James J. Morrison W.G. Dupree

Population Ponzi Scheme

September 20, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Is Australia facing a crisis of overpopulation and do we have enough resources to continue to expand our numbers by bringing in more immigrants into our country? Should we persist in growing our population, allowing immigration, consuming limited resources or close our borders, therefore, limiting population growth and over-consumption? Or is there something else at play of which we are not factoring?

The Government and media often imply that increased population growth is needed to prop up growth in the economy. The premise is that economic demand is only sustainable in Australia through population growth. These adherents note that Australians are exhibiting a spiralling decline in fertility, and rising mortality and permanent departures from the country. They observe that the only reason our population grows at all is immigration. So despite our inherent xenophobia entering the public dialogue, immigration is still officially encouraged.

Australia's net population Growth — Australia’s net population Growth

The slow total Australian population growth, courtesy of immigration, was evident in 19M in 2000 to 24M in 2016. Opponents to population growth, argue that the earth’s finite resources make it necessary to limit population growth.

Ponzi Scheme?

More radical opponents have gone as far to describe growth in population as an unsustainable “Ponzi scheme”. A Ponzi scheme is a fraudulent investment operation that pays a return to investors from new capital rather than from profit. In this case generating a new population of tax payers to support the earlier “investors” or older people. While a Ponzi scheme does not destroy anything, it does not create anything new either. Although it generates the illusion it does, eventually finite limitations prove it unsustainable, and it fails. The opponents of population growth in this country have suggested the population “Ponzi scheme” is failing and our economy is showing signs of it. They claim that the population Ponzi scheme is responsible for the failures in environmental, resourcing, consumption, borrowing, credit, homelessness, debt, food supply, health care, jobs, etc. While it is true Australia’s economic trajectory has shown a glut of economic indicators depicting downfalls in these areas, is the Ponzi scheme of population growth responsible? Is population the scapegoat that generates these downturns? Just which of these failures are the responsibility of this “scheme” or is the population Ponzi scheme argument a red herring stopping us from considering more relevant factors.

Overloading Australia

The only time in the last two decades that we have experienced a sharp (and temporary) rise in population growth rates (predominately due to immigration and partially due to a sharp fall in death rates and increase in birth rates) was in 2007/2008. In the wake of this rise, Mark O’Conner wrote “Overloading Australia“. ABC’s Quentin Demster wrote an article on Mark O’Conner’s book and the Sustainable Population Australia (SPA) advocacy group in 2010. Mark outlined his concerns for population growth in both articles and was reported as pointing out:

We don’t need population growth to support a stronger taxation base to, in turn, support our ageing population.
That we were not suffering from a skills shortage which could only be resolved through skilled immigration.
Faith in human ingenuity is not sufficient to generate solutions to critical resource shortages.

Revised levels of inequality in Australia

All well-supported arguments, but will a zero growth rate change these either way? Are these issues arising from population or policies of inequality? One of the inherent faulty assumptions behind the population Ponzi hypothesis is that all people are regarded as equal consumers. Our environmental impact and consumption is anything but equal. The Ponzi arguments often overlook the role of public policy decisions which are driving inequality. The following paragraphs will illustrate where these policies make a greater contribution to unsustainable consumption, ageing population support, unaffordable housing, transport congestion, job vacancy absences and risks of recession than population demographics.

Be born, .

Diminishing population growth rates in Australia

The SPA has mounted criticisms at Baby bonuses, child care rebates and family tax rebates because it presumes to promote population growth. Australia’s commitment to these policies has been half-hearted at best. The reality is these bonuses and rebates do not offset how expensive it is to bear children in this country. Australia’s has the world’s most expensive childcare and rising economic cost of children. So the SPA’s concerns are hyperbolic. Hence the Federal Government’s abolition of the Baby bonus among other spending cuts “reform” for families, reflects the real lack of commitment to supporting any population growth, despite their verbal claims to the contrary. Did anyone seriously imagine Peter Costello’s call to increase the birth rate with “One for Mum, one for Dad and one for the country” was a patriotic call that any family took seriously? Excuse me if I think any Treasure’s image or public “patriotic” call into the Australian bedrooms was anything of an incentive? Despite a blip in 2007/2008, our continuing experience has been the falling birth rates of the last few decades. There are a few grounds for concern here for the SPA, as the government’s efforts are lacklustre at best. On the other hand, the costs of immigration to bring in workers, to facilitate 457 visas, and even to pay them for working in our economy, is nowhere near as expensive as rearing children. Certainly, elements of corporate Australia would prefer to boost our population via this means, then use Australians, as foreigners can be bought cheaply. Abuse of visa workers is certainly not uncommon. So the question should be, is the need to boost the population to provide support for our economy, which or to facilitate exploitation and inequality?

Travel to work, .

Transportation congestion while being an issue in Australia is a product of an ideology that favours roads over public transport. The ongoing failings of planning and the dubious justifications of WestConnex’s impact on the Sydney transport are illustrative of a political ideology that is rewarding corporate road builders who donate heavily to political parties, over and above developing good public transportation. Not so much a factor of the population but a failure of political impetus to build sustainable infrastructure that should have easily met our population growth.

Borrow to Buy, .

Government Debt is not in any manner like yours.

Governments tend to favour population increases to spread the burden of public debt bond borrowings, raise revenue and stave off recession, presuming our population has the discretionary income to transact. The over-focusing on our tiny public debt (despite it growing from 10.1% to 18.3% of our GDP under the coalition), ignores the real recessionary pressures in Australia. These being credit growth and our unsustainable private debt at 123% of our GDP. While certainly a by-product of the population, perhaps we should focus on evidence-based conclusions for what debt levels we ought to be concerned about. Providing better regulation of banks to alleviate our society’s over-consumption of debt, serves Australian’s interests more than does current ideological policy.

Consume, .

Erratic Household Consumption in Australia.

Australia has a high rate of consumption, but our household consumption is not rising at the same consistent or relative speed as the population in Australia. There are many inconsistencies generated in our entrenched poverty and social inequality in Australia. This makes the links presumed between consumption of housing and population tenuous, especially as the housing construction rate is exceeding demand needs. For example, Sydney is already a city of 90,000 unoccupied homes and Melbourne with 83,000 vacant residences. Blaming population for the risks of Recession and Housing booms/busts as suggested by Michael Janda’s ABC article ignores the effects of policies that support un-quarantined Negative Gearing Capital Gains concessions and facilitating Asian laundering of cash needs. Even where population contributes, inequality breeds erratic consumption levels and greed consumes far more than its fair share.

Invent to Sell, .

Expectations of Job losses to Technology

Technology is often considered labour-augmenting as it increases GDP without an accompanying growth in population. It might have been labour-augmenting in a pre-industrialised society but the onset of technological innovation is changing the playing field. Malcolm Turnbull’s “innovation nation” has an often unpredictable capacity to destroy jobs. The consequences of automation, is disappearing more jobs than outsourcing has ever done. This is evident when we consider the MIT modelling on the relationship between machine learning/technology and job decline. In fact, “Gartner Inc, the technology research firm, has predicted a third of all jobs will be lost to automation within a decade“. This technology overreach will create a shortfall in jobs often inaccurately attributed to over-population.

Produce more, ..

Despite Productivity gains it has gone without rising compensation — Despite Productivity gains, it has gone without rising compensation

Despite the productivity growth over the last couple of decades in Australia, it has not been accompanied by corresponding increases in jobs and wages earnings. Technology and falling remuneration’s impact suggest, paradoxically, that the human component (population) is becoming less relevant to the emerging economic, wealth generation structures. This has implications for the assumption that GDP growth is being fuelled by population growth. Demand and need, certainly continue to exist, and to grow with increasing population, but the relationship between economic and population growths is not proportional. For economic growth to be driven by demand then there must exist a capacity for supply to meet demand. But what if supply can not be paid for, because fewer individuals hold jobs?

Work and slave, ..

Full-time employment has slid 64K since December while part-time work has risen by 136K.

Jobs earn income, and public services provision is dependent on adequate collection of income tax. Already 13.9% of Australians live below the poverty line (including 17.7% of all children). Full-time jobs are diminishing in preference to part-time positions and the top earners/corporations utilising tax avoidance means tax collection will only diminish. Internships providing unemployed labour for minimal costs favour corporations who already pay minimal tax. When population movement does not provide equitable changes in internal revenue collection for distribution into the economy then it can’t serve a population at any level.

and age to Die!

The lower economic quintile spend & stimulate the economy — The lower economic quintiles spend & stimulate the economy

A rising life expectancy has contributed to an ageing population. The justification to pay for this through an increase in younger income earners ignores how increasingly more expensive over time children are to bear and rear. It also overlooks how the aged baby boomers actually contribute financially to the economy and the young (as even Mark O’Conner recognised). While the public purse is quite capable of supporting an ageing population, the lack of political will to do so impedes us. Solutions such as social cooperatives for aged care delivery, lifelong education, taxation on assets, corporations and superannuation are solutions we are unwilling to implement. In fact, the aged – well supported by the public purse – would result in greater spending inside our economy, in the same way as providing for the impoverished would. The ideological and political redirection generating vast inequality is more responsible for a deterioration in support for the aged, than population numbers and longer life expectancy.

What of we who Survive?

At the risk of pointing out the obvious, the ponzi accusation for Australia’s population is somewhat limited by our “surviving” population density. Australia outside of it’s capital cities has the smallest by a long shot. You probably don’t think that if you live in Sydney but then a fifth the population for our entire country lives there. Perhaps we can find a localised ponzi population effect in Sydney? Outside of our capitals you may have to move south to the Antarctica to beat Australia for a lower population density. Yes, it is a semi-desert continent and our capacity for rural production will be victim to climate change but again, the failures of government to support rural Australia should not be laid only at the door of population. So perhaps a country whose population is only .3% of the global population on 5% of the world’s land mass, the population is not the primary problem?

