Flexible work offers benefits but pitfalls as well

Appearing in IN PRACTICE magazine, April 2020

 

Nearly three-quarters of small and mid-sized accounting practices use flexible working arrangements, according to the recent CPA study My Firm, My Future*. Remote working is common, which can mean giving employees the option to work some or all of the time from home, employing individuals to work for a fixed period from home, or using independent contractors, especially to cope with busy periods or special projects. Such arrangements can be good for both the practice and the workers but company principals should be aware of the legal issues and the management pitfalls.

“The basic distinction between an employee and a contractor is that an employee is hired to work, usually exclusively, by one business,” says Nicola McMahon, Senior Associate in the Employment Relations and Safety team at McCullough Robertson Lawyers. “They are paid a wage, after PAYG deductions, and receive entitlements, such as annual leave and personal leave.  Independent contractors work for themselves and sell their services or expertise to one or more businesses. They are paid an agreed rate without PAYG deductions although may charge GST. They do not have paid leave entitlements.”

But there is no definitive test, and sometimes legal advice might be needed. This is important because there have been cases where a business has engaged contractors, but those individuals later argued that they were, in practice, employees, and have brought claims for unfair dismissal or unpaid entitlements.  Also, the ATO may determine that an employer should have deducted PAYG tax for someone they have treated as a contractor, when they were an employee.

“There are also serious consequences for contravening the ‘sham contracting’ provisions of the Fair Work Act 2009 where an employer is found to have disguised the relationship,” McMahon notes. “There are stiff penalties if this behaviour is found to have occurred.”

Working-from-home-1

Clarity needed

Dr Jim Stanford, Director of the Centre for Future Work at the Australia Institute, likewise emphasises that employers should be aware of their responsibilities.

“Some employers might plead ignorance about their responsibilities when it comes to remote workers, but ignorance is no excuse,” he says. “Whether you are talking about employees or contractors, employers have an obligation to know and abide by the legal standards of the relationship.”

An important step is to have a clear policy on remote working. Some large firms have policy documents but many small and mid-sized firms make it up as they go along, case by case. A written policy provides certainty as well as legal clarity to both sides. It also requires managers to consider whether remote working is really appropriate for the company and the work.

“With remote working, employers benefit from not having to provide office space and technology,” Stanford says. “They may experience less absenteeism, and they may find they are able to recruit labour at a lower cost, since the workers will take into account that they don’t have to commute to work in weighing the appeal of the wage offer. On the other hand, employers don’t have clear oversight or direct control over the worker’s activity and effort. That can undermine observed productivity and the cohesiveness of the work.

“Some remote workers may enjoy the convenience of avoiding travel time and being able to work in more flexible time blocks. The downside is the possibility that work expands to take up larger and larger portions of their overall life. Their work is embedded in their homes, which can become very oppressive.”

Relationship building

Ultimately, if an employer wants someone – whether employee or contractor – who works effectively, meets deadlines, and delivers according to the brief, it is in the employer’s interest to invest time and energy in building a positive relationship.

As a part of this, employers who engage home-based employees should also be aware of the OHS issues. They need to ensure that employees working remotely have a safe work environment and are provided with appropriate tools to do their job, which may include IT equipment, desks, and chairs.  Essentially, the OHS requirements are the same as if the employee was in the office.

“Companies should regularly contact employees who work remotely to check their mental health and satisfaction,” advises McMahon. “Working from home has its benefits but it can be socially isolating.”

 

To access a copy of this report go to https://www.cpaaustralia.com.au/public-practice/managing-your-practice/my-firm-my-future

Digital, growth and mindset

Appearing in In The Black magazine, March 2020.

 

Digital is Everyone’s Business: a Guide to Transition
By David Banger
BookPod, $39

Digital is Everyones BusinessMany senior executives understand the necessity of going digital but making the transition from a hierarchy to an organisation where information flows around easily seems like a very daunting challenge. Banger, a CIO turned academic, offers practical advice, starting with the development of a learning-based mindset. For leaders, this can mean admitting their weaknesses in certain areas, which can be a painful step. Finding the most suitable digital platform is important but having the right people in place to make it work is essential.

In many companies there will be long-serving employees who are wary of digitisation, so the leadership group has to be able to present the advantages of the new way of working. The transition also provides the opportunity to reveal activities which are not adding value, a crucial issue in large organisations. There has to be a clear message that innovation and experimentation are critical components of the digitisation journey. Keep the information pathways simple, walk through the changes in plain language, and get up to speed on the technology side, advises Banger.

