Jul 31, 2013

Leftist jargon is village idiocy | The Australian


AROUND where I live, there has been a recent campaign to "Save Bronte Village." I've lived here for more than 20 years and I've never heard the old set of shops up the road from me be referred to as a village. It's just your regular strip of shops.
But a small group of locals started calling it "Bronte Village" as a ploy to stop a large fruit and vegetable shop opening. We might call it progress. Nothing radical, just a new, bigger shop that sells stuff we need, like fresh fruit and vegetables. The activists call it destroying a village.
You have to hand it to this group of malcontents. They know how to steal a word, make it their own, and then flog it to stop progress. The other day a woman from outside the suburb asked me for directions to "Bronte Village." I told her there is no village here, just a set of shops up the road. Nonplussed she walked on in search of a village.
This is what the Left does best. Find some sweet-sounding words, repackage them as a beguiling catch-cry for a campaign, and you're on your way. Soon enough careers and industries are built around a few words - words like "social inclusion" - even though no one knows what the words mean. But when your currency is emotion, logic takes a back seat. That's why words matter more for those on the Left. By contrast, those on the other side of politics focus more on tedious matters such as outcomes and empirical evidence.
Think I'm being too tough on so-called progressives? Start with the misappropriation of that word. Progressive. For decades, so-called progressives championed symbolic, feel-good politics for indigenous people. They talked of treaties and cultural identity, collective land ownership, "rights" agendas, the need for more hand-outs. This was the "progressive" agenda, they told us. And don't dare mention other words like "assimilation". That's the other tactic. Find a word and demonise it, to demonise your opponents.
Assimilation became a dirty word and along with it the notion that indigenous people aspire to what non-indigenous people want - a home, a job, a life based on individual desires rather than collective agendas. After 30 years, there was nothing remotely progressive about the outcomes; the so-called progressive agenda entrenched misery in indigenous communities.
Facing the facts, many on the Left now accept that welfare dependency and rights agendas won't deliver a better life, but it's easy to forget how long unorthodox ideas - such as getting people off welfare - were treated with contempt.
As for the Left's lingua franca about asylum-seekers, the trick is to claim sole moral ownership of the word "compassion." If you reject their policies of open borders, onshore processing and no detention centres, then, ergo, you lack compassion. You are not entitled to use that word. Worse, you are nasty, fearful, intolerant and, of course, xenophobic. The Greens and many within the Labor Party are members of this compassion con. And so are many within our national broadcaster. Just a few recent examples: earlier this month, after yet more asylum-seekers - including a baby - died at sea, ABC News Radio ran an online survey asking listeners whether they supported (a) a tougher line (b) a more compassionate approach; or (c) the existing policy. More akin to push polling, note the sly use of "compassion" as if only an easing of border policy can deliver compassionate outcomes. The results surely disappointed the ABC compassionistas: 70 per cent of respondents wanted tougher measures.
The compassion con has been one of the greatest frauds perpetuated on this nation. When Barrie Cassidy - host of ABC1's Insiders - recently interviewed Immigration Minister Tony Burke about the so-called "PNG Solution," he said "Where is the compassion in the new policy?"
It's all very well for Burke and his Labor comrades to now tell us there is nothing compassionate about a policy that encourages deaths at sea. It was not always thus. Dripping with sincerity in 2007, Burke wrote to the "Buddies Refugee Support Group" : "The Howard government's use of Nauru as an immigration detention centre is not only a waste of money, it is inhumane."
In November 2007, Kevin Rudd said of the Manus Island and Nauru detention facilities: "On the humanity of the situation, we will exit those arrangements as quickly as possible." In 2001, then AWU secretary, Bill Shorten said the Howard government's Pacific Solution was "dirty and nasty."
What's not compassionate is the straight line that runs from the more than 1100 deaths of asylum-seekers at sea and Rudd's decision to join the ranks of the posturing moralists when he dismantled the Pacific Solution.
Acting against advice, a trickle of boats soon became a flow. Six years and eight policy switches later, people-smugglers still dictate our immigration policy and people are dying at sea.
Once again, so-called progressives have been forced to face the facts, but for too long they relied on the "compassion" word to win arguments. If the Left's use of sweet sounding words was harmless, we might forgive them as irrelevant Utopian dreamers. Sadly, the Left's emotional catch-phrases have led to disastrous consequences - and that's why exposing their hypocrisy is critical.
There are plenty of other examples. Words like "social inclusion," "social justice", "human rights" are used to claim the high moral ground, often delivering nothing very moral at all. The Left will mould the phrase "human rights" to include every fashionable agenda - but try asking them to defend the basic human right to free speech, and they slink away, finding excuses or other "rights" that matter more to them. When you trade in emotion, not reason, philosophical consistency is not required.
Take the focus on the royal family. Last week, following the birth of a new prince to the Duke and Duchess of Cambridge, the usual smug, mocking overtures emerged from people like Jon Faine - host of local ABC radio in Melbourne - about the antiquated monarchy. Yet, I'm willing to bet the same people who would happily mow down that bit of our heritage would be keen members of the "Save Bronte Village" campaign. Save a village that doesn't exist but scrap the centuries-old monarchy, in the name of, well, progress. Go figure.