The real Ponzi Scheme

The burden of tax debt falls on the middle class

The ponzi scheme that is failing, is not population, but the redistribution of per capita wealth. Given no appropriate investment in infrastructure for our population to generate jobs, create wealth and hence taxes, where lies revenue growth? Instead the government is desperately fighting a rear guard action by cutting services and talking of deficits limiting redistribution. Instead they speak erroneously of inter-generational debt and budget to commit $50 Billion to reduce company taxes. This economic insistence towards trickle down economics despite all the evidence of it not working to generate any significant economic growth. Morrison’s argument that Australia is being more divided into the taxed and untaxed is only relevant where he is talking about income taxes (which as Ross Gittons points out is “only a little over half the federal taxes we pay”). What Morrison fails to observe though, is the untaxed (from his limiting perspective of taxes) occur at both ends of the income spectrum. They that pay little or no Tax who farm their profits offshore to remove it from our economy and they who are increasingly impoverished (currently 2.5M live under the poverty line), who make too little to pay income tax! It is the diminishing middle class that have a larger tax burden (although small by international standards). Cutting taxes for the wealthy reduces their contribution to any redistribution of wealth via taxation. The unwillingness of the government to re-distribute income to that portion of the population that spends the majority of their income in the economy is counter-productive to our larger national wealth. These policies are merely provisioning for the inevitable revenue winter to come.

What does matter?

Mark O’Conner while acknowledged these issues still berates political emphasis on wanting Australia’s small population base to continue to grow. They that call population growth a ponzi scheme often ignore the reality that the fallout of Australia’s “unsustainable population growth” is far more realistically expressed as unsustainable government ideology driving public policy. Zero population growth will alleviate none of these issues but changes in the ideological policy of inequality can reap benefits for all Australians. While excessive population growth is undesirable and may even be contributing, what effects it is having are masked by the more significant and destructive social and financial inequality. It is impossible to measure the effects of the ponzi population failure in Australia and know what is actually attributable to it when so much social damage is driven not by population but evidence-less ideologies and political corruption via lobbying and donations that drives our policy decisions. Coupled to corporate & political greed, the drivers for excessive private debt, a lack of infrastructure development resulting in job vacancy absences and concessional welfare for the wealthy and we have an economy risking a recession that no absence of population growth will correct.

Banning Muslims

August 12, 2016 by James J. Morrison W.G. Dupree 1 Comment

Calls to ban Muslim immigration are irrational and economically unviable since Australia’s Muslim community, and tourist visitors have brought peace and prosperity — not terrorism.

Our Australian borders, “Girt by Sea”, apparently, require strict border protection. Is the Government’s security claim justified and should we ban Muslim immigration?

In the light of fears expressed by Sonia Kruger and Pauline Hanson calling for a ban on Muslim immigration and Morrison and Dutton’s harsh detention policies for any desperate enough to approach our shores, justified?

Asylum Seekers are not Terrorists

All despite no asylum seeker arriving by a boat ever being implicated in political terrorism in Australia! Yet “Reclaim Australia” adherents and government MPs keep raising the fear levels. They imply terrorists are trudging from country to country, risking life and limb in leaky fishing boats for the expressed purpose of carrying out terrorist acts. Hiding as victimized refugees defies logic, rationality, and common sense, especially when it is easier to fly in simply. This really this is seriously the type of expressed argument by politicians like Cory Bernardi, Jacqui Lambie, Pauline Hanson and George Christensen.

The closest thing to any “Muslim terrorist” we have experienced in the last decade flew in on a comfortable plane on a business visa with the expressed approval by the conservative Government of the day. Granted a protection visa in 2000, Haron Monis became a citizen in 2004. Aside from having a criminal & psychological history and fallouts with the Australian courts for implications in crimes, it was evident that Man Haron Monis only thought of using the “terrorist” angle for his actions in the Lindt Café, as an afterthought. His request for an ISIL Flag to be brought into the cafe reflects the lack of intent of an organised act of terrorism, and is more accurately described as a “violent rampage by a narcissistic and mentally unstable man”.

Perhaps we should stop cutting mental health programs as a mitigating effort? Even if you do consider this an act of political terrorism, (and let’s generously give it the widest definition possible), the death of one person (the police killed the other person) might bring the death toll due to “terrorism” in Australia to five. That number includes the 1978 Hilton Hotel bombing (which killed three) and perhaps adding the Turkish consul-general murdered in Sydney in 1980. Adding this murder as a “terrorist death” is stretching credibility.

It’s hard to manufacture any numbers of significance for actual terrorist acts in this country. Of course the strict interpretation of section 100.1 of the Criminal Code’s definition of a “terrorist act” would suggest only the Hilton Bombing is relevant. If you count world-wide terrorist deaths of Australians killed since the 1978 Hilton bombing, then only 113 deaths are represented. At an average of 3 a year, frankly horses kill more Australians (at a rate of 20/yr). I curiously await the announcement of the closure of the horseriding, rearing and racing industry and sport. Really? <sigh> We tend to become hysterical about hypothetical possibilities, while inadequately dealing with more prominent causes of mortality. (i.e. women’s deaths from domestic violence).

Domestic Terrorism

Australia spends billions on the negligible threat of “terrorism”, while our conservative government had reduced by $300 million the amount we spend on risk mitigation for domestic violence. Kate Stone reported 79 Women were killed last year yet while resources for domestic violence have shrunk, counter terrorism measures for the theoretical possibility of death, has increased by $1.2 Billion in 2016.

White Terrorism

Frankly, the most significant post World War 2 loss of lives on Australian shores due to a single individual was accomplished by a blue eyed, blonde, Caucasian (non-Muslim) man at Port Arthur named Martin Bryant in 1996. Before that, there was the Queen Street Post Office massacre by the Catholic Caucasian Frank Vitkovic who killed nine people (from which the term “going postal” entered the Australian vernacular). In the same year, 1987, the right-wing Caucasian non-Muslim Australian Army officer, Julian Knight killed seven people. In fact the more you examine the history of massacres in Australia (and in particular the ones before the World Wars), the more you realise the real profile of mass killers is very similar to the American experience. The lessons are, restore mental health programs and beware of white, Catholic, right-wing, non-Muslim Caucasians!

We are content to ignore the fact that the vast majority of Muslims worldwide are peaceful law abiding citizens, who are more often the victims of radicalised elements within their society. They have a greater risk of death by terrorism than any non-Muslim Australian.

That doesn’t include deaths instituted by the Western government’s ‘war on terror’ which estimates have put at 4 million people.

So many terrified of so few

Yet death by Muslim terrorist rates as a fear that preoccupies our social media chatter, our racial vilification, our TV talk show conversations. Our irrational fear of barely 2% of our population who are Muslim (a third of which are Australian born) is odd in the face of so many other more fatal causes.

Between 2003-12 the ABS recorded a few causes for deaths many of which were outlined in Crikey’s article. Still, we will spend billions on anti-terrorism.

Are you a Muslim?

With the return of prominent racial vilification on the national political agenda with Hanson’s “One Nation” party returning to power, new calls for action have emerged.

The proposal that we should lock out Muslims from entering our country poses some significant issues. Not unlike the Donald Trump response to the threat of ISIL by locking down borders to any Muslims, the identification of Muslims is problematic. Given Muslim culture is expanded by conversion and spans beyond typical skin colour demographics, do we adopt the Trump methodology of discerning Muslim identity by having Border Force, ask each entrant “Are you Muslim?”

Would we oddly expect a person who is entering the country intent on doing us harm to answer honestly? Who would we then stop? How would Sonia Kruger’s ban be implemented?

Are you a Refugee?

Muslims enter the country as refugees, immigrants, or for education, business or tourism. Refugees & immigrants, historically, add considerably to the economic welfare of our nation. Not only do this asylum seeker population NOT generate terrorist incidents, but they do create economic wealth in Australia (and not by taking jobs so much as creating them). The example of Karen refugees making $40m worth of contributions to the economy in Nhill, Victoria, is a classic case. Spending 1.2 Billion a year to keep them in detention, when they could be boosting our economy by millions is wasteful. So, if it is not refugees that are a threat, then what of the alternative group that fly in on a plane every year? Which industry in Australia are we prepared to damage to allay our fears?

Of the 7.78 Million visitors to Australia, for reasons of holidays, business, employment or education; many originate from Muslim countries.

Tourism.

While Tourism from Japanese has been decreasing, Asian and Muslim countries have been on a long running increase.

In 2015, visitors from Malaysia (with a 61% Muslim population) generated $1.1 billion in total expenditure. Indonesia (with an 87% Muslim population) generated $0.6 billion and the Middle East (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates with a combined 82% Muslim population), about $1 billion. ¹

Tourism Queensland has been marketing to Arab travellers for quite some time and definitely would find Queensland’s Pauline Hanson’s call for a ban, detrimental.

Education.

International students contribute $19.7 Billion to the Australian economy and while Islamic students tend to concentrate their numbers at the Universities of Melbourne, Griffith and the Western Sydney, preventing Muslims from participating in Australian education would have a significant economic impact. If – like the Australian population – Muslims represent less than 2% of university students, then we might be discussing a $400M hit to our economy.

Business

Then there are the business and 457 visas, which facilitate Muslims entering the country for employment or trade. Trade for goods, services and technology with the Middle East & North Africa (MENA) is a $16 Billion industry.

The Economic rationalisation?

The question we need to ask is how much of the billions of dollars in tourism, education and business markets are we prepared to sacrifice or adversely affect? All this in the name of a hypothetical possibility, we haven’t seen actualised in 38 years? If we’d only stopped sabotaging funding for mental health programs perhaps we’d have less murderous events we like to call “terrorism”, inappropriately? To what extent will we lock out the Muslim world from Australia because of this disproportionate fear? I thought true conservatives sought to be prosperous, measure real risk rationally and be economically responsible? So why choose an economically irrational and highly expensive path based on an obscure risk with negligible statistical occurrences? Will the Coalition Government ignore it?

