Category Archives: Economy

Taxes and Welfare are not the problem in Australia

Our public representatives need to learn a thing or two about building healthy societies.

Why we should be angry about carrying Qantas

Today’s news from Qantas is being geared up as a gloomy one. Arguably locking themselves into an escalating war with Virgin ought to put much of the blame on the shoulders of the “brainiacs” on their board.

But that is no reason for us to get angry. We lost our airline back in 1993 when our elected bodies thought it prudent to start a rock-bottom garage sale of public assets.

Today, the Qantas mask hides a bunch of international part owners. Hopefully, we are now no longer mourning this and again, this is no reason to be angry today.

We ought to be angry with any suggestion that our taxpayer dollars can be held ransom to the investment activities of a private entity.

A debt guarantee does not benefit the public in anyway. Should their investments fail, the taxpayer suffers. Should their investments prove lucrative, the shareholder profits. There’s no benefit for guarantor, in this case, the taxpayer.

It is like the government handing over a blank check to a broke gambling addict.

If we are supposed to care about Qantas with any patriotism, stick a few old planes in various aircraft museums around the country. Don’t gamble with the Australian public pocket.

The age of entitlement is apparently over for Australians. This should also span big business, regardless of what façade it wears.

Qantas is no longer the Queensland and Northern Territory Air Service. Qantas is an international private entity. Profits are not our revenue. Qantas jobs are increasingly going abroad as well.

Should it sink or float is for the shareholders and senior board to work for and not the Australian public.

How to erode an economy and look good at the same time

The story below is certainly close to me. I grew up in Morwell, with my father working for CES.

The point here is the exact opposite to what politicians say. Privatization does not lead to increased competition with benefits to the community. Privatization strips local wealth and the quality of service. Privatization provides a small bumper in the budget but erodes long term financial revenue.

This is why Hockey suggested our retirement money should pay for what he should be paying for with tax payer dollars. The government is poorer largely because of the big cash grab of the former Howard government via their privatization actions as well as an inability to plan ahead in key areas.

Privatization does nothing for the community. Privatization is little more than an easy option for the fiscally inept. It’s a way to make the books look good without doing a good job. With the ramifications too far into the future, responsibility is never truly realised.

Wage Explosions and the duped wage earners

Back in the middle of last month, I made the following prediction for the next twelve months;

“I wouldn’t be surprised if Maurice Newman and the Business Council chime ever louder the “findings” that the main problem in doing business in Australia is average wages.

“This will all be in the lead up to the Senate reshuffle after which will make life a lot simpler for the current government to make whatever changes they want.

“The hope will be that the Australian public is suitably primed for the “revelation” that we need to lower minimum wages or provide more power to employers or something similar and the government must act to save Australia’s prosperity…”

Today we have another individual brought in by this government, Federal Employment Minister Eric Abetz, weighing into the conversation. In his words,

“we risk seeing something akin to the wages explosion of the pre-accord era when unsustainable wage growth.”

And,

“Employers and unions must be encouraged to take responsibility for the cost of their deals; not just the cost to the affected enterprises but the overall cost in relation to our economy efficiency and the creation of opportunities for others.”

It is starting to sound as though my prediction might hold some merit. And here I am, an amateur political commentator enthusiast (because, after all, what these people do on my behalf directly affects me and my family and friends).

The Australia Institute looked into Abetz’s concern of a potential wage explosion as well and found the following.

wage growth AI

Startling, I know.

Of course, there was no talk of the negotiated wages at the top end, that can be, as in the case of the CEO of Myer, 75 times as much as that of an employee on the shop floor.

No, the waste is the students, the mums and dads; the wage earners doing the actual work and, collectively contribute a massive purchasing potential, provided they have adequate wages to do more than struggle to make ends meet.

In the lead up to this previous election, this hopeful government assured Australian workers that they wanted to lighten the financial burdens placed on families, with the focus removing the carbon tax. Since they have come to power, they have worked to ensure each one of us has to pay any time we see a doctor, they have started to look at the GST – both moves that disproportionately affect poorer Australians than richer.

