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Category: Constraints

05/04/2021

The IMF suggests taxing those who have benefited from the COVID pandemic.

4 April 2021

So I guess that would be the companies that had just a part of their organisation drop 30% in turnover for a short period, and then claimed for the whole company for a long time- the people mentioned in Michael West’s article yesterday. Here is the article below from the SMH today. And yes, it is the IMF, hardly a Leftie organisation suggesting this, though the Greens did also.

Tax those who prospered during pandemic to repair budget: IMF

Shane Wright, 4 April 2021

Sydney Morning Herald, Senior economics correspondent

The International Monetary Fund has urged nations to consider using the Abbott government’s temporary budget repair levy to overcome the huge deficits left by the coronavirus recession, warning deep cuts to spending could lead to political instability.

Amid predictions Australia’s budget deficit could be $50 billion less than feared, the IMF has also suggested taxes on “excess” profits such as the abandoned mining resource rent tax.

Governments around the world have all been forced to run huge deficits to deal with the COVID-19 outbreak, with collective deficits approaching 13 per cent of global GDP. Australia’s deficit, forecast to reach $197.9 billion this financial year, is close to 10 per cent of GDP.

The IMF, in its fiscal monitor report ahead of this week’s world economic outlook, said that while governments had been forced to run large deficits there had also been an increase in income and wealth inequality because of the pandemic.

It said governments faced difficult decisions on how to cover their large deficits while also not exacerbating inequality.

Among budget repair options, the IMF said those nations with “robust tax systems” could look to increase top personal income tax rates, similar to the budget repair levy put in place by the Abbott government in 2014.

“Temporary increases in personal income tax rates (often restricted to the highest income brackets) were previously introduced during exceptional circumstances in Germany, Australia and Japan,” it said.

The budget repair levy, which was a 2 per cent impost on people earning more than $180,000 a year, ran between 2014 and 2017, raising more than $3 billion to help reduce the budget deficit.

The IMF said another option was to tax so-called “economic rents” or super-profits, targeting those sectors that had done well during the pandemic.

“Taxes on ‘excess’ profits, either in addition to or instead of the regular corporate income tax, can assure a contribution from businesses that prosper during the crisis (such as some pharmaceutical and highly digitalised businesses) and not affect companies (and their workers) otherwise earning minimal profits or incurring losses,” it said.

The fund warned trying to repair budgets by cutting expenditure on services or support to those left behind by growing inequality could lead to substantial political problems.

The Morrison government has pledged not to increase taxes, as the Abbott government pledged ahead of the 2013 election.

Very high iron ore prices, strong GST returns and a better-thanexpected economy are already reducing the budget deficit.

Deutsche Bank economist Phil Odonaghoe said it was not inconceivable the deficit could be half of what had been predicted in the mid-year update.

He cautioned everything would have to go right for that to occur, which would result in a deficit of about $100 billion. Even that would still be a record budget shortfall.

Mr Odonaghoe said a deficit of about $150 billion was more likely, which would set up the budget for future years. “The better starting point in 2020-21 also means smaller deficits across the forward projection period. On our revised profile, the federal budget could conceivably return to balance by 2025-26,” he said.

ANZ economists Hayden Dimes and David Plank said the deficit would be as low as $155 billion because of the better expected economic conditions.

But they cautioned some of this improvement was due to GST receipts.

Due to the way the GST is refunded to the states and territories, the better revenue this financial year could end up a shortfall in 2021-22.

27/03/2021

The Answer to our Problems is not More Religion

27 March 2021

Here is an article in the AIM, drawing attention to the political savvy and militancy of the Christian Right. They have been historically powerful with tax deductible status since the Middle Ages. In the 1960s they got State Aid (i.e.subsidies) to religious schools, and this has allowed them to take an ever greater percentage of the children, effectively entrenching an elite class.

The well-off have ‘choice’ and those who are residual do not, so rather than schools unifying a childhood experience they create two sets of parallel but different experiences in two different groups, and those in the privileged one will grow up with little concept of the other as they inherit the right to rule over it. The organised religions consciously going for temporal power will accentuate this, and the idea that you hide your religiosity until you have power is no less than deceitful.

