JeansWest goes west. March 28, 2025

29:01I don't want stupid knuckleheads with chainsaws on stages. um that's just that's just performative rubbish from a 12 year old man child um but but you know take take take your favorite look let's let's so who's likely to cut back bureaucracy and do that sort of work the right of politics right so so let's let's acknowledge that and so this is why i'm going to say take your favorite left-wing um academic slash business person slash whatever and task them with thoughtfully, sensibly, empathetically finding areas where we could improve government services. That's what we're saying. I'm going to say improve.

29:38I don't just mean adding more services to your point. I mean improve the provision of those things that we do in a way that saves us money. Either improve it or give us the same level of service for a lower cost. So I mean improve in the efficiency sense. Right. So you're right. So yeah, that's exactly what I'm saying. So, you know, can we do this easily, more easily, more cheaply, with fewer rules, with fewer people? Probably, yeah. Why wouldn't we want that as a society? It's not even a right or left thing. I mean, I totally take your point, but it's not like... The slashers are saying the public service cut stuff, it always comes from the right.

30:12So I'm just being... I'm trying to step carefully here in very politicised times just to say, you know, if your view... I've had that on Twitter again, directionally, this is what I said, directionally, something like Doge would work. and so no we don't need we don't need doge we don't all we need is to fix orcas so well and so that's what i mean about the left right the left see this as the kind of cut all public service jobs cut all services you know make make things worse try to try and save some money and that's why i'm trying to say on both sides of this one because it is genuinely seen that way to make the left happy about it pick your guy the right will be happy because you're cutting stuff and you'll be happy because the guy who's a girl who's chosen to do it is going to do it with some degree of ideological similarity to you and if that's what we need to do to get it done that's a that's a compromise I'm happy to make.

30:55Because if we find 75 % of the savings or 100 % of the savings, I'll take them. I'll take them tomorrow. Tell me who you want in that job and I will happily vouch for them so we can get something done in this direction. And that to me, they're two separate points. There's the discussion initially of what services do we want our government to provide and we can debate that all day long. But whatever it is, whether it's nuclear missiles or like, you know, free rainbow flags whatever spectrum on the political spectrum that you want. I want the nukes or the rainbow flags delivered to me in the most cost-effective manner because I'm paying for it as every other Australian through their taxes.

31:35So it's completely, it's just sensible and it's non-political. Just like, can we do something in a non-wasteful way, please? And that's why I was talking before about distribution versus growth because guess what? If we find waste, root it out and save some money, Then we can have a really, really fun and heated conversation about do we then get more services for our money or do people get tax cuts? Do we improve the welfare? Both of those sound good to me. Yeah, that's what I'm saying. And we can have that because, again, people argue on both sides of that. But that'd be a great conversation.

32:05Hey, we found some money. What should we do with it? That's a pretty good conversation to have, right? Yeah, brilliant. So anyway, yes, you're absolutely right. I think that's necessary. Here's the other reason we need it because if we don't, we end up with Doge. i mean oh it's coming it's 100 coming well unless we get in the way so trump trump why does trump rise trump rises because people looked around and went well you guys don't know how to solve you guys don't understand me and you don't understand me and at least he's saying he'll do something about it and that's that's how populism happens it's the and again it's not it's not the fault of the moderates that populists exist it's absolutely the fault of moderates that they leave enough room i say moderates i don't mean left or right i mean moderate people people and the men in the center or even even the center left and center right right that's that that group of people that critical mass normally it's there call that the u.s republicans and democrats up until about eight years ago do it properly trump starts yelling from the side of the like no no we think everything's okay we don't need trump yeah instead trump comes up with lots of problems amplifying grievances with no solutions and people go so rubbish i guess we'll give them a go that that's literally how it happens.

33:15And because they rightly, wrongly, probably rightly, experience the pain. Like, I'm in pain. Economic pain right now. And now this dude over here might be misdiagnosing it and offering solutions that don't work, but he's the only one who is acknowledging the pain. Yes, correct. You know, to have some rich white dude in Washington tell me it's not that bad, what are you worried about? GDP is up and unemployed, you know, Here's a bunch of metrics that you shut up. That's the problem, right? Pretending there's not a problem. Anyway, so that was the budget. The one exception I didn't want to come back to, mate, again, not only to be fair.

33:55I don't say this needs to be fair. I say this just because they're worth saying, and that's what fair is. It's not just being nice to everyone or making sure there's as many good things as bad things. It just is what it is. It was kind of overlooked because it feels like it's not a big deal. One of the really good things they did, which does improve the economy is they're going to outlaw non-compete clauses for people who earn under$175 ,000 a year. All right. Walk me through that. Non-compete clause. Thank you. So if you are in a job and you've signed a contract, your boss might put a clause in that contract, which says, and you may not work for any organization in this industry for six months after you leave.

34:35In other words, you can't work somewhere that competes with me. The boss gets to put that in and has put it. I don't know if it's apocryphal or whether it's made up, but from all reports, people like mechanics and hairdressers have had that included in their employment contracts. Why? So the hairdresser can't leave. The current, you know, I can't think of that good. They've all got catchy pun-based names. Head turners and go down the street to, I don't know, something else. Come and think of something, won't we? No, I'm good. You literally can't. If you're a hairdresser who had signed a contract with non-compete, your employer could preclude you from working for another hairdresser for another six months.