He explains this concisely and systematically, with helpful tools and relevant analogies. The move to digitisation is not easy but this book offers a useful roadmap.

 

Growth IQ: Get Smarter About the Choices That Will Make or Break Your Business
By Tiffani Bova
Portfolio, $53

Working out how to grow the business is the fundamental, and most difficult, task for leaders. Bova is a specialist in the area and draws upon her consulting experience to set out ten paths, ranging from product diversification to partnerships to extended customer base penetration. She carefully unpacks each of these but she emphasises that in nearly all cases sustained growth requires a combination of ideas. The search for a single magic bullet, in fact, usually ends in failure. Understanding each path means that a leader can develop a coherent suite of strategies to provide synergy and flexibility. There is, however, a common thread: a continued focus on the customer, which is the origin of the “growth IQ” concept.Growth IQ Aust cover

Along the way she looks at companies that have implemented multi-faceted growth strategies, such as Netflix, McDonalds and Apple. She also examines some failures, such as Blockbuster, which provide useful lessons as well.

Don’t think it will be easy, says Bova, and neither will it be quick. She believes that sustainable growth builds up slowly. This willingness to eschew the quick fix is a refreshing aspect of the book, and Bova also has a good eye for practical solutions and solid metrics.

 

The Outward Mindset: How to Change Lives and Transform Organizations (2nd ed.)
By The Arbinger Institute
Penguin, $30

This volume updates a 2016 edition, with an expanded set of case studies and new research material. The Arbinger Institute is a training and coaching group, and many of the stories discussed in the book come from its programs. The authors believe that many companies have become inward-looking, having drawn the wrong lessons from management theories that emphasise internal operations. This isolates a company from its clients and the broader environment. Addressing this problem begins with people changing their personal outlook into one based on collaborative listening and positive interactions.

Employee training is useful but the key is the organisation’s leaders demonstrating the value of an outward-looking mindset, and an important chapter provides a game plan for communicating it. Getting there may take several years but the rewards are significant, with the benefits eventually flowing through the company. In particular, teams become more productive and connected to the firm’s objectives.

Some readers might find a few of the numerous stories difficult to follow but there is always follow-up analysis. The website of the Arbinger Institute has many of the stories available as videos, and there is also an online audit tool to assess progress towards an outward-focused mode of thinking.

Outward Mindset

 

Taxing issues for 2019/2020

Appearing in In The Black magazine, March 2020

 

With the end of the current financial year in sight, tax advisers have to be aware of moves by the Australian Tax Office to improve the level of compliance as it works through existing programs and introduces some new initiatives.

Generally, the ATO is pleased with the direction of change, judging from recent comments by its head, Chris Jordan*. In the past few Budgets the ATO has received funding increases which it has used to address the income tax gap and the black economy. There has also been ongoing support for the Tax Avoidance and Phoenix Taskforces.

The intelligence-gathering work of the ATO has also increased, with tip-offs to its Tax Integrity Centre at record levels. As a result the ATO has conducted audit visits to businesses in areas where there appears to be a high level of black economy behaviour, such as not reporting transactions made in cash. The Melbourne suburbs of Frankston and Croydon, and Bega on the south coast of New South Wales have been targeted by the ATO in this program.

The high level of tip-offs might signal a social change, away from the longstanding culture of ‘gaming’ the tax rules towards the view that the system should be fair and transparent.

At another level, the introduction of Single Touch Payroll and the expansion of the Taxable Payments Reporting Systems appears to have improved compliance due to enhanced reporting.

“It is important that everyone pays their fair share of tax, no more and no less,” says Elinor Kasapidis, Tax Policy Adviser at CPA Australia. “The ATO has been signalling for some time the industries and practices where it has concerns. The latest efforts are a continuation of ongoing compliance activities to address the black economy. That has our support.”

Michael Papandrea FCPA, Director of ACT-based Papandrea Partners, sees the advances in technology and information-gathering that the ATO has made as a game changer.

“From a practice perspective we have to keep abreast of the changes under way,” he says. “Advisers have to ensure that they have the systems and training in place to consistently identify the clients who may be impacted by such changes, or areas of risk within their practice. Checklists and investment in smart software can be very useful in this.”

Tax-article-image

Issues for attention

An area that the ATO has long identified as problematic is rental income. In particular, on the deductions side, the ATO has indicated that some taxpayers claim travel expenses to visit their rental properties, while some claim expenses under repairs when they should be depreciated. There have been other cases where mortgage interest has been claimed when the property was not rented or available for rent, but was a holiday house.

