours in Successful Small Businesses…

Protecting your Mates entrenched in FoFA

The Future of Financial Advise (FoFA) regulation is a current hot topic of debate in the national agenda.

Road to success

AMP, the Big 4 and other financial product providers have greatly reduced obligations under the Abbott Government’s FoFA legislation that has just been rejected by the Senate. The perspective of these enterprises is that it is not fair that they employ and train professional advisors and then be forced to offer their competitors products to customers.   i.e. you walk into the Commonwealth Bank and walk out with National Australia Bank products…


They want to be exempt from being forced into this position by government regulation hence the public perception that the “coalition” is looking after their mates from the big end of town

Where are the politicians up to…


As an interim rightly or wrongly, the last government’s legislation is being implemented as an interim measure. It is in my opinion much better legislation to protect consumers, whether it has the desired outcome though or merely intent only time will tell.


Like Sarbane-Oxley Act of 2002 in the USA, government controls to prevent undesirable outcomes, while popular in the community as politicians communicate their intent, rarely do we see true success in the real world.


There is one major flaw in the Labor version of FoFA


Industry Super funds have an unfair advantage over other superannuation fund managers. There are fewer disclosure and advice obligations to comply with under the current FoFA on the table when offering an Industry Super product. Also, a planner is allowed to charge an upfront fee from an Industry Super fund but not from other funds.


The upshot is that if there is less work and more income for the planner another super fund would have to be overwhelmingly better for them to recommend a non-industry i.e. non-union super fund.


Union control of industry funds sounds god in principal and they certainly get a lot of good coverage as low-fee and no commission to financial planner products with a better return for workers. The problem is that the government is picking winners and unions on the one hand and the big end of town on the other are controlling where money is invested in our economy.


Why all the fuss anyway…


Storm financial is the main reason for the FoFA legislation, they used CBA funds management division nearly 100% to provide a product where they typically encouraged people approaching retirement into a risky investment strategy.



I say typically because it is usually later in life where you have equity in your home, some savings in the bank and conscious of maximizing your return the closer you get to pension age. When Storm collapsed because the banks called in their loans these people lost those life savings and their homes with no hope of recovering at that stage in life. On top of that we also have the recent CBA investment scandal currently in front of mind.


Which side is right then?


Industry Super funds control where $165Bn under management is invested in the economy, they manage those funds for over 5 million workers i.e. 50% of the workforce. The big end of town doesn’t want the unions having significant control over the economy that would a significant effect on their own performance through having an unfair competitive advantage.


The reality is that neither side is right; the politicians on both sides continue to look after their mates!


The simple solution would be for government to step out from trying to control the market and simple set the conditions with appropriate penalty where financial planners have to “act in the best interests of their clients.”


No more, no less…


So long as politicians have to be seen and heard to constantly justify their existence, we will always have this discourse between divergent groups who want their position to take precedence in legislation.


The sooner we take responsibility at a local level for our own actions and future prosperity the sooner we will have smaller government with de-centralized control and politicians who are focused on establishing the conditions for a great country, not a great sound-bite for their own re-election…


Yours in Successful Small Businesses…

Do Free Trade Agreements Create Freedom

CHINESE President Xi Jinping has delivered an address to federal parliament lauding Australia’s innovation and global influence. Australia is no longer just a country “on the sheep’s back” or sitting on mineral deposits.


The Free Trade Agreement is both good and bad in my books, not in the sense of the detail in the FTA, but more importantly that they create a bias in the market. Countries that have FTA’s trade with preferentially each other, they have an unfair competitive advantage over the good and services from other countries that are still subject to importation tariffs.


A pragmatist will state that we need to make the most of the reality that regulated markets exist and we just need to get the best deals we can and enhance our own economic wellbeing. That’s a powerful argument and one I can’t fault logically, there certainly is a highly regulated regime of protectionist policies in place around the world.


I say that FTA’s are bad because they result in bias in the market and particularly developing and third world economies cannot enter the market as a consequence of the tariff barriers. On the other hand, if we are to create an ideal global economy and eradicate poverty we need to start the process of eliminating tariffs and this is why I say that FTA’s are also good. They are a means to an ideal outcome of no tariffs and removing unfair competitive advantage. It won’t happen overnight but the more we remove tariffs and create free markets the better for the people of all economies.


I welcome the announcement made by China’s President


“More importantly, Australia is a country of dynamism and innovation… It has produced many world-renowned scientists and made outstanding contributions to the progress of human civilisation.”


Prime Minister Tony Abbott noted Mr Xi’s personal relationship to Australia — after he visits Tasmania on Tuesday he will have been to every state and territory. “This president of China, in fact, is more widely travelled in our own country than most Australians.”


China is Australia’s number-one trading partner, with the two-way flow of goods and services exceeding $150 billion last year. Trade between the countries was worth just a quarter of that amount a decade ago.


They have set themselves two goals; double the 2010 GDP and per capita income by 2020 and to turn the country into “a modern socialist country that is prosperous, democratic, culturally harmonious” by the middle of the century. Now a conversation around innovation and dynamism and a one-party state accomplishing this will have to be for another day…


Details of the Free-trade deal


Australian farmers and dairy processors will get a better deal than their New Zealand counterparts under a free-trade agreement with China. Under the agreement, all tariffs on dairy products will be scrapped within four to 11 years.

Beef and sheep farmers will benefit from the abolition of tariffs ranging from 12-25 per cent.


Australian farmers will no longer be at a disadvantage to their New Zealand, Chilean and ASEAN competitors who have long enjoyed the benefits of an FTA with China. In fact restrictions applied on NZ liquid milk, cheese and butter exports will not be imposed on Australia.


