Australian Federal Budget a cynical political move at our expense
The Australian Federal Labor Party has broken virtually every significant promise made before the last election, and are now a hair’s breadth from being the most unpopular they’ve ever been. Whilst they’d never admit it publicly, they haven’t got a snowball’s chance in hell of being re-elected when voters head back to the booths next year and, behind closed doors, they’re well aware of it. And when you look at last night’s Federal Budget, it’s clear that all they’re worried about is political tactics to try and get themselves back into office sometime in the next decade.
The one ‘promise’ which we might have forgiven them for ‘breaking’ would be the undertaking to deliver a surplus budget. Whilst I’m a great advocate for Government’s living within their means (and I loved Joe Hockey’s speech on this topic just a few weeks ago), it’s critical that the transition is strategically planned to ensure the economy is not stifled in the process. The 2012-13 budget does nothing to encourage the economy and jobs, whilst grabbing money out of the vast majority of middle-income earner’s pockets, and delivering only the slimmest of surpluses on paper, with future surplus forecasts existing only on paper, based around overly-optimistic projections.
Essentially, Labor has done nothing to tighten their belt. They’ve brought in several billion of revenues from the ‘mineral rent’ tax and carbon tax, magically predicted an increase in company and personal taxes (9% and 8% respectively), splashed some cash on welfare (an age-old pre-election gimmick), and shifted expenditure forwards and backwards so it doesn’t show up in 2012-13. As correctly highlighted by Tony Abbott, why does a Government that’s genuinely reining in spending and heading towards a surplus need to increase it’s debt ceiling by 50 billion dollars? Because it’s going to spend more during this financial year (yes, we’re expecting a deficit of $44 billion, a $7 billion increase on the forecast only six months ago). It’s also deferring spending until 2013-14, when it will no longer be their problem and they can hiss and boo at Liberal for cutting expenditures which they’ve budgeted.
Despite claiming that they would have to find major savings in this budget, they’ve found minimal savings and have actually increased expenditure by $201 million – instead they’ve focussed on more income.
Key features of the budget include:
- Tax-free threshold increases from $6,000 to $18,200, but thereafter the 15% marginal rate has been increased to 19% and between $37,000 to $80,000 income the marginal tax rate shifts from 30% up to 32.5%
- Means testing of private health insurance rebate will cost middle-income earners, particularly singles on incomes between $84,000 – $130,000, a total of $1.26 billion
- Promised company tax cuts (from 30% to 29%) have been scrapped, however on the positive side companies will now be able to ‘carry back’ losses, meaning that they can claim a refund on tax losses in the 2012-13 financial year against taxes paid in the previous year (up to a maximum refund of $300,000). On paper, these losses can be carried back two years from 2013-14, but of course this is another sweetener which may not be sustainable and will inevitably be used to taunt the Liberals once they’re in Government.
- $1.1 billion of local Government grants which were due to be paid in 2012-13 pulled forward to the current financial year to help achieve their surplus objective
- Unemployment figures revised down to 5.25% for 2012-13, but then back up to 5.5% and steady for future years (the short-term figures serve multiple purposes including reducing the budget cost of welfare, increasing the projected income tax revenues, and allowing Labor to claim the economy is strong)
- Carbon Tax revenue projections based on ‘greenhouse gas emitting companies’ continuing to emit the same levels of CO rather than any reduction in emissions – which begs the question does the Government believe it’s own rhetoric about the Carbon Tax creating the necessary incentive for companies to invest in cleaner technologies and reducing their emissions
- CPI for current period revised down to 1.25% from Labor’s own forecast of 2.25% in November last year, and well below the Reserve Bank’s target of 2-3%. Very handy if you want those struggling financially to believe their cost of living isn’t increasing too dramatically.
- Real GDP is expected to grow to 3.25% in 2013, a stronger figure than the Reserve Bank’s projection of 2.5-3%.
- Deferred a promised increase in the cap on personal superannuation contributions (we can currently pay only 15% tax on the first $25,000 of our personal contributions and that’s being retained despite a promise to increase it to $50,000) – if the Government was serious about the long-term economic well-being of our country, they’d be focussing on initiatives like this which reduce the need for the Government to provide pensions/welfare to our elderly. Deferring this tax break is a clear sign that they’re focussed on short-term political point scoring.