Some property investors who do not use tax advisers seem to be unaware of the ATO’s data-matching capabilities, and so make claims that might not be fully compliant. This could represent at opportunity for tax advisers to increase their client base by emphasising that professional advice is now not just useful but effectively essential.

“Unfortunately, with the information available from Tax Advisor Google many taxpayers believe they are experts,” says Papandrea. “With its new AI systems the ATO has the ability to match behaviour with what is being declared. Up until now the cross-checking system has been limited. AI is closing that gap, so information will be available almost instantaneously to the ATO. This is where compliance is headed.”

Papandrea, looking towards the end of the financial year, believes that the ATO will continue its focus on GST compliance, especially GST on property transactions. Inappropriate claims on vehicle expenses or travel expenses will be another area of attention, as will debt forgiveness and trust distributions. Issues around the Superannuation Guarantee are likely to figure over the next few years, especially with an amnesty currently in place.

Kasapidis adds that the ATO has updated its information on private groups and has proposed increasing the reporting burden on high-wealth groups. There is also an ATO draft ruling on work-related expenses for non-business taxpayers which may impact some claims.

Another issue for tax advisers is the change Is the lodgement method, with the introduction of myGov ID and Relationship Access Manager. The previous ATO Portals system was the subject of criticism as lacking some functionality and not being user-friendly. While the new system might experience some teething problems the general view is that it will, over time, improve efficiencies for tax practices. However, advisers will need to ensure they are fully conversant with it before the end of the year, and that security issues such as password protection are addressed.

Looking ahead

The overall trend is that the ATO is getting smarter at ensuring compliance. Taxpayers who might be tempted to ‘sail close to the wind’ should bear this in mind, and advisers should ensure that clients understand the message.

“Advisors should have their systems and knowledge up to speed and need to ensure that they can dissect their client base to identify the risk areas,” Papandrea notes. “They need to be on the front foot. Documenting discussions and advice at every stage is critical.
“The ATO is also looking closely at tax agents who have statistically been making the highest claims. Who would want to be dealing with that? You need to protect your brand and reputation.”

In the longer term, the move towards pre-filled returns for many taxpayers will mean that the business model of many practices will have to change.

“While increasing volumes of data are being used for pre-fill, tax advisers and agents still add value in more complex areas of tax and ensuring their clients have access to the full range of concessions and deductions available to them,” says Kasapidis. “Notwithstanding this, CPA Australia has for many years encouraged members to enhance their offerings to clients and focus on value-added services.”

Papandrea agrees. “Compliance will continue to be an integral part of any accounting business if done properly,” he says. “For example, a compliance review of a client’s affairs to stay abreast of the legislative changes and risk areas is the perfect segue into identifying areas of the client’s business that may require attention. This in turn leads to broader business advice for the client and the opportunity for a practitioner to expand into advisory services.”

* See the November 2019 issue of In The Black, ‘ATO’s Chris Jordan: the man with a tax plan’, at https://www.intheblack.com/articles/2019/11/01/atos-chris-jordan-man-with-a-tax-pla

Netflix, transformation and quality

Appearing in In The Black, February 2020

 

That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea
By Marc Randolph
Hachette, $33

That Will Never Work coverNetflix has become a fixture of the cultural landscape but it was a long haul to get there, according to Randolph, and founder and first CEO of the company. In this rollicking account he describes the many false starts and reversals, as the home entertainment business went digital and the technology that made streaming possible developed. There were plenty of sceptics (including Randolph’s wife, from whom the book’s title comes) but Randolph and some key investors persisted, constantly revising the business model and the product mix. At one point they pitched Blockbuster to acquire them; Blockbuster’s refusal stands as one of the worst business decisions ever made.
Randolph was wise enough to know that his strength was entrepreneurial energy and eccentric visions rather than the steady management that was needed as the company grew. He was willing to step back from an executive role but he saw the successful IPO, and the figure of 150 million subscribers, as vindication. The concluding section of the book sets out the lessons he distilled from the experience, and its makes for inspiring reading. The story of Netflix is also one of new technology driving industry disruption, which makes it useful as an extended case study of how modern business works.

