If you want to know why we need a significant tax on the billions being pocket by Gina and the gang, look no further than China and the nervousness circling the globe on the stability of the economy. Eventually the party of the resource boom will be gone–and only Gina and her gang of robber barons will benefit.
EXPECTATIONS that China will today release its weakest quarterly economic growth figures in three years have added to market pessimism on the mining sector.
Yesterday, Australia’s top mining stocks suffered another selloff as investment banks continued to trim forecasts for commodity prices and share prices, with Credit Suisse downgrading its target share price for both BHP Billiton and Rio Tinto.
And you have to connect this to the world economy:
Australian shares are set for a weak start after Wall Street slipped on earnings fears and European markets closed lower following another spike in Spanish bond yields.
This is not rocket science: everywhere in the world, austerity is the order of the day. People don’t have money to spend. People are afraid.
What we need to do here is see the mining boom as our seed corn: you sock it away for the harder times surely to follow. Not in Gina’s pocket. But, in the public’s pocket.
Here’s one thing you can place a bet on and never lose: every fire-breathing “free market” ideologue will wave his arms wildly demanding that we all bow down and worship the “free market”, except when those same ideologues have to actually pay for costs in the “free market”. Then, they become true hard-core lovers of…the public domain. Which brings us today to employee entitlements and, specifically, to the General Employee Entitlements and Redundancy Scheme.
Dave Oliver, the head of the Australian Council of Trade Unions is on the right track here:
THE country’s most senior union leader says the government should be able to go after the personal assets of company directors who do not keep aside enough money to pay employee entitlements when their businesses go bust.
Australian Council of Trade Unions secretary Dave Oliver made the call yesterday following an Age report revealing that there had been a fourfold increase in the cost of the federal government safety net that pays entitlements to workers when companies fail.
And when the money falls short for legally entitled payments, it ends up coming out of the federal budget, because, after all, when you, the business owner, owe money to workers, then, all of a sudden, the “free market” isn’t so lovely, huh:
The $1 billion figure represents the estimated payout over the 11-year history of the taxpayer-funded General Employee Entitlements and Redundancy Scheme.
You see, one of the things that makes it almost an absolute guarantee— you heard it here first and all bets are welcome — that we will go through another global financial crisis is that almost every banker who caused the crisis got away intact. They didn’t go to jail and they kept their mansions, yachts, private planes and even their girl friends on the side (after all, you keep your wealth and that girl friend stays, which is a great motivator to steal).
Oliver is absolutely right — if you don’t go after these thieves’ personal wealth, nothing will change because ultimately the shareholders, or, in this case, the taxpayers are left with the bill:
An Age analysis of insolvency data compiled by the Australian Securities and Investments Commission shows that the number of companies that fall over while owing their workers redundancy payments has climbed from 624 in 2008-09 to 827 in 2010-11, the most recent year for which figures are available.
Over the same period, the number that owed more than $500,000 in unpaid redundancies when they collapsed more than doubled, from 24 to 55.
‘It would impose a massive cost on companies”
Thinking about spending your dollars for groceries?
Know this about Woolies…
Letter to Mr Grant O’Brien re Woolworths-Caltex service stations
Dear Mr O’Brien,
While your company is advertising its commitment to Australian suppliers, your service station partner Caltex is set to close down one of its two Australian refineries, putting 700 Australians out of work.
If you were serious about supporting Australian jobs, you would make sure that Woolworths/Caltex service stations sold Aussie-refined fuel.
But as long as Woolworths sells fuel from overseas refineries, your claims of being “proud to be Aussie, through and through” will ring hollow.
I urge you to fill up on Aussie fuel, and save the jobs of Australian fuel workers.
Paranoia. Delusions of grandeur. Taking steps that endanger his people. Ladies and Gentlemen, may we introduce the Captain Queeg of Queensland, Campbell Newman.
Captain Queeg, you may remember, was the fictional character in The Caine Mutiny. He appears to be effectively no-nonsense until, quite quickly, his underlings understand that he is quite mad, or at least, so infatuated with his own power that he endangers his crew.
Which brings us to The Queeg of Queensland. Elected in a landslide, “Queeg” Newman successfully created a facade of the effective leader who would return the state to ship-shape status. Really? Let’s just take a look at the legal challenge to the the mineral resources rent tax, which The Queeg of Queensland has jumped on, and you start to see the Queensland Queeg more clearly.
On the one hand, you have The Queeg of Queensland whinging about the lack of money and the need to cut services and government workers’ jobs (you can see some of the cuts here). Yet, on the other hand, he’s willing to spend hundreds of thousands of dollars– at the very least– of taxpayers’ money pursuing what is a politically motivated legal challenge to protect the interests of the robber baron billionaires.
And, on its own, it makes no sense because there is no economic argument against the tax, and the opposition to it is simple about the pure greed of Gina and the gang, led, in this case, by Andrew Forrest. As we pointed out just recently:
At least 25 countries increased taxes and royalties on their mining industries, or announced intentions to do so. These include all the major mining nations – Canada, the USA, South Africa, Indonesia, Chile, Brazil, Colombia and even China and India.
