The federal government’s contentious plan to devolve power for environmental assessments has won enthusiastic backing from the Liberal-run states.
Greg Hunt, the environment minister, wants to create “one stop shops” to assess the ecological impact of major projects such as coal mines and ports.
Hunt said: “I have spoken to ministers from all six states and have been heartened by their response but will leave each minister to speak for themselves.
“The government will work with each state across the country progressively to strike agreements to reach a national one-stop shop scheme.”
This system, which the government claims will “slash red tape and increase jobs and investment”, will be run by the states. Currently, major projects have to be approved by the states and the federal government, under its Environment Protection and Biodiversity Conservation Actobligations.
The Coalition said there should be one process for environmental assessments, with a single lodgment and documentation portal. Local government will also be encouraged to be involved in the process.
Photo Damian Kelly
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THIS kowtowing to business over claims of red and green tape being the cause of their failures is just as stupid as the managers at Gorgon blaming wages for their problems.
ReplyDelete"The BIS research, commissioned by the union, is a direct response to a Deloitte Access Economics report released in August by the Australian Mines and Metals Association that showed revenues in the offshore oil and gas sector had risen only 8 per cent since 2007-08 while wages and total expenses per vessel had risen by 40 per cent in the same period.
But the new research found that between 2007 and 2012, companies in the sector enjoyed revenue growth of more than 200 per cent while wages grew by 50 per cent in the same period."
WHAT about this?
"The company is pressing Chevron to once again increase the value of the jetty contract, citing soaring costs and delays. When Chevron agreed to lift the Saipem Leighton consortium's jetty contract to $1.85 billion mid-last year, members of the project staff said they had told Leighton Contractors' management it would cost about $3.5 billion to finish.
Those with knowledge of the project now estimate it could cost about $4 billion. "They're disastrous numbers," a former team member said. "The actual cost to date would be exceeding the revenue right now."
Former project staff said costings submitted to monthly contract reviews in Perth were CHANGED to match revenue figures and the team told to work from those amounts."
SO what is the real story here?
The truth is that it is management that is to blame but this is so against the mindset of "it can't be us - we are never wrong" that every lever has to be pulled to shift the blame onto someone or something else.
eg Proctor and Bloom and their disastrous foray into the "Oil and gas consultancy" business.
The Dunning Kruger Effect.
"Dunning-Kruger as a Vicious Cycle
Dunning and Kruger often refer to a "double curse" when interpreting their findings: People fail to grasp their own incompetence, precisely because they are so incompetent. And since, overcoming their incompetence would first require the ability to distinguish competence form incompetence people get stuck in a vicious cycle.
"The skills needed to produce logically sound arguments, for instance, are the same skills that are necessary to recognize when a logically sound argument has been made. Thus, if people lack the skills to produce correct answers, they are also cursed with an inability to know when their answers, or anyone else's, are right or wrong. They cannot recognize their responses as mistaken, or other people's responses as superior to their own."
Here it is as regards Australian management.
"The unpalatable links between high productivity, leadership and wages"
The reality is that Australian leaders have the lowest proportion of tertiary education when compared to 16 countries across Europe, south-east Asia, the Americas and Canada, according to a report released yesterday. Recently analysis by LeadingCompany revealed that just one in five (20%) of our ASX100 CEOs has an MBA, and 12 of those leaders appear to have no tertiary qualifications (that is, they make no mention of tertiary education in their biographies).
In fact, our leaders do not even rate highly the impact of their own abilities (or inabilities), the report, produced by the McKell Institute, found. “Not all managers regarded good management as an essential ingredient of success, and the evidence in Australia and globally is that many managers overrate their overall calibre and are thus unable to make a realistic assessment of the link between their own performance and the productivity of the enterprise,” the report, Understanding Productivity, Australia’s Choice, says.
In other words, Australian leaders do not know how bad they are.'
"The unpalatable links between high productivity, leadership and wages"
ReplyDeletecont.........
Here is the full article :
http://kathwalters.com.au/the-unpalatable-links-between-high-productivity-leadership-and-wages/
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A Few More :
http://www.news.com.au/business/executive-lounge/bosses-to-blame-for-poor-productivity/story-fng3e17m-1226526941097
Bad managers blamed for poor productivity
"......a study of 5000 Australian executives over 10 years came to the conclusion that they lack basic interaction skills and can singlehandedly stymie productivity.
“It is often mistakenly assumed that business leaders have mastered such critical interaction skills, but our findings show quite the opposite,” Bruce Watt Ph.D., managing director of DDI Australia, which conducted the research, says.