 

The Technology Fallacy: How People Are the Real Key to Digital Transformation
By Gerald Kane, Anh Phillips, Jonathan Copulsky and Garth Andrus
MIT Press, $67

For those CEOs who think that digital transformation can be achieved simply by writing out a big cheque to the IT division, this book makes clear that it does not work that way. Slogans like ‘our people are our most important asset’ won’t take you very far either, unless matched by solid attempts to upskill the workforce, remake the culture, and recruit the right people for the right jobs.
After four years of research, with a survey of 16,000 people overseen by Deloittes, the authors find that very few companies have got it right. Significantly, 68 per cent of respondents said that transformation would require new leadership, both to guide the process itself and then to lead the company along the digitisation road.Technology Fallacy
In this connection, the book introduces a concept called digital maturity, meaning the ability to take advantage of opportunities offered by the new technology. It is about cultivating a digital environment, enabling collaboration, and encouraging an experimental mindset. Kane, Phillips, Copulsky and Andrus provide a useful road-map, with a list of essential leadership capabilities.
It adds up to a useful package for senior leaders, mid-level executives, and HR managers. Some people might not like being told how far they have to go, but it is the sort of thing you have to know.

 

Quality Management: Tools, Methods, and Standards
Edited by Marco Sartor and Guido Orzes
Emerald Publishing, $85

In the globalised, Net-driven, hyper-competitive marketplace of 2020, the factor that differentiates winning companies from also-rans is quality. This book is written by a group of European academics specialising in the field, although they have a wealth of business experience as well. They recognise how the quality debate has changed in the past decade, and they devote important chapters to ensuring quality for stakeholders both inside and outside the company. Moving from theory to practice, they examine and update critical concepts such as the balanced scorecard and the Kano model, as well as new developments in Six Sigma and lean manufacturing.
Quality ManagementManagement accountants and finance professionals are likely to find the most valuable chapters to be those focusing on statistical tools for quality oversight and process mapping. The section on methods of customer satisfaction analysis is also useful.
The second half of the book is devoted mainly to ISO standards such as ISO 9000, ISO 14001, and ISO 45001. The concluding chapter looks at SA 8000, the international standard linked to corporate social responsibility. Along the way, the book provides tools to ensure standards compliance and certification, making it a valuable addition to a critical field.

 

Best reading of 2019

Appearing in Australian Spectator magazine, Christmas 2019 issue

 

The year has been an odd one for books, with some trying to make sense of the political landscape and others trying to avoid the subject altogether. A mixed bag, yes, but one with a lot of good reading.

The dominant event of the year was the federal election. The chattering classes had a rude shock when the Coalition was returned to office, with an increased majority and big smiles. Aaron Patrick, senior writer at the Financial Review, does a good job of explaining how it happened in The Surprise Party: How the Coalition Went from Chaos to Comeback (Black Inc), to the point that in hindsight it all seems inevitable. There was an arrogant complacency on the Labor side, driven by the public polls. Shorten, never really trusted, was unable to explain key policies. Green radicals helped to bury Labor in Queensland. Morrison, on the other hand, had clear messages and no end of rambunctious energy. He made a genuine connection with working-class voters, thereby changing the political demographics of the country and defining a new middle ground. The central lesson? It’s only over when it’s over.

A Sporting ChanceTitus O’Reily has the endearing quality of not taking himself or anything else too seriously – uncommon amongst sports writers, these days. In A Sporting Chance (Penguin) he rounds up a wealth of cases of sports heroes who have managed to get themselves into trouble, whether it involves cheating on the ground or bad behaviour off the field. Steve Smith, Wayne Carey, Shane Warne, Alan Bond: it’s a long list. Amazingly, they are nearly always forgiven for their transgressions. In some cases it has been because the sports-watching public worries about how their exclusion from a team would impact on results (particularly common with international cricket). Other times have been due to a ‘boys will be boys’ mentality. O’Reily recounts all this with his tongue firmly in his cheek, although he adds that things may be changing, due to cultural shifts and the rise of women’s sports. In any case, A Sporting Chance is an entertaining, off-beat package.

Another book that links sports with larger issues is The Football Solution: How Richmond’s Premiership Can Save Australia (Penguin) by political gadfly George Megalogenis. He argues that the rise of Richmond AFL Club to win the flag in 2017 after a long stretch of doldrums could be a model for both sides of Australian politics. Don’t change leaders as soon as you hit a rough patch, he says. Invest in the future with solid, considered choices. Avoid circular firing squads. It is an interesting view but not entirely persuasive. After all, Richmond did not even make the finals in 2018, although they came back to take the glory in 2019. Does this mean that ScoMo represents a return to stability or more missed opportunities? Maybe it is too early to say.