Religious people behave no better than others. All this in Parliament House has been with a Christian cabinet in control of a ‘don’t ask, don’t tell’ policy and the priggish piety that surrounds sex with guilt and makes adolescence that much more difficult has made no positive contribution. It is likely to obstruct the sex education that seems the best way to tackle the situation.

Edmund Burke said ‘The only thing needed for evil to triumph is for good men to do nothing’. And Richard Dawkins said more recently that atheists have to become more militant. Amen to that.

https://theaimn.com/mere-men-are-not-godly-beings/?fbclid=IwAR3uGlSDPeKaHwCLDlEk3m9GWiuzXByP6JPboue2I-ceQchwMl4kWUcBGlo

20/03/2021

Sex, God, Anger, Mental Health, Guns, and Racism

20 March 2021

In a recent article about a mass shooting in a number of brothels in Georgia, USA, the Police were criticised for saying that the alleged killer had ‘had a bad day’. Obviously his day was not as bad as those who were shot. The Police were in trouble for not being condemnatory enough in their statement. There was a lot of discussion whether the shootings were racially motivated as they were in Asian massage parlours. An alternative explanation was that he was getting rid of the outlet for his temptations.

The study of accidents or ‘adverse events’ is a somewhat neglected science. The legal system has graduated from ‘guilty or not guilty’ to ‘at fault or not-at-fault’, as this makes it simple to dispense justice. The more nuanced study of adverse events has been mainly done in the aviation and oil industries where a number of small errors or omissions may magnify each other. The oil industry has tried to quantify the probabilities, which of course is much beloved by the insurance industry, which wants to set its premiums on some sort of rational basis. (How many valves are there in the plant? What percentage of valves leak? What percentage of the valves control volatile liquids? How many areas can form explosive clouds? What sources of ignition are there? etc.)

A common analogy used for major accidents is that there are a series of discs with a hole in each of them all revolving at different rates, and if all the holes line up, something can get through. So if each disc is something that can fail, the combination of failures leads to the disaster.

There is then discussion of the environment, the primary, secondary and tertiary causes and the immediate precipitant.

So the headline of this article was an attempt to put some discs in line to look at why the shooting happened. It is obviously a tragedy and totally unethical, but it is still helpful to discuss its elements coldly and logically.

Sex is a primal drive. An explanation offered for many species is that the males try to reproduce as much as possible, with the females acting as ‘quality control’ selecting who they will mate with and when. Male libido is rarely discussed except as an embarrassment to harmony or a non-justification for unwanted sexual advances. The Christian churches have generally had a very negative attitude to sex. It seems that sex is defined as only acceptable in a monogamous relationship, the alternatives being states of either abstinence or immorality. The word ‘morals’ has come to mean sticking to a sexual code, rather than behaving ethically in business, commerce or anywhere else.

This attitude to sex has made it an exceptional act. When a baby girl first rolls over, everyone claps. When she first sits, stand, walks, talks or rides a bicycle everyone is similarly delighted. But when she first has sex, the world seems terrified. With boys it is similar, but there is much less terror. Christian-ethos-based societies do not seem to have come to terms with our basic humanity and its natural functions. In consequence prohibitions and guilts are major elements in our society.

In Shakespearean society the serfs had nothing to inherit, so were not really concerned who fathered the village children. The middle class had money to inherit, so were very fussy who slept with who, and the kings staffed the Court with eunuchs just to be on the safe side. In some Asian societies the men visit the brothels on the way home so that they will leave their wives alone. This also occurs in Western societies, but with the sex industry more marginalised.

So if a man is at the extreme end of the libido spectrum, but due to personality characteristics is continually denied sex, he may become angry and frustrated. This is unsurprising. If his libido is then defined as abnormal, he may be termed ‘sex-addicted’. Is this then a psychiatric diagnosis? Probably not. There is no real connection between psychiatric diagnoses and physiological brain function, and mental illness is often a question of definitions, which change significantly with time. The diagnosis ‘nymphomaniac’ has gone out of use.

In the US with guns readily available, killing people is much easier; uncontrolled anger is much more dangerous. Obviously an angry man is far more likely to kill 8 people if he has a gun that if he does not.

In that brothels tend to be staffed by people who are marginalised either by race or income, it is observed that many are staffed by Asian women.