Likewise, the dialogue under the former government stressed the shortcomings of current government entitlements such as the pension, where this government thinks they are paying too much.

Minimum wage and worker rights are surely on the table as well. That the top end don’t get a mention is direct evidence that yes, yet again poorer Australians are being attacked.

The voting public were duped. Is this the beginning of WorkChoices v2? Time will tell

Abbott’s Davos Disaster

By Alan Austin                                                                                                      [h/t IA]

AUSTRALIANS WATCHED TONY ABBOTT fly off to Switzerland this week to deliver an important speech to world leaders with muted anticipation. Commentary in advance ranged between frank pessimism and outright dismay.

It is clear now the PM failed to live up to those expectations.

Fortunately, the damage done to Australia’s reputation was limited by most media declining even to mention the Abbott embarrassment.

The New York Times has extensive coverage of the World Economic Forum (WEF) in Davos, with a dedicated web page and many feature articles exploring the key themes and major players. None mentions Abbott — who, by virtue of the high regard for his predecessor, finds himself the accidental president of the G20 for 2014.

Le TélégrammeL’Humanité  and Le Parisien in France published stories from the WEF but completely ignored Abbott. L’Agence France-Presse filed multiple reports profiling the contributors, but excluding Abbott.

Le Figaro focussed on the speech by International Monetary Fund director Christine Lagarde who addressed constructively the new dangers – nouveaux risques – threatening global recovery. These are, she said, deflation in Europe, tapering of US monetary policy and distortions in global financial markets.

With an embarrassed cough, Le Figaro noted Abbott’s address as a footnote, quoting him as calling for more free trade, an idea that was a long way from the agenda – très loin de la thématique – of earlier gatherings.

Les Echos did mention the keynote speech, reporting that the thrust of Australia’s G20 presidency will be free trade. It noted it was odd Abbott didn’t mention the World Trade Organisation.

The Guardian in Britain headlined its piece “Does Tony Abbott always make the same speech?” andreported that it “struck a familiar tone and was criticised for being inappropriately partisan.”

Indeed, Abbott’s reputation as a buffoon appears to have preceded him to Davos.

The Financial Times UK’s economics editor, Chris Giles, tweeted:

‘Sign of the times. [Iran's President Hassan]Rouhani packed out the hall. Everyone is leaving before Tony Abbott explains Australia’s ambitions for the G20 in 2014.’

Abbott’s speech confirmed the nagging suspicions many have had since he assumed the prime ministership, following one of the most manipulated media campaigns in any democracy in living memory.

It repeated all the trite slogans that worked in Western Sydney:

“You can’t spend what you haven’t got.”

“Markets are the proven answer to the problem of scarcity.”

“No country has ever taxed or subsidised its way to prosperity.”

“People trade with each other because it’s in their interest to do so.”

“Progress usually comes one step at a time.”

Unfortunately, I am not making this up.

Riddled with indicators of ignorance, the speech confirmed Abbott knows little about contemporary economics.

He quoted, for example, statistical measures from China:

“China’s growth is moderating, but likely to remain over seven per cent.”

He seems quite unaware that economists no longer trust statistics from China.

All economies today use strategic borrowings, at different levels, from different sources and for different purposes. Managing borrowings is a major challenge. Abbott’s glib admonition “You don’t address debt and deficit with yet more debt and deficit” displayed a dismissive attitude to this complex reality.

There was no sense of understanding the challenges the WEF faces in 2014, let alone having insights into ways forward.

What little strategy Abbott advocated seemed contradictory. He asserted that the global financial crisis (GFC) “was not a crisis of markets but one of governance.”

And then boasted of Australia,

“To boost private sector growth and employment, the new government is cutting red tape …”

Okay. That makes sense.

The prize blunders arrived, however, when Abbott directly attacked the stimulus packages of the Rudd/Gillard administrations:

“In the decade prior to the Crisis, consistent surpluses and a preference for business helped my country, Australia, to become one of the world’s best-performing economies.”

Partly correct.

