The Anti‑Forecast: The Reforms Australia Won’t Make but should. 

The Anti‑Forecast: The Reforms Australia Won’t Make but should. 

Dec 23, 2025 | Change, Governance, Strategy

StrategyAudit works with small and medium businesses. That offers a perspective into how things work, and don’t work, across a variety of domains. We are in a season full of forecasts, pundits everywhere are forecasting what tomorrow will bring. Most will be destined for the round bin, as any business knows, unless you address the foundational challenges and problems hindering performance today, building on top of a shaky foundation is a road to failure.

My advice is always to address three headline challenges.

Simplification.

Focus.

Mutual interest.

Each on their own are challenging. However, they are also interdependent, and compound with every small improvement. If we apply the same formula to the ‘Australian condition’ we can come up with a list of priority items that to date have been endlessly deferred by politics, vested interests, and lack of will.

Simplify

We have made governing, investing, and even trading across state lines needlessly complex. Every layer of approval and every bespoke state rule turns a national economy into a bureaucratic obstacle course.

One economy, not eight mini‑regulators

Harmonise licensing, product standards, and safety rules. Default to national templates unless a state can prove a unique public interest, which should then be applied nationally. Every extra bureaucratic form and protection of some politically engaged but fringe vested interest is a tariff disguised as stationery.

Regulation should protect the public, not the loudest lobby. Each new compliance layer should sunset unless proven that there is widespread benefit.

Transparent, fixed cycles for reform

Adopt four‑year fixed federal election cycles. Certainty attracts capital and allows initiatives to gather momentum before being re‑litigated by the next political marketing campaign. Genuine reform takes time to gather momentum. The current adversarial 3 year term is akin to a terminal case of cancer to most genuine reform. 

Legal and regulatory compliance.

The legal and compliance regimes currently in place institutionalise and solidify power. Those with the resources will (almost) always win against those that do not, as the latter do not have the resources to leverage the necessary lawyers, accountants and relevant experts to argue a case. This mismatch represents a gross mismatch of equal opportunity, a foundation of the nation which is now just a cliche.

Focus

We cannot continue to fund everything but achieve little beyond self-congratulatory press releases, and a few happier individuals and enterprises. Choices must be made about where public capital, political effort, and regulatory clarity will deliver compounding national benefit. Choice requires that we actively choose what not to do. This side of the equation is ignored totally in public and political discourse.

Opportunity cost should be a mandatory line item in every budget and policy submission.

Direct capital to national capabilities

Pick a handful of sectors where we can win. Critical minerals, med‑tech, ag‑tech, renewables, and back them with predictable, performance‑based co‑investment. Stop scattering grants like confetti to the most cashed up and politically engaged opportunists. The absence of a clear national strategy inevitably results in disjointed capital allocations, delivering subpar outcomes. We do not have enough depth of capital to allow this to continue.

Build the grid before we build slogans

Power transmission, firming, and storage are the enablers of the renewable transition, which is happening, like it or not. Without them, debate, announcements, and political jockeying are just supercharged brakes on output. Treat the grid as a platform to future productivity and living standards, not as a project.

Tax what’s unearned, reward what’s built

Shift the tax system to favour productive effort over rent‑seeking. Reform land and capital gains taxes, reduce bracket creep, close offshore residency for tax purposes, return artificial domestic tax minimisation structures like trusts back to their original purpose, and simplify compliance. Productivity grows when builders beat speculators.

Tax reform is the most challenging domain, which is an indicator of its most important priority. With a massive majority in the reps, and an opposition fractured and almost irrelevant, there will never be a better chance to generate meaningful and long-term change than right now. Political history demonstrates that once a reform is instituted, subsequent governments might fiddle at the edges, but do not reverse the direction.

Maintain what we own

Ring‑fence funds for maintenance of infrastructure, schools, and hospitals. It’s cheaper to fix a leak than rebuild the roof.

Maintenance is far less politically ‘sexy’ than announcing new things, particularly things that can be opened, and generate lots of press releases and hard-hat photo opportunities. Maintenance over new investment is a choice, which sadly favours the latter to our detriment. Fix what you have before replacing it. At the very least, you get a better price when you sell it.