These taxes and royalties are often far higher than in Australia – in Colombia they can reach 81% of coal mining profit, while in the oil and gas sector it is well known that Norway taxes almost all the profit of the North Sea oil industry – but what remains is still enough to keep the investors coming.
So, this idea that the mining tax is a competitive disadvantage for mining companies here is just pure lies and false information. It only disadvantages the Robber Baron mining company owners who don’t give a crap about the people of the country and only care about their own bank accounts. It’s greed, pure and simple.
Mr Swan accused Mr Newman, now Premier, of wasting taxpayer money to give billionaires a tax cut.
”Campbell Newman says he hasn’t got any money, therefore he’s got to sack thousands of workers in Queensland. But he’s got enough money to fund an expensive High Court challenge which will be futile and which would ultimately deliver a tax cut to the likes of Clive Palmer.”
Ah, yes, we can’t not have the Empty Suit, leader of the federal Coalition, chime in on this one:
Opposition Leader Tony Abbott said the states are entitled to challenge the MRRT, which the Coalition would repeal, and that it unfairly targeted some states.
“There is no doubt that the mining tax is bad for the Australian states,” Mr Abbott said in Perth on Monday.
“There is no doubt that the mining tax particularly targets the resource-rich states, and if the states in question wish to challenge in court, that’s a perfectly reasonable thing.”
Silver lining: The fictional Queeg ends up being sidelined to a secondary assignment and passed over promotion. Essentially, his bizarre behaviors gets him voted off the island, in today’s TV talk. We can only hope Queeg Queensland suffers the same fate.
Cough. Cough. Cough. It’s that time of the year — the office becomes a petri dish and, please, would you just stay home. But, it’s not that pesky disease that passes that should be of concern. Rather, what hurts more is something more permanent–The American Disease.
I wrote about this back in April for the Sydney Morning Herald:
But the American disease spreads its hurt into every pore of society. Here is how I define it: an ideology based on a phantom idea called the “free market”, whose purity and virtue can only be realised by tearing down any regulation deemed “anti-business”, cutting every tax ever conceived and shovelling most of the wealth created in society into the hands of a few.
The American disease has been wildly successful. It has killed the middle class, diverting 30 years of wealth growth from the people who created the value into the hands of the few. More people live in poverty in the US – 46 million – than at any time in the half-century the US government has measured that figure.
What reminded me of this disease is the continuing obsession with a phantom threat: budget deficits. For some reason, the Labor government has decided that it has to worry about government deficits–which are puny, in relative terms, to the economy. But, this idiotic obsession with deficits has been sweeping the globe, and powered most strongly from the United States, where politicians of both political parties–including the president–are trapped in the foolish debate.
The reminder of the rhetoric here came from, not surprisingly, the Financial Review, last week, which started a hand-wringing warning (behind the newspaper’s paywall) from the International Monetary Fund with:
The US faces a decade of fiscal discipline to get its “heavy and growing debt” under control, International Monetary Fund chief Christine Lagarde warns.
And only at the end are we reminded:
US revenues are lower than in most rich countries and could be raised by introducing a value-added tax, increasing personal income tax rates for high earners, eliminating loopholes and reforming corporate tax.
Well, duh. There is not debt or deficit crisis. None. The problem is not balancing the books. It’s getting the priorities right. So, if the priority is to let the rich continue to rob the country, well, then, you might have to look for more revenues. And if you want to let the drug companies and insurance companies rob people, as opposed to having a real national health care system, then, since health care costs are the major cost factor (15 percent of US gross domestic product) driving the US federal budget, of course, you’re going to have less money.
But, it still is not a crisis.
Which brings us back to Oz. It is obvious to anyone who does basic math that as long as robber barons like Gina, Clive and the rest of the gang are unwilling to pay a fair share of the mountain of cash they keep stashing away, the government’s cash position will be just a bit less.
But, no one should be fooled. Believing there is a deficit crisis is just nonsense. It’s part of the American disease that needs to be rooted out and killed.
Life is too short and, so, yes, one has to pause and reflect: why spend time thinking or writing about a loathsome human being? The “I, Gina” show is truly grotesque, a swirl of demented perversion flowing from the twisted mind of one person. But, independent media being the hallmark of a democracy, we can’t just turn our heads from a person best relegated to a seedy peep show in some red-light district.
So, there was a reason, per Adele Ferguson, for yesterday’s sale of 86.5 million shares by Reinhart:
Rinehart is the richest woman in the world and, if her track record is anything to go by, she will never give up – no matter what the cost. In the case of Fairfax, she took a financial hit yesterday as she cranked up her lobbying for up to three board seats and calls for the chairman, Roger Corbett, to meet virtually unattainable performance measures by the annual general meeting or step down.