All tariffs on horticulture and live animal exports will be eliminated, while wine makers will see about 14-30 per cent shaved off their tariffs. Wool producers who currently supply 75 per cent of their output to China will be able to export another 30,000 tonnes of clean wool on top of existing quotas under an exclusive arrangement. However, cotton, wheat, sugar and rice and oilseeds industries have missed out.


Ricegrowers awaiting final details were disappointed not all agricultural products were included. “It doesn’t appear to be as comprehensive as we would have liked,” said Ricegrowers Association of Australia president Les .



One of the main reasons for our Federation was the abolition of Tariffs


Before 1901 Australia did not exist as a nation. It was a collection of six British colonies, which were partly self-governing, but under the law-making power of the British Parliament. The colonies were almost like six separate countries; for example, each had its own government and laws, its own defence force, issued its own stamps and collected tariffs (taxes) on goods that crossed its borders. The colonies had even built railways using different gauges, which complicated the transport of goods across the continent.


By the 1880s the inefficiency of this system, a growing unity among colonists and a belief that a national government was needed to deal with issues such as trade, defence and immigration saw popular support for federation grow. Sir Robert Garran, who was active in the federation movement, later reflected that the colonies were united by a combination of ‘fear, national sentiment and self-interest’.


While tariffs provided the colonial governments with much revenue, they restricted trade and movement between the colonies. Tariffs increased the cost of goods and made it hard for manufacturers based outside a colony to compete with local producers.


Trade restrictions also inconvenienced travellers; the train journey between Melbourne and Sydney was delayed at the border in Albury while customs officials searched passengers’ luggage. Free traders were among the most vocal supporters of federation, arguing that it would strengthen the economy by abolishing tariffs and creating a single market.


Our forebears understood the importance of this economic condition


While there is much to improve upon today in establishing ideal economic conditions Australia is not too bad a model upon which to base eliminating trade barriers. The strength of our economy, 17th in the world compared to our population size has been a pretty good accomplishment.


FTA’s are a start, but our goal should be to do what the Father’s of Federation did, remove trade barriers completely and allow value to determine which goods are successful not the ones that are protected. Value driven markets deliver for consumers and that’s the type of goods and services I want to be able to chose from!


Free trade creates Freedom in my opinion, what do you think?




Yours in Successful Small Businesses…



G20 Outcome puts Growth as the Agenda not Climate Change

G20 Outcome put Growth as the Agenda not Climate Change


Interestingly the outcome from the G20 was not how to tackle Ebola in West Africa, not what the developed economies of the world should be doing to reduce green house gas emissions, and not about the threat of international terrorism; it was how to further increase economic output across the planet!


There has been a lot of discussion about Obama’s Brisbane speech, an invitation only event at the University of Queensland where the audience heard the US President speak about gender, climate change and world politics.


One Obama quote from BrisVegas that I don’t quite agree with…


“For the young people here: practicality is a good thing. There are times where compromise is necessary. That’s part of wisdom. But it’s also important to hang on to what you believe.


Obama is saying that it’s wisdom to know when to compromise and when to dig in your heels.  I think that compromise is one of the main reasons that we have some of the major problems in the world today.  When we try and make the most of the way things are rather than the way it could be then we don’t settle for second best we actually end up with an environment where people are worse off.


Economic development to create a world where people have more to lose than they hope to gain from insurrection and civil unrest cannot be achieved by accepting second best, we must take an idealist approach to creating ideal economic conditions.


Here’s the full video of the UQ Brisbane Speech




Some other quotes taken from Obama’s Brisbane speech.



The US and Australia have a lot in common. One of the things we have in common is we produce a lot of carbon.


This week I’ve travelled more than 15,000 miles from America to China to Burma to Australia. I have no idea what time it is right now.


We do not benefit from a relationship with China or any other country in which we put our values and our ideals aside.


We’re opposing Russia’s aggression against Ukraine, which is a threat to the world, as we saw in the appalling shoot-down of MH17.


He described to me how crocodiles kill more people than sharks. There are just a lot of things in Australia that can kill you.”


On then-NT chief minister Paul Henderson taking out crocodile insurance for an earlier Australian visit.


I believe that the best measure of whether a nation is going to be successful is whether they are tapping the talents of their women.


We will continue to deepen our engagement using every element of American power – diplomacy, military, economic development, the power of our values and our ideals.


By the end of this decade, a majority of our Navy and Air Force fleets will be based out of the Pacific, because the United States is and always will be a Pacific power.


My staff was very excited for Brisvegas. When I arrived, they advised I needed some XXXX.”   When all else fails, kick back and grab a cold tinnie  and chillax…


If its to be its up to me, “us” actually


Now I rail about big government and regulatory environments that they create and I will never pull back from doing that. However, vibrant small business communities, big business, government owned enterprise and government all have important roles to play in creating prosperity. I have never said that small business is the only game in town that matters, only that it’s the most important.


Personally I am heartened that the G20 understands the importance of economic development, it is after all the reason it was established! I take issue with anyone protesting big business and the intrusion of government in our lives on an “equalization” platform. Typically these arguments go along the lines that we can’t trust government and big business is stealing our wealth and creating all the problems in the world from their greed…


Reality is that to bring in more taxes and cut corporate tax evasion to “give back” to the disadvantaged creates bigger government and more power to the people we don’t trust. Worst part of that conversation is that it will create an environment that reduces global wealth and ultimately less to give anyway. Best case study on this is the effect of Franklin Delano Roosevelt’s “New Deal”.


I’m not a supporter of Tax Evasion, far from it


One of the agenda items of G20 was cracking down on corporate tax evasion, where international corporates move their incomes out of the countries where they earned the money into lower taxing environments or in some cases tax havens to avoid any tax.


The amount of money we are talking about is not very high, Australia estimates that it’s in the magnitude of $500M to worst case $8Bn. Now that seems a lot of money but truth is that the overwhelming majority of business pays their taxes and contribute to our society. Tax evasion estimates are only ½ a percent of GDP and while it would be nice to put that money into consolidated revenue it that amount of money won’t solve the big issues in the world.


