BUCKS: the week in finance

THE merger of the state’s four port corporations into one seemed like such a good idea at the time.
Nanjing Night Net

Back in 2006, when the state government made the move, the theory was putting the Devonport, Burnie, Bell Bay and Hobart ports under one umbrella made sense, not least because it would remove duplication and, presumably, allow efficiencies.

However, what was overlooked, or underplayed, was the competition benefit to shippers and, therefore, consumers, the previous rivalries between the ports provided.

There was nothing the Devonport port hierarchy loved better than getting one over Burnie, which was always keen to gain business from Devonport or elsewhere.

And they both loved having a crack at Bell Bay, in the healthy way competing businesses do.

All this created better deals for customers, so good on the three of them, especially as all three were well run and among the few government owned entities at state or federal level which were actually business minded.

Hobart was a different animal, being more involved in real estate than actual shipping.

That all ended when TasPorts was formed.

Among other things, that created a monopoly, with a monopoly’s ability to avoid worrying about competition at all.

This may be only a minor factor in the current high costs afflicting Tasmanian exporters and importers.

But all the factors in that equation must be dealt with.

ELECTION BOUNCE

There is a widely held theory business confidence picks up after an election is held.

Given the current campaign appears to have been running for about three years (in a practical sense), if the theory is right the effect should be pronounced.

A possible dampener in Tasmania is we will then be into the six-month lead-up to the state election.

POWER PRICES

One very useful boost for Tasmanian business and households will be the expected 5.23 per cent drop in power prices from January 1.

The Liberals are right to point out this follows enormous increases in recent years.

But a drop of more than 5 per cent beats the stuffing out of what we have been getting.

Even more enticing is that, if the state government is right, prices should be flat or even fall further beyond that.

Lower power prices mean more jobs and better lifestyles.

Tasmania, of course, should have the lowest power prices in the nation because of our Hydro system, so this is not the end of the issue.

THE PAY GAP

When one considers the large gap in average wages between men and women, the easiest and quickest assumption is women are discriminated against.

Some are, one expects.

But how much of a factor that is is incredibly hard to measure.

There are some clear factors which would play a role in the $116.80 a week gap between men and women in Tasmania working full-time (ABS figures).

One is that the lowest paid sectors – retail and accommodation and food services -have more female workers than male workers by some margin.

So those two big industries would be dragging down the overall female average pay.

At the other end of the scale, mining is by far the highest paying industry, and mining jobs are absolutely dominated by men.

So mining is pushing up the average male wage by far more than it is the average female wage.

Baby making is another factor.

When children are born to working couples, it is much more likely to be the woman who stays home with the very young child than the man.

Let’s say those two people are young lawyers, working at the same firm, with similar capabilities, experience and income.

After the birth, she stays home for, say, three years, and returns to (quite possibly part-time) work at age 30.

By that stage he is a junior partner, with three years’ more experience and a higher income.

It can happen the other way around if the man stays home to look after the child, but that is less common at this stage.

(The logical thing would be for the person with the lower wages and/or lesser career prospects to stay home with infant, and there are plenty of dads who wish they had been able to do that).

Anyhow, the factors mentioned above are all measurable.

How many women get a lesser deal on pay simply because they are women is much harder to determine.

It may be 1 per cent of them, it may be 71 per cent of them.

BUCKS has no idea and little confidence in seeing reliable estimates on the matter any time soon.

Especially since there wouldn’t be too many firms/bosses who would come out and admit to gender-based discrimination on pay.

NT PLANS A CROC

Interesting to see Rudd Labor adopting as policy an idea from the Coalition the ALP rubbished mercilessly.

Tony Abbott has promised a white paper on developing northern Australia, including creating a low-tax zone.

Labor has now adopted the low-tax zone idea as policy (no rigour, no study, no cost-benefit analysis; think pink batts for crocodiles).

There is no doubt northern Australia has massive economic development potential.

As does Aboriginal Australia.

Both must be pursued.

But setting up low-tax zones is no sort of answer.

Like most forms of positive discrimination and market distortion, it raises many negative prospects and creates at least as many losers as winners.

Most importantly for Tasmanians and most of the rest of Australia, it creates a vastly uneven playing field.

Also – and don’t expect to hear this from Liberals or Labor any time soon – the Northern Territory is already booming and is the only one of the eight states or territories which is.

It doesn’t need a special tax deal, it needs good governance and leadership, as do we all.

This story Administrator ready to work first appeared on Nanjing Night Net.

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