OPINION by Scott Phillips>>

MERRY CHRISTMAS. Oh, I know it’s not actually Christmas. It’s better – it’s Federal Budget day!

No, I’m not even being facetious. You can send sympathy cards to my wife, if you feel the need, but I really, really like Budget day. For a few reasons.

First, I’m an economics nerd. And it doesn’t get more economically nerdy than our country’s profit and loss statement being announced live on television.

Second, I’m a politics nerd. It’s frustrating as hell most of the time, but I love the workings of democracy. 

And last – and perhaps most importantly – it’s the combination of the two. Despite my regular exasperation at the way politics is played, we are bloody lucky to live in a country where the democratic processes of government are not only followed, but are played out (largely) in front of us.

It is the embodiment of a lot of what our system is, and means, and while I don’t expect everyone to love it as much as I do, I hope most people at least appreciate that many people around the world aren’t this fortunate.

It is something to be acknowledged and treasured, I think, even if not actually celebrated.

Now, back to Christm… I mean the Budget.

WHAT A GREAT BUDGET SHOULD LOOK LIKE

There’s no point in me writing a wishlist. I’m not naive enough to think Treasurer Josh Frydenberg is waiting with baited breath to find out what I think he should put in the budget! And, of course, the ink is dry on the budget papers anyway.

But I’m going to have a stab at what the Budget perhaps should look like. Here are some things I’d like to see in tonight’s announcement.

First, I want to see a plan from the government on how we get the budget back into structural balance. Not actual balance, every year, but ‘structural balance’. See, it’s important that the government borrows money when the economy is stuttering, to provide a backstop and to stoke demand. Doing so means recessions should be shorter and less severe than otherwise might be the case.

But ‘structural balance’ means that in the really good times, the government has a surplus, taking some heat out of the economy, and offsetting previous deficits with surpluses. These two sides of the same coin mean a less volatile economy and society, with less extreme economic shocks.

We are – and I know this won’t come as a shock – a loooong way from a structural budget balance.

Frankly, I don’t think that will get addressed tonight, despite the rhetoric. And that’s a shame. I really don’t want to leave a messed-up national balance sheet to our kids.

Second, I’d love to see a focus on economic growth, including wages growth and unemployment. Even as a finance guy, I know GDP isn’t the only (or even the most important) indicator of national prosperity. But in a financial budget, it’s the headline number. I’d like to see our governments actually turning their hands to creating the right conditions for that prosperity. 

And the wages growth and employment has to come with it, otherwise the ‘prosperity’ is concentrated in too few hands, and too many of the profits might actually end up overseas. I have no issue with foreign ownership (that’s a whole other debate) but it’s reasonable to want prosperity to make it into the hands of all of us, not just some.

Third, I’d like to see governments really tackle infrastructure. But not in a ‘lots of bridges and tunnels’ kinda way. It’s easy to throw billions around (and hard to resist the temptation to direct those billions into politically sensitive seats), but the money needs to be invested thoughtfully, in projects that actually remove blockages in the most efficient way possible.

(I read a tweet yesterday suggesting you could put water tanks on every house in one rural town for a fraction of the cost of upgrading the local dam. Sure, the machinery would be smaller and the photo opportunities would be fewer, but that sounds like smarter spending to me!)

Next, I’d like to see the government properly fund action on climate change. It’s true that Australia can’t offset the rest of the world’s emissions, but the least we can do – in our own interest – is be responsible for our own mess, and then use that example to cajole other countries into doing their bit. And frankly, depending on who you listen to, it might actually be a positive economic return on investment. At the very least, we can feel good about the country we’re leaving to our kids.

INCREASE SOME TAXES HERE AND THERE

You’ll notice nothing about taxes in the summary above. Of course we all want to pay less tax – it’s just natural. But I don’t think we, as a country, need to collect less tax.

How’s that for controversial? 

The problem is that we see every single dollar of tax taken out of our pay packets, but we don’t value the services we get for that money in the same way.

We expect the roads to be sealed and smooth. We want to know that the coppers, fireys and ambos will come when we call them. We want to know the schools, unis, hospitals and national parks are there when we want to use them. And that pensions will be paid, in full and on time.

But we don’t see the value in the same way, dollar for dollar, as we do our taxes that come out of our pay.

That doesn’t make those things any less important. It just means we need to consciously remember them.

Not only that, but with the budget deep in the red, it would be irresponsible to cut taxes right now.