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TTF submission into the Department of Foreign Affairs & Trade inquiry into trade with the Middle East – Nov 2014

Growth Rate Indicators

June 24, 2016 by James J. Morrison W.G. Dupree Leave a Comment

With many economic indicators over the past few years showing a downturn as Alan Austin has pointed out, it interesting that growth in the economy is a mantra for the conservatives. The LNP government’s assertions inherent in their three word slogan of “Jobs and Growth” presumes we are experiencing these in certain quarters. Let us begin examining a few.

Australia’s net population growth is still positive. Moving steadily from 19M in 2000 to 24M in 2016. The net populations growth by itself is the product of accumulated ebbs and flows. For example, in 2012-13 a total of 91,761 people indicated that they left Australia permanently. Many of them professionals but only half of them were actually born overseas. A concern for the department of immigration which sees it as “a loss of skills and experience as well as a loss of social investment in fields such as education, training, health services and settlement costs of immigrants”.

The growth rate per year although, has been decreasing over time. From it’s highest point in 2008 of 1.22% it had fallen steadily to 1.09% in 2014 according to Miguel Barrientos founder of IndexMundi. From this site other statistics from multiple sources have been garnered. Australian birth rates have been steadily dropping from 13.08 in 2000 to 12.19 per 1,000 persons in the population (per 1K/Pop) in 2014. Death rates since 2000, have been increasing as would be expected our ageing population dominating and rose to 7.07 per 1K/Pop in 2014. So why, with thousands leaving, a growing death rate and slowing birth rate do we have a steady total Australian population growth? The answer to that and the anomaly of change you may have noted between 2007 and 2008 on all the graphs, is migration. The influx in migrants, whether they be asylum seekers, visa holders or all manner of foreigners, maintain our growth. Much to the ire of many red-neck Australian “tea party” proponents who would rather we send even more “back where they came from” than the 91K we lose in a year. While the Department of Immigration is optimistic that net migration rates will increase in the future – and has published optimistic forward estimates figures – the actual historical statistics shown no such trend. Net migration rate which was at 5.74 immigrants per 1K/Pop in 2014, has been steadily decreasing since 2008 when it was 6.34. Despite the annual departures without the larger influx, the total Australian population growth might be in serious decline. Given the financial, social and intellectual contribution the likes of migrants, including asylum seekers, have proven to supply Australia, it remains economically irrational to be restricting their entrance. They don’t take jobs as that irrational argument by some protests, they create them. The example of Karen refugees making $40m worth of contributions to the economy in Nhill, Victoria, is a classic case. Spending 1.2 Billion a year to keep them in detention, when they could be boosting our economy by millions is both wasteful and sheer economic vandalism. Taken for reasons that have more to do with politics of fear mongering that is pandering to the emotional insecurity of a racist Australian population. It certainly has nothing to do with good economic management of a resource that is, desperate to be here and that we are blocking. So if we are socially & politically inhibited in using the resources of people to aid our economy, are we working well with the population we have in seeking to grow our net wealth?

Our economic results are reported as positive news. Recent quarters have shown Australia’s economic growth has beaten expectations. This is particularly good news especially after our total GDP dipped in US dollar terms from 2013 to 2014. Unfortunately the growth rate in GDP despite numerous fluctuations, has been showing a falling trend generally since 1999. GDP per capita although, has shown a stead increase over the same time. It looks prosperous, provided you fail to account for wealth inequality.

One of the noticeable absences from Joe Hockey’s Intergenerational Report (IGR) last year, was no indicator of the Gini coefficient (a normally standard reporting indicator in previous IGR’s for socio-economic impact of policies). The Australian National University has noted that wage inequality has increased steadily from early 1980s onwards [1] and ACOSS has noted an increase in numbers of citizens living below the poverty line.

Poverty numbers in Australia thrust upward to 2.55 million in 2014 (over .6 million of that being children). This continues the long-term trend of growing inequality in Australia. This factors certainly skew the per capita growth in GDP towards the already wealthy demographic.

So many conservatives hope the coalitions focus on Jobs and Growth is a progressive step in the right direction to shift the burden of growing poverty and provide jobs that can lift our limited growth population out of poverty. So are jobs the solution and have jobs increased? Scott Morrison is loudly boasting, “yes they have!” And if you want to retain that shallow positivist joy, this is where you should stop in your examination.

Participation in the labour force has continued to increase to just over 12.78 million in May 2016. It was just over 12.46 million when the coalition government came into power. Unemployment has of course increased while available jobs in the market have decreased. Jobs growth (according to the Coalition) of 300,000 since they came into power, is not actually keeping up with labour force growth, let alone expanding to overcome the decreasing population growth rate aforementioned. When you consider that we have just turned over 11 months of consistent part-time job increases measured against the fifth straight months of full-time job decreases, then it is not hard to know where the real “Jobs and Growth” are occurring.

When Scott Morrison got excited about apparent jobs growth in recent ABS statistics, he did not delve too deeply into their makeup. But isn’t any job even if it is a part-time one, at least “a job”? Probably not when it cuts you off from Newstart support but just like “Newstart”, still leaves you in poverty. The recent years have seen the rise of an unemployment problem called “the working poor”. A phenomenon where working families who are subsidised by wages, live below the poverty line. Another unique employment issue (even recognised by the Telegraph who have a reputation for a lack of sympathy for the unemployed) is the homeless but fully employed demographic. The National Coalition for the homeless claimed 44% of homeless people have jobs and that was a claim from back in 2009. Given that the ABS does not rate you as unemployed if you have worked for as much as one hour in a month, none of these homeless demographics register as “unemployed” but they do qualify as part of the “jobs growth solution” boasted about by the Liberals.

But at least if you have one of Joe Hockey’s “good” jobs (or your family needs a couple of them) and can afford a home, you have to be making some leeway? Chances are, if you are not a baby boomer who has finally paid off your home and retired, you are burdened by an enormous amounts of private debt. Millions of Australians are lumbered with housing debt. Private Debt zipped past our GDP to loom above it by over 123%. The over $2 Trillion in private debt is being chased by it’s little brother, “Foreign Debt” who has only grown to over $1 Trillion but has ambitions. Australia is already living beyond its means with faint ambitions by the average wage earner to grow their wealth.

It is therefore a shame that Morrison’s “growth” part of the equation doesn’t include Australia’s hourly rates of pay. These have been steadily diminishing over the term of this government. Even the Reserve Bank has expressed their concerns over the how wage growth has declined markedly in Australia over the last few years. What has been growing at a rate that is outstripping our economic growth – that Morrison can boast about – is housing. As the global property guide proclaimed. “House prices rose by 11.4% in Australia´s eight major cities during the year to end-Q3 2015 (9.72% inflation-adjusted), up from an annual rise of 9.23% in a year earlier and the highest y-o-y increase since Q2 2010, based on figures from the Australian Bureau of Statistics.”

So in summary, Debt and housing costs are growing but wages to afford the debt and housing is not. If I were to provide advise, it would be if you have a full-time job, don’t leave it. They are vanishing and there is only growth in part-time jobs. If all you can find is a part-time job, the chances of you descending into poverty are statistically significant. Don’t live in major cities. Given there are at least 8 times the number unemployed as there are jobs in the market, your chances of getting a job,- even a part-time one – are slim to none. Australia won’t allow highly motivated foreigners – like asylum seekers – into the country to boost our economy, as they have historically proven to do over decades. In fact we would rather spend billions abusing them in offshore gulags, then give them that opportunity. This is the price of being insular and parochial. Conservatives with a reputation for a love of money would rather spend billions on locking people up when you could be exploiting them to create millions. Am I the only one that is puzzled by this? So with a slowly diminishing rate of growth for population, GDP, hourly wages, full-time employment, and innumerable other economic indicators and a rapid rise in debts, housing prices, part-time employment, poverty and inequality, has it occurred to anyone that something is wrong here?

The record of the current government is laid out in its last three years of office. On July 2^nd you have a chance to ensure this continues. That choice is your’s Australia!

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[1] “Is Inequality Increasing?”, Powerpoint Presentation for Parliamentary Library Vital Issues Seminar, 10 October 2012 by Peter Whiteford, Crawford School of Public Policy

July afterthought.

With a heavy heart, I have only one comment to add to this article in the July that followed that election.

Australia, you have failed again! <sigh>

Negative Gearing

June 18, 2016 by James J. Morrison W.G. Dupree 1 Comment

Private debt in Australia has escalated beyond the $2 Trillion mark shooting past Australia’s GDP of $1.6 Trillion by 123%. Housing affordability is reaching crisis levels driven beyond the budgets of many Australians, by negative gearing and capital gains concessions.

In fact, we have just bypassed Denmark (the previous first placeholder) to hold the prize for the single largest ratio of household debt to GDP. Our government net deficit/debt is minuscule by comparison at only 17% of GDP. It was only 11% when Labor left Office. At the time, Australia had the third smallest net government debt relative to GDP in the OECD. Unfortunately, the sheer hysteria over government debt expressed by Joe Hockey led many voters to believe this was significant. Ignoring that Australia used to be one of the world’s best-performing economies in 2013. One of the predominant components of any magic act is the art of distraction. Hockey, and later Morrison, frequently shrieked at the “mouse” of Government debt to catch your eye, while allowing the “elephant” of private debt to sneak across the stage. Despite doubling our deficit since then, we are still in an internationally enviable position as far as Government net debt is concerned.

A little perspective on the debts of our nation?

The issue of negative gearing has been confusing for both the Coalition and the public. Kelly O’Dwyer was contradicting Malcolm Turnbull on whether or not the revocation of negative gearing would result in house prices falling or rising, did nothing to assure the public.

ABC’s Lateline hosted a debate between IPA Stalwart, Sinclair Davidson and economist Saul Eslake on the 10^th of May 2016. Saul suggested Negative Gearing (which he has opposed for 30 years) was costly and ineffective for its originally intended goal. Saul referenced the Reserve Bank’s analysis and the Grattan Institute’s research, as supporting his case. Davidson referenced his own personal “number crunching” but mainly appeared to channel his inner apprehensions over losing negative gearing. Curiously he claimed the “poor folks” who earned only $100K a year were not “rich”. (Despite that only 10% of Australian taxpayers can earn more than that.) With that redefinition of “relative poverty” in place, he argued negative gearing was not “a lurk or a rort for the rich”. He provided neither his “modelling” nor independent evidence that the absence of negative gearing would cause housing prices would decline. He was, although, perfectly prepared to disparage the modelling conducted by the Grattan Institute. In fact, pages 30 to 32 of the report go to some length to explain why it is unlikely to do as Davidson feared. These pages explain that a 2% reduction in the normal 7.3% average growth experienced since 1999 is the most its absence would affect the rate of growth.

