When working a 68-hour week still doesn't cut it

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750 posts

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#903216 26-Sep-2013 16:49

MaxLV:

The $$ figure on an annual report is not the only measure of how profitable a business is.

I’ve just had a wee peek at The Warehouse 2012 Annual report. They must surely be a filthy capitalist money grabbing wage slave exploiter of poor serfs living hand to mouth out of a cardboard box in the back of some downtown alley. Actually I have no idea what they pay!

But I did see that their profit is 5% of sales. Dirty rapacious people aren’t they! I’ve hunted but couldn’t find any other line that said “Profit”. The cunning swine have hidden it beyond my investigative powers – perhaps you could enlighten us on where all this other “profit” is hidden.

They are however going down the “Retail Wage” route which will bring qualifying employees pay up to $18.50 or even $20. The only small catch is that a person will have to work for them for three years so that they actually offer skilled value to the business. Oh – and the employees are going to have to go through the different training levels and improve themselves as well.

I say “Shame on all ye Warehouse Shareholders. Where is your social conscientious? You should pay $18.40 based on cigarette addiction, lack of skill and ability to get ones girl up the duff.”

Geektastic

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#903386 26-Sep-2013 21:53

minimoke:
MaxLV:
Most (all?) employers, no matter how big or small, obviously have enough profit coming out of the business to afford the material 'must haves' and lifestyles that makes a 'lie' of any claims they make about running the business on 'razor thin' profit margins and cant afford to pay their employees a 'living wage'.

The $$ figure on an annual report is not the only measure of how profitable a business is.

OK, so everyone gets educated. Who's going to do all the jobs that dont require a 'skilled' workforce and 'education'. And again it's the government (Tax payer) that has to subsidise the employers need for 'educated' skilled workers. Employers want a skilled workforce with the education to match? Then THEY should be paying for that skilled workforce and required education, NOT the taxpayers.

How do we put this simply Max LV

Say I have $1m to invest. I can, say, stick it in the bank and make 5% or $50,000 a year pretty much risk free.

If I want to invest it in business I have to get $50,000 out of the business to make it worth my while. I actually have to get more than that because I also want something to cover the risk of me losing my $1m. Lets say $108,000 is a number that does it for me.

You’ll probably accuse me of being a filthy capitalist pig for having a $1m so say I borrow $1m from the bank. That will cost me say $100,000 a year just to service the interest cost.

Lets say I sell boxes and I can sell 400 boxes a week. My customers will buy New Zealand made for $80 a box so I make $1,664,000. Or they could get Chinese made for $75 a box or perhaps order off the internet and get it for $70 a box.

It takes my 10 employee’s 1 hour each to make a box. I pay each of them $15 an hour so my labour costs are $312,000. My bank interest costs $100,000. My local supplied raw materials cost $15 a box or $312,000. My electricity, building rent etc costs $15 a box or $312,000. My advertising and selling cost $15 a box or $312,000. My freight and logistics costs $1 a box or $208,000. After all my overheads are accounted for I’m left with $0.52 a box. I get to take home 6.5% of my sales or $108,000 per annum. It’s a filthy capitalist world I know but thems the breaks. I’ll get to put some gas in the Hummer this week!

So lets say I am forced to increase my hourly rate to $18.40. I’ve got to find $3.40 a box or $707,000 from somewhere. I can’t take it from the bank. So what am I left with.

Lets say I can screw $1 a box in raw materials off my supplier. He’s also making 6.5% “profit”. Rather than $0.937 profit he’s now making a $0.063 loss. Lets do the same for my land lord. And electricity. There’s another $1 saved but their profit margins now mean their business is not very viable. I can shave another $1 off my advertising – but my message no longer hits my market so next year demand is only 350 a week. I’ll hit my freight and logistics up for a 20% reduction so there’s another $0.20 saved. I’ve only got $41,600 left to find or $0.2 a box.

Here’s a thought. I’ll take $41,600 out of my pay. I’m now left with $66,400 a year or 4% of my sales go into my pocket. Oh dear, I’m left with just cake to eat!