Her latest move is linked to her wanting to retain the right to sue the directors of the Fairfax board if she becomes a director. The way company insurance policies work is a director holding a shareholding of more than 15 per cent causes problems for the coverage of director and officer insurance. Insurance companies will not cover directors in the event of a spat that results in legal action. Corbett asked Rinehart to sign a waiver that she could not sue her fellow directors. She opted instead to reduce her shareholding to below 15 per cent. [emphasis added]
I just wonder: why would anyone want to remain a director of Fairfax with this lunatic on the loose? You basically now understand this–she wants to be on your board, to mess with the editorial content of the newspapers, AND, if you don’t see it her way, she wants to be able to sue you.
This is the way a lunatic treats the world, whether it be her children or her peers: you are mine, I own you, I decide your life.
Message to Fairfax directors: run for the hills.
Here is an undisputed truth: All of life can be explained either by The Godfather or Star Trek. Period. Full stop. Which brings me, logically, to the rising Aussie stock market.
In the Star Trek movie, “The Final Frontier”, there is a moment when “God”, all-knowing and apparently benevolent, asks to be transported from the planet’s surface on a starship. To which Captain Kirk, clearing his throat, interrupts and asks, “What does God need with a starship?” That simple question exposes “God” as a fraud–no God needs a starship as his or her wheels to skip around the universe–and, well, Kirk’s question pisses off “God” who quickly turns malevolent…but I digress…
The point is: the stock market’s rise is a fraud, or, at best, a very bad yardstick to ask a better question we ought to want to know–how are most of the people doing? Of course, transcribers of press releases (formerly known as “journalists”) in the business press don’t ask those questions. They just revel and rejoice in the stock market going up, up, up…
Shares back in rally mode
The Australian sharemarket has closed higher as local investors took heart from better-than-expected economic data out of the US and an improved outlook for the troubled eurozone.
The benchmark S&P/ASX200 index was up 45.0 points, or 1.1 per cent, at 4172.2 points, while the broader All Ordinaries index had lifted 47.4 points, or 1.1 per cent, to 4213.8 points.
CMC Markets senior trader Tim Waterer said the Australian market had followed a positive lead from markets in the United States.
How many times have the transcribers of press releases (formerly known as “journalists”) in the business press reached orgasmic rhetorical heights–anyone remember the predictions of the Dow Jones reaching 30,000? I do–only to write the very next week in sour, deep disappointment when the market comes plunging back to earth because, surprise, bankers didn’t bother counting all the bad mortgages they had on the books. Oooooppppssss!
Because, like Star Trek, a lot of the stock market is fantasy. It’s built on a house of cards of psychology, not reality.
And, reality, in the lives of most people, is what they see in their paycheck and in their bank balances. And what’s left at the end of the month when the bills come due.
At the very least, we should demand that every report about stock market gains or other business-driven data includes what the Australian Council of Trades Unions points out: that 40 percent of Australians are in insecure work. Because long after the stock market bursts or flies higher, and long after Gina and the other mining robber barons each pocket an extra billion dollars while whinging about paying just a smidgen more in taxes, and long after the Empty Suit leader of the Coalition exhausts his fear campaign over carbon pricing–long after all that millions of people still won’t be employed in jobs with secure futures.
Or, as Captain Kirk might say, the Prime Directive (if you have to ask, Google it) in a decent society should always be guaranteeing prosperity for all, not capital gains for the few people lucky enough to be riding the wave when the market soars.
I’ll bet this happens to every person at least, say, once a week: you read something in the newspaper (that’s the thing that you actually hold in your hand and leaf through–I’m just practicing an explanation I’ll need to use with young people in ten years) but it bears no relation to what you see happening in YOUR real life. If you are aching for that feeling, you only need read most coverage of economics–as in a column today in the Sydney Morning Herald.
Ross Gittins, who I hasten to say is relatively sane compared to the free market, knuckle-draggers who write about economics and business over at The Australian and The Fin, muses about housing prices today. Here are his two key points:
FOR years when people at dinner parties worried about houses becoming too expensive for the younger generation to afford, I used to tell them not to worry: it was logically impossible for prices to rise to a level no one could afford. Why do I remind you of this? Because it’s starting to look like I was right.
And, then, at the end:
I take the present small falls in house prices as a sign the limits to affordability have been reached, and won’t be exceeded.
As a matter of supply and demand, Gittins might be right: prices may not be going dramatically higher. But, c’mon, “limits to affordability”? You got to be kiddin?
The real world is explained by our friends at the Australians for Affordable Housing. To wit:
- Almost one in ten households is in housing stress
- On any given night over 105,000 people in Australia are homeless
- Both house prices and rents have risen well above inflation. For people on low incomes this means that housing costs are eating up more of their income and leaving less for the other essentials in life. [emphasis added]
So, my problem with Gittins’ column is really context. It’s a bit misleading to wax on and on about how terrific it is that housing prices aren’t skyrocketing without balancing that with an insight into the real life people face trying to actually find housing, whether buying or renting.
Context, context, context!!!
Read Essential's ongoing research on the public response to Covid-19.Download this week's Report