Danish Fat Tax Scrapped – A Lesson for Australian Tax Philosophy

November 13, 2012 3 comments

Danish lawmakers have scrapped the fat tax – a tax designed to encourage people to eat healthy food. The Danish tax ministry quoted:

“The fat tax and the extension of the chocolate tax – the so-called sugar tax – has been criticized for increasing prices for consumers, increasing companies’ administrative costs and putting Danish jobs at risk”

Sounds exactly like the taxes recently introduced by the Labor government in Australia. Sure the stuff being taxed is different, but I’m talking about tax philosophy. I’m talking about how governments go about maintaining a healthy economy whilst at the same time achieve other social and environmental goals. The consequences of the Danish fat tax are exactly the same as the consequences of the carbon tax and mining tax. Australian jobs are at risk and living costs are forever increasing.

Is taxing stuff the answer? Is adding to our already high cost base the best way to go when we already can’t compete in international markets? Manufacturing, tourism and retail continue to decline and the new taxes keep rolling in.

Mette Gjerskov, the Danish minister for food, agriculture and fisheries, said during a news conference:

“The fat tax is one of the most maligned we [have] had in a long time. Now we have to try improving the public health by other means.”

You mean there are other ways of achieving a goal apart from decimating business through tax hikes? Labor take heed. We need a government that can manage the budget and lower the cost of Australian business. The current government in Australia is exactly the opposite.

Qantas Job Cuts

November 8, 2012 3 comments

I thought news on high profile job cuts and factory closures came in at around once a week since the Labor government came to power. It seems that rate is accelerating to a few examples every week. The latest is Qantas. A few days ago it was Holden. Prior to that it was car parts manufacturer Autodom.

Qantas is in trouble. They can’t compete with international airlines. Our corrupt union run government is fueling the high costs that are making Qantas uncompetitive. In Australia, under a labor government, job cuts would usually be countered by workers going on strike. Maybe I don’t understand business, but wouldn’t striking make your position worse as a worker in a company struggling with high costs?

I continue to worry about Australia’s future in an international economy. Something needs to change before we price ourselves out of every industry and have nothing left. I don’t think labor’s universal strategy of increasing taxes will solve this.

Greens say Ban Live Exports

November 6, 2012 2 comments

The Greens party and some antiquated union believes there should be a ban on live animal exports. Processed meat exports are more profitable they reckon.

I’m no expert on the meat industry but I’m pretty sure companies exist to maximize profits. Live animal exports are there for a reason. It wasn’t pursued randomly. For example the countries that import live animals may want them live so that they can process the animals themselves for religious reasons. I don’t think the Greens are in the best position to gauge economic decisions. Companies are pretty good at that.

I’ve said it before – no knee jerk reactions from the government this time round please. Any changes need to be to the satisfaction of all stakeholders. Banning live exports so that countries import their live meat from other sources does not improve animal welfare. In fact it makes it worse – there’s a good chance an alternative live animal exporter will not have the standards of Australian exporters. Animal welfare is worse and Australia loses business. If we ban our exports that does not change a country’s demand for live imports. What are we trying to achieve?

Australian Automotive Industry in Terminal Decline

November 3, 2012 Leave a comment

It’s rare that a week goes by in Australia and there’s not some news about a factory closing and jobs being lost. This week it’s a high profile company – Holden. Automotive manufacturing in Australia is no longer competitive in international markets due to rising costs. This has manifested as reduced demand for Holden vehicles and the announcement this week of the axing of 170 jobs at the Elizabeth manufacturing plant in South Australia. Many people are prediciting this is just the beginning of Holden’s eventual demise.

Along with tourism and retail, manufacturing in Australia is in terminal decline. It’s too expensive. Rising costs means we are no longer competitive in a world economy. The Gillard Labor Government is fueling these rising costs with a continual introduction of new taxes and tax hikes and by pandering to unreasonable union demands that force Australian labour rates to unsustainable levels. What do you expect from a corrupt union run government that lacks any ability to manage a budget?

The Australian economy is faring ok as we continue to be supported by the remnants of the mining boom. Our ability to rely on mining has already been diminished through the mining super tax which is reducing our international competitiveness in the mining industry. What happens when mining eventually declines? We’ll have nothing left. Our economy will be devastated  Maybe labor will counter the problem by increasing the carbon tax and mining super tax whilst getting us to learn Asian languages? This is what Gillard suggested in her Asia white paper. Is learning an Asian language going to give us a competitive edge in a market where we are too expensive? Wouldn’t reducing costs be a better alternative? If I was running a business I’d rather hire a translator and have a lower cost base so that I could focus on delivering a cost effective product.

The Labor government is adding to the cost base of Australian businesses. Australia cannot tolerate this burden forever. I hope this arrangement is corrected by a change in government before it’s too late.