Mutual Interest

A society works when effort and reward align, and when long‑term collective benefit trumps short‑term political advantage. Education, national security, climate resilience, and competition all belong here. They’re not partisan, they are foundational.

Education that serves every child

Make needs‑based funding sector‑blind and tied to evidence‑based teaching. Publish learning growth metrics nationally. Equality of educational opportunity, irrespective of geography, socio economic position, and learning style and preference should be a national priority, not a slogan.

Shared national objectives

Matters of strategic importance: energy transition, sovereign capability, defence, and education should be somehow quarantined from the election cycle. A comprehensive national set of strategic priorities as previously noted is essential, requiring non-partisan engagement.

The real deficit is not fiscal, it’s moral. We lack the will to argue transparently, in public, with facts about the past and a clear sense of plausible futures beyond the next poll. Until that changes, reform will always be a press release.

Almost everything in the current adversarial culture of party and individual politics aligns itself against this absolute necessity if we are to leave the place better than we found it. There is really only one cure for the disease: collective leadership, and a leader who inspires followers. It seems we have run out of those!

The reasons these things won’t happen are familiar: politics seeks popularity, not durability; vested interests fund resistance; bureaucracies protect complexity; and the public has been trained to demand benefits without trade‑offs. None of that is inevitable.

The antidote is political courage married to public literacy. Tell the truth about the trade‑offs, publish the facts, and stop pretending that every tough decision can be deferred until after the next election.

This has been the last post for 2025. My thanks to the (very) few people who have stuck to reading the thoughts I have as presented in this blog. Amongst the tsunami of AI generated slop that is increasingly infecting publicly available platforms, it is becoming increasingly challenging to be seen.

Header by Nano Banana. it is an amazing tool!

Cockroach subsidies: Why Australia pays multinationals to stay

Cockroach subsidies: Why Australia pays multinationals to stay

Dec 11, 2025 | Change, Governance, Strategy

 

Federal and state governments now face a steady queue of large, tax advantaged Multinational corporations with a simple message: “Subsidise us, or we shut the gates.”

Jamie Dimon, CEO of JP Morgan recently said at an earnings call: “When you see one cockroach, there are probably more.”

We now see the same thing with corporate subsidies.

Once one bailout appears, a small army of “essential” projects scuttles out from behind the skirting board.

Think about a few recent examples.

Whyalla Liberty Steel receives a multi‑billion dollar rescue package.

Glencore secures support for its Mount Isa zinc smelter and Townsville refinery.

Nyrstar’s lead‑zinc smelter attracts funding.

Arnott’s receives a 45 million grant to ‘shore up their balance sheet’

On top of that you have the fuel tax credit scheme running at around ten billion a year, and a series of Petroleum Resource Rent Tax concessions.

Not every one of these choices fails a hard‑headed test. Some, probably many, will stack up when you count jobs, regional impact, supply chain risks and national sovereignty. However, that does not diminish the simple fact that the only ‘policy’ we have is to be selectively tactical in our response. Little integrated, coherent policy aligned with the long term best interests of the country, that has bi-partisan support.

The problem sits with the ongoing failure of the adversarial nature of our political system, and successive governments to provide a stable and reliable long term investment environment.

Taken together the tactical responses do not look like strategy, but they do look like frantic pest control in a kitchen nobody bothered to design properly.

The cockroaches are running wild, demanding sustenance.

There is a common thread.

Most calls for subsidies exploit the absence of a coherent energy policy, and restrictive, time consuming approval processes, combined with a small domestic market.

Governments then reach for subsidies to keep often extremely wealthy, tax‑advantaged multinationals from walking away with their capital, seeking the best risk adjusted returns elsewhere.

It pits national governments against one another in a global options game, that filters down to regional governments.

In contrast to our ad hoc playbook, China has played a long and highly strategic game with subsidies. For example, they have spent years locking down global supply of rare earth minerals, and Chinese firms now dominate large parts of the EV supply chain. The same playbook has been applied to batteries, solar panels, and increasingly AI.

It is a giant international poker game, and we are a minor player with a few good cards if played well.