Creating a commerce environment where governments or the world have transparent access to banking records for tax avoidance crackdown is a good thing. Even more important though and I’ve spoken about this many times, is setting the conditions where the incentive to conform and contribute is far greater than the perceived return from avoiding taxes ie progressive penalties.


What should we be doing


The key is how we make ourselves an integral part of the implementation process to grow the worlds economies and not sitting back idly from that conversation waiting on politicians.


A $2 trillion growth target by 2018 which equates to 2.1% is a figure bigger than our entire economy and is the real key to moving people in third world and developing economies out of poverty.


Allowing politicians to be in charge of that however is a big mistake, creating big government where they decide where, when and how money is invested in the economy has never worked. Stimulus around the globe, austerity and even the most regulated market the old USSR has shown us that it is impossible for government to know everything and plan everything to enable centralization to work.


Our responsibility is to understand how economics work, determine what is happening in our own patch of the world and take action locally. Centralized action must by its very nature create unintended consequences at the margins, it is far better to take action at the margins directly and see the immediate effect, adjust, adapt and recalculate there and then.


The reaction time of big business and big government is too slow for them to be effective, it is up to small business to drive the change we want to see in the world.



Yours in Successful Small Businesses…





The glass ceiling well and truly shattered

Gail Kelly is a prime example of accomplishment and taking advantage of your opportunities through sheer hard work and determination.

Westpac chief executive Gail Kelly annou

Born on ANZAC Day, the 25th of April 1956 in South Africa. As an Australian businesswoman, she was until yesterday the chief executive officer (CEO) of Westpac, one of Australia’s big four banks. In 2002, she became the first female CEO of a major Australian bank or top 15 company when she was appointed as head of St George Bank, and in 2005 assumed the mantle of the highest paid woman in an Australian corporation.


Creating equal opportunity for everyone doesn’t mean that there will be an equal outcome. I am a firm believer that race, sex, religion and socioeconomic status are not limiting factors in a society where we have established commerce, rule of law and a robust society, which demands action and will not tolerate abuse of competitive advantage.


Australia is such a society; we risk abrogating our freedoms at our peril. If we understand the imperative and make a commitment to shifting our regulatory environment to establishing market conditions rather than setting them, we would have a model that would be able to eradicate world poverty. It would be instrumental in establishing the economic conditions in third world and developing economies that would create global prosperity and stability.


Incentive is the key to performance


I have an immense problem with setting “equality” targets, establishing a policy where minorities and gender must be employed as part of the selection process is a transaction cost our economy we cannot afford. When it becomes an obligation on the employer to engage rather than the employee being required to demonstrate their suitability as the best person for the job, we have removed the most important incentive from the equation… “Performance”.


In a recent National Press Club address another top performing female, the Foreign Minister Julie Bishop made the statement that she didn’t believe there was a glass ceiling. Feminists are furious over her comments that ‘feminism’ is not a useful term and that women need to ‘get on with it’. Bishop repeated the comments for Australian magazine Harpers Bazaar, which has named her ‘Woman of the Year’.


If top performing women like these do not ascribe to self-limiting factors, why do others in society believe there is? My personal view is that there is more a mixture of covetousness and rationalising for our personal inadequacies at play than there being real discrimination. Don’t get me wrong, I firmly believe that discrimination happens, we should and do have legislation that penalises bad behaviour.


A conversation around incentive to conform to the norms of society through the application of appropriate penalties on this and many more aspects in setting market conditions needs be for another day… To close this point for now; performance as the only selection criteria is the ideal market condition.


What made Gail Kelly successful?


As of 2014, Forbes lists Gail Kelly as the 56th most powerful woman in the world, Business Insider Australia published what it believed was the top 9 quotes from the lady herself that explained her incredible accomplishments.


On women in business


“As a woman, you have to make choices with regard to your life and your career. There is no doubt it’s hard. I myself have four children, so life my life is very full. You make choices with regard to how you prioritise, and how you manage your whole life, but again, key to one’s success is loving what you do, being very happy in what you do, enjoying working with and through people and prioritising and being pretty focused on what matters. I prioritise my whole life, not just my work life. I don’t seek to compartmentalise my life and I make sure I prioritise the absolutely crucial family events, and absolutely crucial activities that surround my four children.”


On living life in the moment


“If I’m watching my son play soccer, that’s what I’m doing. If I’m going to a school concert, that’s what I’m doing. I turn the phone off. I actively tune into whatever I’m doing. I walk every evening with one of my sons and for that half an hour, 45 minutes, that’s what I’m doing.”


On how she fits it all in


“I don’t sleep a whole lot – four hours a night – I’m very quick as well. I’m not talking about intellectually quick. Everything I do is quick. I’m fairly impatient. There’s some element of stress in that, but you also just get things done.


I don’t waste time. I move. I finish things. I don’t try and do things to the ninth degree. I know what’s important and what’s not. I’ve really learned that. That’s a judgement I’ve learned, what really matters.”


On the workplace


“You should choose organisations that are going to be flexible and supportive and recognise people are going through different stages in their careers actually need different sorts of support.”



On the importance of a positive attitude to life.


“We’ve all seen the same situation happen to two people. One looks for the lesson, sets their shoulders back and presses on while the other asks ‘why does it always happen to me?’ You can choose not to sit on the fence. You can choose not to criticise. You must stand as guard at the door of your own mind and choose to be positive.”



On what women should do if they wanted to rise up the ranks of corporate management


“If you have chips on your shoulders you will never get there. The women in this room (senior Westpac executives) are no-nonsense, pragmatic women — women who deliver, who go about their jobs in a pragmatic, no-nonsense way. That is the way you are going to get success.”


