Are we Australians paying way too much?

Yes, good post Peter, I wouldn't necessarily recommend a property like that as an investment, particularly with regard to letting it out, unless you were living there and managing holiday lets or something, it is more of interest as to what you can get for your money in Europe regarding architecture and land.

I do thing there are some interesting potential investment props in Europe, particularly in Germany, where they have a decent solid and trustworthy ethos, and borrowing costs and yields that make sense. you wouldn't have made any spectacular capital gains, but then they tend not to go for boom and bust.
 
Today's news:

Our immediate neighbors in the western hemisphere are 1/2 the labor costs:

http://www.smh.com.au/business/australian-jobs-on-the-move-to-nz-20120417-1x5jv.html


HUNDREDS of Australian jobs have been shifted to New Zealand as local producers try to avoid the impact of high wages, a soaring Australian dollar and restrictive labour laws.
Woolworths is the latest to transfer jobs across the Tasman. It transferred 40 contact centre jobs to Auckland this week. Imperial Tobacco has also announced it will move cigarette manufacturing from Sydney to New Zealand.
The companies are following in the footsteps of the food production industry, which has been shifting jobs out of Australia to take advantage of New Zealand's lower wages.
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Heinz Australia recently scrapped more than 300 jobs across three states in favour of its large plant in Hastings, New Zealand's largest food processing and food producing centre.
The International Labour Organisation says Australian manufacturing workers earned more than $US35 an hour in 2008. In New Zealand the rate is under $US20 an hour.
Average weekly earnings for manufacturing workers in Australia are higher than those in Canada, Britain, New Zealand and the United States, says a study which put Australian earnings at more than $1000 a week, versus about $700 in NZ.
Simplot Australia is the last remaining vegetable processor in Tasmania after its rival McCain shifted production to New Zealand in 2010, citing a better return on investment.
Callum Elder, the executive general manager of quality and innovation at Simplot, said penalty rates and wage inflation make Australian processing much more expensive.
''Penalty rates are a significant cost difference to manufacturers, particularly in the agricultural game where you're unable to properly plan,'' Mr Elder said.
This has combined with wage rises that are not matched with productivity improvements, and instead stoked by high salaries in the mining sector and infrastructure projects, he said.
''Our productivity hasn't increased in the past three to four years, as an industry, but yet we've been paying 3 to 4 per cent increases [in wages], which is a large part of the cost. It's very expensive to put people into Australian factories.''
Mr Elder said base pay of $60,000 a year can leap to $100,000 when overtime, payroll and other costs are included. ''The average base salary is probably around $60,000 and there's probably another $20,000 in penalty rates, and the rest comes from surcharges and taxes.''
High wages, penalty rates and productivity of Australian workers has come under attack in recent
months. Toyota Australia's chief executive, Max Yasuda, has criticised the culture of his workforce at Altona, Melbourne, where he said absenteeism can be as high as 30 per cent.
Earlier this year the New Zealand Finance Minister, Bill English, told BusinessDay his country was benefiting from a more flexible industrial relations environment, a lack of infrastructure bottlenecks and stable energy prices.
''The IR environment is pretty flexible and has enabled quite a lot of flexibility to our manufacturing sector, which has in the last while been growing, despite the high dollar,'' he said.
The mayor of Hastings, Lawrence Yule, believed New Zealand's ''more holistic view on employment'' appeals to Australian companies.
He cited New Zealand's lower levels of unionisation, ability to operate outside traditional daytime hours, and greater use of seasonal employees. ''Our labour laws are more relaxed, as I'm told,'' he said. ''I've been advised that's part of the mix.''
Peter Burn, director of public policy at the Australian Industry Group, said New Zealand has not followed Australia in ''tightening'' industrial relations settings, and labour laws could prove to be ''the straw that breaks the camel's back'' for some firms. ''Labour laws in themselves aren't going to be the 'knock them down' difference, but could make a difference at the margins.''
Agrifood consultant David McKinna said penalty rates during peak times were putting pressure on the sector. ''If you take the cost of labour, it can run anything up to $50 an hour, whereas in New Zealand it's probably $20," said Dr McKinna, principal at strategic business consultancy McKinna et al.
Jessica Ramsden, spokeswoman for HJ Heinz Co Australia, said the now-closed plant in Girgarre, Victoria, was small by global standards, and the investment to make it competitive was too great. Differences in labour conditions between the two countries did not affect the company's decision.
Jason Hefford, from the Australian Manufacturing Workers Union, said shifts to New Zealand were a concern, but pointed to the high dollar and health and safety obligations over the high wages.
 
