Paul Wallbank – Brilliant Communications

Tag: Australia

  • Australia’s software disadvantage

    Australia’s software disadvantage

    This morning ABC Radio 702 asked me to comment on Adobe, Apple and Microsoft being summonsed to appear before the Federal Parliament’s IT Pricing enquiry.

    As has been widely reported, the committee has asked the software giants to explain why there are such price differentials between Australian and overseas prices.

    By way of example, Adobe Creative Suite 6 is available on the company website for $1299 US which is AUD 1263 on today’s exchange rate. The listed Australian price is AUD 1974 – a mark up of 56%.

    This is not new

    Australia has long been an expensive place to buy things, I remember my parents in the 1970s asking relatives to send over Marks and Spencer underwear as prices in Melbourne were so expensive.

    Books and music have long been overpriced, the publishing industry openly printed the price of books in various countries and the Australian price has always been substantially higher than UK and US charges given prevailing exchange rates.

    The high exchange rate has focused attention on the high prices, while the Aussie dollar was low consumers were tolerant of the rip-off. With the Aussie dollar high, consumers are wondering why the prices of many imported goods, particularly software, has remained so high.

    A lack of competition

    One of the biggest reasons for Australians being overcharged for many items is the lack of competition in the domestic marketplace. Most distribution channels are dominated by one or two players which lends itself to price gouging in areas ranging from technology to food.

    A good example of this is the brewing industry, a revealing Fairfax article examined the Australian beer sector and exposed the failings and lack of competition in the market which results in the multinational duopoly extracting five times the profits of local retailers.

    The conservative nature of Australian consumers is their own worst enemy as locals, including corporations and governments, prefer to buy major brands rather than experiment with local or lesser known providers.

    Where alternatives exist, the price differentials rapidly fall. The price differential for an iPad is far less than the software apps that run on it. The reason for this are the range of alternatives available to the Apple product.

    If Australian buyers were to explore open source alternatives, smaller suppliers or locally developed products then the prices of imported goods would fall.

    Structural weaknesses

    The pricing inquiry illustrates  the structural weakness in the Australian economy where the nation has become a price taker both in the domestic consumer sector and bulk export industries.

    Where Australia finds itself is an expected consequence of a generation of economic policies which favours debt driven consumer spending underpinned by selling assets and raw commodities.

    Hopefully Australians are realising the price of software is just one of the consequences of current policies and start demanding the nation’s political and business leaders have a clear vision for what the country’s role will be in the 21st Century.

    If that vision for Australia is a quarry with a few retirement homes clinging to the edge, then we’re well on the way to achieving that. At least software prices will be the least of anyone’s worries.

    Similar posts:

  • Do kids really need laptops in school?

    Do kids really need laptops in school?

    Are laptop computers really essential to educating our kids? Fairfax media reports this weekend that the Australian Federal government’s laptops in education scheme is near collapse.

    What stands out from the story are the quotes from educators;

    Chatswood High School principal Sue Low said her school was providing laptops to students in year 9 but the uncertainty over future plans was unsettling.

    “Laptops are now just as much of the culture of education as are pens and paper,” she said. “To not have certainty over how we will administer laptops to our students is very disruptive, and we need that certainty as soon as possible.”

    Some schools have come up with their own solution to the problem. One NSW school has made arrangements with a private provider under which parents can buy a laptop for $1341 or rent-to-buy for $90 with monthly payments of about $50.

    That computers are important is not a debate, but are we putting to much emphasis on the tools and not enough on what education is trying to achieve?

    One educator said a decade ago that they could teach an 80 year old to use a computer in a few hours, but an illiterate 15 year old may be lost for life. This is truer today than it was then.

    Computers are flooding our lives with information and the tools to gather that information are intuitive and don’t need 12 years of school to master.

    What we are all need are the critical and mathematical skills to filter out the dross and misinformation that floods onto our screens.

    Old and young have the belief that if something is on the web, then it must be true. The biggest challenge for parents and teachers with the web is convincing kids that cutting and pasting huge slabs of Wikipedia into an assignment isn’t research.

    Not that this is just a problem in the classroom – plenty of politicians, business leaders and time poor journalists have been caught out plagiarising Wikipedia and other websites.

    In recent times I’ve been to a lot of ‘future of media’ events where the importance of ‘data journalism’ has been raised. What really sticks out listening to these is how poorly equipped both young and old journalists are to evaluate the data they’ve gathered.

    This isn’t just a problem in journalism – almost every occupation needs these skills. We could argue those skills are essential for citizens who want to participate in a modern democracy.

    Computers, and coding skills, are important but we risk giving students the skills of today rather than giving them the foundations to adopt the skills of tomorrow.

    We also risk making technological choices that risk education departments, schools and kids being locked into one vendor or system.

    Giving every child a laptop is not a replacement for them having the critical, literacy and numeracy skills to participate in 21st Century society.

    Similar posts:

  • High cost politics – how the Australian election will fail business

    High cost politics – how the Australian election will fail business

    “Running costs have gone crazy” complains Sydney restauranteur Jared Ingersoll at the same time the Australian events industry warns it’s being crushed by a higher dollar.

    While the closure of an inner city cafe doesn’t mean that much, a bigger warning about Australian costs comes from Royal Dutch Shell who have put their gas investments on hold due to project blowouts.

    Natural gas investments are the core of Australia’s economic policies with the country’s Asian Century report identifying energy exports as being the country’s main revenue earner over the next quarter century.