- The Government “plans” to increase the Superannuation Guarantee to 12% by 2019-20 – a plan so far ahead that it’s laughable they’ll be in any position to actually deliver on that, but that allows them to claim to be doing something about retirement savings
- $1 billion dollars towards the National Disability Insurance Scheme
- ‘Golden handshakes’ no longer get a tax break above $180,000 total income
- Assistance to SME businesses in the form of an increased threshold to write off any asset purchases up to $6,500 in the year of purchase, and $5,000 rebate on the purchase of new and used cars from fiscal year 2013.
- Scrapping of tax breaks for ‘Green Buildings’ program (worth $405 million over four years).
- ‘Connecting Renewables to the Grid’ expenditure pushed out to 2018-19 and 2019-20.
- Solar Hot Water initiative scrapped
In summary, this is a budget which increases taxes, increases spending, projects flimsy surpluses that only exist on paper at this point, demonstrate no belief in their own carbon reduction policies, provide no incentives to encourage business and the economy, and most importantly for Labor, moves an imaginary line to an unattainable position so that any prudent decisions made by the Liberal Party when they take over Government in the near future can be attacked for political points.
Implications of offshoring for your brand image
Two years ago I posted my first article in this series on offshoring. The ideas behind it had already been percolating for a couple of years, and my thoughts on this controversial topic continue to develop over time. I don’t intend to claim any moral high ground, but it’s my hope that I can contribute to what is a crucial discussion about the complex issues associated with offshoring.
This post was intended to focus on the commercial implications to your brand image if you decide to offshore. However, particularly in recent weeks, it’s become increasingly clear that it’s impossible to discuss the consequences for your brand without also discussing ethics and corporate greed.
ANZ have announced that they’re shedding 1000 staff, Westpac are getting rid of 400, NAB is eliminating 130, Suncorp is slimming their headcount by 150 – in fact, of Australia’s Big 4, the only bank not to implement substantial reductions in Australia staff numbers is the Commonwealth Bank – the bank that I’ve avoided for 20 years! Of course, a number of these jobs are being offshored to India and Philippines, paying Asia-based staff as little as 10% of the rate Australian staff would need to be paid.
Based on my earlier articles, you might expect me to defend this on the principle that offshoring is not inherently unethical and will help to alleviate poverty in developing countries. But you’d be wrong.
As far as I’m concerned, these moves by the ANZ, NAB and Westpac banks particularly are the epitome of stupidity and greed combined in one fell swoop.
Whilst on principle I’m supportive of the right of businesses to offshore, this needs to be considered in the context of their responsibility to their existing workforce. For the mega banks, who are all set to rake in over $6 billion profit in the current financial year, any argument that they “need” to trim down and send a percentage of those jobs offshore is baloney – it’s pure and simple greed. As an employee at risk of losing your job in such an organisation, how appreciated would you feel? Clearly, their staff are considered to be just a disposable commodity.
When a company is competing on a global stage, exporting products and services, and fighting to remain viable or risk everybody losing their jobs, I accept the argument for offshoring. If a company has the foresight to offshore as they grow I don’t believe that there is anything unethical in this. But for a CEO and board members to dismiss 1000 people from their jobs with the stroke of a pen in order to increase their profit margins which are already health, is quite simply immoral and disgusting.
Of course, I’ve hardly mentioned brand image yet. But do I need to? Clearly there are three of the big four who have taken a battering in my eyes (and those of many others) simply by their decision to offshore.
This post was originally going to focus on the perceptions that consumers/customers carry with them after a customer service experience, but quite rightly my opinions on this have developed further since this article was conceptualised and hence the focus of this article is now much broader.
Whilst considering a company’s brand image, it’s also important to consider the alternatives as well.
After hearing that Westpac had made the decision to eliminate 400 staff I started doing my homework. We’ve now signed Aktiv Tactics up with the Commonwealth Bank (who I’m sure are no angels – but there’s a point to be made here: we’ll support the banks that value the hard work and dedication of their employees and don’t make hundreds redundant just to replace them with cheaper offshore alternatives). I’m also in the process of planning to shift the banking of my other company, Techeffectiv, away from Westpac to the Commonwealth Bank.
