Is CASA a liability to an aircraft industry?

[Bruce Tuncks]

Consider this: " governments gradually employ more and more ambitious elites who capture a greater and greater share of society's income by interfering more and more in people's lives as they give themselves more and more rules to enforce, until they kill the goose that lays the golden eggs"

 

You would think Ibn Khaldun knew about CASA, but he wrote this nearly a thousand years ago.

 

Personally, I think that if CASA were abolished, we could have a dynamic aviation industry, but alas as a country we are too stupid to consider this. We have Jabiru despite, not because of, CASA. Could it be that you would be better off developing new aircraft in a less over-regulated place?

 

 

[Guest ozzie]

How many companies and individuals have already moved offshore because of the over regulating of CASA.? Promote safety or industry but not both. Will be interesting to see if any positive changes come when McCormick leaves CASA when his contract expires this year.

 

 

[turboplanner]

The systemic problems are bigger than McC.

 

A better solution would be what the Victorian Government did with the Transport Regulation Board which spiralled out of any control, had enforcement officers carrying guns etc. It closed the TRB down, and converted the two multi story towers in Carlton into Units.

 

We've never missed the TRB, and Regulations are no longer produced by the dozen every year by bureaucrats who never drove vehicles, but by the Parliament after debate through two Houses and representation from the Community.

 

 

[John Nooyen]

We are seeing this in mining also.

 

I call them 'Self sustaining Beaurocracies' They make doing business so expensive and un-workable that companies shut down and move overseas.

 

 

[cscotthendry]

There is no simple answer to this in reality.

 

Companies are designed and required to do one thing only, make profit. The safety and wellbeing of their customers and workers just isn't a consideration except where regulatory bodies enforce it. A completely unregulated industry or business environment would be a pathological monster that would damage people, the environment and anything else that got in the way of profits. The GFC was a shining example (although some are still in denial) of how deregulation can lead to disaster. Even then, the financial industry wasn't completely deregulated, but there was enough failure of oversight that we ended up with global economic calamity.

 

That said, bureaucracies expand endlessly to occupy all available space and need to be periodically deconstructed or reformed.

 

There is no static solution.

 

 

[fly_tornado]

Won't Warren Truss just install an out of work farmer in the top job?

 

 

[facthunter]

A review of function and performance of this organisation is long overdue. It is unpredictable and inconsistent in aim policies and direction. It probably requires a change of the act of Parliament under which it operates. It would impose a sense of uncertainty to all participants in the Industry that could well be done without. US FAA seems to function much better as they seek to AID the industry, not shackle it. Nev

 

 

[turboplanner]

A review of function and performance of this organisation is long overdue. It is unpredictable and inconsistent in aim policies and direction. It probably requires a change of the act of Parliament under which it operates. It would impose a sense of uncertainty to all participants in the Industry that could well be done without. US FAA seems to function much better as they seek to AID the industry, not shackle it. Nev

No change of the Act is needed, just some bi-partisan recognition that rolling several departments into one reduces oversight, and a few decades of this has led to an out of control situation, which needs to be brought under control.

 

 

[turboplanner]

Won't Warren Truss just install an out of work farmer in the top job?

From my experience with him, he wouldn't have been able to get around to think of that one, but it would probably be a vast improvement.

 

 

[facthunter]

I am still informed that a change IS needed to the act to require them to take the welfare of the industry into account with the way they do things. Nev

 

 

[Ignition]

A review of function and performance of this organisation is long overdue. It is unpredictable and inconsistent in aim policies and direction. It probably requires a change of the act of Parliament under which it operates. It would impose a sense of uncertainty to all participants in the Industry that could well be done without. US FAA seems to function much better as they seek to AID the industry, not shackle it. Nev

The FAA used to function much better, it's gradually becoming more bureaucratic unfortunately...

 

 

[DrZoos]

CASA do a great job with air transport. But they need to be reigned in as they have become a massive cost burden given they now have functioning systems that work.

 

Innovation works in other countries and if they sell there aircraft here they obviously comply with our rules as well. So blaming CASA might be not entirely accurate. Perhaps looking at the ridiculously high wages Australians get paid needs to be addressed. Most my friends and family are gainfully employed or run businesses, but over the xmas new year i mixed with extended family and friends. It was insightful to speak with some people who are unemployed and would happily take a full time job for far less then the minimum wage. But they are not allowed to.

 

Australia will face ongoing issues in all sectors until we manage to get our wage growth in check. I know some people struggle but the reality is we work now in a global labour market and we are tooooooo expensive. Some employees just are not productive enough on the world stage to warrent the high Australian minimum wage.