Fiddling with criteria to hide unemployed | The Australian

DURING recessions and financial crises, governments have a habit of manipulating unemployment figures to make the unemployment rate appear to be lower than it really is.
The manipulation typically involves pushing long-term unemployed people with a minor impairment on to the disability pension, which not only takes them off unemployment benefits but also reduces the unemployment rate because they no longer have to look for work and are no longer counted in unemployment statistics.
However, the government has been too clever by half in portraying itself as good economic managers following the global financial crisis because it has been fiddling with the eligibility criteria and hiding the unemployed on unemployment benefits such as Newstart Allowance (NSA). It has done this by turning more than 110,000 people on unemployment benefits classified as jobseekers (people who have to look for work as a condition of receiving their welfare payments) into non-jobseekers (people who no longer have to look for work to receive welfare payments).
In July 2009, 613,000 people were receiving unemployment benefits: 427,500 were classified as jobseekers and 185,500 as non-jobseekers.
Just three years later, in June last year, there were 632,000 people on unemployment benefits, but the number of jobseekers had fallen by 22 per cent to 332,000 and the number of non-jobseekers had increased by 62 per cent to more than 300,000.
Following reforms to Parenting Payment, 760,000 people have been receiving unemployment benefits as of May this year, but only 400,000 of them are jobseekers and the remaining 360,000 are non-jobseekers.
The main reason for the skyrocketing number of non-jobseekers on unemployment benefits is that NSA recipients are required to enter into work experience activities (including education and training) after 12 months, and early school-leavers are required to complete Year 12 or its equivalent to receive Youth Allowance (Other) (YAO) instead of looking for work.
As a result, the number of people on unemployment benefits undertaking education and training has skyrocketed by 138 per cent across the past three years, from 62,500 in July 2009 to nearly 150,000 in June last year.
This is not necessarily a good thing: if people on welfare do not have to look for work, they will stay on welfare for longer. For example, the proportion of long-term YAO recipients has increased from 49 per cent in July 2008 to 59 per cent in June last year.
It also means that tens of thousands of people who would otherwise be counted by the Australian Bureau of Statistics as unemployed are not because they are not looking for work.
My estimates show that the government has managed to reduce the unemployment rate in Australia by between 0.2 per cent and 0.5 per cent since July 2009 because of these policies. This also means the government's claims to being a good economic manager following the global financial crisis are overblown because the government artificially lowered the unemployment rate by pushing tens of thousands of people who otherwise would be unemployed out of the workforce and into education and training.
The problem here is that more education and training is not always better for everyone.
Generally, people are better off by upskilling or reskilling (particularly new mothers returning to the workforce) to improve their employability, but there are marginal diminishing returns from more education and training, and sometimes people are worse off.
If you haven't learned to read, write or count after 10 years of school, another two aren't going to do you much good. That time would be better spent working or at least looking for work.
Rather than hiding the unemployed on unemployment benefits and pushing tens of thousands of people out of the workforce, the government should ensure that everyone on unemployment benefits who is capable of working is required to look for work in addition to fulfilling mutual obligation requirements such as work-for-the-dole.
Even the OECD has said: "The non-jobseeker population (in Australia) on unemployment benefit is so large that it needs more analysis and attention."
The rapid increase in the number of non-jobseekers on unemployment benefits from July 2009 is a scandal and evidence that the government has been manipulating unemployment data and the lives of the unemployed for its own political benefit.
The government has not been honest with the Australian people. Every time they point to Australia's relatively low unemployment figures, remember that 360,000 people receiving unemployment benefits are not required to look for work.
Andrew Baker, research fellow at the Centre for Independent Studies, is author of Not Looking for Work: The Rise of Non-Jobseekers on Unemployment Benefits, released today.