Stan Grant is often thought of as an erudite hero of the whining classes but Australia Day (HarperCollins) finds him in a reflective, even-handed mood. Using the controversy over Australia Day as a theme he examines a range of questions about the place of indigenous cultures in modern Australia, adding his personal experiences as well. Somewhere along Australia Daythe line we became entrenched in a blame game, and he admits that some of his own comments in the past might have done more harm than good. There are times when he even sounds like – wait for it – John Howard, searching for ways to unite Australians rather than divide them. He does not come up with concrete answers but says that both sides should, at least, step back from the heated rhetoric and look for decent compromises. Well, it would be a good start.

The idea that people should be able to discuss differences without rancour seems to have evaporated in the US, according to The Rise of Victimhood Culture by sociologists Bradley Campbell and Jason Manning (Palgrave). They trace its origins to about 2012, when several university campuses began to focus more on encouraging left-wing activism rather than teaching. Victim status became a sign of moral worth, with a slicing-and-dicing of society into aggrieved minority groups. White people were defined as inherently oppressive, targets to be attacked and abused. There was an inevitable backlash, and in this sense Trump was an effect and not a cause of the trend of polarisation. Campbell and Manning do not see an obvious way out, although they speculate that maybe the proponents of victimhood culture might eventually grow up and get real jobs. Possible, but not likely.

Justice on Trial: The Kavanaugh Confirmation and the Future of the Supreme Court (Regnery) by Mollie Hemingway and Carrie Severino shows just how much the liberal left, which once held itself out as the exemplar of due process and reasoned argument, Justice on Trial coverhas become mired in its own self-righteousness and venom. There were claims of rape, assault and even paedophilia made against Kavanaugh; some were obviously ludicrous but even the more serious ones failed to stand up under scrutiny. Hemingway and Servino believe that the left, in its shrieking way, was playing to the public, thinking that they could damage Kavanaugh so seriously that any votes he cast on the Supreme Court would be seen as illegitimate. Kavanaugh’s supporters, on the hand, focused on ensuring there were 51 Senate votes. Ultimately, Kavanaugh was confirmed mainly on party lines, making one wonder about the point of the whole exercise.

Donald Trump has a way of driving his opponents crazy, especially when it comes to foreign policy. Danny Toma, in America First: Understanding the Trump Doctrine (Regnery), argues that Trump’s policies are surprisingly coherent if you care to look. Toma, who has worked in many global hotspots as an on-the-ground official of the State Department, examines Trump’s major speeches as well as his actions. Putting the interests of your own country first is hardly surprising; the surprise is that many of Trump predecessors failed to do so. Some of America’s supposed allies seem to see the US as a giant ATM, producing cash when the right buttons are pushed. Trump admires the military, and is against putting American soldiers in harm’s way for no good reason. He emphasises that it is not the job of the US to clean up other people’s messes. Toma agrees, noting that attempts to do so usually backfire, costing blood and treasure. In the end, Toma says, the strategy is obvious: don’t be a chump.

Not just in the US but in Australia as well, the Trump era has made the cultural warriorsPolitically Correct Dictionary of the left even more virulent than usual. Kevin Donnelly has written several books about how language and education are the new battlefields, with the advocates of political correctness shouting down anyone they disagree with in the name of what they define as tolerance. Honestly, it would be funny if the effects were not so painful to so many people. Donnelly, in his latest foray A Politically Correct Dictionary and Guide (ConnorCourt), ably assisted by cartoonist Johannes Leak, has fun showing how the left often gets lost in its own circumlocutions, ending up in weird places. Personal favourite: that “dairy milk has long been a symbol of white supremacy”. Donnelly makes some serious points in the essays of the second half of the book, and offers strategies for battle. But in the end the most important lesson might be the idea that the best way to fight tin-pot tyrants is to laugh at them.

Justine Nolan and Martijn Boersma, both respected academics, have provided a sobering book, Addressing Modern Slavery (NewSouth Books). In its current form, they say, slavery is less about the ownership of people than their exploitation through deceit, intimidation, and coercion. People from under-developed countries are the most likely victims, often tricked into working on farms or in mines, because paying them effectively nothing is more cost-effective than using machinery. Nolan and Boersma also look at the situation in Australia, where there have been many cases of illegal immigrants or others of dubious legal status being exploited. They argue that legitimate businesses have an obligation to monitor their contractors and supply chains to identify cases of exploitation, and they outline how it can be done. But the nightmare stories stay in the reader’s mind. This is an awful book, and a very important one.

