Home > Economic policy > Job cuts and wage cuts

Job cuts and wage cuts

August 2nd, 2012

I was on Steve Austin’s radio program today, talking about my critique of Campbell Newman’s claim that Queensland was on the verge of the kind of debt crisis we have seen in Greece and Spain. At the end, Steve threw me a question I hadn’t prepared for, about a couple of claims made by Newman in the last day or so. These were

* Job cuts would not be needed if the unions would agree to a wage freeze
* Every 0.1 per cent wage increase implies the loss of 800 jobs.

Newman didn’t spell out his reasoning, but it seems clear that he is assuming a fixed fund available to pay wages. Given this assumption, any increase in wages implies a proportionately equal reduction in employment. So, we can easily check his arithmetic, starting from an estimate supplied by his own office that Queensland currently has just under 200 000 (full-time equivalent) public servants (using the term in the broad sense to cover teachers, firefighters and so on, in addition to administrative workers).

Looking at the second claim first, 0.1 per cent of 200 000 is 200, so Newman appears to be out by a factor of four here, or maybe a little less if part-time employees are taken into account. The first claim is a little harder to assess, but the announced cut of 20000 jobs amounts to 10 per cent of the existing total, so an offsetting wage freeze would need to hold wages constant over a period during which they would otherwise increase by 10 per cent. That would at least 2-3 years, assuming steadily increasing real wages, more like 4 years relative to an outocme that maintained the value of real wages. In practice, it’s very rare to sustain a comprehensive wage freeze for so long. Good staff start leaving and are hard to replace, morale is poor and so on. Then again, the alternative offered by the government isn’t doing much for staff retention or morale.

The big problem, as I said last time, is that long-term problems are being addressed with short-term panic responses. Although he is happily ditching promises made to public sector workers, Newman cites vague language about the ‘cost of living’ to rule out any re-examination of tax poloicy, even though most of QUeenland’s low tax effort reflects concessions to business rather than households.

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  1. Marginal Notes
    August 2nd, 2012 at 15:52 | #1

    So Ikonoklast was right in the previous thread on this topic to say that Campbell Newman is simply (and consciously) acting as an agent of capital, using spurious arguments and a smokescreen of panic to attack labour rather than reduce tax concessions to business.

  2. August 2nd, 2012 at 15:57 | #2

    This claim originally popped up in the context of 2011 FTE numbers of 206,880 – with Newman saying that Qld has 20,000 public servants that can’t be afforded and that for every 0.1% increase in the 2.2% wage claim he offered, an additional 800 jobs would become unaffordable on top. He then proclaimed his policy of attrition and non-replacement of staff.

    Conversely, one would think (at least using Newmanomics), that for every 800 FTE reduction *beyond* 20,000, an additional 0.1% could be afforded. Modelling out public service separation rates from that 206,880 number that Newman was basing it on – the 2012/13 pay rise would be 2.2%, the 2013/14 rise would be 3.4% and the 2014/15 rise would be 4.5%. It gets up to about 7.4% by 2016/17 – but by then, one would expect that he may well have become aware of the aging demographics of the public service, especially when his government becomes bogged down in problems associated with substantially large staff shortages and corporate knowledge loss o_O

    New governments are always the last to realise that the only thing new about government happens to be them.

  3. charles
    August 2nd, 2012 at 17:26 | #3

    Any voter regret for exhausting your preferences at the last state election yet? You got what you wanted.

  4. John Quiggin
    August 2nd, 2012 at 17:39 | #4

    @charles
    The LNP are worse than I expected in various ways (particularly the speed with which they’ve reached the levels of cronyism typical of a government that’s been in for years), but I doubt a re-elected Labor government would have been a lot better – they’re listening to the same advice.

    My biggest single regret is that, despite a historic drubbing, Labor still hasn’t learnt anything. Even now, they’re reluctant to admit that the asset sales were a mistake in substance, not just in process.

  5. August 2nd, 2012 at 18:15 | #5

    The state does not exist to provide for the public service. The public service exists to serve the state. The Qld public service is too large, it must be reduced. Indisputably the health system has not been fixed by throwing clerical staff at it.
    In fact Qld is quite hamstrung by pointless clerical work.

    “…most of QUeenland’s low tax effort reflects concessions to business…”

    And so it blanking well should! Business is constricted by no end of paperwork that serves no function. The cost of doing business in Qld is artificially high because of that.

    The change of government is at the very least likely to lead to businessmen being treated as adults. Labor deserves the obscurity they have been banished to. They deserve to remain there for the lifetime of anybody who is alive today.

    Campbell Newman & his government are likely to fall short of answering every prayer, but they’d be hard pressed to do a job as bad as Labor did. Ever were I to try, I’m not sure I could run Qld as badly as Labor did.

    Hopefully we’ll never see incompetence on an ALP scale again in our state government.

  6. Steve McLaren
    August 2nd, 2012 at 19:14 | #6

    It’s simple, Professor.

    Unions = Labor
    Labor = Debt

    Queenslanders are sick of offering the Public Service a gravy train .. whilst they blow OUR budget. This includes those in the never never land of Universities. The outcomes of the Public Service (at all levels) are pathetic. The LNP election win is the public making these very statements.

    Professor … surely you can be a little more honest about the publics election sentiment ? STOP WASTING OUR BLOODY MONEY. DELIEVER US SOME DECENT BLOODY OUTCOMES.

    It’s really quite sad that you can’t align with what the tax payer (those who pay YOUR wage) wants.

  7. John Quiggin
    August 2nd, 2012 at 20:20 | #7

    @Steve McLaren
    If these job cuts are what voters want, why didn’t Newman announce them *before* the election, instead of promising the opposite “public servants have nothing to fear from me”?

    And of course, less jobs=less services. The Commission of Audit is honest enough to admit this, although neither of our Steves seems willing to do so.

  8. August 2nd, 2012 at 20:27 | #8

    wit of the staircase

    p

  9. billie
    August 2nd, 2012 at 20:27 | #9

    Clearly Steve wants to pay for his kids education rather than employing public servants, teachers in this case, to teach his kids in government schools, hope he has $30,000 per annum per child for a decent education or $8000 per child for a crappy outcome at a catholic or K12 school.