Fiddling with criteria to hide unemployed | The Australian

DURING recessions and financial crises, governments have a habit of manipulating unemployment figures to make the unemployment rate appear to be lower than it really is.
The manipulation typically involves pushing long-term unemployed people with a minor impairment on to the disability pension, which not only takes them off unemployment benefits but also reduces the unemployment rate because they no longer have to look for work and are no longer counted in unemployment statistics.
However, the government has been too clever by half in portraying itself as good economic managers following the global financial crisis because it has been fiddling with the eligibility criteria and hiding the unemployed on unemployment benefits such as Newstart Allowance (NSA). It has done this by turning more than 110,000 people on unemployment benefits classified as jobseekers (people who have to look for work as a condition of receiving their welfare payments) into non-jobseekers (people who no longer have to look for work to receive welfare payments).
In July 2009, 613,000 people were receiving unemployment benefits: 427,500 were classified as jobseekers and 185,500 as non-jobseekers.
Just three years later, in June last year, there were 632,000 people on unemployment benefits, but the number of jobseekers had fallen by 22 per cent to 332,000 and the number of non-jobseekers had increased by 62 per cent to more than 300,000.
Following reforms to Parenting Payment, 760,000 people have been receiving unemployment benefits as of May this year, but only 400,000 of them are jobseekers and the remaining 360,000 are non-jobseekers.
The main reason for the skyrocketing number of non-jobseekers on unemployment benefits is that NSA recipients are required to enter into work experience activities (including education and training) after 12 months, and early school-leavers are required to complete Year 12 or its equivalent to receive Youth Allowance (Other) (YAO) instead of looking for work.
As a result, the number of people on unemployment benefits undertaking education and training has skyrocketed by 138 per cent across the past three years, from 62,500 in July 2009 to nearly 150,000 in June last year.
This is not necessarily a good thing: if people on welfare do not have to look for work, they will stay on welfare for longer. For example, the proportion of long-term YAO recipients has increased from 49 per cent in July 2008 to 59 per cent in June last year.
It also means that tens of thousands of people who would otherwise be counted by the Australian Bureau of Statistics as unemployed are not because they are not looking for work.
My estimates show that the government has managed to reduce the unemployment rate in Australia by between 0.2 per cent and 0.5 per cent since July 2009 because of these policies. This also means the government's claims to being a good economic manager following the global financial crisis are overblown because the government artificially lowered the unemployment rate by pushing tens of thousands of people who otherwise would be unemployed out of the workforce and into education and training.
The problem here is that more education and training is not always better for everyone.
Generally, people are better off by upskilling or reskilling (particularly new mothers returning to the workforce) to improve their employability, but there are marginal diminishing returns from more education and training, and sometimes people are worse off.
If you haven't learned to read, write or count after 10 years of school, another two aren't going to do you much good. That time would be better spent working or at least looking for work.
Rather than hiding the unemployed on unemployment benefits and pushing tens of thousands of people out of the workforce, the government should ensure that everyone on unemployment benefits who is capable of working is required to look for work in addition to fulfilling mutual obligation requirements such as work-for-the-dole.
Even the OECD has said: "The non-jobseeker population (in Australia) on unemployment benefit is so large that it needs more analysis and attention."
The rapid increase in the number of non-jobseekers on unemployment benefits from July 2009 is a scandal and evidence that the government has been manipulating unemployment data and the lives of the unemployed for its own political benefit.
The government has not been honest with the Australian people. Every time they point to Australia's relatively low unemployment figures, remember that 360,000 people receiving unemployment benefits are not required to look for work.
Andrew Baker, research fellow at the Centre for Independent Studies, is author of Not Looking for Work: The Rise of Non-Jobseekers on Unemployment Benefits, released today.

Jul 29, 2013

Actions hurting small business | The Australian

THE Rudd Labor government is spending big on media advertising declaring that it's small-business-friendly. But the facts show a government intentionally damaging small-business people.
In the past two years, for example, the number of micro-businesses (one-person businesses) has collapsed by 130,000. This is a direct result of a package of anti-small business, anti-self-employed measures imposed by the Labor government.
Just one measure, for example, makes being a small-business person impossible.
Under Labor, the the Australian Taxation Office has been denying individuals Australian Business Numbers. Without an ABN, a small-business person cannot issue legitimate tax invoices, is unable to tender for work and can't register a business name. That is, people are effectively blocked from being a business and are forced to find work as an employee.
Further, denying people ABNs encourages the black economy and damages the integrity of the tax compliance system.
Labor has particularly targeted small-business people in the construction sector. It has introduced a complex, red-tape transaction reporting system aimed at small-business construction subbies. The outcome is to favour big business against small business.
In the clothing sector, Labor declared people who run sewing businesses at home to be employees, denying them small-business status. This has damaged small-business start-ups in the Australian fashion design industry, forcing aspiring designers to look overseas.
Enormous damage has been done to the hospitality and tourism industries, particularly in Queensland. These industries are 24/7 operations dominated by small business. Kevin Rudd's Labor, however, has imposed new industrial relations arrangements that artificially force up the cost of providing tourist services on weekends and evenings. Yet these are the peak tourist demand times.
This shows that Labor treats small-business people as if they run big business or public service bureaucracies. Rudd's Labor government consistently demonstrates that it just doesn't get small-business people. Yet Labor admits that the majority of Australian workers work in small business. That's more than seven million of Australia's 11.5 million workers.
Still, the Prime Minister wants the millions of people working in small business to vote for him. So, what's he doing? He's spending a lot of taxpayer money on radio and television ads declaring the government has a plan for small business.
Just recently, Labor's Small Business Minister Gary Gray (the party's sixth small business minister in five years) announced details of the plan. This involves the relaunch of an old online small-business information kit, Labor's response to a franchise review, and a promise to think about doing something regarding late payments to small-business people. This plan amounts to nothing other than political public relations talk.
If Rudd is serious about supporting small-business people, there is something he could do right away.
He should recall parliament and undo the damage Labor has done, perhaps starting with the recognition that in small business there's no imbalance in bargaining power between the business owner and the people who work with them.
Small-business operators and their co-workers are all equally exposed and vulnerable. They are all just people working hard to earn a living. Rudd should remove the unfair weekend cost discrimination and let people work.
The Prime Minister has the power to do things. People working in small business want action, not his political spin.
Ken Phillips is executive director of Independent Contractors Australia and author of Independence and the Death of Employment.

