A Boss Who Tells It like It IsDate: 14 February 2009To All My...

A Boss Who Tells It like It Is

Date: 14 February 2009


To All My Valued Employees,


There have been some rumblings around the office about the future of this company, and more specifically, your jobs. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country.

However, let me tell you some little titbits of fact which might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Subaru Outback outside. You've seen my big home at last year's Christmas party. I'm sure all these flashy icons of luxury conjure up some idealised thoughts about my life.

However, what you don't see is the history of this company

I started this company 28 years ago. At that time, I lived in a 2 bedroom flat for 3 years. My entire living area was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you

My diet consisted of baked beans, stew and soup because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a wonky transmission. I didn't have time to go out on dates. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50,000 a year and spent every cent they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the David Jones for the latest hot fashion item, I was trolling through the discount store extracting any clothing item that didn't look like it was birthed in the 70's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.

So, while you ' physically ' arrive at the office at 9am,' mentally ' check in at about noon, and then leave at 5pm, I don't.. There is no "off" button for me.

When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Subaru, the vacations... You never realise the back story and the sacrifices I've made.

Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail-out all the people who didn't. The people that overspent their pay suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.

Yes, business ownership has its benefits but the price I've paid is steep and not without wounds.

Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes, Property taxes, Sales and use taxes, Payroll taxes, Workers compensation, Unemployment taxes, Taxes on taxes. I have to hire an accountant to manage all these taxes and then guess what? I have to pay taxes for employing him.. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct
15th, I wrote a cheque to the Australian tax Office for $288,000 for quarterly taxes. You know what my "stimulus" cheque was? Zero, Zip, Zilch.

What is Kevin 07 Rudd doing with all my taxes? He's giving them away to people who don't work as hard as me, to people who have never worked and have no intention to, deliberately single mums breeding more drones, recent migrants legal & otherwise plus their huge extended families. They are told to spend, spend, spend - the very thing that got us into trouble in the first place!. Go out and buy that you-beaut widescreen TV for say $2000 of
which $1,750 goes to China , Taiwan , South Korea , Singapore & Malaysia where all the bits are made or assembled, the remaining $250 keeps the salesperson & delivery guy in a job for another day & pays a franchise fee to Harvey Norman.. As we hardly manufacture anything in Australia any more virtually all the money spent on manufactured goods keeps overseas workers in jobs much longer than any locals.

Now, to cap off mere financial incompetence, Rudd has risen to mind boggling levels of truly monumental stupidity by borrowing about 40 billion dollars every year from foreigners, we don't have the savings here!....... to GIVE AWAY!!!!. The State Labor government s have all been grossly mismanaged, even QLD & WA are in trouble despite the good mining boom years, NSW is effectively bankrupt & VIC is not far behind, SA & TAS are reverting to basket case status. The infrastructure funds are a thinly disguised bailout to incompetent Labor mates in the States but at least that will employ Australians, however , inefficiently.

Rudd has blown what we thought of a huge multi-billion dollar surplus in one hit, in just one year!. But borrowing to give people $950 to spend on goods that will employ Asians mostly?, that will make our current account deficit worse and create a HUGE DEBT that will have to be repaid by us, our kids and our grandkids. Taxes will have to go up drastically for decades to pay for all this - there is no other way. Rudd's cure is going to be vastly more painful than the illness, unemployment is still expected to increase by 500,000 by the end of the march quarter 2010. Bringing forward the next tax cuts would reduce that to 350,000 and if we were to spend stimulus money productively on pipelines, bridges, hospitals, rail systems etcetera instead of wasting it on $950 gifts we'd have to better off and have more people in jobs.

Rudd wants to emulate Obama's huge spending spree without realising that we simply can't do that. The US dollar is the world's reserve currency, they can print money and it will still be worth a dollar, but if we print 30% more money, which is effectively what borrowing does, our $A will be worth 30% less which makes everything we import be it petrol or TV's 30% dearer and so. Rudd plans to do this for four years to the tune of $200 billion! .....
Despite Rudd often referring to Turnbull as the (wealthy) Merchant Banker, Rudd, or at least his wife, has many more millions than Turnbull and his family, most of it from Liberal Government training programs ironically. We'd be better off if Ms Rein was running the country, her husband's ego is such that he'd never listen to her ,unfortunately, at least they will still be sitting pretty when it all goes pear shaped.

Turnbull is right about Tax Cuts, it has been proven over & over again in all Western democracies that for all tax brackets, for every $1 of tax cut the multiplier effect is $3 - now that's a stimulus!. That stimulus happens each year, every year because it's a gift that keeps on giving as the saying goes. Give away $1 and that's it - spent $1 no multiplier effect, this or any other year.
Once Rudd borrows & gives it away forget about tax cuts for a decade - think higher taxes, higher GST until we repay the huge debt burden he's creating. This is not rocket science! it's real, as opposed to Rudd's fairy's at the bottom of the garden approach to ruining the economy.

Rudd's hero is Gough Whitlam, for those who are old enough to remember, Whitlam came within a whisker of sending Australia bankrupt and the country was saved from financial disaster by the Governor General, Sir John Kerr dismissing his government . The Greens & Independents, being the populists that they are, will pass Rudd's so called stimulus with minimal changes. We are going to be lumbered with this very bad mistake. Let's hope that Ms Quentin Bryce will likewise act with courage and conviction before Rudd looks like losing the plot completely and takes us down with him.

The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business?, or the single mother sitting at home pregnant with her fourth child by the latest unemployed layabout who won't pay child support, waiting for her next welfare cheque? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (Read: Stole) 50% of your pay you'd quit and you wouldn't work here.. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.

Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had the government suddenly mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Canberra black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart?
Business is at the heart of Australia and always has been. To restart it, you must stimulate it, not kill it. But the power brokers in Canberra believe the poor of Australia are the essential
drivers of the Australian economic engine. Nothing could be further from the truth and this is the type of change you can keep.

So where am I going with all this?

It's quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your 4WD and your child's future. Frankly, it isn't my problem anymore.

Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalises the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship. There will be many, many more small & medium sized businesses that do the same and between us we employ 60% of all Australians in work and produce 68% of GDP (more when China is not paying top dollar for everything we mine). Fewer people paying taxes mean higher taxes. Much higher taxes for the remaining taxpayers who have no choice but to work. Countries like China are thrifty, have all the money, and will own all the mines and a lot more because we will have no choice but to sell them the ' family farm ' to pay our debt. That's business - whether it's mine or the Country's.

So, if you lose your job, it won't be at the hands of the economy; it will be at the hands of a politician that swept through this country, changed its financial landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about....

Signed,

Your boss