(Yes, I know they’ll probably throw cash at us, tonight. And probably cut fuel excise. Both wrong and irresponsible, in my view. How’s that for an unpopular view?)

In fact, the one tax I would increase is on the extraction and sale of Australia’s national resources. A former government levied a ‘super profits tax’ on miners, but I think that was the wrong way to think about the target. They relied on people thinking ‘hey, they make too much money’, but Australians have never really worried about that, per se. What we have always focussed on is fairness. Which is where my take is different.

Resources companies dig or drill for resources that have been formed over millions of years, and that were the property of our forebears and their forebears. If a company is going to take them out of the ground, forever, then sell them, it strikes me that fairness suggests the country should be very well compensated for their sale. Not because the miner is making a ‘super profit’, but because if you’re going to dig up and sell off part of our country, the country should get a fair price for that asset.

So, I wouldn’t levy an extra or higher tax on profits. I’d charge more, per tonne, ounce and barrel, for those assets themselves. I’d also put the proceeds into a sovereign wealth fund, or similar, so those natural resources can have a perpetual benefit, rather than being simply taxed and spent once. Taking an ounce of gold that’s been in the ground for millenia and spending the tax proceeds in one year, leaving nothing for future generations seems, to me, the epitome of (unintended) selfishness.

PAY UP, WEALTHY CORPORATIONS

I do think, by the way, that our Federal Government (and it’s been the same under the administration of both major parties) collects way too little tax from the wealthy and the major corporations, particularly the multinationals (Australian-based, as well as foreign).

These groups can afford the best accountants and lawyers, and the poor old taxpayer is being played for a mug. For all of the effort that goes into cracking down on ‘welfare cheats’, for precious little result (and hot tip: $5 says the government announces a program to do just that, tonight), bugger all effort, in any relative sense, is being spent on either improving legislation and/or enforcement of collection from the big end of town.

And I’m no anti-capitalist. I think our system of democratic capitalism, though inevitably flawed, is one of the best around. The profit motive is one of the primary drivers of growth and progress.

But it needs to be well-managed and appropriately legislated.

I haven’t done the numbers, but I dare say if the law was improved to actually ensure the government captures the tax revenue those laws were originally intended to collect, we might be able to fund much or all of my wishlist, above. And maybe get the budget closer to structural balance.

I’ve joked on Twitter that I’d only need 12 months as Treasurer to significantly fix our system -- tax collection in particular. And then? Well, let’s just say I would annoy enough people that any chance of re-election would be out of the question.

Which probably means I’ve got it just about right.

It also probably means I’ve offended or upset a small minority of my readers, today. I would simply ask one thing: rather than being upset or offended, please be motivated to add your voice – even in stark opposition to mine, if you are so motivated – to the national debate.

Politics is at its best when it’s a contest of ideas among engaged, informed citizens. It’s at its worst when people simply don’t bother forming or expressing a view.

So here’s to our very Australian form of representative democracy.

And Merry Budget! 

About the author

Scott Phillips is the chief investment officer at The Motley Fool Australia financial investment advisory group. He is a regular commentator on radio, television and in national newspapers on economics and private investment . www.fool.com.au

OPINION: By Sarah Boorman >>

FOR ALL THE PROGRESS that has been made, women continue to remain underrepresented in leadership positions – and healthcare sector leadership is no different.

According to a recent survey by the Advancing Women in Healthcare Leadership (AWHL) project, despite making up 75 percent of the healthcare workforce, women are only 45 percent of public hospital board chairs, 39 percent of private hospital CEOs and 38 percent of state and federal chief medical or health officers.

Women are the majority of the workforce but do not hold an equitable share of healthcare leadership positions. 

Additionally, the fact that women in leadership positions continue to be paid less than their male counterparts is a big problem. And women in leadership rarely have the luxury of stepping back from work commitments which makes it extremely difficult to balance the demands of parental commitments – which increased a hundredfold since the emergence of the COVID-19 pandemic.

The sad reality is that until the pay gap is equitable, women will need to continually overcome unreasonable demands on their time to step up into leadership roles.

HYBRID WORK MAKING THINGS WORSE

Former Prime Minister Julia Gillard also warns of the effects of working from home for women, stating that when given hybrid work locations as an option most men are choosing to return to the office while most women are choosing to work from home so that they continue to balance domestic commitments.

Ms Gillard says the potential effects of this choice for women is that they will be seen as less committed than their male counterparts by their employers and also miss out on those ‘water cooler’ conversations that can lead to opportunities like taking the lead on a big project.