Now you are happy – your workers are getting there $18.40 an hour. But what are we left with.

So I’ve taken a 38% drop in pay and I’ve worked harder this year stitching up these deals.

Your workers have done nothing at all extra and their pay has gone up over 22%.

My raw material supplier is no longer profitable and about to go out of business.

My landlord is about to sell his building because there isn’t enough money in it for him.

I’ve got the prospect of reduced sales next year.

But that’s OK, because I’ll lay 3 or 4 guys off so they will end up on the dole or on $14.40 an hour.

An alternative is that I could put my prices up $3.40 a box – and then I’ll loose all my custom to the Chinese or Amazon. Then I won’t have to worry about this Living Wage nonsense as I won’t have any employees to worry about.

Outstanding.

Wasted, but outstanding! The Force is strong in this one.

Geektastic

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#903387 26-Sep-2013 21:57

minimoke:
MaxLV:

The $$ figure on an annual report is not the only measure of how profitable a business is.

I’ve just had a wee peek at The Warehouse 2012 Annual report. They must surely be a filthy capitalist money grabbing wage slave exploiter of poor serfs living hand to mouth out of a cardboard box in the back of some downtown alley. Actually I have no idea what they pay!

But I did see that their profit is 5% of sales. Dirty rapacious people aren’t they! I’ve hunted but couldn’t find any other line that said “Profit”. The cunning swine have hidden it beyond my investigative powers – perhaps you could enlighten us on where all this other “profit” is hidden.

They are however going down the “Retail Wage” route which will bring qualifying employees pay up to $18.50 or even $20. The only small catch is that a person will have to work for them for three years so that they actually offer skilled value to the business. Oh – and the employees are going to have to go through the different training levels and improve themselves as well.

I say “Shame on all ye Warehouse Shareholders. Where is your social conscientious? You should pay $18.40 based on cigarette addiction, lack of skill and ability to get ones girl up the duff.”

I may have missed the point when I was at Oppression Of The Masses classes, but isn't the point of serfs to exploit them? If you can't do that, what are they for? Littering my estates with their untidy hovels. I quite like the forelock tugging and all that, but if I can't exploit them then that isn't enough to keep them around.

Release the hounds, Smithers!

mattwnz

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#903417 26-Sep-2013 23:27

minimoke:

Say I have $1m to invest. I can, say, stick it in the bank and make 5% or $50,000 a year pretty much risk free.

Where can you get 5% from, from a bank? 4% is about max. Also you are forgetting about inflation, so the real earning are a lot less, as the capital loses value over time, if you take all that interest as earnings. So the real amount you are making after inflation and tax is probably 2% ish

MaxLV

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#903423 26-Sep-2013 23:39

Geektastic:
MaxLV:
KiwiNZ:
MaxLV:
Inphinity:
MaxLV:

The minimum wage (it's what we're talking about here) is not a market set wage. They Government set's it.
And yes I do believe working New Zealanders should get a living wage of at least $18.40 p/h. And employers should be paying it, not the government through things like WFF, Work start, etc. Why dont you?

What you think about low paid workers getting a living wage of $18.40 P/h has been obvious from the start. Why you think that way is for you to explain and justify, not me.

It's not as simple as "Just up the minimum wage and she'll be right!", though. You want a ~34% increase to the minimum wage? Are you happy with the accompanying reduction in minimum-wage positions, and the impact on the portion of people who were in between the previous minimum and the new minimum, most of whom will get no relative increase, and thus will now be minimum wage (and, as such, worse off then previous relative to the labour market)? What about the increase in prices that will occur because of the increased costs to employers? How about those on an unemployment or other benefit, do they get an equivalent increase? How many people will end up worse off, because their employer had to lay 10% of their minimum-wage staff off due to the cost increase, and those people are now on a benefit that pays them less than they got when they were working for the old minimum?

Heck, if it was as simple as "set the minimum wage and there'll be negative impacts", I'd love to see it happen. But, especially with such a large proportionate jump, there are a LOT of factors to consider, and quite honestly I'm not convinced that many of the people supporting this figure have taken them in to account.

