Tag Archives: small business

“As A Nation We Are Owning Less But Owing More”

12 Jul

A superb, insightful op-ed from Barnaby Joyce in the Canberra Times:

GrainCorp may be purchased by Archer Daniel Midland. Photo: Natalie Behring

GrainCorp may be purchased by Archer Daniel Midland. Photo: Natalie Behring

To be a strong nation, we must focus on core beliefs

What do you believe in? What would you give your political career up over, rather than compromise?

If politics is the jousting of social clubs, then a politician can be anything on any day, which is a little dangerous. Have we now such a greater fascination with form over substance that it has really become a quasi thespian frolic devoid of Lincoln, Churchill and Julius Caesar.

Are we just minnows usurping the space that would be better returned to the page three babe in a bikini? Is that who we are, a people who as a nation are owning less but owing more?

There has got to be a political spine that the nation stands on, a set of principles that hurt because you stand by them: family as traditionally proposed, even if it’s not your personal reality; small business, the farmers and the shops, despite the lubricious entrapment of economic policy, a policy that has a tendency to favour the large over the small and in many instances the external over the domestic.

The mining boom is waning, prices are falling, our debt is rising and our economy cannot put its hand to an international champion that is domestically owned. BHP is majority foreign-owned, Rio is not even based here anymore. There is no international agricultural champion that is Australian-owned.

If Graincorp is purchased by Archer Daniel Midland, we will have yet another impediment to becoming the agricultural powerhouse of South East Asia. Under the current conditions our debt both public and private is higher than it ever has been and getting worse so our economic bible has taken us to a peculiar religious experience.

Our belief in a global rule book is going to be challenged by a new Asian reality that gives scant regard to wishes but exploits our weaknesses. Our terms and conditions will be just ours, as seen this week when Yancoal stepped away from their Foreign Investment Review Board conditions.

After a mining boom we should be flush with funds, instead we are $258 billion in gross debt and conducting an increasingly desperate search for what will take the place of mining. Maybe live exports because we have excelled there!

China is creating a deeper pool of offshore liquidity as it moves to replacing the US dollar as the global reserve currency. That is a global game-changer and, if we are not fully versed in all the ramifications of that massive power shift we will be in a long term strategic disadvantage.

All this is happening but what is the political debate about? Kevin Rudd managing the process of how Rudd got rid of Gillard, a slew of new ministers from treasury to agriculture with little or no expertise in their new portfolios, a tawdry attempt to politicise indigenous recognition when nothing but bipartisan goodwill has been shown on this issue thus far.

What we can take out of the indigenous recognition issue is, in the history of humankind and economics benevolence takes a backseat to greed. This is the reality of human nature which we ignore at our peril.

Europeans basically dispossessed and exploited the resources that had belonged to indigenous Australians. In a more complicated form that process is still at foot but it is just being conducted by different parties in a more clandestine form. It is naïve to think a policy desire that relies on international relations can be delivered to the detriment of that specific external nation.

Here is my point: when you look at the deeper issues, the more relevant issues that are vital to our nation’s future today, they are not the ephemeral issues that Mr Rudd appears to be engaged with.

Mr Rudd has not changed. He is a man of media, earnestly delivered with sometimes flawed and brash statements.

Whether he has the competency to guide our nation over the longer term is unlikely on previous form.

Barnaby is right.

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5 Charts Show How Banks Are Raping Small Business

9 Jul

“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”

– J. Paul Getty

With Dun & Bradstreet’s most recent ‘Business Failure and Start-up Analysis’ reporting that “the number of small businesses going bankrupt jumped by 48 per cent over the last 12 months” — growing by 57 per cent over the year among firms with less than five employees, and 40 per cent over the year among firms with six to 19 employees — and that the start-up rate for small businesses fell by 95 per cent, it is worth taking a closer look at the usury rates charged by the banks for small business loans, as compared to large ones.