Thanks for the article Chief - our Kiwi's bro's will be very happy, and I totally agree that our archane workplace restrictions and inflexibility (that Lib's tried to remove but Lab put back) will be our undoing in production.

Notice that the car industry in Melbourne is putting off another 350 workers - despite masses of (wasted) money put in by federal government.

http://www.goauto.com.au/mellor/mellor.nsf/story2/374976D6DCAB2C18CA2579E20011A065

The workers intend to protest (which I assume means strike) - well - fine - the company will simply shut up shop and move overseas. I do wonder how the sacked workers were "handpicked". Maybe it was those 30% absentism folk.

I am finding that, behind the wings, small business is just getting on a doing without red tape getting in the way. I find who I need to do the work (small business), they do it promptly and cost effectively at a time that suits them, I pay them promptly, all happy.
 
Notice that the car industry in Melbourne is putting off another 350 workers - despite masses of (wasted) money put in by federal government.

http://www.goauto.com.au/mellor/mellor.nsf/story2/374976D6DCAB2C18CA2579E20011A065

The workers intend to protest (which I assume means strike) - well - fine - the company will simply shut up shop and move overseas. I do wonder how the sacked workers were "handpicked". Maybe it was those 30% absentism folk.

As an employer, it's sickening and scary, that Bill Shorten is saying that Toyota cannot hand pick bad employees for pay out, with full entitlements, without being biased.

What does that say to the those workers who did turn up. Did not pull sickies. It says.....Your stupid:p. Could have stayed home, bludged and still be protected.

Toyota will simply say, OK, we will move the lot to Thailand. Free trade. No tariffs. No strikes. Willing workers.

Does the Union not recognize this?!!! Too busy spending members funds on "entertainment"?

I am a balanced voter but we have the most corrupt, inept, inexperienced, naive Federal Government ever at this time. I just hope the Liberals has the talent to pull us back from the brink.

Regards Peter 14.7

PS thanks for the kind words re France. It is beautiful country and culture. I could move in heartbeart. In the country they value life for living. It is socailist but no stupid.
 
They should move operation to Thailand. That way the Aust Govt can stop making donations of millions of dollars to these car companies.

Love to see the quality of a toyota made in the land of smiles!
 
I agree money paid to failing industries doesnt make good economic sense. However regarding your comment implying quality wont be the same if built in thailand I would remind you BMW, Mercedes have plants there... so I would guess the quality and price would thump what we build here and hence why its a struggling industry.

The problem is government policy isnt dictated by economic thinking, logic and rationality its dictated by public opinion which would prefer having the car industry on life support for eternity just because it gives us a warm fuzzy feeling that its there.

If we dont adapt we will become the states.. holding onto past glory and refusing to make the hard decisions going into the future...

Basically we have two choices.. Our choice or no choice. What i mean by this is simple.. who just 10 years ago would have thought FIAT would be effectively own a chunk of JEEP (and all of chrystler) and Hummer by the Chinese?? - this was not their choice it was a case of "no choice" i.e. do or die. If you could turn back the clock and have cut the workforce, offshored production and either live by capitalism or die by it these companies and a host of others would be still majority US owned.

Instead we have a proped up economy from ironically the proponents of free market and capitalism.

Until decisions are based on cold reality we will simply repeat the same problems here...


They should move operation to Thailand. That way the Aust Govt can stop making donations of millions of dollars to these car companies.

Love to see the quality of a toyota made in the land of smiles!
 
Thanks for such a great post Peter. I LOVE hearing all that nitty gritty and tried to ask a few questions of the private rental owner when we went to Paris last year. We weren't looking to buy anything, but I really am interested in how they live in other places.
I would have loved to have heard more about how people lived, but my french is non-existent.