In 1996, Australia was the 6th-ranked economy in the world. But by 2007, after 11 years of a Coalition government, it had slipped back to 10th place. Still, that is one of the best.

Abbott continued:

All economies today use strategic borrowings, at different levels, from different sources and for different purposes. Managing borrowings is a major challenge. Abbott’s glib admonition “You don’t address debt and deficit with yet more debt and deficit” displayed a dismissive attitude to this complex reality.

There was no sense of understanding the challenges the WEF faces in 2014, let alone having insights into ways forward.

What little strategy Abbott advocated seemed contradictory. He asserted that the global financial crisis (GFC) “was not a crisis of markets but one of governance.”

And then boasted of Australia,

“To boost private sector growth and employment, the new government is cutting red tape …”

Okay. That makes sense.

The prize blunders arrived, however, when Abbott directly attacked the stimulus packages of the Rudd/Gillard administrations:

“In the decade prior to the Crisis, consistent surpluses and a preference for business helped my country, Australia, to become one of the world’s best-performing economies.”

Partly correct.

In 1996, Australia was the 6th-ranked economy in the world. But by 2007, after 11 years of a Coalition government, it had slipped back to 10th place. Still, that is one of the best.

Abbott continued:

“Then, a subsequent government decided that the Crisis had changed the rules and that we should spend our way to prosperity. The reason for spending soon passed but the spending didn’t stop because, when it comes to spending, governments can be like addicts in search of a fix. But after the recent election, Australia is under new management and open for business.”

Two stupidities.

First, it was precisely that extensive rapid spendingthrough the GFC which saw Australia rise from 10th-ranked economy in 2007 to the world’s top ranking by 2012, a reality all those present with an awareness of the G20 economies would have known.

Secondly, attacks on domestic opponents are never acceptable abroad.

In New York last October, Abbott was roundly condemned for a political attack on Kevin Rudd.

American Academic Clinton Fernandes said he created an image of

“… coarseness, amateurishness and viciousness.”

Political scientist Norman Ornstein surmised:

“Perhaps you can chalk it up to a rookie mistake. But it is a pretty big one.”

Clearly, Abbott has learned nothing from that humiliation three months ago.

Abbott then continued to spruik domestic politics — the commission of audit, paid parental leave, cutting the numbers of pensioners, and infrastructure, especially roads:

“… because time spent in traffic jams is time lost from work and family.”

He concluded with a final hypocrisy — following his attack on Labor for spending so much on infrastructure during the GFC.

He gobsmacked anyone still listening with this:

“Then, there’s the worldwide ‘infrastructure deficit’, with the OECD estimating that over 50 trillion dollars in infrastructure investment is needed by 2030.”

Several questions arise.

Why such an appalling performance? Where are his advisers? Does he think he needs no advice? Or is the whole Coalition this amateurish and oafish — or worse?

And why, as ABC News highlighted, is he still battling Kevin Rudd and Julia Gillard?

Does this reflect self-doubt about his capacity in the role? They had a vision for the nation; he does not. They had plans to improve the prospects for pensioners, students and people with disabilities; he does not. They nurtured the economy; he cannot. They had character, integrity and authority; he simply does not.

Perhaps it confirms that Abbott knows deep down that the 2013 ‘win’ was illegitimate — that it was secured only by deception and dishonesty.

Perhaps it is time for his party to consider the matter of leader.

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

Hot 2013; adaptation to climate change is no longer trivial

Firstly, thank you to all followers of NewAnthro. I hope you have enjoyed my work here over the past year and will continue to do so into 2014.

My only hope for the coming year is that, with the heat waves over the past autumn, the warmest winter on record, incredible bush fires of this past spring and the first day of the new year threatening to break records for maximum Australian temperatures, the dialogue will shift away from trivialities in certainty of expected climatic change and to what matters; making Australian communities more resilient in any case.

Energy companies were once telling us that price rises were likely if Abbott removed the carbon price and now they’re telling us the opposite. The only thing I think Australian families can bank on is ever increasing prices for electricity, gas and fuel. For this reason too, the dialogue needs to shift towards making the Australian economy more resilient (which starts with those who do the work – the wage earners).