Wunch of BankersMost government inquiries attract little public attention but the one into the finance system was always going to be different. In A Wunch of Bankers: A Year in the Hayne Royal Commission (Scribe), Daniel Ziffer recounts the many shonky practices and straightout illegalities of the finance business, and how former judge Ken Hayne and his redoubtable counsel Rowena Orr (nickname: Shock & Orr) worked their way through them. They started with individual cases and worked up to the system level, an effective if unglamorous strategy. The arrogance of many of the key figures in the banks is astonishing, with Ken Henry, the former Treasury head who moved to the top job in NAB, the undisputed winner. It would be comical if there was not such a long trail of human pain, loss and anguish involved. Various legislative changes have been made or are under way but their long-term effectiveness is yet to be proven.

The Miles Franklin Award for the year went to Too Much Lip (University of Queensland Press), the sixth novel by indigenous writer Melissa Lucashenko. Set in the fictional town of Durrongo as several generations and branches of an Aboriginal family gather for the funeral of an elder, the key figure is Kerry Salter, who arrives on a stolen Harley. There are various disputes and disagreements between clan members, and a shadowy (white) property developer hovers in the background. The problem is that no-one in the sprawling cast is particularly likeable, and the numerous back stories tend to bog the story down. Lucashenko has a good ear for dialogue and a knack for telling details but the direction and purpose of the story is not always clear. It is worthy of the Franklin, although no-one would call it an easy read.

This reviewer’s annual prize for the most unnecessary book of the year, the Trees Are Dying For This Award, was a difficult choice. A standout contender was Plots and Prayers: Malcolm Turnbull’s Demise and Scott Morrison’s Ascension (Scribe) by Nikki Savva. It is well-researched and efficiently written, the story of the Liberals falling Plots and Prayersbetween stools – or, more correctly, stalling between fools – to bumble their way to a plausible outcome. The problem is that it has been overtaken by events. The outcome of the 2019 election turns the book into an historical curio and not much more. Sorry, Nikki, but … who cares?

Nevertheless, Plots and Prayers is not sufficiently unnecessary to take the award. The TADFT guernsey has to go to Jeff Sparrow for his Fascists Among Us: Online Hate and the Christchurch Massacre (Scribe). He spends 132 pages to tells us that people who commit random massacres are nutcases. Thanks, Jeff, we didn’t know that. He tries to knit their Internet rantings into a dangerous network but there aren’t enough of them to amount to a conspiracy (and naming names has led to legal problems with the book). Neither do Sparrow’s attempts to link shooters to the mainstream conservative parties work: they are simply too marginal and deranged. At the same time, he is happy to overlook the alt-left, which has produced worryingly violent, well-organised groups like Antifa.

A very cheap certificate awaits your collection, Mr Sparrow.

 

What Happened

The Surprise Party: How the Coalition Went from Chaos to Comeback
By Aaron Patrick
Black Inc, $30, 256 pages, ISBN 9781760642174

There’s always the unexpected, isn’t there? The chattering classes, the media commentariat, the denizens of the Canberra bubble: all of them thought that the 2019 election was over before it started. The Coalition would be swept from office, the Labor Party would be returned to its place as the natural party of government, all would be right with the world. Didn’t work out that way. Sorry.

The Surprise PartyIt’s a strange story, the tale of the election campaign, and Patrick is a good person to tell it. His previous books, Downfall: How the Labor Party Ripped Itself Apart and Credlin & Co: How the Abbott Government Destroyed Itself, established him as a fair-minded writer and a careful researcher. As a senior writer for the Financial Review he had a ringside seat for the twists and turns of the campaign as well as access to key people, and he is experienced enough to not take too much at face value.

A central element in the view that the Coalition was doomed were the opinion polls, which had shown Labor ahead for years. It seemed that the public, after the government churning through leadership dramas and policy failures, were waiting with baseball bats. The Labor policymakers agreed, signing off on a suite of big, complex policies. It was mainly the old-time religion, with more taxes and more money for anyone who put their hand out, but a new wrinkle was a belief that the public was hungry for radical solutions on the climate change issue.

The one area of weakness for Labor in the polls was Shorten, who was consistently behind Morrison. No matter, said the old hands: every PM usually polls better than the Opposition Leader.

To many on the Labor side, Morrison ScoMo was a figure of ridicule. Beefy and suburban, he even went to a Pentecostal church, where he sang and clapped and prayed. You could almost hear the Labor elite saying: really!? Church!? In 2019!? He’s dead.

Patrick provides an interesting discussion on this point. He speculates that faith might be more important to Australians than previously realised, but the point of Morrison going to church (and being filmed) was that it indicated his authenticity. What you see is what you get.