Thanks. Since many where interested (kudos) here is some more "quirky" but loveable and enlightened, French stuff so please indulge me.

The French believe in living life in the moment.

They value Food, Sex, Friends, and Family. Wealth is used to achieve the above, not an end in itself.

Thus the culture and politics achieves this. Farmers are protected but still provide stunning soft cheeses at markets and every town has bakery, butchery, patisserie and supermarkets are tolerated. So FYI (prepare to be bored)……

PROPERTY
In addition to previous notes...

Property "in the family" is why so much great homes are available for rent as BNB. When someone dies they leave it to family and (it seems) they all can take or pass on it, with compensation to the others. This also means a clear title can be a $10k exercise on a 1600 era farmhouse.

Are Apartments in Paris cheap? Depending on the suburbs, costs can be reasonable to very expensive...

Are they big. No, but all have separate WC to Bathrooms. French don’t do like all in one bathrooms like us. Very vulgar. Hotels are the same. Small but separate bathrooms to WC. Maintain the “ardor”. See sex.

SEX
Sex is not slutty but sensual. Think Ditta Von Tease. Older woman are expected to and remain stunning. Lingerie is an essential. Tracksuits are never worn out. Women dress to impress regardless of age. Men get chubby but remain handsome. Almost old Hollywood Glamour.

WELFARE IS FAIR
They tax the hell out of high wealth but are fair in doing. I.e. they provide free childcare even nannies, regardless of income from almost birth. Hence a high % of mothers work. Hence there is no shortage of doctors, teachers etc...Hence it keeps wage costs down and collects taxes, provides a career (2 jobs) and does not waste Uni training.

Here once you earn above middle you get punished. My wife and I get nothing re family tax A and B despite low incomes because, get this, in AUS, they include all income as income and do not count loses. Yep, neg gearing does not apply for allowance. We can sell every IP we have, buy a mega home on 30 acres and drive matching leased Porsches and get both A and B but have a few IPS neutral gearing, sacrebleu, you are a fat cat! So my wife, an experienced professional and her friends (similar) do not work. It is not worth it financially.

PS no- one in France says “sacrebleu” it would be like saying Dag nabbit in the US or Stone the Crows in AUS.

GREEN
Very green but with no reservation about getting 87% percent of the power from Nuclear so lowest CO2 in the developed world. Are you listening Julia or Christine.

PERSONAL RESPONSIBILITY
They are absolutely NOT paranoid about public liability. . They assume you take your own risk as it should be.

Visit a castle and want to climb the summit, go for it, at your risk. But at best, one handrail, steep stones and slip: you’re dead. I.e. We visited Longues-sur-Mer a Normandy D Day Battery, http://en.wikipedia.org/wiki/Longues-sur-Mer_battery and climbed in and out of craters, guns, tunnels. No fence or even signs : avoid massive hole in floor" LOL

Here is AUS if you dive into the ocean and hit your head you can sue the council for the sand bar. End result: signs everywhere and everyone blames the gov.

WHY ARE THEY NOT FAT?
OK they are getting fatter but not US our AUS because whilst they eat rich (butter, pastries, etc.) it is small serves and you have to walk, and up and down stairs, to get everywhere or ride see Bike. I :rolleyes:when Greens says we need public transport like the famous Metro Rail in Paris because yes, it means you can be at a station within 500m of everything but it also means it just may take three station changes and 10 sets of stairs ( I do not exaggerate) to get there.

Mc Donald’s is better quality but not at the major freeway service stations which run massive quality Cafeterias and if not your thing/time fresh baked bread, ham and cheese, et all so you can picnic. No roadside McD. See Food is religion.

PARIS IS BEAUTIFUL, ADD MOST OF FRANCE IS BELLE
The main Paris of the 20 arrondissements (suburbs to us) is largely unchanged since 1860 and hence very beautiful. Frozen in time in a romantic period. All buildings have the same controls, re height and architecture. Again, no lifts. Almost none have carparking. Very Egalitarian.

