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COMING OUT THE OTHER SIDE

We, that is all of us by the way (no one misses out on this one), are in the middle of a once-in-a-lifetime crisis – The Covid-19 Virus.

This wicked virus that targets and kills the weak and vulnerable, no matter what colour, no matter how much money you have, no matter what position you hold – no person is beyond its reach. The spread of this virus has put us in a place we have never been before, in situations we only read about in futuristic novels, governed by a ‘Police State’! Yes that is exactly the description, a state where government and police rule are the norm and we as a population are very accepting of it! It is the only way we can see this virus being beaten in the short term. The longer-term solution resting solidly on the shoulders of our scientists seeking out both a cure and a vaccination. Until either one, or both of these, are achieved we live in an environment of fear – hoping the virus will not affect us or our loved ones – locked in voluntary isolation waiting, waiting waiting!

Waiting for what?

That is indeed the big question, but probably best described as “Life on the Other Side of the Corona Virus”. That space, that place, our leaders constantly talk about but tell us we can’t go there yet!

Yes, it will come but none of us really know when. Will it be partial, gradual, or will this isolation and lock down of a country remain in place while cure and vaccination remain futuristic dreams. I think what is clear is – the longer this process takes, the larger the financial, emotional and mental pain will be. The longer we stay in isolation – for the good of the country – the longer and harder it will be to come out the other side.

I have no skills in identifying or assessing the timing of our ‘return to normality’ so I simply won’t go there – I will leave that to those medical and political minds that until now we have placed total faith! And I can suggest that they have performed above expectation. Nevertheless I am preparing for the future in my mind and this is what these notes/thoughts/ramblings are all about.

What I can do is have an opinion and comment on ‘Life on the other side’.

In very, very general terms we have a simple choice of two options:

• Return to the life we knew as soon as possible
• Recognise this tragedy as an opportunity to re-frame our lives, our country, our politics – our future.

The first choice is possible the easiest from a political and financial perspective. Get everything back on track as it was – the blueprint is already there and we are experienced in that. Albeit with a debt level that will be a stone collar around our economy’s neck for possible generations to come.

To my mind there is only one choice and that is the second choice. Not a choice but an opportunity! The time spent by us all in isolation should be spent in some level of contemplation. Of course, that is after the shed and the wardrobe has been cleaned out! If we do spend that time in contemplation then this blog is an example of how a very ordinary and very average Australia thinks about our future.  I have spent 64 years in this wonderful country and enjoyed the benefits that have come from being an Australian. But nothing is perfect and when given an opportunity as we all have, then it is our duty as Australians to do something about it and at least think about how we could do things a bit better.

In no particular order, no particular theme, these are simply the thoughts and contemplations of a 64-year-old as he sits in isolation, contemplating both ‘where we have been’ and ‘where we would like to go to’. How do we make this fantastic country a better place for our children and their children?

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BIG Business or ‘Big Brother?

I have a problem with Big Business. It is a simple problem. I don’t think they play by the same rules that every other business in Australia plays by. I don’t think they have even a remotely similar business philosophy to small and medium size business.

Australia is often called the ‘land of small business’ and when you look at the statistics it is a well-proven call. 93 Percent of Australian businesses have a turnover less than 2 million dollars. Only 7 percent remaining are classified by most government reports as big business. I would go a step further. My definition of Big Business comes down to a much smaller group. The mega companies of Australia that include banks, food and alcohol retailers, petrol suppliers and so on.   

Australia is a land where the economy is based on a Free Enterprise model. The basic definition of free enterprise being:

Free enterprise is a type of economy where products, prices, and services are determined by the market, not the government. It’s capitalism, not communism. Things that are free are unconstrained, and a business is an enterprise. So, free enterprise refers to an economy where businesses are free from government control.

A basic definition and principle that drives the majority of Australian businesses. But what happens when business get too big? That is, they grow to a level where they can influence and control their business sector and the broader economy in a manner that the definition above strives so strongly to avoid.