35:10And economists for a very long time, including the Productivity Commission, have said that is meaningfully impactful. It stops workplace mobility. It stops competition. You couldn't go out and set your own hairdresser. You'd have to take six months off mowing lawns and come back and do hairdressing after that or vice versa if you're a mechanic. You have to go and cut hair for a while and then come back and set your own mechanic shop. It is anti-competitive effectively. It's trying to reduce the impact of competition. Now, it doesn't stop people. Sorry, it doesn't allow people will take intellectual property with them.

35:38You can't then say, I've got my current hairdresser's customer list, I'm taking that with me. That's still illegal. They just can no longer prevent you from working for another hairdresser if you leave their employment. And that is a really, really good thing for economic growth. It's a really good thing for competition. We talk regularly about removing barriers to competition. That's one that's been put in place by employers and removing it is a really, really good thing. I don't know anyone other than business council and it turns out the Liberal Party, strangely enough, think that keeping those in place is a good thing.

36:08So that's going to happen while Schumer gets legislated. That's a really, really good thing. It's a minor improvement, but it's the one where I can say, yep, they made some effort to streamline, improve, remove barriers from competition in the economy. Can I play devil's advocate? Please do. And let me, usually when someone says, I'm going to play devil's advocate, they really mean my own advocate. I just disagree. But I genuinely mean devil's advocate because I haven't really thought this through. So let's do it live. Stop the wheels turning. Here we go. And I'll start thinking out loud and then contradict myself and then answer my own question.

36:50That's how ideas get generated. That's how it does. Now, I'm an employer. I train, I hire someone and I invest in them beyond their wage and salary, like for the output that they deliver for me, I invest in them. I might pay for their studies. I might train them in particular techniques, particular to my industry. I've made a very big investment in them. And so presumably non-compete clauses came up because it's like, well, I have improved your earnings capacity out of my own, by my expense, additional to what I'm paying you. And then you're just going to take that potentially and go work with one of my competitors who now get you fully trained up.

37:43And beyond that, while I might not be able to take specific bits of content, there is a lot of information in my head about, like, you can imagine if I hire someone from I'm Paige and Co. I hire someone from Phillips and Co. It's just like, so how does Scott do this? And how do they do that? And, oh, by the way, who are your contacts at this customer? You know, like I can imagine from an employer's standpoint, and again, I'm just putting that out there. I'm thinking out loud here. Like that they might reasonably go, well, look, I'm just saying that there's got to be a bit of a buffer in there just to the unintended consequence might be, well, well, I'm just not going to train you up.

38:25Yeah. Why would I train you up for the industry at large? Not for my own sake. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

38:41I don't talk about training because one of my favourite lines from business, and I promise it's not deliberate, but you mentioned training, is person one and person two talking to each other. You know, what if I train them and they leave? another person says what if you don't train them and they stay yeah true that is true so I I don't know so there are solutions fixed term contracts or extended term contracts are the way you would do it okay if you want to do something like you're worried about something like that here's the thing though it's circular because Page & Co then loses someone to Phillips & Co and so what you try to me trying to protect myself from you and your so for me it's kind of it goes it goes around that's kind of what happens people leave one and go to the other you're going to employ someone who previously worked somewhere else as well um so you know or i'm gonna do it so whichever way it was around your story was um so yeah i i get that employers want it like that's that's the point that's why they have them that's if i was a selfish employee that's exactly what i'd want i'd also like to collude with my competitor and i'd like to uh have have market power over my over my suppliers as well and i would i would of course i would say to my supplier you're not allowed to supply the other page and go because i want to do for myself um and you know there's i don't you're i'm saying right as As a devil's advocate, that's exactly what the employer would want.

39:50The role of competition policy, effectively, this is a function of or a subset of, is does it actually provide the best outcomes or are there unreasonable impediments to competition? And while the employer would want it, I think the economy is better off without. No, it's not about the employee, although the other problem is if you say to me you can't work for six months, like, well, I want to be paid reasonably more than minimum wage for my hairdresser and I'm getting minimum wage. And so you've got to make me sit out for six months. It kind of makes me a kind of indentured servant. I might get paid for it, but I kind of can't afford to leave because I don't pay the mortgage.

40:20So it's bad for people. It's bad for the economy because you mentioned friction before. It's frictional if you make people step out before they go into somewhere else. Yes, there are downsides for employers. That's kind of, again, in this one, there's a winner and a loser and that's kind of okay. All that being said, employers, and this is the other problem that BCA have an issue with it, is employers overall don't lose. You lose and I win or I win and you, but overall, someone's still an employer. If the business card says they, who are they trying to protect? Incumbents? Yeah, but if business council might have Page and Co, Phillips and Co both as members, I want your employee.

40:55You don't want to let your employer go. So who are they standing up for? Why is it the employer, the current employer that matters? It feels really, really short-sighted when it's like only the status quo matters. There's an employer who's going to benefit from the change. The BCS says, we don't want it. So hang on, why would you not want that? What would be bad about it? Yeah, yeah. And I guess also, if you don't want someone to leave, look after them. Right. Pay them more. Or train them. Because I'll say it. Yeah. You're right, mate. There are downsides. So you're right to ask the question because I didn't go through the whole, you know, why it's good and why it's bad.

41:30I think it's unequivocally good. Workplace mobility is positive. Go on. That's a great example of something that doesn't cost a dime. Yes, exactly. Perfect. It doesn't cost, make it sure it's Australian, a cent. It doesn't cost a cent, and yet there's potential improvements. Yeah. And it's such an easy thing to do. It's just, and that's why, you know, I don't want Elon Musk running doge because Musk is going to run around and look for big numbers and get rid of them. And that's, maybe there is some value in that, maybe there's not. But it's when you start for the position off simply, as you say, what's, again, the red tape cutting again is politicised because it tends to be favoured by one side of politics and the other.

