FlySurfer said...

Paradox said...
The reality we face is that right now Australian Labour costs about 30% or more than an equivilent US worker - across the board. Thats the US, not China....we are uncompetative. Hopefully that will ease over time with the FX rate as the global economy improves.

So who sets the value of the A$?

We (the world) do.

Why has the US$ lost so much against other currencies?

Because the U.S. economy isn't going very well.

What if Yuan appreciated 100%?
Why isn't the Yuan or Renminbi higher?

The Yuan is set by the Chinese Government, which is why it doesn't and won't appreciate..

If our $ was 30% lower against the US$ and the Yuan 100% higher, would we be able to make a BBQ cheaper than somebody in Guangdong?

No. We couldn't make one cheaper for either price or quality

Little Jon said...

China's fixed dollar is their form of protectionism. What's ours?

Iron ore, gas, coal, bit of gold and copper and soon uranium.....

evlPanda said...

FlySurfer said...
Why has the US$ lost so much against other currencies?

Because the U.S. economy isn't going very well.

What if Yuan appreciated 100%?
Why isn't the Yuan or Renminbi higher?

The Yuan is set by the Chinese Government, which is why it doesn't and won't appreciate..


No. We couldn't make one cheaper for either price or quality

They were rhetorical questions.

So isn't the US doing well? Could it be they sent all their manufacturing to China? Then let a private bank (Federal Reserve) print their money in to oblivion? And China wants to maintain its manufacturing base so it pegs the ¥ to the $ causing massive inflation.

I reckon we could make a better BBQ... mine is a Webber made in the USA. Wouldn't buy a Chinese gas one, cos I'd scared it would blow up.

CMC said...

I'm no economist but when I watch the finance news and they report that the US sharemarket and $ Value has gone down again based upon employment figures and business growth it makes sense doesn't it?

They're ahead of us on the outsourcing thing and don't seem to have the resources to sell. Perhaps if they didnt send all of their jobs overseas they'd have greater employment, tax revenue and consumer spending to keep their economy moving.

Is this just too simplistic? Is it a look into a crystal ball at our own future?

The US economy and industry overall is a very good one and will eventually recover very strongly. They have great industry and thier productivity is a world benchmark. They just overshot thier standard of living and are going through an adjustment phase. Low interest rates and continual printing of money is stimulating their economy and also lowering their dollar. There is also a process underway to shed the $US as the worlds base currency. This is a good thing. They might actually return to being a major world exporter down the track, especially when the Chinese eventually bow to pressure and float thier currency.

Interestingly this strength of the US is founded on industrial relations laws that have very low minimum wages, allow employers to sack (and hire) staff as they feel fit with little ramifications and overall take the view that strong companies with minimal restraints provide better overall employment conditions than a heavily regulated one. A true market economy.

Ummm....and I note your graph projects growth of Citations in International Literature....???

Could be related to economy, but perhaps not a commonly used indicator?

FlySurfer said...

China may overtake the US in 2013 but it will take a further 10 years for the Chinese to get the instruction manuals readable.

Alan Joyce is a deluded fool to think he will be able to either establish
or profit from a Qantas offshoot in Asia.No country will allow it, any more
than Australia would allow a foreign airline to set up here.
At best Qantas will get a minority stake with foreign investors.
This in an already saturated market. Jetstar Asia is surviving by
cross subsidising from the mainline Qantas and a little from slave labour asian wages.
Its a dream of all management to pay rock bottom wages.
When all the jobs are offshored we can all go on the dole.
Ultimately,any companies that survive will pay 100% tax to feed us.

Everybody seems to be siding with either the Unions or Qantas.

I reckon it is a pretty sad state of affairs when all flights of the national airline can be shut down immediately via industrial relations issues. Weather conditions, acts of God, war, may all be more excusable but either employers or employees have a dummy spit is ridiculous.

What next ?

Telstra turning off the phone network ?
Cleaners closing the houses of parliment ?
The police all shut out of their vehicles becuase somebody doesn't want to change an indicator bulb ?