 

Unfortunately until we go thru some sort of correction we will continue to lose jobs overseas. We will never have labour as cheap as developing nations and we should not try to compete with them as they have a role of provding cheap low skilled employment. But if we want to compete with the higher skilled nations and the emerging skilled nations we need to look at our labour costs.

 

The UK has been through its correction as has the US and as a result they are now both showing some signs of recovery. We have not had a correction. We have had 30 years of growth and we where largely shielded from the GFC as a result of the savings built up by Howard and then spent by Rudd and Gillard. So we emerged unscathed, but we will continue to see industry and employment shrink until we see wages come back into sync with other western nations.

 

So im not saying dont blame CASA. But i am saying the issues of industry being hamstrung in Australia are far more widespread. Yes we have huge regulatory and taxation burdens, but our wages are one of the most significant factors holding us back.

 

The unions keep arguing for higher minimum wage. But the fact is every time they get it they also prevent some people retaining jobs and others from getting jobs. Its not that i dont think some people shouldnt get $650pw but the problem is at $650pw many industries and many people just cant create the $1000+ worth of productivity it takes to be able to pay someone $650pw and still have a profit left for the business owner.

 

Its not nearly as simple as this and i have only partially explained some aspects so some parts of this are poorly explained. But we need as a nation to work out do we all want to share the burden of a slightly lower living standard through lower wages growth or wage reductions or do we want the social problems and pain to be put on a certain percentage of people who's jobs continue to get lost to overseas until we wake up one day and realise we should have foreseen this problem coming and addressed it, rather then waiting till we have 10 or 20 or even 30 % unemployment and an economic recession to force the correction upon us. .

 

It wont be overnight but it will happen if we dont do something about it. We cannot continue to have business and govt pay $1000 for the productivity that $200 can buy overseas or that $500 will buy in the US or UK from equally skilled workers.

 

With this will come some pain like falling real estate and asset prices, but its going to happen anyway eventually as market forces price us out of the labour market. So do we want to be proactive and reduce our wages gradually till they are competitive or do we want to wait till we have a severe correction that gets lumped upon us at an intensity and timing that we have no control over.

 

 

[facthunter]

Flogging the LNP dead horse there Zoos. The working poor are not the people who should be paying for some of the crook business management we have here. Nev

 

 

[coljones]

There is no simple answer to this in reality.Companies are designed and required to do one thing only, make profit. The safety and wellbeing of their customers and workers just isn't a consideration except where regulatory bodies enforce it. A completely unregulated industry or business environment would be a pathological monster that would damage people, the environment and anything else that got in the way of profits. The GFC was a shining example (although some are still in denial) of how deregulation can lead to disaster. Even then, the financial industry wasn't completely deregulated, but there was enough failure of oversight that we ended up with global economic calamity.

 

That said, bureaucracies expand endlessly to occupy all available space and need to be periodically deconstructed or reformed.

 

There is no static solution.

The trucking and towtruck industries are two very good example of what happens when you don't keep a lid on the cowboys

 

 

[DrZoos]

Flogging the LNP dead horse there Zoos. The working poor are not the people who should be paying for some of the crook business management we have here. Nev

So who pays Nev. My point is better off with a working poor then a non working poor. Something has to give. Our wages are ridiculous . Our house prices are ridiculous and they will both continue to rise and keep the working poor very poor until we adjust wages back into line with our overseas counterparts. The problem is that drives jobs offshore. Australias biggest export right now is jobs. So at what point so we decide as a nation that we need to stop exporting jobs and have some temporary pain.

Low paid workers will always be the working poor. Its the nature of economics that the lowest educated and poorest skilled, and the poor money managers will always struggle to afford what thier higher paid counterparts can. One thing is for sure though. If you want a sever difference between the rich and poor, then the best way to do it is drive up unemployment. Id rather be working poor any day then on welfare, and thats the way we are heading if we dont do something about out disproportionate wages. PS i voted against work choices because it was too extreme. But we do need to do something in this area less extreme then work choices.

 

My wife runs a business and we would happily employ more staff if we could cheaper and we are constantly getting asked by people for work. But we cant justify it because they cant add $1000pw week to our bottom line to make it worth our while. We have had people offer there services at reduced rates but its not allowable or right to do so. If we could employ someone for $600pw in total we would probably have let our business grow and employed 3-5 more people by now. And we would have 3-5 very happy unemployed people in full time work rather then on unemployment benefits. Small business employs 49% of all Australians and the businesses we mix with are all singing the exact same tune. They would love to employ more staff but its just not viable at current wages plus overheads. I know at least a dozen businesses that would employ staff tomorrow if they could do so at a reasonable cost.

 

In 5 to 10 years time there will be few retail stores thriving in Australia, because the transport and logistics prices to store it and ship it from overseas will drive many Australian retailers out of business. And i think we can already see whats happening in manufacturing which is a precursor to other industries.

