Category: Business

I’m still in two-minds

Posted by Chief Blogger – 19 January, 2012

I see the arguments for both sides, but if we are going to get rid of auto car subsidies lets get rid of all business subsidies, especially for ‘renewable’ energy.

Senator Carr said that one million Australians are employed in some form of manufacturing and that the automotive industry is the foundation stone of manufacturing.

He said that, at only $17.80 per taxpayer, the Australian government’s level of support for the car industry was very low compared with Canada ($96.39), France ($147.38), Germany ($90.37), Sweden ($334) and the UK ($27), let alone “the great home of free enterprise”, the US ($264).

“Nowhere in the world – nowhere – does the automotive industry survive without substantial co-investment by the governments,” said Senator Carr.

If the politicans really cared

Posted by Chief Blogger – 10 January, 2012

HOLDEN’S Australian operations hang in the balance as Ford today announced a $103 million investment to keep its Victorian plants open for another four years.

South Australian Premier Jay Weatherill and federal Manufacturing Minister Kim Carr met with General Motors chief executive Dan Akerson in Detroit this morning for talks on the future of its Australian subsidiary, Holden.

The Ford investment, made in Geelong today, includes $34 million of taxpayers’ money, to boost the fuel efficiency of the Ford Falcon and Ford Territory models.

Mr Weatherill said the closure of the GM’s Australian operations was “one possible scenario”.

He said the SA and federal governments were negotiating a deal to prevent that occurring.

If the ALP really wanted to save the car industry in Australia then they might consider implementing my five point plan detailed here. Let me update it and call it my ten point plan:

  1. Abolish government transaction taxes on new Australian made cars sold to private buyers, including stamp duty and registration;
  2. Abolish payroll tax for the entire car manufacturing sector;
  3. Reduce the corporate income tax rate to 5 per cent for the entire car manufacturing sector;
  4. Provide funding for an automobile R&D centre of excellence made up of local industry, local universities and the CSIRO, to focus on the engineering challenges of meeting EU environmental standards and other government regulations;
  5. Provide tax-credits for new automobile manufacturing investment;
  6. Relax current IR laws, including unfair dismissal and collective bargaining and implement ‘employer at will’ AWA arrangements;
  7. Abolish any government scheme, alternative energy requirement or subsidy that drives up the cost of power;
  8. Abolish the Co2 tax;
  9. Allow the owners of Australian cars – no older than 4 year old – to travel 130 km/h on some dual freeways; and
  10. Relax immigration restrictions for persons that have expertise and investment dollars for the automobile R&D and manufacturing sector.

If the SA and VIC governments really want automobile manufacturing in their states there is nothing stopping them from abolishing payroll and transaction taxes on Ford and Holden tomorrow. The problem with Ford and Holden is symbolic of the wider problem with manufacturing in Australia though: governments, through a myriad of taxes and regulations, is making the sector uncompetitive in world and domestic markets. That is about 75 per cent of the problem.

Ford Falcon less than 8 litres per 100km

Posted by Chief Blogger – 3 January, 2012

While not officially announced, Ford has let slip the fuel usage figures for the new Ecoboost Falcon in their latest brochure:

By injecting small amounts of highly pressurised fuel into the combustion chamber, the EcoBoost® engine increases fuel efficiency by up to 20%…when compared to the I6 petrol engine.

That works out to be 7.92 litres per 100km. Now Ford just needs to add in the ZF 8-speed transmission and lose some weight off the front.

Thanks ALP, another valuable export industry destroyed

Posted by Chief Blogger – 16 December, 2011

Some months ago ABC’s 4 Corners ran a story in which they claimed that Indonesia were abusing Australian cattle. The story was weak and poorly sourced and based on a brief bit of video footage. There was never any confirmation that the cattle were Australian, that the abattoir shown was in any way representative of the cattle trade and some doubt arouse that the persons involved may have been paid to abuse the cattle. In any case the cattle that were abused numbered less than ten. Nevertheless, the ALP government banned the entire live export trade to Indonesia, even though the trade provided the protein requirements for millions of Indonesians. So insulted by the ban, the trade has never recovered and now the Indonesians have taken additional steps:

In a move that has surprised the live export sector, Indonesia cut its demand for Australian cattle by about half to 285,000 next year.