On flexible working conditions


“I am a huge believer in flexibility. If you give an individual a sense of accountability to shape their own worklife, their productivity shoots up.”


It’s not all about setting the conditions


As a society the starting point is creating a society where we all have an equal opportunity to succeed, the most important thing though is our own effort and desire. Not a single person I have spoken with has criticised my vision for a prosperous society, or the mission that will create it. I have had the observation made that I won’t be able to help those who won’t help themselves.


The journey will be incredibly gratifying, of that I have no doubt. It will be interesting to see how communities react to taking responsibility and being accountable for their own prosperity… and the way that indolence, ignorance and insouciance are actually handled.


A thought for another day…


Indigenous cultures have much to teach us and us them, first nation people can often appear lacking in common-sense or street smarts in our world. Look at reality survivor shows to see how we look in their world! One of the most important things we can learn from them is the way the tribe handles its weak links, it’s all about “incentive”.


I wish Gail Kelly all the best on the next phase of her life, knowing what she has accomplished so far you would expect her to continue being very successful.


Yours in Successful Small Businesses…


Are G20 and the Rosetta Comet Mission a waste of money

Not really, according to government the economic benefits from hosting the G20 far outweigh the costs, and access to technology is one of the key cornerstones in creating developed nations.



I haven’t done the homework to agree or disagree with the commentary that the G20 will be economically beneficial to Brisbane and Queensland. The Russian Fleet sailing close to Australia and Tony Abbott’s shirt pulling comment have certainly created mainstream media traffic around the globe… Not sure if that’s good or bad buts its certainly high profile.


One thing I do know is that there have been a couple of incredibly successful promotions worth every cent of their investment in my lifetime. Tourism Australia ran the Paul Hogan “throw another shrimp on the barbie” campaign in the USA from 1984-1990. Before it ran, Australia was approximately 78 on the “most desired” vacation destination list for Americans, but became number 7 three months after the launch. Before long it was at number 1 or 2 on Americans’ “dream vacation” list and remained in that position for most of the next two decades.


Queensland Tourism promotion of the “World’s Best Job”


The “World’s Best Job” campaign recruited a young Briton, Ben Southall, as the caretaker on Hamilton Island. In the process, it made headlines around the world and delivered more than $330 million in free publicity to Queensland.


But the real measure of success for any tourism campaign is whether it delivered visitors. According to Tourism Queensland’s chief executive, Anthony Hayes, the campaign did its job. “US visitor numbers to Queensland in the quarter to June increased by 15 per cent on the same period last year and the biggest travel wholesaler in Germany has reported sales 50 per cent higher than in the same period last year.”


I need to declare my interests


Eradicating world poverty is driven by my empathy for others, seeing everyone having access to an equal opportunity and a base level free from persecution from which they can achieve anything they put their heart and back into has always been an innate part of my psyche.


I have an interest in a much higher imperative that is less urgent. It is of no consequence in our lifetime nor our children’s children, however at some point in time this planet must cease to exist when our Sun runs out of fuel. It has to happen and when it does if we cannot off world colonize then irrespective of all other life, human kind will be no more.


Three incredible barriers prevent us from achieving this; Intergalactic travel and the distance between galaxies make voyages impractical, we need to develop technology capable of travel in the realms of light-speed. Developing technology is dependant on incentive in the marketplace creating prosperity, from there investment can be made from either consolidated revenue or from the private sector.


Second is carrying fuel, the gravitational pull of the planet makes lifting massive quantities of fuel into space impossible. The moon and comets are important part in solving this; ice can be separated into oxygen and hydrogen if we build the processing plants on the moon. The third and most important problem to solve and this is what the overwhelming majority of space projects are about is also related to gravity.


The division of cells in reproduction, when the DNA helixes unravel and reform into two new cells cannot occur in space. The process of making new life only happens under the gravitational conditions here on Earth. We must solve the conundrum of life in order to populate new world. Understanding how life started from studying the pristine samples on comets is invaluable!


The Rosetta landing is exciting news


After a decade long trek through the solar system, the European Space Agency’s spacecraft Rosetta made a historic rendezvous with a comet known as 67P/Churyumov-Gerasimenko in August. The craft is now in orbit just 10km above the comet’s surface. Philae a small probe has descended from the mother ship and became the first craft to ever survive a landing on a comet.


Made of ancient ice, dust and other materials, comets are objects of scientific curiosity because they have survived virtually intact from the earliest days of the solar system, more than 4.6 billion years ago. Because comets carry water and organic molecules, scientists also hope that the Rosetta mission will provide insights into whether comets could have brought water to Earth and possibly kick-started life here.


“We already have a wealth of data about the comet, but the lander will tell us more about its surface material, such as the composition, strength and hardness,” said Gerhard Schwehm, a former mission manager for Rosetta and currently a consultant to the mission. “We can’t learn that from 10km away.”


Seek first to understand then to be understood


Stephen Covey’s words of wisdom stand us in good stead today, understanding that events and activities that may cost us money today may have a much more important purpose is asking of ourselves the right questions to become informed.


Asking where the money is coming from to pay for G20 and the Rosetta mission are generally driven by self-interest, “why can’t that be spent on me, I have needs the government can’t afford now”. Looking after yourself is important, unless you do you can’t give to others but if we all thought more about how we could serve rather than be served, the world would not only be a nicer place it would be better for it.


Yours in Successful Small Businesses…

Imposed Regulation has a deep cost

There is a massive difference between governments introducing regulations to drive desired behaviour, and government establishing the environment conducive to creating desired behaviour.

Businessman sinking in heap of documents


With over 2.5 million small business owners in Australia, generating regulation becomes an industry in and of itself, trying to establish the good corporate citizenry that we would like to see in our commercial enterprises is incredibly difficult and often not fails to deliver the intended outcome.


