Is Government a Business

Small businesses have an imperative unlike any other sector of society, it’s called cashflow and it is this very vulnerability that makes us in my view, the most important part of the economy. We hear often about the losses that QANTAS have been making in past years and the projected return to profitable trading. Debt and deficit at all levels of Government is in the news almost every day, the distinction between debt ie level of borrowed money and deficit which is a shortfall in the cashflow of government is important.

Doctor - No Face

Too many in society don’t understand how to manage cashflow and the term budget is anathema to most. Perhaps the biggest barrier is it’s something we have very little knowledge around the basics and as a consequence it’s viewed as something too difficult. Members of the foundation have free access to the “essentials pack” and one of the modules – Financials, Budgets and Cashlow”.

The reason small business is so important to our economy is that they must react immediately to external influences otherwise they go broke. Government and big business can ride out cashflow crisis, sometimes for years. Small business won’t last a month if they don’t adapt, change, innovate; they don’t have any other option other than to be profitable or disappear. That’s very healthy, in fact critical to ensure that our economy doesn’t stagnate. I’m not anti-big business just for the record, but it’s important to understand why I focus on small business as my main interest.

So the question is should government be in business, well the reality is they are! The delivery health and education for example are services, and private enterprise or government can deliver them. I often get into discussions about the concept of universal or “free” services and why that’s better a system than paying a private company that have to make a profit.

To start with government does not deliver these services for free, they collect taxes and pay the costs on behalf of us. Like cashflow, delivery of universal health is also not well understood and looking at better ways to deliver services is a sensitive topic. I was chatting with an elderly couple recently and they were comparing the contrasting very different experiences they each had had in the public health system.

At one hospital the service was extraordinary, at the other it was very different. Arriving by ambulance transport service, he was taken in a wheel chair up to his appointment by a hospital wardsmen. Taking his patient to the head of the line, he was told by the receptionist that he would have to go to the back of the line and wait. Now the wardsmen already had a call to pick up another patient, which he told the receptionist who promptly ignored him. Leaving the patients documents on the counter he responded by saying to call him when the patient was ready to be taken back to his transport.

A long story short, the patient waited patiently and after three or four attempts to find out where his appointment was at, decided to leave after 4 hours without seeing his doctor as it was apparent his paperworkj was not going to be processed only to find that his transportation paperwork had been shredded by the receptionist. The biggest difference in this story contrast in standard between two hospitals in the same town and significantly that in a universal free system, the patient cannot chose to go to the other hospital.

This highlights for me the difference between small business and particularly government. While there are many dedicated professionals in the health services, there is no imperative to deliver great service. The wages next week will still be paid, the government may change but the headlines stay the same.

If we had a system where all health was delivered by private enterprise, but had a system that saw reduced taxes so that the majority become responsible for taking out their own insurances and choose where they go. Bad service means that a bad hospital will become unprofitable as customers vote with their feet. The improvement from the imperative to perform in both courtesy and quality of medical treatment will see great hospitals become the norm.

And those who cannot afford to be part of this system, well they ARE a part of it as the cost is still met by government, just that the patient has the choice where to go and use the credits provided to the vulnerable. No different to health being universal but the outcomes are demanded by the patients at the point of delivery, not by complaint at the ballot box which changes little.

The really sad part for me in writing today’s post is that conversations like this are not yet a normal part of our society, there may be better solutions than mine but we need to explore them. We seem to be more focused on taking less responsibility for ourselves and for my mind this delivers a lower standard outcome.


Trevor Dixon

Chairman Small Business Foundation

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