Negative gearing is designed to compensate for the losses encountered by a borrower for an investment property where the rent and costs of managing the investment exceed the cost of borrowing. In Australia and New Zealand deductions for negatively geared losses on a property can be made against income from any other source. In other countries, this is quarantined. For example, in Canada, losses cannot be offset against wages or salaries. Similar restrictions exist in the UK and Netherlands. Australia has by far the most generous conditions now. Before 1985 it had been quarantined so losses could not be transferred to an individual’s income from labour.

Between July 1985 and 1987, the Hawke government abolished it and rent prices fell everywhere except in Perth and to a lesser extent in Sydney. This price fall was not due to Negative Gearing’s absence, but the meagre “available” vacancy rates and competition from inflated rent prices. (Grattan Report: Page 34-34) After that though, a less quarantined negative gearing was reinstated.

Housing & Rent prices rose but not at the rate they have since 1999. What mitigated the potential effects on the economy of unchecked negative gearing, was the 1985 introduction of a CPI indexed Capital Gains Tax. In 1999, the Howard government removed indexing and introduced a 50% discount for capital gains for individuals. From that point on, housing prices (and rent) skyrocketed an average of 7.3% annually. (Grattan Report: Page 31) The 2010 Henry Tax Review recommended reining it in, and at the very least, capping the deductions. The Labor and subsequent Liberal governments chose to ignore this. In 2013-2014 these features of Negative Gearing & Capital Gains cost the Tax department $11.7B a year in deductions claimed. (Grattan Report: Page 34-34)

Negative Gearing was originally touted as a means to increases the supply of rental property and decreases the rent charged by Landlords. Lobby groups with enormously financially vested interests such as the Taxation Institute of Australia and Real Estate bodies continue to do so. Like bad journalism, they have a dislike for when the facts get in the way of a good story. In fact, precisely the opposite of their claims has occurred.

While housing construction has grown, occupancy or use has not. Sydney, by way of a singular example, is a City of between 90,000 unoccupied homes. There are 83,000 in Melbourne. Notably, we have 45,000 homeless, Australia wide.

So the myth of housing scarcity that requires Negative Gearing to support it is not born out of anything other than a fabrication. That isn’t to say that the “scarcity” isn’t artificially maintained by refusing access to these unoccupied properties. These properties are primarily bought by Chinese investors needing to launder illicit funds.

The argument put forward by the Government though is that the majority of negatively gearing taxpayers earn under $80,000 and revoking it would adversely impact these “mum & dad” investors from “getting ahead”.

As Tax earnings go, it’s an interesting choice from which to start. Especially when you consider that the median wage in this country is more accurately $52,000. Only 40% of negatively gearing taxpayers lie below this median income. So why do the Liberals and the IPA spokesman, Sinclair Davidson, begin focusing on $80K? It’s not the average medium wage, so what does it represent? Is it because it is the lowest rounded number figure in which the majority of negative gearing taxpayers exists below? That being 67%. (Cart before horse thinking?) It’s the point at which the Liberals can confidently say the “majority exist”. Taxpayers that earn greater than that $80k demarcation represent only 20% of all taxpayers.

There are three problems with this analysis spoken of in these terms.

The large percentages are a deception because we are talking about a minimal subset of all taxpayers.
We are using taxable income as the measure after they are adjusted for negative gearing.
The undeclared interest these politicians have in maintaining the status quo.

Notice the use of the term “negatively gearing taxpayers” because the reality on the larger scale is, that “negatively gearing taxpayers” represent just under 10% of ALL taxpayers. So regarding total taxpayers it is 6.7% of all taxpayers that negatively gear and earn less than $80,000. Conversely only 4% of all taxpayers therefore negatively gear and earn less than the median wage of $52K. More than 90% of taxpayers don’t negatively gear and just want an affordable home in which to live.

The level of “earning” is based on declared income to the Tax department after negative gearing losses have been deducted. As many corporate figures and recent tax avoidance scandals do suggest, there must be a lot of individuals pulling in very, very large incomes but whose “declared” income is so modest that they pay negligible tax. The whole purpose of negative gearing is to lower your “taxable income”. (Grattan report: Pages 27&28) So using a measure of “Taxable income” as a valuation is a smart statistical deception. “The typical tax savings for negatively geared individuals is $1,800 per year”, although it may be as much as $11,800. An individual could conceivably be earning the pre-gearing taxable income of $90K a year and still fall into the category of being “below $80K of taxable income”. If you take out rental losses from negative gearing from taxable income then only 56% of people who negatively gear are in reality earning less than a disposable income of $80K (or 5.6% of all taxpayers). A similar adjustment for the median average taxable income is 33% (or 3.3% of all taxpayers). Negative gearing mainly benefits those on higher incomes as the top 10% of taxpayers receive almost 50% of the benefits from it. (Grattan report: Pages 27-29) The suggestion that it doesn’t, borders on hallucinatory ideology or deceit. This is the realms of magicians and conjurers.

Even before becoming Prime Minister as a high-profile Communications Minister, Malcolm Turnbull owned an impressive portfolio of seven properties, and many of his ministers have similar conflicts of interest. Interestingly it is Turnbull’s electorate who are the biggest negative gearers in the country. It is no wonder the Government resists any action to repair the economic damage done by this facility.

Warnings about housing bubbles bursting have appeared for a while. As Jessica Irvine wrote in the SMH, Sydney houses now cost “12 times the annual income”, up from four times from Gough Whitlam’s time. Jessica went on to describe it as a “classic Ponzi scheme” which is even how Liberal Backbenchers like John Alexander have described it. Walled Aly discussed these faults on “The Project” on the Coalitions negative gearing claims, which may engage from the perspective of the graphics, the numbers quoted and the nonpolitical research provided.

If economic rationalism, the deterioration of wages, rising living costs and housing & rent price explosions hadn’t caused as much damage as it has to our economy, negative gearing could have been easily dismissed. It has become a much more complex and entrenched mechanism. Labor’s grandfathering negative gearing strategy is one safer way to ease out of the problem. Affordable housing will continue to evade the grasp of average Australian in pursuit of the “great Australian dream” of home ownership while the current system is maintained. The only hope many Australian’s have for affording to buy a home in the future is if negative gearing and the capital gains concessions are dismantled. (Grattan report: Pages 46-47)

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Tax Cuttings

May 28, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Tax bills are perceived, by many wealthy entrepreneurs, as the slicing guillotine blade of government. Ever since the French introduced Madame la Guillotine’s blade as their historical precedent for resolving differences with the wealthy upper class, the wealthy 1% have been understandably nervous. Anything that separates them from their beloved wealth irks them mightily. They traditionally hold it securely, so none of it can trickle out or hide it in havens, lest any be taken from them. To settle the proletariats, the government must be observed to be taxing the bourgeois, without actually removing their entitlements to wealth. The Liberal Party’s 2016 budget is an illusion of mastery of this particular magic. Allow me to paint a scenario.

The stage is dark. The white haired magician enters stage left. He is tall, imposing with a smug look of self-assurance. All born of the certainty this is a trick he has had much personal experience. Having performed it in Panama, the Cayman and the Virgin Islands. Doing it before an Australian audience of stupefied Aussies should be a milk run. Malcolm the Magnificent waves his hands and the lights fall upon Madame la Guillotine. It’s fearsome blade poised over a skimpily covered, but not too revealing $100 bill. Dame Nelly bats her eyelids and smiles up at the poised blade. All eyes watch as the blade descends, threatening to tax Dame Nellie Melba, right before our very eyes.

The Government’s latest trick is the traditional guillotine illusion where the blade falls upon the “victim”, but nothing is cut off. Tax cuts and tax management were a predominant topic of the Budget. Shaving off a little less for the not even 1/5th of the taxpayers that earn over $80K but apparently pursuing deeper cuts from they that hoard their treasures. Certainly, none of the Liberal Party’s largest donors in the corporate world wants to have Madame la Guillotine chop their perceived entitlements.

In fact many corporations and wealthy bourgeoisie protest and quite legitimately, to ATO auditors that everything is above board and legal. Let us consider the three primary ways that companies avoid Madame la Guillotine’s taxing burden. The basics for facilitating reduction of their taxes.

Offshore Registration of your business in a foreign municipality with a cheaper rate of Tax aids companies in avoiding tax in the country wherein they may do business.
Transfer Pricing makes use of a subsidiary firm - again in a foreign country with cheaper tax rates – in which that firm is the official sales agent. An agent is selling your Australian product. Much like Google does by selling Australians advertising locally (to the tune of $2 Billion in 2015). Although it is officially billed to Singapore where they pay only 2.5% tax (or $5M). The business pays reduced tax on profits acquired at the foreign rate, not the local rate. It’s essentially a legal means of money laundering.
Tax Havens are numerous, such as Panama, Luxembourg, Cayman Islands (our Prime Minister’s choice to hold his stash), Bahamas, Seychelles, Maldives, Malta, Tonga, Singapore, Bahrain, Channel Islands, San Marino, Hong Kong, Nauru, Cook Islands, Costa Rica, Marshall Islands, Switzerland, the Virgin Islands and many others. They all provide the facility for companies to set up holding companies on paper. Practices such as:

- IP Licensing – where you sell your intellectual IP back to your business and
- Debt Loading – where your foreign holding company lends money to your subsidiaries in Australia.

In the latter case, the Australian firm pays back the “loan” at crippling interest rates reducing any profits the company would otherwise make. As a result of this “loan sharking” manoeuvre, profits vanish. Often the interest acquired overseas is not even taxed at all. All their hard earned profits disappear in a puff of smoke. The cabinet that cute little tax dollar walked into, is reopened, to reveal the cupboard is bare. Nothing to tax here!