I truly believe that so much of what holds women back in the workplace is founded in society’s belief in a woman’s position. When I look around school at pick up time, 80 percent of the parents are women; Mother’s Day stall gifts continue to include items like oven mitts and decorative pegs; correspondence that comes home from school is almost always addressed to me. Honestly, we have not come as far as we think we have!

HEALTHCARE SYSTEM HODGE-PODGE

The Australian healthcare system is a mess of fragmented and inefficient systems that are poorly integrated. Women in healthcare leadership have the opportunity to shape the healthcare system for the better.

Melinda Gates writes in her book The Moment of Lift: How Empowering Women Changes the World: “You have to understand human needs in order to effectively deliver services and solutions to people. Delivery systems matter. Getting tools to people who need them in ways that encourage people to use them. It requires getting around barriers of poverty, distance, ignorance, doubt, stigma, and religious and gender bias. It means listening to people, learning what they want, what they’re doing, what they believe and what barriers they face.”

I think that because women have been charged for so long in meeting everybody else’s needs we are so uniquely placed to do this work and actually deliver a system that works.

PERSONAL EXPERIENCE COUNTS

My personal journey in healthcare leadership has involved long hours and a lot of sacrifice – prioritising work over any kind of social life or hobbies. But all along, having the courage and privilege to speak my mind and #BreakTheBias has been important to me.

I say ‘privilege’ because I think it’s important. Fortunately, I come from a wealthy-enough family and so I've always had the backup I needed to call out sexism or any form of discrimination from those in-charge.

The need to do so arises a lot, particularly in corporate environments. But what I’ve learnt from those encounters is that perpetrators/people like that more often than not respect your honest opinion.

I know a lot of smart women who don’t speak up or change the way they show up in key moments. My advice to them would be to be authentic and courageous. Don’t dumb yourself down, don’t hold back your opinions – even if you think they’ll upset someone; in fact, especially if you think they’ll upset someone. 

If you have something to say then say it. Don’t tolerate people, call them out if you can. Show up for women with less power than you. The more women that have the courage to take this path, the more we pave the way for future generations so that they hopefully won’t need to overcome the same struggles we did. This is how we break the bias.

EMPOWER EACH OTHER

It is so important for us to empower each other as women. And I’m privileged to be surrounded by some of the strongest women leaders I know and look up to.

My role models are people I know rather than public figures because I feel closer to their journeys.

I’ve been fortunate to work with some amazing women in Scale My Clinic’s Project X community, all of whom are leaders in their field.

Julie Thompson is a general manager of a group of medical practices in Yeppoon, Queensland. I’m in awe of her positivity and dedication.

Emily Carroll is the co-owner of Pear Tree Family Practice and a business coach at Scale My Clinic. Dr Carroll’s  ability to balance ownership, management, consulting and parenting commitments is a constant source of inspiration.

So many other talented female owners, managers and nurses whom I work with each day remind me that the cause we are fighting for is worth the effort. And I can’t stress enough the importance of surrounding yourself with strong women and lifting each other up.

It really is true that when women support each other, incredible things happen. So, to all my fellow colleagues in healthcare and leadership, let us take a pledge to support one another and collectively #BreakTheBias today and every day. 

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By John Sheridan >>

BUSINESS EDUCATOR and author, Peter Crucker famously said, “If you can’t measure it you can’t manage it."  And we in Australia have an economy that is out of control.

We are the hair on the tail of the world economy dog, influenced by decisions made elsewhere – in the USA, EU, China, Russia, Japan, Korea and so on. And it shows.

How fast are we going? Should we brake? Should we speed up? 

The RBA doesn’t know. The Federal Government doesn’t know.

In a car, we use the speedometer to indicate speed. To let us know how fast we are traveling, so that we can make decisions about acceleration and braking. We look at the road ahead so we can steer the vehicle in the direction we want to travel.

The information we receive through our eyes is translated into decisions by our brain. Are we traveling too fast? Slow down. Are we over the speed limit? Slow down. Destination sign ahead, slow down and prepare to turn in the direction we want to travel.

Feedback. Evaluation. Decision. 

We accept the information we receive from the gauges in the vehicle – speed, revs, fuel, temperature and oil.

Does it matter?

Well yes, it does. Unless you know how fast you are travelling you can make mistaken decisions about braking, cornering, overtaking and end up in a ditch or worse.

So real feedback influences driving decisions. And we take this seriously to the extent of punishing people who break speed limits. Having people and vehicles pass tests. If you can’t trust your speedometer then you can land in serious trouble.