So imagine a city of 6 storey apartment blocks in stone, wide boulevards. Why? For beauty, for grace. No, the wide roads were to allow the army to get easy access to quell riots. The name “city of light” was the same, lots of lights to stop riots forming in the dark. Killed that romantic bit hey….

PARKS DITTO are beautiful. Manicured and heavily used. You DO NOT litter. You picnic. Often gated, they open and close on time. No lingering.

CULTURE
Despite socialist leanings and a motto of Liberty, Equality, Fraternity they are unlike us and very agreeable to rules and procedure and uniformity. They queue for food, taxis. No pull overs. Don’t dare push in.

Again, this means everything is beautiful and People own the "place". Gaudy advertising is not allowed. You don't see road signs everywhere, simply colored poles. Pedestrian Crossing are everywhere but shared. If you don't step on they will not stop. Despite smoking everywhere, you never see butts.

TRAVEL
Pushbikes rule. Literally. In an accident between bike and car, the car is automatically at fault. Thus everyone gives a wide berth and you see 65+ old men riding the Provence Hill towns. See why not fat. PS No one wears bike helmets, see personal responsibility above.

ARE THEY RUDE?
No they are just old school courteous and expect the same back. I.e. If you enter a shop in a village you should say “bon Jour” (generic, good morning, evening) to the Shopkeeper and to the other Customers. They will reply. On leaving Merci (thank you). If not, you will get a curt, “Can I help you” or translated you are rude get out of my shop. Manners matter. I never had any one rude to me except when I accidentally
Code:
pushing in a Fromagerie (cheese shop) queue. See queues. See respect your elders.

BUT I DON’T SPEAK THE LANGUAGE
Don’t worry about your French, Try your best and they will do the same. Most speak English well enough if not very good. Simply learn, “pardon, monsieur, je ne parle pas français, parlez-vous anglais?
Which is, of course “excuse me mate, I don’t speak French, do you speak English”

MADAME vs. MADEMOISELLE IS TRICKY
The above formality means titles matter, hence mademoiselle means Miss or unmarried and Madame means Mrs. Do your best to pick based on ring and age. Garcon is NEVER used for waiter. It is for boy.

On that point, overall, class and snobbery is frowned upon. Elderly are respected. Treat all as equals gets you far, as it should be. Remember, food is religion and professional waiter in France is the same as Doctor here, a professional. Treat a waiter bad and risk the consequences. Treat with respect and expect a better service.

ALCOHOL is very cheap, often good. Avoid obvious tourist traps. If you drink with the locals or hosts expect the wine/ cognac/ aperitif to flow and flow. To refuse is to offend. Thankfully they don’t a lot of breath tests. They think our paranoid enforcement of going not over 110km/hr on wide freeways as puzzling, so do I.

WATER is mineral and bought because in some towns, the drinking water is safe but too mineralized to make it palatable. Here we see that as being trendy. Whole lakes in the Provence hills are green with minerals but perfectly safe.

COFFEE IS BLACK EXCEPT WHEN NOT Mostly they drink "café noir" except a breakfast when it is Au Lait (large, swimming in milk, essentially a coffee milkshake). Coffee culture is different: At work you go out, to cafe, order cafe noir, stand at table, chat, nod, greet, sometimes smoke and then throw it down. Take away coffee is frowned upon. Take away food, being eaten, as you walk is virtually taboo. The equivalent to us seeing someone eating in a public toilet.

EIFFEL TOWER
A cliché but a must…… but BOOK or expect to wait 1 to 4hrs.

US?
They love Australians, tolerate British, admire Germans, distrust Italians, and ignore Americans. Except in Normandy were they have US and UK Flags everywhere thanking the DD day invaders for rescuing them. But Normandy is full of Brits and I think the flags are more marketing than passion. Despite the present issues hardly anyone wants the EU to die. They never want another War like WW2. In fact, except in Normandy, they “don’t mention the war”. Germans are like NZ to AUS, cousins.

VISIT US
They want to. They all have friend/s in Melbourne, Sydney, Brisbane, etc... and ask if you know them. They all want to visit Ayers Rock and Barrier Reef but are scared off the distance and snakes, sharks and crocodiles. They are shocked to find you have not visited Ayers Rock but live there?!? They also all holiday at the same time in summer. So they don’t get the travel far due to this constraint.