Government regulation is expensive to implement and administer which place strain on the public purse, making it more difficult to deliver desired services we want to see from our governments. Even if it achieved the intent behind the regulation there is a much better way for government to be effective.


No government wants to be irrelevant


The problem with governments, which switch from big policy statements to one where they establish market conditions with incentive as the driver of behaviour is just that…   They don’t have any big policy statements to announce, a government which goes quietly about protecting our individual freedoms won’t be heard in the media cycle and they know they won’t get re-elected!


Major Major Major Major’s name was a conundrum for the lead character in Joseph Kellers novel Catch-22. General Disaster would perhaps be more appropriate to describe the outcomes of the problem politicians face when making policy decisions on implementing regulation, act in the interests of the people or their party!


To my mind it should be a simple exercise, create the market conditions which remove unfair or abuse of competitive advantage by establishing proportionate penalties that have so high a consequence that corporations at all levels dare not act in any other way than being great corporate citizens.


The outcome would be much smaller government bureaucracy and the behaviour that we would love to see. It would only take the first Company Director to pay the consequences and the rest would be on their best behaviour. Instead of money in the economy being tied up in government agendas, it would be released into the commercial arena where economic output is generated.


Corporate fraud is real none bigger than Enron


Enron Corporation (former New York Stock Exchange ticker symbol ENE) was an American energy, commodities, and services company based in Houston, Texas.


Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and was one of the world’s major electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $111 billion during 2000. Fortune named Enron “America’s Most Innovative Company” for six consecutive years.


At the end of 2001, it was revealed that its reported financial condition was sustained substantially by an institutionalized, systematic, and creatively planned accounting fraud, known since as the Enron scandal. Enron has since become a well-known example of willful corporate fraud and corruption. The scandal also brought into question the accounting practices and activities of many corporations in the United States and was a factor in the creation of the Sarbanes–Oxley Act of 2002.


The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting firm.


Enron filed for bankruptcy in the Southern District of New York during late 2001 and selected Weil, Gotshal & Manges as its bankruptcy counsel. It ended its bankruptcy during November 2004, pursuant to a court-approved plan of reorganization, after one of the most complex bankruptcy cases in U.S. history. A new board of directors changed the name of Enron to Enron Creditors Recovery Corp., and emphasized reorganizing and liquidating certain operations and assets of the pre-bankruptcy Enron.


On September 7, 2006, Enron sold Prisma Energy International Inc., its last remaining business, to Ashmore Energy International Ltd. (now AEI).


Major banks exposed include Abbey National, ANZ, Bear Stearns, Canadian Imperial Bank of Commerce, Chubb Corp, Citigroup, Commonwealth Bank, Crédit Lyonnais, ING Group, JP Morgan, Mitsubishi UFJ Financial Group, National Australia Bank, Nikko Cordial, Principle Financial, Sanwa Bank, Sony Bank, Sumitomo Mitsui Financial Group, and Westpac.


Government response was regulation that did not deliver…


The history of Enron is useful to illustrate the consequences of corporate fraud, not only were banks exposed but many peoples pension funds were invested in Enron and these evaporated with its collapse also.


Shaken to its core at the depth of the collapse the US Congress implemented the Sarbane-Oxley Act to ensure that Company Directors were forced into accountability with a paper trail basically confirming their good governance on every major transaction.


Sarbane-Oxley is most definitely a well intentioned regulation, the problem is that since its implementation it has not detected the collapse of a single corporation before its demise, and far more importantly general consensus is that it has added around 5-10% as an expense cost to businesses to meet their compliance obligations. Money which adds no value to your purchase as a consumer but which you pay for.


We are not just talking about fortune 500 companies here; it goes all the way down to small business corporates who may only be turning over revenues in the one million dollar magnitude.


Worse still, if you thought that it’s the only the USA anyway and doesn’t affect you here in Australia, you’d be wrong. Overseas operations of US companies still have to comply with the Sarbanes-Oxley Act and there are accountants here in Australia and other countries that specialise in this area of compliance. The costs are very real around the world.


A far better approach


If the legislation has had such a high cost and not delivered its intended outcome, why was it introduced and persisted with? Simply its good politics to be seen to be doing the right thing by mum and dad investors in voter land than to be perceived to be doing nothing.


If there was a system of proportionate penalties in place, much like the way we have progressive taxation as you earn more money; companies of much bigger magnitude and therefore risk to investors would attract far greater penalties than a sole shareholder company for example. What we need to create is a system where individuals have far more to lose than they hope to gain from their fraudulent activities.


The incentive needs to be right for Directors to act in the best interests and needs of the enterprise they are responsible for, not their own back pockets.


Yours in Successful Small Businesses…

Are we Asking the Right Questions…

Last night I attended an alumni event at University of Queensland, one of the UQ Business School Global Leadership Series. Professor Ramesh Thakur presented an informed perspective on the G20 but I was disappointed in the assertion as “fact” the opinions of some other panellists.

G20 Extended Masterlogo

The Global Leadership Series is a promoted as a lively program of events for alumni and community.  Invitation is extended to attend the lectures and discussions with the best of the best UQ-related speakers on matters that impact your community and shape your ideas of the world.


In my travels I have met a lot of ignorant academics and some very highly educated individuals who lack basic common sense, the evening was a disappointment not because of the perspectives of those in attendance or on the panel. We are all entitled to our opinions, I believe that we should be able to position our arguments based on actual facts and not emotive or anecdotal experiences.


I was disappointed because the evening was pre-occupied with the mechanics of the G20, with what the leaders were not doing, why they were not setting meaningful agendas and the process of the event. A perfect illustration of this was the first question of the night… “How do they decide what language they will use to run the G20, will it be in English because it’s in Brisbane?”


