diddy

Interesting Reading:

Australia leads the way in free markets

By Tim Colebatch, Canberra
February 9, 2006

AUSTRALIA is the most deregulated economy in the Western world, the OECD says. In a new report aimed to whip up enthusiasm for economic reform, it depicts Australia as its pin-up model for open markets and small government.
The report, Economic Policy Reforms: Going for Growth 2006, finds Australia has the fewest restrictions on product markets of the 30 OECD countries. It now has the lowest government ownership of business, and least impact of regulation on economic behaviour.
But while Australia performed well on most indicators, the OECD raises concern about the high number of teenagers dropping out of education and the poor performance of business in research and development.
Its statistics also give a mixed report card on Australia's affluence. We behave as if we are rich, with consumer spending per head the fifth-highest in the Western world. Yet in GDP per head we rank just 11th.
In income per head, we drop to 13th. And in GDP per head per hour worked, we appear to be about equal 17th.
The OECD report, released yesterday in Paris, aims to provide performance benchmarks to spur OECD members, particularly those in Europe, to greater efforts at reform.
Launching the report, OECD chief economist Jean-Philippe Cotis deplored the lack of reforms in Europe to lift workforce participation, especially to remove incentives for workers to take early retirement.
"The social costs associated with this failure (to match the reform leaders) are plain to see, and will only worsen with demographic ageing", Mr Cotis said.
The OECD notes that Australia has tackled some of the reform priorities it set in last year's report: reducing the growth of award wages, reducing access to disability pensions, tackling skills shortages and allowing a more generous of family benefits.
But it notes that we are still waiting for COAG to deliver increased competition in electricity, rail, gas and water. And it again urges Australian governments to do more to strengthen vocational education and training, so as to reduce the number of teenage drop-outs.
This year's report focuses on innovation, and area in which Australia's report card was mixed. The OECD found that Australia is very strong in public-sector science, with the fifth-highest government spending on R&D in the Western world. Yet this strength is not energising business spending on R&D, which ranks in the bottom half of OECD nations.
It urges tackling this by working to increase commercialisation of university research and strengthen industry-science linkages.
Australia ranks poorly in venture capital financing for start-ups, it says, but is much stronger in funding the expansion stage. Superannuation funds dominate venture capital funding here as in no other country.
HOW AUSTRALIA RANKS of 30 OECD countries
Top tier
1 Least regulation of product markets.
1 Least impact of regulation on economy.
1 Least public ownership of business.
2 Highest minimum wage.
5 Consumer spending per head.
5 student performance in reading, science and maths.
5 Government spending on R&D.
6 Access to credit.
7 Regulation of stock markets.
8 Lowest overheads for banks.
Middle tier
11 GDP per head.
13 Income per head.
18 Private spending on R&D.
Bottom tier
20 Highest public investment.
28 Highest unemployment benefit.
SOURCE: OECD, Going for Growth 2006 (www.oecd.org)

Stormz

lol!!! and the highest charges I have encountered so far!! They must be raking it in!

arkon

Man, what a load of coblars, Its not like that from where I'm sitting, The OECD must have had Ali G at the conference when they came up with that list, A bit too much home grown botswanian in the tea I think.

I don't doubt they believe their own stats, as for least regulation, & Least impact of regulation on economy they can't be serious. :scared:

arkon

Ok for the sake of fairness, here it is from the rural Arkon viewpoint...

1 Least regulation of product markets. ROFL
1 Least impact of regulation on economy. ROFL
1 Least public ownership of business. Can't coment, but so what
2 Highest minimum wage. I don't doubt this at all judging by the amount I get charged for things.
5 Consumer spending per head. All those fees and fines again
5 student performance in reading, science and maths. Yea Right, Reading & writing road signs and analy retentive laws and regulations. Science I agree afterall got to figure out how to fix the eco system they destroyed, And maths...LOL, got to add up those fines and charges properly and the better you are at maths the quicker you can work out how to diddle someone out of thier change.
5 Government spending on R&D. See wasting money on pop music
6 Access to credit. As I say need that to pay all the fees and fines.
7 Regulation of stock markets. Can't comment on this as I've stayed away from that sofar, I look forward to all the regulation when I do, I'll probably be made to do a Tafe course to be allowed to trade LOL.
8 Lowest overheads for banks. LOL. and highest charges, Robbing bastards. Was a time when you needed a horse and wear a mask!
11 GDP per head. Gross Domestic pests, or Grossly Disfunctional People, LOL that sounds about right
13 Income per head. Probably correct, Got to pay all those fines and fees
18 Private spending on R&D. Don't know why they are spending on pop music!

