Several things are killing Australian non-resource workers at the moment.
1. Dollar strength : used to be you could make software or movies in Australia at a decent discount to doing it in the US for roughly the same quality. Not any more. This is unikely to change anytime soon.
2. Hostile government : the current rhetoric is about 'tax the rich' and 'pay your fair share'. For now, it's mostly aimed at Mining and Banking companies, but the overall tone is very negative when it comes to creating wealth. Whatever your thoughts about this as a political strategy, it's not exactly conducive to attracting capital either domestically or internationally.
3. Extreme housing + other living costs. Just taking a family out for a modest meal can easily push a C-note when you're all done. Adding movies onto that is going to be a buck fifty. Moving cities for another job is pretty much out of the question unless you get a $100k bonus to do so.
The one good thing Australia has going for it is the health insurance side of things. A startup doesn't have to take out health insurance for it's employees - if it does, it doesn't cost the earth. Whatever risks one might take in signing up with a small company, healthcare isn't one of the issues.
Some US places like the Bay Area or Manhattan might have high rent, but other costs are much, much lower.
But the overriding fact is : you're more likely to meet Australian tech entrepreneurs at a USA conference than somewhere in Australia. Conferences and the like are dominated by enterprise employees and talk of starting new things is relatively rare.
Pay for your fair share isn't about robbing the rich to feed the poor. Higher tax rates for high income earners and boom industries (mining) etc, is all about generating tax revenue to _reinvest_ into the same system that gave you the opportunity to be successful! What are those benefits? Low tax rates for low income earners, family financial assistance, the free primary/secondary education that you received as a child, the heavily discounted tertiary education and free Medicare (at least in Australia). This stuff doesn't pay for itself.
Realise that just because you had some level success, it doesn't mean it was all because of you and that it's not fair to pay your dues - it is fair. Economic and social welfare policies that were enacted more than 20 years gave you the environment to thrive. Now its your time to give back to that system so we can give others in the future their chance too.
It is all nice in theory and sounds good if you are in church but in reality it is bad for economy of any country overall if it is not balanced well. If you are very rich you usually have freedom to move your business to other country with lower taxes. In result your country loses. If you are just somewhat rich that's starts to be funny. E.g. with my salary I'm in top 25% of people and to enter this rich class I need to yearn more than 1000$ per month (before taxes). E.g. this number is smaller than minimal wage in USA (8$*160 hours). Any progressive taxation on rich in my country would make people simply emigrate to other countries with lower taxation (e.g. Ireland) or will cripple any motivation to work more (why should I work extra hours for several dollars per hour? That's what would left for me after taxes if some aggressive progressive taxes were introduced here).
Don't get me wrong. I don't have anything against progressive taxes but usually they are balanced poorly and do more harm than give value.
My point was not whether you agree with the current taxation changes or not.
My point was that the rhetoric surrounding these is very anti-investment. The public attacks of rich people by politicians is extremely dissappointing and concerning.
As for the actual tax changes, taxing miners extra at the upswing of their cycle and handing out the cash as welfare isn't reform, it's naked vote buying and bad for the short, medium and long term.
Australia indeed should be listening to people wanting to invest in this country, and working out ways for them to double or triple the amount they're planning to invest. Not slagging them off and looking for new ways to loot their pockets.
Australia does not need foreign investment. It's a reasonably developed country with a high standard of living and a small population (22 million). If anything they are better of discouraging foreign investment until after this boom as it drives up domestic prices and effectively acts as a loan which is paid back when the foreign investors pull their profit back.
Comments
Was just explaining this to a SV CEO last week.
Several things are killing Australian non-resource workers at the moment.
1. Dollar strength : used to be you could make software or movies in Australia at a decent discount to doing it in the US for roughly the same quality. Not any more. This is unikely to change anytime soon.
2. Hostile government : the current rhetoric is about 'tax the rich' and 'pay your fair share'. For now, it's mostly aimed at Mining and Banking companies, but the overall tone is very negative when it comes to creating wealth. Whatever your thoughts about this as a political strategy, it's not exactly conducive to attracting capital either domestically or internationally.
3. Extreme housing + other living costs. Just taking a family out for a modest meal can easily push a C-note when you're all done. Adding movies onto that is going to be a buck fifty. Moving cities for another job is pretty much out of the question unless you get a $100k bonus to do so.
The one good thing Australia has going for it is the health insurance side of things. A startup doesn't have to take out health insurance for it's employees - if it does, it doesn't cost the earth. Whatever risks one might take in signing up with a small company, healthcare isn't one of the issues.
Some US places like the Bay Area or Manhattan might have high rent, but other costs are much, much lower.
But the overriding fact is : you're more likely to meet Australian tech entrepreneurs at a USA conference than somewhere in Australia. Conferences and the like are dominated by enterprise employees and talk of starting new things is relatively rare.
Pay for your fair share isn't about robbing the rich to feed the poor. Higher tax rates for high income earners and boom industries (mining) etc, is all about generating tax revenue to _reinvest_ into the same system that gave you the opportunity to be successful! What are those benefits? Low tax rates for low income earners, family financial assistance, the free primary/secondary education that you received as a child, the heavily discounted tertiary education and free Medicare (at least in Australia). This stuff doesn't pay for itself.
Realise that just because you had some level success, it doesn't mean it was all because of you and that it's not fair to pay your dues - it is fair. Economic and social welfare policies that were enacted more than 20 years gave you the environment to thrive. Now its your time to give back to that system so we can give others in the future their chance too.
It is all nice in theory and sounds good if you are in church but in reality it is bad for economy of any country overall if it is not balanced well. If you are very rich you usually have freedom to move your business to other country with lower taxes. In result your country loses. If you are just somewhat rich that's starts to be funny. E.g. with my salary I'm in top 25% of people and to enter this rich class I need to yearn more than 1000$ per month (before taxes). E.g. this number is smaller than minimal wage in USA (8$*160 hours). Any progressive taxation on rich in my country would make people simply emigrate to other countries with lower taxation (e.g. Ireland) or will cripple any motivation to work more (why should I work extra hours for several dollars per hour? That's what would left for me after taxes if some aggressive progressive taxes were introduced here).
Don't get me wrong. I don't have anything against progressive taxes but usually they are balanced poorly and do more harm than give value.
The problems are:
1. Recurrent expenditure has risen faster than investment expenditure, which rather weakens the "reinvestment" argument,
2. The way the taxes were introduced have created a permanent sovereign risk drag on investment in Australia, and
3. The rhetoric is what makes it to overseas ears.
Australia needs foreign investment. We are a teeny tiny country in economic terms. And funnily enough, foreign investors want to make a profit.
Thank you for getting my point.
My point was not whether you agree with the current taxation changes or not.
My point was that the rhetoric surrounding these is very anti-investment. The public attacks of rich people by politicians is extremely dissappointing and concerning.
As for the actual tax changes, taxing miners extra at the upswing of their cycle and handing out the cash as welfare isn't reform, it's naked vote buying and bad for the short, medium and long term.
Australia indeed should be listening to people wanting to invest in this country, and working out ways for them to double or triple the amount they're planning to invest. Not slagging them off and looking for new ways to loot their pockets.
Australia does not need foreign investment. It's a reasonably developed country with a high standard of living and a small population (22 million). If anything they are better of discouraging foreign investment until after this boom as it drives up domestic prices and effectively acts as a loan which is paid back when the foreign investors pull their profit back.
Australia simply does not have the pool of ready capital required to invest in everything worth investing in.
Foreigners do.
When they invest, foreigners profit -- but so do we.
That's the bottom line.