If one accepts that there were 6 discs that had holes in them, one could argue which causative factor was the most important. The Police may have been keen to play down the racist element. They may assume that the guns and the ‘moral framework’ are not able to be changed, hence not worthy of mention.

Australia has no gun problem like this, but sexual consent is certainly the topic of the moment. A more natural and secular approach to sex education would seem to be necessary, and an obvious approach is to put it into a civics and ethics class into schools. The crunch question will be whether it displaces scripture, which increasingly seems an anachronism.

www.smh.com.au/world/north-america/alleged-killer-says-sex-addiction-not-racism-motivated-atlanta-shooting-spree-20210318-p57bqb.html

19/03/2021

Murray-Darling Farce- Another Summit.

19 March 2021

One of the more absurd ideas of neo-liberalism was to privatise ownership of all the water in the Murray-Darling and then rely on ‘the Market’ to allocate the water optimally. All that happened was that water was another commodity to be traded with its price more related to its possible future price than any physical or environmental constraint.

I learned a bit about this many years ago from my grandparents. One of my grandfathers was a retired metallurgist who would tell me about world trends in metal demands and buy shares accordingly. His wife, my grandmother, knew nothing about this but would buy shares based on what the market was doing and tell me separately about how she despaired of my grandfather’s share investments. After a few years, she was much richer than he from a much lower base. The moral was that the share price had little to do with reality.

Why anyone would think that turning water into a speculative commodity would optimise its use is beyond understanding. But that was what happened. Joh Bjelke-Peterson built Cubby dam on the Queensland border and used the water to irrigate cotton, so NSW was behind the 8 ball from the start. NSW cotton farmers used surface water and took water from aquifers with no supervision of their meters. Brokers with mobile phones bought and sold water entitlements, and famously recently a Singapore-based company sold a lot of water rights to a Canadian superannuation fund, who felt that growing almonds (which are heavy water users) would be a good thing to do. (SMH 3/12/19) Hey, the price of almonds is good at present and you cannot smell rotting fish from Canada.

The idea that if you fix the money, everything else will come right seems to permeate every aspect of our neo-liberal, managerial society. I think of it as a religion, that ‘the market knows best and will allocate optimally with the unseen hand’. It also seems that religious folk are more prone to believe this, happier to believe that an unseen force can magically fix things and that it morally worthy to suffer now for some future redemption.

But in politics, we do not even have to debate these things; there is another option, ‘kick the can down the road’. Having the CSIRO produce a report in 2008, ‘Water Availability in the Murray Darling Basin’, led to an inappropriate Murray-Darling Basin Authority report in 2009. The CSIRO’s scientific response in 2011 was ignored. There was a Royal Commission inquiry by Bret Walker which found that the Authority has shown ‘gross negligence’. So they had another ‘Summit’, just last month.

All this is not to mention that Angus Taylor spent $80 million in taxpayer money to buy back water rights from a company called Eastern Australian Agriculture registered in the Cayman Islands and run by an ex-rowing mate, with the deal signed off by Barnaby Joyce. (The Guardian 19/5/19)

It is a worry, when the senior counsel assisting Walker inquiry writes a book called ‘Dead in the Water’ and still comes back with an opinion piece like this.

www.smh.com.au/national/murray-darling-basin-summit-a-laughable-response-to-finding-of-gross-negligence-20210318-p57brq.html

18/03/2021

Mutual Obligation and ‘Noblesse Oblige’

18 March 2021

‘Mutual Obligation’ is the new buzz word for unemployed people. If they are to get ‘welfare’ they have to be trying to get a job. An index of this is to make a lot of job applications, that surely must be the bane of every employer in the land, with an obligation of job seekers to apply for 20 jobs a month and about 8 job seekers for every vacancy.

‘Noblesse Oblige’ is a French term dating from when English royalty spoke French after the Norman conquest (of 1066) and refers to the benevolent, honourable behaviour considered to be the responsibility of persons of high birth or rank. The term is so quaint and medieval that is often used ironically. But these days with the growing gap between rich and poor, and the lack of sanction on poor behaviour by the empowered class, it may be that old fashioned ethics is all that remains to help poorer people. And they are in short supply.