CHILDREN
They really love children. I mean really love them. They expect well behaved but do not limit them having fun and happy to spoil them. They serve children hot chocolate and chocolate glace (ice cream) that should have a coca warning label on it. They sit you at fine dining tables with crystal and fine crockery, and would not dare to suggest a high chair or booster or plastic cups.

However French Children are smaller than Aussie so they are surprised at how big your daughter is at 4. More than once we had been set up with a Cot swiftly changed when they viewed “mol enfant”.

So in closing…….

EATING IS RELIGION

Ahh.. Why I love France.

In summer, they eat in public squares, sit down affairs, three courses for as a little as $12 per person. Allow 1 to 2 hrs. Seriously, it cannot be rushed (we tried) and shops close anyhow. Nothing is too hard. At night they do soirees (village parties) in the same squares. You MUST book night and SHOULD on busy day. Reservation is a French word and a French way. It is all about courtesy. Do not expect to get lucky and turn up.

Once we learn t this we enjoyed the privileges it brings.

I.e. we arrived at a Chateau de_Chenonceauin http://en.wikipedia.org/wiki/Château_de_Chenonceaui n the Loire 10am, huge tourist mecca.

Despite being stuffed from BNB breakfast, first thing we did after one look at the cafeteria is book lunch at the converted La Orangery (Glasshouse). Huge space, stunning views, all glass and marble, etc…

Arrived back on time at 12:30pm (do NOT be too late or too early) to find huge queue of (mostly) Americans trying to get in. Wafted in, using our best French to avoid having to show we understood the complaining American about “why are THEY getting in” (see Class) and was seated at a table for 8 despite being only 3.

Feeling guilty as we looked at the hungry masses, we offered to let others join at the table to which the Waiter replied (confused look) “but then you would have no view of the Chateau”. We agreed, enjoyed 5 courses of delicacies plus 2 more palate cleaners for $35 AUS each. The Americans looked on like peasants.

ALL TOO GOOD, WHAT TO AVOID?
Marseille was crap. Think Gold Coast with Graffiti.
Normandy, yes to D Day History. No to Poms everywhere.
And personally, Palace de Versailles was big, hot, crowded opulent and boring. Wife disagrees.

VERY LAST as I escape to French Restaurant for Dinner, here is a moment to remember…

On the train back from Versailles. Daughter bored, hot, grumpy. To keep her amused (no coloring in would cut it) we said, sing a song? What song!? She grumped. Well we are in France why not "Alouette" the rhyming song. We started, she refused, but then two girls elsewhere joined in, they were German, then another two children French, and then our daughter jumps in and it was a choir. After exchanging “bon Jour” and “gutten tag” to parents, and “sorry, we don’t know you cousin in Handorf, Adelaide”, the kids played up and down carriage for the rest of the trip (40 mins) and not one passenger complained.

Children and Parents hugged on leaving, confirmed names and emails if they ever visit Aus or we Germany, so cute and so surreal. One did contact and I helped their niece find her way in Sydney for work.

Regards, Pierre 14.7

PS ignore poor spelling please.
 
COFFEE IS BLACK EXCEPT WHEN NOT Mostly they drink "café noir" except a breakfast when it is Au Lait (large, swimming in milk, essentially a coffee milkshake). Coffee culture is different: At work you go out, to cafe, order cafe noir, stand at table, chat, nod, greet, sometimes smoke and then throw it down.
.

I love your passion Peter!! I hope you get to spend lots of time in France in the future. I have a similar passion for Japan (which is probably on the opposite spectrum in "personality".

But your comment on coffee reminded me of my first trip to Italy. It was a business trip, and the group went out for dinner. At the end of dinner, someone ordered a cappucino.
The Italians reaction was akin to them having asked to have his first born son killed and served up for dinner!!!! :D:D
The thought of having milk coffee after breakfast was quite offensive to them! The poor Irish guy who ordered it still feels embarrassed about it.
 
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