This disappearing act is not unlike the magic performed by the “Murdoch the Mystic” when the Tax office held in their very hands the $882M that they had taken in tax from him. With a wave of his wand, the profit he made in Australia was relocated to foreign US shores. Before you could pronounce “expecto patronum”, the $882M had relocated itself back into Rupert Murdoch’s bank account. It was coincidental, of course, that this occurred during the election period, which resulted in Abbott being magically levitated onto the public stage as Prime Minister. Mr Hockey who was hysterically alarmed by our enormous national debt never raised the spectre of these funds vanishing from the public purse. Perhaps he was befuddled by the mind manipulating force that emanated from a Sith Lord.

Apple booked $8B in revenue in Australia yet paid us only $85M. Something must have gone drastically wrong with their profit redirection to be paying as much as 1%. I am sure they have fixed the trap-door now, so everything vanishes down it cleanly. Certainly no longer leaving any caught sliver of clothing that the tax-man can scavenge.

These corporate raiders have made use of the resources of our country. They pay for our labour (but not the development of it), transport (but not what it moves on), ports (but not their construction), power & rent (but not the infrastructure that supports it). Every other small business in Australia pays for this as well, because the rest of us pay taxes! Taxes paid by their customers, employees, and even the staff that clean their offices. Individually any of these often pay more tax then have these companies. They are allowed to exploit our country by taking money (and sometimes resources, technology and/or minerals) out of the country. They deplete the wealth of this country for their profit but don’t pay the cost. It is no wonder we have a net foreign debt of 1 Trillion dollars with all that draining from the country.

So how does one lower Madame la Guillotine’s blade without chopping off anything? Mr Morrison announced “1,000 specialist staff in the ATO to police and prosecute companies, multinationals and high wealth individuals not paying the tax they should”. Whish, down comes the “blade” to be “combating tax avoidance, especially by multinationals, with new measures to ensure everyone pays the tax they should on what they earn in Australia, not avoid tax by shifting their profits offshore”, said Morrison. The joint media release later elaborated that “The Taskforce will have around 1,300 jobs in the ATO, including 390 new specialised officers.”

But does the blade cut anything?

First off and the most obvious, 1300 newly minted Tax officers are hardly a replacement for the 4700 very experienced ATO officers that lost their jobs since Hockey cut their funding. They weren’t keeping up with the multinationals that weren’t paying tax when they had that many. Now they are short-changed by 4400 staff and have lost a world of experience.

Less obvious is to what extent these new diverted profits laws are applied. These new laws came into effect on 1^st Jan 2016 and applied where the annual turnover is more than $1Billion. This will positively affect Apple and Google, but many foreign interests who carry on through subsidiaries in Australia will not be affected. The only real targets will be the top mining and technology sectors where services, research or marketing performed in Australia is booked to overseas subsidiaries.

What needs to be reiterated is companies like, Amazon, Google, Energy Australia, GE, Bhp Billiton, Facebook and the like, practice legal tax avoidance. They will modify their strategies, as booking transactions to overseas is just one strategy. Certainly, companies with $1 Billion in turnover can well afford to restructure and break their turnover up amongst multiple entities to go below the threshold. While an obvious strategy, I am sure they will come up with better ones. Remember none of their tax avoidance practices is illegal, immoral, yes, but not illegal. They may stonewall in Senate hearings because they are embarrassed and want to avoid public distaste and a drop off in profits, but they HAVE DONE NOTHING ILLEGAL. These Billion dollar turnover companies may lose a few locks of hair to Madame la Guillotine’s blade, but certainly no head.

Unless the government changes the Law, to significantly cast, a wider net encompassing transactions made in Australia facing tax liability, not much will change. The falling blade of Madame la Guillotine’s blade is nothing more than another clever illusion. Mr Morrison’s taxing blade may apparently thrill your perverse appetite for expecting blood on the scaffolding. But the results will ultimately disappoint your blood lust. There is little hope of seeing the corporations and wealthy spill as much as one drop of their precious blood money into the dry, thirsty, cracked soil of the still economically barren landscape of Australia.

Internships and Growth

May 18, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Scott Morrison the magician, illusionist extraordinaire, has made all Australia’s failing job & economic growth problems vanish in a puff of smoke and mirrors (with apologies to John Passant for stealing his phrase). He has created a grand facade of jobs springing miraculously from the presumption of Australia’s economically fertile soil. Drought resistant and immune to the emerging heat of anthropomorphic climate change (which was provided with no new solution in the 2016 Budget) our economy is expected to blossom with “-Jobs and Growth”. Prosperity is forthcoming to the families of Australia, except for those who are too lazy to earn over $80K a year! To cheers of “Hear! Hear!” amongst his colleagues, Morrison & Turnbull supercharged the great Australian dream of owning your own home. It is now, apparently, attainable by one year’s olds and children of financially well-endowed parents throughout the land. Not earning enough, then fret not! Our unregulated “scandal-free” banks will inflate your income on their paperwork. Hence your appearance as a newly minted millionaire will allow you access to funds you never dreamed you could have, much less pay back. Foreign investors looking at the bank’s books will loan us cheap money because they are too addled by the theatrics of our slight of hand. So hoodwinked that they fail to recognise a proliferation of highly leveraged loans. They barely acknowledge that countries where much smaller housing price to personal income ratios than Australia’s, have been characterised by collapsing economies. (Australian repayment rates in Sydney are 12.2 times the median salary) These lessons from history are nothing but smoky memories. Their amnesia over housing crises that have collapsed economies previously makes these investors inept at recognising our negatively geared Ponzi scheme. Certainly, no one pays attention to the fact that Australian mortgage debt is equivalent in value to 123% of Australian GDP. In the next term under the Liberals, we will all have jobs producing wealth enough for us to continue to support this mountain of debt? Wow! Welcome to Australia, a land of magic, miracles and illusion. Let us dazzle your senses, while we pick your pocket in search of some way to raise our revenue to maintain helicopter riding politicians’ out of pocket expenses.

Budget 2016 was a menagerie of shameless self-promoting political aggrandisement and back slapping. All designed to create an illusion they have a magically restorative budget that will provide jobs for us all. But as any pundit watching a magic show wants to know, “how do they do that?” So let the revelation begin.

ABS V Roy Morgan - size matters — ABS V Roy Morgan – size matters

The unemployed begins the illusion. That much maligned 10.4% of the workforce (April Roy Morgan stats) that the ABS desperately tries to sell you like 5.7%, so you don’t understand how significant the issue is. If a Newstart recipient works for so much as an hour (paid or unpaid) in four weeks, they are no longer registered as unemployed by the ABS. They still, although, may retain dole payments because they have earned little to nothing. Unemployed people who cannot declare they are ready to work immediately, whether because of other commitments or because they are so completely in a state of dysfunction that they cannot respond, are also eliminated. Hence single parents with responsibilities to children or disabled persons moved across to Newstart, simply don’t count and are not counted. The ABS’s methodology hides the real size of the “rabbit” the Government is trying to keep under their hat.

But as Michaleia Cash would intimate, all you had to do is follow the golden Liberal “PaTH”! Announcing the unemployment solution of “internships”! That government conjuration that pays businesses $1000 to accept unemployed people to perform 25 hours of tasks for them a week. The government funds interns at below minimum wage rates. They are compensating “interns” with a surplus $100 a week. To redress that, the government cut the “newstart” base support rate in the 2016 budget. Despite the Business Council of Australia arguing “the Newstart Allowance is so low it may be bad for the economy as it prevents people finding work and risks entrenching poverty.”

Contrary to some hysteria of $4/hr that social media is alarmed about; that is the $100 incremental rate change. Given the current single person’s dole rate of $263.30 a week after adding $100, the aggregate rate represents around $14.53/hr. That valuation is nothing about which to boast. It is still well below the poverty line. It is certainly less than the legislated minimum wage that was of concern to the Business Council. All for the aspirations of the unemployed who crave a chance at ongoing work for a fair wage.

Why would not businesses take advantage of “PaTH” interns as free labour and simply churn through them? Michaelia Cash’s claim, to be able to block companies from doing that, outlines no viable strategy to accomplish this? Why might I suggest businesses will exploit interns? Because businesses already have!!

The Monthly’s Richard Cook points out: “An Interns Australia report in 2015 found 86.4% of interns surveyed were not paid or were paid below minimum wage, and 78.92% reported that their internship did not lead to paid work with the same company. This unpaid precariat accept it as part of the price (or lack of price) for this brave new world of workplace flexibility and personal entrepreneurship.”

So “internship” solves everybody’s problem! Satisfies those “communists” on the left wing of the Business Council of Australia, who want to pay unemployed youth more. The true believers on the right wing of the BCA are granted free labour for 12 weeks. All participating businesses get $1000 for each unemployed person they consume. Unemployment plummets because they have “worked” for more than one hour. The jobless vanish from the ABS’s books. Workers compensation is not required as technically; interns are branded as volunteers. The government has solved everyone’s issues in one single policy. Well except for the unemployed, that crave a real job. But then they don’t matter, as they don’t have the financial capacity to bequeath wealth as political party donations. The Rabbit has vanished, and the black hat is empty!

Magic performed! The unemployed vanish beneath the ABS cloak of invisibility. Business’s unskilled, manual labour workload disappears as the unpaid fairies at the bottom of the garden do all the work. The government has apparently found more people work as they are less unemployed. Businesses are booming as costs are down, and CEOs can award themselves higher wages. Prosperity lavished on all. The last vanishing act will be the business profits as they are stashed overseas in Panama or the Virgin Islands. And that, dear reader, is how job’s growth is performed.