The G20 and Global Economic Governance


A pretty in depth headline for last night’s event, it was promoted on the basis that it to my mind would have stimulated a lot of in depth consideration of how we should analyse our contribution to global prosperity;


“With the G20 Leaders’ Summit just around the corner it brings into question the benefit and global impact that results from this two day conference. How important is the G20 and the G20 Summit? With limited representation from the poorest countries in the world, is the G20 really an institution for the global economy?


Given international economic uncertainty, these questions are crucial not just for the global economy but for the future national economic outlook of Australia.


You are invited to join our expert panel as they discuss these questions and more. If nothing else, in the context of significant disruption to communities and movement in Brisbane during the event, this discussion is also an opportunity to find out what all the fuss is about.”


What I had thought when registering for the event would be an evening of robust discussion on what the attendees saw as opportunities, suggestions and questions on how the worlds top twenty economies could be tackling issues on a global level instead the night fizzled out into a G20 bash about what they are not doing as if our lives as dictated by 20 people and it’s all their responsibility!


The night was largely self-promotion of opinions…


Keynesian exponents and Equalisation strategists espousing that economic development of nations does not work, equalisation is the only solution to solving the worlds problems, that capitalism has been shown not to work and Government spending as the solution to market downturns were all presented as fact.


The real facts are that the conclusions presented as incontrovertible fact were based on interpretation of micro samples in either size or time and individuals with agendas to promote latch onto data that appears to confirm their view of the world. In over 200 years since data has been collated by the United Nations, against any social development measure you care to choose, the only factor that stands up to any orthogonal challenge is that continued wellbeing of the worlds people is directly related to economic development.


The only conclusion possible from a global sample across a considerable time period is that when GDP per capita increases, social standards improve and when economic development is arrested the standard of living plateaus or declines.


An opportunity to ask the right questions


Last night that opportunity was lost; understanding transaction costs in an economy easily explains the short-term conclusions drawn and further discussion on Equalisation strategies and Keynesian models are in the realm of ephemeral gratification with little or no long-term benefits.


To explain this, economic stimulus largely benefitted big business with big government deciding who the winners in our economy will be. We don’t trust politicians but the policies espoused are based on them deciding how and where to spend our hard earned money.


Pragmatists and Realists make statements that capitalism hasn’t worked, that their view of the world has to be adopted unfortunately the UN data clearly shows that their models are self-limiting. Some of the right questions that we should be asking are; what are the transactional costs that have checked social development in economies across the globe? What have been the unintended consequences of macro government policy? How do we fight the peace across the globe to stabilise and reverse the rise of extremism?


What question would you have asked?


I believe the most important question, what responsibility am I personally prepared to accept and how can I contribute to society?


Yours in Successful Small Businesses…



The Price of Corruption – Farewell Wayne Goss

As one Labor luminary is remembered in a State memorial address last week another reached the end of his lifetime today.

Wayne Goss

Wayne Goss led Labor into the 1989 state election against the National Party government of Russell Cooper at a time when the Queensland Nationals were still reeling from revelations of the rampant corruption of the Government under long-time premier Joh Bjelke-Petersen and the then named Queensland Police Force & police commissioner Terry Lewis. The polls at the time showed Labor had its best chance of winning power in years. Labor had been in opposition since 1957, and last made a serious bid for government in 1972.


Goss seized on National Party ads arguing that his plans to decriminalise homosexuality would result in gays flooding into Queensland. He replied with ads painting Cooper as a wild-eyed reactionary and a carbon copy of Bjelke-Petersen.


Bjelke-Petersen’s immediate successor, Mike Ahern, had been toppled in a party-room coup just two months before the election, the Queensland electorate however recognised that in order to stamp out the endemic corruption identified by the Fitzgerald Inquiry, a change in Government not just party leaders was what they demanded.


I often rail against politicians however….


My main beef with politicians is their lack of understanding of the economy at the margins, the unintended consequences of their macro policies and the centralisation of power and decision-making.


They perform an incredibly important function in our democracy, the adversarial political system we have ensures that no one party attains absolute power. The parties are always constrained by the reality that they can be voted out of office by the people. In todays digital world the scale of corruption in the 1970’s and ‘80’s would be difficult to keep disguised, along with this the regulatory controls and transparency in the politician’s register of pecuniary interests etc. make it unlikely we will see a return to the bad old days of brown paper bags.


Wayne Goss wasn’t instrumental in instituting the Fitzgerald Inquiry, that was without a doubt due to the courage of the Deputy Premier at the time, Bill Gunn. What Wayne Goss had been incredibly effective in doing however was in pursuing the minister for everything Russ Hinze, in ensuring that the adversarial aspect of parliament led Bill Gunn to take the action he did.


Today in fact we are still conscious of transparency.


In NSW, the courts there just today ruled Crown Prosecutor Margaret Cunneen should front a public anti-corruption inquiry into allegations she advised her son’s girlfriend to feign chest pains to avoid giving a breath test to police after a car accident.


NSW Supreme Court judge Clifton Hoeben today ruled that the Independent Commission Against Corruption (ICAC) had the right to pursue Ms Cunneen, despite the respected Crown Prosecutor arguing it was not in the NSW anti-corruption body’s powers.


Ms Cunneen launched a pre-emptive strike against ICAC, arguing it should be forced to drop its investigation and public inquiry because it has strayed outside its jurisdiction. The public perception is that public officials should be held accountable and act transparently, we have a higher expectation that they should set the example for society and not take advantage of their position or influence.


Take of the handbrake on our economy.


Regulation, corruption, & monopolies are in my view the greatest transaction costs in our economy. Red tape is without doubt the biggest of these three but is getting regulation right, which removes corruption and abuse of competitive advantage. I don’t envy politicians; it’s a mighty fine line getting the balance right.


