Jun 27, 2022 | Governance, Leadership, Personal Rant
The ‘Insiders’ program on the ABC yesterday morning featured considerable debate about the coming wave of inflation, the increasing wages gap, the structural deficit now built into the national budget, and an interview with the new treasurer Jim Chalmers. I was struck again by the narrow focus of the conversation on the expenditure side of the equation, irrespective of the specific topic of the moment.
It seems to me that while we have an expenditure problem, about to become worse with the combination of inflation and the promises made to get elected, the real problem is with revenue.
While it is both sensible and well overdue to chop out the waste and costly lifestyle cushioning of liberal ‘mates,’ that will not solve the problem.
Long term we need a more productive economy, which does not mean less jobs, but it does mean that we need to edge up the international productivity ladder. This requires further investment in education, technical training, and investment in science and the means to commercialise the outcomes of that science.
Unfortunately, this takes investment at a time when investment is challenged by the scarcity of money. Anyone running a business understands this to their core. They also understand that to dig out of the hole, they need to generate added revenue to enable the investment, as cutting costs can only be useful at the fringes, and longer term is well documented as a failed strategy.
The government simply must examine revenue and put in place measures to increase it. Politically, and practically, increasing personal income tax is off the table. In addition, the temporary cut in fuel excise will end on 28 September, adding to costs throughout the economy and no doubt creating howls of protest.
The obvious way to generate revenue is to really bite the bullet politically and chase multinational companies that currently pay little or no income tax in this country. That would invite a huge PR response from these companies, comfortably headquartered in many of the tax havens around the world, exercising transfer pricing, related party loans, and the many other rorts that go on. They will claim that the competitiveness of investing in Australia has been destroyed, and deliver a litany of tales about the damage to the economy the withdrawal of that capital will deliver. Remember the effort the Minerals council made to force the Rudd government to abandon the mining ‘tax’? That would pale into insignificance compared to the shouting a real across the board tax collection effort would bring.
Bring it on I say. I am sick of seeing multinationals use the infrastructure, resources, and capability of Australians to benefit a group of obscure owners and shareholders hiding behind the curtains of tax minimisation and avoidance possible as a result of the simple reality that tax rules are national, while money is international, aided by political hubris.
Header Cartoon credit: Scott Adams and Dilbert.
May 8, 2022 | Governance, Personal Rant
Last Tuesday’s prime rate increase has been positioned as a disaster level cyclone by the opposition, and an inevitable but minor storm in a well-managed teacup by the Government.
Which is it?
Anyone who has been using their brain over the last months recognised there would be a rate rise, soon.
House prices have surged, supply chains are broken, energy and telco prices are ramping up, there is a not so little war going on in Europe. China is locking down millions in response to Covid outbreaks, and we, along with the rest of the developed world have been printing money like Darcy Duggan on day leave.
If ever there was a recipe for an inflationary breakout, this is it.
Unfortunately, or fortunately, depending on your point of view, we are in an election campaign characterised by ever more expansive promises to spend more in pursuit of a few votes.
Who now cares about the rhetoric that previously dominated the political agenda: Debt and deficit? Seemingly the current government has had some sort of shape-changing conversion on the road to Kooyong that makes all that former fiscal rectitude irrelevant.
Meanwhile, the opposition, while squarely blaming the government for the inflation rate is determined not to be outspent in the vote buying contest.
All this is happening while teachers in NSW strike for better pay for the vital job they are doing, Nursing home staff are as rare as non-drinkers on Anzac Day, and hospital staff are exhausted after two years of intense pressure on them while listening to politicians tell everyone not to worry, everything was under control.
There has been a wholesale replacement of fact by opinion and belief.
A fact is repeatable, its veracity can be tested, and the impact of changing input variables measured. A belief by contrast cannot be put to the test, but for some it becomes an absolute truth that is beyond dispute, and any disagreement is treated as some form of advanced blasphemy.