The experience of selecting Commonwealth was rather illuminating. I started by tweeting them to confirm that they were committed to not sacking local staff and offshoring instead. As per their media statements, I got a confirmation that this was in fact their stance. They then provided me with incredibly courteous and prompt assistance via Twitter followed by a direct phone call. Finally, when I visited our nearest branch to establish our accounts I was astounded to meet the Branch Manager near the front door, who promptly ushered me in with a ‘Customer Service Specialist’ – no delay, no queues, fantastic efficiency, friendly service, knowledgeable staff – and all this with the most profitable of the Big 4 banks, who have achieved their stellar results without sacking Australian staff and offshoring their roles.
The high standards of local service, the Australian support, and the commitment to retaining their staff, have all dramatically enhanced the Commonwealth Bank’s brand in my eyes.
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Past blog posts in this series:
Offshoring – the pros and cons from a social and commercial perspective
Too Connected For Our Own Good?
Around the world, we’re all becoming ‘connected’ 24 hours a day. We’re tweeting, texting, emailing, Facebooking, and generally accessing and accessible from the moment we wake up (sometimes even moments before), until after we’ve switched off the light and are about to drift off to sleep in bed. China has 500million internet users; Brazil had 210 million mobile phone subscribers in August 2011, for a population of 195 million people; almost 300 billion emails are sent every day worldwide (although 90% of these are SPAM which we need to filter in order to get to the ‘real stuff’).
Research by German IT association Bitkom found that 88% of German workers are reachable for clients, colleagues and bosses outside business hours, compared with 73% only two years ago.
On the one hand, we can’t remember how we survived before we had all this connectivity and information at our fingertips. But on the other hand, we’re struggling more than ever to put boundaries on our activities and just ‘be present’ with our family, friends, and even our work tasks. Whilst a degree of multi-tasking is a necessary human function, we struggle to perform to peak efficiency during our ‘normal work hours’, and then continue to have work bearing down on us in the evenings and on weekends when we should be relaxing and recharging.
Neuroscientists like Dr. Gary Small are confirming what we probably sub-consciously already know – multitaskers make more errors than people who focus on one task at a time.
Many of us escalate from multitasking to partial continuous attention: we’re constantly scanning the environment for the next exciting bit of information — the next text message, IM, email, or even land-line phone call. That next ping or buzz or ring interrupts our focus and charges up the dopamine reward system as we anticipate something new and more exciting than the task at hand.
When paying partial continuous attention, people may place their brains in a heightened state of stress. They no longer have time to reflect, contemplate or make thoughtful decisions. Instead, they exist in a state of constant tension — on alert for a new contact or item of news or information at any moment. And, once people get used to it, they tend to thrive on the perpetual connectivity. It becomes irresistible.
If we’re going to perform to our best, we’ve got to seriously reconsider the ways in which we work (and play). We need, as the new 21st century phenomena has come to be known, a digital detox. At work, we need to get serious about focussing on the task at hand.
- Create a list of tasks to work on today, and work your way through that list, only allowing yourself some preset times to attend to emails and other potentially distracting tasks.
- Turn off your email notifications so they don’t pop up while you’re working
- Switch off your iPhone, Blackberry, or HTC while you’re in the office, or at the very least while you’re working on your tasks. If you insist on just putting it into ‘silent’ mode, then place it in a drawer where you can’t see notifications popping up on the screen
- If you’re heading out for lunch or a coffee break, try leaving your phone behind. Chat to a friend/colleague instead, or enjoy the time out to read the newspaper, a book, or just ‘people watch’.
But just as significantly, we also need to reclaim our ‘personal’ time and make the most of that, enjoying the opportunity to socialise, relax, and not have to be constantly ‘switched on’.
In Brazil, new legislation was approved by President Rousseff last month deeming work emails sent and received outside business hours as ‘overtime’. Clearly workers had reached the point of saturation and were no longer happy to receive emails day and night without being compensated for being constantly ‘on duty’. Although the legislation doesn’t directly restrict the amount of after-hours communication, it should give employers good reason to reconsider sending emails if they’re going to incur additional overtime costs.