So just because an employer decides a job suddenly costs too much, they sack the employees rather than pay them and the work the employees were doing just goes away? Who's going to do the work of the employees that have been sacked because they were too expensive to employ... Who is going to do the work that makes the employer their profits when they have sacked all their 'expensive' employees.

The employer still wants/needs someone to do the work, only as long as it's done at minimum cost to the profit margin. If you're a company owner/employer, and claim you're running the company on razor thin, make or break profit margins, then you're either telling porkies to hide your real profits from the tax man, or your business plan is wrong/is not working, and/or you cant run a business properly.

We hear this excuse from employers all the time when they dont want to cut their profit margins just to pay their workers a reasonable living wage. That and the BS claims that they run their businesses on razor thin margins, yet always claim they're making a 'good profit' to the annual shareholders meeting.

It is easy to say profits are easily earned, it is considerably harder to do it in reality. Most NZ SMB's exist on very tight margins. Just like most home budgets are not bottomless neither are most business budgets.

The key is not Government funded living wages but better funded education so we have a higher skilled workforce and considerably more venture capital. This is the way to a higher income populous not artificial elastoplast fixes.

Most (all?) employers, no matter how big or small, obviously have enough profit coming out of the business to afford the material 'must haves' and lifestyles that makes a 'lie' of any claims they make about running the business on 'razor thin' profit margins and cant afford to pay their employees a 'living wage'.

The $$ figure on an annual report is not the only measure of how profitable a business is.

OK, so everyone gets educated. Who's going to do all the jobs that dont require a 'skilled' workforce and 'education'. And again it's the government (Tax payer) that has to subsidise the employers need for 'educated' skilled workers. Employers want a skilled workforce with the education to match? Then THEY should be paying for that skilled workforce and required education, NOT the taxpayers.

Bluntly it is for the owner of the business, whose capital is at risk, to decide just how much money is right for him. It is not up to the government to dictate such matters.

Businesses pay taxes like everything else in NZ so they are making a perfectly reasonable contribution to the cost of their operating environment.

If it is all so easy, why aren't you out there doing it?

But employers sure as hell demand the government dictate the minimum wage stay at 14.40 an hour and the general wages/salary levels be kept as low as possible dont they.

Businesses also do all they can to avoid paying tax, and get a lot more tax rebates and handouts from the government and tax payer than their employees do.

MaxLV

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#903427 26-Sep-2013 23:49

KiwiNZ:
MaxLV:
KiwiNZ:
MaxLV:
Inphinity:
MaxLV:

The minimum wage (it's what we're talking about here) is not a market set wage. They Government set's it.
And yes I do believe working New Zealanders should get a living wage of at least $18.40 p/h. And employers should be paying it, not the government through things like WFF, Work start, etc. Why dont you?

What you think about low paid workers getting a living wage of $18.40 P/h has been obvious from the start. Why you think that way is for you to explain and justify, not me.

It's not as simple as "Just up the minimum wage and she'll be right!", though. You want a ~34% increase to the minimum wage? Are you happy with the accompanying reduction in minimum-wage positions, and the impact on the portion of people who were in between the previous minimum and the new minimum, most of whom will get no relative increase, and thus will now be minimum wage (and, as such, worse off then previous relative to the labour market)? What about the increase in prices that will occur because of the increased costs to employers? How about those on an unemployment or other benefit, do they get an equivalent increase? How many people will end up worse off, because their employer had to lay 10% of their minimum-wage staff off due to the cost increase, and those people are now on a benefit that pays them less than they got when they were working for the old minimum?

Heck, if it was as simple as "set the minimum wage and there'll be negative impacts", I'd love to see it happen. But, especially with such a large proportionate jump, there are a LOT of factors to consider, and quite honestly I'm not convinced that many of the people supporting this figure have taken them in to account.

So just because an employer decides a job suddenly costs too much, they sack the employees rather than pay them and the work the employees were doing just goes away? Who's going to do the work of the employees that have been sacked because they were too expensive to employ... Who is going to do the work that makes the employer their profits when they have sacked all their 'expensive' employees.

