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Message to Kevin, Wayne and Lindsay: sweat the small stuff

By Nicholas Gruen - posted Tuesday, 18 December 2007


Wayne’s Swan’s first media release as Treasurer was a boilerplate exercise. Or was it? It left me hoping that it was hinting towards something more promising.

Today I call on families, individuals, business and community groups to submit their ideas for the Government’s first Budget, as we go about meeting the big economic challenges Australia faces.

Let me tell you a story. In 1993 when I worked in Treasurer John Dawkins’ office a letter arrived. The author was a Brisbane solicitor and he drew Dawkins’ attention to weaknesses in the Tax Act which was permitting liquidated companies to advantage their creditors ahead of the Tax Office.

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In the spirit of a random audit, I took a copy before passing the correspondence on to Treasury. Nine months later I rang the solicitor and asked how our reply measured up to his expectations.

His response? “What reply?”. Opposition Leader John Hewson and National Party Leader Tim Fischer had replied thanking him for the letter and assuring him they’d look into the matter on assuming Government - which it turned out took one more parliamentary term than they were expecting.

No one in government - neither the Treasury, the Tax Office nor the Treasurer - had managed a response.

In one sense this is unusual. Departments have systems to prevent such snafus. But we all know how anodyne their responses usually are. “The Treasurer has asked me to thank you for bringing your views to his attention … etc, etc, etc”.

Large organisations were always a bit like this. But in the 1970s something genuinely new emerged. Firms like Toyota built their processes around the assiduous cultivation of and responsiveness to feedback - from employees, suppliers and customers.

Moving beyond the old suggestion boxes, Toyota paid workers to regularly meet in “quality circles” to endlessly strategise to improve productivity. Suppliers were cultivated for their contribution to long term design - rather than just short term price. And a deep interest was taken in winning customer loyalty by meeting their needs.

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Economists have paid too little attention to this remarkable new phenomenon.

But I entertain a fond hope that the new government might see how much it can help them with their current and future labours. As our commodity prices went through the roof swelling the profits of our miners, the Government that has just passed into history found an extra few billion dollars each time it looked at the kitty.

Life doesn’t look like being so easy for the new Government.

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A shotened version of this article was first published in the Australian Financial Review on December 10, 2007.



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About the Author

Dr Nicholas Gruen is CEO of Lateral Economics and Chairman of Peach Refund Mortgage Broker. He is working on a book entitled Reimagining Economic Reform.

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