An unseemly rush to the trough.

Irrespective of your views on climate change, the carbon tax, global warming, and the need for change, the sight of all the spivs and carpetbaggers mixed amongst the crowd setting out to get their noses into the new troughs created by the Federal Governments clean energy funding initiatives should  make the blood of taxpayers run cold.

The Clean Energy Finance Corporation (CEFC)has been quick off the mark with the press releases, but short on all but the vital detail, $10 billion to be given away, kicking in 2015-16 fiscal, so plenty of time to plan, or if you happen to be a real company, struggle for finance to see you through. The really lovely part of this is that it will be run by those paragons of free enterprise and productivity, The Greens.

The Australian Renewable Energy Agency (AREA) has been set up to take the place of a mash-up of existing programs, guided by an “Independent board”, and will allocate and administer $3.2 billion, including the 1.7 billion unallocated under the current programs.

This is a monster party at which bureaucrats will again pick winners, a task at which they have demonstrated a remarkable  lack of skill in the past, but if you practice enough with taxpayers money, it will be right on the night, trust me, I’m a politician!

One tiny word to alter the carbon debate.

It seems to me that the carbon “debate” currently taking place fails on the most basic level of dealing with any of the facts. It is simply a political poop throwing contest, where the only success factor in either of the protagonists minds is the level of noise they can generate.

The science appears pretty clear, human activity is contributing substantially to climate change, carbon being the primary villain, but nevertheless just one of many, and whilst it is long term in the context of any individual life, it is reasonably clear that we are on borrowed time.

This is not to support either political position, nor to accept or deny the value of a Tax Vs an ETS Vs “Direct Action” but simply to acknowledge the need to take out some insurance, with a very long time frame, so perhaps out great great grand-children will thank us, or perhaps cash in the policy. Either way, they will be better off.

The question currently being asked is “how can we?” and there are many answers, none really addressing the range of challenges in the implementation. Perhaps a better question to start should add one tiny word: “how can we not…..”?

 

Politicians God Complex and the carbon tax.

We all understand the “God Complex” the situation where someone proclaims their universal truth about a complex problem. My solution is the right one, no argument!.

Problem is that complex problems are really, well,  complex, hard to understand, and there is rarely a single right answer, and even rarer that an individual stumbles across the solution first time, without trying many potential solutions and partial solutions, revising the bits that worked, dismissing those bits that proved to be useless. Sound familiar, its trial and error, continuous improvement, or to the Lean adherents amongst us, PDCA, or the scientific method, perhaps AAR, all variations to a theme about which I have written a bit.

In the case of the carbon tax in Australia, it may be a contributor to a solution to global warming, it may make enough difference to worth the pain, it may not, problem is we will not know until after the data is in, but by then the dice will be rolled, and we cannot unroll it.

Currently we have two political leaders proclaiming the rightness of their solution to a hugely complex problem. Neither knows the answer, that will be the outcome of a hugely complex set of assumptions and outcomes containing multiples of permutations of what may happen depending on decisions and actions over which neither pollie has any control at all.

Wouldn’t it be nice to have both of these silly wallies admit they do not know the right answer, that there certainly is not one “right” answer, but agree that the problem is real, as they have done in a tacit way by each “committing” to the 5% reduction. In a bi partisan manner, map out a program of experimental measures across a range of activities, with a view to refining over time the range of measures to be put in place to reduce our emissions, and encourage the “clean” economy through technology and changed practices. This stuff is important enough to our collective future that it requires genuine wide ranging collaboration to come up with an evolutionary and decade straddling program for there to be any hope of success.  

Somebody, please tell me I’m dreamin’.

 

Explicit and tacit knowledge in the national accounts

I was struck last month by the blizzard of numbers and alternative views presented as a part of the release of the national accounts.

The economy was down, but the floods in QLD and Vic had largely caused the problem and was it short term only, consumer spending was up, but we are saving more than ever, and so on, and on, and on. However,  the overall picture is so rosy that the Reserve Bank appeared likely to put up interest rates again pretty soon.

Little of it struck true at a “gut” level, a two speed economy is probably more like a 6 speed economy, with a couple of gears going backwards, and the picture if you take away mining, just a horrible mess of varying degrees.

Thank heavens over the last fortnight the Westpac chief economist has come out and said that interest rates were in fact too high, and all but the mining industry was struggling. On Monday the Reserve Bank minutes released indicated they were taking note of the problems, and rates were likely to be steady for a while. 

In my patch, in and around the food industry, one of the largest drivers in the economy, the landscape is littered with landmines. It has not been worse in my 35 years of engagement. No numbers here, just tacit knowledge based on observation, discussion, and experience, all of which run counter to the heroic stuff mouthed explicitly by the treasurer, most economists, and the shiny pants set in Canberra who just rely on the macro numbers.

Socialising branding

Procter & Gamble is a huge branded consumer business, but seems to be able to maintain the agility and innovation capability of an SME. Supermarket retailers have to be nervous when they display a determination to build a direct business model for their brands, and when they start talking about “qualified retailers” it is music to my ears, having struggled in an unforgiving Australian FMCG duopoly for years.  It is the other side of the coin from retailers developing their own brands beyond Housebrand status, noted previously.

P&G tried with Amazon, and the effort had its challenges, so they are quietly widening the approach  with this facebook collaboration, creating a new descriptor in the process, “f-commerce” and recruiting  Wal-mart as a “qualified retailer” (not bad for a start)

This also ticks facebooks boxes, as it is a strategy to monetarise their huge base of connections to consumers, and sets them against Amazon in the e-fulfilment business.

Poor old Microsoft, increasingly it seems to have missed the boat. Just a decade ago the US government had them in court trying to break them up to give others a chance.

What’s the old saying about roosters and feather dusters?