Jobs and Growth – Part 2

May 2, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Jobs and Growth – Part Two

As already outlined in part one of examining the mantra of the Coalition’s claim to be creating “jobs and growth”, jobs in the economy are in inadequate supply. Indeed when you consider the vast numbers of under and unemployed on record, as well as the numbers of foreigners eligible to look for and consume jobs in the market, jobs are relatively non-existent. But if there is potential for economic growth in the Australian market, albeit little hope for millions of Australians to find suitable work in the short term, then perhaps there is hope for the long term holds. Perhaps, given enough time, the Coalition – who want you to believe they pride themselves on being “THE economic managers” – can pull a “rabbit out of the hat” and grow the economy to generate more job vacancies for the unemployed to fill than the rate of expansion of the workforce. For now, they are struggling to do this.

Growth?

The discrepancies between perception and reality in Mining

So, with the Coalition supposedly focusing on “Jobs and Growth”, exactly what infrastructure is the government committing to, to creating growth in our economy? There is a big focus to one of the large contributors to the LNP, of the Mining Industry. Mining reaps the benefit by our largess in revoking emissions trading and mining taxes and billions in subsidisation of fuel, exploration costs, grants and cheap loans. All of which results in profit margins well in excess than these subsidies, most of which goes overseas, as mining is 83% foreign owned. Despite the big sell of the benefits of mining by the government – which the public largely buys – the reality is quite different. Mining investments are a diminishing industry with declining jobs – now down to 2% and a negligible contribution to GDP. In fact nothing at all in the Dec 2014 quarter. As jobs were disappeared from mining, the expected pickup in Construction did not occur and had in fact begun failing us as well – as it fell 3.6% in the last December Quarter with every expectation of it continuing to weaken. Any new mines – despite exaggerated claims to the contrary by the coalition about the Adani Mine – will take up tiny numbers of our unemployed as Rod Campbell demonstrates in “The Australian”. So no growth in these industries, unless you are talking about increasing workplace deaths in which case the reintroduction of the ABCC in construction is useful. The previous regime of the ABCC saw dramatic rises in construction industry deaths under the Howard Government because of a lack of the union’s ability to enforce safety standards. There was a rapid drop off of deaths once it was abolished. This would be a small boon for employment as more workers die quickly then vacancies in the construction industry will arise more often. The uptake of the unemployed into construction will help reduce unemployment’s numbers. So while mining and construction are not growing, and is shedding employee numbers, the rollover of employees through the implementation of ABCC style legislation may be of benefit to the unemployed – should they survive the experience. It certainly has no powers to combat corruption so there must be other reasons for its existence. The government’s desire to expand this style of legislation into other industries such as the Registered Organisations Bill, would potentially expand businesses capacity to roll through the unemployed as they “dropped” off, while not necessarily contributing to the real growth of the businesses in question or addressing any union corruption issues.

Exploring other industries, we might note the government have undercut our manufacturing sector as car manufacturers will bleed 200,000 jobs and as much as $29 billion in lost economic output. The steelmaking company Arrium, which employs one in ten people in the South Australian town of Whyalla, just went into administration in April this year (2016). SPC fruit canning industry only needed a tiny fraction of the money we hand out to mining to protect the industry and jobs. The Manufacturing Worker’s Union had no success at convincing Abbott to adopt a less hard-line approach to our canneries.

Proportion of electricity generated from renewable sources in Europe

RET and renewable energy changes from both Abbott and Turnbull have devastated a growing industry that had a vibrant future. This is evidenced by the progress established in multiple European countries who despite many having less sunshine & wind access than Australia, are contributing significantly to their energy needs and in Norway’s example exceeding their energy requirements from renewables.

The change from public transport initiatives to road building means people are more dependent on vehicles at a greater cost to the consumer and the environment. (Perhaps Joe Hockey will be right after all, and poor people won’t be able to afford cars) Other OECD countries have developed public transport that keeps travel costs low by the clever development of properties around the transport hubs (school, hospitals, shopping centres, etc.transport). The lack of investment in public housing in city CBDs means that disenfranchised people are more remote than ever from employment opportunities, health and education services. So no growth in transport or city building infrastructure except for the most etransportation options for the public.

Health follows wealth and employment follows education, so the inadequate or lack of infrastructure development in these areas will equate to the failure to invest in human capital. This represents appalling short-sightedness at a time when China’s tertiary sector, Singapore, South Korea and Japan (and in time, Indonesia) are making dramatic consolidations around trade and education. They are gearing their workforce up to be able to participate effectively in 21st-century technology economies while Australia’s professional full-time occupations are declining according to the Graduate Careers Survey from the CGA. As degree qualifications become more expensive, the long-term outlook is not optimistic. Integral to this is that Australia is creating an NBN system that has us ranked down from 30th in the world to 60th in internet speeds. The educational advantages of online learning specifically for a country like Australia where distance education is a pertinent need is undercut by our pathetic internet offerings. Cutting the Gonski funding for our children reduces the future level of education for our nation. It’s simply short-sighted. From education to health, the prognosis is also heart stopping. Given the reduction in funding by removing previous indexing arrangements for hospital funding to “save” $80 Billion, the Government’s commitment to health in the midst of a population with an increasing proportion of aged care needs is counter-productive. If you want your population’s retirement age to be delayed as Howard, Abbott and Hockey suggested, then you need to cater for rising health costs, not diminish them. So no growth in health and education.

working for a goal may achieve different results

Under the coalition, Australia has dismantled active market labour programs creating the ineffective “work for the dole” scheme, where people are forced to paint community halls and rake garden paths. This semi skilled meaningless busy work is not dissimilar to the enforced programs that you see in North Korea. It is, after all, a means by which people are forcibly employed at below minimum wage rates with penalties extracted for failures to comply. Perhaps a North Korean labour camp is not that big of a jump, conceptually? Neither scheme in Australia or North Korea results in fulfilling full-time work.

Tourism and Agriculture although are key growth areas for Australia. Given there are 267,000 tourism businesses in Australia 95% of which are micro businesses which outside of the casino industry and hotel and hospitality association are not broad enough to afford to donate to the Liberal Party to attract favourable considerations. Given Mining can do so; it is no surprise that it is given priority over tourism and agriculture. As the Australian Institute has pointed out: “The expansion of mining causes a contraction in non-mining industries, particularly manufacturing, tourism, agriculture and education. This results in business closures and job losses”. Recent government decisions in regards tailings dumping on the Great Barrier Reef and the Shenhua mine’s resumption of farming land in NSW bear these assumptions credit. Support for these industries by the government is certainly not a priority.

Given the history of ongoing falls in consumer and business confidence, apart from a temporary boost at the change of Coalition leadership, there has been too little evidence of worthwhile growth in Australia. In fact, if it were not for the way we account for defence spending, by only accounting for all previous payments as one lump sum presumed to be paid in total on the final instalment for an “item”, Australia’s economic outlook would be dire. Change the accounting convention to recognise the defence payments when they were made, and Australia would be officially in recession.

Unemployment is an pernicious problem not being dealt with by a government that is busy dismissing public servants and growth industries and their support mechanisms (Renewable Energy projects) and undermining manufacturing in this country and reducing funding for numerous Not-for-Profits (i.e ABC, SBS, CSIRO, the Climate Commission and dozens of expert advisory bodies). All of these resulting in massive retrenchments, increasing the stress levels of employees in these and related industries leading to the aforementioned reduction in economic growth that this country is experiencing.

So, given the coalition’s reluctance to tax the wealthy or large businesses which contribute significantly to the Liberal Party but next to nothing in taxes to the Australian people’s health, wealth, infrastructure and even employment, where will we find the revenue to support Australians? The continued reluctance to pull back the massive welfare subsidisation of such companies which contribute so little to our GDP – such as mining & construction, is deeply inegalitarian when one considers how little welfare we supply to Australians who have real financial needs. The service sector contributes 68.7% of our GDP, but where the government’s policies do either so little for or are inhibiting the non-finance segments of it, from what do we then build national revenue? An economy where it is no longer possible to raise sufficient revenue from income tax because people don’t have jobs, explains the coalitions desperate bids to reduce services to the community. “JOBS AND GROWTH” have been the mantra of the Government for the last three years, worryingly resulting in such a poor performance that we risk further economic collapse. And, in the next financial year, we may not have fully paid off the next defence purchase in time to hide the reality, that Australia, will be in a recession.

Jobs and Growth – Part 1

May 1, 2016 by James J. Morrison W.G. Dupree Leave a Comment

The capacity for people to be cruel and disparaging, born of opinionated judgements of self-righteousness is one of the qualities at which human beings excel. Whether it’s our attitude to foreign refugees or racial discrimination among our indigenous people, if there is a “them” to our “us”, we are determinedly resistant to human unity. None is more apparent that that of the economic divide between the “haves” and the “have nots”. The social pariah (the unemployed, the disabled, the un-superannuated elderly and just poor) is the drain on society that our government would happily have removed from any significant social benefit.

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The 2014 Budget’s proposal to eliminate six months of unemployment benefits, amongst other cuts, was the carefully considered resolution to our “economic debt crisis”. The response from the public, alternative media, professional agencies and senate surprised them. These were the unemployed, the dole bludgers, the welfare cheats, and later on, the double dippers, who were the malignant sore on the face of a civil society that needed to be lanced. So it was a mystery to the conservatives that anyone existed who wished to preserve or subsidise this lowly contingent of “un-people”, especially, when mining companies were clamouring for continued subsidies. (See Part 2 for further commentary on this.)

Punishment of Jobless

Unemployment under the coalition accelerated and coasted around 6% of the Australian workforce according to the ABS and MSM. The Liberal party claimed to be creating jobs while these bludgers were just not taking them up. These recalcitrants apparently wouldn’t attend appointments with the selfless private enterprise employment agencies who do every thing in their power to find them jobs. So Malcolm Turnbull devised an appropriate punishment for these malingering jobless. On the spot fines for failure to comply with the directions of these agencies, in relations to appointments, behaviour or training. Of course, should appeals lodged against these fines find them unjustly applied, then the job seeker will eventually be reimbursed after four months. This new disciplinary power rewards employment agencies for their “exemplary services” in spite of these “malingerers”. These are the same agencies depicted by the “Four Corners” expose “The Job Game” in February last year. The federal government presumably thought, after recovering $41M worth of false claims by these agencies following that report, that these were the most trustworthy organisations to enforce penalties on the unemployed. Perhaps, dear reader, you are beginning to suspect that there is something that is not quite kosher with the attitudes indicated above.