42:07But it makes sense. Go and have a look. you mentioned the regulation for a cafe i've seen you before and i don't repeat myself too frequently but i i i firstly i have to believe every single cafe in the country is breaking the wall in one form or another because so many bloody regulations how could you possibly do it and if i was going to start a cafe i can't even i can't even think where i would go to make sure i could find every single regulation that applies to me and make sure i was compliant with them all and then on an ongoing basis make sure i was compliant with them all how do you do that it's you know it's you pay a lawyer a lot of money it's what you do even then a solicitor or something Are they going to get it right with that many laws?

42:40I mean, just human nature. Can you - Yeah, no, it's mad. A cafe lawyer might be able to do it, but if I got my general lawyer up the road, it's like, make any final laws to apply at cafes. I'll do my best, yeah, but I can't promise you I'm going to find them all. It's like, yeah, just madness. Yeah, madness. Honestly, you and I will sit down for a day or two. We'll come up with 50 recommendations, they're budget neutral. And we'll have a - And we'll have inside the tent. Get someone inside government. Give them the option. Go and get them to sit down with the Department of Veterans Affairs and then go and sit down with the department of the environment and go and sit down with the department of small business or workplace safety and then go on.

43:13It's the Toyota Five Wires. Why do we do it that way? And the other thing, by the way, is I do think we need some business in there, not because I want to run government departments as businesses, but because you think about the better way to do things. Not that governments can't do it, but if all you, I work for people who work for companies for a long, I've been working for now for 13 years. I'm getting to that point myself. But when I was at a previous company, had really long tenured employees. They just had done things the way they'd done things because they'd done them that way. And no one had come in and said, it's almost to your point actually, there might be a different, I've used some different software in the past.

43:48Should we look at that? Or have you thought about doing this this way? Why do we do that? There might be other solutions. Oh, really? It's not dumb. They're just institutionalized. And that idea of getting someone externally, I suspect a lot of, frankly, technology solutions, technology-based solutions, would make things a whole lot better. massive wrap for service new south wales um by the way currently labor was liberal i don't know who brought it in originally the online stuff for services is very very very good so it's an online portal for all new supplies government i'm sure other states are the same or not you know um just really good drive digital driver's license access your rego um it's just it's a very very well done system they've done a really nice job with it and i think more people who could actually start with some of that expertise and go into other departments say hey why do we do this this way we could always have is there a better way i don't know well here's an idea oh that's good idea let's save us some money or we've got rid of some staff that that's worthwhile here's the other thing and this this doesn't feel a bit doji but i'm going to go with it anyway i um i worked for a company it was heinz a long time ago so i don't mind mentioning it um heinz started globally to sack 10 percent of the workforce and stupidly because they just can't help themselves they go every office i've got to cut 10 percent which is dumb because as if as if waste is universally spread but anyway it is what it is so the australian business was told to cut 10 percent of jobs from head office just told right outright and unfortunately i had to make a couple people redundant as part of that process here's the thing two weeks later the same work was getting done the same output was getting produced yeah and those people weren't bad people and they weren't even the ones who were made around it weren't the problem what it meant was people who were left went what jobs we actually have to do how do we actually have to do them what time have i got to do them come on i swear to god mate it was only looking back did i go we didn't miss a beat it wasn't like oh that thing can't be done or that no one knows that thing or that system's now bro it just worked i was like oh my god we were 10 of the staff and nothing changed and i'm not again saying the same is true i don't know what the numbers are the percentages are but to imagine that we are fully um utilizing all government departments to their absolute maximum i just think is is not because they're government this is the other thing people say oh governments are bad and public servants are bad it's not even that no it's an institution thing not a private That public thing.

45:58Right, exactly. Exactly. Yep, 100 % agree with that. Should we move on? Yeah, I just got the one, the delineation that is important in that public-private debate. And I agree with everything you said. It's just, it's certainly not something that it's public, therefore it's bad. Right. But what the private sector has going for, when I say going for it, I mean, it's not something you'd like as someone in the private sector, but you constantly have the sort of democles hanging over your head. If we do not react or change, we ultimately go out of business and we cease to exist. Yes. With government, that is far less – like you can go on and on and on and on and on failing to deliver.

46:40There is no mechanism that says you're clearly failing here and there's consequences for that. There's political consequences, but they have to get rather extreme before they come into effect, right? There's also benefits from making the cost cuts over and above just the competition, thing which is we can make more money if we can find a better way to do something right yeah and governments don't have that incentive they shouldn't right i don't i don't want a hospital administrator trying to work out whether they can possibly avoid someone dying if they cut down to two nurses rather than four maybe we'll get away let's try it and see i mean you know there is there is a service provision which is not and it makes it harder it's really hard education department same thing how do you how do you how do you how do you calculate how many you need some someone's gonna make a decision but the the the you know the the impact is what you're trying to measure now you do it by measuring the impact and seeing if you do have a negative impact then you can change some stuff and there are ways to do it which i don't say you can do nothing i'm saying it's much much easier to go hey if we sack that person do we make less money and that's all that matters you know that that's if we sack someone in the department of affairs do we save some money yes do the veterans not get their payments maybe do they get their phone calls answered when they call because they should probably not okay well how do you draw that service line it's really really hard and it's super hard it's also entirely subjective by definition.

