Posted to Monash Weekly (13/2/2014) on 13/2/2014 at 9:42 PM
Commenting on "Shepparton SPC. Future secured with $22m?"
http://www.monashweekly.com.au/story/1796247/shepparton-spc-future-secured-with-22m/
What's the worth of SPC if its door is closed tomorrow? Very likely it will worth as much as the the scrap of the dated machinery, building and land site. So how much is this worth - $50 million, $100 million or more than the Government assistance the company is asking for?
I find it amusing that Government is handing out packages to rescue private companies when they become uncompetitive due the company management lack of forward planning, unrealistic forecast, and perhaps their inaptness or incompetence to recognise market threats.
With public companies, it is unfortunate that profits are normally distributed as dividends to shareholders, and when bad times come, there is not enough in the coffers to support losses. Lack of fund can delay or stop major maintenance, upgrades or purchase of equipment critical to ride out difficult moments. The reverse of the adage "short term pain, long term gain" is valid too, that is "short term gain, long term pain".
Australia is not only a welfare country giving handouts for many Australians, rightly or wrongly, but also for inefficient public companies. Time and again we witness Government's bandaid financial assistance fail to resolve problems in a long run. Like former Singapore Prime Minister, Mr Lee Kwan Yew, once said, "give a beggar a gold coin, he will ask for a second one".
Is there a better way to tackle this problem? I do believe so. However, I shall leave this to those highly paid parliamentarians, advisers and experts to do some hard thinking. Think outside the box, or else Australia will live in one soon.
Commenting on "Shepparton SPC. Future secured with $22m?"
http://www.monashweekly.com.au/story/1796247/shepparton-spc-future-secured-with-22m/
What's the worth of SPC if its door is closed tomorrow? Very likely it will worth as much as the the scrap of the dated machinery, building and land site. So how much is this worth - $50 million, $100 million or more than the Government assistance the company is asking for?
I find it amusing that Government is handing out packages to rescue private companies when they become uncompetitive due the company management lack of forward planning, unrealistic forecast, and perhaps their inaptness or incompetence to recognise market threats.
With public companies, it is unfortunate that profits are normally distributed as dividends to shareholders, and when bad times come, there is not enough in the coffers to support losses. Lack of fund can delay or stop major maintenance, upgrades or purchase of equipment critical to ride out difficult moments. The reverse of the adage "short term pain, long term gain" is valid too, that is "short term gain, long term pain".
Australia is not only a welfare country giving handouts for many Australians, rightly or wrongly, but also for inefficient public companies. Time and again we witness Government's bandaid financial assistance fail to resolve problems in a long run. Like former Singapore Prime Minister, Mr Lee Kwan Yew, once said, "give a beggar a gold coin, he will ask for a second one".
Is there a better way to tackle this problem? I do believe so. However, I shall leave this to those highly paid parliamentarians, advisers and experts to do some hard thinking. Think outside the box, or else Australia will live in one soon.
