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A Few Political Bits and Pieces

Some of you have remarked to me how difficult it must be to define a topic each week, research it and then write an essay to post for you. In reality it is not usually hard because I write about things that have interest to me and that have often come up in discussion with clients and friends.

This week, however I must confess, is a little different. My last two blogs, on Militant Islam and Indigenous disadvantage, have resulted in considerable positive feedback for which I thank my readers. They are both, big, emotionally charged issues. It is difficult to follow them up with anything as significant and consequently I am left feeling a little flat and devoid of inspiration this week.

As a result, I am just going to comment on a few political developments that have recently sparked my interest.

To begin with let us have a look at the misdemeanours of the Honourable Stuart Robert who has just resigned his cabinet commission as Minister for Human Services and other sundry things.

Robert was educated at Rockhampton Grammar School where, at the age of 17, he secured a scholarship to the Australian Defence  Force Academy as an Army Officer Cadet. Following the Academy, Robert attended the Royal Military College Duntroon.

He completed a Masters in Business Administration at Central Queensland University, a Masters in Information Technology at the Queensland University of Technology and graduated from the University of New South Wales with a Bachelor of Arts with Honours.

Robert had a military career where he specialised in intelligence and rose to the rank of captain.

After leaving the military Robert established an IT business whose success was lauded by the Business Review Weekly.

In the past I have criticised political parties for promoting candidates with no real life experience and no understanding of business. Too often we see people elected to parliament with no life experience outside politics and who and aspire to represent us not to improve our welfare but to further their political ambitions. Well Robert had it all: obviously intelligent (see his academic credentials) and two successful careers, one in the services and one in business – I thought to myself it would be great to have more politicians like that!

But then he goes and betrays us by contriving to have the taxpayer pay for travel and accommodation that was more related to his personal affairs than to his ministerial responsibilities.

I don’t particularly want to single Stuart Robert out for his misdemeanours. In recent decades there have been many politicians from both sides caught out misusing the privileges of their office for personal benefit. They seem to have a great propensity to ensure there is political work to be done close by whenever there is a wedding to attend to or an attractive sporting event they wish to view.

All of this of course leads to the sceptical opinions ordinary citizens have about politicians.

Whilst this is often unfair, and I know that there are many politicians who are well-intentioned and work very hard, the public will always be sceptical of them whilst such travesties continue to be perpetrated. And I suppose another factor that increases the ire of the electorate is the fact that many of those attempting to game the system are reasonably well-off!

Let’s move on to my second observation.

In the recent cabinet reshuffle, following the resignation of Warren Truss, Fiona Nash has emerged as the Deputy Leader of the National Party.

On acceding to the Deputy Leadership, Nash was asked, “How will this be a different leadership.”

Her reply, given in good humour was, “Probably one of the most obvious differences – I’m a girl.”

Despite the fact that Nash is the first female ever to hold such a leadership position in the National Party she has been denigrated by feminists. It seems that her unaffected description of herself is seen to be demeaning. To have someone describe herself as a “girl” apparently does not express the gravitas required of someone in such a senior role. One commented that describing herself as a “girl” meant that she couldn’t be taken seriously. Where is the logic behind that?

No doubt it is my male chauvinism but I applaud her for her remark. It seemed to me to reflect youthful enthusiasm and joy at her elevation even if she is over fifty. Mind you at my age any woman under sixty five might legitimately describe herself as a girl and I would not demur.

But what silly semantics these people engage in. Nash’s elevation to such a leadership role is surely an indication of further progress for women. Nash will make a far more substantial contribution to the progress of women than the complaining feminists will ever do. Perhaps they need to go and learn the song from the Rogers and Hammerstein musical The Flower Drum Song that was titled I Enjoy Being a Girl? Fiona Nash and a multitude of other Australian females certainly seem to!

My final point is a little more philosophical. As my long-suffering readers would have noticed the continuing burgeoning of Government expenditure has been a great concern for me. I read an article recently, authored by Liberal Democrat Senator, David Leyonhelm, where it was claimed that our debt servicing now cost about $1 billion per month which it was asserted was “more than what we spend on unemployment benefits, foreign aid and the ABC combined.”

Joe Hockey and Tony Abbott had a crack at reducing spending and because they hadn’t primed the electorate well or articulated the case for reducing spending, the majority of their cost reduction interventions were stymied in the Senate.

Malcolm Turnbull and Scott Morrison seemed to have shied away from mounting any major efforts to reduce expenditure and have spent the last few months sounding out taxation measures to increase revenue instead. Finally they have concluded that the most promising measure for increasing revenue, increasing GST, is politically too difficult. Increasing taxation and increasing the size of government should never have been on the table for a conservative government. Australia already has a bloated public sector which needs to be reduced if we are to regain control of our fiscal destiny. Increasing the public sector doesn’t increase our wealth. It just makes it more difficult for the private sector, which does create wealth, in competing for resources.

Having led many cost-cutting exercises as an executive, here a few things I have learned.

Firstly don’t reward inappropriate behaviour. Many executive remuneration schemes actually reward executives for the size of their budgets and the number of people they manage. Whereas, in fact, our most valuable leaders are those that can manage with less, whether it be financial or human resources.

Most managers don’t know enough about the work done in the workplace to make good judgments about the resources required. As a result it is useful to benchmark against organisations doing similar work.

A second strategy is that if an error is not going to result in the end of the world, resist demands for more staff and more expenditure and see what happens. Often a leader can facilitate productivity improvements by sharing staff across divisions and by encouraging divisional leaders to learn from each other. The easy way out is to accede to the plea for increased numbers of employees. Don’t give them the easy way out!

