28/05/2008 - 22:00

Lack of choice leaves bitter taste

28/05/2008 - 22:00

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I had to get coffees for group of people at work last week, and I couldn't help seeing of it as a great example of how the world has changed.

When I started my career, the only coffee was what my beloved calls 'tinkle, tinkle' referring to the sound of the spoon in the mug as it stirs the instant variety. It's the kind you still get at roadhouses on a long country haul.

But in a modern office, especially one with a choice of cafes, the options are much broader.

The order I took for seven people had to be written down due to its complexity and variety.

Only two were flat whites, while the rest were lattes involving soy milk, skinny cappuccinos or decaf long macs and I'm sure one of them had a twist of lemon. Perhaps that last one was a joke, but the rest is as near to fact as my memory, lacking the remnant of that crumpled note, can recall.

If I'd gone back in time just 20 years and showed someone that list it would have been indecipherable. Yet today, many people can't get through their day without one of those versions of coffee.

Perhaps this sort of thing may appear indulgent to some readers - caring so much about what's ultimately just water, ground coffee beans and, usually, something to make it white - all spruced up by a fancy machine made in Italy.

But it shows what can happen when more choices are offered.

When coffee was boring, one-dimensional 'tinkle tinkle', you can guarantee people drank a lot less of it and, notably, spent a great deal less on it.

These days, a couple of coffees at a cafe costs about the same as a whole tin of the dried instant stuff.

Rightly or wrongly, choice provides huge incentives for people to consume, because the more they can get exactly what they want, the more likely they are to buy it.

If coffee bean imports have gone through the roof it's not because we have the affluence to buy more coffee, it's because we have the affluence to make choices more affordable.

So, why do I blather on about choice?

Well beyond the mere observation, I think it says a lot to people who have to provide services to people, whether in business or government.

For those in business, it's simply working out how many choices can be efficiently supplied to customers while keeping a balance between profitability and competition.

That same premise applies equally to hiring and retaining staff, who have more choices than ever these days.

For those more ideologically bent, such as politicians, the desire for choice is a very important lesson, especially to those who believe in the one-size-fits-all approach.

Take health insurance. There is a strong belief on the left of politics that universal health care is the best system available. While I don't deny that Australia's health system is one of the finest in the world, there are obvious signs that it is crumbling, as modern medicine becomes too expensive for the state to underwrite for everyone, all the time.

That's bad news if we want to be able to get medical treatment when we need or want it - in other words if we want a choice.

The health debate played out on talkback radio each week is largely about waiting lists, which is really what happens when there is a queue. A queue forms only when there are no other choices.

When federal Labor sought to increase the Medicare levy surcharge thresholds in its recent budget it started removing choices from people in middle Australia.

The tax paid for health care, so people had a choice to get private insurance with the money or simply stick with the universal system. Certainly, in doing so, it effectively subsidised private healthcare, but that was simply a mechanism to get more people off the public queues, in effect improving the choice for all.

The increased money in the private health system was growing that sector, increasing its ability to offer choices and helping take the load off the public system - ultimately making the state sector a better choice for those who can't afford the alternative anyway.

The government will argue that by raising the levy threshold it is giving people a choice about whether to spend their money on health care or not. But that is a false message, because almost none of us ultimately has a choice about using health care, because in 99 per cent of cases we'll end up in the medical system at some stage.

By encouraging people to choose between health insurance or their hip pocket, we are just allowing people who can afford to pay for their own health care to choose to get someone else to pay for it.

So we step backwards, limiting choice for many to simply the public sector and increasing the burden on that system, so that the choice becomes a worse one by the day.

It will be interesting to see how many other choices are removed from people and whether or not that results in the electorate making different choices at the ballot.

I'll bet they don't vote for International Roast.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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