If there were mutual obligation, a government would be obliged to give its citizens a decent life. In the 1950 and 1960s it was considered a government responsibility to get everyone a job and governments fell if the unemployment rate was over 1%. In the 1980s when I worked at Sydney Water, it ran employment programmes for ex-prisoners, people who had been unemployed for more than 3 months, and people with disability. The employment was for a 6 month term, and my job was to check that applicants were physically able to do the job. There was a programme to separate sewage and rainwater in inner city areas and a pipe replacement programme. Both of these programmes were simply canned. The Apprentice School, which had about 180 apprentices including plumbers, electricians and carpenters was closed. Sydney Water’s staff went from 17,000 to less than 3,000, and all the wages saved were simply turned into ‘dividends’ from the State Owned Enterprise’. A tax in short. Contractors were used, and mains repaired when they burst. The government had out-sourced the work and outsourced the responsibility for employment. The latter was less obvious.

The Global market place that was created in 1944 to lessen the chance of wars allowed countries that produced things cheaper due to cheaper labour costs to prosper, and multinational corporations moved their factories. The Americans call it ‘off-shoring’. But our governments have acted as if none of this exists. An abstract entity, ‘The Economy’ is now responsible for job creation and unemployed people are responsible for getting them. The government has outsourced job seeking to private corporations, and as we know, their duty is to make as much money for their shareholders as possible. So if it is better to churn many people through short-term jobs to get a commission every time someone starts, hey that is the way to go. So it is about how the rules are written. If the old CES (Commonwealth Employment Service) clerks could find someone a job they did. No one complained that they did not try to place people, and there was no incentive for them to do anything other than to try to place people in the best way possible.

I work with the Workers Compensation insurer, iCare, whose remit seems to be to minimise the cost of claims by saving on both claims managers and payments to injured people, and they are still paid a bonus if the ‘customer’ (i.e. patient) gets back to work, so there is pressure to force them back. The CTP insurers are always in a total conflict of interest position. They get the premiums and every dollar they avoid paying out goes to their bottom lines. The idea that a private market will fix things is complete nonsense.

Now we have revelations of gaming the system in the privatised job placement agencies. The whole dismantling of the public system relies on the assumption that people will not work without incentive payments and private is always better than public. I was in the public sector for many years as a salaried doctor and then in Sydney Water. My experience was that the public sector did its job quite well and thought about better ways to act, undistracted by incentive schemes that would distort resource and time allocation. The Dept. of Public Works built most of this state; Sydney Water built Warragamba Dam.

Privatised rorting is now a major industry draining resources from CTP insurance, Aged Care, the NDIS and now job search. This is not to mention over-priced private monopolies in toll roads, transport, land titles office or oligopolies gaming electricity supplies.

Will there ever be a government that rebuilds the public sector to put an end to this? Will Labor just roll over as Liberal Lite as they did to get an extra $3.50 on ‘JobSeeker’?

But the key issue is that everyone has the right to decent life, and if the government cannot provide jobs, it should provide income support. Noblesse Oblige. As one of my more insightful friends said, ‘There is no shortage of work. Everyone I know can think of things that need doing. It is not a shortage of work, it is an unwillingness to pay’.

Watch this video re the privatised employment agencies.

https://nsfuw.com/?secure_token=8fb90d8862532ccff17c55370720566372b28b851af78200f9c4a13b9171c28e&t=GZ1ZJT09R&utm_campaign=Expose_predatory_job_agencies&utm_content=30518&utm_medium=email&utm_source=blast

06/03/2021

Scathing PWC Report Finds Perottet’s iCare Incompetent

6 March 2021

A 100 Page report by consulting from international PWC (Price Waterhouse Coopers ) found weakness in performance and governance, and the Board did not hold management to account.

We might also consider that the Minister, Dominic Perottet did not hold the Board accountable, and appears to show no interest at all in the injured people for whom the whole scheme supposedly exists. We might note that no doctors or patients appear to have been interviewed either- Hey, it’s all about money you know! One could ask why PWC did a report when Justice McDougall was simultaneously doing one that it coming out in April? Perhaps he is a lawyer and does not know enough about money.