 

Why hire a warehouse in Sydney and staff at $20 hour when you can store it in asia, pay $2 an hour and have it delivered in 48 hours. Why have it manufactured in Australia which is a small market when you can get the same labour skills in the US inside a bigger market and get employees for $8 per hour.

 

Im not saying its right. But its real. And the forces of a world labour market will eventually bite any emu's burying their heads in the sand in Australia very very hard on the but.

 

 

[metalman]

CASA has existed under both sides of our political parties, and has never got better, leaner ,fairer or interested in the GA arena, it's simply not in the vocabulary of buearocrats to want the focus of their regulation to prosper, survive kind of ,but not prosper. When an industry is growing and prospering it's hard to control ,and CASA is all about control,

 

Matty

 

 

[coljones]

CASA do a great job with air transport. But they need to be reigned in as they have become a massive cost burden given they now have functioning systems that work.Innovation works in other countries and if they sell there aircraft here they obviously comply with our rules as well. So blaming CASA might be not entirely accurate. Perhaps looking at the ridiculously high wages Australians get paid needs to be addressed. Most my friends and family are gainfully employed or run businesses, but over the xmas new year i mixed with extended family and friends. It was insightful to speak with some people who are unemployed and would happily take a full time job for far less then the minimum wage. But they are not allowed to.

 

Australia will face ongoing issues in all sectors until we manage to get our wage growth in check. I know some people struggle but the reality is we work now in a global labour market and we are tooooooo expensive. Some employees just are not productive enough on the world stage to warrent the high Australian minimum wage.

 

Unfortunately until we go thru some sort of correction we will continue to lose jobs overseas. We will never have labour as cheap as developing nations and we should not try to compete with them as they have a role of provding cheap low skilled employment. But if we want to compete with the higher skilled nations and the emerging skilled nations we need to look at our labour costs.

 

The UK has been through its correction as has the US and as a result they are now both showing some signs of recovery. We have not had a correction. We have had 30 years of growth and we where largely shielded from the GFC as a result of the savings built up by Howard and then spent by Rudd and Gillard. So we emerged unscathed, but we will continue to see industry and employment shrink until we see wages come back into sync with other western nations.

 

So im not saying dont blame CASA. But i am saying the issues of industry being hamstrung in Australia are far more widespread. Yes we have huge regulatory and taxation burdens, but our wages are one of the most significant factors holding us back.

 

The unions keep arguing for higher minimum wage. But the fact is every time they get it they also prevent some people retaining jobs and others from getting jobs. Its not that i dont think some people shouldnt get $650pw but the problem is at $650pw many industries and many people just cant create the $1000+ worth of productivity it takes to be able to pay someone $650pw and still have a profit left for the business owner.

 

Its not nearly as simple as this and i have only partially explained some aspects so some parts of this are poorly explained. But we need as a nation to work out do we all want to share the burden of a slightly lower living standard through lower wages growth or wage reductions or do we want the social problems and pain to be put on a certain percentage of people who's jobs continue to get lost to overseas until we wake up one day and realise we should have foreseen this problem coming and addressed it, rather then waiting till we have 10 or 20 or even 30 % unemployment and an economic recession to force the correction upon us. .

 

It wont be overnight but it will happen if we dont do something about it. We cannot continue to have business and govt pay $1000 for the productivity that $200 can buy overseas or that $500 will buy in the US or UK from equally skilled workers.

 

With this will come some pain like falling real estate and asset prices, but its going to happen anyway eventually as market forces price us out of the labour market. So do we want to be proactive and reduce our wages gradually till they are competitive or do we want to wait till we have a severe correction that gets lumped upon us at an intensity and timing that we have no control over.

Then again we import from countries where labour (including children) are treated like slaves and the environment is trashed at the expense of winning market share or lining pockets all the way up the commercial tree. One of the sad things of this new reality is that Bunnings and Woolies are squeezing out smaller hardware shops so the quality one expected is no longer there because the stores no longer stock quality items. I am sure Bunnings rings China and says - send us a hundred contaiers of stuff, any stuff will do, we don't have the expertise to even specify quantity, quality or what people actually want or need. I went into Bunnings one day to buy some LubeStick, they didn't have any and indeed didn't know what I was talking about. I bought a vacuum cleaner at Bunnings once, I went back a couple of days later to buy spare bags - sorry special order, you need to buy those on the internet and pay freight.

The US and UK have the advantage of scale that we don't - the idiots that allowed Holden and Ford to compete making cars that people didn't want while being propped up by governments (of all types) set the demise of the business from the time that the first Falcon came off the production line.

 

Just imagine how lousy aviation would be if we let Bunnings set the terms of trade.