The research looked at executive skills in relation to team meetings, coaching, delegating and their general ability to communicate effectively ... and it found them wanting with:
• 55 per cent of executives believing their ideas are the best and not listening to others
• 45 per cent assuming they understand the problem, but they don’t
• 50 per cent failing to listen effectively or read other people’s reactions well
• 48 per cent leaving meetings without a plan for what to do next
The findings, DDI believes, are the result of an emphasis in recent years on filling the skills gap and improving training and education, which has meant how to deal effectively with human beings to get the best out of them, has been sorely neglected."
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http://www.growyourbusiness.com.au/your-biz/leaders-only-have-themselves-to-blame/
"......I’ve seen businesses fail and the owners have blamed red tape, unions, tariff reductions, higher currency and lower currency, the weather, the GST and, of course, staff.
My brother-in-law once had a successful franchise in a big shopping centre. It was a good centre, the rents were dear but the franchise was a solid one run by a great franchiser and business grower himself.
Brian always remembers one of his regulars, who never bought a cup of coffee, but always would yell out to him as he walked past: “Staff will bring you down.” The poor guy, clearly, had had a bad brush with business but had still not learnt the lesson — generally, poor leaders bring themselves down. "
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http://www.fmmagazine.com.au/news/poor-project-governance-to-blame-for-most-project-failure/#.UmHj64yQ99A
Poor project governance to blame for project failure
A survey of Australian chief executives and other senior managers lays the blame for failed major projects – such as big-ticket infrastructure items – on poor project governance.
New research by Caravel Group and Melbourne Business School has found major project governance teams are dysfunctional, lack the skills and experience to govern major projects, exhibit poor corporate behaviour, are conflict-ridden and rarely have their performance measured or reviewed.
Project success rates in Australia were found to be on average 40 to 50 percent, and while blame for failure has traditionally been laid at the door of the project management team, it was found that most of the fault actually lies with the project governance team.
Poor project governance to blame for project failure
ReplyDeletecont.......
Project management teams focus on creating the deliverables in accordance with the scope of work. They manage the people, money and resources and all other facets for delivery and report to the project governance team. Aside from monitoring progress and supporting the project management team, the project governance team should focus on the strategic intent of the project and delivery of the value promised in the business case. Project governance, therefore, encompasses authority, accountability, stewardship, leadership, direction and control.
“Too many governance teams are stacked with ‘stakeholders’ to secure buy-in rather than people with proven ability to govern projects,” Graeme Cocks, Melbourne Business School associate professor, states. “These people are often heavily conflicted and have no accountability for their project governance role.”
When measured against nine basic elements for successful project governance the respondents deliver an average score of only 24 percent. “The most glaring omission is lack of an approved governance plan – these were absent 87 percent of the time,” Paul Myers, Caravel Group director and CEO, states.
Teams also performed badly in ensuring zero conflicts of interest, adequate delegated financial authority, and understanding the difference between consultants, solution and project delivery SMEs. “Our findings demonstrate that a major rethink and reform of project governance practices in Australia is required,” Myers concludes.
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BUT here is how management and their various "Chambers" and "Society's" see it :
http://www.afr.com/p/national/productivity_bosses_blame_the_system_a6WRsuvpllPhTZEI7RHelM
Productivity: bosses blame the system
Geoff Winestock
Business has rejected Treasury’s claim that the performance of management is partly to blame for Australia’s poor productivity performance, citing too much regulation, taxes, skills shortages and pro-union industrial relations laws.
“The adversarial workplace culture unleashed by the Fair Work Act in some industries is not conducive to managers taking risks with innovation to lift their productivity,” the president of the Business Council of Australia, Tony Shepherd, said.
“Industrial relations laws are limiting the capacity of companies to lift their productivity at the project and firm level by making it harder for them to allocate their labour in the most productive ways.”
Treasury’s macro-economic forecasting head, David Gruen, said on Tuesday there were several causes of poorer management practices in Australian companies compared with the US and elsewhere, including their size and the education of managers. Some business leaders believe Treasury wants to deflect attention from complaints about the Fair Work Act.
“Management skills and education levels can always be improved but disturbingly there seems to be a view emerging in Treasury that it’s the fault of business that productivity is languishing while it skates over large areas of public policy deficiencies that adversely affect business and need to be addressed,” the Australian Chamber of Commerce and Industry’s director of economics and industry policy, Greg Evans, said.
He said the government should look at its tax and industrial relations policies rather than management.