    Of course Steve is keen to be a patient in a private hospital because doctors and nurses are public servants also.

    Steve drives around on toll roads because using public transport or public highways is just well so . . . . . undemocratic. Lets not talk about those road workers leaning on their shovels as he drives past in his airconditioned car

  10. billie
    August 2nd, 2012 at 20:29 | #10

    And I forgot, Steve doesn’t rely on the sacked public servants purchasing his products or services for his livelihood. How many builders work 2 hours a fortnight because the customers for their houses . . . . public servants can’t afford to move from a flat to a McMansion

  11. August 2nd, 2012 at 21:17 | #11

    “Less jobs = less services”? Erm… presumably you mean less public service jobs.

    ….and that is the problem, we weren’t getting any services. Just a great big bill for public staff that served no useful fucntion. Above a certain level, the public service only gets in people’s way, which is most definitely what was happening under the previous government.

    I look forward to the public service getting off my back. When jobs existed only to hamper those who do the actual work, then we are better off without that job. The ALP has not covered itself with glory lately. They aren’t exactly the party of intellect!

    If a job isn’t real, it should not exist. That is; if a public job is not providing a public service, then it should not exist.

  12. John Quiggin
    August 2nd, 2012 at 21:49 | #12

    Great, so as far as the Pub is concerned, you won’t be calling the police or fire brigade in the event of any problems like burglaries, fires etc. That will be fun to watch, and will reduce the burden on the rest of us.

    Or do you imagine that all those 200 000 public servants are pushing pens to no purpose?

  13. rog
    August 2nd, 2012 at 21:54 | #13

    “I look forward to the public service getting off my back.”

    I presume that compliance is an issue for you.

    How does sacking of staff help with change of policy?

  14. SJ
    August 2nd, 2012 at 22:32 | #14

    JQ Says: “In practice, it’s very rare to sustain a comprehensive wage freeze for so long. Good staff start leaving and are hard to replace, morale is poor and so on.”

    You know that I rarely disagree with John, if ever. But you must know that the US has maintained a comprehensive real median wage freeze since the early seventies.

    Michael Costa (NSW Labor) started the introduction of this stuff in Australia, and that was quite a long time ago – before the GFC.

    Maybe you could start a new meme, along the lines of “Politicians can remain irrational a lot longer than you and I can remain solvent.”

  15. August 3rd, 2012 at 06:30 | #15

    @John Quiggin

    John

    I work in the public service and i know how it works

    I work at quite a senior level – i’m not your average pen pusher – i’ve come form a life time of private practice in a very competitive market

    The public service is the as it was a century or even 20 years ago – it has changed substantially

    Somehow, and i do not profess to know what all the driving forces were, where previously it had been made up of predominantly “blue collar” workers it is now made up of three categories of worker:

    1. the old school “blue collar” workers doing the grunge and grunt jobs
    2. managers (many from category 3) – managers of managers and managers of managers of managers ad infinitum
    3. contractors – zillions of them and increasingly in very high paid top level positions

    I know “managers” with NO professional skills in the field they are working in who are earning high six-figure incomes and protect their incomes come hell or high water

    They belong to that lowest of all forms of life i define as “vote right spend left” – living in posh north shore properties worth many millions, collecting huge “salaries” while spending tax dollars like water

    (incidentally i have these posts:
    http://thepeakoilpoet.blogspot.com/2012/07/contracting-for-fall.html
    http://thepeakoilpoet.blogspot.com/2012/03/voting-right-and-spending-left.html
    )

    These people infuse the whole public service and form a much larger, pervasive, “revolving door” problem than the one we are usually familiar with – where relationships between service providers and senior public servants are self-fulfilling

    When people attack public service spending they do so for either of two reasons

    1. they want to shed as much of the poor blue collar workers as possible so that they can be replaced by much more expensive contracting firms and individuals who have no group power through unions

    or

    2. they want to get rid of the humungous wasteful spending created by the contractors leeching on the system and making themselves indispensable

    humans are, as all of nature, inclined to hang around a food source

    the best way to start the clean up is get rid of the food source

    the question is – when people shed workers who are being shed by whom?

    follow the money to find out who the real predators are – i think you’ll find that it’s systemic and that politicians are at the mercy of the monster we have all created

    you and i included

    pop

  16. conrad
    August 3rd, 2012 at 08:01 | #16

    “so as far as the Pub is concerned, you won’t be calling the police or fire brigade in the event of any problems like burglaries, fires etc.”

    Perhaps STAP could identify some areas he’d like to see cut. Everyone brings up the police and fire brigade, but there are other categories, and I don’t see why reducing the size is out of the question, although presumably fairly unnecessary given the growing population unless there really is a lot of waste which should then be obvious. They could try the Victorian solution and simply get rid of TAFEs and child protection workers, and evidentally anyone that knows anything about infrastructure projects (the latter of which have botched by the Labor government also).

  17. Ikonoclast
    August 3rd, 2012 at 08:53 | #17

    As Bill Mitchell says “every wage is somebody else’s income”. One can only hope that SATP’s pub is a public service frequented waterhole. Hopefully, his till will then be ringing less often.

    I’d also like to recast a couple of SATP’s arguments as follows;

    1. The state does not exist to provide services to publicans. The full costs of maintaining public order in the localities of all licensed pubs and clubs should be charged to the owners of all tiers of the alcohol industry.

    2. Indisputably, the health system has not been assisted by the alcohol industry throwing all its health damaged victims at the public hospital system. The full costs of alcohol damage to individuals and society should be charged to the alcohol industry.

    Why should the alcohol industry get a free ride from the taxpayers by being able to privatise the profits of pushing a dangerous, addictive substance while socialising all the costs?

  18. Julie Thomas
    August 3rd, 2012 at 09:00 | #18

    Charles “Any voter regret for exhausting your preferences at the last state election yet? You got what you wanted.

    Labour was incompetent and too neo-liberal; that was why ppl I know didn’t preference them; there just didn’t seem much difference between their ideology and that of the right when they were busy selling off the state’s assets.