Israel press bemoans price of peace talks | The Australian

AS Israeli and Palestinian negotiators head to Washington for the resumption of peace talks, most Israeli newspapers hit out at the decision to free 104 prisoners in return.
"The murderers will go free," was the top-selling daily Yediot Aharonot's front-page headline after the cabinet agreed to release the veteran Palestinian and Israeli Arab prisoners, many of them convicted militants.
In a tense session lasting more than five hours, ministers on Sunday endorsed Prime Minister Benjamin Netanyahu's proposal to release the 104 prisoners imprisoned before the 1993 Oslo peace accords as a gesture to the Palestinians.
Media reports say that many of them have Israeli blood on their hands and that while the vast majority are Palestinians, a few are Israeli citizens.
The names of those to be freed have yet to be officially published, or even revealed to cabinet ministers, but Israeli and Palestinian groups have published their own lists of those in prison for more than 20 years.
They include petrol bombers whose attacks on buses killed Israeli women and children, perpetrators of fatal stabbings on city streets and the makers of bombs planted on buses and in the main Jerusalem produce market.
Yediot columnist Nahum Barnea compared the release to the October 2010 exchange of 1,027 prisoners for the freedom of Israeli soldier Gilad Shalit.
"The early release of terrorists is disturbing to any decent person," he wrote.
"The images of remorseless murderers celebrating on the way to the bus are a humiliating, agonising, infuriating sight.
"The Palestinians did not give anything this time, except the willingness to hold talks on holding talks. It does not take much imagination to guess what Netanyahu would have said about this, had someone else been prime minister," Barnea added.
Israeli and Palestinian negotiators were to meet in Washington later on Monday, along with US officials, after months of dogged shuttle diplomacy by US Secretary of State John Kerry secured a resumption of talks after a three-year hiatus.
"Here we go again," the Jerusalem Post headlined over an analysis by its diplomatic correspondent Herb Keinon.
"These murderers will be hailed as heroes in Hebron and Ramallah and Jenin," he wrote.
"Parades will be held in their honour, flowers thrown at the bus carrying them home, poems written about their 'glorious' exploits.
"If the Palestinians are indeed serious about the upcoming round of talks, they need to make that apparent to the Israeli public," he added.
"One way to do this is not to celebrate the release of terrorists who threw petrol bombs into buses and incinerated innocent men, women and children."
Maariv analyst Shalom Yerushalmi shared the general media sense of outrage.
"As always, the government has chosen the worst option," he wrote.
"Prior to going to the negotiations in Washington, the Israeli government made a decision to free terrorists who have committed terrible crimes against innocent civilians, many of whom were teenagers and children.
"This tears at the heart of each one of us, regardless of political views."
The left-leaning Haaretz daily grudgingly welcomed the cabinet decision.
"The Israeli government bumped into reality on Sunday," diplomatic correspondent Barak Ravid wrote.
"Like a drunk driver heading for a wall at full speed only to get a grip on himself at the last moment and hit the brakes, most government ministers came to their senses and voted in favour of releasing prisoners in order to enable the renewal of talks with the Palestinians."

Australians pay 50 per cent more for tech goods, says IT pricing inquiry | The Australian

A LONG-AWAITED parliamentary report into the "price gouging" of Australian technology consumers wants the lifting of restrictions on parallel imports, a ban on geo-blocking stopping Australians wanting to buy goods offshore, and the formal monitoring of IT prices.
The committee found that Australians on average paid 50 to 100 per cent more than US consumers and makes sweeping recommendations that include the repeal of a section of the Competition and Consumer Act 2010, and the lifting of parallel importing restrictions under copyright law if necessary.

The IT Pricing inquiry conducted by a House of Representatives committee examined what were described as rip-off prices Australian consumers pay compared to their US counterparts, for computers, notebooks, operating systems, software, and gaming.
It also investigated the effect higher IT prices locally had on Australian business, and what higher tech costs meant for the ability of Australian business to compete globally against companies with lower costs. Australian taxpayers too were bearing the brunt of higher costs for technology used by government.

The inquiry, which began in May last year, received 133 submissions and 15 supplementary submissions from angry consumers who detailed allegedly exorbitant prices they were paying. The inquiry also generated heat within the IT corporate sector when in March this year, the committee compelled Adobe, Apple, and Microsoft to appear publicly and explain their pricing policies in Australia.

Committee chair South Australian Labor MP Nick Champion said the committee had found that on average big IT companies and copyright holders charged Australians, on average, an extra 50 per cent, a practice consumers called the “Australia Tax”.

“High IT prices can have significant impacts given the critical role IT plays in many areas of Australian life,” Mr Champion said.

“While companies should remain free to set their own prices, the committee took the view that there are a number of ways in which Australia can act to increase competition in IT markets, which should reduce prices over time,” he said.

Other key recommendations in the report include a consumer education campaign, to help consumers find cheaper goods online, reforms to the Competition and Consumer Act and the Copyright Act to remove barriers to competition, foster innovation, and ensure consumer rights are not lost in the transition to digital content.

The bi-partisan committee also wants to reduce the impact of high prices on Australia’s most vulnerable social groups – the disabled, students, and low-income Australians.
"Australian consumers and businesses, however, must often pay much more for their IT products than their counterparts in comparable economies. In many cases Australians pay 50 to 100 per cent more for the same product." the report said.

"Evidence presented to this inquiry left little doubt about the extent and depth of concern about IT pricing in Australia. Consumers are clearly perplexed, frustrated and angered by the experience of paying higher prices for IT products than consumers in comparable countries.