47:53Profit is really objective. You make it a good day. By the way, plenty of companies still do put short-term profit ahead of long-term gains. Companies aren't perfect. No. But there at least are measurable outputs that are relatively singular in their impact, frankly. Yeah, there's a course correction mechanism that's in there, I suppose. Hey, speaking of course correction, speaking of budgets and politics and all that kind of populism, we haven't yet, you and I at this point in time, heard the opposition leader's budget reply speech. But we do know that in the interest of good policy, long-term economic prosperity, and making sure Australia becomes a better place, he's going to announce a 25 % fuel excise cut for 12 months.

48:35Okay. That's it. That's it? Okay, that's the thought bubble. Well, let's think about it. So, I don't know, I admitted to you off-air, I'm not fully across this drop this morning. That's all it is. That is the drop. 25 cents off the exercise for 12 months. So I guess my question would be,

49:00am I better off and how much less is the impact to the budget? If there is some combination of, and again, just framing it, there's only two choices. There's what Labor says and what Liberal says. They're the only two choices. They're both bad choices. but if I'm trying to evaluate those two choices I guess the only question I would have is like well in aggregate are more people better off both in terms of what they get in their pocket versus what the government is able to deliver is that fair? have I phrased that right? yeah I think it's right I guess we don't know because someone's got to crunch the numbers and all of that right?

49:42this is the problem and here's the thing it's 12 pounds for 12 pounds What's the point? There is no policy here. It's vote buying, right? And again, it's not means tested. So everyone gets a fuel exercise cut. It's for 12 months only. So is it needed or is it not needed? And if it is needed, who's paying for it? If you're just going to put it on the national credit card and pay the credit card off at some point in the future, all you've done is shifted consumption. I mean, I'm all for the automatic stabilizers of, you know, deficit budgets and surplus budgets and all that kind of stuff. So there are times when you want to provide that support.

50:12And again, as I said at the end, this is the thing, by the way, I always say to people, I keep it over Twitter, after I posted the energy subsidy criticism. Oh, I suppose you'll criticise the petrol subsidy then, will you? Actually, yeah, I will. I'm not a partisan hack like the people who are responding to me. They're both stupid. They're non-demand tested. They're temporary. They don't solve any problem. They just paper over a problem. By the way, guaranteed if the opposition wins, government does this. They'll say, see, we're bringing inflation down. They won't say when it stops, inflation goes back up again.

50:44it's just a mindless waste of money again because it's unfunded now I will give the I'll give the opposition leader some time and again by now you're listening to this you know the answer so I want to I will kind of you know just forecast a little bit in a time if they fund it with some savings somewhere else then that's much more understandable I still wouldn't do it universally because GROs need a tax cut for all the for all the things we need to do and fund and everything else let's find the savings we can save now sometimes there is worth cutting something universally. Not everything has to be means tested.

51:15But if you're going to dip into the budget, by the way, if it is fully funded, you could probably use some of that fully funded savings to actually offset the debt and deficit. That'd be nice. Rather than giving away fuel excise. So, you know, partisanship drives me bananas. But, yeah, it's just stupid. There is no justification. Are there benefits? Yeah. Does that mean it's justified? No. You know, there's also drawbacks to things that are justifiable too. Doesn't mean they shouldn't be done. but as as policy I can't even call it policy it's not policy it's an announcement for votes yeah that's all it is it's and the usual suspects will jump all over it and tell you the petrol tax guy's good but the energy subsidy's bad it's the same thing it's expensive politicking for the purposes of winning votes with no meaningful impact on the long term health or growth of the economy nor dealing actually with the long term structural issues and distribution that we have as a country that is absolutely the core of the issue for me.

52:12There's nothing that's been structurally addressed. By the way, just on the deficit idea here, right? I mean, correct me if I'm wrong, but isn't the theory that the reason you have a deficit is to stimulate when the economy needs stimulating? Yeah. Now let's just high level here. I'm not saying that these are the best of times, right? I'm not saying that everyone's just crushing it. Yeah. but it's not a recession. Stock market's at record levels. Unemployment's about as low as it's ever been. GDP is growing forward. Inflation is back, at least how they measure it, to some semblance of what is targeted.

52:52So my point is, where's the emergency? Where's the recession? I mean, one's coming because they're sowing the seeds of it right now. It's like, yeah, correct, correct. I'm trying to avoid it. Absolutely sowing. Yeah. But do you see my point? This is always my pushback with the ideology here. It's just sort of like, well, we absolutely should spend when the economy needs it. It's like, well, if we're doing it now, where's the dry powder for when we really need it? Because there's a recession coming. I don't know when or why or under what circumstances, but as sure as night follows day, the cycle will turn at some point and we will have one.

53:28And so these should be the times, arguably, that we're in surplus. If we can't be in surplus with the stock market at record levels, unemployment super low, GDP growing, et cetera, et cetera, et cetera, et cetera. It's like, when? When is this surplus ever going to come? We're running a deficit in the good, I'm not saying they're great times. They're obviously not. And this is so much of the problem with GDP and these other asinine measures of economic well-being. But nevertheless, at least through the framework and the mental models that the mainstream sort of looks at these things, it's just like, why now?

54:05You're not even prosecuting the ideology in the way that you frame it. And that's exactly the problem. When you start with that situation, there is no out. And this is, yeah, you're absolutely nailed there, mate. The deficit spending is not even that you choose. Oh, man. If the budget's working properly and that we have a structural balance, I've talked about that so many times and no one cares because it sounds wonky and I get it, but it's important. You don't even choose a deficit. Deficits happen automatically because your tax take falls and your welfare payments go up. You don't even have to choose a deficit.