Middle Australia, on the other hand, never really trusted Shorten. No-one knew what he believed in, except his own ambition. The story he told of his working-class background did not fit the facts, and his attacks on ‘the big end of town’ sounded like a sound-bite package. Patrick reiterates a comment that how could a man who had changed his faith, his wife, and his football team be trusted.

Personal shortcomings might not have mattered if Shorten had been able to sell the policy package. But he kept getting crucial details wrong, then backtracking. He seemed surprised that journalists would actually ask him difficult questions and check the answers. He was not helped by colleagues like Chris Bowen, who said that if voters did not like the policy on franking credits they should not vote Labor. In fact, this policy – framed by the Coalition as a “retirees’ tax” – was one of the key game changers.

Another was the Labor attitude on climate change policy. It came across as an attack on the fossil fuels sector, which was a killer in Queensland especially. Even worse, Shorten could not explain how it would work, how much it would cost, and who would pay for it. The Greens, always willing to open their mouths and put their foot in it, created a huge problem for Labor with a caravan of protesters to the communities near the Adani coal mine, where they happily told people how awful they were.

Yes, there was plenty of dishonesty on both sides, and Patrick analyses the major examples. The Liberals had been taken unaware by the ‘Mediscare’ campaign in 2013 and were determined they would go on the attack, and did so with gusto. Labor’s assertions that there had been huge cuts to social spending did not fare well, with the Coalition ready with reams of refuting statistics. Even the ABC was sceptical of the Labor claims, which should have sounded a very loud warning bell.

Patrick notes that while the public polls through the campaign showed Labor ahead the parties’ internal polls revealed a different story. Broken down into regions and seats it was even worse. Maybe this is why Morrison seemed to increase his energy over the campaign, while Shorten started fraying.

Nevertheless, on election eve Labor was still sure of triumph. The actual results were a devastating shock, with some journalists refusing to accept the trends until the numbers could no longer be ignored. In the end, only a small number of seats changed hands, although it was enough to give the Coalition a working majority.

But this was not just a personal vindication for Morrison, says Patrick. He looks at data showing that many of the people who switched to Labor were in the upper brackets for income and education. Conversely, many of those who switched to the Coalition were what Labor considered to be its blue-collar base. This is something the new Labor leaders will have to look at closely.

The reasons are not clear. Was it just dislike of Shorten and Labor’s policies or are larger factors at work? Has the social conservatism of the non-elites overtaken historic economic allegiances? It is too early to tell, but we might look back on this election as a pivot point. If so, this book will be a good one to go to.

Holiday reading

Appearing in In The Black magazine, December 2019

 

The Vagabonds: The Story of Henry Ford and Thomas Edison’s Ten-Year Road Trip
By Jeff Guinn
Simon & Schuster, $40

Vagabonds book coverJumping into a car and heading for the horizon is an idea often associated with young people but it was, in fact, started by two American inventors late in their careers. Edison was the tech entrepreneur of his era, and Ford had created the first affordable vehicles. When they met in 1911 they hit it off, and in 1914 they decided to hit the road. They continued to take regular sojourns for the next decade. They did not exactly rough it, with an accompanying convoy carrying camping and cooking equipment, servants, and a chef.

They traversed the American hinterland, a nearly roadless and often impoverished setting. By all accounts they had a wonderful time. Guinn punctuates the story with vivid portraits and interesting side-trips, and it adds up to an enjoyable tale. One is never too old for an adventure.

 

How To Do Nothing: Resisting the Attention Economy
By Jenny Odell
Melville House, $49

The early promise of the Internet was about binding people together in a network of opportunities and information. True to an extent, but the darker side is the way the screen often leads to disconnection from the real world. Odell, an artist at Stanford University, believes that we will lead longer, happier, more responsible lives if we ditch the devices occasionally and spend some time doing simple things that brings us satisfaction. After all, the objective of the tech platforms is to keep us looking at the screen so they can make money. Not much of a reason for us to give them so much of our lives, really.

So hit the ‘off’ button. Take a walk, hug someone you love, listen to the world, do something slowly. These things might not sound like much, but they are everything.

How To Do Nothing book cover

 

The Future is Asian: Global Order in the Twenty-first Century
By Parag Khanna
Hachette, $23

Parag Khanna, Managing Partner of FutureMap, a scenario planning and strategic advisory firm, is very good at drawing disparate pieces of information into a meaningful picture. He collects data on trade, demography and technology to paint a picture of a rising Asia, powered along by an aspirational middle class of over two billion people.