As an aside many will complain that it is a dreadful thing to overwork people, and no doubt that is true. But the most soul-destroying workplaces I have encountered are those where people don’t have enough to do largely because of restrictive industrial arrangements and lazy, compliant managers.

Adding additional employees in an unhelpful industrial environment often does nothing for productivity. One such enterprise I managed found that after losing almost fifty percent of its employees there was little change in workplace outcomes!

Thirdly, it is essential not to be driven by unions’ agendas. The Public Service is far more highly unionised than the private sector. In such an environment, often cosy relationships evolve between managers and unions which stifle productivity. Both often have incentives, as I have shown above, to maximise employment.

Now you might think that I am somehow prejudiced against employing people. Well that is far from the case. I want people to have jobs. But I want people to have real jobs that enable them to contribute to the purpose of the enterprise that employs them. Such jobs are essential jobs that can’t be removed because they fulfil essential functions required by the organisation. They are not just jobs designed to increase union membership numbers or inflate the salary of a manager.

Running a lean organisation requires discipline and a culture that values employees but has high expectations of them, treating them as intelligent adults.

One of the best managers I had, used to say that he acted as though he owned the business. And, of course, such an attitude is bound to ensure less wastage and more productivity.

Now if our only passage to a balanced budget is long-term cost-cutting by Government, I doubt they have the skills, or in many cases, the desire to implement a regime such as I have described above.

The two contributing components of government, the politicians and the public service, will both be threatened by such an approach. The politicians want to distribute largesse to win over voters. The public service has been conditioned to seek as the solution to any problem increased funding. This solution also appeases unions because increased funding usually results in more public sector employment.

I am reminded of an incident in my own career as an executive. I was pursuing renewable energy projects and the government had just created a fund to support new renewable energy projects. Excited by the prospect of being able to progress a few projects with such support I approached a senior bureaucrat with whom I had a good relationship and asked when we might be able to access such funds. He told me it would take at least six months. I was dismayed by his response and asked why it would take so long since the money was immediately available. “Well, yes,” he replied, “but we need to recruit about a hundred people to administer this fund and no monies will be available until that recruitment is complete.”

 

So my concern is that if we are going to have to rely on an ongoing cost reduction exercise by the government to restore our budget then as I said earlier we are going to be disappointed because they don’t have the will nor the skills. The desire of the politicians to spend their way to popularity and the inability of the bureaucracy to act “as if they owned the business” will doom us to failure.

I can only hope that the New Zealand Prime Minister’s sleepover at Malcolm Turnbull’s house might have inspired the Australian Prime Minister to have the courage to emulate his New Zealand counterpart!

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  1. 5 Comment(s)

  2.   By Roslyn Ross on Feb 20, 2016 | Reply

    In terms of Fiona Nash referring to herself as a ‘girl’ I can see both sides. I am sure it was a throw-away reference with ‘girl’ used to mean female, but I can also appreciate the view that it is a term with connotations which ‘woman’ would not have.

    At the end of the day however, a bit of a fuss about nothing.

  3.   By Brad Carter on Feb 21, 2016 | Reply

    Hi Ted
    Looking back with hindsight, I find that my experience as a senior bureaucrat involved with government financial programs aimed at improving the viability of the private sector to have generally been fruitless exercises involving an enormous cost to maintain accountability. New incentive programs announced by politicians of both persuasions start with the usual noise and accolades that they will stimulate our economy. Invariably, what happens is that the bureaucracy usually takes time to catch up (as you correctly identified with 100s of employees and six months to access funds etc). The bureaucracy then sets itself up as judge and jury to ensure that the funds are spent wisely neither going to government supporters or opponents for fear of criticism in the media. Then there is the establishment of an approval system with layers of recommendations and a committee to make the final determination to ensure that accountability prevails. The funds usually trickle out with all sorts of conditions attached which limit the ability of the recipient enterprise being able to effectively utilize these funds and the funds probably then end up covering existing expenditure of the enterprise which can be accounted for to keep auditors happy.

    However, to summarize my experience, most of the costs of the program were spent on staff and accountability costs which were usually at least 3 times greater than the funds being distributed as part of the new program initiative. There were many bureaucrats that were very good at setting up new structures to manage these new programs with no real experience in the wider world of achieving real outcomes. These same bureaucrats are still there today, but probably in higher positions and nothing has changed, but the accountability mechanisms and the protect the government systems are well entrenched and are almost impossible to dismantle. You need to have an elected government who is committed and serious about effective change management and transformation to get our economy stimulated at both national and state levels.

  4.   By tedscott on Feb 21, 2016 | Reply

    Thank you Brad for your frank response. It certainly reinforces my own experience which leads me to believe that many government programs provide such poor returns on investment and that our overall welfare would be improved by downsizing the government sector. It is just with so many vested interests involved it has become an almost impossible task.

  5.   By Greg Brown on Feb 21, 2016 | Reply

    Ted you talked about one of the best managers you knew commenting that he managed as if he owned the business. I fully agree with this attitude and have always worked with the same mind set. I have discovered though that this does not mean good management decisions will be made. I have over the years seen many poor decisions being made by people who were genuinely aligned with the business’s success. Then I realised that most people can not manager their personal lives (finances) efficiently and really not surprisingly most people do not make good managers regardless of how much they feel that the business is their business. Not sure you can put it on a job description or selection criteria but I think that successful personal management is a very strong indicator for professional management. If you can pay off your house well under the loan term or have no or very little credit card interest or have the will power to invest rather than spend then I think you probably have good management potential. Perhaps even leadership potential but that is of course quite a different beast.

  6.   By tedscott on Feb 22, 2016 | Reply

    Good point Greg. I suppose using mathematical terminology acting as if you own the business is a necessary but not sufficient condition to ensure financial performance! As you rightly point out other attributes are also desirable.

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