20 Highest public investment. Got to give jobs to all the pen pushers and fee and fine calculation and collection people
28 Highest unemployment benefit. For all those people in work, dead or not born yet. The radio today recconed 47,000 people were claiming that were dead and another 40,000 were claiming that wern't even born.

SOURCE: Arkon, Going for Bust 2006 (www.Imnotathiefgetmeouttahere.org)

Wol

I haven't checked out the reference but I am assuming this is a huge joke?

For anyone to say that Australia is in the lead for competition - well, words fail me!

Of the places where I've lived, Australia is the most "tied up" country: it's almost like the Mafia, with areas carved up between the big factions. I am sure many of the multinationals who enter the market here just train up the management and let them get on with it, falsely secure in the belief that the company is being run as at "home" while in fact it slides back into the 19th century.

Not entirely fair, as we *have* had some good experiences, but all too often you find it an uphill battle.

One example: Miele. You have to buy at one price, and you have to have one installer - and it's not the supplier.

(Comments deleted for legal reasons)

Vash the Stampede

I can't help noticing that some people have completely missed the point of the study.

The study was about deregulation and government ownership. It was not about unions or competition, etc.

The study concluded that Australia is a world leader in deregulation and government ownership.

It did not claim that Australia is a world leader in the areas of unionism and competition.

That's not what the article said.

It said:

diddy

Two things we've also missed:

1. Self imposed regulation. Australians push hard to buy/ sell their own products more than any country I've known.

2. We all assume that meeting the criteria in the article is a good thing.

Paul.

NKSK version 2

This always makes me smile. When retailers say to me "Australian Made" I always look back at them, smile and say "So?".

After you've experienced "British made" in the 70s followed by the "British made" falling apart or breaking down, you realise that "Japanese made" is often a much better option.

Buying "Australian made" just encourages yet more inefficiency, lower productivity and greater union strength.

arkon

I too now look on Australian made to be exactly like the 70's Buy British campaign, Both equally rubbish. There is an unhealthy credit given to Australian made and owned, and for the life of me I can't see how this is either good for the economy or consumers. I find nearly all Australian made goods I have had the misfortune of buying to be either poor quality, shoddy, too expensive and just plain not fit for purpose. This is not meant to be a dig at Australia no mater what you read into this, its just my observation as a both a business man and a consumer.

The really ironic thing is some of the clearly made in china tools I have bought were marked as made in Australia! I’ve since found out that if you import the components into Oz then get them made hear you are exempt from some of the high import duties, I wonder then if this means they are now technically made in Oz albeit with inferior raw materials and components.

You can buy cheap shoddy stuff in the UK too but you at least have a much much wider choice of the good stuff, here the monopolies and short sighted consumers almost actively try an discourage the import and sale of high quality foreign stuff.

So BUY anything other than OZ and make them change their ways……

ABCDiamond

Of course that is good for the economy..... the theory is:

If it is made in Australia, then it creates employment for an Australian.

If it is made elsewhere it creates employment elsewhere, and sends A$ out of the country

IF it is made in Australia and it doesn't last as long, then it creates more employment for Australians, in making the replacement.


The actual figures were:
ALMOST 1.5 million Centrelink customers are dead, a new report shows.
More than 27,000 have never been born, 33 died but never saw the light of day, and one customer was born two months after he or she died.

A small number of these customers were still receiving welfare payments, but most were not.......
http://www.couriermail.news.com.au/c...55E953,00.html

NKSK version 2

But ABC you know the contrary argument - that buying Australian is essentially protectionism and is only a short term fix. It can't last forever.
And whilst it goes on, production never becomes lean so will never be able to compete when that protectionism is removed.

Protectionism can never last - ultimately, (when consumers wise up), there will have to be a structural shift in the economy of Australia. If Australia stops producing things which can be produced at a tenth of the price in China, the country won't collapse - it will just have to start 'making' something else. Providing tertiary level services to Asia might be one possible.

BTW did anyone read the latest union issue? Workers in Mandurah walked off the Perth-Mandurah rail link construction job last Tuesday because the temperature hit 38 degrees - in Perth - one hours drive north. In remained 27 degrees in mandurah. The legal minimum temperature to enable you to walk offthe job is 37.

How the hell they are allowed to get away with this I'll never know. Vash - I'm not sure even you can defend this..!!

arkon

I hope you don't really believe what you've written or maybe you've just been away from the UK too long. This is what it was like in the UK 30 years ago, Since then Britain and its attitudes have changed and the country has never been as financially strong as it is now. Australia needs to wake up, grow up and change otherwise countries like Ethiopia and the Sudan and what the heck even Russia will soon be ahead of Australia and this place won't be fit for the kangaroos.

