Australian Politics General...

[SirRumpole]

It's killing the host.

The bottom line is that there are more consumers than shareholders and the shareholders depend on the consumers for business profits, so look after the customers and you look after the shareholders.

The problem is that this only works on an economy wide basis, so an individual shareholder in a company says "screw the customer, I want my return". But if every shareholder in all the companies said that then they would be stuffed as well.

Shareholders can't really think beyond their own little world.

 

[Value Collector]

What's the average ROC for a typical bank depositor?

I dont know, but that wouldn't be a good metric to measure anything about depositors, because they aren't investors they are largely consumers using a service.

It's like saying, what's the return on capital of the average woolworths customer.

But by the way the banks have some of the lowest roc out there

 

[Value Collector]

Shareholders can't really think beyond their own little world.

Thanks a lot?

Nothing more than a small minded greedy little twit living in a bubble am I?

I actually think its customers that struggle to see the big picture.

Any way, I am out on this conversation, over to the cynics for the last word.

 

[SirRumpole]

Thanks a lot?

Nothing more than a small minded greedy little twit living in a bubble am I?

Like most of us you see the world from the view of how it would affect you. What your return on your investment is. You don't see things on an economy wide basis. If you can't the sense of what I said in my last two posts then I'm afraid there is little hope of trying to explain it further.

Bottom line is that overall in the total economy (and in individual businesses) there are more customers than investors and if customers are badly treated they go elsewhere and investors don't get a return.

Are you truly unable to accept this ?

I remember being totally ignored in a department store once by four sales assistants who were sitting around chatting. I walked out and never went back. That store has now closed so obviously a few others had the same problem.

As far as banks go in this country the profits of banks are pretty well assured. They look the same, offer similar services and similar rates with little competition to their dominance. They need a shake up. They are getting a grilling in the Parliament but it needs to go further so the public can see how they really operate.

What is cynical about wanting a better deal ?

In fact I can't see anything more cynical than saying that bank depositors deserve bugger all when they are the ones supplying the stock in trade in the first place.

 

[SirRumpole]

One way of overcoming the customer/investor conflict.

https://theconversation.com/the-for...in-australias-leading-private-companies-18282

 

[Value Collector]

if customers are badly treated they go elsewhere and investors don't get a return.

And that business wouldn't earn a good return on equity would it?

A high return on equity is a sign of a business that is doing a good job, not a bad one.

But I am over this conversation

 

[luutzu]

The bottom line is that there are more consumers than shareholders and the shareholders depend on the consumers for business profits, so look after the customers and you look after the shareholders.

The problem is that this only works on an economy wide basis, so an individual shareholder in a company says "screw the customer, I want my return". But if every shareholder in all the companies said that then they would be stuffed as well.

Shareholders can't really think beyond their own little world.

That's right.

Big and small corporate titans are given too much credit for being "smart" entrepreneur etc. when anyone could see that what they're doing is not good for them in the long term.

It's like a farmer not taking care of the land or the crops, not feeding their livestock properly. It's not going to end well.

But I guess there's the nanny state making policies where consumers have little choice but take what's given; and when the big boys fail, it's bail out.

 

[luutzu]

And that business wouldn't earn a good return on equity would it?

A high return on equity is a sign of a business that is doing a good job, not a bad one.

But I am over this conversation

You can earn good returns by screwing over your customers too. Doesn't mean it's a good business.

 

[SirRumpole]

A high return on equity is a sign of a business that is doing a good job, not a bad one.

That's not the whole story and you know it , or I hope you do.

Any company can earn a high return by being a monopoly or ripping off customers. If ROC is your sole judgement of a company's benefit at large then I think I have proved my point about cynicism.

But I am over this conversation.

 

[luutzu]

I dont know, but that wouldn't be a good metric to measure anything about depositors, because they aren't investors they are largely consumers using a service.

It's like saying, what's the return on capital of the average woolworths customer.

But by the way the banks have some of the lowest roc out there

Woolies give a return to its customer - food, groceries at "reasonable" prices in the one convenient location. So that's their customer's return.

Compare that to an average bank depositor, ones whose paycheck comes into the bank, sits there for at least a few day; or sits there for a rainy day... Let say there's 10M account in Australia, each with average of $1000 - amount too low for a term deposit so no or little interest are paid on them.