    Costs of doing business in Australia have been steadily on the increase since the Howard government introduced the GST which triggered Australia’s transition to a high cost country.

    It didn’t have to be that way but Howard’s addiction to middle class welfare meant what should have been a opportunity to reform the economy during the mid 2000s was squandered with gifts handed out by one of the highest spending governments in Australian history.

    While Whitlam at least spent money on bringing sewers to the suburbs, Howard spent his on subsidies to rich schools and parking permits to self-funded retirees.

    It would take a brave government to undo Howard’s work which isn’t something we can expect from the populist and cowardly Australian Labor Party that lacks any of the honesty or strength required to confront the whining middle classes about their unsustainable entitlements.

    Which makes the election announced last week interesting. In her election announcement the Prime Minister made a mention of dealing with the high Australian dollar, which at least shows the Labor Party sees there’s a problem – although they certainly don’t have the stomach to make the tough decisions required.

    On the other side of politics though it’s all unicorns and magic puddings. Tony Abbot and his friends are partying like it’s 1999.

    The Liberal Party policy paper released last week is notable for not acknowledging the global financial crisis and maintaining that taxes can be cut while Howard’s middle class welfare state can be expanded.

    The best example of the Liberal’s addiction to middle class welfare is their promise to introduce a parental leave scheme. As their Strong Australia policy document explains;

    Paid parental leave ought to be paid at a person’s wage rate, like holiday pay and like sick pay, because it is a workplace entitlement, not a government benefit.

    Not only does the Liberal Party believe that high paid workers should get subsidies for their nannies, but that employers should pick up the bill, just like holiday and sick pay.

    Middle class welfare and a massive business cost increase to boot.

    In a Smart Company poll last week, the small business readers overwhelming endorsed the Liberal Party.

    They should be careful what they wish for.

    For those worried about getting Australia’s high cost base down there are serious debates to be had about our tax and welfare systems along with tackling issues like high property prices, over-regulation, aging population and workforce skills.

    Most importantly, we have to define what Australia wants to be in the 21st Century.

    Little, if anything about these issues will be discussed before September and in the meantime the Dutch disease will slowly strangle Australian business. We need better.

    Similar posts:

  • Managing unemployment perceptions

    Managing unemployment perceptions

    Stephen Koukoulas has a look at the changing composition of the Australian economy in Business Spectator today where he looks at how things have evolved over the last 50 years.

    One of the notable things is unemployment and how our perception of what an acceptable level is;

    Australia’s unemployment rate is 5.4 per cent at present, it was 0.9 per cent in August 1970 while in August 1951 it was a staggering 0.3 per cent.

    In the 1961 Federal election the Menzies government hung on by one seat, having been punished for allowing the unemployment rate to reach the dizzying heights of 3.5 per cent.

    Through the Twentieth Century, Australia’s unemployment rate averaged around 5% as shown in this Treasury graph.

    Australia's unemployment through the twentieth century

    What’s notable in that graph is how high unemployment became the norm in the last quarter of the century. When it became obvious politicians and economists couldn’t move the needle below 5%, the process of convincing us that five percent was ‘good’ began.

    One wonders what the acceptable level of unemployment will be for the next generation. Will they consider us the failures that our grandparents would?

    Image of unemployed carpenters in 1935 courtesy of the NSW State Library via Flickr

    Similar posts:

  • Why you won’t retire

    Why you won’t retire

    Outliving Our Super is the headline of an Australian Financial Review story on the problems of an aging population.

    Jacqui Hayes cites a billboard in San Francisco declaring that life expectancy will soon be 150 and we have to plan for longer retirements.

    The flaw in this discussion is the idea of retiring in our 60s. When the age pension was introduced in 1910, a new-born boy could expect to live 55 years and a girl, 59 years. The odds were against the average person every receiving the pension which was an effective, if ruthless, way of ensuring the solvency of social security programs.

    A hundred years later, a new born can expect to live well into their eighties. Meaning the average person will spend two decades in retirement.

    Making matters worse is the nature of that Millennial’s work pattern – when great, great grandpa entered the workforce in the 1920s,  he was almost certainly in his early teens and worked a solid fifty years paying his taxes before prospect of retirement arrived.

    Today, that child won’t enter the workforce until at least their late teens and more likely until their early twenties. A modern child is also going to have a much more fragmented work career and will likely have periods of unemployment or low earnings as a casual or contract worker.

    For today’s child to retire at 65 it would mean he or she will have had to saved enough over a forty year working life to sustain them for fifteen years of retirement, those numbers are tough and to achieve it most won’t be living the millionaire lifestyle during their golden years.

    With a life expectancy of 150, the early twentieth century model of retiring at 60 or 65 means today’s child would spend less than 30% of their lives in the workforce. Put simply, the numbers don’t add up.

    The reality is most of us won’t be retiring at 65, the baby boomers reaching retirement age now are learning this and it’s a lesson that’s going to get harder for the Gen X’s and Y’s following them.

    As a society, or an electorate, we can pretend there’s no problem and policy makers and politicians will pander to our refusal to face the truth by keeping structures that reflect early Twentieth Century aspirations rather than Twenty-First Century realities.

    We have to face the reality that the retiring at 65 is unaffordable dream for most of us. Once we accept this, we can get on with building longer lasting careers.

    Picture of pensioners courtesy of andreyutzu on SXC.HU

    Similar posts: