Coles boss Richard Goyder slams WA trading regime as 'an absolute joke'

This is good from a business executive who should know:

Coles boss Richard Goyder slams WA trading regime as 'an absolute joke'

WESFARMERS boss Richard Goyder has slammed WA's restricted trading hours as "an absolute joke" costing jobs and forcing customers to pay higher prices.

Speaking today at the Chamber of Commerce and Industry WA's ``In Support of Free Enterprise'' breakfast Mr Goyder said Wesfarmer's ownership of Coles and Bunnings introduced him to retail trading hours in WA and allowed him to open all guns on WA's laws which he claimed were ``an absolute joke''.

``The laws reduce employment, demand customers pay higher prices and serves the interests of a few,'' he said.

``Yes, it is competition to Coles but in the spirit of free enterprise, bring on the competition.

``Bunnings has a ridiculous situation of  being able to sell flat-pack kitchens on Sunday which are on display alongside electrical goods for the kitchen such as ovens and rangehoods. But the law says we can't sell you the electrical stuff.

``People can have a meal on Saturday on a sidewalk in Perth but if they have alcohol, they are told to move on.

``And do you know what really gets me - someone is paying people to go around and patrol this type of activity. Give me a break!''

Speaking about Australia's economic future lies in less government intervention and a greater emphasis on free enterprise principles.

He said that without free enterprise, WA citizens would not enjoy their ``marvellous'' lifestyles.

``We have living standards second to none,'' he said.

``We have excellent railways and roads and schools and  hospitals and we have a society that is very innovative - all enabled because we have free enterprise, not barriers.

``I can't think of a better place to live.''

Mr Goyder, who lived in Sydney from 1986 to 2002 before returning to WA, said he revisited NSW recently to see a friend who was in hospital.

``I think NSW is a state in decay,'' he said. ``The hospital in Sydney was like something from the third world.

``We have to be very careful this doesn't happen to WA.

``We need to ensure we have healthy businesses. We as businesses insist on exporting to free enterprise markets because we know that those markets will attract capital.''

  He said he had returned from a recent holiday with his family at Rottnest and said sections of it were ``run down'' and it ``was a good example where free enterprise could do a better job that public ownership''.

``Free enterprise is described as the freedom of private business from state control,'' he said.

``It is often maligned but is the only economic system that has delivered high rates of economic growth, standards of living and life expectancy for its communities.''

Mr Goyder used the example of New Zealand which, in 1950, had the world's third best GDP and had a strong economy.

``In 1980, after 30 years of government control, it was down to the 22nd in the world,'' he said.

``Then, David Lange stepped in as prime minister and restructured the country, deregulated it and now New Zealand is in the world's Top 10 for GDP per capita and in the Top 5 for life expectancy.

``I think that's a really good example.''

The CCI's discussion paper, presented by the chamber's chief executive James Pearson, urged that the Federal and State Governments should not lose sight of the benefits of a free enterprise economy.

``Some politicians are tempted to roll back the economic reforms that in recent decades have helped make this country one of the best places in the world to live and do business,'' Mr Pearson said.

``This must not be allowed to happen.

In the paper, Mr Pearson said: ``There is no role for government in directing economic activity in an effort to increase wealth and living standards.''

``The government itself is not able to generate and increase wealth within an economy - it is merely able to redistribute wealth.''

Mr Pearson said the free enterprise system allowed Australia to ``adapt, respond and innovate'' in response to last year's global financial crisis.

He said our structural reforms had been critical to the Australian economy's ability to respond to changing economic conditions, such as the Asian financial crisis of the late 1990s and the recent GFC.

``To date, the impact of the GFC on the Australian economy has ben less severe than the recession of the early 1990s which saw the economy shrink and unemployment rise in excess of 10 per cent for more than two years,'' he said.

``A free enterprise system provides incentives to those who work hard and take risks.

``If these incentives are removed by introducing greater restrictions, the wealth and job-creating capacity of the economy will be significantly diminished.''

Czech view of market socialism... the main obstacle to progress

On types of economic management:

"The third way is the fastest way to the Third World. We are not interested in the market socialism dreams of the leftist liberal economists on the east coast of the United States. Right now, the main obstacle to our development is ideological infiltration from the West."

- Vaclav Klaus, Finance Minister, Czechoslovakia, 1989

The third way refers to the mix of free market capitalism and socialism. Popularised by Tony Blair in with his famous 'third way' speech references.

Public spending and wealth growth

In researching a paper I'm writing I came across this chart on the impact of public spending on economic growth.

What this says is pretty clear. Excessive government robs the economy (and citizenry) of economic growth. The difference between 6.6% growth (small government) and 2.0% growth (large government) compounded over 20 years is HUGE. For the record Australian GDP is between 35% and 40% (middle size government).