    It’s obvious now that the real ideologues are in charge how very bad their ideas are and I have no doubt that this wake up call will be all the stimulus we Qlders need to never vote for these stupid ideas again. Sure, and pigs will fly :) If only the people with common sense can get it together to form an opposition in the next 3 years.

    These stupid excesses are the only way that some of us will see, because of the world wide indoctrination we have received via the capitalist media, how essential government services are for us all to be free and empowered. Facebook has a Keep Campbell to Account page.

  19. DP
    August 3rd, 2012 at 09:23 | #19

    @rog
    ” How does sacking of staff help with change of policy?”

    Great question.

  20. Tom
    August 3rd, 2012 at 09:53 | #20

    @SJ

    I believe what wage freeze in this case meant nominal wage freeze instead of real wage freeze in the context of US. Real wage freeze would mean that the wage of workers increase inline with inflation rate while nominal wage freeze would mean the wage of workers will not increase even when there is inflation. Usually real wage freeze (or even cut) is less resistance by workers perhaps due to money illusion (?), but nominal wage freeze is a bit more difficult to maintain.

  21. August 3rd, 2012 at 10:21 | #21

    Attorney General Bleijie has been instructed by the Premier to slash over-regulation of the liquor industry making it much easier for anyone to set up a pub-like business.

    In a true free market, anyone would be able to sell liquor and the artificial market distortion which has benefitted the cosseted hotel industry would cease. You could slash a bunch of jobs by removing all oversight and control on the sale of liquor.

    We’ll see, but I’m not sure Australia’s largest publican – Woolworths – would be very keen on that idea and I doubt it will work out that way at all.

  22. Uncle Milton
    August 3rd, 2012 at 10:27 | #22

    Usually when state governments cut back the public sector, they attempt to make a distinction between “front line” public sector workers (teachers, nurses, police etc) and “back office” public sector workers. The front line workers are usually relatively immune from the cuts. Has Newman made this distinction? (I admit, I haven’t been following very closely.)

  23. Xevram
    August 3rd, 2012 at 10:40 | #23

    A real problem where I live with PS employess is the personal accountability. A lot of them hold a permenant position, what this CAN mean is that if the outcomes of what they are mnanaging/responsible for are negative, they just get moved; sideways usually with no loss of income/grade. So how to have KPI,s that have ‘teeth’, how to enforce it, this is one of the questions.
    In the public business world if you are consistently doing bad, have targets not reached, consistently fail to meet KPI’s, you are called to account, you are responsible, if you cant or dont improve……….. Real world experience for me in this scenario is that I am provided with all the support and training possible, my compnay, my colleagues, my boss they ALL want me to succeed. Of course so do I, for myself personally and on behalf of my company.

  24. conrad
    August 3rd, 2012 at 10:53 | #24

    “The front line workers are usually relatively immune from the cuts.”

    I guess you mean job losses here — the real problem with cutting non-front line workers is that someone has to do all the adminstrivia, and so it basically wastes the time of front-line workers unless the level of adminstrivia is also cutback, which must be almost impossible in some areas like child protection, policing, and anything else where things need a really high degree of accountability. Working in a university where I see people payed $120K to fill in useless forms all day, fight with photocopiers etc. ., the idea that you can really chop away back-end workers with no consequences is just a sales-line, not a reality unless there really are far too many back-end workers.

  25. Uncle Milton
    August 3rd, 2012 at 11:23 | #25

    @conrad

    Back office workers are indeed essential, in general (someone has to do the payroll) but I’ve seen examples in the public sector where back-end workers were cut back with no real effect on anything. It’s not that the people who were cut back didn’t do anything. They all worked hard doing what was asked of them. It’s just that what they were doing didn’t need to be done. Of course this is not unique to the public sector. The same is true in any large bureaucracy, such as Telstra, BHP, Commonwealth Bank etc.

    Whether there are 20000 such jobs in the Queensland public sector is another question. It’s a big number, especially for Queensland.

  26. John G
    August 3rd, 2012 at 13:54 | #26

    @xevram

    As a public servant, my problem with KPIs is that a lot of what we do is not easily counted in the same way as producing widgets. If I come up with a good policy about child protection and, for whatever reason, the politicians fail to implement it, or don’t resource it as necessary, is that my failure or theirs? If I’m a “frontline” staffer at community services and I can’t achieve my “customer” targets because the people I’m trying to help don’t have the intelligence, language or life skills to understand what I tell them and it therefore takes me longer than the allocated 5 minutes to deal with them, should I be held to account. Likewise, for teachers, police officers or any other staff that have to deal with the recalcitrant, ignorant and irrational individuals they encounter on a daily basis whilst trying to meet KPIs based on some sort of counting system.

  27. John Quiggin
    August 3rd, 2012 at 14:31 | #27

    The Commission of Audit notes that most of the expansion under Labor was in the “front line” category and argues (on the basis of very sketchy data) that this expansion has not produced a comparable improvement in outcomes. Implicitly, they are pushing for cuts here.

    My guess is that many back-office jobs now being axed will be contracted out, quite possibly to the people who have just been dismissed. This is a process which typically looks better in the short run than the long run

  28. Uncle Milton
    August 3rd, 2012 at 14:43 | #28

    @John Quiggin

    Contracting out has its pluses and minuses from the Government’s viewpoint. You don’t have to pay for annual leave, public holidays, long service leave or sick leave. You can set up a competitive tender process and hire the cheapest, or at least the “best value for money”. In fact public sector procurement processes insist that you must do this. You can sack them at the end of their contract without even a hint of employment law getting in the way. But contractors know this, so they demand, and get, a higher rate per hour than employees. It’s swings and roundabouts. Essentially, the Government pushes the risk onto the ex-employees/contractors, some of whom do well out of the new arrangements and some of whom do badly.