54:49Similarly, you don't choose a surplus because when times are good, tax rate soars, tax take soars, sorry, and the welfare spending falls. That's why they call it the ordinary stabilizer. They just work that way. The problem is we have no structural balance. So what happens is you run massive deficits in the bad times and little deficits in the good times. That's right. That's exactly right. Or a tiny$9 billion surplus. And people say, oh, at least Chalmers delivered a surplus. He didn't deliver a surplus. He was around when it happened. And I'm not being political here. Johnny on the spot when commodity prices spike, right?

55:21That's how we do surpluses in this country. Which, by the way, is perfectly fine. Yeah, hey. We should run a massive surplus. So two answers, mate, or two thoughts, and they're kind of opposed. We should have had probably somewhere north of a$50 or$60 billion surplus in the last couple of years. Yeah. We should still be in surplus now, and we should be in surplus next year. The problem we have is politically, and I will say electorally because too few people understand this, and it's been exploited by the politicians, that if there'd been a$60 billion surplus last year, that would have been held to pay politically.

55:59Because don't you know we're struggling? And this, I'm truly very careful in public how I say this because I'm going to come off sounding like a heartless bastard. Things are really tough for a small number of people who need support because inflation is through the roof. But that's absolutely true and I have no issue with that. When I've just talked about before about everyone saying they need a tax cut, middle and upper class Australia is not struggling through the impacts of economic vagaries. When they're struggling is when they lose jobs. They are struggling because, and there is some policy in this, by the way, it's not entirely our slash their fault.

56:37They have two new cars, kids in private schools, a$3 million mortgage, a restaurant habit that our grandparents wouldn't have any idea about, a need for consumerism that is discretionary, not required. Regular overseas holidays, ivory backscratchers, et cetera, et cetera. And I'm not going to Christmas people having that. If you've got everything, do it. Hey, hell yeah. No shade whatsoever thrown here. Do it if you can. But things get better and worse. Don't cry poor while you're doing it. That's the issue. And again, it's wrapped up a little bit in government's wasting money, so I want some back.

57:16and that's both true and also just not an excuse. So they're different. The claim is true. Therefore, I need a tax cut is ridiculous. And so that is the fundamental problem is we have created lives that cannot deal with economic volatility and we have created expectations of government that have allowed us to or wanted us to have those expectations because they want to solve our problems and be elected to do so. That's the answer. And so we should have, we should, a responsible government would have delivered a 50,$60 billion surplus last year. And a, frankly, an electorate with a clue, I'm going to be a politician, I'm just abusing everybody now, would have said, shit, that sucks.

58:03I can't, honey, we can't afford the overseas holiday. We'll go local this year because inflation's up. That's it. That's as far as it goes, right? But I'm glad the government's actually got a surplus so they paid out some of the debt so my kids don't have to deal with it yeah i don't know or i don't have to deal with it right this is i mean this is we we can decry what we might perceive as unfair or uncomfortable i i get that but we've we've just always got to remember that these financial engineering approaches don't actually solve the problem they shift the problem they either shift it in time or in nature yes so you can't come we again you're an alien you land on earth the hairless apes are doing their thing right you you've just always got to and then you do an inventory of the stuff right everything from the pencil to the supercomputers to the cars and to the services that people are able to provide each other you do was inventory of that right and then you measure that and we'll just actually just let's just stop at that point there it's like it whatever it is it's it's finite and you have to come up with a way to how do we how do we distribute this finite stuff around in a way that's fair yep probably the biggest question that a civilization can can ask certainly way up there right and the debates have been raging for centuries on how you do that.

59:32But that's - Safety in healthcare and then it's distribution of assets. That's the framing that you've got to start with here. And I was ranting to you off air, like, it's just like you're talking about the budget. And I said to you, I can't watch it. Yeah. And the reason is, it's like, is it important? Yep. Is it interesting? Yeah, I dig this stuff. I can talk about this stuff all day long, but I can't watch it because no one's even engaging in the debate. The two sides are talking past each other. They're basing it on principles that are neither accepted or established in any way, shape or form.

1:00:10It's all just on the vibe and how it might feel and how it might look. And I can't listen to it. Now, if there was a genuine debate amongst thinking people who recognized the reality of certain things, even no matter what ideology you're on, we should be able to agree on a common set of assumptions. And there are some shared realities that we just can't. The sky is, do we all agree the sky is blue? Yes. Okay, let's put that aside and then move on from that kind of point. We're not even at that point. That's why it's so easy to be, like, it's, you know. what's the word? It's just to be nihilistic about all of this stuff, because it's not like my preferred philosophy ideology is not being prosecuted, although that is true.