Likewise with an economy.

How many people are employed? How many are underemployed? How many are unemployed?

These questions raise constant debate. Because the answers influence government decisions about investment, the economy, education, exports, infrastructure, political claims, PR releases and even where Australia is heading.

If we think that employment is fine, then we can carry on business as usual. If we believe that unemployment and underemployment are a problem, then we may have to do something to address the problem.

In Australia, the government relies on the Australian Bureau of Statistics (ABS). But the ABS measures employment and unemployment in a manner that is open to question. Producing figures that are misleading. 

Figures that continually underestimate real employment, unemployment and underemployment by significant amounts.

Accept ABS figures, as current Government Ministers do, and it is possible to claim economic success. 

Accept the figures produced by Roy Morgan Research and it is not possible to claim success at all. 

In fact, the unemployment and underemployment figures produced by Roy Morgan research of 18.2 percent, suggest that we should be concerned.

And acting with vision and commitment to do something about them.

Feedback. Evaluation. Decision.

To decide one way or the other requires a basic understanding of how employment figures are compiled and Roy Morgan explains this very clearly.

"Roy Morgan’s unemployment figure of 8.5% for December is over 4% points higher than the ABS estimate for December 2021 of 4.2%. 

"However, the ABS figure for December counts as employed an additional 38,700 Australians who were working zero hours for ‘economic reasons’ and 46,300 Australians who were working zero hours for ‘other reasons’ – such as being forced out of work by mandatory lockdowns or forced isolation due to catching COVID-19 or being a close contact of a confirmed case."

"If these 85,000 non-workers are added back the ABS unemployment estimate for December increases to 659,000 (4.8%). The ABS also claims there are 918,000 Australians (6.6%) under-employed for a total of over 1.5 million unemployed or under-employed (11.4% of the workforce) – an estimate which is still way under the latest Roy Morgan unemployment and under-employment estimate of 18.2%.

"This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly interviews of 784,153 Australians aged 14 and over between January 2007 and September 2021 and includes 6,031 telephone and online interviews in September 2021. *The ‘under-employed’ are those people who are in part-time work or freelancers who are looking for more work.

"The Roy Morgan Unemployment estimate is obtained by surveying an Australia-wide cross section of people aged 14+. A person is classified as unemployed if they are looking for work, no matter when. The results are not seasonally adjusted and provide an accurate measure of monthly unemployment estimates in Australia.

"Households selected for the ABS Survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month. The first interview is conducted face-to-face. Subsequent interviews are then conducted by telephone.

"The ABS classifies a person as unemployed if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week.

"The ABS classifies a person as employed if, when surveyed, a person worked for one hour or more during the reference week for pay, profit, commission or payment in kind, or even if a person worked for one hour or more without pay in a family business or on a farm.

"The Australian Bureau of Statistics Unemployment estimates are also seasonally adjusted.

"For these reasons the Australian Bureau of Statistics Unemployment estimates are different from the Roy Morgan Unemployment estimate. Gary Morgan's concerns regarding the ABS Unemployment estimate is clearly outlined in a 2012 letter to the Australian Financial Review, which was not published."

And a lot of people will of course be saying….”So what?”

Well, as Peter Drucker said, “If you can’t measure it you can’t manage it."

If you don’t understand fully the current state of the economy, then you can do nothing to fix it. 

Which is what the current Federal Government is doing. And isn’t doing.

The government tends to fall back on Business As Usual with reliance on iron ore and coal to fix the economy. 

Which it has been doing nicely for decades.

Mining, agriculture, education and tourism have been reliable generators of income for many years. 

But no longer. 

Things have become more complicated.

COVID has shaken things up. Chinese ambition and interference has shaken things up. The digital revolution has shaken things up. And Russia is now threatening to shake things up as well.

Our central bank has yet to understand the impacts of digital disruption on the economy. 

Things have changed. Roughly 50 percent of Australians are now employed on contracts, freelance, part-time, and in the gig economy, not in traditional full time work.

So it is easy to understand why they have little or no leverage on wages, in the way they used to. 

Job uncertainty does not offer strength in wage negotiations. 

Many full time jobs have evaporated. Unions have lost bargaining power. 

And software has also diminished bargaining power for most of the workforce. 

Low wages = job. 

Demand for higher wages encourages employers to shift to software, automation, robotics and AI, where the workforce is not fickle, doesn’t need holidays and sick pay, and can deliver 24x7.