The employer still wants/needs someone to do the work, only as long as it's done at minimum cost to the profit margin. If you're a company owner/employer, and claim you're running the company on razor thin, make or break profit margins, then you're either telling porkies to hide your real profits from the tax man, or your business plan is wrong/is not working, and/or you cant run a business properly.

We hear this excuse from employers all the time when they dont want to cut their profit margins just to pay their workers a reasonable living wage. That and the BS claims that they run their businesses on razor thin margins, yet always claim they're making a 'good profit' to the annual shareholders meeting.

It is easy to say profits are easily earned, it is considerably harder to do it in reality. Most NZ SMB's exist on very tight margins. Just like most home budgets are not bottomless neither are most business budgets.

The key is not Government funded living wages but better funded education so we have a higher skilled workforce and considerably more venture capital. This is the way to a higher income populous not artificial elastoplast fixes.

Most (all?) employers, no matter how big or small, obviously have enough profit coming out of the business to afford the material 'must haves' and lifestyles that makes a 'lie' of any claims they make about running the business on 'razor thin' profit margins and cant afford to pay their employees a 'living wage'.

The $$ figure on an annual report is not the only measure of how profitable a business is.

OK, so everyone gets educated. Who's going to do all the jobs that dont require a 'skilled' workforce and 'education'. And again it's the government (Tax payer) that has to subsidise the employers need for 'educated' skilled workers. Employers want a skilled workforce with the education to match? Then THEY should be paying for that skilled workforce and required education, NOT the taxpayers.

I am sorry where do you get the notion that most company's make good profits, given that that most startups fail with in the first two years and the number of liquidations would beg to differ with you.

My second point, there will always be those on low pay and there will and should be a level of support for them, however by raising education levels and providing venture capital the odds of more people people gaining higher levels of income impproves
without adding inflationary pressures.

If starting up your own business and running it is so hard and so bad (profit wise) why do so many people aspire to own their own business. If it's not to make a profit what's the point of starting the business in the first place? Why do it at all when you dont get a good enough return/income to live on?

This just doesn't ring true either. It's little better than the razor thin margins justification.

MaxLV

656 posts

Ultimate Geek

#903428 26-Sep-2013 23:49

KiwiNZ:
MaxLV:
KiwiNZ:
MaxLV:
Inphinity:
MaxLV:

The minimum wage (it's what we're talking about here) is not a market set wage. They Government set's it.
And yes I do believe working New Zealanders should get a living wage of at least $18.40 p/h. And employers should be paying it, not the government through things like WFF, Work start, etc. Why dont you?

What you think about low paid workers getting a living wage of $18.40 P/h has been obvious from the start. Why you think that way is for you to explain and justify, not me.

It's not as simple as "Just up the minimum wage and she'll be right!", though. You want a ~34% increase to the minimum wage? Are you happy with the accompanying reduction in minimum-wage positions, and the impact on the portion of people who were in between the previous minimum and the new minimum, most of whom will get no relative increase, and thus will now be minimum wage (and, as such, worse off then previous relative to the labour market)? What about the increase in prices that will occur because of the increased costs to employers? How about those on an unemployment or other benefit, do they get an equivalent increase? How many people will end up worse off, because their employer had to lay 10% of their minimum-wage staff off due to the cost increase, and those people are now on a benefit that pays them less than they got when they were working for the old minimum?

Heck, if it was as simple as "set the minimum wage and there'll be negative impacts", I'd love to see it happen. But, especially with such a large proportionate jump, there are a LOT of factors to consider, and quite honestly I'm not convinced that many of the people supporting this figure have taken them in to account.

So just because an employer decides a job suddenly costs too much, they sack the employees rather than pay them and the work the employees were doing just goes away? Who's going to do the work of the employees that have been sacked because they were too expensive to employ... Who is going to do the work that makes the employer their profits when they have sacked all their 'expensive' employees.

The employer still wants/needs someone to do the work, only as long as it's done at minimum cost to the profit margin. If you're a company owner/employer, and claim you're running the company on razor thin, make or break profit margins, then you're either telling porkies to hide your real profits from the tax man, or your business plan is wrong/is not working, and/or you cant run a business properly.