Looking at heat stress, losses in primary production, human respiratory health (air quality in relation to dust, smoke and smog), economic stress on families and direct damage to communities due to bush fire and flooding should be enough to change the tone of the conversation in Australia towards activities that would otherwise be considered to both mitigate from and adapt to future climate change. It’s a niche market that is only likely to grow and we can prosper from leading the way or pay through the nose if we lag.

Apart from this, my silence over the past few weeks is due to a few factors.

Firstly, I have been writing. I’ve produced a number of articles that I’ve provided to various outlets and been undertaking some revisions to suit their platforms. This is in the hope of increasing my audience (I’ve produced more than 600 posts now on this blog – I know it is of value from the feedback I receive, so I’m hoping to maximise the impact of my work).

I’ve also started a few projects, more or less as a hobby. I’m interested in learning more about a lot of technology. This has led to building an 115W, 12V solar panel thus far which I’m very happy with. All up, I managed to build it for under AU$100.

I have a lot of experience with off-grid systems, so I’ll make good use of it and have since moved onto other projects.

This recent activity has been spurred by the common point that a lot of climate aware commentators make; we currently have much of the technology required to decarbonise human activity.

I want to know more about what this technology actually is, how practical it is, how we can adopt, adapt and improve and what potential setbacks actually exist. I started with solar because it’s what I’m most familiar with. I hope that all of this experimentation will both help my writing and eventually shift my career into something I’m highly motivated about.

On that note, I must admit that reading and writing are among my greatest passions, which makes me feel a little disappointed with myself for leaving NewAnthro idle for so long. Hopefully, I can find a new groove into the new year and return to a better pace of writing.

Retail Democratization: online is a game changer

As I stated in the end of the post, Retail shopping; does it really help local economies? more to follow.

Initially, the focus of this post is what drove me to write on the subject, but the first post was also required. Retail is not driven by humanist motivators at a community level, but entirely by selfish goals for self preservation within an aggressive marketplace and fickle consumers, with hungry CEO’s and shareholders to appease.

What really interests me is this entity, the “online” which clearly is the spanner thrown into the works of business-as-usual.

The newer industries of fortune of the twentieth century are all at odds with this new player. Retail, as I will focus on, but also media and the arts in the form of visual and audio are hit heavily by online. In such cases, we find a centralisation other wealth creation to a minority of individuals and companies which are then able to further sway and manipulate the distribution of money.

A given company that owns two “competing” products on the supermarket shelf is one example, but with movies, for instance, it is a vicious cycle that the wealthiest companies attract the best artists and can charge a premium…

The online environment, however, undermines this entirely. People can share and even create their own media and products and often, such as with some freeware computer programs, enthusiasts can compete in the quality of output to some very expensive licensed products.

Some online media prove that quality of entertainment is not related to the budget behind the project, but instead the imagination of the creator. Music, on the other hand, is finding a new level of centralisation online where they are cheated out of revenue when their work is popular.

Even considering online music, all of this leads to power of choice being returned to those whom make use of these goods and services. In other words, the internet is democratizing various industries which have long enjoyed a privileged position.

For this reason, I am very concerned about the Coalition’s watered down NBN. This is arguably an attempt to hobble media choice, preserving the status quo and premiums for pay TV, for instance.

Equally, the noise within the retail industry about online shopping sounds like little more than panic from a dying world model. The aging profit giants are slow on this front and inept at adapting to this new democratic platform, without complaining about staff wages (ignoring the pay ratio from the top to bottom, of course). The retail industry is at odds with democracy, which is increasingly obvious.

Coupled with community wealth extraction (compared to low staff wages), how can we feel bad for avoiding the premiums of hungry shareholders and expensive CEO’s, paying less so we can reduce local debt and keep more money local?

Shop online or shop local from farmer’s markets or small, family business, this season if you are driven by interest in local economy and giving something extra special to you friends and family.