The bottom line is that it was run from the top by people who only knew about money with little input about its proper function from the people at the coal face, who presumably should have some knowledge of the people that they are supposedly helping. (I say that with reservation, as the case managers that I deal with have high turnover, little insight and seem to assume that a large percentage of their cases are fraudulent, the doctors are hell-bent on inventing pathologies to over-treat and they have to follow elaborate protocols designed to ensure that no one could under any circumstances get one cent more than was absolutely necessary).

So we digest the Management-speak of this report and await the McDougall report which had terms of reference that allowed little input from patients or doctors, held no hearings and seemed to exist principally to take the heat off the Minister from last August until its April release.

It seems that there has been a generic concept since the 1980s that managers know best, that other degrees and knowledge from lesser beings or lesser ranks and incomes are not of value or to be listened to. It has come unstuck in so many situations that its time that some little boy (or girl) points out that ‘The Emperors have no Clothes’. Then we can go back to an older time, where people had appropriate training, worked their way up, knew their jobs, were promoted on merit and had small salary increments reflecting their incremental status rise. But I suppose that this would rely on people having permanent jobs and depower the whole new managerial class and their symbiotic consultants and reduce the workplace ‘flexibility’ that allows the obscene salaries at the top and insecurity at the bottom.

If Anglo society does not want to fall to more realistic societies in Germany and Asia, there needs to be a large rethink of the Harvard 1980s management nonsense that is the foundation of these sort of debacles.

www.smh.com.au/national/nsw/scathing-icare-review-finds-a-need-for-cultural-change-20210301-p576tq.html

05/03/2021

Subsidies for Inequality

5 March 2021

As a child our family moved to Port Kembla, and we lived on Hill 60, just above the rocks where a lot of people have drowned recently.

I went to Port Kembla Infant’s School, which was overcrowded but interesting. Half the kids there came from the migrant hostel in the old WW2 army camp where ‘displaced Persons’ (as WW2 refugee families were called) lived. These kids arrived in kindergarten without a word of English. This was taken as normal by the teachers, who just plugged on. The kids from the hostel were called ‘Hostels’, but it was a descriptor rather than a pejorative. By the time we got to 2^nd class in our 4^th year (Kindergarten, Transition, 1^st Class, 2^nd Class) there was no difference between Aussie borns and Hostels. There were 46 in my 2^nd class and girls filled the top 6 places. There was minimal racism in kids leaving this school.

There was no anti-discrimination legislation or bureaucracy in the 1950s but all the parents had jobs in the steelworks or associated industries and the Housing Commission was building suburbs full of affordable housing as fast as it could. If you had a go, you got a go. The ABC Radio had an awkward segment before the news called ‘Learn English with us’ where some somewhat stilted practical speech exercises lasted about 2 minutes. I used to wonder how the new migrants all tuned in for this little segment if they could not understand the rest. But the intention was there.

In 1966 there was a movement demanding ‘State Aid for Church Schools’ on the basis that they had paid their tax, and now they had left the state system they were paying twice. The government wanted to win the election, and this was seen as critical for the Catholic vote. The Democratic Labor Party, which had split from the ALP were the champions of this and still represented a significant threat to the ALP as they preferenced the Libs. State Aid came in.

Some time later there was a lot of emphasis on ESL (English as a Second Language) classes at TAFE, which were held during school hours. Their target was migrant women and their objective was to encourage English speaking to allow the women both to meet each other and to participate in society more easily. John Howard defunded the programme; ‘user pays’ was the new paradigm.

I now live in Sydney in a relatively central affluent suburb. Each morning 8 private school buses start near my door ferrying students to 8 private schools. No public transport needed- the school takes care of it all. Others students in private school uniforms catch subsidised public transport to the schools of their parents’ choice. But the cost of ‘choice’ is ‘residualisation’. Schools where there are a lot of ethnic students suffer from ‘white flight’, and so have concentrated social disadvantage and a lack of native role models. One school I visited in Western Sydney had had a stabbing in the playground about 25 years ago. The school photos in the foyer had no white face for the last 20 years. That was as far back as the photos went.

When we wonder if the Cabinet have any idea how the poorer folk live, my opinion is that they do not. These social dynamics have now been going for long enough that it is possible to be old enough to be in Cabinet and have no idea how the other half live. Some think that people without jobs have ‘wasted their opportunities’ or have alcohol or gambling problems. Add a little self-ri ghteous religion, ‘the poor are always with us’, a touch of arrogance and a peer group that thinks the same, and you have policies that are increasingly dismantling the fair go and equity that should be at the heart of our culture. It may be that you cannot make all people equal, but you can give all children equality of opportunity, and all adults enough to live on. We have to change direction and do just that.

