Time to give thought to who really needs tax cuts

There’s a lot of heat not much light being generated around Bill Shorten’s “Captain’s Call” to repeal the tax cuts for medium-sized businesses. It was probably poor politics but it’s worth giving thought to whether it is good economics.

Naturally, the Business Council and small business owners are up in arms. Withdrawing the tax cuts they say will curb investment and decrease productivity.

But the central problem in the Australian economy is flat wage growth and flat retail spending  (coupled with increasing house prices). Businesses will not invest if there is no increase in demand and increases in demand will only come if the workers have discretionary income to purchase. And that is not the case at present.

Giving businesses, particularly large, overseas owned, businesses tax cuts will not stimulate the local economy.

Whereas giving tax cuts to workers will stimulate the economy and that stimulation, particularly in the area of retail sales, is what will spur investment in small business. Not tax cuts.

The Business  Council and small business owners are being disingenuous suggesting that tax cuts will spur investment. It will not. Only increases in demand will do this. Tax cuts to small and medium-sized businesses will only put money in the owners’ pockets. They are highly unlikely to pass that on to the workers.

It is worth watching this video from  American billionaire entrepreneur Nick Hanuer/

 

The Australian electorate is being conned by the Coalition. They had been conned into thinking that providing tax-cuts to business owners is somehow beneficial to wage earners. There is little economic evidence to suggest that this is the case.

Economist Saul Eslake has emerged as a prominent sceptic of the benefits of reducing the company tax rate.saying would prefer cuts to personal income tax rates to more directly address the main problem besetting the Australian economy – weak consumer spending.

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Economist Saul Eslake has emerged as a prominent skeptic of the benefits of reducing the company tax rate.  Photo: Christopher Pearce

In fact,  many  economists will argue that exactly the opposite is true.

It seems as if the Government’s tax cuts to business has been defeated in the Senate  having failed to secure the support of Pauline Hanson and the One Nation Senators.

‘We need more time’: Turnbull government concedes defeat on company tax cuts

Given the instability of the Hensonites and tenacity  and undeniable ability of Finance Minister Mathias Cormann the issue is clearly far from dead. It is also disturbing to see that he  appears to be bargaining One Nation’s demands for new coal-fired power stations against the tax cuts, two issues two are clearly not related. But then, what else could you expect from Hanson.

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Time to give some thought to who really needs tax cuts.

There’s a lot of heat and and not much light being generated around Bill Shorten’s “Captain’s Call” to repeal the tax cuts for medium-sized businesses. It was probably poor politics but it’s worth giving thought to whether it is good economics.

Naturally, the Business Council and small business owners are up in arms. Withdrawing the tax cuts they say will curb investment and decrease productivity.

But the central problem in the Australian economy is flat wage growth and flat retail spending  (coupled with increasing house prices). Businesses will not invest if there is no increase in demand and increases in demand will only come if the workers have discretionary income to purchase. And that is not the case at present.

Giving businesses, particularly large, overseas owned, businesses tax cuts will not stimulate the local economy.

Whereas giving tax cuts to workers will stimulate the economy and that stimulation, particularly in the area of retail sales, is what will spur investment in small business. Not tax cuts.

The Business  Council and small business owners are being disingenuous suggesting that tax cuts will spur investment. It will not. Only increases in demand will do this. Tax cuts to small and medium-sized businesses will only put money in the owners’ pockets. They are highly unlikely to pass that on to the workers.

It is worth watching this video from  American billionaire entrepreneur Nick Hanuer/

 

The Australian electorate is being conned by the Coalition. They had been conned into thinking that providing tax-cuts to business owners is somehow beneficial to wage earners. There is little economic evidence to suggest that this is the case.

Economist Saul Eslake has emerged as a prominent sceptic of the benefits of reducing the company tax rate.saying would prefer cuts to personal income tax rates to more directly address the main problem besetting the Australian economy – weak consumer spending.

evewwter.jpeg

Economist Saul Eslake has emerged as a prominent skeptic of the benefits of reducing the company tax rate.  Photo: Christopher Pearce

In fact,  many  economists will argue that exactly the opposite is true.

It seems as if the Government’s tax cuts to business has been defeated in the Senate  having failed to secure the support of Pauline Hanson and the One Nation Senators.

‘We need more time’: Turnbull government concedes defeat on company tax cuts

Given the instability of the Hensonites and tenacity  and undeniable ability of Finance Minister Mathias Cormann the issue is clearly far from dead. It is also disturbing to see that he  appears to be bargaining One Nation’s demands for new coal-fired power stations against the tax cuts, two issues two are clearly not related. But then, what else could you expect from Hanson.