1:00:57And part of my frustration is that we're not even talking about it. We're not, we're completely beyond, we're just not discussing it. And the people that should perhaps be more forthright in surfacing these discussions and forcing these questions on the powers that be, i.e. the journalists, aren't. They're just, I mean, you listen to any journalist forum, it's like all they're interested in doing is trying to guess when the election date's going to be called. Like how many times, who cares? Sometime in the next few months. May 2nd? Oh, is it going to be May 3rd? is it going to be like what are we can we just talk about like these massive societal issues and the structure that we're building around here and like and how that might be a bad idea and the interesting thing is not interesting fascinating annoying frustrating thing is that i think really when you force both sides on a couple of key points they'll both be in agreement like there there is there is far more overlap in agreement than disagreement yet if we can't even acknowledge or or or recognize those core truths and we're just we're just point scoring at this point who it's not who is better who sounds better yes that's what matters exactly and that and that's and then and like i you sort of say that the electorate and you know we we do get what we deserve but i'm always i'm actually pretty forgiving of that because again people are just trying to raise kids earn a living you know like yeah hey son you should grow up and become a plumber oh by the way yeah on the side you should also be uh an investment analyst and a macro strategist that's right oh and a monetary theorist as well that's right why dad because well you kind of have to if you ever want to navigate politics and you know it's like but but i should still be a plumber yeah but as well as all of these other things and it's it's just that that's that's where i just uh that's why i find it which is the exact wrong thing to do i know it's the wrong thing to do but i disengage from from the debate because there is no debate yeah glad i got that off my chest well done hey um let's speaking of speak while we're in the real talk uh phase let's finish off with a little bit of business news after after a lot of politics and economics but hopefully useful stuff and i'm gonna bring some politics back if i know where you're going go on about jeans west yeah oh yeah don't you worry there's always a line back to it okay uh jeans west has gone broke for the second time in five years uh the company bought it out of administration has basically plunged it back into administration uh couldn't make it work 90 stores closing 600 people uh 600 jobs lost um i was going to go on a bit of a a mini range a mini rant tangent uh but i'll let you do it instead if you've got some things to say what do you want to what do you want to throw in i've just i read the headline and i was like cool when's when's the bailout first reaction And like, no one's talking about it.

1:03:58There won't be a, why not? They're a large employer. Now, Wyala, we've talked extensively about on this pod. They are twice as big as Jeans West. Yeah, that's right. In a number of employees. Not Ballpark, something like that. Not 10 times bigger, not 50 times bigger, twice as big. So making steel, bail out. Making jeans, selling jeans. And my question is, why? Yeah. I assume the answer is for strategic purposes. You don't believe that. I don't believe that. I have to laugh, right? Because it actually makes sense of the periphery, right? It's like, well, if we get into real trouble here, I really hope that Australia can manufacture steel.

1:04:48And if we don't have any jeans, we'll be okay, right? Yeah. there is a dimension to it until you start thinking about the scale and quantity and caliber of what we can actually do and what strategic advantage it actually does bring about, you know, when, when push comes to shove and you start taking inventory of all of these kinds of things. But isn't it funny though, or I should have actually made drawn the comparison with, is it Bonza? Who's the airline? Yeah. Bonza was the last one. Rex, you mean Rex? Rex, sorry. Hard to keep track. I know. Yeah. Which one's, which one's gone broke now? Which one's gone from.

1:05:19But it's just like, there are some, if I'm ever dumb enough to start another business in this country, I'm going to do it in an airline or steel. Steel works. I want to do it in something that is politically favored. And by the way, I don't think jeanswear should be bailed out. And I feel terrible for all of the employees, but it bailed out because you, me, and all of our listeners and just people in aggregate weren't shopping there. And they certainly weren't prepared to pay a price to make them viable. or they would just run so poorly that that value proposition couldn't be put to us as the consumer.

1:05:52And, you know, that's sad, but that is that correction mechanism that we spoke right at the beginning of the thing. And it's like, well, what's the choice here? We have a very inefficient delivery of genes and a very costly one and a very low quality one, or we make room for someone who can do it better. I'm like, well, I'll go for that. As you would say, we're not even making room for it. they're just disappearing and will be replaced by something else. Yeah. I have not woken up after hearing that news with any concern as to whether I'll be able to source a pair of jeans. You're getting your jeans.

1:06:24Fair enough. Fair enough. Yeah, no, I think that's right. My, yes, I think I was, I wasn't going to go in the jobs and bailouts direction. I was going to. But it's just, it's just funny though, because that's where we go. Like on industry A, that's our go-to. Industry B, it's like, oh, well. My suspicion on that one made it a couple of things. big single businesses in single locations are seen as more politically poisonous because if Whaler loses the steelworks and the Whaler town suffers and therefore some politician is going to complain about it or be tagged with it. So I suspect it's a bit like that.

1:06:56It's a bit like shipbuilding in South Australia, right? Every election, there's always shipbuilding in Adelaide to try and keep jobs there because that's what they want to do. So I suspect that's actually the fundamental difference. The other one though is kind of to your point, which is that emotional, we talked about this before, the emotional nostalgia thing about we'd like to make things and we're not going to make things anymore not making things is bad so yes we see retail as different from manufacturing as if one is more um uh virtuous than the other worthwhile or yeah and i really i hate that i that people say oh we don't manufacture stuff all we'll do is you know sell coffees and and whatever it's like as if as if someone choosing to spend money on a coffee and have that coffee made by someone who's got a job is less than someone choosing to buy a bit of steel from a steelworks like the the value judgment and that the dismissiveness of that of baristas aren't real jobs but but steel work needs real jobs it's just it's just nonsense right and it's it's it's 1950s thinking i get it i actually i do think honestly i do think there's something really deeply ingrained in our psyche about making stuff and i think we we project that and i think it's real i don't necessarily blame those people in i don't blame people for the instinct i do think we have to be a little more thoughtful about, you know, somehow a manufacturing job is more real than making a coffee or cutting hair or physiotherapy or whatever else it is.