Increasing Tax on Cheap Wine

October 30, 2012 Leave a comment

Labor’s perpetual tax hikes are proceeding unabated with a plan to increase tax on cheap wine. Australia already has one of the highest tax rates on alcohol in the world. From this world leading position, labor wants to further increase tax. This is just another tax hike in a long line of tax hikes introduced by the labor government, further adding to Australia’s cost base and exacerbating our uncompetitiveness in international markets. I suppose the revenue raised by their introduction of the alcopop tax has not been enough to curb their inability to manage the budget.

See other politics section for more information about labor’s addiction to spending and strategy of continuous tax increases.

Live Animal Exports

October 10, 2012 Leave a comment

The problem with animal welfare related to live animal exports will not be resolved by banning Australian live animal exports. The problem resides in the countries importing the animals. Those countries have a demand for meat. Whether they get it from Australia or elsewhere does not change how they treat animals. If Australia bans live animal exports to those countries they will find a different market to purchase their animals from. In fact I think the best way for us to help improve animal welfare is by continuing to do business with these nations. That way we have an ongoing interface with their industry. We have leverage to help encourage them to change. Banning exports is tantamount to putting our heads in the sand. The result is less business for Australia and no change to animal welfare.

I don’t claim to have the answer to this issue, but whatever the potential answers may be, I implore the government to avoid repeating the knee-jerk reaction seen with the cattle industry in 2011. The sudden banning of live cattle exports to Indonesia was irresponsible and foolish. Allowing cattle to suffer and die in Australian pastoral land is not good for animal welfare. Further, the knee-jerk reaction was devastating to the businesses involved in the cattle export industry. The current Labor government has a history of suddenly changing the rules on business, mostly through the introduction of new taxes such as the mining tax and the carbon tax, which only serve to help offset their addiction to spending and inability to manage the budget. Sudden changes to the rules on business is extremely poor government policy. The perception of an uncertain business environment leads to deteriorating business investment and a deteriorating economy.

Whatever the changes are to policies that may come about from the latest incident with sheep in Pakistan, they need to be developed slowly and carefully, with consultation to all stakeholders. Of course, unlike the case for banning of cattle exports to Indonesia, potential consequences of any policy changes need to be carefully considered. Negative consequences need to be addressed to the satisfaction of all stakeholders before proceeding with change. Change needs to be deployed slowly to allow business to adjust. Knee-jerk reactions must be avoided.

Alan Jones vs Terrorism

October 7, 2012 2 comments

Like most Australians, I don’t really care about what Alan Jones says, nor do I use him as my moral compass. I don’t support his comments made about Julia Gillard and her father, John Gillard, but I do support his freedom to say it. The people who threaten Alan Jones and the companies that advertise on his program have the same philosophy and ideals as terrorists. Extremists. Fanatics blinded by irrational beliefs. These are the type of people, who if not kept in check, will escalate their opinions and beliefs into actual acts of violence. They make threats. They try to enforce their beliefs through threats. If given the chance, they will act on their threats. They are terrorists. Perhaps their extreme methods are watered down, being labelled as “cyber bullies.” In terms of philosophy, they are terrorists.

Companies should not give in to terrorists. I believe companies should support Alan Jones and his freedom to say what he likes. If you don’t like what he says, you are free to not listen. Pulling support and advertising in the wake of threats is a decision that gives power to the terrorists making the threats. Companies should stand strong against these terrorists. They should not pander to threats. They should not support the idea that opinions can be enforced onto others through terrorism. This only encourages more terrorism. I’d be encouraged to buy the products of a company that supports it’s people in any type of hardship, whether it’s from terrorist threats or anything else. I am discouraged to buy products from gutless companies who pander to threats or do not support their people when they need support. It’s easy to pull the pin. It’s much harder to fight and maintain support.

These terrorists, like most other terrorists, are likely to be hypocrites  They have probably enjoyed the entertainment value of a shock jock at some stage. Whether it’s Australian Idol or one of the other mundane spin-offs or some sort of radio program. Whether with or without Kyle Sandilands, many programs use this device to garner an audience. It’s entertaining. It’s a ploy to get attention. It’s controversial and sparks discussion and interest  People watch it, and in doing so support it. Watching or listening to a show containing this style of entertainment device is a vote in its approval. Part of the risk of this type of ploy is that sometimes some people will be offended. It’s part of the game. It’s unavoidable. Watching or listening to a shock jock is accepting and supporting the fact that occasionally some people will be offended. To be critical and withdraw your support when an unfavourable circumstance arises from a device that you originally supported is hypocritical.

I’ve never listened to Alan Jones’ show. Since I’m strongly against terrorism and hypocrisy  I might start listening now. I want to demonstrate my support for freedom and the right to live in a world where you are not threatened by hypocrites who believe something different to you. Also the show is commercial free now. Bonus.