At some point, the piper will have to be paid, and ignoring that simple fact only makes the day of reckoning more painful.
Whichever party wins on May 21, they will inherit a generational mess of its own making. Trouble is, we, the voters, will be paying for it while politicians and by then former politicians will be running for the publicly funded sinecures provided
Header cartoon credit: the great Leunig
Apr 11, 2022 | Governance, Personal Rant, rant
On Sunday as the 2022 election was being called, I was sitting in a café in one of those affluent strips observing life, and gathering my thoughts.
It occurred to me that the blather we are all now about to face will avoid any reference to the key question that should be addressed: the growing distance between the ‘haves’ and ‘have-nots’, and how to redress the balance.
This is not about the cost of living, price of petrol, or availability of some subsidised form of income. It is about the national income, and the way governments of both persuasions over the last 50 years have let the money required for schools, hospitals, aged care facilities and all the rest slip through their fingers, while ensuring some sticks to selected fingers on the way through.
A brief economic history lesson, recognising I am neither an economist nor historian.
Towards the end of WW11, recognising the coming challenges of post war reconstruction, the allies set about removing the danger of the wild ride that had been the relative value of currencies up to that time. The result was an agreement amongst the allies in the little New Hampshire town of Bretton Woods. That agreement laid out the mechanism by which post war currencies would be tied to the price of gold, pegged at $US35 an ounce. The US dollar became the ‘reserve currency’, a guarantee to exchange an ounce of gold for $US35. At the time, the US was about the only solvent nation, and held most the world’s gold in Fort Knox (Remember ‘Goldfinger’). The International Monetary Fund was created as a part of the agreement as a release valve to address short term fluctuations.
The laws of supply and demand being what they are, the value of gold outside the official control of central governments soared, leading to an active unofficial gold market where it was traded for multiples of $35. Trouble is, you had to move the stuff, and it is heavy. (Goldfinger again)
Over time the core problem of a fixed currency regime became obvious. Money is international, it can be moved and exchanged globally, while the regulatory control of any one country ends at their borders. The obvious example of this disconnect is the so called ‘pirate’ radio stations positioned in the North Sea just outside the international boundary of the UK. These popped up because the BBC which controlled all the UK radio stations refused to play the emerging ‘Pop’ music of the 60’s and early 70’s. Being outside the border, the BBC could not close them down, but those who wanted the music could listen as easily as they could to any other radio station, just move the dial a bit.
Analogous to the pirate radio stations, the gnomes in Switzerland who were sitting on huge and very private sums of hidden wealth that could not be easily used by the owners created their own pirate system: bearer bonds. These enabled those hidden fortunes to be put to work, not only earning interest on the loans, but increasing the capital value of the investments, previously impossible.
By the late 1960’s the Bretton Woods system was clearly broken, and the US terminated the convertibility of US dollars to gold at the fixed $35 in 1971, followed closely by the pound sterling, and other major currencies. In effect we then had floating exchange rates, in an environment where countries still had regulations that stop at their borders, while money is globally mobile. It did not take long for countries to recognise the value of attracting this previously inaccessible capital by a range of means around low tax rates, banking secrecy, and personal anonymity. The lawyers and accountants since then have made this disjoint between the mobility of money and the static nature of sovereign borders a financial bonanza for those individuals and organisations with the money and will to hide their assets and ensure they do not pay tax. Hundreds of billions have been looted from the system by these ‘legal’ means, leaving those with insufficient income to fund the legal complexities to hide their income to pay for the schools, hospitals, and aged care facilities we are all demanding.
This is, to my mind, the core challenge of this election that will not be spoken about.
Labor policy is to collect tax from multinationals by denying deductions for royalties to related parties. This makes sense, but will be hard to enforce, and does not address the inequities in other huge areas of tax minimisation and avoidance. Besides, when sovereign rules change, the tax arrangements of corporations and individuals change as well, moving to a more accommodating regulatory environment. On top of that, those who make the rules are also the ones who benefit, so while there might be some ineffective fiddling at the edges for a press release, real change which requires global collaboration and endorsement currently is just a pipe dream.