  29. Xevram
    August 3rd, 2012 at 14:55 | #29

    @John G.
    All good points, and I sure do not have the answers, however accountability and results have to have a connection, surely. I take your point on the KPI’s and that I guess is where the balance comes in to play, with a decent perforamnce review that looks at more than KPI’s surely an assessment can be made that will lead to support/assistance or remedial action.
    Some of the best police I have come into contact with have displayed good judgement and balance.
    Some of the worst PS’s I have into contact with have simply explained their existence by saying, ‘I just do what I’m told, and anyway they are paying me a lot so why should I give a s_ _ t’. (or words to that effect)
    Policy development is somewhat different to policy implementation, is it not. So if your brief is to deveop a sound policy and you do so, surely that is a job well done. If however the policy is implemented in a poor way, underesourced, incorrectly targeted for instance and the result is negative outcomes; someone is accountable for that. So the remedial action may be a complete review of the policy, the implementation, the measurment instruments used; my point is that the whole process has just got to lead to improvement. Otherwise it is not just inefficent but wasteful.
    Right now there is no doubt that we have intelligent, resourcefull and well paid people, (a lot of them full time PS’s), sitting in their offices with not a whole lot to do. Secure in their permenant PS position, but sidelined due to underperforming or maybe even just annoying the wrong people. I think you could describe that situation as inefficient, wastefull and demoralising.

  30. August 3rd, 2012 at 15:47 | #30

    @Uncle Milton

    you say

    “You don’t have to pay for annual leave, public holidays, long service leave or sick leave. You can set up a competitive tender process and hire the cheapest,…..”

    BOY ARE YOU OUT OF TOUCH!!!!!

    It’s exactly the opposite of what you assert

    Permanent as being shed for contractors not because contractors are cheaper – they are not – contractors cost way way more than permanent staff and they end up being indispensable and therefore permanent

    It’s a self-fulfilling process – contractors hire contractors because they can get them faster and there is less red tape

    procurement requires tender only over a set amount – hiring a 300K per year contractor does not generally require anything other than the supplier being appropriately recognised by government (ie has insurance, costs a fortune etc etc)

    go into any government office and count the contractors – they outnumber perms by a lot

    any dept that has few contractors is for the chop simply because they represent a dead end for service providers and contractors – no swanky dinners to be had getting contracts there mate and no “revolving door” favours from service providers when certain contractors apply for executive level positions at other govt offices

    pop

  31. Charles
    August 3rd, 2012 at 22:55 | #31

    My biggest single regret is that, despite a historic drubbing, Labor still hasn’t learnt anything. Even now, they’re reluctant to admit that the asset sales were a mistake in substance, not just in process.

    I can understand the commonwealth selling assets, they get a percentage of the profits anyway, and they lose the responsibility for running whatever properly. I have never understood why a state would do it, all the income is transferred, either to the buyer or the commonwealth.

  32. August 4th, 2012 at 00:43 | #32

    @Charles

    Also, coal fired electricity has been historically owned by States.

    If we still owned them it would be much easier to reduce electricity consumption, because we would all benefit.

    Lower emissions, lower costs to users etc…

    Privatising public utilities allows them to be used against the common good. Obviously, a government owned emitter would (hopefully) have an interest in reducing CO2, but a privately owned emitter has a duty to pump out as much CO2 as is necessary to maximise profits.

  33. billie
    August 4th, 2012 at 07:05 | #33

    ACTU statistics compiled at time Jeff Kennett slashed the Victorian public service, targetting teachers, nurses, electricity workers and public transport were

    - for every 100 people made redundant, 5 got better jobs, 10 get equivalent jobs, 35 got worse jobs or part time work and 55 never worked again

    I feel very sorry for Queensland with Jeff Kennett and Peter Costello helping CanDo helm the ship of state onto Palmer Reef

  34. Hal9000
    August 4th, 2012 at 10:34 | #34

    Many public servants whose services have been deemed dispensable have been engaged in activities designed to benefit the economy of the state through maximising the utility of available resources. For example, training and employment programs have been badly hit. The program to train indigenous young people to equip them to take up jobs in the resources sector has been abolished, so presumably those people will not be employed and will head instead for a life of welfare dependency. The jobs they could have taken up will be filled in large part by foreign workers, given the notorious shortage of the requisite skills.

    Again, the unit working to put together transit-oriented development has been abolished. The idea here was to maximise the utility of public transport investment by creating multi-use intensive developments around south east Queensland suburban railway and bus interchanges – including workplaces as well as residential and retail within walking distance of public transport. Private sector developments by contrast generally focus on motor car access, and to intensify development of the CBD – exacerbating intractable traffic congestion and the amount of time spent commuting.

    So, programs to address major public policy problems are to be canned and the expertise of the units carefully built up to address them will be dispersed to the winds. It is easier to destroy than to build.

    Meanwhile, taxpayer dollars are to be gifted to commercial horse racing and thus to support gambling. These are the revealed priorities of the new government.

  35. boconnor
    August 4th, 2012 at 13:15 | #35

    SJ @ 14: “Politicians can remain irrational a lot longer than you and I can remain solvent.” Classic.

  36. August 5th, 2012 at 19:28 | #36

    John Quiggin :Great, so as far as the Pub is concerned, you won’t be calling the police or fire brigade in the event of any problems like burglaries, fires etc. That will be fun to watch, and will reduce the burden on the rest of us.
    Or do you imagine that all those 200 000 public servants are pushing pens to no purpose?

    Correct, those 20,000 (recently hired) public servants are surplus to requirements. It’d be even worse had the Qld Labor govt. been borrowing to pay public service salaries? (Surely that is merely a malicious rumour? Even the ALP couldn’t be THAT stupid?)

    I’ve never called the police for a burglary, or the Fire Brigade for anything. I don’t expect that to ever change. But you never know. I do know enough about fire fighting to be well aware that they can’t save the pub. The bureacra-isng of the fire brigade is one of the more shameful legacies of the ALP government. I’d prefer a fire brigade full of firemen, not pen-pushers. Considering how the government caved in to the fire unions, we NEED a government that’ll get something for all the money spent on the fire brigade.

    A bunch of fit & committed young men sitting around all day, acting butch & waiting for the batphone to ring (which it rarely, if ever, does) isn’t a particularly efficient use of public money.

    As for the police, anyone in the pub trade is well accustomed to doing their job for them. One legacy of the ALP govt. is pubs now do all their own enforcing, at their own expense.
    The police have abrogated most of their responsibilities around pubs, we’re well accustomed to it!

  37. August 5th, 2012 at 19:37 | #37

    rog :“I look forward to the public service getting off my back.”
    I presume that compliance is an issue for you.
    How does sacking of staff help with change of policy?