Automobile manufacturer Volkswagen has agreed with their employee’s labour representatives to limit emails to between 1/2 hour before the commencement of work until 1/2 hour after the end of their shift (Reuters). Whilst executives and mission-critical staff have been exempted, it’s clearly a significant step towards reclaiming a bit of work/life balance.
Numerous other examples of digital overload both during and after work hours are emerging:
- German consumer goods manufacturer Henkel imposed a ‘Blackberry-free week’ for the management board between Christmas and New Year (to be broken only in the case of an emergency)
- Telecommunications company Deutsche Telekom introduced a “Smart Device Policy” encouraging employees to claim communication-free time when they are off work, and promised in exchange not to expect them to read emails or answer their phones during those blackout times
- Multi-national IT services firm Atos plans to eliminate email entirely by 2013, with their CEO Thierry Breton describing emails as “an instrument to shirk responsibility” – the shift is already on to use Instant Messaging and Facebook-style internal systems which allow project teams to collaborate and communicate by posting on socially-enabled intranet web pages
- The Saudi Government has touted the idea of a complete ban on smart phone devices for Government employees during business hours (the concern being that staff were receiving too many non-work related interruptions which were impacting the quality of service they’re delivering. Although this idea may not be ideal, and has a lot of opposition, it nonetheless highlights the substantial number of distractions workers are confronted with every day
We’re clearly struggling to find a sustainable balance in the way we use all of our gadgets and technology. What do you think? I’d love to hear your comments, suggestions and anecdotes!
If you are not part of the cure, then you are part of the problem.
If you are not part of the cure, then you are part of the problem.
5 Reasons Your Not-for-Profit Marketing May Be Failing
Marketing of not-for-profit causes and organisations is the challenge of a lifetime. Many people expect that, because they’re promoting something incredibly worthwhile and rewarding, they simply need to get the message out and tens of thousands of supporters will materialise overnight. But as anybody who’s actually tried it can attest, that’s very rarely the case. Why?
In an increasingly socially conscious generation, many organisations are competing for the attention of your target audience. Numerous causes are asking donors to contribute funds out of the generosity of their heart, but with no direct economic benefit being offered in exchange, and the public is becoming increasingly discerning in their selection of organisations to support.
Here are five of the most common areas, in my experience, that marketing of NFP’s fall short:
1. Lack of Knowledge
Effective marketing strategies require market knowledge, product knowledge, company knowledge, and a strong working knowledge of the marketing mediums in which you’re going to promote.
I frequently see enthusiastic marketers throwing themselves directly into marketing campaigns based on a host of assumptions, many of which are inaccurate or unclear.
People often don’t know what they don’t know. Often, some basic market research would improve their focus, saving a lot of wasted energy on unproductive activities, and uncovering key motivators for their audience.
Likewise, when it comes to social media and online marketing opportunities, many marketers are struggling to keep up with a rapidly evolving landscape which changes the dynamics of marketing significantly. Where historically marketers ‘advertised’ their wares and controlled what was said, now consumers have the power and it is up to marketers to win their loyalty, support, and recommendations.
It is critical that marketers dedicate a suitable portion of their time to meeting with their peers, attending seminars, listening to the counsel of experts in their field, and generally ensuring that they are exposed to the successes of leaders in these new fields. (Our Marketing Essentials Seminar in September 2011 is one such venue to enhance their practical knowledge and skills in areas of Market Research, Internet Marketing, and Social Media).
2. Lack of Resources
I’ve seen a lot of campaigns launch and flop that were reasonably well devised, but failed predominantly because the organisation underestimated the resources necessary to achieve the stated goals.
A well researched and targeted message, with a compelling proposition, still needs to be heard by enough people. And the results are not linear. As you reach a certain level of public awareness, the message can take on a life of its own and this has a multiplying effect.
Therefore, radio advertising on a community radio station for a short period (e.g. a couple of weeks) may have little or no impact, and yet it’s inaccurate to assume that multiplying the radio budget by a factor of 10 would yield similarly poor results.
Using the same message, but increasing the repetition over a longer period of time and to a larger audience, may well generate great results, particularly when conducted as part of an integrated strategy with email marketing, social media, blogs, and so on.