First off, let’s examine the veracity of the claim that 6% is our unemployment rate. Not only have the ABS stats have been rubbished by a former head of ABS who said they are “not worth the paper they are written on“, but also they have been criticised by Steve Keen a writer for Murdock’s “The Australian” paper. He doesn’t hold to the validity of the ABS statistics on “unemployment”. Steve noted that: “The ABS uses the internationally sanctioned definition of unemployment, which is similar to Tom Waits’ definition of being drunk: you have to be really, really out of it to qualify. Not only must you not be in employment, but you can’t have done even one hour of paid or unpaid in the four weeks before the survey. Nor can you be discouraged by the absence of available jobs either – you must have applied for something in the previous four weeks – and you must be available to start immediately.” The truth is, as Steve continues that the Roy Morgan’s statistics measure real unemployment in Australia – not the ABS.

If not ABS then…

Snapshot Changes in workforce Numbers from Sept 13 to Feb 16

So what does Roy Morgan tell us? As of Feb 2016, of the 13,174,000 people in the workforce, 1,319,000 are unemployed, and 2,480,000 Australians are unemployed or underemployed. This is 18.8% of the workforce. Participation in the workforce had risen steadily from the 12,467,000 when Abbott was elected. A reflection of numerous factors including a population growth of 1.75%, and a net migration growth of over 1%. (These add approximately 400K and 200K per year to the population respectively). Other factors include the growing propensity for later retirement. Each time the share market drops, diminished returns for superannuation funds which directly impact the capacity for those profits to fund people’s retirement capacity results in an increasing tendency to remain in the workforce beyond retirement age. Add the rising numbers of women entering the workforce. Add the single parents and the disabled; beings reassigned to “Newstart” and expected to “look” for work despite their apparent disenfranchisement. Let’s not forget, also, each year Australia has around 300K school leavers many of whom become new entrants into the workforce. Every year HSC and university graduates eventually enter the labour force via traineeships, apprenticeships, a job or the unemployment line.

Vacancy Index - Dept of Employment — Vacancy Index – Dept of Employment

Thwarting all their efforts to be employed is the pitifully small numbers of job vacancies within Australia. ANZ bank’s survey of newspaper and Internet ads for February noted a 1.2% decrease to 154,748. The Department of Employment’s Internet Vacancy Index (IVI) observed a decline of 4000 jobs to 163,000 in February. The Index does not include the declining number of newspaper ads or limited copy ads employers may put on shop windows or their websites. The ABC reported in January that “…newspaper ads rose 0.4 per cent last month, but now make up less than 5 per cent of employment advertising…”. Let’s be as generous as possible to our government in assessing the number of jobs the Australian market has – therefore ignoring ANZ Bank’s smaller estimate – and add around 5% to the government’s Vacancy Index. That makes a generous estimate of 171,000 vacancies available to 1.3 Million unemployed (or nearly 2.48M if you add the underemployed). The opinion of the Employment Minister Michaelia Cash is that there are jobs for Australians to find?

Beyond Numbers

Numbers, of course, never tell the whole story as one need also consider issues such as locality & accessibility limitations, skill & education levels, competition, financial limits, literacy, and the arbitrary selection processes and criteria of employers. Let me give you an example of locality issues. NSW and Victoria supply 64% of all Australian job vacancies. You certainly don’t want to be looking for employment in Tasmania; the Northern Territory, ACT or South Australia whose combined percentage of vacancies do not exceed 9% for the Australian market. Skills and education levels in Australia are eroded by the fall off of trade apprenticeships, and the growing expenses inherent in TAFE qualifications and university costs. Need I expand further with all the rest?

Other factors for which I have not made adjustments, are the issues around foreign workers with rights to work in Australia. In May of 2015, the SHM reported that there were 167,000 457 visa workers and, that the 1.2 million foreigners who have work rights include 160,000 with working holiday visas or more than 623,000 New Zealand special visa holders. Now to be fair to the government, the number of 457 visa holders has recently dropped to just over 100K, although that is officially only the number of direct visa holders and does not include accompanying families. It is not that all these foreigners are competing for the jobs available to Australians but that they can, and of course, many do. Companies claim to bring in foreigners on 457 Visas because of the absence of appropriate skills in this country. What does that, therefore, say about the level of education we provide or our commitment to education? (more in part 2)

Non-Australian participants

Even for the ABS stats, for what ought to be reclassified as the “absolutely, desperately, undeniably unemployed”, there are five people for every vacancy. For the more realistic Roy Morgan numbers of merely unemployed, there is an 8:1 ratio. Add in the underemployed, and the ration becomes 14:1. Add in the 1.2M foreigners with work rights and your competition for work becomes a ratio of 21:1. Given the requirement for the 1.3M to write 20 applications a month to – to at the most – 171Kvacancies, statistically, the average employer might receive 154 letters a month. These numbers, would, of course, vary due to local accessibility, skill/education required, etc. and be dependant on a given vacancies attractiveness to foreign workers, including 457 visa workers, or underemployed and employed “drifters” (fully employed people who would like to change jobs).

Poverty

Should the unemployed suffer difficulties inherent in limited access to appropriate finance, transport, training, education, online facilities, social connectivity, digital literacy, access to health services, housing, clothing, live in the wrong State or city and have to busy “working” for the dole or be occupied be irrelevant training and paperwork from your employment agent; then they can kiss any job prospects goodbye! Worth noting is that unemployment “wages” are $391 below the international poverty line. On top of that, the mainstream media goes out of their way to find someone, anyone in fact, who looks as though he/she is not actively searching for work, and labels them as “dole bludgers” on the front page of a Murdock press paper or a current affairs program. This effectively extends that label – with no justification – to nearly a fifth of Australia’s workforce. That 18.8% of the workforce constitutes a workforce that probably lives below or close to the poverty line, which has some correlation to ACOSS’s claim that over 2.5M Australians live in poverty. Following an attack by the media, or being treated disparagingly and/or having been fined by the very people who are supposed to assisting them find jobs – that actually are statistically irrelevant – and having to “work for the dole” to receive a “pay rate” far below minimum wages, what would you believe is their level of psychological resilience?

Telling someone “get a job” as though it was simple, expresses an opinion (a dismissal of reality in actuality). It reflects ignorance of the real facts evident in the real factually non-opinionated numbers of jobs available and the vastly larger numbers of people competing for them and the real (not imagined or opinionated) sociological issues associated with being unemployed.

Job creation?

So are the Liberal party policies facilitating jobs creation in Australia? Alan Austin questioned the media and Coalition’s take on unemployment in February referencing Scott Morrison’s claim that Australia had generated more than 300,000 jobs since the coalition was elected. Alan focused on ABS figures pointing out numerous flaws in the coalitions numbers. What, though, are the numbers from Roy Morgan’s perspective? It would appear 300K jobs generated, grows to 685K jobs since September 2013. Looking so much better than you would have to wonder why the Government only uses ABS’s figures until you look at the larger realistic unemployment numbers.

Workforce Numbers, jobs and Vacancies

It is, however, the Department of Employment’s vacancy index that has shown relatively slow marginal growth in job vacancies of only 23.6K over the full LNP term of office. [IVI Sept 2013 vacancies: 139K and Feb 2016: 163K] Keep in mind that NET unemployment only (RM figures), has increased by 22K and net participation has grown by 707K during the coalition occupation. [Roy Morgan Sept 2013 unemployed: 1297K to Feb 2016: 1319K and RM Sept workforce: 12467K to Feb 2016: 13174K]. With such a small rise in vacancies, it becomes concerning that no matter which statistics, either ABS’s or Roy Morgans job growth are used, it is evident that it is only just keeping ahead of the increase in workforce participation. The net change of growth of employment (vacancies plus occupied jobs) 709.9K with the total workforce change 707K (highlighted in yellow in the spreadsheet) suggest the market is only just keeping its head above the rising water of workforce population growth by 2,900 jobs in three years. Statistics – is a game that has margins of error – if you were to use ANZ’s vacancy numbers, then we would be drowning by 14,000 jobs. Either way, you look at it, if Australia fails to maintain a better margin in the growth of jobs, then the workforce participation growth would overtake jobs; and unemployment will skyrocket. As a country, we had better hope there are no significant job losses on the horizon like, oh … a major loss of manufacturing jobs for example. At best, this country is just “treading water” in a desperate “dog paddle” to stay afloat, and at worst, they are peering over a chasm into a very deep valley and an economy about to collapse into recession.

Continuity with change

March 31, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Many have noted the re-emergence of the three-word slogan, as Malcolm Turnbull attempts to trigger a double dissolution that will rid him of these “damnable” cross benchers in the Senate. Copying his predecessor’s style, Turnbull repeated this slogan four times within two minutes in a recent interview with Leigh Sales.

“Continuity with Change“! Turnbull stated that as he had been a part of the Abbott Government, he was maintaining policy continuity. Even Abbott confirmed this when he said from London “It’s very easy for me to campaign for the election of the Turnbull Government because the Turnbull Government is running on the Abbott Government’s record, and it’s a very strong record.”. Malcolm although, has claimed he’s made changes that were allegedly uniquely his.

It would become apparent that others had come up with this slogan also. Although, unfortunately for Malcolm, it was specifically chosen for its meaninglessness! Simon Blackwell one of the writers for the comedy “Veep” wrote in a Tweet:

Could he have come up with a more meaningless slogan?

“In Season 4 of Veep we came up with the most meaningless election slogan we could think of. Now adopted by Australian PM.”

Malcolm is desperately distancing himself from the slogan now, but is it meaningless for him or does it betray a strategy for “change” that is uniquely his?

Aspects of Malcolm’s changes began to fit a familiar pattern which was expressed in his own words via last year’s science prize awards speech. Let’s examine the “changes” that Malcolm mentioned in the ABC as mentioned above interview, with a few he forgot, thrown in to illustrate the pattern.