    Oh yeah, compliance is an issue for anybody in business! There is one person on my payroll whose job title is “compliance officer”. They do nothing but ensure all the I’s are dotted & T’s crossed (as it were) & that all the reams of paper other stuff is filled out & filed.

    This is insane in a business the size of a pub! None, repeat, none of the stuff my Compliance Officer does has any point, that is: None of it improves public safety, helps things run more smoothly, or achieves any point at all.

    How would sacking public servants help? Any public servant who is engaged in (a) thinking up, or (b) enforcing, or (c) anything else to do with all that pointless compliance, & is thus serving no useful purpose, if their job is deleted, the rest of the state is better off.

    Repeat: We’re better off without them. The state will run better, & people can do more work.

    Fire.them.now.

  38. August 5th, 2012 at 19:49 | #38

    Ikonoclast :As Bill Mitchell says “every wage is somebody else’s income”. One can only hope that SATP’s pub is a public service frequented waterhole. Hopefully, his till will then be ringing less often.
    I’d also like to recast a couple of SATP’s arguments as follows;
    1. The state does not exist to provide services to publicans. The full costs of maintaining public order in the localities of all licensed pubs and clubs should be charged to the owners of all tiers of the alcohol industry.
    2. Indisputably, the health system has not been assisted by the alcohol industry throwing all its health damaged victims at the public hospital system. The full costs of alcohol damage to individuals and society should be charged to the alcohol industry.
    Why should the alcohol industry get a free ride from the taxpayers by being able to privatise the profits of pushing a dangerous, addictive substance while socialising all the costs?

    Ikonoklast: I’ve had my customer base dry up a few times in my career. Nobody is entitled to having a customer supply forever.
    Public servants (historically) were entitled to more job security than the rest of us, the trade off being lower pay. The very minute they became equally paid, (never mind better paid) they no longer have any entitlement to security.
    I’m reasonably well patronised by the public servants in my town. I’m their main watering hole. They are public servants, and they prefer the best!
    The government is also a big client of mine, which is how everybody from the GG down knows me by name.
    The ALP are better customers of mine than the other fellers, partly because the ALP are more likely to shove their snout into the trough, and partly because my ALP pedigree is impeccable!

    The full cost of maintaining public order around pubs should be charged to pubs? Be careful about opening up that can of worms, (charging for police service) it may bite.
    That aside, if you put down the tabloid newspaper & go to some pubs, you’ll notice that there is very little public disorder around most of them. There is a reason why.

    The alcohol industry hasn’t had a “free ride” since the Liquor Act was changed by Wayne Goss. That was 20 years ago. If you’re going to comment, try to stay up to date. I don’t mind educating you. But if you get snarky, stand by to be made a fool of. ;-) Like most, your knowledge of the pub trade could be written on the back of a postage stamp!

    The (cough) cost to the hospital system caused by pubs should be paid by pubs? You say that as if you are unaware of the health care levy that is unique to pubs? It is not a small levy. It costs me more than payroll tax.

    Anything else you haven’t bothered to research?

  39. Chris Warren
    August 5th, 2012 at 21:52 | #39

    Obviously, judging from the above, Australia would be better off with less pubs or maybe better publicans?

  40. TerjeP
    August 5th, 2012 at 22:00 | #40

    This is insane in a business the size of a pub! None, repeat, none of the stuff my Compliance Officer does has any point, that is: None of it improves public safety, helps things run more smoothly, or achieves any point at all.

    Having run a small business for ten years I can relate to this. Why does the public sector come up with so much mindless crap?

  41. Freelander
    August 5th, 2012 at 22:08 | #41

    Because any fool is allowed to try their hand at running a small business, and because some of them fail to see the point in doing what they ought to do, government finds it necessary to take measures to ensure the public is protected. That case is well put above.

  42. Ikonoclast
    August 5th, 2012 at 22:49 | #42

    @Steve at the Pub

    Australians spent about $25 billion on liquor in 2011/12.

    In 2010, research by the Australian Education and Rehabilitation Foundation (AER Foundation) put the total economic impact of alcohol misuse at $36 billion per annum.

    Since the economic damage is about 50% greater than the total amount spent on alcohol then it is clearly impossible for the alcohol industry to pay for all the damage it causes. Even if its profits were taxed at 100%, the amount raised would still fall far, far short of repairing all the damage it does. Do some research SATP! You are not even in the right ballpark. You and your “industry” are a serious net drain and destructive influence on society.

  43. Nick
    August 6th, 2012 at 07:23 | #43

    “In 2010, research by the Australian Education and Rehabilitation Foundation (AER Foundation) put the total economic impact of alcohol misuse at $36 billion per annum.”

    Hmm, actually, Ikonoclast, it didn’t. It put it at about $20 billion total, and even that figure is highly questionable (to put it politely).

    86% of the costs they estimated were from “time lost” due to things like “picking your partner up from the pub”, which were then multiplied by average Australian weekly earnings (no matter if you’re 18 or 75). What a strange opportunity cost to choose. It implies that any and all time spent looking after a drunken person is time you could have been working. Rather than, say, relaxing watching TV after work or on your weekend…or perhaps even going out shopping or to the movies or the hairdressers and *spending* money instead…

    No less than $10 billion of the total was identified using that methodology. It also makes little sense to include $6 billion of intangible costs (fear, pain, heartache, stress from arguing), without deducting intangible benefits (joy, good times, new friends, dinner at my parents’ house tomorrow night with my sister down from Qld)…

    Actual costs pale in comparison:

    Total cost for health services/hospitals = $90 million

    Total cost of child services/ protection = $671 million

    Total out of pocket costs (legal expenses, vehicle damage, vandalism etc) = $2.4 billion

    That’s pretty much it. Not to diminish the immense damage alcohol abuse causes to Australian society…but $36 billion of “economic impact”? I understand the need to account for “time lost” and “intangibles” and not ignore their effects on quality of life, but what good does putting a dollar sign in front of them do…aside from offering up a big figure for Family First senators to wave around in parliament as if it actually means something? Like we could swap an NBN for it…

  44. August 6th, 2012 at 08:29 | #44

    Giving all the credit for misbehaviour and/or genetic inability to cope with liquor is a tad on the strict side. (Though Ikoklasty is welcome to call me “wrecker boy Steve”!)