That's $10 billion dollars. And on average, it moves up and down, but over the entire year there's $10B in deposits everyday the banks get to play with and pay absolutely nothing on them.

That's robbery man.

And these depositors are not paying for a deposit box. It's not storing their jewelries or collectibles. It's cash the bank can use to lend out knowing that there are rules against total withdrawals on a single day.

 

[Value Collector]

Woolies give a return to its customer - food, groceries at "reasonable" prices in the one convenient location. So that's their customer's return.

.

CBA give a return to its customer - Cash storage, transfer and return at "reasonable" prices in the one convenient location. So that's their customer's return.

 

[bellenuit]

Th

CBA give a return to its customer - Cash storage, transfer and return at "reasonable" prices in the one convenient location. So that's their customer's return.

That's why they are called Transaction Accounts and the convenience they offer is worth the lack of interest payment. In most cases the money goes in (usually automatically) every pay day and is withdrawn or expended usually in full before the next pay day. Cash withdrawals can be made for free anywhere in Australia and bills paid automatically by proper set up of the account. There is little to no opportunity for the bank to onlend these funds as they are required to meet daily disbursements. If managed properly by the customer, this is a fantastic facility that can be obtained for free.

If a customer has excess funds regularly left over by the next payday or additional funds from elsewhere, then these should be moved to a Savings Account which offers interest.

Calling Transaction Accounts a ripoff shows a lack of understanding of their purpose.

 

[luutzu]

Th


That's why they are called Transaction Accounts and the convenience they offer is worth the lack of interest payment. In most cases the money goes in (usually automatically) every pay day and is withdrawn or expended usually in full before the next pay day. Cash withdrawals can be made for free anywhere in Australia and bills paid automatically by proper set up of the account. There is little to no opportunity for the bank to onlend these funds as they are required to meet daily disbursements. If managed properly by the customer, this is a fantastic facility that can be obtained for free.

If a customer has excess funds regularly left over by the next payday or additional funds from elsewhere, then these should be moved to a Savings Account which offers interest.

Calling Transaction Accounts a ripoff shows a lack of understanding of their purpose.

How much is that convenience worth? $100M, $200M a year?

Let's be conservative and assume that every adult Aussie has 1 transaction account.

Assume that their pay and what's set aside or yet to be spent averages a $1000 in each of the account.

Money goes in and goes out for the individual, but not all at once. So on average, the bank pretty much have that $1000 per account each day of the year.

Assume that there's no fees on these account [big assumption there, most would be charging about $10 a month plus some $0.25 per transaction over 5 or six transactions].

At 10M account, $1000 each... that's $10,000,000,000 sitting in people's account that the bank does not pay any interest on, and can play with.

If the bank were to be charged at rate they're charging their borrowers, at say 3%... that's $300Million a year.

So much for being nice and kind and not at all gouging customers.

The banks are abusing their practically monopolistic position and robbing people blind.

yet that's a fair dinkum. Good on 'em. Offering invaluable service for "free", make only some profit so that the economy remain strong.

This is Alice in Wonderland stuff.

 

[Value Collector]

If the bank were to be charged at rate they're charging their borrowers, at say 3%... that's $300Million a year.

Firstly they need to pay less to their suppliers than they charge customers, just like Woolies and Coles.

but ok, so lets say they are charging customers indirectly $300M each year, for the service the customers are taking for granted

How much would it cost to provide that service?

If I gave you that $300Million, how much of it would you have to spend to replicate even just the big fours ATM networks including renting sites, maintaining them and armour guard deliveries etc, the call centres dealing with customer enquires, the bank tellers, the software systems, the physical moving and storing cash, processing checks etc.

Or did you think the expense fairy paid the cost of providing those services?

 

[SirRumpole]

Firstly they need to pay less to their suppliers than they charge customers, just like Woolies and Coles.

but ok, so lets say they are charging customers indirectly $300M each year, for the service the customers are taking for granted

How much would it cost to provide that service?

If I gave you that $300Million, how much of it would you have to spend to replicate even just the big fours ATM networks including renting sites, maintaining them and armour guard deliveries etc, the call centres dealing with customer enquires, the bank tellers, the software systems, the physical moving and storing cash, processing checks etc.

Or did you think the expense fairy paid the cost of providing those services?

Look, the fact is that banks have saved millions over the years by replacing staff with ATM's and saving the salary cost. Sure there are costs associated with ATM's but if it was less profitable than getting rid of staff then they wouldn't be doing it.