“What is even worse, policymakers are proposing and implementing policies which are negative for productivity such as the carbon tax and the reduction in flexibility in the workplace relations framework,” Mr Evans said.
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Productivity: bosses blame the system
ReplyDeletecont......
Adam Bisits, the president of the H. R. Nicholls Society, a free-market advocacy group, said Dr Gruen had failed to acknowledge the importance of labour-market flexibility in his speech to the Australian Conference of Economists in Melbourne.
“It would be more helpful if Treasury identified for immediate removal the regulatory constraints faced by managers instead of dodging the increased government intervention issue not only in labour markets but now in energy markets too.”
Dr Gruen told the conference that research of manufacturing firms in 18 countries by the US National Bureau of Economic Research showed that Australian management practice was behind the front rank of the US, Germany, Sweden and Canada in a second echelon with Italy, France and Britain.
He said that lifting management practices in Australian manufacturing firms to the average level in the US would raise the level of productivity in Australian manufacturing by around 8 per cent.
Roy Green, dean of the Business School at UTS, who led the Australian section of that research, said Australian firms scored well in tests of operational management and on performance management such as setting production goals. They scored poorly on people management.
He said Australian managers were very weak in measures of their capacity to identify talent and correct poor performance.
“The failure to instill a ‘talent mind set’ gives a very disturbing outlook on our ability to develop a sustainable economic model after the commodity boom is over,” Dr Green said.
He said the key determinants of good management were firm size.
Larger firms, especially multinationals, had better management and innovation practices. The Australian economy suffered in the ranking because it had a relatively high proportion of small- and medium-sized firms.
Dr Green said firms that handed more autonomy to business units rated higher.
He said the calibre of management was closely linked to education, both specific management education or education in some other discipline. He said Australia’s mediocre management ranking reflected a generally low level of education among managers.
“We are right at the bottom of the table in terms of management education,” Dr Green said.
He said that the report showed little correlation between industrial relations flexibility and good management. Australia was rated as having relatively low levels of “employment rigidity”, behind only the US and Canada, and its management performance was average.
Steve Vamos, a director of Telstra and president of the Society of Knowledge Economics, said that Dr Gruen was right to move the focus of the productivity debate to management quality.
“The debate about management development is by far the most neglected aspect of what drives productivity,” he said.
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WHAT will really happen - the continuing story of "Rhetoric vs Reality"
Red tape ruckus will amount to nothing
Michael Pascoe
Can you remember any wannabe government not promising to cut red tape? Like kissing babies and rorting entitlements, it’s standard parliamentary fare. The next question is whether you can think of any government that left behind less regulation. No, I can’t either.
..............What it overlooks is that the private sector’s red tape burden often is a revenue source for one or more of our three levels of government.
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Revenue Source
ReplyDeleteI'll say that again ...................REVENUE SOURCE
SO let's presume untold billions of red tape is cut - where will the revenue come from for the three tiers of government ?
The answer (despite all the rhetoric to the contrary} IS of course an increase AND broadening of the GST.
Most likely it will include food - whether or not any help will be afforded the poor who are already below the poverty line remains to be seen.
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http://www.rossgittins.com/2013/10/miners-pinch-company-tax-cut-kitty.html
Let me make a fearless prediction: big business will get no cut in the rate of company tax in Tony Abbott's first term, and probably not in a second term, either. What you see before you now is all you're likely to get.
I doubt whether Abbott will break his promise to cut the company tax rate by 1.5 percentage points to 28.5 per cent from July 2015. But, of course, big businesses will get nothing from that. They'll be paying the new 1.5 per cent levy on big company profits to help finance Abbott's more generous paid parental leave scheme.
On Joe Hockey's own figuring, the levy will claw back 90 per cent of the cost of the company tax cut, leaving most listed companies no better off. The losers will be the Australian shareholders of those companies, who'll have 1.5? in the dollar shaved off their dividend franking credits.
The point to take away from these ins and outs is that, though the cut in the company tax rate yields no net benefit to big businesses, it still represents a $4 billion-a-year hit to the budget because Abbott effectively excused big business from bearing any net cost to cover the additional budgetary cost of souping up parental leave.
So Abbott's already done his dash on cutting the company tax rate. He's already made a cut he can't afford and it looks like being a mighty long time before budget finances return to being healthy enough - and the surplus fat enough - for him to afford another rate cut.
This is why more realistic proponents of a lower company rate accept that some explicit source has to be found to cover the cost of the cut. So any rate cut would have to be part of some give-and-take package that left the budget no worse off in net terms.