 

 

[Old Koreelah]

Doc I agree with most of what you say, but Nev also has a point. Much Australian business management has been woeful; but they have become adept at making excuses for poor decisions and lack of vision.

 

It took our car industry 40-odd years to decide to produce 4 wheel drives, too little too late. We export some of our best and brightest people, frustrated at the lack of opportunities in their own country. Australian architects are driving some of the most innovative new cities, while people at home mortgage their life to buy unimaginative, inefficient houses.

 

We can do far better. One ray of hope is that most expatriates return, bringing new skills and experience. That gave NZ a viable film industry and is doing the same for Indonesia. I'd like to see my countrymen sent on a fact-finding mission around the world.

 

Perhaps this deserves its own thread:

 

I'll kick it off with Japan, where we could learn how to build, run (and value) a rail system.

 

Any other contributions?

 

 

[DrZoos]

 

From 2013

 

Even with currency taken into account this is our problem. Compare us to comparable western countries eg US UK Canada and then try to justify why our workers are worth so much more. I really feel for the poor and working poor, but this highlights our predicament more then a few CASA rules.

 

coljones - As you say we should not try to compare with countries that use human abuses for labour and we ought to impose restrictions on items produced in those countries for mature markets. But just compare us to the western countries and then try to justify we dont have a wages problem. And guess which two countries are struggling to sustain growth and employment right now. France and Australia.

 

Relative to average wages we have the fourth highest minimum wage in the world. So our working poor are actually the working non poor when compared to other nations.

 

And you cant use tips as an excuse because most minimum wage jobs in those countries do not rely on tipping.

 

If your a courier driver in Australia please tell me why you ought to be paid 80%+ more then a courier driver in the USA. Are you really able to deliver 80% more parcels. Likewise manufacturing, if your sewing or on a production line putting car doors on. Do you do it 80% better or faster??? If you make sandwhiches or are on a checkout are you 80% faster then a US employee. Or do we just expect to live more comfortably at the expense of exporting our jobs. And there lies the problem.

 

If we want to pay our employees 80% more for the same job, then we can expect all the non essential jobs that can be done overseas will be. And then those of us lucky enough to still have work will enjoy the fruits of not being on the union induced unemployment lines.

 

If companies with cash flow and huge govt subsidies like holden and ford cant justify production in Australia, how can we ever expect small start ups and cash starved innovators to get going here on a descent scale..

 

Donald Trump said if you half wages you get 8 times the jobs. We dont need to half wages, but we do need to at least halt wages growth or have some reduction.

 

 

[Guest Crezzi]

Perhaps its unsurprising that a graph from an Australian business organisation exaggerates the differences in minimum wages.

 

https://en.wikipedia.org/wiki/List_of_minimum_wages_by_country shows the values for 192 countries expressed in international dollars for a more balanced comparison

 

Cheers

 

John

 

 

[turboplanner]

The trucking and towtruck industries are two very good example of what happens when you don't keep a lid on the cowboys

What on earth are you talking about? Both these industries are very tightly controlled, and statistically sound.

 

 

[pmccarthy]

The Australian mining industry is under great threat due to excessive wages, everyone from the CEO to the truck driver is overpaid, and the industry will contract a lot further because it is not internationally competitive. That matters, because much of Australia's current prosperity flows from mining investment and mine production. A large part of Australia's commercial aviation industry is funded by mining. Not just FIFO, but much of the full fare intercity traffic.

 

 

[metalman]

What on earth are you talking about? Both these industries are very tightly controlled, and statistically sound.

Well not so well controlled, there was a lot of fuel tankers and trucks sitting around last year from corner cutting,,,,and they were the ones that got caught!

Matty

 

 

[metalman]

The Australian mining industry is under great threat due to excessive wages, everyone from the CEO to the truck driver is overpaid, and the industry will contract a lot further because it is not internationally competitive. That matters, because much of Australia's current prosperity flows from mining investment and mine production. A large part of Australia's commercial aviation industry is funded by mining. Not just FIFO, but much of the full fare intercity traffic.

As it comes out what the Holden workers were getting paid it's no wonder they pulled the pin,,,these are basically low skilled workers who would be on $20 an hour in a non union factory, getting 2-3 times that is just plain ridiculous, nice , but unsustainable,

Matty

 

 

[crashley]

why is falling real estate and asset prices a pain if assets and real estate was cheaper you wouldn't need such high wages to survive

 

With this will come some pain like falling real estate and asset prices, but its going to happen anyway eventually as market forces price us out of the labour market. So do we want to be proactive and reduce our wages gradually till they are competitive or do we want to wait till we have a severe correction that gets lumped upon us at an intensity and timing that we have no control over.