"High IT prices make it harder for Australian businesses to compete internationally and can be a significant barrier to access and participation for disadvantaged Australians (in particular Australians with a disability)."
The report also rejected the argument that higher costs were the result of doing business in Australia, which included costs of distribution to a vast geographical area with a relatively small population in global terms.
"Based on the evidence received over a 12 month inquiry, the Committee has concluded that in many cases, the price differences for IT products cannot be explained by the cost of doing business in Australia. Particularly when it comes to digitally delivered content, the Committee concluded that many IT products are more expensive in Australia because of regional pricing strategies implemented by major vendors and copyright holders."
The report prompted demands for action by consumer groups.
Choice urged bipartisan support for the recommendations, including a possible end to geo-blocking, which prevents consumers using the internet to buy products cheaper from overseas.
“Our research shows Australians cop a raw deal on digital prices,” Choice director of campaigns Matt Levey said.
“Today's report provides a much-needed trigger for government action to terminate the so-called 'Australia tax'.”
The Australian Communications Consumer Action Network (ACCAN) said higher tech prices were particularly hard on those with disabilities and low incomes.
It cited the example of a screen-reading software package, designed to help people with sight disabilities, which it says costs $1095 in the US and $1420 in Australia.
ACCAN urged both sides of politics to commit to a government-led accessible IT procurement policy, saying it could help drive down prices.

Australian parliament's IT pricing inquiry recommendations:

1. The Committee recommends that the ABS develop a comprehensive program to monitor and report expenditure on IT products, hardware and software, both domestically and overseas, as well as the size and volume of the online retail market.

2. Considering the importance of IT products to education, and in the interests of greater transparency in this area, the Committee recommends that the Australian Government, in consultation with Universities Australia and CAUDIT, conduct a comprehensive study of the future IT needs of and costs faced by Australian Universities, in order to provide clearer financial parameters for negotiations.

3. The Committee recommends that the Australian Government consider a whole-of-government accessible IT procurement policy, to be developed by relevant agencies including AGIMO, and in consultation with relevant stakeholder groups including ACCAN.

4 Copyright, circumvention, competition, and remedies": The Committee recommends that the parallel importation restrictions still found in the Copyright Act 1968 (Cth) be lifted, and that the parallel importation defence in the Trade Marks Act 1995 (Cth) be reviewed and broadened to ensure it is effective in allowing the importation of genuine goods.

5. The Committee recommends that the Australian Government amend the Copyright Act’s section 10(1) anti-circumvention provisions to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

6. The Committee further recommends that the Australian Government investigate options to educate Australian consumers and businesses as to:
* the extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods;
* the tools and techniques which they may use to do so; and
* the way in which their rights under the Australian Consumer Law may be affected should they choose to do so.

7. The Committee recommends that the Australian Government, in conjunction with relevant agencies, consider the creation of a ‘right of resale’ in relation to digitally distributed content, and clarification of ‘fair use’ rights for consumers, businesses, and educational institutions, including restrictions on vendors’ ability to ‘lock’ digital content into a particular ecosystem.

8. The Committee recommends the repeal of section 51(3) of the Competition and Consumer Act 2010.

9. The Committee recommends that the Australian Government consider enacting a ban on geo-blocking as an option of last resort, should persistent market failure exist in spite of the changes to the Competition and Consumer Act and the Copyright Act recommended in this report.

10. That the Australian Government investigate the feasibility of amending the Competition and Consumer Act so that contracts or terms of service which seek to enforce geo-blocking are considered void.

