He’s at it again. Harvey Norman chairman Gerry Harvey has been complaining about how red tape makes it impossible for new businesses to get started. Like many complaints we hear from Gerry Harvey, this one is long on rhetoric and somewhat shorter on facts.
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Harvey’s latest complaint, the SMH reports, is that a “100-foot-high” tower of red tape makes launching a new business too difficult. He claims that a business idea he had planned to launch this year was scuppered because of too much regulation. “I’m in favour of governments being there to govern in the areas that need governing not a whole heap of other things that they stick their sticky fingers into.”
He also told the paper that business people and society in general should not rely on government support, instead taking responsibility for themselves:
When I grew up there was a self-care thing, you had to learn by your mistakes you didn’t have everyone around the place looking after me and changing my nappy every time I peed myself, so you have to look after yourself, take responsibility for your actions and things like that.
This is a somewhat remarkable statement for Harvey to make, given that he frequently crusades for regulatory changes designed precisely to boost his own business. To use an analogy that seems very suitable for a racing enthusiast on Melbourne Cup day, Gerry Harvey has form in this area.
The one that will be most familiar to Lifehacker readers is Harvey’s frequent complaints that online traders have an unfair advantage because they aren’t subject to 10 per cent GST. The most cursory research into pricing shows that this is unfounded, since the price difference is demonstrably often much higher than 10 per cent in most cases. For electronics in particular, Harvey Norman very rarely works out as the cheapest option, either online or offline, and there’s no evidence that’s due solely to the GST.
Another example? Earlier this year, Harvey complained that wages in the hospitality sector (he has resort investments as well as his stake Harvey Norman) were too high. The difficulty here was that he claimed a maximum wage of $42 an hour, while the highest rate paid on the relevant award on a Sunday (the day Gerry Harvey complained about) was $34.49. In other words, he was complaining about paying a wage rate that didn’t actually exist, and demanding something be done about it.
Yesterday’s claim about red tape is hard to assess, because Harvey didn’t offer up any specific examples of what should be improved. Lesson #1 right there: if you want something fixed, you need to provide details.
However, the evidence doesn’t appear to suggest that Australia is particularly badly off here. A recent comparison by the World Bank ranked Australia as #4 in the world in terms of ease of starting a business, outranked by New Zealand, Canada and Singapore. So while there’s always room for improvement, it would be difficult to argue we’re a basket case in this area.
What Gerry Harvey says will almost always make news, but it needs to be reported in context, not treated as gospel merely because he said it. His success as a businessman gives him some authority in the area, but that doesn’t mean every last word is true.
One final thought? Harvey Norman sales are up 1.2 per cent, and have been growing for three quarters. That doesn’t suggest government regulation has destroyed the business. But history certainly suggests that Gerry Harvey will keep complaining about it.