The American Dream

For those wishing to see the future of Australia as seen through the eyes of the Liberal dries and their cronies, have a look at the Four Corners (http://iview.abc.net.au/) episode broadcast on 13th March 2017. Prepared by a french documentary team, it shows the end results of a low wage policy and how extremely profitable companies are abusing their power and using dubious methods to cut the wages of their employees. One example, GE, distributed $26 billion to its shareholders last year while at the same time closing a locomotive factory in one state and opening a new one in Texas where they are able to pay their employees half what they are paid at the existing plant.

We continue to see this sort of behaviour in Australia. The Liberals privatised the power market in Victoria with the promise of cheaper power through competition between retailers and improved efficiencies in production of power. The end result has been ever increasing cost of electricity to consumers and ever increasing profits to both power retailers and wholesalers . Its worth noting how the retailers have no qualms in ripping off consumers that return solar energy back to the grid. Retailers pay wholesalers approximately $0.28 per kilowatt for power but only pay customers $0.06 for the power they produce to then sell it to the next door customer for full price. The market supposedly has its behaviour controlled by market pressure but, as we constantly see, this is simply untrue. Large companies collude to limit pay rises for their employees while scratching each others backs when it comes to executive pay. Consumers have little power in the market – they have to take the prices offered because companies operating in a global market can sell their goods to whomever pays the highest price (e.g. natural gas shortages in Australia because the asian consumers will pay more for it). Governments cannot force them to take lower prices as they would then be accused of attempting to nationalise an industry or of breaching free trade agreements. The reality is that the rich, that is the shareholders, don’t care what poor people have to pay as long as the  rich continue reaping obscene profits and have the ability to live the lifestyle they desire.

Rich Australians, compared to their overseas counterparts, are more self serving and less altruistic. Occasionally one of them makes a grand gesture that makes it into the media because it is so rare. I commend those people but would encourage them to become the conscience of the rich and show them they need to share the wealth with all Australians, especially their employees.

Fair Fair Work, Hardly

I’m amazed that the Fair work Commission still believes in the trickle down effect and that the various business associations are the only one’s that know how the changes to penalty rates will effect both employment and employees. If anyone believes that the reduction in penalty rates for Sunday will automatically result in increased employment is naive at best, lying at worst. I would expect the majority of employers will pocket the resulting savings because the Fair Work made its ruling to improve productivity. That is to say the Commission was looking for a reset where the same amount of work is carried out for a reduced cost. Employers will not increase employment by 25% if their current staff is meeting workplace output demands. Equally, employers not currently opening on Sundays because the wage outlay is unlikely to be covered by the Sunday trade will not have reason to believe that this has changed as a result of the 25% cut.

The problem is that no-one seems to have thought through the real effects on employees and the rest of the economy. This ruling has resulted in 600,000 employees having their Sunday penalty rates cut. Many of those affected are people who use weekend shifts as their sole income as they undertake full time study. Others use the weekend shifts to make it through the week to week struggle. I personally know people on the Disability Support Pension that have been able to undertake limited Sunday shifts which results in greater return for their restricted labour.

The Commissioners need to realise that their actions will result in the lowest paid workers in Australia having their wages cut and the likelihood that this will have an adverse effect on EBAs that will be negotiated over the next few years. It seems as if this is a deliberate attack on the poorly paid in an industry that provides services to the wealthy – are they aiming to reduce costs to the rich at the expense of the poor?

God dammit, He’s back again

The belligerent buffoon has returned. Fresh from showing his two-faced climate belief credentials in the lower house as he joked about coal fired power stations, the country was melting under severe weather with even more records being broken today. Still its good for a laugh to pass the lump of coal around while South Australian’s lost power again, not because of renewable generation but because power companies were playing the system to increase the wholesale price of electricity and refusing to take up the Regulator’s request to increase output. But, hey, we’re not in parliament to look after the people, we are in parliament to look after ourselves (just ask Senator Ian McDonald as he bleats about having his entitlements cut even after he has lived off the public purse for 30 years and currently earns, nay receives, around $200,000 per year)

Its one thing to play political point scoring, its quite another to dismiss offhand the problems that are facing Australians and the rest of the world. This is the same clown who thinks there is nothing wrong cutting the Newstart allowance to 22 and 23 year olds and paying them under the Youth Allowance instead. Apparently landlords don’t charge full rent for these people and supermarkets offer them a discount on their food – buggar me I hadn’t realised. But wait there’s more – not steak knives but how about giving companies a tax cut while cutting welfare payments, lining up the old and the disabled for the firing squad while allowing multimillionaires tax breaks using negative gearing which keeps pushing up house prices especially for first home owners. But Scott the Twot says it will improve the economy and increase wages. Its a miracle! Mind you his own modelling says that the increase in GDP will be in the vicinity of 3.5% AFTER 20 YEARS! I thought he was bad as Immigration Minister but as Treasurer he seems to have become totally blind to the needs of the poor, working families, and ordinary hard working Australians in small business, while being only to happy to accomodate the rich, multinational companies, many of whom are dodging paying their fair share of tax.