We hear this excuse from employers all the time when they dont want to cut their profit margins just to pay their workers a reasonable living wage. That and the BS claims that they run their businesses on razor thin margins, yet always claim they're making a 'good profit' to the annual shareholders meeting.

It is easy to say profits are easily earned, it is considerably harder to do it in reality. Most NZ SMB's exist on very tight margins. Just like most home budgets are not bottomless neither are most business budgets.

The key is not Government funded living wages but better funded education so we have a higher skilled workforce and considerably more venture capital. This is the way to a higher income populous not artificial elastoplast fixes.

Most (all?) employers, no matter how big or small, obviously have enough profit coming out of the business to afford the material 'must haves' and lifestyles that makes a 'lie' of any claims they make about running the business on 'razor thin' profit margins and cant afford to pay their employees a 'living wage'.

The $$ figure on an annual report is not the only measure of how profitable a business is.

OK, so everyone gets educated. Who's going to do all the jobs that dont require a 'skilled' workforce and 'education'. And again it's the government (Tax payer) that has to subsidise the employers need for 'educated' skilled workers. Employers want a skilled workforce with the education to match? Then THEY should be paying for that skilled workforce and required education, NOT the taxpayers.

I am sorry where do you get the notion that most company's make good profits, given that that most startups fail with in the first two years and the number of liquidations would beg to differ with you.

My second point, there will always be those on low pay and there will and should be a level of support for them, however by raising education levels and providing venture capital the odds of more people people gaining higher levels of income impproves
without adding inflationary pressures.

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surfisup1000

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#903431 27-Sep-2013 00:04

MaxLV:
If starting up your own business and running it is so hard and so bad (profit wise) why do so many people aspire to own their own business. If it's not to make a profit what's the point of starting the business in the first place? Why do it at all when you dont get a good enough return/income to live on?

This just doesn't ring true either. It's little better than the razor thin margins justification.

People never start businesses with a goal of failing. Over optimistic sales forecasting, cost underestimation, sales / expense mismatches and inexperience.

I think this is more true than you may realise.

I have a friend who runs and his employees get paid way more than him. Sure, he hopes the business may grow and things turn around, but this business has stressed him out and even if it does succeed I question whether the stress and effect on his health will have been worthwhile.

Employees are lucky, they go home and don't have to worry about the business whereas the owner may have to worry about losing his home used to guarantee business bank loans.

MaxLV

656 posts

Ultimate Geek

#903433 27-Sep-2013 00:05

Inphinity:
MaxLV:
Most (all?) employers, no matter how big or small, obviously have enough profit coming out of the business to afford the material 'must haves' and lifestyles that makes a 'lie' of any claims they make about running the business on 'razor thin' profit margins and cant afford to pay their employees a 'living wage'.

The $$ figure on an annual report is not the only measure of how profitable a business is.

So which business is it again that you run that employs 100 people and returns you just equivalent of the minimum wage?

If there is a business that is really returning just the minimum wages to the business owner, then the seriously need to look at what they're doing wrong in the running of that business.

The reality: Boss says he's only getting minimum wage from his business.
He drives a car that cost $70K His wife has her own car that cost $50K, their house has a GV of $950K and a mortgage of 1.5M. Their kids go to a private school. Their house is packed to the rafters with all the latest must haves...

How do the pay for it all on the minimum wage they're taking out of the company? Because hes paying himself (and his wife and possibly the kids) minimum wage to cut their income tax to the lowest rate possible. The cars and house are on the company books as 'assets' that are paid for out of company bank accounts, and on top of that his accountant works the tax breaks and rebates on these depreciating company assets.

All legal and above board, but sure as hell has a lifestyle that isn't anything like the lifestyle of his minimum wage employees.

dickytim

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#903457 27-Sep-2013 06:40

MaxLV:
Inphinity:
Johnk:
To add to the above, I started bringing up a family of four in Auckland on 55k closer to 65k now, sure that's a struggle, but we make do.
But I'm thankful for the small bit the govt does with WFF to help ends meet.