High cost of fairy floss policies | The Australian

Eric Lobbecke
Illustration: Eric Lobbecke Source: TheAustralian
ALWAYS keen to play the blame game, Kevin Rudd claims Labor's climate change policies are not "the primary reason for the hike in electricity prices"; rather, the hike is due to "excessive rates of return for publicly owned transmission and distribution utilities which have become cash cows for various state and territory governments". That is not just incorrect; it misleads the public about the cost of Rudd's policies.
It is true that allowed rates of return for both publicly and privately owned electricity utilities increased after the global financial crisis made investors more risk averse. But it was not state governments that were to blame. Rather, independent regulators decided higher returns were needed to attract investment. Painful though those increases have been, they are temporary: as financial market conditions improve, regulated returns will fall, and electricity prices with them.
That is not the case for climate change policies, for it is impossible to slash carbon emissions without substantial, steadily rising costs. Yet Rudd has never flinched from the "far-reaching" emissions cuts he called for in 2007. Treasury's carbon tax modelling spells out the price of those cuts: even on its optimistic assumptions, cutting domestic emissions reduces gross domestic product by $115 per tonne from now to 2020, with costs as high as $158 per tonne this year.
Little wonder then that in Queensland, Labor's climate change policies already account for 20 per cent of the average household's power bill.
When the Newman government was elected in March last year, those costs were projected to increase to an annual $621 per household by 2015-16, thanks not only to the carbon tax but to the renewable energy target (which will transfer $300 over the next three years from each household to the rent-seekers in the renewable energy industry) and also to contracts Anna Bligh entered into which pay five times more for power from solar panels than it is worth.
Rudd's proposed changes to the carbon tax will do nothing to stop those increases in the longer run. Sure, their immediate effect may be that carbon prices will fall to EU levels; but at those low prices there will be virtually no reductions in Australia's emissions. If Rudd genuinely wants to make the domestic emissions reductions Treasury modelled, the lower carbon prices will have to be very short-lived.
In fact, Treasury's modelling implies that after falling to $7, permit prices will need to rise to $50 per tonne (in 2010 dollars) by 2030, almost doubling wholesale electricity costs compared to their levels without a carbon price.
So Rudd faces a choice, and voters do too: low electricity prices or deep cuts in Australian emissions. Yet Rudd pretends he can have his cake, eat it and give it to his green-minded friends.
Where that refusal to recognise costs leads is all too clear. The stringent electricity reliability standards the NSW and Queensland Labor governments mandated in 2004 are a case in point. A political fix in response to increased brown-outs, those standards' impacts were scarcely assessed, much less adequately disclosed; but they ultimately required $2.75 billion in capital expenditure in NSW, while capital expenditure on electricity networks in Queensland has had to double.
Yes, reliability has improved, but studies show the benefits to consumers are worth barely 30 per cent of the costs incurred to achieve them.
The Newman government has now shifted to more cost-effective ways of ensuring network reliability, with an expert panel concluding that the measures could save more than $3bn in the next three years. Unfortunately, however, the bulk of the investments have already been made and their costs will weigh on consumers for decades, with the average household's annual power bill $200 higher than it would need to be.
Exactly the same outcome seems likely from Labor's National Broadband Network.
Decided by Rudd and Stephen Conroy on a flight between Melbourne and Brisbane, the NBN helps ensure that Australia, along with Japan, is the only advanced economy that the McKinsey Global Institute recently concluded spends more than it should on infrastructure.
With costs exceeding benefits by more than $20bn, productivity in the economy as a whole must drop as the NBN absorbs resources that could be more efficiently used elsewhere.
Indeed, each $10bn wastefully invested in the NBN makes us some $14bn worse off. And who will pay for the inefficiencies is no mystery. As Conroy himself insisted just days before resigning, "it's going to be paid for by users", with Telstra estimating that network charges, after falling for two decades in real terms, will have to rise fourfold over the next 15 years.
But Rudd continues to claim that broadband bills won't go up. Just as he claims he can deliver both cheap power and tough action on climate change. And just as he claimed school halls could be built, and pink batts installed, without enduring costs.
In the real world, however, there are no free lunches. Bob Hawke and Paul Keating knew that, as did John Howard; and they even had the courage to face voters with tough decisions.
But the magus of Nambour is made of different stuff: he offers not choice and consequence but fantasy and fairy floss. Yet when the party is over, it is consumers and taxpayers who will be left with a toothache that just won't go away; and no amount of blame-shifting will make it any less painful.

Jul 27, 2013

Squeeze on truckies | The Australian

Squeeze on truckies


WHILE supermarket giant Coles rejects any responsibility for the lethal squeeze on truckies, hundreds of people every year are killed in truck crashes ("Coles rejects claims it forces unsafe driving", 25/7).
One in every $3 of road transport revenue comes from companies such as Coles. Truckies know how powerful this makes them. Coles sets standards across the industry and right now it's driving them down.
The evidence is in, but Coles is choosing to ignore it. More than 20 years of coronial reports, inquiries and independent research show the links between rates and conditions for truck drivers and safety on our roads.
The Australian retail market is the most profitable in the world and Coles is one of its biggest players. It's time Coles started working co-operatively to save lives on our roads.
Tony Sheldon, national secretary, Transport Workers Union, Sydney, NSW

Jul 26, 2013

The consumer strike threatening Australian retail

Australian consumers have gone on strike. And it’s a strike that will require dramatic management changes among retailers to break.

I reach that conclusion from the Boston Consulting Group’s latest annual survey of consumer sentiment. BCG only goes as far as suggesting that consumers are ‘threatening to go on strike’, but when you look at their material you see that Australian consumers are already on strike and it helps explains why so many retailers are in trouble.

In just one year the proportion of consumers who want to save in 2013 rather than spend has risen from 40 per cent to 46 per cent while those who are less inclined to buy new things has risen from 49 per cent to 54 per cent.

Why has this happened, who is being affected most and what can be done to reverse it?

It’s true that the mess the Gillard government made of the economy, including its attack on small business, has had a big effect. But the problem goes much deeper.

I believe that many Australian sense that the organisations they are working for are not coping with the internet revolution and industrial relations laws. So they feel insecure, and this is reflected in their spending  My earlier comment today highlighted this (Companies failing the online test, July 26).

To underline this failing among Australian retailers to understand the internet, Australians are rushing to buy goods online from overseas retailers. Amazingly, Australians are leading all developed countries in their frequency of overseas internet purchases. And BCG says we are driven not by lower prices but by better product ranges and availability on overseas sites.

BCG says we are seeing fundamental changes in demand and the way consumers behave, which will require different marketing approaches including more skilled marketing to women. I am stunned to discover that among all developed countries, Australian women have the least help from their partners with grocery shopping.

Meanwhile, there is a clear preference for savings over spending, with almost half of all Australians now in this mindset.

BCG say that among the new savers, 49 per cent are acting on concerns about another economic downturn, but 43 per cent are saving more just to meet financial goals such as retirement and the cost of healthcare.

The leader of BCG’s marketing and sales practice in Australia and New Zealand, Jane Danziger, goes even further and says that Australians are now rejecting consumerism.

“We see Australian consumers are increasingly jaded with the very idea of buying new things, and are becoming quite critical of companies pushing sales in an increasingly difficult economic climate,” Danziger says.

“Australians are still planning to increase their spending in a few selected areas in the next 12 months, including holidays, fresh food and items for their children.