This has to stop, you cannot persist in this thoroughly disreputable theory of Trickle-down Economics. It hasn’t worked, the disparity between rich and poor continues to grow and the vast majority of us are feeling powerless hence the desperate moves to whacko right wing political parties. If you want to save Australia, if you want to save the western democratic system, this basic current tenet of capitalism has to change. We can no longer (as if we ever could) trust the market to self regulate. They won’t act fairly because they know they will not be punished by governments, quite the opposite. If they stuff up governments use the taxes of the poor to bail out the rich, greedy capitalists. The poor have no power in this unequal relationship. This why governments have to intervene. If there is no shift in the current positions of the major parties, they will fail within four terms of the parliament and we will end up with unstable coalitions of either right or left leaning parties and policy failures as illustrated in the United States of America in both the Presidency and Congress.

You have been warned.

Time For Change

I wonder if you agree with me – its time to change Australia Day. Let’s face it, 26th January is really Sydney Day or, at best, NSW day. It really does not reflect anything about Australia as a whole. A true Australia Day would probably be the 1st January as a nod to our independence from Britain in 1901. But I think a more meaningful day would be 3rd June, the day on which the Mabo decision was handed down in 1992. This decision finally acknowledged the existence of the Aboriginal nations prior to white settlement and for the first time, acknowledged links with country.

I would say that this is the day that Australia finally matured into a fully fledged nation albeit with plenty of work still to be done. Nevertheless, it makes Australia one country belonging to us all.

3rd June has my vote.

The World is Watching

Well its started, Donald is President. I hope, against all hope, that this narcissistic bombast can control his temper, listen to cooler heads and do something constructive without trying to line his own pockets.

Notably a great many women of the world have had their say and they’re not happy. But I must note that they are not citizens of the United States, so they should hold THEIR governments to account and ensure that their governments don’t blindly follow Trump’s lead. They must also ensure that ALL their population is sharing in the wealth of their nation. Its often easy for well off liberals to want social justice but they fail to realise that there are many people who don’t share their ability to earn and who fail to see social justice as a priority as they’re struggling to put food on the table and a roof over their heads.

Remember, charity starts at home, so make sure the less well off in your society are coming along for the ride.

Oxfam’s Rich List

Interesting/alarming news from Oxfam today with their annual richest in the world conference in London. The top eight billionaires in the world have a combined wealth greater than the poorest 50% of the worlds population. And Australia isn’t exempt from this inequality. I quote from Oxfam’s 2017 Inequality Report for Australia.

The latest data from Credit Suisse shows that wealth in Australia is concentrated in the hands of a few: the top 1% have over 22% of total Australian wealth.

And, the top 1% own more wealth than the bottom 70% of Australians combined.

The two richest billionaires in Australia, who are part of the top 1%, own more than US $16 billion between them, which is more than the combined wealth of the poorest 20% of the Australian population.

See https://www.oxfam.org.au/what-we-do/inequality/

Now I can see all those merchant bankers and land developers jumping to justify this inequality with grand, self promoting explanations how they work so hard and the structure of society expects, nay, demands that you have people like this earning vast sums, how else can society advance?

The reality is that a society that only values people by their wealth and that allows the aggregation of wealth by a select minority is not a society that is moving forward. Equally, we cannot fall back in to the extreme left’s utopian view. The reality is that there have to be incentives in the form of profits and wages in order for the system to function efficiently. The problem is that we’re not all on an equal footing. There are many examples of unjustified government interference in the market, just look at the incentives for planting grape vines, creating movies and, the latest, negative gearing on investment properties. Negative gearing is a classic example of government largesse being given to the wealthy (and before you start bleating about mum and dad investors, Scott Morrison, if you can afford a second mortgage for an investment property then you are wealthy. Banks won’t extend those services to poor people). Not only are you allowing wealthy people to reduce their tax liability (once again Scott, that’s why these people do it), but you are concentrating wealth into the hands of the wealthy again by making it harder for renters to purchase their own home by driving the prices of houses up. And this is a symptom of a greater problem. Governments have reduced their expenditure on social housing because they claim its more efficient for the private sector provide it. Their concession to the poor is to provide rental subsidies to those on welfare payments. So in effect the government takes a double hit – they have to pay welfare recipients a subsidy and they give the property owner the ability to write off more tax. I wonder if anyone in Treasury has ever bothered to do the sums? What is the total of rental subsidies and tax breaks costing the government? Add to this the increase subsidies given to first home buyers in an attempt to relieve the financial stress on them trying to buy their first home.