This, in turn, is why any rate cut would be part of a tax reform package that emerged following yet another major review of the tax system (as if the Henry report became useless on September 7).
But there's no magic in this process. The potential sources of higher taxation to cover the cost of a company rate cut are obvious and limited.
** Many business executives dream of the goods and services tax being increased to cover the cost, but Abbott's repeated election promise that "there will be no change to the GST, full stop, end of story" puts paid to that. In any case, the premiers have a much stronger claim on any increased collections from the GST.**
The other potential source is base-broadening: using the reduction of sectional tax breaks to pay for a cut in the rate of the tax. Julia Gillard attempted to get agreement to such a deal from the business lobbies in 2011, but no industry wanted a rate cut badly enough to be prepared to give up concessions.
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Miners-pinch-company-tax-cut-kitty
ReplyDeletecont......
Only to be expected? Such is the growing rapaciousness of the industry lobbies that you're probably right. But get this: all previous rate cuts (and we've come down from a rate of 49 per cent in the late 1980s) have been funded by government-imposed broadening of the company tax base.
Above all, remember this: Labor did come up with a package that would have financed a 2 percentage-point rate cut, but dopey big business let it slip through their fingers.
What was paying for the rate cut? The original resource super profits tax, of course. But business sat around with its eyes, ears and mouth closed while the largely foreign-owned big mining companies conspired to escape paying any specific tax on their huge resource rents.
Abbott is about to play out the last act in that monumental exercise in legal tax evasion by abolishing the mining tax before the exhaustion of accelerated depreciation allowances turns it into a much better earner.
Equally remarkable was the rest of business' inability to see it was they who were being ripped off by the miners, not some hated Labor government. It never crossed their tiny minds that the budget isn't a bottomless pit or a magic pudding; that if the miners get in first, there's not much left for everyone else. It's called opportunity cost.
It's time business woke up to the crude facts of fiscal life: the two most hugely profitable parts of our corporate sector are banking and mining. The more their economic rents are adequately taxed, the easier it is to afford to cut the company tax rate for everyone.
Abbott's abolition of the mining tax is the last nail in the coffin of the case for a lower company tax rate.
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IT seems the only way for them to go is via the GST.
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MEANWHILE over in Africa where government and management can't blame high wages - as Gina and Twiggy know hence their desire to lift them out of poverty - here is the conversation :
http://allafrica.com/stories/201308260193.html
Nigeria: Bad Leadership Blamed for Mismanagement of Nation's Resources
The president and chairman of council, Nigerian Institute of Management, Chief Dr. Michael Olawale- Cole has stated that government alone cannot be blamed for poor management of the nation's resources.
Dr. Cole, who made the statement during the North Central zone summit of the institute in Abuja, which had the theme, "Strategic Leadership Skills for Managing Institutional Challenges," identified paucity of qualitative leadership as a major challenge to meaningful development.
He said, "Since mediocre performance has been the bane of meaningful growth and development of most organisations and the nation at large, due to paucity of inequality leadership, it is imperative for any organisation that wants to surmount its challenges to put in place a leadership with needed skills."
He, therefore, tasked Nigerians on efficient management of human and material resources.
"For any organisation to stand the test of time, it must have a leader with strategic leadership skills at the helm, firmly in the driving seat. This means efficient management of human and material resources.
"Again, for any organisation or nation, to have a sustained growth and development, the right attitude and management processes must be in place. The collapse of some seemingly strong and well managed organisations in recent times can be traced to poor performance occasioned by having a confused leadership in charge,"he added.
Meanwhile, the keynote speaker and governance adviser, UNDP, Nigeria, Prof. Sam Egwu emphasised the need for Nigeria to have democratic, visionary and transformatory leadership at all levels.
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No easy revenue raisers up the Coalition's sleeve
ReplyDelete................And in a final slap to those who believe that Liberal governments are somehow inherently good at improving the budget bottom line, he referred to the Howard government's reduction of debt by recalling, "the Howard Government reduced debt by $58b between 1997 and 2002, and sold around $40 billion of assets, including TELSTRA, the COMMONWEALTH BANK, and SEVERAL AIRPORTS." Alas, Daley noted, "it is not obvious that the Commonwealth Government has many sellable assets worth this kind of money today."
All of which suggests that if the Abbott government is going to follow through its rhetoric of opposition to "pay back the debt", he and Joe Hockey will need to make tough decisions.