The following charts show the total value of variable usury-rate business loans, that have a usury rate of 17 per cent or greater.

First, loans of $100k to less than $500k:

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Click to enlarge

Loans of $500k to less than $2 million:

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Click to enlarge

Loans of $2 million and over:

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Click to enlarge

And finally, loans of less than $100k:

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Click to enlarge

Clearly there’s been no mercy shown by the usurers to their smallest business borrowers, post-GFC.

Here’s the direct comparison of business loans less than $100k, versus loans greater than $2 million, that are copping a 17 per cent or greater rate of usury:

Click to enlarge

Click to enlarge

All-time record low “official” interest rates?

Perhaps someone forgot to tell the usurers.

Who needs small businesses anyway, right?

Monopoly “capitalism” is much better.

For the 0.1% at the very top.

“Competition is a sin.”

– John D. Rockefeller

Abbott’s Super Hypocrisy Raises Darker Questions

26 Mar

Ask yourself this, dear reader.

If the leader of a political party that proclaims supporting small business is “part of our DNA” truly believed that a new government law was bad for small business, then why would he refuse to repeal that bad law on becoming Prime Minister?

TONY Abbott has scoffed at Labor assurances that employers will not have to pay for Julia Gillard’s increase in the superannuation guarantee, but has reaffirmed the Coalition will not repeal it in office.

Passage of the legislation has sparked concern from employers that they will bear the extra cost, estimated to be worth $20bn a year by the end of the phase-in period, but Mr Shorten said the money would come from deferred wage increases negotiated as part of enterprise bargaining.

Yesterday, after businesses and unions rejected Mr Shorten’s explanation, the Opposition Leader said: “It’s very obvious who is going to pay for the superannuation increases.

“It’s not the mining tax; it’s not federal government. The superannuation increases are going to be paid for by business, in particular by small business.

“This is a $20bn impost once it’s fully implemented on small business and I understand why, on top of every thing else — the carbon tax, mining tax, the private health insurance tax — why small businesses are not very happy about it.”

Mr Abbott said Labor had attempted to deceive Australians over the issue.

But he said that while the opposition voted against the [MRRT] legislation and did not support an increase in superannuation, it would not repeal the move when it next took office.

Why not, Mr Abbott?

Could it have anything to do with your sneaky plan to steal our super, quietly released as formal Liberal Party policy on June 3, 2011?

A policy that has now been stolen, and implemented, by the ALP?

After all, Barnaby Joyce has repeatedly warned that public servants’ super in the Future Fund would be used to help pay down Labor’s monster debt.

But the Future Fund is tiny, compared to Australia’s ever-mounting pile of government debt. And it is positively microscopic, compared to the massive debt exposures of our house-of-cards, government-guaranteed banking system, that is teetering on the precipice.

No doubt Mr Abbott, you and your Big Banking friends would love to have an extra 3% of the nation’s combined payroll being siphoned off struggling employers directly to the ATO – as per your sneaky new policy of last June – and from the ATO straight into short-term money market interest-bearing investments, “managed” for fees plus monster salaries by parasite bankers, before (hopefully, someday, maybe) actually getting to each Aussie citizens’ personal super fund.

And no doubt whatsoever to this humble blogger, that is the real reason why you are bleating hypocritical platitudes about how the ALP’s superannuation policy is bad for small business, and making all the right noises claiming that you do not support it … while refusing to repeal it yourself.

As has been so well-evidenced by the CO2 derivatives scam, our so-called “democracy” really is “an unholy alliance of politicians and bankers versus ordinary people”:

Small Business “Expected” To “Pass On Majority Of Increased Costs To Customers”, Says Govt

11 Aug

Own a small business?

Employed by a small business?

The government’s Clean Energy Future scheme Regulatory Impact Statement might interest you (relevant section reproduced in full; emphasis added):

Attachment A: Small Business Impact Statement

Small businesses are defined by the Australian Bureau of Statistics as any business with less than 20 employees.