Surely when it got to the postiion of all planes being grounded then the government is the one that failed, failed to foster an industrial relations culture where items of such importance can't be taken so trivially.

Whatever your political persuasions or industrial relations stance, surely the Government has to act to stop it, or anything like it, happening again. Surely Fair Work Australia could have made the ruling of no action for 21 days then an arbitrated outcome, without all the planes having to be grounded first ?

But - I heard Antony Albanese in Question Time saying 'nobody asked us to intervene so we didn't - and it is all Joe Hockey's fault because he told a senate inquiry that he had heard on the radio Qantas was going to close down and didn't do anything about it, and I knew nothing, so there, thats it, no more to say'.

Paradox said...
This is the problem many are not seeing. Qantas has to compete with international airlines. It cannot do so and survive without approaching thier business the same way.

Qantas is already doing this. It's called Jetstar and I gather their overseas operations aren't doing too well either which kinda negates the whole "we need to be more efficient" argument.

Qantas are getting pretty desperate for crews

mineral1 said...

Hay toc the head of Qantas was asked a number of times to go with "fair work Australia" he refused each time, well before he took the drastic action to shut down the airline. This guy and his cronies are as bent a safety pins. I take great exceptions to morons like him jeopardizing "my super funds" with political grandstanding like he did. Should be thrown in jail the lot of them, Qantas board and Union leaders alike. Along with a few treasonable parliamentarians

Interesting point, and not actually true.

Were you aware that under Fair Work Australia Qantas could not get action by the FWA tribunal on the Unions protected industrial action that had been rolling on for months? Those who don't travel often may have forgotten that there has been stoppages and disruption for months. Death by a thousand cuts so to speak and Qantas were helpless to do anything except to give in to all the demands of the unions.

The ongoing rolling industrial action by the unions had been specifically designed to cause maximum harm to Qantas and minimum loss to the striking workers. It was also deliberately kept under the threshold that would trigger an intervention by FWA.

The only way Qantas could get the issue to FWA was to do exactly what they did and trigger a significant economic harm clause in FWA.

This whole issue could not have happened under the previous industrial relations laws.

A certain % of shares of any company should be held by the employee's, this way they are working for themselves and thinking for themselves.

mineral1 said...
...

Hay toc the head of Qantas was asked a number of times to go with "fair work Australia" he refused each time, well before he took the drastic action to shut down the airline....

This is my point. If the situation can only be resolved after the grounding of the entire company then surely something is wrong with the state of the IR system.

If what you say is true then surely he should be forced to either go to arbitration, or continue negotiating. Neither side should unilaterally be able to stop the nations national airline.

I am not pro or anti either Qantas or the unions, I just reckon the state of IR culture is wrong if this can happen to Qantas. What happened shouldn't have happened and the government should have stepped in to prevent it.

I would see no problem if it happened to companies that don't have state sponsored monopolies or can singularly affect the entire nation.

What if NAB or Commonwelath Bank put a freeze on all accounts pending IR outcome with their software engineers ?

It shouldn't be allowed to happen, and the Government should stand up and stop it happening.

SomeOtherGuy said...

Carantoc said...
This is an interesting point. I hear in the senate commitee and elsewhere people saying the Government shouldn't have enacted section (whatever it is) of the Fair Work Act to prevent the grounding as it has never been done before and may have resulted in legal action.

Correct. If the government had stepped in and forced the issue then that's a section of the act that's untested in a court. So Qantas or the unions could (and probably would) have appealed. The matter would drag on and on and meanwhile the Qantas dispute would be unresolved. Bad Thing.

It's clear the government will have to test that section of the act but I'd bet they'd want to choose a case that's a got a whole lot less hinging on it.

Read this - it's a pretty good summary of the difference between old SerfChoices act compared to the current one.

(Executive Summary: Not a lot)

www.abc.net.au/news/2011-11-01/janda-qantas-dispute-no-reason-for-rushed-ir-reform/3613164

Good article, thanks SOG. An informed opinon and some things that I was not aware of. I would agree with the comments on the motivation behind all this. ie both parties want a public brawl to bring the issue to a head, so both probably avoided quieter paths.