Considering you usually come across as knowing what your on about, I am stunned that you think the way Australia and its short termism can actually work for any length of time.

NKSK version 2

Opinion piece in today's London Times

Britain has bloomed by striking out its winters of industrial discontent
Graham Searjeant, Financial Editor



FEWER working days were lost through industrial disputes in 2005 than in any year since records began nearly 200 years ago. Whatever else may be wrong with the economy, that is a cause for celebration. Every strike or lockout represents a failure. And the ordinary families who lose their pay usually suffer most.
The 156,000 days lost last year compare with about 30 million in 1979, when public sector unions killed off the Callaghan Government with their winter of discontent over pay. The last year of widespread industrial chaos came in 1984, when 27 million days were lost — coalminers were manoeuvred into a prolonged, bitter strike against closures of uneconomic pits, which precipitated the industry’s virtual demise.



During the 1970s disputes typically cost between six million and ten million working days a year. Those disputes were, however, only the culmination of industrial warfare that made the UK the sick economy of Europe.

Disputes began to run at several a day from the mid-1950s, when there was only fractional unemployment and British industry faced little competition from the rest of Europe or beyond. Stoppages regularly cost three million working days a year. They escalated so rapidly in the latter 1960s, especially after devaluation, that the Wilson Government planned but shelved a thorough reform of industrial relations. Sir Edward Heath’s Government, which replaced it in 1970, enacted legislation.

It fell when Sir Edward was ousted by a miners’ strike, although the number of petty disputes did start to decline.

Days lost make up only a small part of the economic damage that industrial disputes caused. Labour relations took a high proportion of management time and mental effort that needed to be spent making businesses competitive, investing for the future, developing new products and exploring new markets.

Change was likely to be resisted by powerful unions, adding to the cost of investment and cutting returns. Bloated stocks of materials, parts and finished goods had to be kept to allow for supply disruptions; that in turn absorbed capital that could otherwise have been invested. Most managers preferred the quiet life or were simply not up to it.

The relentless series of reforms introduced while Lady Thatcher was in charge cut trade union power, curbed contagious disputes and reduced wildcat stoppages. Ending closed shops effectively ended the power of unions to sack their members. But the change to a nearly strike-free 2005 was the product of many deeper economic and social factors.

Manufacturing has declined more than almost anyone imagined. On the way, dirty industries that were highly unionised have given way to services where unions are weaker. In these new employments, individual or family self-interest usually counts for more than solidarity with fellow workers. In a richer consumer society, mortgage payments and credit card bills curb people’s freedom to risk their cashflow.

More competition has probably played an even greater role. The destruction of British Leyland was a terrible lesson to everyone who thought it had a right to exist regardless of what was happening in its markets. Free trade forces managers and employees to fight against products and services from almost anywhere in the world, instead of fighting against each other. Privatisation has brought competition to swaths of industry that had not experienced it for generations. Price caps are even imposed on infrastructure utilities to mimic the disciplines of competition.

More recently inflation has been tamed — that removes the constantly changing relative price levels that obliged different groups of workers to leapfrog each other to maintain financial status and living standards. The growth of single union plants does away with the internal competition between groups of workers. And few now imagine that higher wage costs can simply be passed on in higher prices.

Except, that is, in the public sector. Strikes in highly unionised public services are blessedly rare compared with the 1970s, partly because, as again yesterday, ministers give way at the slightest threat. In education, health, administration and parts of the transport industry, unions can still rely on taxpayers to foot any bill. Over the past eight years public sector strikes have caused the vast majority of days lost.

In the private sector the most encouraging feature of the new realism is that we can now enjoy low levels of unemployment without inflationary pay rises. Even the Governor of the Bank of England is looking for an acceleration in pay deals but it has not come. Avoiding strikes helps to maintain stable prices without economic pain.

No gains come free. Bad employers are now freer to exploit workers than they have been for generations, though markets usually find them out eventually. And trade union barons have been replaced by smoother but less virtuous barons in the boardrooms and counting houses of investment banks. Curbing them will be tomorrow’s battle.

ABCDiamond

3 years away from the UK isn't that long ?

I thought at least the last line would raise a smile

Whether anyone actually wants to buy Australian or not, there is little choice with many goods, as so much is imported.

The companies that are saying "Buy Australian" are doing so, not because of National prestige, but because it's their business, and they need people to buy.

Dick Smiths products are Australian, but do you find many in the Mainstream supermarkets ? No... Not enough profit in it for the Supermarket chains

Wol

I must plead guilty to not R'ingTFQ but in my defence I saw the OP's title line:

>>Australia leads the way in free markets<<

and had a good guffaw!