This ongoing inequity in society is starting to crack the fabric of society both here and abroad. The signs are there – Brexit, Trump’s success and the ongoing disillusionment with politicians in Australia, all signs of people feeling that they are missing out and that their voices are not being listened to. People will only take this crap for so long.

Its time for at least one of the parties to listen, and my guess it will have to be the Labor Party. Its time to end government subsidies to the wealthy in the form of tax write-offs. No more negative gearing, no more tax schemes that allow the wealthy to use the public purse to top up their wealth. No more exemptions on superannuation for people with extreme wealth. We have the answers, we just need people to listen.

Is it just me?

Is it just me that is stunned by Trump’s sensitivity to criticism, or do the rest of you feel the same? If Donald expected to be met with tugging forelocks and sycophants he should have stuck with reality television. When you enter politics you have immediately lined up a large proportion of the population that, at the very least, don’t like what you stand for. And in this world of instant outrage there is also a fair chance that you will be disliked personally.

Meryl Streep, rightly or wrongly, politicised the awards night by taking aim at Trump’s disparagement of the journalist with a physical disability. For Trump to deny it ever happened beggars belief. Its the behaviour of a naughty eight year old who, despite his parents witnessing the crime, will continue denying it until he’s sent to bed without supper. Well, Donald, I think you should be grounded for a month. You can have your Inauguration party next month, but only if you behave until then. By the way, make sure you leave your phone and/or tablet on the breakfast counter because the rest of us are tired of getting your late night tweets.

On a serious note, what will happen when Donald gets insulted while sitting in the White House. Are we going to see retaliation that outweighs commensurate behaviour? Who will/ is capable of controlling this man’s temper and ensuring that his behaviour is moderated while in power. If no-one can stand up to this person I fear terrible consequences for the world let alone the USA.

Demonstrating The Market At Work

I know some may think I’m being alarmist and that Australia is sitting pretty in the scheme of things.  Just in case you think I am a left wing unionist thug, you’d be wrong. I owned and ran a successful business in a very competitive industry for twenty-five years. During that time, all my employees received all their legal entitlements, were paid award wages or higher, were treated with respect and were highly valued parts of the enterprise. In the end I retired, tired of the constant battle against competitors who either underpaid their staff or had sham contracting arrangements that led to hard working people not getting their fair share and me being unable to compete on price.

Even when I approached a government department with the proof of illegal behaviour by the contractor that had undercut us on a government contract that we had held for eight years, the public servants refused to investigate (presumably because their department would have to pay more for the contract). So I suppose you can understand where I’m coming from when I get upset at seeing such blatant abuse of workers. Have a look at Bakers Delight. According to an article in The Age, Bakers Delight have been using a  Victorian workplace agreement that was formulated in 2006 under the Howard era Workchoices system. This is despite the fact that Tony Abbott declared Workchoices dead and buried.

The owners and co-founders of the company, Roger and Lesley Gillespie, are apparently doing it tough. According to The Age report, they were listed in the 2015 BRW rich list with assets of around 150 million dollars. Its no wonder that they have to cut the penalty rates to teenagers on weekend shifts, how else can they make ends meet? I mean teenagers shouldn’t expect to earn a decent wage for weekend work and besides, according to the quote in The Age, …”A number of the younger kids, for example, want to work on Fridays, Saturdays and Sundays,” he said. “The flexibility around the workplace agreement not only suits our business but also suits the individual.”…

Now, excuse me if I’m being cynical, I would have thought that its Bakers Delight who want these young people to work on the weekends because I doubt that any adult would tolerate or work on weekends without receiving penalties. Employers cannot complain about the extra costs associated with weekend work – they choose to open on the weekends and employers are’t going out of their way to increase wages over and above award payments. In fact it could be argued, that as time wears on we see more and more examples of workers being paid below award rates of pay. Interestingly, the companies involved all seem to be making good profits. This is where I think the current capitalist system is filing. In days of yore, businessmen were largely respected and respectable. They provided employment and has sense of civic responsibility. Now, its the entrepreneurs that are lauded, but the term entrepreneur has now becomes synonymous with greed, cutting corners and dodgy dealings. Governments around the world have been taken for a ride, either through stupidity or through financial influence, and consistently fail to hold these people to account.

