7. Mar, 2017

The puppet masters are just playing with us: PENALTY RATES

Will the cut in week end penalty rates create jobs? I doubt it, and here is why. Let’s look at it from 2 perspectives.

Firstly the average business and the penalty rate cuts. By the government and its departments own figures the average is going to be $6000 lost per person. That I doubt to start with. But simply put if an average company or employer has 5-10 employees only 2-3 of them are going to be on week end shifts. In many cases a lot of those are casual especially in hospitality and retail. So let’s say 1 is on a full time employment package. The employer would save $6000. The obvious question is that going to pay to create another job… NO  

Secondly let’s look at jobs… jobs are not created by cutting penalty rates they are created by profit, growth and expenditure (from spending) when a company or employer sees a need or opportunity to employ someone. This is where the company tax bill giving $50B back to companies is/will be a failure and this is for several reasons:

Future jobs are not certain as I have shown before. Up to 50% of jobs from the last 15 years will not be here in 25 years… truck drivers, warehousing staff such as pickers, packers etc, check out operators… anything that can be computerized will be.

Growth has and is still slowing and will do for the next 3-6 odd years as we sort all of this out.

Confidence has and is continuing to shrink and will do so as above for 3-6 odd years.

Spending …as governments grapple with all of the above and also the public spending will decrease especially as we continue with this foolishness of old aged economic/political paradigms.

Shareholders’ interests… simple, shareholders want returns and as usual money will be directed to them before employees especially given all of the above.

The first four are occurring because the political and economic mix and policy in Australia is all wrong …there is no balance simply because there is no real plan and definitely no foresight.

Other points come into play such as how does a business really run and where to you place government (public money) funding where it will work best in the economy.

Three points are they are really important. Government must believe business people are stupid because they keep thinking they need a hand with DFAT and Tax based incentives… business doesn’t need a hand… what it needs is for government to set in place a better plan and stick with it for at least an economic cycle. Secondly, is spending and you only have to ask Harvey Norman this and he will confirm it… Instead of giving money to other countries and big business give it to those who spend or need to spend it … pensioners (an 8% increase), those who are disabled or have illness, run a decent Newstart and TAFE system with OJT and apprenticeships, build some homes (50000 of them) for the homeless. Then not only are you spreading money around the economy but you are doing it in many tranches. Lastly but importantly employ Australians (lessen the 457 intake by 50%) and support Australian productivity first. That includes a business development and infrastructure fund.