Maurice Newman; the problem is bigger than you know

To further my criticism of the comments made by Maurice Newman, I just stumbled upon this article in The Guardian.

To quote Alan Milburn, the UK’s government’s adviser on social mobility, “In most developed countries there has been a declining share of economic growth going to labour (and a higher share to capital) at the same time as there has been growing wage inequality.”

Wage growth has no aligned with economic growth for decades; a problem that is shared in many countries.

The fact that Australia is very expensive exacerbates the problem locally.

Maurice Newman might understand business, but he does not understand the pressures on the average working Australian.

Maurice Newman; It’s Expensive to be an Aussie!

Earlier this week, Maurice Newman, chairman of the Prime Minister’s Business Advisory Council, gave a speech, largely blaming the high minimum wages in Australia compared to other similar economies globally.

Is this a fair assessment?

As always, when someone gives a simplistic relationship like this, alarm bells went off in my head. So I thought to look up Rent Index of the cost of living index as lower income earners are largely renters to see how these countries compare. No surprises, Maurice Newman overlooked this to make his point.

The index value for 2013 in New Zealand is 46.06, Canada, 39.85 and the US, 37.39. And Australia? Well, we scored 4th highest, at 72.72.

With the groceries index for 2013, there is the same trend; New Zealand is 111.78, Canada, 101.24, the US, 80.74 and Australia again at 4th with 128.69.

So it’s clearly expensive to be an Aussie.

What strikes me as short sighted here is, if Australia is expensive, it is obviously expensive to be a consumer here. Without forking out on wages, Aussies can hardly be consumers and thus local business dies.

What does Maurice want; Aussies to work for bread crumbs so that business can sell it off dirt cheap (well, as cheap as they need to, to be competitive while maintaining profits for shareholders) in other countries? Without homes and a full belly, your bread-crumb workers would soon drop dead as well.

This is entirely the problem with big business. It forgets that it is part of a Anthroposystem (ie. a human built “ecosystem”). All self-sustaining systems are cyclic. What Maurice and many like him really want is a concentration of wealth – like a bunch of giant Redwoods stubbornly holding all the resources in the canopy indefinitely.

Without the flora and fauna elsewhere in the system, sustained by a return of resources, eventually there is nothing to convert matter (or no matter to convert) into further nutrients that feed the Redwoods.

Just like Rinehart’s comments about African’s wanting to work (for a dollar a day), the comments by Maurice represent a complete denial of the daily struggle for the average working family in Australia. Both and others that make similar comments are detached from reality and unfairly yield more sway in politics compared to the average Australian.

Such comments ought to be seen for what they are; obscene and immoral to the majority of people trying to make ends-meet in our country. And these comments were made by the chairman of the Prime Minister’s Business Advisory Council. That alone should concern Aussies. He might be able to advise business, but only in a detached irrelevant context.

The natural progression of a utilities monopoly

I’ve been a little slower to report on this than I would have liked. That’s because I’ve been unable to source an article relating to a quote I heard on the morning radio a few days ago.

The quote being from an individual within the power industry stating that electricity bills will increase if the new government fails to remove the price on carbon. I’ll have to assume ABC news as a reliable source.

The reason for this additional hike, as was stated in the report, would be due to the uncertainty involved following the Coalition’s election promise.

Yet, this is an industry that made healthy profits in the last financial year. This industry also plans to charge all South Australians an additional cost to manage trees around overhead power lines – even South Aussies with underground cables will be hit with this change.

And then there’s the embarrassing point that this same industry also threatened a couple years ago that prices would go up if the Coalition removed the price on carbon.

It seems that this industry is as confused about its practices as the average polly is on acceptable travel allowances.

The skinny here must be that no matter what happens, power prices will go up because this, now private industry (thanks Libs), effectively has Australian’s over a barrel, with no other choice but to pay whatever charge is set… The only problem is excusing the price hike. It would seem we’re damned if we do or damned if we don’t have a carbon price.


There’s the other side to this story… One involving us, the consumer with a heavy carbon footprint… But more on that soon.