The RBA needs to wake up to the new paradigm of a digital 21st century, which is disconnected from the traditional control levers of interest rates. 

“If you can’t measure it you can’t manage it”.

Luckily, we are not just a country of mineral resources, we are also a country of smart thinkers. 

Creating new industries from innovative businesses in robotics, health, space, agritech, defence, mining and ICT. 

But many of those businesses do not fit comfortably into another government measurement system – ANZSIC. 

All Australian and New Zealand businesses are nominated to categories and sectors in ANZSIC. Yet, so far we do not have categories for many of our new businesses and industries in the current structure. Which makes it difficult to measure the impact of new innovative businesses by government and its agencies.

“If you can’t measure it you can’t manage it."

So ABS gets it wrong. And ANZSIC gets it wrong.

You would think in the 21st century that we would stay up to date with the operational environment. 

So we can measure it and manage it.

But we don’t.

Like many of our most important agencies, the ABS is under funded. With more money, it could do a lot more. Even measure employment and underemployment properly.

CSIRO, our leading research agency is hugely under funded. With more money it could do a whole lot more. 

Let off the leash, it could be the engine room for the creation of new business in Australia.

That would allow us to mitigate the challenge of China. Shrink our supply chains. Even onshore mission critical manufacturing.

Create new jobs and exports. 

And allow us to manage the challenges from digital disruption = because software destroys jobs. 

Yes, it creates jobs as well, but a lot fewer than it eliminates. So this needs managing.

The ABC, our leading communication and news agency is under funded. With more money it could become the knowledge and information sharing platform for the new economy. Minimising the 'fake news' generated by News Ltd with its 'back to the 1950s' commentary.

The ABC does a good job with what it has, but could do a whole lot more.

Federal Government is not investing in the future of Australia. It is not supporting an economy that could provide jobs and work for our high school and university students.

These issues are not invisible. These issues confront us all every day. 

We can and should use measurement and digital tools to manage our way forwards.

It has always intrigued me that we manage our 'creative resources' and 'capital' = crops and animals -- well, when we apply farm management techniques in agriculture.

We have been doing this for 12,000 years now.

We allow freedom to our 'creative resources' - seeds and animals to do their thing - grow - and we support that creative principle with the power of analysis, managing inputs - water, fertiliser, sun, weeding, pest control etc so that we maximise the outputs = crops and food.

We allow the 'market'- crops and animals - to flourish but we apply management to the process to optimise outcomes.

There would be nothing wrong with capitalism today if it was managed with vision in the same way farmers manage farms - with an eye to outputs - but also with an eye to the future = managing soil health, water, animals in a sustainable manner.

Allowing our 'creative resources' - innovative businesses - to do their thing - grow - but use the power of analytics and inputs - investment, collaboration, fair competition and governance to manage business development in a sustainable manner - supporting innovation, investment, export, climate action and the future of work and jobs.

Most farmers manage their properties, looking to improve the land steadily and sustainably to be passed on to children and grandchildren.

We should do the same with our economies - passing viable, healthy, future proof economies onto our children without damage. 

Manage the 'farm' ruthlessly and you get North Korea. Let the farm go wild and you get the 1% at the expense of the 99%.

I am not sure that our current crop of economists and the central banks that rely on them really understand this principle. Farmers do.

The fact that the RBA can ignore the impact of low interest rates on property prices would be like a farmer ignoring a crop disease that is steadily destroying the crop.

For the first time ever, we have the technology to do more than just manage farms = Farm Management System, we actually have the technology to manage regions, economies and even countries.

What we don't have is 'intelligent farmers' (politicians and economists) with a real interest in the 'farm' and passing a 'better farm' onto the future.

"If you can’t measure it you can’t manage it."

Well, we can measure it, and with the right leadership we could manage it as well.

About the author 

John Sheridan is CEO of Digital Business insights (DBi), an organisation based in Brisbane, Australia, which focuses on helping businesses and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. DBi has been researching and analysing the digital revolution for more than 15 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs. Now DBi is turning that research into action through a series of digital business development platforms, the first of which launched in 2016, the Manufacturing Toolbox. DBi has also launched a series of international online trade showcases, promoting Australian goods and services to specific countries and promoting use of those showcases in those countries. Australia's Regional Economic Development (RED) Toolbox was launched three years ago. The latest in the toolbox series is the ED Toolbox, which helps high school students, parents and educators navigate the future of work and jobs.

www.theredtoolbox.org

www.edtoolbox.com.au

http://www.db-insights.com/

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