Direct impacts

The Government does not know of* any small businesses who would be directly liable under the carbon price (certainly they would have significant turnover26).

Indirect impacts

The more important impacts on small business will be the indirect impacts associated with increases in the price of inputs. The carbon pricing mechanism will effectively put a price on greenhouse gas emissions (referred to below as carbon emissions). Products that ̳embody‘ carbon emissions (that is, products where emissions were released in their manufacture) will rise in price. The degree of price rise will depend on the price of permits and the amount of carbon released.

The price of permits will depend on the prices set by the Government in the fixed price period, the pollution cap set by Government in the flexible price period, the design of the mechanism and the cost of abatement in the economy. In putting forward preferred positions to Government the mechanism has been designed to minimise the costs associated with meeting any given emissions target. The coverage is recommended to be as broad as possible, subject to measurement and compliance cost constraints. The broad nature of the mechanism should open up more avenues for carbon abatement, thereby ensuring that the lowest cost opportunities are pursued first. Allowing the use of certain international units to meet liabilities under the carbon price mechanism will open up international abatement opportunities which will further reduce the costs associated with placing a price on carbon emissions.

Nevertheless, the price of certain goods and services (those with a significant amount of embodied carbon) will rise. Price rises will be associated with electricity usage, potentially around 10% over the first five years. Most electricity generation in Australia is derived from the combustion of fossil fuels which releases significant amounts of greenhouse gases.

The prices of other goods are also likely to increase. However, it should be noted that many of the most emissions-intensive goods, such as cement, steel and aluminium, are internationally traded and provided significant assistance to offset the impact of carbon pricing.

Overall impacts

Overall the majority of impacts on small business will result from changes in the price of inputs. For some small businesses, which rely on emissions intensive inputs, these may be significant. However, it is expected that small businesses will be able pass on the majority of these increased costs to customers.

Moreover, the impacts on small business will be in proportion to the impacts on other businesses and households**. Price rises faced by small businesses are likely to be in line with price rises felt by other sectors of the economy. Relative to larger businesses that have to participate directly in the scheme, the impacts on small businesses will be significantly lower.

26 At an initial carbon price of $23 per tonne, an emitter on the 25 kt CO2-e/year threshold would have a yearly liability of $600,000. Their turnover would have to be significantly higher than this figure.

* The government “does not know of any” small businesses who would be directly liable? Dear reader, the government does not know anything about any of the so-called “biggest polluters”, much less anything about small business. Proof here.

** Key difference not stated: small business will receive zero “compensation”.

Business Failures Rise 25%

13 May

From Dun and Bradstreet:

Business failures jumped nearly 25 percent in 2010 as cash flow pressures made their presence felt even as the Australian economy continued to be one of the better performers in the developed world.

This is just one finding from new research by Dun & Bradstreet examining new and failed business trends over the last three years, which includes the Global Financial Crisis (GFC) and Australia’s return to post-crisis growth.

The research found that while business failures climbed marginally in 2009, during the peak of the GFC, there was a dramatic upturn in 2010. The rate at which businesses failed in 2009 climbed a marginal 4 percent to just over 8,000 however spiked dramatically in 2010 by more than 23 percent to over 10,000 firms.

As a small business owner myself, Tony Abbott’s Budget Reply speech last night included a number of lines that really resonated with me. And doubtless with many tens of thousands of other small business owners throughout the nation (emphasis added):

“… the Coalition is always looking for ways to help small business suffering in a patchwork economy because that’s where jobs are created and families get ahead.”

“Mr Speaker, Labor can’t help treating small business with suspicion as potential tax cheats and havens for non-union workers. The Coalition thinks that small business is more likely to treat workers like family and is the engine of higher employment and greater prosperity.”

When it comes to government economic policy, we are the “forgotten Australians”.

A family to our workers.

And the now-sputtering engine of Australia’s real economy.

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