Not-for-profit organisations need to understand that the old adage ‘you need to spend money to make money’ is (unfortunately) still essentially true.
Whilst you may be able to find clever ways to get free exposure, it’s very rare that an organisation can effectively promote themselves without dedicating the necessary human resources and budget to their marketing.
3. Lack of Differentiation
If you’ve researched the market, devoted sufficient resources, and got the message out to the right audience, the question still remains – “so what?”, “Why should I get involved with your organisation?”
Most of us are overwhelmed by a never-ending stream of requests from thousands of organisations all asking us to pitch in and help their ostensibly worthy cause. How does an individual decide who he’s going to commit his limited time or money to?
It’s a sad reality that the majority of the world lives in poverty, and there are tens of thousands of organisations trying to feed and educate starving and malnourished children, provide sanitary drinking water supplies, eradicate malaria and AIDS, and so on. Whilst your goals are noble, so are the goals of the last 10 requests the consumer was confronted with.
The key is differentiation. How you ‘position’ and differentiate yourself is a critical element of your marketing strategy.
4. Lack of Relationship
As more and more organisations go online to find and connect with their ‘audience’ and stakeholders, some are still thinking in the mindset of traditional advertising – that is, present a carefully crafted message for the masses, and trust that a sufficient percentage will respond favourably.
Social media marketing requires an adjustment of mindset. Whilst there are still opportunities to present advertisements and offers, the real power of social media lies in engaging the public (in particular your target audience) so that they participate in discussions, share your ideas with their own social networks, and give you suggestions, feedback, and even criticism.
Social media marketing is about relationship.
5. Lack of Sustainability
Perhaps the greatest challenge for many not-for-profit organisations, particularly those involved in international development and poverty alleviation, is leveraging the donations of financial supporters so that current marketing activities reap longer term rewards.
This is potentially the single most important question not-for-profit organisations can ask themselves. It’s a much bigger question than just “how do we advertise what we do”, it actually requires that you continually review your core operations and be prepared to enhance and adapt them to maximise the impact of the funding your receive.
I believe that it’s time for a lot of organisations to ask some tough questions about their whole operational model and consider new opportunities such as ‘creative capitalism‘, micro-lending, capacity building, and other commercial endeavours that, with the assistance of seed capital to launch, will over time become self-sustaining. (The book ‘Out of Poverty‘ by Paul Polak illustrates this brilliantly and may provide some inspiration. Also check out kiva.org)
If you could market your not-for-profit organisation with the promise of multiplying rewards, and potentially even some small returns to ‘investors’ (as opposed to donors) you would open the door to a vast new audience who, under current models, may be completely unreachable.
Why the NBN Should be Costed in Rupees
ONE in eight Australians will be able to work from home by 2020 under an ambitious blueprint for the National Broadband Network that predicts it will save the typical family $148 a week. At least, that’s what yesterday’s Herald Sun declared.
For those not yet familiar with the currency exchange rate, that’s savings of about Rp. 7113. (The Indian national currency is Rupee, and there’s about Rp. 48 for every AUD $1.)
Yesterday’s launch of the National Digital Economy Strategy was, of course, the trigger for this most recent Herald Sun article. A key plank of the ‘strategy’ is the supposed benefits to be derived from our improved ability to ‘telework’. The Gillard Labor Government jumped on “a recent survey of Australian businesses [that] revealed that 20 per cent believed the NBN would change their employment model by facilitating increased flexibility in the location of staff and expanding the supply of skilled labour”, and started throwing around figures of a few billion dollars extra value to our economy.
But as any economist or market researcher knows, you can’t make policy decisions and fiscal projections on the basis of a throw-away question in a popular opinion survey.
Any role that can be performed by a teleworker in Australia, can be done more cheaply by a teleworker in India or Philippines – which is of course the ultimate when it comes to “increased flexibility in the location of staff and expanding the supply of skilled labour”. Businesses in Australia don’t care who does the job, as long as it gets done – and preferably at the lowest possible price. They’re not going to give preference to a swag of individual home-based rural Australian workers when, for half the price, they can have a whole team of trained and supervised Indians working in a professional office environment in Bangalore.