The questions remain whether they will do so, who they will target, and how intense they will be. Margaret Thatcher liked to say of her austerity that the medicine is harsh, but the patient requires it in order to live. We wait and see whether Mr Abbott and Hockey's cure is worse than the disease.
Why cut a nearly undetectable tax?
ReplyDeletePrepare for a price shock. Australia's inflation rate is out on Wednesday and the market is expecting 1.8 per cent. That's an annual rate of 1.8 per cent - a September quarter result so breathtakingly low it's close to the quarterly rate of 1.4 per cent for the previous September quarter.
The September quarters are the big ones. They are when electricity price rises hit the index. That one year on from the carbon tax a September quarter inflation result could be so low throws into an entirely different light Tony Abbott's claim that the price impact of the carbon tax would be ''almost unimaginable''.
''Almost undetectable'' might be a better description. This month energy consultant Hugh Saddler of Pitt & Sherry told Fairfax Media it had been ''almost impossible'' to see the impact of the carbon price when it was introduced, and it would be no easier to see what happened if it was removed.
The Bureau of Statistics agreed.
''The ABS is not able to quantify the impact of the introduction of carbon pricing, compensation or other government incentives and cannot produce estimates of price change exclusive of the carbon price,'' it said in a statement. ''Similarly, the ABS will not be able to quantify the impact of removing the carbon price (if that were to occur).''
The near invisibility of the ''great big new tax on everything'' creates both political and administrative problems for Abbott. And a minefield for businesses.
The political problem is that it's hard to get the public outraged about a tax that is part of the furniture. Sure, there was a bump in energy prices when the tax came in the September quarter 2012, but it's hard to tell how much of that was due to the tax and how much was due to the rapacious behaviour of the utilities we have been enduring for years. And the carbon tax bump is in the past (it won't be part of the annual inflation figure). The ongoing contribution of further adjustments to the carbon price is small by comparison.
The administrative problem is that it's hard to be sure you have removed what you can't see.
Abbott promised last week that if he axes the tax ''Australian households will be better off to the tune of $550 a year''.
The estimate derives from work done by the Treasury but it isn't the Treasury's. The department was asked in 2011 to predict the impact of a $23 a tonne emissions tax. It came up with $9.90 a week a household, around $515 a year. Abbott's team scaled that up for the increase in the carbon price from the middle of this year and the increase scheduled for the middle of next and came up with an impact of $550.
But, as best we can tell, the boost to prices from the carbon tax turned out to be lower than the Treasury forecast. That means any fall in prices resulting from axing the tax would also be lower, if suppliers act on the way down as they did on the way up.
(Environment minister Greg Hunt's claim the saving would be ''$3000 per family over the next six years'' is silly. It's hard enough to know what it would be for a year.)
There's an apparent acknowledgement in Hunt's draft repeal legislation that things aren't as straightforward as they seemed. During the campaign he promised that the Australian Competition and Consumer Commission would establish a unit to monitor and enforce reasonably expected price reductions following the abolition of the carbon tax.
It would ensure that ''businesses pass on the benefits of lower input costs to consumers in the form of lower supermarket prices and lower prices for other goods and services''.
Why cut a nearly undetectable tax?
ReplyDeletecont.....
The draft mentions by name only four types of goods, none of them sold in supermarkets. They are natural gas, electricity, synthetic greenhouse gas and synthetic greenhouse gas equipment. The minister would be able to specify other types of goods later, but the exclusion of supermarket goods - so prominent in the Coalition's advertising - suggests it is coming to the realisation that the tax pushed up their prices by so little that there's little point in making sure they are brought down.
Woolworths reports that its average food and liquor prices were 2.9 per cent lower in the financial year that followed the carbon tax. The Treasury had expected it to nudge up food prices by 80¢ per week.
The minefield for businesses caught up in the law is that if they engage in ''price exploitation'' by not cutting their prices by what the ACCC thinks is enough, they can be fined up to $1.1 million plus damages. Worse still, Abbott says the tax will vanish from July next year even if the legislation axing it isn't passed until later, after the new Senate meets that month. Not knowing what they are liable for and not knowing what they will have to pass on sits uneasily with a clause in the law gagging businesses from making "false or misleading representations about the effect of the carbon tax repeal''.
If political positions weren't so entrenched Abbott and Hunt could just leave the tax in place. It's causing minimal damage, it's kicking goals (per capita household electricity and gas consumption is down 3 per cent) and it's an old tax. Google "old tax" and "good tax" and see what you find.
Twitter: @1petermartin