The Opposition has called for Senator Ludwig to be dumped as Minister over his handling of the live export trade with Indonesia.

They say the cuts in quotas are a result of the Government’s poor handling of animal cruelty in Indonesian abattoirs earlier this year.

….

Opposition Leader Tony Abbott says Senator Ludwig should have been dumped in the recent ministerial reshuffle.

He says Senator Ludwig is only in the job because of his father Bill Ludwig’s involvement with the Labor Party and because the Prime Minister did not want to send Foreign Minister Kevin Rudd to sort out the problems in Indonesia.

“We have a totally incompetent minister, Joe Ludwig, still in the Cabinet because he’s not only a faceless man, he’s a hereditary faceless man,” he said.

“He was one of the people who deserved to be sacked from the Cabinet. Instead the Prime Minister sacked or sidelined the people who she feared.”

It is pretty incredible that a government can so easily destroy the livelihood of tens of thousands and risk the nutritional requirements of millions based solely on a flimsy 20 minute left-wing hatched job by ABC’s 4 Corners. It should concern every Australian who is trying to run a business and everyone else that is dependent on those businesses.

Shooting ourselves in the foot

Posted by Chief Blogger – 15 December, 2011

So the government had a multi-million dollar green car fund designed to assist local car manufacturers. Well the government gave in one hand and took away in the other:

TOYOTA Australia has blamed its second after-tax operating loss in as many years on increased market competition, unfavourable exchange rates and another tax adjustment to previous years.

Announced after business hours at 6pm last Friday, June 24, the $13.2 million net loss for Toyota Australia’s 2010-2011 fiscal year….This time last year Australia’s top-selling vehicle brand was forced to pay a $290.2 million tax bill including an “under provision” $246.7 million payment that comprised an unspecified one-off tax settlement with the Australian Tax Office for previous years.

Before tax Toyota was actually profitable. So here’s a suggestion. Instead of handing out corporate dole money like the green car fund, why not just slash taxes for local manufacturing. If this government really wants this vehicle capability, then why make them pay such high taxes?

 

Renewable Energy Meltdown

Posted by Chief Blogger – 9 December, 2011

From Scotland this week. Apparently wind turbines can’t cope with high winds.

Holden: advertising better

Posted by Chief Blogger – 26 November, 2011

If you need anymore evidence that consumers do not always make rational decisions then check out the Holden website. Now even though I drive a Ford I do not have any gribe against Holden, BUT it should be perfectly clear to unbiased readers that Holden is layering on thick the go green treatment. So much so that Holden has started branding all of its products with nice green motifs and other symbols to win over the eco-friendly crowd. They even had the audacity to stick one of their green emblems on their 6.0L V8 models that have Active Fuel Management – which basically shuts off half the cylinders on the highway – even though car still only gets  12.3L / 100 km. Clever.

The following little marketing detail really also plays on the ignorant. For the new Cruze:

Call me petty, but Watts Link is hardly setting a new standard – it has been round since the 1700s.

I’m fed up with the Coles/Woolworths bashing

Posted by Chief Blogger – 11 November, 2011

If you don’t like Coles or Woolworths then go to ALDI.

…..the Government has already launched several investigations into Coles, and enough is enough.

“We’ve had any number of fuel price inquiries, we’ve recently had a Senate inquiry into the price of milk, believe it or not, and a subsequent ACCC investigation,” Mr Goyder said.

“And fortunately they’ve come out and said that there’s an overwhelming consumer benefit in what Coles has done – and importantly we’ve done nothing illegally.”

Yes, food prices are high. But if consumers continue to go to C/W instead of exploring the alternatives what do people expect. Then one has to consider the inflexible workplace regulations these companies have to work with, along with the obscenely high wages paid to casual staff, high corporate tax rates, payroll taxes, the very high cost of land due to greedy governments, and the environmental water buy backs, etc… and it soon becomes clear why the cost of living is so high. Furthermore, C/W have customer satisfaction rates of over 80 per cent.