    The consumption of liquor deserves a more holistic look than some browned-off sourpuss seeing all the negatives.

    I’ve had better stuff from stronger relgious zealots than Ikonoklast. In fact Iko isn’t even in the hunt with the stuff I get from the evangelicals/pentecostals in my town. (translation: you’re only an amateur religious zealot Iko, keep practicing!)

    Thanks for the idea though. I’ll write a post on ALP dickheadsmanship as it was applied to the pub trade.

  45. August 6th, 2012 at 08:42 | #45

    “.. giving ME all the credit…”

    Perveiw raelly is my firend.

  46. Julie Thomas
    August 6th, 2012 at 09:24 | #46

    “Why does the public sector come up with so much mindless crap?”

    Cos they are only human beings with all the limitations we all have when working without understanding each other’s preferences?

    Because they have been ‘driven’ to this type of stupidity by the overwhelming strength of the greed is good ideology?

  47. rog
    August 6th, 2012 at 09:53 | #47

    @Julie Thomas Or because the PS is there to implement govt policy.

    SATP complains about compliance without giving any detail and then recommends sacking PS as a remedy for his obligations. The reality is that his compliance will continue whereas sacking hospital staff, firemen, police and other PS will somehow makes things better.

  48. Julie Thomas
    August 6th, 2012 at 11:09 | #48

    Rog

    For sure STAP is a whinger – I mean he owns or runs a pub; the job most people think is the best life possible and in Cairns ffs and he wants more? How much better does it get? You’d think he’s be ‘grateful’ for his success?

    It’s clear he’s got the wrong end of the stick; he’s stuck in the past but he’s a publican. I met a couple of very interesting publicans way back in the late ’60′s, when I did work as a ‘barmaid’ in the late ’60s; they are often ‘characters’ and not to be taken too seriously.

    Like Icony – you gotta have a nick name in Oz eh? – said to me, don’t get too worried about Steve.

    It’s in his bones to hate the PS and believe that everything they do is just to annoy him.

    Some people are like that. I am closely related to the owners of a small business who also whinge constantly about the costs of compliance and payroll tax etc; of course they automatically side with any move to get rid of ps’s; lazy bastards who never do a days work.

    Oh and the unions! God almighty, my relatives have never in the 20 years they have been employers they have never had an issue with a union or anyone in a union; they have never been sued for wrongful dismissal although there are at least two ex-employees that I would say had a damn good case and yet to listen to them, well I don’t, I walk away, you’d think unions were satan’s special project.

    I like to read Dorothy Parker at the Loonpond just to start my day; you might find some amusement there, I am particularly amused by this piece in which Mark Latham and Andrew Bolt have lunch together! Maybe Steve would have liked to be there?

    http://loonpond.blogspot.com.au/2012/08/and-who-can-say-or-tell-which-was-which.html#.UB_vnfaPUqM

  49. August 6th, 2012 at 11:35 | #49

    Julie Thomas, your knowledge of pubs (like that of most) can be written on the back of a postage stamp. Call me a “whinger” all you like. It translates as: you well know I am better than you. If you wish to be seen as having any intellect, you’d do well to ease of on some of the unsubstantiated “publicans are all dumb bogans” guff you spout.

    (Most curious coming from one who says that another – me – should not be taken seriously, for no reason other than my occupation)

    Basing your observations on something you saw in the 60s means you are only about 50 years out of date. You want to be laughed at, just keep up that sort of stuff!

  50. August 6th, 2012 at 11:38 | #50

    Shorter Rog: All compliance mandated by a government is good.

    I won’t say that is a stupid line to take, but certainly it is not supported by the facts. Locate a piece of compliance I have to meet, that serves a useful purpose, & you may get taken a little more seriously. I have archive boxes full of compliance paperwork, that nobody has ever read, ever will read, and that serves no purpose whatsoever, excpet to cost me time & money.

    All of it mandated by the unlamented ALP govt. of Qld. As I said above, the ALP isn’t exactly the political party of intellect! (nor of adminstrative competence, in fact one is hard pressed to find anything positive about them in Qld).

  51. Troy Prideaux
    August 6th, 2012 at 11:51 | #51

    To my (I admit naive) understanding, we do have an issue with the growth rate of alcohol consumption in this country, but it’s not the pubs we should be pointing any fingers at, it’s the supermarket duopoly.

  52. rog
    August 6th, 2012 at 12:11 | #52

    @Steve at the Pub “I won’t say that is a stupid line to take..”

    Just as well as it is your line, not mine.

    Your assessment of intellect would challenge the wisdom of self regulation.

  53. August 6th, 2012 at 12:28 | #53

    Ah… rog resorts to ad hominem attacks…. instead of listing some sane compliance issues.

    That’s conceding the point to me. ;-)

  54. Julie Thomas
    August 6th, 2012 at 16:46 | #54

    Steve everybody has to deal with compliance issues; health and safety laws are a real pain in the arse for anyone who tries to do ‘work’ in a university. There are even ethics committees which mean that we can’t just do anything we want to people who participate in experiments.

    Life is a struggle; who told you it was meant to be easy?

    It’s a good thing that we humans have to do things that we don’t want to do; or are you over all that character building stuff? That’s for kids eh? You have enough character already? I thought so.

    My very unintellectual – ha can’t even spell it – and unprofessional advice to you is that you could think of these imposts on your freedom and your right to make a living, as a challenge rather than seeing them as a personal affront?

    Have you heard how the young people say “Build a bridge’?

  55. Troy Prideaux
    August 6th, 2012 at 17:00 | #55

    Julie Thomas :
    Steve everybody has to deal with compliance issues; health and safety laws are a real pain in the arse for anyone who tries to do ‘work’ in a university. There are even ethics committees which mean that we can’t just do anything we want to people who participate in experiments.
    Life is a struggle; who told you it was meant to be easy?

