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  • Jul, 2012

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    Queensland’s Queeg

    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.

    Wayne Swan has it right:

    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.

  • Jun, 2012

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    Are The Chinese Lying–And What That Means In The Mines

    Before they shuffled off for the weekend, you kind of wonder weather the PM, or the Empty Suit (leader of the Opposition) orr Gina, the mining baron who is busy with her “I, Gina” show, had a chance to catch a story in the paper of record on the other side of the planet, which, if true, could mean a huge headache for the economy here at home. The upshot: China might be lying about its economic health. Uh-oh.

    The New York Times weighed in with this nugget:

    As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.

    Someone apparently is going around counting coal cars (talk about boring jobs–does that person get extra pay?):

    Record-setting mountains of excess coal have accumulated at the country’s biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said.

    Electricity production and consumption have been considered a telltale sign of a wide variety of economic activity. They are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country’s economy, because the gathering and reporting of data in China is not considered as reliable as it is in many countries.

    Indeed, officials in some cities and provinces are also overstating economic output, corporate revenue, corporate profits and tax receipts, the corporate executives and economists said. The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.

    What might this mean…nothing good:

    The executives and economists roughly estimated that the effect of the inaccurate statistics was to falsely inflate a variety of economic indicators by 1 or 2 percentage points. That may be enough to make very bad economic news look merely bad. [emphasis added]

    If the point of the story isn’t obvious: If China’s economy is actually very bad, not just bad, then, it will get worse here. Or to put a more fashionable for the season spin, perhaps inspired by the cacophony of sneezing and hacking rumbling from office pod to office pod, if China is coming down with an economic flu, it’s going to spread fast across Western Australia and every corner of the mining boom.

    So, maybe all those regular people who aren’t feeling as optimistic as the Reserve Bank keeps telling they should be feeling know a lot more than the people in charge of monetary policy.