“They are also trading up on big-ticket items related to their home and their cars in order to get quality and durability.”

I suspect that spending on telecommunications is taking demand from conventional retailers. The good news is that the balance sheets of Australians are improving and so if their disposition changes they are in a position to spend. 



Read more: http://www.businessspectator.com.au/article/2013/7/26/retail/consumer-strike-threatening-australian-retail#ixzz2a78E93lE

Jul 25, 2013

Europe's new 'liability' union | Business Spectator

Last week, I wrote about how the euro crisis had been put on hold until the German federal election (A euro crisis on German ice, July 18). One of the policies affected by this crisis deferral is the European Union’s so-called banking union. If implemented, it could turn out more costly than previous bailouts for periphery governments. No wonder German politicians don’t like to talk about it prior to the election.

‘Banking union’ is a bit of an Alice in Wonderland term. It means just what EU politicians and central bankers choose it to mean, neither more nor less. For na├»ve observers, it is primarily a technical shift of financial supervision to the European Central Bank – and that’s certainly part of it. But it is also a pan-European deposit insurance scheme and a mechanism to deal with insolvent financial institutions. And this is where the supposed ‘banking’ union quickly turns into a liability union.

If the union were only about introducing consistent supervision standards for Europe’s banks, there would be little opposition to it. In fact, such a policy would probably aid a single European financial services market. The only question would be whether the ECB is really the best-placed institution to provide oversight. The conflict of interest between the ECB as both a lender to Europe’s banks and their regulator is quite obvious, especially when some banks already depend on the ECB for their survival.

However, the desire to push through plans for a banking union has little to do with such considerations. It is mainly driven by fears about nine trillion euros of debt on the books of commercial banks in the crisis countries, a substantial part of which may be toxic.

Estimates about the amount of bad loans vary but the best estimates are somewhere between €500 billion and €1 trillion. At some stage in the future, these loans will have to be written off. If (or rather when) that happens, someone will have to foot the bill – and the whole discussion around banking union is really about who that someone will be.

Over the course of the euro crisis, the main concern has been with the solvency of sovereigns. When yields for government bonds started to rise in the euro periphery, concerted efforts by the European Union and the ECB aimed to drive them back down again. Part of these efforts was the provision of large amounts of central bank credit to the banking sector in the hope that these low-interest loans would be used to soak up higher-yielding government debt.

As is now becoming clear, while these operations may have had a calming effect on sovereign bonds, they also increased the vulnerability of financial institutions. Soaked full of bonds of their own national governments, European periphery banks are arguably in a worse state than at the beginning of the euro crisis.

It is clear that sooner or later Europe’s banking sector, widely regarded as too large, will shrink down to a healthier size and that this process will force some struggling banks to close or be nationalised. Proponents of a European banking union, particularly from the euro periphery and the European Commission, are trying to make the European Stability Mechanism absorb most of the losses. This solution has moral hazard written all over it and could turn out to be expensive for core euro members like Germany.

Under these plans, national governments would not be required to save their own banks if doing so would threaten their own solvency. So in practice, great contributions from periphery countries to their banking sector are unlikely to be forthcoming. Crucially, the plans would also exempt different categories of deposits, for example loans from the ECB but also private deposits of up to €100,000.

As Professor Hans-Werner Sinn, president of Munich based Ifo research institute, warns in a column for Germany’s business magazine Wirtschaftswoche this week, struggling banks would react to these incentives by shifting around all their liabilities until, in the end, they only had protected liabilities on their balance sheets. This would then force the ESM to pay for all the costs of bank failures and restructuring operations.

The bailout of Cyprus earlier this year for the first time had bailed in bank depositors in order to protect taxpayers. At the time, this was presented as a model for future crises. However, if taxpayer protection is still the goal then the planned banking union is not the way to achieve it. On the contrary, it will leave (mainly German) taxpayers vulnerable via the ESM.

Unfortunately, the Germans may also be required to pay for banking union in another way. If plans for a joint European deposit insurance scheme are passed, savers in Euro core countries will be affected. Germany’s many co-operative banks are especially opposed to such a scheme. Because their own form of deposit protection is well capitalised, they have little desire to pay for Spanish, Italian or Greek savers.

For the time being, however, plans for a European banking union are on hold. As Malta’s prime minister Joseph Muscat explained in an interview with Bloomberg last week, the reason for the delay is the German elections: “The EU is in the waiting room until the vote.” After that, he expected banking union to be created.

It could be quite a rude awakening after the September 22 election. An unsuspecting German public will quickly find out the real state of the euro, how much saving it will cost and what share of banking losses Germany’s savers and taxpayers will have to take in the euro periphery.

And they will also learn that the seemingly harmless term ‘banking union’ could be of the most costly projects for Germany ever to be forced into.