Instead of passing these savings to customers they pass it to their profits, but they are very quick to pass on RBA interest rate reductions to their customers.

 

[luutzu]

Firstly they need to pay less to their suppliers than they charge customers, just like Woolies and Coles.

but ok, so lets say they are charging customers indirectly $300M each year, for the service the customers are taking for granted

How much would it cost to provide that service?

If I gave you that $300Million, how much of it would you have to spend to replicate even just the big fours ATM networks including renting sites, maintaining them and armour guard deliveries etc, the call centres dealing with customer enquires, the bank tellers, the software systems, the physical moving and storing cash, processing checks etc.

Or did you think the expense fairy paid the cost of providing those services?

First, practically all the set up costs were paid for by the government, i.e. taxpayers. All the tech, the sites, the infrastructure etc. etc. were set up and paid for by the gov't before it was offloaded, for a song, to private banking enterpreneurs and their "mom and pop" sharedolders.


Second, give any idiot $300M a year, that's per year, and trust me, they'll set up networks and ATMs like they're getting $300M a year forever.

 

[Smurf1976]

.It's like a farmer not taking care of the land or the crops, not feeding their livestock properly. It's not going to end well.

It can work very well in the short term but it's ends in disaster in the longer term.

It's like machinery. You can make the financials look good by (1) running the machinery as hard and fast as it can possibly go whilst (2) minimising maintenance which costs through lost production, wages, materials and so on.

Doing that makes you look good. Look see, we've increased production, got our costs right down and everything's going just fine.

Then a point comes where you find that your machinery doesn't just need a service but instead is completely stuffed and requires total replacement. Meanwhile you notice others who didn't run it as hard as it would go and who kept up the maintenance are having no such problems and are carrying on business as usual.

It sounds silly but there are plenty who have done it over the years. Land, animals, staff, machinery and so on can all have the **** flogged out of them in the short term until they collapse in a heap.

 

[sptrawler]

Well I guess it can be said, there is the option of using overseas banks, like HSBC, Citi etc.
Maybe they will offer better service and returns, as their Australian subsidiaries, are a small part of their global footprint.
Their obvious leverage to the bigger global market, should enable them to undercut, the Australian banks.
It might be just a case of shopping around, for the best deal.
It may be just like the Australian car industry, they rode the consumer into the ground, on the basis they had the dealer network.
Eventually everyone bought the better overseas product, despite the service challenges, so maybe people should talk with their feet.
Find another bank other than the big 4, and support them, I know I do.
I also know Telstra is feeling the pain of competition, people are talking with their feet, with regard telco providers.

 

[Logique]

Will be watching with interest in future, Ms Ellis' pronouncements about gender quotas and the gender pay gap. And her former colleague Nicola Roxon too.

Kate Ellis to quit frontbench, forcing Bill Shorten to reshuffle - 9th March 2017
http://www.smh.com.au/federal-polit...ill-shorten-to-reshuffle-20170308-guu2n8.html

Labor frontbencher Kate Ellis is set to quit politics at the next election after more than a decade in federal parliament to spend more time with her young son.

She will step down from the shadow ministry, creating a vacancy in the early childhood education portfolio for Bill Shorten to fill, but will serve the remainder of this term and not force a byelection...

 

[Logique]

Let's have a 50% quota of men in nursing, primary school teaching and librarians. And 50% quota of women in plumbing, motor mechanics and garbage collection. It cuts both ways.

Not that Ellis will mind, swanning off with her indexed parliamentary pension.

HOWARD’S POINT PROVED - Tim Blair, The Daily Telegraph
http://www.dailytelegraph.com.au/bl...d/news-story/4f3e53c43f5d676a777c5fbbc5531689
March 9, 2017 - Labor’s Kate Ellis takes issue with John Howard on the topic of women in politics.
The Australian reports: Labor Shadow Minister for Early Education, Kate Ellis, has hit out at former Prime Minister John Howard ...

Last year Mr Howard said federal parliament will never see an equal representation of women and men because “women play a significantly greater part of fulfilling the caring role”.

“I think that is absolute rubbish,” she said. “I am someone who has had a child as a member of parliament, who has benefited from the flexibility that we get in our workplace that most workers just don’t get.”

And then she quit politics to look after her two-year-old son.