1:08:16It's just nonsense. Here's my view. If it exists, it by definition is in demand. Until it's not, right, exactly. Until it's not. I mean, just like if I can – I'm going to start a yoga studio, right, here in the mountains and 10 years later I'm here and I'm supporting myself with it. The only inference you can make from that is that not by government decree or political will or by anything other than the fact that for some reason people are happy to come along and let me instruct them in yoga. Yes, yes. Now, and so you have to overtly criticize the subjective decisions of people spending their own money in their own way for that not to be valid.

1:08:56So if I, you can say yoga is a waste of time and my God, you are the worst possible instructor and you might have valid opinions on both of those. but I exist, right? I do it. That's the evidence. This is like, is it valuable? Definitionally, it's valuable or otherwise I wouldn't be viable and I wouldn't therefore exist. Yeah, the value judgment that goes on is ridiculous. The point I was going to make about Jeans West, mate, just as we get close to the end is speaking of real talk and being, you know, I blame people for, you know, being greedy and selfish and all that kind of stuff and I might as well just keep going with the real talk.

1:09:27Jeans West going broke is not a bad thing. So it's bad for the people involved and it's bad the employees it's bad people lost money but who bought the business trying to make some money out of it objectively bad for those people cool it is not it is not something that we should and and by the way the other thing is like oh the economy must be terrible jeans west is folding no now i will say you made a point earlier about the economy we're not in recession we probably are in a relatively you know close to a discretionary retail recession to the extent that's true because we've oh and we've been in a per capita recession for forever except for one more recent quarter.

1:10:01Yeah, yeah, exactly. So, yeah, and I know you won't make that point. One out of eight quarters we've gone slightly forward on a per capita basis. Yeah, thank goodness everything's solved now. Yeah, so why I wanted to, Mosaic Brands has gone broke. Who else went broke recently? I can't remember. Anyway, this is capitalism doing its thing. And if I'm right, you'll throw a capitalism is like religion by the hell at some point. But it's not a tragedy that a business tries to succeed and doesn't. And that sounds like I'm being really harsh. And it kind of goes back to your points you made through the pod, mate, about the money – people aren't going to buy fewer jeans because jeans' worth goes broke.

1:10:42They're going to buy things from a company that does a better job. And by the way, that company that does a better job will employ more people and make more money and have more stores and do a better job of servicing the consumer. And we get better, cheaper jeans. Right, and that is a win. And so everyone wins. The people who work jeans will work somewhere else. The money that's lost for jeans West was paid to somewhere else, was made from somewhere else. Someone will make money on just jeans and lose money on jeans West. That's competition. Not every company can survive, and we shouldn't see company failures as a failure of economics.

1:11:13Here's one, by the way, speaking of bagging the Labor government. Here's a, I'm not going to support necessarily, but, you know, oh, Labor's doing a terrible job, all these businesses are folding. It's not a government's job to keep businesses in business. They fold if they can't do something that people... You made the point about the yoga teacher. You lose your job as a yoga teacher, not because I think yoga is a bad thing, but because all your students, are they students? Attendees go, Andrew doesn't know a thing about yoga. We're not coming back. Now, yoga teacher loses job. It's not something the government's got to fix.

1:11:45Waller can't make steel profit. It's not something for the government to fix. Jeans West going broke is not a sign of a broken economy or anything going wrong. it's the sign of democratic capitalism working that's literally someone tried and they failed to someone else who tried and succeeded that's the fun that's how we that's how we create value someone said i reckon a jean shop would work actually two people did the guy who thought i think jean shop work and actually worked how to do it well is still in business and making a fortune the guy who went i think a jean shop i'm gonna call it jeans we're just gonna do it like this didn't work why because people didn't want to shop there and i just i just think we've got to be the whacking stick of it's the government's fault business goes broke or we've got to fix the economy that business goes broke.

1:12:27Neither of those things are real and we've got to get that through our heads. Oh, 100, 150 million percent. I agree. I mean, the way I think to really help the penny drop, I mean, it seems so obvious. I don't think anyone listening is struggling with this concept except maybe some of our business leaders and political leaders. But if you think about the counterfactual so that what you're saying is that anyone anywhere can start a business and have a God-given government guaranteed right for viability. And if it can't be made viable in the marketplace, we'll make it viable by decree. Yeah. Now, what that means, what that means, again, doing the aliens, doing the inventory of the stuff, the resources, the scarce resources with alternate uses doesn't change one iota.

1:13:19But now a whole bunch is being directed to areas which are explicitly not demanded by people. what you know but that's why there are bread lines in soviet russia it's like east germany you couldn't get like a car that worked right it's like we we were misallocating these very very scarce resources and we're all poorer off so that's the question that's the reality of these things is it is it sad yes is it exactly what we should need yes because if we don't have that then we just have a mass collapse of the economy and society, ultimately. It's just as simple as that. Yeah. I mean, only for the sake of the hyperbole, I don't know if necessarily things would collapse, but you end up with just massively, massively reduced standards of living.

1:14:04You know, bread lines and crap cars and, you know, all the bad things. If we want to have a society that gives us a better standard of living, you don't do it by propping up bad businesses. Now, again, as we've said many, many, many times, you look after the employees. You make sure there are conditions in place that if genes went broke because there was some sort of non-competitive or uncompetitive behavior or can't tell baby or someone else. That's social welfare. That's not business welfare. It's so different. You're so right. I mean, they're completely different things. And people just, they muddy those things.