Quarter-life crisis: Find me a twentysomething who isn't having one - Telegraph

It’s a sunny Saturday night in a pub in East London. I'm sweating it out alongside the other punters when an empty tip jar catches my eye. Its sign reads: “Please tip us. The staff are all graphic designers, musicians and artists, which in the real world means we are simply bartenders. We have no inheritance and slim chance of ever owning a property … Our lives are sh*t.”
To the twentysomething-aged bar staff: Firstly, way to make the clientele feel guilty. Secondly, it sounds like you’re in the middle of a quarter-life crisis. Welcome to the real world: the chances are, your customers are having a ‘QLC’ too.
A recent UK study reveals in fact that 86pc of some 1,100 twentysomethings suffer from serious anxiety and stress: a fear that they're not doing enough with their life, a fear of missing out.
As I stood there trying to enjoy my Saturday night (at least I was actually out in a bar, not at home vegging out – that's got to prove that I'm living life to the full, right?) that simple tip jar confirmed to me a long-harboured suspicion that increasingly, people my age (twentysomething) are waking up with an existential crisis on their hands.
Which of the following things do you constantly worry about?
Take Nikki, 27, who's lived and worked in London for five years and readily admits she's suffered from – and thankfully been through – a QLC . “I would describe what I went through as a prolonged identity crisis," she says. "Having been defined by education up until 22, it was very difficult to find my place in the real world; aspects of my life suddenly didn’t count in the same way.” She's in PR now, in a job she enjoys, having "escaped" from the charity sector.
Elsewhere, Phoebe, who’s 25 and currently in a "dead-end job" in retail, confesses she’s panicking: “I recently wrote down goals I want to achieve by the time I’m 30 and it’s terrifying how little time I have left.”
Damian Barr, author of Get It Together: A Guide To Surviving your Quarter-Life Crisis and faculty member of The School of Life, describes these feelings perfectly. “You may be 25 but feel 45. You expected to be having the time of your life but all you do is stress about career prospects, scary debts and a rocky relationship.”
Does anybody agree that it would have really been appreciated if someone had told us that before we left uni? Perhaps even as bluntly as Barr puts it: “If your life was a movie it would go straight to Netflix, but nobody would rent it. Not even you.” Harsh. Admittedly, there could have been a lot of red eyes at graduation, but maybe it would have managed our expectations? I'm 23 and a budding journalist (hint, hint), but am working in a largely unrelated field having just left university.

Over-qualified and under-prepared

No one prepares us for the decades’ worth of post-education revelations such as "dream jobs" are pretty hard to come by (but by the way,unemployment isn’t), having a real job is not like an episode of Mad Men and finding "the one" is virtually impossible. One of the most difficult home truths to come to terms with however, is realising that we are not, and probably never will be, millionaires. Just as we face up to this unfortunate reality, we also calculate that £1m is exactly the amount we need to buy a decent property with a garden and a few bedrooms in a nice area of London. And yet the practicality of getting a mortgage worth even a quarter of that is all but impractical when you're out of work or in low-paid jobs. And it suddenly dawns on us that, aside from that cool little blog we genuinely believed was going to take off and earn us the big bucks, we actually have no strategy in place to make any money.
While it’s assuring that our peers are also wondering "is this it?" and experiencing all the other lovely hallmarks of a midlife crisis, it's sad that, as Barr notes, these crises are happening earlier. “To an extent the younger generation expects more than their parents did, but it’s also harder for young people today than it was for their parents. Their parents didn’t have to fight for their first job in a depressed global economy and banks offered mortgages without asking for a lottery-win sized deposit.”
Alice, a graduate working in her local cinema picking up empty popcorn boxes, mirrors this sentiment exactly: “I’m 24, I have a degree but after countless interviews I still have no luck. So, I work at the Odeon, swim in my overdraft and live with my parents, who at my age were married with a house and kids.”

The new norm of not settling down

Our parents had to deal with having babies younger which was arguably the bum deal (considering I’ve been known to cry in the work toilets because it all got “too much”, I don’t much fancy my chances at looking after another human being just yet.) Then again, my parents also bought a house and, the minute they did, property prices shot up. At 27, they nested in their goldmines with real-life things like marriage, jobs and babies. Fast-forward to today, at the same age, we are paying through the nose to simply exist in London and would jump at the chance of owning a downstairs toilet.
Yet, has the new norm of settling down later also encouraged a belief that we can put off important decisions? Thirties are apparently the new twenties, right? This decade doesn’t count, right? Wrong, says Barr, “denying the QLC is the worst way to deal with it”.
Nikki admits that it took her a long time to 'get to grips' with her crisis. “Every time I planned to confront my anxiety, I got distracted by nights out, and the hangovers only added to the impending sense of doom.” All the ‘fun’ going on around us posted on Facebook contributes another feature to the QLC: worrying we are not having enough fun by comparing ourselves to those who have bothered to put up Facebook photos. Remember though, “no one posts snaps of the growing number of nights in under a slanket with a takeaway.”
Facing so many uncertainties, twentysomethings are at constant odds with themselves being incredibly ambitious but painfully indecisive. As Nat, a 24-year old medical student, says: “I frequently question what I’m doing and feel trapped knowing that my career is set out for me.” It's as if everyone’s feeling the exact same way, even those who seem to have it all worked out, like Alasdair Snow, 24 and a founding director of popular app TripTease“Everyday I’m faced with a million and one reasons why I’m likely to fail," he admits. "In starting my own company I have made my own crisis and have set myself on a long and uncertain road, prolonging the feeling of gut-wrenching fragility.”
Whatever course we are on, it seems we are all fa-reaking out right now. And so, East London bar staff: that is the reason why your tip jar shall remain empty – sorry.
Julia Oliphant is a 23 year-old budding journalist who lives and works in London. She writes a blog Losing Our Edge with journalist Alicia Burrell. Both suspect they are suffering from a quarter-life crisis.