THIS week I received an interesting note that started me thinking. The notion it contained was generally against compulsory superannuation.
THIS week I received an interesting note that started me thinking.
The notion it contained was generally against compulsory superannuation.
Personally, I have been suspicious of super for some time, mainly because I see more and more of our savings being pumped into the US economy, often into companies that end up buying our own.
What I am concerned about is losing that sovereignty of investment control, because there is no doubt there is an emotional premium to investing in something you feel comfortable with — and that applies to your homeland.
Anyway, my argument has a lot of swings and roundabouts, but the letter I received took a more localised view of the issue.
It raised the issue of super money being cheap funds – and it is, because it literally subsidises listed companies – for large companies to compete with smaller businesses that rely on family money/debt.
Even worse, this letter pointed out, is that in many cases a small business’ contribution to super, through its owner’s and employees’ contributions, was funding its own demise! Given the deregulation debate, it should be no surprise that retailers were one of the examples provided. Every time a small retailer puts money in their own super fund or pays regular contributions for employees, it suggested, they were literally funneling more money to the big listed shops to put them out of business. It’s a perfect cycle — fund managers do such a poor job of finding decent investments that they go for the safe bet of retailers in bad times.
They push up the share prices of retailers (ask any stockbroker and they’ll tell you everyone has to eat) and provide the cheapest expansion capital going, at the expense of smaller operations with no access to the share market.
Unless one of these big retailers takes a giant leap and uses this unique period to expand overseas, they might find they run out of market share to grab (already around 80 per cent of supermarket share in most States). And suddenly they might not be able to justify the funds they receive.
Even worse, we’ve packaged up most of our retail market into handy bite-sized stock market listed pieces for an international buyer — just like we already did with our beer, our wine, our mining companies, our food and our airlines.
It’s like musical chairs, and the music always stops at some time.
AFTER weeks of argy bargy, the Kim Beazley challenge for Labor’s top spot failed on Monday when Simon Crean won a Caucus leadership ballot 58 to 34.
While only time will tell whether or not that is the end of the matter, it is worth speculating on the impact of this struggle.
Firstly, I have to disagree with many who believe it was bad for the Labor party.
At a time when John Howard was hogging all the attention with his post-war victory lap, the Labor party managed to steal the limelight with what literally amounts to a sideshow.
Critics of Mr Beazley say the move was divisive and unsettling but I disagree.
Suddenly, everyone knows who Mr Crean is — they’ve seen him walk and talk, play a leadership role, argue persuasively and even offer a bit of mongrel.
Australian Story has profiled him and made him seem human, complete with a family. While the rest of us wait to see them, half of Australia even believes now that he has policies. All in all, it’s gone so well, you’d almost think they planned it.
Deregulation part II
I HAD promised not to talk about trading hours again, but the news from the retail front is that deregulation is apparently not inevitable despite our conclusion a couple of editions back.
At least it seems Sunday trading won’t be introduced just now. That is a small win, if it is true, for small retailers.
However, let’s be pragmatic about this. Deregulation is inevitable, even if it takes another term of office from this Government or even a change in power.
The difference is the WA Liberals have sought a sensible approach to deregulation — at least at first glance that is my reading of it. Like all things in life, you can’t hold back the tide, but you can prepare for it. That means giving small business the wherewithal to compete against east coast-based national players before changing trading hours.
Labor is not well placed to do this be-cause one of the biggest issues is industrial relations and their ridiculous idea that Sunday could be a normal shopping day but employees deserve double time for working. You can’t have an enlightened consumer-based policy working in tandem with Dark Ages labour laws.