We supply resources, are stable politically and economically (despite the problems) and have an educated workforce. However, we have shallow and short term oriented capital markets, so need investment to leverage our natural assets, while rabbiting on about sovereign capability.

For Australian governments to attract mobile capital on sensible terms, we need a different offer.

Subsidies and favourable tax treatment can play a role, but they do not carry the game when they are subject to management by press release, and the loading of investment in marginal seats.

Serious investors look for something more valuable: reliable educated workers, technical capabilities, and reliable institutions, all of which contribute to the certainty that encourages investment.

The strategic dilemma is that competitive countries have a different set of foundational assumptions that deliver competitive advantage.

On one side sit the cheques written to keep multinational operations in place.

On the other side sit the losses in productive capacity, skilled jobs, capability building, and tax revenue if those operations close.

Do our governments, bureaucracies, and political culture have the capability and courage to wrestle with that complexity?

Because until they do, the cockroach subsidies will keep multiplying under the fridge.

 

 

 

 

Comedy, Copernicus, and the Curse of Agreement

Comedy, Copernicus, and the Curse of Agreement

Oct 13, 2025 | Change, Innovation, Leadership

 

If everyone in the room agrees, you are probably all wrong. Innovation does not come from consensus; it comes from the friction created by different ideas and perspectives.

If you listen to comedians, there is a common thread through everything they say. A friend of mine who does a bit of fun standup calls it the ‘1,2,5’ of conversation. The first statement sets the scene, the second reinforces the first, the next is entirely unexpected. It is not the obvious ‘3’, rather, it is oblique, often the opposite, and always a surprise. The laugh, or in my friends case, occasional quiet chuckle, comes from that unexpected punchline.

Consider the survival chances in a hostile environment of two groups of people.

One is a homogenous group, that automatically sees things in a similar way.

The second is a neurologically diverse group that sees things from different perspectives.

Which is the more likely to survive that hostile environment?

This leads to the obvious but often ignored idea that the way you make up the groups in your business requires some heretics, comedians, and philosophers.

Rather than randomly allocating people to a group tasked to undertake a specific challenge, would it not be better to ensure you have a neurologically diverse group undertake it, as they are way more likely to surface new, different ideas. Some of those ideas, even most, may be absolute crap, but it just takes one to deliver the idea that changes everything.

Nicholas Copernicus presented the idea that the earth was not the centre of the universe, using Galileo’s newly invented telescope. This led to him being excommunicated for heresy by the Catholic church. Later, he was proved right, which did not help him. In time however, it helped the rest of us as it completely changed the way we think.

Every new idea starts as a heresy noted 19th century philosopher Thomas Huxley.

If you want these ideas that are often extremely inconvenient, to emerge from your group, you need to work for them.

Header: The eyepiece of Galileo’s telescope

 

 

The secret to solving hard problems

The secret to solving hard problems

Sep 18, 2025 | Change, Innovation, Leadership

 

The secret isn’t glamorous. It’s not an app, a hack, or a shiny new framework.

It’s the part everyone pushes down the priority list as they break a problem into its component parts. The hardest bit. Break the problem into its pieces, then go straight at the hardest part first.

AI now helps us do the problem analysis faster. It can model options, run simulations, and point out blind spots. However, it cannot focus your attention on the hardest bit first, that requires you.

Failure is the toll on this road. Edison’s “I now know what doesn’t work” wasn’t optimism, it was realism. Most attempts will miss. Data won’t rescue you when you’re in uncharted territory. Only cycles of trial, error, and learning will.

And here’s where humans stumble. We hate failure, and often failure has consequences in corporate life, so we become risk averse. We look for shortcuts, silver bullets, or easy wins. AI makes the shortcuts more tempting because it gives us mountains of plausible-sounding answers in seconds. But plausible isn’t proven.

The real advantage belongs to people who can keep their “discovery tempo” steady, using AI as an accelerant while still accepting that most paths will be cul-de-sacs.

AI has changed the speed and nature of problem-solving. What hasn’t changed is the rule: robust innovation comes from persistence through failure. The cycle is now faster, but the psychology hasn’t shifted.

So, the winners will be those who combine two rare qualities: the resiliance and patience to face repeated failure, and the discipline to use AI not as a crutch, but as a lever to attack the hardest part of the problem first.