1:14:33Like, oh, what about the workers? What about the workers? Let's have a discussion on social welfare. That's perfectly, I'm 100%, not throwing them to the wolves. It's between the worker and the job. that started a business that no one likes and was run really badly we're going to reward that guy with my money that I paid in tax like get real can I go back to it very quickly I don't mean to do this but I will I hate the what's in it for me articles that get written about the budget after budget how much do I get it's like they'd be the most read ones I guarantee I was going to say they're easily the most clicked but it's like so someone said there's nothing there for small business it's like I don't care I mean what did you want to hand it, did you?

1:15:12Why? What have you done? Special flour deserve more money than you've got now. Not because I don't like small businesses, just because it's not the job of government. There's nothing in there for left arm, you know, fast bowlers who work in Tasmania in the brewery, but on the weekends like to shine their Camaro. No, you're right. There's nothing in there for that person. And that's okay because that's not what budgets are about. It's not handouts. Well, politicians are treated as handout season. It's not handout season. It's what we're going to spend money on during the year, things that are needed, and how we're going to raise the money from hopefully worthwhile things and appropriate things, inappropriate amounts, that's the job of the budget.

1:15:43It's not what's in it for me and what didn't I get? Who'd missed? Oh, there's nothing there for the regions. Yeah. Okay. There wasn't nothing there for cities either. What's your point? Other than, oh, so you're selfish, I get it. And I sound harshly, every small business owner is now yelling at me about how hard it is to do business in Australia, how small business is getting screwed. We've already talked about productivity. We've talked about regulation. The point is, there's nothing in it for X is just such a craven, self-interested way to think about the budget. And yes, people say, well, other people got money.

1:16:12Yes, they did. Well, the government's wasting money. They should throw me some into it anyway. No, make the deficit worse. Throwing bad spending on top of bad spending. That's actually not the way to have a good... I'm very ranting and very critical today, Ram. It's not how you get... You'd have a better country by throwing money at everyone just because someone got something. It's just the... I... Let me broaden this out. A lot of our... We blame our politicians for stuff and they deserve the blame. I've got to say, mate, though, on top of that, I really do... And this sounds like I'm doing the rose-coloured glass thing.

1:16:46Things were all better in the past and there's a lot of bad stuff in the past, all that kind of rubbish. I really honestly wonder what our grandparents think we're doing. Like, think about all the things that we get and all the things we're given, all the demands we make and all the selfishness we exhibit and think, man, we don't want to have another war, but Jesus, we could do with some, you know, some sort of pulling together of recognising what's actually really important, what we actually need and what's... I'm not saying people should go without stuff they need. Just get off the lawn. If you can't have your fifth bloody bottle of red or your third overseas holiday or your second brand new BMW, that's okay.

1:17:17You know, sometimes it's just not about you. And that's... I know in 2025, that seems like a strange thing to ask with social media, Instagram, and everything's about me. It's just not always about you. No. Or be the change you want to see in the world. Don't... The monolith of government isn't there to cater to every single individual's whim need. It's not there to do it. It's practically impossible to do that. Actually impossible. So, I mean, here's another subtle point I should have made earlier. I think I've made it on the pod before is that it's not just deficits and spending aren't intrinsically bad.

1:17:59You touched on it before where you sort of said wasteful spending. That's the problem. If the government poofed a bunch of money into existence and spent$10 trillion more than they brought in, however, they put that money to use, which had an incredible return on investment, either dollar-wise returns or social societal returns, we'd actually be better off. So it is theoretically possible to spend well beyond your means and still make everyone richer. That's going to take a bit of time to wrap your noodle around. That's what every new business owner does. They take a whole lot of capital and say, I'm going to throw$1 ,000 in this bucket and get nothing for it yet.

1:18:44Yep. You just waste$1 ,000. One day, hopefully, I'll get something back for it. And that's absolutely right. So it's not – you've got to be careful, again, because there's intent and then there's how that is received. Yes. I want to be clear, I don't think either of us are sort of saying governments shouldn't spend money. And certainly, you know, even it's the spending beyond your means combined with spending in poor areas, areas that have a very low or probably negative return. That's what makes us all poorer. That is the issue that we need to be upset about. Yeah, correct. So hard though, I guess from the electorate standpoint, you've got decisions made where often the benefit is immediate and tangible and the cost is long-term and difficult to connect the dots in.

1:19:31So you say, I'm the treasurer, here's a bunch of money, might not be much, but I get 10 bucks. Hey, in my mind, that's great. Now, the long-term consequences of that, probably more inflation. Yeah, that's right. By the time that that emerges from a consequence of that action, I forget who caused it and it's hard to sort of connect the dots all the way through. So it's sort of like, you know, which is why I guess things are the way that they are. Yeah, totally. And that's the challenge. I think we're done. I think we've probably flogged those horses. But, yeah, the disappointment of budget week.

1:20:07And, look, maybe the opposition leader surprises us tonight, our time, and maybe. No chance. No chance. I just want to listen we don't know what he said you're kinder than me there is zero chance that there's going to be anything of substance thank you for destroying my faith in you I'm sorry I don't hate to be the yes you do you love being the bad news you would audition for a role as a grim reaper if you got the opportunity no I'm kidding thank you we'll try and we'll try and be a little bit happier next week maybe we can find some good news cross our fingers that being said there also might have been an election called and God forbid it's going to be an interesting couple of other ones.

1:20:43We will see you on Sunday, though, after Andrew has competed or completed some degree of strength or endurance or something impressive. We'll find out in a day and a half time. In the meantime, have a great weekend and full on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.