If I want to earn more money I know that I need to either retrain, up skill, or start my own business up ( I work in the construction industry)

Likewise, it wasn't many years ago we were managing in Auckland with 3 on just over 50k.

Some people believe you shouldn't (be allowed) have kids until you can 'afford' them. Like kid's are something you go out and buy somewhere with your discretionary $$$.

this comes down to living within your means, if you can't afford kids why should I pay for them as a tax payer? Are you trying to be thick or contradictory?

MikeB4

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#903458 27-Sep-2013 07:00

@ MaxLV. You are right, running a business is dead easy, easy to start easy to run. Only takes a few hours a day and they all make 300% profit margins. All company owners have $999k plus homes and at least three $90k plus cars. They all sit in a café in the afternoon laughing at their minimum wage minions.

minimoke

750 posts

Ultimate Geek

#903497 27-Sep-2013 08:49

mattwnz:
minimoke:

Say I have $1m to invest. I can, say, stick it in the bank and make 5% or $50,000 a year pretty much risk free.

Where can you get 5% from, from a bank? 4% is about max. Also you are forgetting about inflation, so the real earning are a lot less, as the capital loses value over time, if you take all that interest as earnings. So the real amount you are making after inflation and tax is probably 2% ish

5% was really just a nice round number. But if you go to pretty much any bank you get 5% on a 4 year term or more. ASB and Rabo now offer 5.5% for 5 years - but with my $1m I reckon I get get a bit of icing on top.

minimoke

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#903518 27-Sep-2013 09:07

MaxLV:

If starting up your own business and running it is so hard and so bad (profit wise) why do so many people aspire to own their own business. If it's not to make a profit what's the point of starting the business in the first place? Why do it at all when you dont get a good enough return/income to live on?

This just doesn't ring true either. It's little better than the razor thin margins justification.

There is no simple answer to this one. The closest I can come to is the same dream people have of owning their own home. Financially it just doesn’t make sense at many levels.

I think some of it is perhaps a dream to better oneself. The trouble is we don’t have the financial intelligence to turn the dream to a long term profitable reality. We can see so many examples of how illiterate we are.

The most obvious at the moment is people saying “Meridian Shares are just $1 each. A dollar is cheap so I’m going to buy some”. They haven’t figured out they are buying a debt. Nor have they figured out that a share price is value of company divided by number of shares. $1 is easy to derive – you simply keep the number of shares on offer and devalue the company. This is even better – cos that way we can buy 1,000 shares and isn’t that a lot of shares to have. 500 shares at $2 isn’t a marketers dream – too few shares and over priced. Go figure!

We are simply awash with ignorance – look at all the ponzi schemes people get sucked into; the finance companies with the “too good to be true” interests rates of the past.

Look at all the “sales” advertised in the media. People haven’t figured the best way to save 100% at Briscoes is to not shop there in the first place.

People don’t understand the difference between profit and income. So many tradesmen, for example, make no profit and have limited “income” (ie off the book cash jobs or money going in to pay the “car”) that when it comes time for a loan or an ACC claim they don’t have the income and come unstuck.

Then you get all these “Mr Green” build your own business franchise opportunities which are nothing but a scheme to buy a job. There is no shortage of examples but I fear I am straying off topic

Geektastic

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#903595 27-Sep-2013 10:32

MaxLV:
Geektastic:
MaxLV:
KiwiNZ:
MaxLV:
Inphinity:
MaxLV:

The minimum wage (it's what we're talking about here) is not a market set wage. They Government set's it.
And yes I do believe working New Zealanders should get a living wage of at least $18.40 p/h. And employers should be paying it, not the government through things like WFF, Work start, etc. Why dont you?

What you think about low paid workers getting a living wage of $18.40 P/h has been obvious from the start. Why you think that way is for you to explain and justify, not me.