 

 

 

The fundamental management distinction: Principle or Convention?

The fundamental management distinction: Principle or Convention?

Jul 28, 2025 | Change, Strategy

 

 

 

My time is spent assisting SME’s to improve their performance. This covers their strategic, marketing, and operational performance. Deliberately, I initially try and downplay focus on financial performance as the primary measures, as they are outcomes of a host of other choices made throughout every business.

It is those choices around focus, and resource allocation that need to be examined.

Unfortunately, the financial outcomes are the easiest to measure, so dominate in every business I have ever seen.

When a business is profitable, even if that profit is less that the cost of capital, management is usually locked into current ways of thinking. Even when a business is marginal or even unprofitable, it is hard to drive change in the absence of a real catalyst, such as a creditor threatening to call in the receivers, or a keystone customer going elsewhere.

People are subject to their own experience and biases, and those they see and read about in others.

Convention in a wider context, status quo in their own environment.

Availability bias drives them to put undue weight in the familiar, while dismissing other and especially contrary information.

Confirmation bias makes us unconsciously seek information that confirms what we already believe, while obscuring the contrary.

Between them, these two forces of human psychology cements in the status quo, irrespective of how poor that may be.

Distinguishing between convention and principle is tough, as you need to dismiss these natural biases that exist in all of us. We must reduce everything back to first principles, incredibly hard, as we are not ‘wired’ that way.

The late Daniel Kahneman articulated these problems in his book ‘Thinking fast and Slow’ based on the data he gathered with colleague Amos Tversky in the seventies. This data interrogated the way we make decisions by experimentation, which enables others to quantitively test the conclusions, rather than relying on opinion.

That work opened a whole new field of research we now call ‘Behavioural Economics’ and won Kahneman the Nobel prize. Sadly however, while many have read and understand at a macro level these biases we all feel, it remains challenging to make that key distinction between convention, the way we do it, the way it has always been done, and the underlying principles that should drive the choices we make.

As Richard Feynman put it: “The first principle is that you must not fool yourself—and you are the easiest person to fool. So, you have to be very careful about that.”

 

 

 

 

 

 

 

 

 

Is Australia about to see its ‘Minsky moment’?

Is Australia about to see its ‘Minsky moment’?

Jul 21, 2025 | Change, Governance

 

 

Few readers will have heard of Hyman Minsky. However, given the Australian parliament reconvenes in its post-election form tomorrow, it may be time.

Minsky was a prominent economist whose theories, labelled ‘Financial Instability Hypothesis’ were largely ignored until the financial crisis in 2008.

The dominating financial theory before the wake-up of 2008 was that financial markets were generally efficient, reflecting the best information available at any one time.

The financial crisis killed that idea.

Suddenly Minsky’s theory was that markets are driven not by just the available information, but by cycles of greed, fear, and the pursuit of power. (I feel certain that Daniel Kahneman would have agreed)

I wondered if the same cycle could be applied to the Australian body politic and economy.

It seemed an appropriate time for such thoughts, heading as we are into a term of government where the incumbent has a huge majority, and no effective opposition.

So how appropriate is the Minsky cycle to the current political and economic environment the Albanese government faces?

In the aftermath of the election, aware sentiment can change quickly, the Government surprises, and turns risk averse. After all, they now believe they have several terms to ‘get stuff done’, and do not control the Senate. This starts to create frustration in the electorate, as it seems obvious that genuine change is more possible now than for the last 30 years. Only vocal interest groups are scaring the government into inaction. The presence of such hoarding of political capital provides the catalyst for a renewed opposition to effectively attack the inaction on pressing issues.

The cynic in me assumes that none of the challenges we face as a country will be adequately addressed. Politics has devolved into a Ponzi scheme of elaborate lies, misdirects, and inaction. The focus is on gaining and keeping political power for the sake of the power, not for the long-term betterment of the country.

The optimist in me is tempted to listen to the practiced rhetoric of the two leading Labor figures and think: ‘perhaps this time’.

The header is my adaptation of the Minsky cycle reproduced below.

With apologies to Hyman Minsky.HET: Hyman P. Minsky