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Calling Canberra: leadership needed

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With such market volatility this week, it puts the wisdom of the Reserve Bank board’s decision to leave interest rates on hold for August into a positive perspective. They could only have nailed it and shown their brilliance if they had actually cut rates.

Now all we need is to get our politicians to see the economic and financial world as it is, rather than how it might be, and we might see them come out and change their thinking, as well as their rhetoric.

If this could happen in concert with lower interest rates, then Australia — one of the best economies in the world, with relatively low debt and positioned in the best part of the economic world — could actually get through this tough time with both business and consumer confidence on the rise.

What I am seeing now and what I am asking politicians, Reserve Bank officials, as well as board members and the influential economists in this country, is to consider John Maynard Keynes’ reply to criticism he received for changing his mind.

This is what he said: “When the facts change, I change my mind. What do you do, sir?”

That was one of the great intellectual putdowns of recorded history and this is what I put to our political pygmies in Canberra — the economic facts have been changing but you are not changing your mind.

If the European debt disaster gets worse and the US heads into a double dip recession as a consequence, the Reserve Bank will change its mind.

But what will the Federal Government do?

Delay the carbon tax? Shelve the mining tax? Call a national summit not on how they can tax the butt out of Australia but maybe on how they can devise policies to encourage entrepreneurs to grow the economic cake, which will pump up the tax returns organically and less painfully.

It’s time for positive political leadership and it’s time for the Prime Minister to look at what is making both consumers and business so negative. Then it would be a good idea to act upon it.

Treasurer Wayne Swan came out last Friday and told us that we were not immune from what was going on in Europe and the US with their debts but our debts were low, and he is right. But then he said we have a “business investment in the pipeline.”

People with no business experience keep saying this and they ignore the fact that if markets go south big time, the pipeline will be stretched out and even blocked for a time.

Politicians and others who don’t believe me should be made to borrow a million dollars, be given 20 employees, take out a three-year lease of a $100k a year. They should be visited by the tax office, the occupational health and safety mob and then try to apply for a business credit card as well as a merchandise facility.

Next they should be faced with a pay rise for their staff, an interest rate rise and a threat of three more. Oh yes, then let each staff member take carer’s leave for 10 days in a row and when one comes back let another one do their 10 days.

And let’s throw in a bullying case by a staff member as well.

Then they might understand why business confidence is low and why many Aussies are dying to see supportive, positive leadership.

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Friday, August 12, 2011

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