It's not as simple as "Just up the minimum wage and she'll be right!", though. You want a ~34% increase to the minimum wage? Are you happy with the accompanying reduction in minimum-wage positions, and the impact on the portion of people who were in between the previous minimum and the new minimum, most of whom will get no relative increase, and thus will now be minimum wage (and, as such, worse off then previous relative to the labour market)? What about the increase in prices that will occur because of the increased costs to employers? How about those on an unemployment or other benefit, do they get an equivalent increase? How many people will end up worse off, because their employer had to lay 10% of their minimum-wage staff off due to the cost increase, and those people are now on a benefit that pays them less than they got when they were working for the old minimum?

Heck, if it was as simple as "set the minimum wage and there'll be negative impacts", I'd love to see it happen. But, especially with such a large proportionate jump, there are a LOT of factors to consider, and quite honestly I'm not convinced that many of the people supporting this figure have taken them in to account.

So just because an employer decides a job suddenly costs too much, they sack the employees rather than pay them and the work the employees were doing just goes away? Who's going to do the work of the employees that have been sacked because they were too expensive to employ... Who is going to do the work that makes the employer their profits when they have sacked all their 'expensive' employees.

The employer still wants/needs someone to do the work, only as long as it's done at minimum cost to the profit margin. If you're a company owner/employer, and claim you're running the company on razor thin, make or break profit margins, then you're either telling porkies to hide your real profits from the tax man, or your business plan is wrong/is not working, and/or you cant run a business properly.

We hear this excuse from employers all the time when they dont want to cut their profit margins just to pay their workers a reasonable living wage. That and the BS claims that they run their businesses on razor thin margins, yet always claim they're making a 'good profit' to the annual shareholders meeting.

It is easy to say profits are easily earned, it is considerably harder to do it in reality. Most NZ SMB's exist on very tight margins. Just like most home budgets are not bottomless neither are most business budgets.

The key is not Government funded living wages but better funded education so we have a higher skilled workforce and considerably more venture capital. This is the way to a higher income populous not artificial elastoplast fixes.

Most (all?) employers, no matter how big or small, obviously have enough profit coming out of the business to afford the material 'must haves' and lifestyles that makes a 'lie' of any claims they make about running the business on 'razor thin' profit margins and cant afford to pay their employees a 'living wage'.

The $$ figure on an annual report is not the only measure of how profitable a business is.

OK, so everyone gets educated. Who's going to do all the jobs that dont require a 'skilled' workforce and 'education'. And again it's the government (Tax payer) that has to subsidise the employers need for 'educated' skilled workers. Employers want a skilled workforce with the education to match? Then THEY should be paying for that skilled workforce and required education, NOT the taxpayers.

Bluntly it is for the owner of the business, whose capital is at risk, to decide just how much money is right for him. It is not up to the government to dictate such matters.

Businesses pay taxes like everything else in NZ so they are making a perfectly reasonable contribution to the cost of their operating environment.

If it is all so easy, why aren't you out there doing it?

But employers sure as hell demand the government dictate the minimum wage stay at 14.40 an hour and the general wages/salary levels be kept as low as possible dont they.

Businesses also do all they can to avoid paying tax, and get a lot more tax rebates and handouts from the government and tax payer than their employees do.

Any sane person does all they can to keep their tax bill as low as possible.

I run my own businesses and can assure you that I get no 'tax rebates or handouts' at all.

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#903596 27-Sep-2013 10:38

minimoke:
mattwnz:
minimoke:

Say I have $1m to invest. I can, say, stick it in the bank and make 5% or $50,000 a year pretty much risk free.

Where can you get 5% from, from a bank? 4% is about max. Also you are forgetting about inflation, so the real earning are a lot less, as the capital loses value over time, if you take all that interest as earnings. So the real amount you are making after inflation and tax is probably 2% ish
5% was really just a nice round number. But if you go to pretty much any bank you get 5% on a 4 year term or more. ASB and Rabo now offer 5.5% for 5 years - but with my $1m I reckon I get get a bit of icing on top.

And with $1 million, you are looking at global opportunity too, so you can put into any number of currencies in any number of countries and get their interest rates, for example.

My own wider family alone has entities and/or accounts in Panama, Switzerland, Monaco, Channel Islands, USA, NZ, UK, Australia and Canada. All are perfectly legal. The financial world is simply a great deal bigger than most Kiwis seem to grasp.

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