A classic example of this is Uber. Uber arrived in Australia to much fanfare and then started flogging its services to the public. When it arrived it was aware that what it was doing was in breach of local law. It instituted systems that prevented known telephone numbers of regulatory agents from accessing their system. If this had been any ordinary Australian citizen, we would have been charged with breaches of the law regarding the hire of vehicles, possibly charges relating to coerciong others to break the law and with obstructing the investigation of a crime. Uber’s spin merchants hopped onto their soapbox to tell us it was all about the new order of things and the sharing economy and the old model was dead because they said so. Not one politician or journalist asked the question “Why should we change our system so that you, an overseas company that avoids paying tax in Australia, can make a profit while providing very little of your own infrastructure and relies on the work of “independent”  contractors, while existing businesses have to abide by the law and pay award rates of pay?”

Why wasn’t the question asked? Why do politicians allow American “entrepreneurs” to tell us what is acceptable practice in financial markets and on the stock market? How can short-selling shares on the stock market be legal (in any other area if I sell something I don’t own its called fraud)?

Are We Going Down the Path to Oblivion?

Australia is not immune to Trumpitus, as is illustrated in the recent successes of Pauline Hanson’s One Nation at the last federal election. Once again, someone with no practical policies, playing to the disgruntled, largely white, working class – never correcting misleading beliefs regarding asylum seekers and their entitlements. Never acknowledging that global trade has increased the wealth of all Australians by providing low cost consumables and decreasing the cost of living but quick to bemoan the loss of Australian jobs. Of course job losses in Australia are an anathema to all fair minded people. The loss of jobs leads to decreased  income for workers at the lower end of the education spectrum and a reduction in cash flowing though the economy. With the advent of Artificial Intelligence systems, even jobs previously immune to automation are slowly coming under threat. Sadly the Liberal Party is facing this looming crisis by lurching to the right, intent on saving the bacon of its dominant financial base. Most Australian voters still do not understand that the Liberal Party (or rather, the economic dries of the party) are chasing that false American dream of small government. False because in reality, the wealthy are in fact fleeing taxes and that reduction in the tax base means that government programs have to be cut. Yet someone like Trump says there is a need for infrastructure investment – according to the economic dries, if infrastructure really needed to be upgraded then the private sector would step in and do it as part of the market at work. Tony Abbot has been fond of saying no-one has taxed their way to prosperity but that simplistic view of economics belies the truth that State and Federal Governments in the first eighty years of federation, especially in the post war period, built the infrastructure to create the conditions for a vibrant economy. The reality is that the private sector didn’t get involved with large infrastructure projects until Jeff Kennet’s reign in Victoria allowed them to take effective ownership of public property at bargain prices to underpin the creation of new Public/Private Partnerships (PPP). Indeed, many people still question how these PPPs are cost effective for the taxpayer. Surely if a private company is going to rake in ten billion dollars over the life of a project, the state should receive some of the benefit.

We need to be vigilant and call out people and parties that make outrageous claims against immigrants, or who express that tax cuts for the rich are vital for the economy, that companies can’t survive without massive corporate tax cuts.

Australia wake up, the future is in danger!

Look, up in Trump Tower, its Donald

With increasing gloom, we slide towards the 20th January, when a buffoon will take over the Presidency of the United States. Looking on from afar, its difficult to understand why Trump has such support (albeit he lost the popular vote) when he spouted so many obvious lies or distortions of the truth. Even if you ignore these utterings, why did white working class Americans believe that Trump is any different from those business owners who laid off staff and took manufacturing and call centres jobs off shore – their jobs. On the one hand he is saying that he is going to increase expenditure on infrastructure to boost the economy, yet on the other he decries the budget deficit as the fools on the hill spend big on borrowings. His grasp of economics is questionable when he then says that he will cut taxes for the rich, while still running deficits. My only conclusion is that these voters wanted to believe that someone was listening to them and that, even if they didn’t understand it, this person had a solution to their perceived problems. A sign of utter desperation that they forwent any critical analysis and suspended their belief in the existing system or parties.

Now Donald is telling General Motors if they move any manufacturing outside of the USA he will hit them with a massive border tax. Ah Donald, what happened to free trade? You know, the thing you want other countries to accept so that you can sell US manufactured goods without punitive import duties. You know the very theory that has allowed US companies to manufacture their goods in China so that local consumers receive lower prices. The very practices that YOU have indulged in to make more money. History shows us that US companies have been doing this since at least 1947 when the first American tyre company built its new factory in the Phillipines.

Gee, Donald, all this governing thing is very complicated but as long as you have twitter you’ll be fine.