Here, at the risk of being repetitive, is an article on Christian Porter.

www.themandarin.com.au/150633-christian-porter-the-unshakeable-belief-of-a-white-man-born-to-rule/?fbclid=IwAR2PbktE5jzTIgIjcL4orzdW1TO8ax03VpOBCFDTzDbRUepQnigaB1WG24Q

27/02/2021

The Cost of Colonialism

27 February 2021

Most of the wealth of the West is built on the labour of countries that are paid less.

The British Empire was built on exploiting other countries. India the most, being the biggest, but the gold of Africa and the riches of Australia and Canada were not trivial.

Colonialism pre-1900 insisted that the coloniser took over, and in Britain’s case put their flag on the colony’s flag. After 1900, things became a bit more subtle. The financial arrangements were made, but not advertised on flags. The US in the Philippines is a good example, or its efforts in South America.

It is good that this is discussed as in the article below. It is the first step in change, though note that the article is from 2018, so the discussion is by no means inevitable.

As there is free trade since WW2 top level capitalists get stuff made in low cost countries then sell it in high cost countries. The rip-offs continue but there is still a gradual transfer of both capital and expertise to developing countries, as well as the transfer of jobs, that is squeezing developed country jobs.

The greatest challenge for the next generation is to have justice between nations without the West’s lifestyle being destroyed; you could call it a controlled climbdown. Some method of evening the wealth within Western countries might be a start.

www.aljazeera.com/opinions/2018/12/19/how-britain-stole-45-trillion-from-india?fbclid=IwAR0JosFy8foda9iCMA-arjrccEEgsNUeQVINetrH3PoILVAGutePbgNHEMo

12/02/2021

Value Capture and Equity in Infrastructure Development

3 February 2021

One of the ways to finance new infrastructure projects is to capture the extra value that they produce. A rail line makes a suburb far more valuable, particularly the areas around the stations. As it is planned some areas can be sold, or the government can develop the central areas and charge higher rates or a percentage of the increase in value when the land is sold. Simply to buy the land, built the railway and let the developers make all the profit is just plain dumb and is why there are so few rail lines in Western Sydney.

But there seems no sensible plan. The Federal government paid 10 times as much for some non-vital land to a mate, and now seems to be squeezing smaller landholders as they compulsorily acquire the land. If the land is going to be worth a lot more because of the railway, the people who are forced to move should get a bit extra for their trouble. This is only fair.

What is needed is a public formula that gives a fair price when the land is acquired and some value capture for the taxpayer. Railways should be self-financing, with fairness for all.

It seems that the governments are both corrupt and inept. With all the consultants floating around a formula should be proposed, debated, decided and implemented.

www.smh.com.au/national/nsw/sickening-to-watch-scale-of-acquisitions-for-airport-line-upsets-landowners-20210120-p56vjy.html

07/02/2021

COVID Problems Caused by Lack of Respect for Knowledge

7 February 2021

Prof Raina McIntyre argues that the COVID19 problems in the developed world, particularly the Anglo world are the result of an understanding of and a lack of respect for public health. She charts this as within the medical profession, which has its own hierarchies, but also in the political arena. The overwhelming influence of the corporate sector and the profit motive, and the managerial approach which assumes that if you are not an expert, you can quickly find one, bone up and take over has been found sadly wanting. For a manager or politician, selecting an expert is not as easy as it sounds as there are many people who want to tart up their CVs and market themselves with dubious claims to expertise.

This has resulted in a very suboptimal preparation for and response to the pandemic. The failure in the managerial decision-making process has been laid bare in the COVID situation, but this is not an isolated example. The lack of respect for expertise, the replacement of knowledge with marketing spin, and public good with corporate profits will lead to more bad decisions, which often take a crisis to become evident. It happened in the bushfires, and is happening with climate change. Examples in foreign policy, education, health and defence all come to mind.

Here is Raina’s paper about COVID19

https://iser.med.unsw.edu.au/blog/hijacking-public-health-and-price-paid-during-covid-19-pandemic