The silent role of Department of Foreign Affairs and Trade (DFAT) is to work with the Governments of developing nations to help them get this right in their countries. One trap to be conscious of is cultural differences, another is appearing to impose solutions rather than help set the conditions to get their economy on track.


The more that our neighbours develop strong economies with good judicial systems, individual freedoms, and appropriate commercial conditions, the less we will need to support them with foreign aid and more importantly the more stable and politically secure they will be. That’s a good thing for a former soldier because the last thing I want to see is deployment in the future of our armed forces into conflicts and peacekeeping missions that could have been avoided with prudent aid delivered today!


If we are conscious of our role and responsibility in todays society, understand the importance of maintaining vigilance against regulatory burden, fight to stamp out corruption and ensure that the market is free of unfair competitive advantage, then we are setting the conditions in our own country to create a prosperous nation.


Yours in Successful Small Businesses…

Are you wasting your time?

One of the hardest things to do in life is allocating the time to do the things that are important but not urgent. Professor Stephen Covey taught us this a long time ago in his Urgent, Important quadrant.


Covey explained very well in his 7 Habits of Highly Successful People that often not it is the urgent, which consumes our time, and we leave very little time, even putting off forever some things that may be incredibly important. Sending flowers to our life partner or giving them a hug is incredibly important but won’t bring the world down around our heads until much later in life when we get that “Divorce” paperwork in the mail.


Important but not-urgent are the game changers that affect us catastrophically if left unchecked.  We may be able to get more done in life is we were perhaps a bit better organized or sometimes didn’t just find a reason to put off getting the work done. Procrastination is one thing that you can change through understanding foundational habits and becoming more productive in your daily routine.


The Small Business Foundation wants to eradicate world poverty


You can create the ability to be more productive if you have the desire, getting into a routine where you stop being distracted allows many tasks to become habit rather than direct thought and your mind can focus on the bigger issues that are important.   Being the change you want to see in the world is possible, to quote Gandhi, but it’s all about you taking responsibility for yourself and your actions.


I don’t want to change the way everyone thinks or sees the world; I am allocating my own time these days to an incredibly important task. Running the Small Business Foundation has a vision to create a society where everyone has an equal opportunity to prosper. To realize this I have to be incredibly focused both in the audience I target with the message of how we can do it, and in the way I allocate my own time to get everything done!


Small business owners already think and see the world different from most other people. It is these people that I focus on to change the world, as they are already of the mindset that you can achieve anything if you work hard enough and have a go. More about the work of the foundation in an another conversation though…


It’s not always about changing yourself .


While accountability is always about you, sometimes that means that you need to take responsibility for changing how others are able to impact you. Emily Chantiri in The New Daily wrote a good article on another situation that may be consuming your valuable time; your work mates, through their dependence on you for help, knowledge, generosity or simply sheer boredom to fill in their day can be draining your energy and your time.

“Colleagues can have a habit of interrupting just when you are getting into a groove with work. Here’s how to stay productive, and keep good working relationships.


Have you ever wondered how much of your time is hampered by interruptions and phone calls when all you want to do is get on with work?


Executive coach Sarah Fraser says one of the biggest distractions is emails.


“This does take some discipline but only schedule certain times of the day to check emails, say early morning, lunch time and late afternoon. Turn off the email alert to stop the temptation.”


So before a colleague drags you out for a morning coffee, here are some key tips to keep your head down and your colleagues at bay.


  • Cut the phone calls


When answering the phone, rather than saying, “Hi John, how are you doing’- as this can lead to a long conversation, instead lead in with, “Hi John, how can I help you?”


This way you can get to the point quicker. Keep conversations short and stick to the facts.


  • Manage meetings


Meetings can be one of the biggest time wasters, says Ms Fraser.


“It is worth challenging the duration of the meeting. Can it be done in half the time?


“One of the things I found that helped is asking myself whether I’m giving value or gaining value by being in that meeting? Ask yourself, are you bringing something to the table? If you can not answer yes, then speak to the person running that meeting to see whether you need to be there or not.”


Scrum meetings are a great way to keep meeting shorts. What this entails is that the meetings only go for 15 minutes and attendees remain standing. The meetings start on time and discussion is limited to quick updates rather than lengthy discussion.


  • Book time in your calendar for yourself


If you need time to think or write a report or performance review, block a time for yourself either away from the office or in a meeting room. Make sure that other people can see in your calendar that you are booked for that time. This is good for women who do tend to prioritise others over themselves.


“Business coach expert Mike Reddy from Shape Your business agrees with Ms Fraser. He says it’s important to remove yourself from distractions.”


  • “We know through research that we are at our most creative when we are away from the workplace. We make better decisions when we step away from the issue and take time out,” he says.


  • “How many great ideas have you had in the shower or in the car? Allocate time away and switch electronic devices to do not disturb. This is an amazing productivity function in itself.”


  • Learn to delegate


Business owners tend to retain control and there is a price to pay for this. This can be a huge distraction to focus on all things big and small. It is so important to focus on the end game rather than the day to day activities.


Let your team handle the daily grind while you focus on the strategies necessary to increase profitability, cash flow and ultimately, the value of your business.


  • Get your head in the clouds


For example, if you expect people to comment or engage in a discussion document. You can collaborate in the cloud by using tools like Google Apps which is a suite of products supplied by Google that come with documents, spreadsheets, forms and slides. All of which can be used to collaborate with others in the cloud.


You can be anywhere in the world and people can exchange or comment. Google translation allows their words to be translated right before your eyes. This is a great time saver.”



This is all good advice


If your goal is to allocate the necessary time, energy and resources to the important but nor urgent things in your life, the starting point is to cut out procrastination and distractions. Being disciplined in the way you allocate time at work is critical but it all starts with the routines we establish to ensure that the “rubber hits the road” the moment we leap out of bed every morning.