    Just as well you’re not building rockets for a crust! Then you’d be very familiar with Newton’s 3rd law of advancement – for every action, there’s an equal and opposite bureaucratic regulation :P

  56. rog
    August 6th, 2012 at 17:43 | #56

    As SATP has been reluctant to detail the compliance that he has issues with it would be safe to assume that he needs a compliance manager.

    My experience with compliance is that for the most part it is productive ie compliance is cost effective if you are willing to comply. When GST was introduced BAS and other compliance sorted out those who did not run a proper up to date accounting system. I took it as an opportunity to increase the quality of management.

  57. August 6th, 2012 at 19:21 | #57

    @rog

    it’s like when the Nazis made everyone comply with the regulations re Jews

    It really helped everybody improve their HR skills

    yes indeed herr rog – compliance is always productive

    p

  58. August 6th, 2012 at 19:48 | #58

    @ Peak oil poet. You’ve nailed it re compliance regulations.

  59. August 6th, 2012 at 19:51 | #59

    @ Julie Thomas, you write like someone who has never had to pay their own way in life. (There are plenty of those around).
    Compliance is for “building a bridge & getting over”? It is merely an “interesting” exercise plonked into your workaday?

    You haven’t ever experience pointless regulation. Try this: If every regulation you had to comply with, & the time spent complying with it, was deducted from your income.
    If you got anything wrong, or made a mistake, you lose a week’s pay.

    If you’ve an imagination, this may give you some idea what it is like for businesses.

  60. rog
    August 6th, 2012 at 20:06 | #60

    @The Peak Oil Poet Godwin alert

  61. August 6th, 2012 at 21:08 | #61

    @rog

    “Godwin’s law itself can be abused as a distraction, diversion or even as censorship, fallaciously miscasting an opponent’s argument as hyperbole when the comparisons made by the argument are actually appropriate

    wikipedia

    p

  62. rog
    August 7th, 2012 at 03:43 | #62

    @The Peak Oil Poet What’s your point POPs – that you have mastered cut and paste?

  63. Freelander
    August 7th, 2012 at 05:30 | #63

    Seems a valid point.

  64. Julie Thomas
    August 7th, 2012 at 07:19 | #64

    Steve it depends what you mean by ‘pay your own way’ don’t it?

    Money type wealth is the only thing you value in life?

    More free advice from a drop-out academic psychologist; your compliance problems are due to your personality problems. It’s all connected Steve, the hippies and Spinoza who wrote about the unity of mind with the whole of nature, were right.

    I can’t believe you are such a grumpy old man clinging to the past – Joh and the moonlight state was the high point of your life, your golden age?

  65. Julie Thomas
    August 7th, 2012 at 08:01 | #65

    Steve, Do you have live music at your pub? If so check out this man,

    http://www.andycollins.com/

    he’s a Cairns based musician and a long time friend of mine.

    He will be able to tell you if I have ‘paid my way’, although his wife would be a better source of insight into why people like me find your views personally threatening and very scary.

  66. Freelander
    August 7th, 2012 at 08:19 | #66

    Good points. Included amongst the self-employed category, those small business people, are, as you suggest, a certain grumpy type of non-conformist non-compliers. These types are basically unemployable due to there unwillingness to comply with others. Needless to say they are bad employers and their lack of business acumen means they struggle; they do not enjoy the best return on capital.
    Unsurprisingly to their mind the source of their problems is not within themselves, but is due to big government, unfair competition or some such.

  67. Julie Thomas
    August 7th, 2012 at 09:11 | #67

    Freelander I agree; my father was always starting up businesses because he couldn’t work for anyone. He had ‘bi-polar disorder’ – note I think diagnosis in psych is just a phase we are goinng through – and he was so functional when he was on his ‘up’ time but when he went into a downer and became totally useless and even worse than useless, a burden that my mother with no family support had to cope with and also to wind up the business or whatever scheme he had on the go at the time.

    Steve takes things personally – isn’t that sposed to be a female trait? – so I better say right now that I am in no way suggesting that Steve is in any way similar to my failure of a father. Steve is obviously very successful man with lots of ability and has worked hard and smart, and is certainly to be admired in the way he runs his pubs and has such respect from lots of people on both sides of the political fence.

    Now to talk about the general theme that some types of people like to behave in certain ways; and then there are types of upbringing. You also got to look at those. Apparently one class of people bring up their children to be honest and look after each other; poor kids have to ‘share’; it isn’t a ‘choice – fkn ‘choice’ – I’m reach for a drink when I hear that word. But the other class of people bring up their kids to be ‘empowered’ to look after themselves etc etc.

    So in this society where we value individualism over community, where we value that false ideology that all people can freely choose and be masters of their destiny, we get circumstances in which a certain type of ‘personality’ can have an upbringing that is extraordinarily individual – eg Gina – and so has nfi about the ‘others’.

    But you are too hard on them Freelander, you judge them too severely – I think – but then as we all know I know nothing about running a pub. I have to say that some of the ‘characters’ I have worked for were worth every minute of listening to and pretending to admire their superior understanding of the world. I valued them for their ‘style’ their wit and probably because they were mostly decent people on a personal level.

  68. Troy Prideaux
    August 7th, 2012 at 10:05 | #68

    @Julie Thomas
    I agree. What we have to be mindful of is at the end of the day, a healthy “anything” relies on balance. We definitely need regulations, laws and compliance to enjoy a high standard of living, but they have to strike the right balance as to be not too burdensome or too lax. Of course it’s often (or even always) a subjective call as to what the right balance is.

  69. Nick
    August 7th, 2012 at 10:46 | #69

    Compliance requirements for a pub:

    - Ph numbers of business owners/company directors
    - Ph numbers of police, fire, local government
    - Copy of liquor license with opening hours, restrictions, security requirements, how many tables permitted on street etc
    - Copies of liquor licensing signs (no alcohol to minors, fine amounts etc)
    - Copies of staff RSA certificates, signed, dated, logs of when due to be updated
    - Copies of individual security licenses, subject to regular police computer checks
    - Copy of own procedures for service of alcohol (no drink specials, dollar pots or promotions etc) – all staff and security required to read, cite, sign and date every three months
    - Health and Safety, Fire Plan, first aid kits, records of electrical work etc.
    - Security camera policies, maintenance log of security cameras

    It’s seriously not that much work and all pretty much common sense, rather than anything resembling a nazi state. Are they effective? In the end, you’re still letting in and serving liquor to intoxicated people. They can’t force an irresponsible pub to do it responsibly. But any pub who can’t meet those basic requirements deserves to be fined and/or shut down. The joints on King St have for days at a time for not meeting security staff requirements. Good. That’s what you get for hiring ex-crims. Steve, you probably serve food and have a whole other list of restaurant type regulations to meet as well? How many employees do you have out of interest? I mentioned to my partner you hire a compliance officer…’lazy @unt’ she smirked ;)

  70. Freelander
    August 7th, 2012 at 11:05 | #70

    Compliance regulation can be useful for someone new to a particular type of business because they tell them those basic things that they need to do, but could easily overlook.