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How one smart kid made the case against Enid Blyton.

Enid Blyton has had many critics.  In fairness, she has remained exceptionally popular with children since the 1930s. I can say I have done nothing to contribute to the popularity.

As a teacher, I waged a relentless war against her books.  In Britain, some schools and libraries banned her books. I removed all of her books from the Bayfield school library during a staff meeting during where they all wound up in the rubbish bin. It wasn’t a universally popular move but it was irreversible.

One of my favourite pupils, Liz, returned a Christmas present of an Enid Blyton book to an aunt saying, “Sir, says we’re not allowed to read Enid Blyton.” I think she was nine the time.  In some respects, I suspect she’s changed little in the last 50 years.

Her mother recounted the story to me. I must say I was mortified that my crusade had spilled over and possibly spoiled a family Christmas Day. I need not have been. Liz’s mother was immensely amused and rather proud. Had she lived another 50 years, she would have continued to have been proud of the daughter who continued on doing a PhD on the history of midwives in New Zealand and carving out of stellar career. We remain friends to this day. I am exceptionally proud to have played some small part in her education.

Blyton’s response to her critics was that she was uninterested in the views of anyone over the age of 12, claiming that half the attacks on her work were motivated by jealousy and the rest came from “stupid people who don’t know what they’re talking about because they’ve never read any of my books”.

So  I have decided to print this review by probably one of the smarter kids in my best-ever class  and certainly by far the best reader I have taught.  This was around 1968, so Grant was probably about 12 with a reading age of about 16 and an intellect to match.

There had been a general prohibition on Enid Blyton in the classroom so I was surprised when Grant came up to me and said, ” I’ve been reading a lot of Enid Blyton lately and I would like to do a presentation on her.”  Surprised is probably not the word,  gobsmacked that Grant would read Enid Blyton but I said, “Yes fine.”

So Grant started his presentation with a big pile of Enid Blyton books in front of him, all neatly bookmarked.

“Now,” he said, “I know Sir has told us we’re not allowed to read Enid Blyton but I thought I’d have a look and see what it was about Enid Blyton.” Then Grant started out reading the first chapter of a number of Famous Five and Secret Seven books.  The beginning of each book was exactly the same. It was just that the names have been changed.

“You might think this is just a coincidence,” said Grant (He was good with words like “coincidence”). “But let’s look Chapter 5.” It turned out that Chapter 5 in each book was exactly the same except that the names had been changed.

“So let’s look at Chapter 11,” said Grant. Same result, different names.  Now, I suspect that the point was probably lost on most of the group of 11 and 12-year-olds in the class, but it certainly it wasn’t lost on Grant.

Blyton would often write 50 books a year, Grant’s presentation demonstrated quite clearly how she was able to do this. She was a charlatan and a 12-year old boy, albeit a fabulously intelligent one, was able to demonstrate why she was.

Children like Enid Blyton because she is easy, because she was predictable. But she is unchallenging and intelligent young readers who are given a chance to read good literature, find her unsatisfying. Most of the books are the same, just the names have been changed. My argument was always that there was so much better material , it was called literature, available for children.

I would read to my class for half an hour every day. Tolkein, C S Lewis, Alan garner, Roald Dahl, E B White, Ursula K. Le Guin and Lloyd Alexander.

Robert Wark wrote to me saying he remembered The Hobbit and he remembered the poetry.

Every Friday, I would march the whole class all the way down Jervois Road to the Leys Institute Public library where everybody was joined up and borrowed two books every week.  The headmaster asked me if this wasn’t a bit of a waste of time and I remember thinking at the time that he was a Philistine.

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I also joined up with the Country Library Service which allowed me to borrow 30 books at a time to lend to the kids. I never was able to return all 30. I reckoned that the kids who didn’t return them really liked the ones they stole, so that was okay  and the parents couldn’t afford books anyhow.

We had oral poetry and singing for half an hour every morning. Every pupil had a poetry book into which they copied a poem or part of a poem every morning. Loretta Crossley has sent me her poetry book from 1965 and I have copied the poems which can be found, along with her illustrations, at 1965 Bayfield Primary School Book of Children’s Verse.

I suspect the singing and poetry used to drive the other teachers mad, all that noise, singing and chanting.  But 50 years later, Robert Wark still remembers it and so do I.