However, the first step in solving any problem is to recognise that we have a problem.
Unfortunately, this conversation will not be started by either party in this coming election. For the long-term health of Australia, and Australians, as well as every other person on the planet, apart from the tiny minority of looters, it is a conversation that needs to be started, and followed through.
I need another coffee after all that.
Dec 31, 2021 | Leadership, Personal Rant
I had not intended to publish another post until 2021 was behind us after the review a few days ago.
However, the decision of national cabinet yesterday, coupled with today’s Covid numbers changed my mind.
In the back of my memory is an early Monty Python sketch.
Two characters discussing the very disturbing rise in murders, and what should be done. One finally suggests that murder be made legal, end of the problem with murder rates and associated public outrage.
Yesterday our politicians ‘led’ by #scottyfrommarketing decided to change the definitions of what constitutes a ‘Close contact’. While the definitions and consequences have varied across states to date, they are now consistent, and will reduce the number of tests, and therefore the number of cases of Covid reported.
Problem solved?
Not as such.
Perhaps the political problem has been massaged, but Covid has not gone away. The collective memory of Australians will be that once again, politicians have, if not lied, then creatively massaged numbers to make black look a bit more like white.
It is Ok to acknowledge that this pandemic has become endemic, and despite all the science at our disposal, we are stumped, for the moment. That admission however tacitly concedes that people will become sick, and some, particularly the old and in some way vulnerable, will die. Not a good election promise.
The header graph is NSW covid cases to December 29th. The 30th, yesterday was 21,151 and today, the 31st will be added tomorrow, January 1, 2022. Probably not a good beginning to the year.
Yesterday’s 21,151 came from 148,410 swabs, a 14.3% infection rate. This is a number that very recently would have induced political panic, now it is just a number to be massaged.
I wonder what the gagged scientists think of the massaging?
Have a good, and distanced, new years eve celebration.
Aug 23, 2021 | Governance, Leadership, Personal Rant
The Prime Minsters performance on ‘Insiders’ yesterday reminded me of Erwin Schrodinger’s cat thought experiment.
This was an absurd illustration of wave function collapse, a characteristic of quantum mechanics. (Note: I understand absolutely nothing about quantum). It proposes that the imaginary cat can be both alive and dead at the same time. Clearly a challenging situation, for the cat at least. Dead but not dead, perhaps just not buried yet?
It also seems to represent the Morrison governments chattering about climate change, and the choices that are needed, and not needed, all at the same time, amongst several other important questions.
As with Quantum, I fail to understand the half in the box and half out of the box ambiguity that is presented by those supposed to be making the tough choices on our behalf, and then acting on them.
Perhaps they are acting and not acting at the same time as well, and perhaps acting, taken in the context of performing rather than taking action is appropriate.
The resurrection of Barnaby Joyce to the exalted role of Deputy PM may be another kitty both in and out of the box. It seems to depend on whether he is berating the Labor party (who have their own litter of pussie-cats hidden away, unseen in the box) for some infraction of his imaginary rules, or defending George Christianson’s right to blather nonsense in the federal parliament.
I guess George does have the right to blather nonsense in parliament, he had a solid majority in his electorate at the last election, so some must think he is on the money, but the Nats also have the right to kick him out of their box. Label him clearly as a dead cat! Problem of course that they want to hold the seat, so he must remain alive as well, at least until they can find some alternative feline just as screwy to replace him at the next election.
This is a ‘Schrodinger Government’ both dead and not dead at the same time. Disturbing to see them still stumbling around blathering.
The pussy is also busily clawing at the response/non-response to the question of enabling businesses making covid vaccination mandatory. They are hoping business will do their job for them, again, and carry the risk of legal action brought under the provisions of an act clearly not reflecting the current need.