Likewise, as the article points out, “by the end of the decade it will be common for people to visit the GP for a standard check-up without leaving their home”. Of course, this is not a capability that is the sole domain of the NBN, but its reach is extended into even the most remote rural areas, increasing the attractiveness and commercial viability of the Australian marketplace for Internet-based medical practices around the world.
And if we don’t feel confident going directly to an Indian online doctor and being quoted in Rupees, our entrepreneurial Australian medicos will be able to help us bridge the gap, providing a reassuring local face for a service which is Medicare compliant, but which they can then substantially outsource to India.
Meanwhile, Australia continues to strengthen our cultural and economic ties with India, as we welcome large numbers of students, migrant workers, and students who become migrant workers. In a bid to overcome our ‘skills shortage’, we’ve been able to import entire gangs of car wash attendants, shopping trolley collectors, McDonalds night crews, and of course 95% of our professional taxi drivers. This has been highly effective in releasing our unskilled Australian citizens from such mundane and mind-numbing employment to pursue more important roles such as trying to become a teleworker or perhaps develop some new skills in order to take on one of those burgeoning careers for which we currently have a skills shortage.
As our ties to India become more robust, Australian firms have the flexibility to improve efficacy through telework arrangements with India, and all Australians have NBN access to engage a GP, lawyer, accountant, business consultant, security monitoring firm, or even enrol for university studies in India at a fraction of the local cost, it begs the question – will the Government put pride above practicality and cling on to the Australian Dollar even after it’s passed it’s use by date, or will they be progressive enough to follow in the footsteps of the EU and consider adopting a common currency, most likely the Rupee because of it’s universal applicability?
The playing field is being leveled. Teleworkers will need to work for comparable rates to their Indian compatriots if they wish to have any real prospect of securing a job. Potentially, leveraging the benefits of the NBN, they could even secure contracts with Indian and other foreign employers. And as our income levels start to reach an equilibrium more in line with Indian remuneration, our spending power and economic activity will also adjust to a point where it will make more sense to collaborate with India using a single currency.
Given that the NBN is going to open up these amazing opportunities to a greater range of businesses and consumers to access cheap and efficient services from India, would it not have made more sense to cost and justify the NBN in the currency which is likely to dominate the transactions it facilitates?
No longer will your opportunities be restricted based upon your geographical location – thanks to the NBN, you will now be able to compete freely with anybody else, located anywhere in the world.
Are your ideas ‘good’ or ‘bad’?
I was recently re-reading another great book from Edward de Bono, “New Thinking for the New Millennium”, which was published in 1999 and is clearly as just as applicable today as it was 12 years ago. Human nature being what it is, we have a tendency to get lazy in our thinking and, for expediency, process many of our decisions on auto-pilot.
If we want to really make progress in our businesses, and in society generally, we need to take time to think constructively and with genuine creativity. This involves challenging other people’s thinking, and allowing them to challenge ours.
Money is a token of exchange. In the past a fisherman might exchange fish for grain from a farmer. A brothel lady in Nevada could be paid with a chicken. Money was more convenient. You were paid in money and you could then busy something with the money. In the same way there are certain ‘value words’, which act as tokens of value. Instead of having to explain why something will not work or having to show that something might indeed work, you use simple words like ‘good’ and ‘bad’: ‘That is a bad idea’; ‘That is a good idea.’ ‘Good’ and ‘bad’ are token words which are accepted as indicating value. Just as a person with too much money can become a spendthrift, so the very existence of these value words means they can be applied rather too easily. They can be applied without any need for justification. It is only if the labels are challenged that justification may be demanded. The immense ease of this sort of judgement makes thinking unnecessary and the outcomes very poor. The applied judgements are just as easily based on emotions as on logic.”
- Edward de Bono (New Thinking for the New Millennium)
Often, the dynamics of corporate life discourage team members from challenging the accepted wisdom or requesting justification. If the boss dismisses something as a ‘bad’ idea, that’s normally as far as it goes. Companies need to be able to get on with the day-to-day job of delivering value to their customers, and repeatedly doing what they know works well (this is known as process, procedure, “best practice”) – so it’s untenable to have staff challenging every decision that’s made.
But could this mean we fall into the trap of stifling real progress? What could we be doing to nurture and reward thinking processes which will challenge the status quo and trigger genuine innovation and creativity?