Why is it so? Government spending is inefficient but at the lower levels necessary. Government spending for law and order, defence, justice etc creates the economic and social security an economy needs to prosper. Beyond that level government takes wealth (capital) from private individuals to 'consume' on low-productivity investments. The economy is denied that the economic benefits of the productive investment that would have been made by private profit seeking individuals. The more the government spends, the greater the economy suffers from a growth perspective.

Don't believe? This data is from over 30 countries over a multi decade period. Practically irrefutable. What is the best government? One that simply provides security and gets out of the way.

Poland shows the way...

I never thought a European country would have much to offer Australian politicians, however inquiring minds are reconsidering Poland.

Rejecting the European socialist, US corporatist, and Australian labour models of government; the Polish Civic Platform government (a center-libertarian government) has Poland the best performing European and possibly global economy.

Here's Peter Schiff commenting on how...

Watching the world's leaders stumble their way through the economic crisis, it often feels as if political success and economic understanding are mutually exclusive. Even the Chinese, who over the past generation have engineered a dramatic turnaround from their Maoist economic nightmare, show a remarkable willingness to pursue a monetary policy (a currency peg to the U.S. dollar) that yields no benefit to their citizens. Amid this morass of economic quackery, it is refreshing to see a clear ray of sanity emanating from one country: Poland.

Last summer, I was invited to speak at the Economic Forum in Krynica, a resort town in Southern Poland. I was amazed at the level of economic activity and civic spirit that was on display throughout the country. I also was fairly surprised that my economic views, which are routinely ridiculed at home, have much wider support among the Polish economic officials who presented at the conference.

This common sense understanding was showcased in an opinion piece published this week in the Financial Times by Polish Finance Minister Jacek Rostowski. Contrary to the public flogging of the free market currently underway in Washington, under the auspices of the Financial Crisis Inquiry Commission, Rostowski explains how governments caused the Crash of 2008 by removing the necessary element of fear from the markets. He states that this was symptomatic of the "deep Keynesian project," in which governments over the last half century have looked to smooth the economic cycle through periodic floods of monetary expansion and government spending. I couldn't have said it better myself.

A product of the Solidarity movement that opposed the Polish Communist Party in the 1980's, Mr. Rostowski, like many of his colleagues in the current Polish Administration, is intimately familiar with the hazards of central economic planning. He has seen this movie before, and he knows how it ends.

Instead, Poland has enacted economic policies that are informed by a belief in Austrian School (read: free market) economics. After the downfall of the Communists in 1989, Rostowski was part of a group that called for "shock therapy": the rapid privatization of state-owned enterprises and the dismantling of price and currency controls.

In 2007, the center-libertarian Civic Platform party was put in power, with Rostowski as Finance Minister. Along with Prime Minister Donald Tusk, he has continued the process of transforming Poland into a laissez-faire paradise. Not accidentally, Poland is the only EU member state that showed positive GDP growth in 2009, at 1.9%. Also its public debt, at roughly 55% of GDP, compares favorably with its neighbors - and with the United States.

A top priority of their administration was reduction of the income tax. The previous system, with three-tiers of 19%, 30%, and 40%, has been reduced to two tiers: 18% and 32%. In addition, the system's minimal use of deductions and credits makes it radically simpler than the U.S. income tax.

In the meantime, Civic Platform is continuing its move toward privatization. Recently, Poland held an IPO for its state-owned power utility, Polska Grupa Energetyczna. According to a news report, "The sale brought in $2.1bn, pricing at the top end of the bankers' guidance range, and becoming Europe's largest IPO of the year." The government has used these revenues to fund its budget and keep taxes in check. More importantly, it has returned capital to the marketplace to be used in the most efficient manner.

Civic Platform also understands that regulation hurts small business disproportionately by raising barriers of entry. Fortunately for Poland, a multi-year program of deregulation has been a boon for small businesses, and has given the country the most entrepreneurs of any state in Europe. This may explain the country's resilience in the face of the global economic crisis.

Poland's current growth is also fueled by an influx of foreign investment. To encourage such inflows, Rostowski has laid out a specific plan to adopt the euro as the country's currency by 2015. While I have never been crazy about the euro concept, as opposed to a gold standard, the effort indicates to foreign investors a desire to control inflation. Assuming the block is able to stick together, the European Central Bank is considered a reliable enforcer of strict monetary policy. Poland's zloty rapidly devalued after it was allowed to float, and though the rate of inflation is declining, it remains high. Eurozone membership will impose external discipline on the Polish government, even if Civic Platform loses power.

Anecdotally, I can attest that these people are hungry for free markets. My visit to Krynica was a breath of fresh air, and a startling reminder of how far America has strayed. If the Polish people can hold onto the traumatic lessons of communism, and continue undeterred down their current path, then this battleground of the 20th century may be the paragon of the 21st.