Future is AsianToo often, he says, Western commentators think of Asia only as China and the Pacific Rim. This region is important, he readily acknowledges, but there are plenty of interesting things happening on the Indian subcontinent, Central Asia and the Gulf States. Underpinning the boom in intra-Asian trade is new-gen infrastructure, especially China’s ‘Belts and Roads Initiative’.

Of course, it is not going to be all smooth sailing. Many countries have a legacy of political instability and corruption, and others have longstanding disputes with neighbours. There are no easy solutions but, on balance, Khanna is optimistic.

 

 

Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader
By John Rossman
McGraw-Hill, $40

Remember when Amazon just sold books? Now it bestrides the world, and everyone wants to know how Jeff Bezos & Co did it. Rossman was a senior Amazon executive who worked on the scalability side, so he is well-placed to explain. He offers a long list of guiding principles, ranging from developing platforms that can provide self-service growth to focusing metrics on customer relations to using AI-based technologies wherever possible.

On culture, Rossman emphasises the value of semi-autonomous teams and of constant testing and reviews. Even successful units are told to look for disruption opportunities in their area. Bonuses are given in shares and not cash.

Interesting stuff, although occasionally Rossman might have delved more deeply rather than skimming across the surface. Few companies could use all of these suggestions but most could learn from at least some.

 

The Moment of Lift: How Empowering Women Changes the World
By Melinda Gates
Macmillan, $33

As the wife of Bill, Melinda Gates could have chosen a simple life of counting money and attending parties. Instead, she – and spouse – jumped into global philanthropy, trying to focus their energy and resources where they could do the most good. For Melinda this meant working with women in under-developed countries, on the basis that they were the ones most likely to lift up their communities. She started with the idea that contraception should be readily available but soon realised that a change of mindset through education was needed.

This concept is not new but here it somehow feels fresh. Gates admits there have been times when she felt almost overwhelmed. She was only able to keep going by occasional personal successes – a “moment of lift”. It is a powerful, touching sentiment by someone who is intent on making the world a better place.

 

 

The Non-Obvious Guide to Emotional Intelligence (You Can Actually Use)
By Kerry Goyette
IdeaPress, $31

Many discussions on Emotional Intelligence quickly start to sound like feel-good fuzziness but Goyette, who was a psychotherapist before becoming a business adviser, keeps her focus on the practical. She explains how leaders can become more aware of their emotions by asking the right questions of themselves and by seeking feedback from others. This helps them to understand their own motivations and ultimately improves their decision-making.

The book has guides, tests and case studies to show how stronger EI can help a leader overcome performance derailers such as conflict avoidance and impulsivity. Once someone has improved their EI they can more easily recognise problems in others and lead them to better outcomes.

Goyette acknowledges that developing this level of self-awareness is not easy. But the gains in professional achievement and personal satisfaction make it, in the end, a worthwhile journey.

 

Outspoken: Why Women’s Voices Get Silenced and How To Set Them Free
By Veronica Rueckert
HarperBusiness, $60

Outspoken book coverSpeaking is not difficult, says communications coach Rueckert. Being heard: that is difficult. She has solid advice for women who want their voice to be heard, in both literal and figurative senses. She examines research showing how often women in the workplace are ignored due to their method of speaking, and suggests techniques on how to avoid being interrupted and how to interrupt a conversation – or monologue – successfully. She has interesting things to say about claiming physical space and asserting the right to speak without being aggressive.

Rueckert, who is a trained opera singer, also tackles the mechanics of voice projection, including useful exercises to help transcend “cubicle voice”. Her tone is encouraging and supportive, and sometimes funny. But she never loses sight of her serious point: that liberating the female voice is a key to liberating the self.

 

Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries
By Safi Bahcall
St Martin’s Press, $27

Bahcall is a physicist who specialises in a field called phase transitions, such as when water turns to ice. He believes that this explains a wide range of shifts, from voting to the flocking of birds. A series of small structural events tip each other into a cascade.

The main thrust of this book is how phase transition fuels innovation, especially at the leading edge of possibilities. Bahcall presents plenty of examples in science and business, and finds a common thread of ideas being transferred between (apparently) unrelated fields by eccentric individuals. A once-crazy idea suddenly looks plausible, even inevitable. This is uncommon in large organisations, although they can compensate by establishing quasi-independent units of creative mavericks.

Bahcall believes that this area will be a key driver in the next decades. If his enthusiasm is an indication, he might be right.

Loonshots book cover