  71. Ikonoclast
    August 7th, 2012 at 12:37 | #71

    @Steve at the Pub

    Steve at the Pub, I am not a religious zealot. Though I might be a bit of an agnostic existentialist zealot. :) I find the religious types of the kind you mention hard to tolerate too. I feel my two proudest theological “moments” occurred as follows. They involved visiting Seventh Day Adventists preaching door to door. We all know the type.

    1. Approach 1 – Drown them out with noise.

    I was fitting window security bars on my old house. They came right up to the open, low sill windows where I was working from the inside. Then began preaching to me non-stop and would not leave when I politely said I was busy and needed to keep working. After asking twice, nicely, I simply ignored them, took up my very noisy old electric drill and kept drilling. They soon left.

    2. Approach 2 – Demonstrate Superior Biblical Knowledge

    I was, at one time, quite knowledgable in biblical matters for a layperson. As a then militant atheist, I studied the Bible to debunk Bible-Bashers. The SDAs bearded me at the side gate to my house and began talking about evil and Old Nick. I simply said the “Good Bearded Man in Heaven” is actually responsible for all good and all evil, it says so plainly in the Bible. Then I said, check Isaiah Chapter X Verse Y. I used to know that one off by heart. They duly checked it in the Bibles in their hands, were duly flummoxed and left forthwith.

    * * *

    As per another critic of my costs post; yes indeed the method of calculating economic and social costs of alcohol needs to be carefully designed and in an unbiased way one would hope. Does Prof. J.Q. or other any other economist blogger here know of an or the arguably most objective and unbiased report analysing this? I would be interested to know.

  72. rog
    August 7th, 2012 at 20:15 | #72

    @Nick You could include simple items like the checking availability and functionality of fire systems.

    Evidently SATP and others resent having to undertake compliance yet are able to maintain criticism of those that fail to comply with their own expectations.

  73. August 9th, 2012 at 09:11 | #73

    Gosh, I didn’t realise the extent of ignorance among the population (regarding the compliance burden) Rather shocking actually.

    Iko: Your anti-grog comments are straight out of the handbook of some hand-clapping church. It is understandable that some many reasonably confuse you for a religious zealot. You have much in common with that beast!

    Nick: If you’re of such low character that you make comments revealing your “partner” to be an brainless ill-mannered bint, then you deserve the slattern.

  74. August 9th, 2012 at 15:18 | #74

    @Steve at the Pub

    my old dad used to say

    if you hang about in places infested by snakes and funnel webs

    don’t complain about their behaviour

    pop

  75. August 9th, 2012 at 17:11 | #75

    @ Pea Coil Poet: “Touche”

  76. Nick
    August 9th, 2012 at 17:43 | #76

    Thanks for that, Steve. I was having a joke, and so was she. Mainly I think she found it funny I thought I could tell a pub manager (anyone for that matter) that their job is easy…I just wanted to see what the shoe looked like on the other foot. In any case, you’re still a whinger.

    Ikonoclast, I hope it didn’t come across as if was having a go at you personally. That wasn’t my intention. I’ve been enjoying reading your posts…I wasn’t trying to align you with that report or its authors. FWIW, re the chess allusions in the Sandpit, a rook doesn’t exert pressure on less squares when it’s further from the centre, it’s something bishops and knights suffer from. Interesting maybe to consider why that is.

  77. Nick
    August 9th, 2012 at 17:50 | #77

    As far as structures and models and their bodily counterparts go, a pub (even more so a club) is usually understood to represent the womb. It works ontologically on so many levels…not the least, watch a grown man cry and squeal when you kick him out in the middle of the night – “Let me back in!”

  78. August 9th, 2012 at 18:20 | #78

    & you’re still a “hundred yard hero” Nick. How shall I put this….? Nobody, would call me a whinger from within hitting distance. There is a reason for that. (Something for you to reflect upon!)

    But you’re focusing only upon one part of a pub. As I’ve posted before, 3% of my business is public bar trade. (Actually times have changed since I wrote that, it is currently about 5%). Given the aggravation that comes with it, I could well do without bar trade.

    The change of political wind has certainly been noted by regulatory officials. Pretty much from the date of the great LNP victory in Qld, the regulatory tin gods have pulled their head in. Even they, in their hubristic ivory tower, are aware they were going waaaay too far in their persecution of pubs. Most of those who were put in within the last couple of years, purely to persecute the liquor industry, are very very aware that their chances of keeping their job now depends upon those very people (pub staff & publicans) who only a few months ago they were treating like a traffic cop who has just pulled over a speeding ferrari.

    It feels good to be treated like an adult. It has been more than 10 years since that happened. For that reason alone, I’m hoping that the ALP is never again elected to office.

  79. Nick
    August 9th, 2012 at 19:59 | #79

    Oh, I would Steve. I wouldn’t care how touchy you are about the subject. Was there another reason?

    If we can both get past our version of the ‘hundred yard hero’ act though, yes I was interested in what the rest of your business is, and which regulations cause you so much grief.

    It seems it’s mainly the people. Fair enough. Fresh out of uni can be especially annoying, though police are often worse. Yes, a Baillieu government in Victoria has meant much the same thing, no I wouldn’t ever vote for him because of it.

  80. Nick
    August 9th, 2012 at 20:14 | #80

    “a Baillieu government in Victoria has meant much the same thing”

    I should add…mainly in relation to live music and security requirements, not much else though…

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