So in the long run, I still think that I was justified in saying ” No Enid Blyton, I can do so much better than that for all these kids.”

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ASKO: Still poor on quality, worse on service

I recently wrote a blog entitled ASKO: making the wrong calls on quality and service.  

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In this, I outlined our experience with a brand-new $2300 ASKO dishwasher ( that’s the most expensive domestic dishwasher that you can purchase) that broke down after four weeks and the difficulty we had with the ASKO service centre.

In addition to the difficulties with the service centre, when the repair man arrived, he didn’t have the spare part required to fix the four-week old dishwasher.

When he rang the warehouse on Friday afternoon, there was no one there to take his call.

When he contacted them on Monday, they didn’t have the spare part and had to order it in from interstate which took another two days.

This made the total turnaround of two weeks to fix a brand-new, under-warranty dishwasher..

And then four months later, the machine broke down again. The repair man, who arrived rather more quickly this time. said ” It’s the same problem.”

I said ” We would like our money back.”

He said, “You have that choice.”

When I rang the ASKO  service centre, I said to the young man at the end of the phone, “One of the difficulties is that there is normally a 20 minute wait getting through to anyone.”

He said, ” I simply don’t believe that.”

Now, what you do when the first thing that happens when you speak to the service staff and they call you a liar. It’s a bad start especially after the litany of poor experiences that we had. But strangely this  appears to be part of the ASKO approach to customer service.

The young man said he was not authorised to approve the refund and would have to pass it on to management (who were very busy). I asked how long this will take him and he said he would do it as soon as possible. I explained that I would like something more definite than  “as soon as possible”.  He appeared quite resentful that I might require a more definite indication of the likelihood of his performing his duties. He reluctantly agreed that he might get it done by Wednesday.

However, Wednesday came and went and I had no contact from him about the removal of the dishwasher.

I contacted him again on Thursday, the day of the delivery of our new Miele dish washer.

When I finally managed to contact him, after a 20 minute wait, he indicated that he had done nothing since Tuesday organise the refund or the removal of the old dishwasher.  I told him that I would organise to have the defunct dishwasher delivered back to ASKO at my own expense.

At this point he said, ” I am washing my hands of this.” And hung up.

Yes, that’s right. Having refused to do anything, he actually hung up on a customer because he was miffed at my insisting that he should.

My repeated experience of the ASKO service department is of a culture that is dominated by complacency, rudeness and arrogance and  and an attitude that the service staff will condescend to help the customer if they feel like it and if they don’t, they won’t.

What the ASKO service people that I have had contact with do not seem to realise is that it is customers like me, who purchase ASKO products, who pay their salaries.  That alienating people like me, ultimately damages ASKO’s market position.  I will  never purchase an ASKO product again.

And I’m in a very important demographic. We recently purchased a new fridge. We spent $7500 on it.  We spent $2300 on dishwasher. We are the kind of customer that white goods manufacturers really should not be insulting because we purchase top end products. Rather,  companies like ASKO  should be trying to lock us into loyalty programs.

The young man the service department needs to understand that out in retail land  companies win customers one by one and you lose them one by one as well.

A man came to pick up the dishwasher at 7.30 this morning. Obviously, someone had managed to bypass the young gentleman (and right quickly at that.)  The ASKO delivery man was out in the cold doing the hard graft of  delivering ASKO service. He was appalled at my story. And a little pissed off as well.  I think he understands a little about about customer service.

But all his hard work counts for nothing if the guys back in the office keep insulting the customers.

And then there is a multiplier effect. If one person reads what I have written and doesn’t buy an ASKO next time they go to Harvey Norman, then this damages ASKO in the marketplace.

So here are some other views

Asko Appliances 

If you want to get an idea of how ASKO rates in the international marketplace go to the consumer affairs website.  But to save you some trouble here are some representative quotes:

“Customer service takes 15 minutes to answer. Top of the line prices, bottom of the barrel quality and service. Stay away.

“Do not buy any Asko products. The dishwasher does not clean; the machine will break. The washing machine motor will burn out in one year and Asko will not provide any help!”

“We own an ASKO dishwasher. It is the worst dishwasher we have ever owned”.

“Our model 1876 Asko dishwasher started on fire and burned a hole through the door panel. We were lucky my wife smelled the smoke and called the fire department. A fireman said another few minutes the whole kitchen would have been in flames.”

So there you have it. ASKO rates 1.3/5 which is marginally above “appallingly bad”