My last tip….. Cut the plug off your TV lead, it will be liberating to discover how much time you actually spent on the couch watching the damn box!



Yours in Successful Small Businesses…

A Standing Ovation for Free Tertiary Education

Gough Whitlam, who died a fortnight ago aged 98, received a state memorial service yesterday at the Sydney Town Hall. It was chiefly a deeply felt tribute to a loyal Labor man whose reforms during three turbulent years in ­office had a profound influence in changing Australia, not always however in the way that Whitlam intended.

Graduation Concept Vector Illustration

Also attending the grand farewell and adding to the historic occasion by putting them all together for the first time were former prime ministers; Julia Gillard, Kevin Rudd, John Howard, Paul Keating, Bob Hawke and Malcolm Fraser.


Keating was right when he said, “there was one Australia before Whitlam, and a different Australia after”. Contemporary relevance, he said, were Whitlam’s watchwords. He hailed Whitlam as the bridge between the fears of the past and hopes of the future: “Optimism, enthusiasm, confidence against fear, prejudice, conformity — that was his enduring message.”


Love him or loathe him, he was certainly a polarizing individual with an obvious, deeply held conviction that his vision for a better world was the right one. I agree with Keating that Gough brought Australia into a new age. I think that the old imperial views of our position in the world changed under Whitlam, that we felt our own distinct “Australian Ethos”, Whitlam was certainly an avowed Republican.


Where then was Gough Whitlam’s flawed in his thinking…


There has been much discourse over the last two weeks about the economic wisdom under the Whitlam Prime ministership, and that’s a discussion that requires a much larger space than this article allows.   The main thing I want to look at today is why such a towering figure in Australian politics had his flagship policy torn up by none other than a subsequent Labor government!


Cate Blanchet yesterday received a standing ovation when she stated that she was the recipient of a “Free Tertiary Education” and yet it was Bob Hawke who tore up this Whitlam reform.


In 1989, the Hawke Labor Government set up the Higher Education Contributions Scheme (HECS), which was first proposed by Professor Murray Wells and subsequently developed by economist and lecturer at the Australian National University, Bruce Chapman and championed by Education Minister John Dawkins (see Dawkins Revolution).


Under the original HECS, a $1,800 fee was charged to all university students, and the Commonwealth paid the balance. A student could defer payment of this HECS amount (in which case it was called a HECS debt) and repay the debt through the tax system, when the student’s income reached a certain level.


As part of the reforms, Colleges of Advanced Education entered the University sector by various means.


In 1996, the new Howard Coalition Government, while otherwise retaining the HECS system, created a three-tier HECS fee structure. Fees were charged on the basis of the perceived value of courses. Courses considered to have most likelihood of generating higher income for students in the future (e.g. Law and Medicine) were the most expensive and those least likely to generate higher income (e.g. Nursing and Arts) were the least expensive.


At the same time, HECS charges increased by an average of 40%. Universities were permitted to create full-fee places on which they could charge full up-front fees to students who missed out on a HECS place. And today the Abbot government is in the process of removing regulatory control over University Fees entirely.


Whitlam was trying to create advantage for the disadvantaged


The problem with Whitlam’s well intentions is that there are always unintended consequences at the margins with every policy that every government introduces….


Interestingly, neither Niall Ferguson nor Seth Godin mention education as an imperative in creating modern civilisations or tribes within them in their work on the importance of access. Access to education does not mean that you will create an equal opportunity for everyone in our society.


An intention to educate underprivileged and disadvantaged in society was the motivation for Whitlam, the unintended consequence is that none of them were able to take advantage of the opportunity, as they were not empowered in any way to qualify for tertiary entrance.


The unintended consequence was that middle class families who were always going to send their kids to University now were able to do it for free, placing a higher strain on the resources of government to deliver services to the disadvantaged and poor that may have raised their academic performance capabilities.


It was most certainly not an equal opportunity for all


Bob Hawke understood that in rolling back free tertiary education, so what is the right approach?


Eton College is a name that usually will instil in people a perception of class and elitism… The antithesis of why we need to deliver equal opportunity by making education free and doing away with privileged advantage in society i.e. an equalisation policy. This prestigious school was after all established to provide free education to the poor.

Arthur Wellesley, better known as the Duke of Wellington was an Eton old boy, attending in 1781 to 1784 and was later to send his sons there. While passing an Eton cricket match many decades later, he was to remark, “There grows the stuff that won Waterloo”, a reference to “the manly character induced by games and sport”. Wellesley is indicative of the perceived elitism that is Eton.


What went horribly wrong, why did they became elitist and forget about the heritage of their foundation? Well nothing actually, founded in 1440 Eton today still educates the poor and disadvantaged, it gives all Britons an equal opportunity to succeed in life. 20% of all students there are bursary or scholarship entrants, they enter based on their merit, the incentive to achieve in life is in front of them but unless they perform at school and take advantage their opportunities Eton doesn’t give a free education to all, it gives an equal incentive.


Distil it down to basics and create incentive


Equalisation may be a noble desire and the way that many people view the world but the only way to create equal opportunity is establish the framework in our society for a system that removes abuse or unfair competitive advantage. The basic premise which Whitlam got so wrong is that the incentive to take advantage of free tertiary education lay with the wrong people, those he hoped to help did not have a chance to succeed.


Government should focus on the delivery of services that the people demand and stand back from imposing their will upon us through policy based on the paradigm of how they see the world.


Equal opportunity is there for all if a society establishes the basics correctly, we need to ensure that we operate under the Rule of Law, have Recognition of Property Rights, and access to Banking & Finance. Establish these and the Eton model is the outcome of a just society. The people will take advantage of equal opportunity and through their voice ensure that government doesn’t allow abuse, which removes the opportunities they have.


Freedom is ours until the day we allow Government to remove it.


Yours in Successful Small Businesses…