Some simple examples follow”

Example 1

The retail food industry has all but destroyed the Australian dairy industry. How have they done this? Simply, they have used their position as the majority outlet of a basic food product to manipulate pricing to their commercial advantage – stuff the poor dairy farmer!

Example 2

A ‘new player’ enters the food and beverage retail market. They need to make a space for themselves in the market. Something that takes time. In this case, they want the broader population to know that ‘we sell alcohol’. To do so they make an ‘own brand’ – source the raw product, pay someone to make and brand it under their own name. Not some cheap and nasty ‘own brand’ but premium product that comparatively would cost $45 per bottle. But they sell it for $12.95. Probably a price that may even be below cost of manufacture. And they then sell this range of product at these price levels for an extended period of time – years! Their goal, simply to make sure that the public know we sell good booze. Problem here. There are hundreds of other Australian companies making and selling an identical product – at $45 per bottle. Why? Because that’s is the ‘Free Enterprise’ model working to set a price that represents the hard work, time and costs involved and then allowing that business to make a fair profit. Yet, now they have multiple ‘big business’ outlets competing aggressively against them. Who has the biggest pockets. Who can last the longest before their business starts to fail. Well the small business will fall over because they can’t compete at that price level. The large business will always survive, because their initial aim was never to make a profit!!!

And we can argue – but the public benefit from cheaper booze. Yes, that is true. But if we remove the small businesses we are left only with big business – and there then remains no incentive for them to create choice and we will all end up drinking what they tell us to drink, not what we want to drink!

Example 3

Banks: I don’t need to write much here. We have just had a Royal Commission do it all for me. Put simply these are classic examples of businesses that lost sight of their customers. They didn’t place any value on their customers. Their customers were simply a source of income and their God was their shareholder group! When they looked fragile in the GFC the government simply bailed them out. Why? Because as individual companies they were too large for our economy to let them fall over. And that situation remains. We have had a Royal Commission. But has anything changed?

The examples can go on forever but we need to go back to the definition above which tells us that Free Enterprise is an economy free of government control. What I suggest is that these large businesses that exist today have moved from the Free Enterprise model and because of their size and influence on their industry sectors they have become as powerful or more powerful than any government. They have a capacity to wield power and influence over both their customers and their associated industries. Everyone jumps to their commands and wishes. Government is scared of them and know they are basically useless in controlling them because of their size and influence. They have become more powerful than the ‘government’ mentioned in the definition above. We can’t have an economy where businesses grow to a size where the principles of Free Enterprise don’t exist. We can’t have an economy where businesses are so large that the Government can’t afford to let them fall over. That is one of the fundamental principles of a Free Enterprise economy – businesses live or die based on their decision and the market they work within. If they lose sight of their customer they should die on the vine. If they try to manipulate a market there should be sufficient competition to prevent this. Yet we have allowed these businesses to grow within our economy like a “Virus”. That virus is slowly killing free enterprise and growing within itself at the same time.

Post Script: I read this morning that convenience and general stores within Australia (classic small businesses) cannot get supply of product into their stores. Why? Because our big retail outlets are working together (supported by Government) to ensure their own supply – for the good of the community. Put simply – hanging the small corner store out to die, while allowing Big Brother to grow stronger.

But where to?

As part of our ‘learning curve’ in our Covid-19 Contemplation we need to look at some core values. Is our life ruled only by the $? In other words, are our decisions made based purely on the cost of something. If that is the way we want to live then Big Business will rule and become an even stronger dictator of how we live our lives.

Alternatively, if we place a different set of values on the way we live such as – quality, freedom of choice, value for money, customer service, consciousness of product source and so on, we may decide that smaller, independent businesses deserve our support, and by doing so, we will allow them to survive and thrive, providing us with innovation, quality and choice within that space.

I am very aware that someone with a very restricted budget is going to answer – I want the cheapest! But perhaps the broader community who can afford choice need to take a leadership role, support small to medium enterprises and let others see the benefits of them doing so. It could be a gradual journey, but one very worthwhile travelling. Big Business currently wields more power over the average Australian than any government could – that is not good.