As for whining dairy farmers and cheap supermarket milk. There are billions of Asian crying our for good quality dairy products, so farmers might try broadening distribution network and product lines instead of making themselves beholden to C/W while also trying to use C/W as scapegoats for their own lack of innovation and entrepreneurship.

NBN propaganda via WhistleOut

Posted by Chief Blogger – 18 October, 2011

I have never heard of the comparison site WhistleOut. It is run by a bunch of blow ins from the UK – they look like LaboUr Party voters. Anyway, they have conducted an analysis about the NBN, with the results being great news for Mike Quigley’s ponzi scheme. news.com.au used the report to tell us to stop complaining about the NBN.

Anyway this looks like propaganda straight from the NBN play book. Hardly unbiased reporting above. Let’s look closer at the analysis.

My current plan with line rental is about $74 per month for an actual download speed of close to 19 MBPS for 200 GB per month. That works out to be about $0.37 per gigabyte compared to an NBN cost of $0.43. If I had naked ADSL we are talking closer to $0.3 per GB. How is any of the above better than what I currently have? The NBN figures above are also not the full and final cost per month. NBN is giving sweat heart deals to IPs to get people signed up – the NBN monthly price will go up. Despite the deal at last count the NBN had more employees than customers, so people are not exactly being won over by Mike Quigley’s generosity. Furthermore, NBN plans usually require a contract and the equipment ain’t cheap, and if the NBN had to price plans at the full cost -  without tax-payer subsidies – then prices would be even higher. Eventually they will have to go that way or taxes will have to go up to pay for the network.

The vast majority of people will also not be able to afford or willing to pay anything more than 12 MBPS, maybe 25 MBPS prices. Let’s though for the sake of an argument accept the figures as presented to us and ignore my personal circumstances. For an NBN full cost of $70 billion, a consumer can…..wait for it…..save 13 cents per GB per month. Wooot wooot wooot!!!!!!!!!!!!!!!!

I’m back

Posted by Chief Blogger – 25 September, 2011

Been off the grid for a week or two in Australia’s north. Some thoughts:

  1. Roads are second rate. This may be a function of a lack of people, but when one has to drive hundreds of kms on dirt roads being used by local businesses to sell products and provide services there is something wrong. Think of the additional fuel and maintenance costs, not too mention lost time in transit. There is also an issue of safety. I know 4WD enthusiasts lap it up, but in the year 2011 arterial roads like the Gibb Road need to be paved and made for the most part flood proof. Even the national highway funded by the Federal government is worse than state highways. Single lane bridges, lack of road shoulders and clearing to keep wondering animals away from the side of the road. There are still flood ways in place probably because the Feds are too cheap to build flood proof bridges. Try playing chicken with a road train on a single lane bridge on a bend. That’s what it is like. Thankfully the speed limit is 11o kph, but I never saw any Police so I gather anything goes within reason.
  2. Telecommunications are second rate but could be made so much better quickly. Unless you are with Telstra then forget it with a mobile. Go outside town and you get no mobile coverage, sat phone is your only option. Telstra though have a network of microwave towers built back in the 1980s and 90s. One wouldn’t think it be too hard to put m0bile tech. on them to extend coverage. Not really a critical issue though. Simply the function of long distances and not many people.
  3. There is no lack of water in the north. Lake Argyle is not small body of water so the Coalition’s recent proposal to build dams in the north may have merit, if geography permits and local councils release land to allow businesses to attract people to work. Unlike in the south, the north has great rivers like the Missouri, Colorado and Mississippi rivers. Large parts of the north-west remind me of Arizona, Utah, Nevada and California. Plenty of people live in those states, the north-west could be no different. The Kimberley seems to the geography to support well over 1 million people – land, water, natural attractions, good variable weather and close to Asia. As long as the land is private and without restrictions and not Crown or aboriginal communal land governed by a complex set of regulations, then that should attract people to the region. Unfortunately I don’t think that is the case.

Back to city life for me.