That comes on top of the narrative happening in Kabul. The PM blathered yesterday about how hard the government has worked to get out those who helped us in the 20 years of slog, and how honourable the sacrifices made by our armed forces. The fast words delivered with the conviction of a snake-oil salesman will carry little weight at all to the families of the 41 killed, and 249 injured, and those we leave behind in that sad place.
At least the chronic decision making vacillation and teflonesque reflex to dodge outcomes is consistent!
Header cartoon courtesy www.howstuffworks.com
Mar 1, 2021 | Governance, Personal Rant
How is it that some individuals at the top can get away with the claim that they knew nothing about the stench that must have been emanating from below the floorboards?
Our chief marketing spruiker, the PM, seems to know nothing of the rotting corpse that is the culture of parliament house, until forced to set up some arse covering inquiries after widely accepted allegations of sexual misconduct of the most grievous form emerges?
Some months ago, the ABC had the temerity to show a program titled ‘Inside the Canberra Bubble’ that had the roaches running for the dark corners, and the chief law officer of the country sending ‘please explain’ letters to the ABC.
Now you have multiple accusations of rape, followed by what can only be described as cover-up under the guise of maintaining the confidentiality of the victims. A noble aspiration, misused by those who are ultimately responsible for the culture and behaviour in the place.
The culture it seems, follows those who survive it.
Helen Coonan, former Liberal cabinet minister remains on the board of Crown casinos, indeed, is now chairing the business after a scathing report written by Patricia Bergin SC found Crown had been a very naughty boy. Money laundering, involvement with organised crime, and in general being a really nasty piece of work. Ms. Coonan, has conceded that Crown had facilitated money laundering at its Melbourne casino, but denied turning a blind eye, blaming the oversight on ineptitude. She has been on the board of Crown for a considerable time, so the Lord Nelson defence holds little water.
Meanwhile, to what extent have the recommendations of Royal Commissioner Hayne been implemented? A few of the easy ones have been, and the odd head has rolled out the boardroom door, but there has been little more than added bureaucracy built into the system, and a few of the perpetrators of selling insurance to dead people, breaking the laws surrounding money transfers being promoted.
Despite the calls for some sort of ‘Federal ICAC’ supported by most in Canberra, except those with a majority in the House (until the odious member for Hughes bolted for the cross benches last week), little has transpired. The proposed legislation is as toothless and useful as my granddaughter’s teddy bear. Looks fierce, but no teeth at all, just a cuddly bed mate. Utterly disgraceful.
Perhaps the castrated, non-existent Fed ICAC, should it emerge into law, would like to examine the disgrace that is the absolute lack of transparency surrounding political donations. We all know that money given by corporate donors, is given in the expectation of a return. Shine a light on it, and we might see who is actually making the laws. As a wonderful example, just look at the basket of ‘PR-able’ nonsense that is the ‘Media Code’ passed into law last week. Mr Murdoch’s shareholders are very grateful to you.
There is an exceedingly long list of dodgy dealings, to be kind with the description, that could be listed here, but the work has been done for me. While this list of 124 instances of malfeasance is exclusively the Liberal party, I see no reason to believe the current opposition is any different and would not take similar advantage given the opportunity.
I am reminded of a couple of quotations, which sadly both apply:
Firstly, George Bernard Shaw: ‘When a stupid man is doing something he is ashamed of, he always declares it is his duty’.
Secondly, Erwin Schrodinger, he of the cat in the box: “The task is…not so much to see what no one has yet seen; but to think what nobody has yet thought, about that which everybody sees.”
Meanwhile, Small businesses struggle to survive, employ, and train most of the workforce, pay their tax, and try to get on with the job despite those in charge of the country grasping every opportunity delivered by power to screw them.
Header cartoon courtesy Tom Gauld at www.tomgauld.com