Senate voting reform
Mass transit and public transport in cities
Media ownership reform
Domestic violence agenda
CSIRO changes in funding & management
Business continuity and changing corporate bankruptcy laws
Clean energy innovation projects fund.
The resurrection of the ABCC

I will deal with each only briefly. You can look up the links provided for more detailed analysis.

Senate Voting reform was an initiative of the Greens (rather than Malcolm or the Liberals) that began a decade ago with Bob Brown in 2004 introducing legislation to reform Senate voting. Idealistically to limit party control over preferences between parties for “Above the Line” (ATL) voters, the new system still harvests preferences through the order in which candidates are listed. Ungrouped Candidates don’t get a look in at all with ATL voting. So independents will most certainly be disadvantaged. Yet it is the independents which have often held the major parties to account adequately for their policies to the people, rather than the normal a priori of factions, lobbyists and party ideology. People at the voting booth rarely have the time, inclination or education to understand all the issues. People’s political allegiances in most “democracies” are largely driven by irrational fears, family alliances, emotional opinions unrestrained by cognitive dissonance, and driven by self-interested media manipulation. When you consider that despite the protests about preferences, that each voter has complete control over them by simply voting “Below the Line” (BTL), and yet only 3% do, then what does that say about the average voter? Does not the problem with voting and preferences boil down to the propensity of Australians to be too lazy, too busy, too preoccupied, too disinterested, too ambivalent, too apathetic, too overwhelmed, too angry, too helpless, too pessimistic, too disempowered to make complex choices about voting. And that is what the Greens and the Liberal Government are counting on.

Turnbull’s policies for mass transit/public transport in cities arrived with a new minister and new Cities and Built Environment portfolio. He gave this portfolio to the infamous Jamie Briggs, a junior minister without a significant expenditure capacity and without significant regulatory powers and under the “environmentally responsible” influence of Greg Hunt and the administrative support of the Department of Environment. This Underpowered portfolio has its origins in the Rudd Gillard government’s series of reports on City infrastructure issues as Alan Davis listed out in an earlier Crikey article. Perhaps that is from where Malcolm got his ideas?

Malcolm Turnbull’s own words about Media ownership reform to Leigh Sales were that they were “…kicked into the long grass, never to be seen again, apparently; taken out. It is now the Government’s policy.“. Historically, not even the “captain’s calling” Abbott had tried to deregulate the media laws despite his efforts to reduce what he referred to as “Red Tape“. Instead the influences appear to originate from lobbyists from commercial media outlets that have worn bare, the red carpet trail to Canberra to argue their case. Does the public want a diminishment of media laws that results in fewer voices in rural media or local news and permit a concentration of media in singular hands (guess who’s) as mergers and acquisitions occur?

Funding for domestic violence prevention from Turnbull represented a fraction of the money originally stolen by Abbott (1/3^rd), which he then re-invested in an odd assortment of extras not highly sought after by any woman’s support groups. Websites, GPS bracelets, alternative legal aid, police counselling, locks, CCTV & 20,000 mobile phones benefit IT professionals, security companies, police, and communication providers more than it does abused women. What women’s groups asked for was Shelters but wherever Malcolm got his ideas from it wasn’t from the afflicted women.

CSIRO was another example of only a portion of the $110M Abbott cut being reallocated with completely unasked for commercial provisions. As with Domestic Violence where many of the legal services and shelters were gone by the time Malcolm gave some money back, several CSIRO projects complete with the experts that researched them were also gone. Abbott had installed a venture capitalist, Larry Marshall, as CSIRO chief executive who only a month ago astonished the scientific world by abandoning climate data gathering and modelling. Turnbull’s refunding itself was tied to increased commercialisation of research.

Malcolm’s efforts for business continuity and changing corporate bankruptcy laws are based on the Productivity Commission’s report on insolvency law, where such things as “reducing personal bankruptcy to one year”, “introducing a safe harbour for directors during restructuring” and “nullifying ipso facto contract clauses” have captured Malcolm’s attention. Malcolm has cherry picked these from the Productivity report – which in other circumstances he appears not to have read (see point 8). The collective of Australia’s less reputable fraudsters in Business are positively ecstatic at these protections for consumers dissolving. The question has to be for whom does the benefit of such changes serve, Business corporates or consumers? Let the buyer/voter beware!

Abbott’s aggressively ideological agenda to protect coal at the expense of the Clean Energy Finance Corporation (CEFC), by directing it to cease investment in wind farms and domestic-scale solar projects and the cutting of $435 million from the Australian Renewable Energy Agency’s budget (ARENA); has seen some change under Malcolm Turnbull. Originally Malcolm had refused to support the CEFC which had been turning a profit at 3 per cent over the bond rate. Then in a rapid change of mind, Malcolm announced a new “Clean Energy Innovation Fund” (CEIF) to be in a manner managed by both these organisations. The problems with the proposal are multiple.

The term “fund” is a misnomer because what it is, is a loan.
ARENA’s management is limited as it has been stripped of its powers
Requiring a return on investment will limit the scope of renewable innovation in Australia.

Malcolm’s “change” to turn grants into loans, was to placate the conservatives in the coalition who preferred to be dismantling the agencies. The remit for the CEIF is oddly very similar to what ARENA was already doing in the area of renewable energy, so it seems apparent Malcolm is just repackaging an existing concept in a more conservatively climate-denying placation of his backbench.

On ABC national Radio on the 22^nd March, the morning show with Michael Brissenden, Malcolm spoke of the Heydon royal commission’s findings as “compelling” and “recommended” support for the ABCC. The Royal Commission’s 79 recommendations made no mention of the ABCC. In fact, upon reading the report, Hayden had recommended continuity of the pre existing regulator with beefing up investigatory and compulsory powers.

Turnbull in his interview with Leigh Sales said “The Howard Government set up the Australian Building and Construction Commission to have a strong industry watchdog which reduced disputes. It improved productivity by 20 per cent. The Labor Party in government, Mr Shorten in fact as the minister, abolished the ABCC …” Leigh Sales replied , “… a report by the Productivity Commission in 2014 found that the introduction of the ABCC didn’t improve construction productivity overall and nor did the removal of it have a negative effect. Overall its impact was fairly marginal.” When Malcolm Turnbull disputed this she held up the report in her hand and said she had it with her. The claim of 20% improvement along with the suggestion it was bringing $6 Billion to the economy was based on a discredited report by Econtech which even the ABCC removed from their website. The bad safety record of the ABCC alone should be reason enough to be concerned it is an inappropriate solution.

Safe work Data show more workers died under ABCC

So why resurrect a commission that in truth had such a minimal impact on productivity and a downfall on safety? Malcolm had certainly read the Productivity Commission’s report to have implement it’s recommendations on insolvency law (as mentioned earlier) but apparently only cherry picked from it? Econtech was discredited a long time ago, so why try to sell it as something is wasn’t? As Michael Brissenden pointed out to Malcolm, “ABS figures from December last year show overall industrial disputes diminishing and days lost due to industrial disputes down considerably from 2012”? Instead of supplying evidence against either ABS or the Productivity report Malcolm resorted to anecdotal opinions based loosely on the maligned Royal Commission saying it found there was a “culture of lawlessness in the construction sector”. Despite the Commission’s Aug 2015 findings that referred 30 people for various charges, already 5 of these have had their charges dismissed.

Let’s face it if Malcolm were honestly concerned about corruption, then why resist the numerous calls to have a federal ICAC instigated in the face of the NSW illegal donations discoveries? Is the pot calling the kettle, “black”? So why try to resurrect a Howard initiative for a lack lustre body like the ABCC with a dubious success record, for a single industry, that already has regulators in place and have that as a trigger for a Double Dissolution?

This in more of a late mention or side note as this change isn’t in yet, but after Abbott made $57 billion in health cuts, apparently Mr Turnbull wants to return $5 billion and thinks that is a solution of merit to take to the next budget. Anyone yet figured out one of the patterns in his approach?

All these “changes to continuity” have a common thread or theme emerging from them that is a measure of what Malcolm sees as “changes” from Abbott’s policies. Best exemplified in the transcript of a speech by the Prime Minister to the science prize awards dinner in Canberra last year, “If somebody else has done something that is even better than what we have thought of, then we will, recognising that plagiarism is the sincerest form of flattery; we will pinch it and use it.”

In his own words, this soft “plagiarism“, dominates the changes he has wrought. There is a typical pattern of evidence of previous governments, reports and communities that have held pre-existing ideas which appear to have been mostly regurgitated, modified, re-costed with cheaper alternatives, to be released as his re-badged “changed from continuity” policy. Not withstanding the couple of additions I’ve included, Malcolm was happy to call them his changes to Leigh Sales. Despite his penchant for spending millions promoting his innovative “ideas boom” ($28 million to date) there is nothing revolutionary, innovative or creative being generated in these “changed” policies.

Now to be honest, is there anything that says a policy has to be innovative? No! It is also fair to say that many of these are at least a partial recovery from the ideological destructiveness of the Abbott Government (ABCC not included). It is also fair to say that none of these organizations or causes have a hope of recovering to the point they had progressed to, before the Abbott Government under any of these “changes to continuity”. Most of them will, in fact, be easy targets for abuse and/or mismanagement.

For Malcolm, these are low-risk manoeuvres that fly under the radar of his neo-conservative right-wing backbench, that – where they will fail – he can pass them back to the originator of their idea, but where they succeed (if any of these possibilities can) for which he can claim credit. Win-Win for him, perhaps not for us.

So as many, including Tony Abbott, are saying the Coalition’s policies represent a continuation of the Abbott government, Malcolm was pitching for “Continuity with changes”! Re-branded, reworked, low cost, low impact, policy changes that represent the re-branded concepts of other people, introduced in a manner that has largely dismantled their previous record of success and for which future successful outcomes are in considerable doubt. Simon Blackwell in an interview with the Guardian described the slogan as “hollow and oxymoronic”, but perhaps that is the way we ought to explain the changes from the Abbott continuity implemented by this, new leadership.

Protected: Van

March 9, 2016 by James J. Morrison W.G. Dupree 1 Comment