News That's Fit To Punt - 11/May/2016

Global Warming Rolls On

I hate the term Climate Change when I think about the simple fact that the climate is going to change towards the warmer and more volatile. It feels like an attempt to sugar coat the unpalatable, a bit like Milo Minderbinder's attempt to sell chocolate coated cotton in 'Catch-22'. For heaven's sake it's Global freaking Warming and pretending that the climate is merely going change like the timetable for the public transport system is part of the idiotic nonsense that allows a certain breed of conservative politician to flat out deny it's even going on, or that it's man made.

But you've heard that from me well enough so I'm just here to plonk this bit of further evidence on to the immense pile.

Within the next couple of weeks, a remote part of north-western Tasmania is likely to grab headlines around the world as a major climate change marker is passed. 

The aptly named Cape Grim monitoring site jointly run by CSIRO and the Bureau of Meteorology will witness the first baseline reading of 400 parts per million (ppm) of carbon dioxide in the atmosphere, researchers predict.


"Once it's over [400 ppm], it won't go back," said Paul Fraser, dubbed by CSIRO as the Air Man of Cape Grim, and now a retired CSIRO fellow. "It could be within 10 days." 

The most recent reading on May 6 was 399.9 ppm, according to readings compiled by the CSIRO team led by Paul Krummel that strip out influences from land, including cities such as Melbourne to the north. (See chart below, with the red line showing the baseline CO2.)

I mean, just look at that line going up. So for all this talk of emissions control and Kyoto protocol and what have you, we just keep adding on to the carbon dioxide in the atmosphere. Even the deal in Paris was non-binding so there's really no evidence we're going to help one another or even ourselves. We wasted a valuable 20 years under the Kyoto protocols not doing enough, and Paris will promise not much more. 

What's genuinely frightening is that we've managed to do absolutely sweet fuck all to halt this calamitous progression. Extraordinary things are going as we speak:

Fish are dying because oxygen in the sea is eaten up by the algae blooms fed by the rise in CO2. 

The Ocean itself is acidifying at an increasing rate because of the CO2. 

The Coral is bleaching. 90% of the Great Barrier Reef is suffering.

2016 is already showing record temperatures around the world.

And that's just the beginning. Google says there are another 235,000 news items to do with Global Warming. 

Sydney's had a mild autumn really. It should be winter at this point in the year but the forecast for this week tells me its sunny and 22-24degrees right down to Sunday. Sydney weather's always been nice, but not this nice this late into May. It's downright creepy.

...but what do you do? It would certainly help to vote out these clowns.

The Crappiest Election In Memory

Here's a piece from David Marr who thinks we don't have much going in terms of choice. He's probably right. 

Australians want action. Polls year after year have shown we believe climate change is real. We know Australia isn’t doing enough. We are more uneasy than ever that it’s Australian coal destroying the atmosphere.

But the political system can’t deliver a solution.

So we head into yet another election campaign – and this the longest anyone can remember – arguing over familiar problems with little hope that the next election will be any more use than the last in solving them.

Education standards sag; life grows steadily worse in remote Indigenous communities; marriage remains beyond the reach of the LGBTI; multinational corporations operate largely untaxed; and budget deficits deepen year after year. 

We do executions better than solutions. Turnbull is Australia’s fourth prime minister in five years. Australians want this leadership churn to end. They crave continuity. But victory no longer guarantees survival.

It's enough to make you want to cry. Australia doesn't have to be so captive to this kind of politics. I don't know how it happened but the electorate is far more progressive than the politics of the place seems capable of being. It's as if the whole electorate has to wait for the stupid kids to catch up to the notion that this Global Warming thing might be a bad thing for them and them in particular. Instead we keep missing the moment, distracted by issues that are equally 'worthy' but on the whole far less significant in terms of how are lives are materially lived. 

The bleeding irony is that Malcolm Turnbull once stood for doing something about Climate Change. You'd look at him now and you know he's totally captive to the stupid Right Wing denialists. Bill Shorten isn't exactly the scintillating alternative given his history surrounding the climate change policy wrangling in the ALP government. Even with a 5% swing, an ALP government isn't going to do anything too radical. The problem is, of course, that the situation is demanding something radical be done. 

What do you do? I say we start by voting out these bastards.

Just Who Are The Aussie Tax Dodgers?

The Panama Papers point to a coterie of Australians. Some are companies, some are individuals, but they clearly weave a complicated web of money intrigue. It's interesting the SMH focuses on this bit first before going into the companies.

Australia's fifth-richest man, chairman of Hong Kong-listed Shimao Property Holdings Hui Wing Mau, who boasts a wealth of $6.9 billion, is on the list. He's among a number of Chinese billionaires listed. 

The company is listed as an officer for Mossack Fonseca client Vicking International, which in turn is a subsidiary of Shimao Property Holdings, according to the company's annual report.

Shimao Property Holdings is also listed as a client of Mossack Fonseca. Shimao purchased a Sydney office tower in late 2014 and last year launched its Ashmore apartment development in the Sydney suburb of Erskenville.

Mr Hui, whose current fortune trails behind Gina Rinehart, Anthony Pratt, Harry Triguboff and Franky Lowy, debuted on the BRW Rich 200 list in 2013.
He went to university in South Australia in the 1990s and was described by BRW as being "private and elusive about his business dealings".
Shimao and Mr Hui did not respond to inquiries. 

All up, the ICIJ's database links to people and companies in more than 200 countries and territories.

Is it just me that detects nascent racism in going for the Asian Australians first before going for the big boys? Because the more famous names are just as intriguing, and probably a bit more vexing: 

Australia's biggest company BHP Billiton, shopping centre behemoth Westfield, Rio Tinto subsidiary Alcan Corporation and ANZ Bank and National Australia Bank have all had either the head company or subsidiaries named in the Panama Papers and Offshore Leaks. 

Many of the subsidiaries severed their relationship with Mossack Fonseca years ago, according to the database.

BHP Billiton, which has been named previously in reports on the Panama Papers, declined to comment. 

Alcan's relationship with Mossack Fonseca ended in the mid 1990s. A spokesman for Rio Tinto said: "The period in question pre-dates Rio Tinto's ownership of Alcan, and as a result we are unable to comment." 

NAB, which is listed as an intermediary, did have a branch in Labuan in Malaysia, which was closed in 2005. 

A NAB spokeswoman told Fairfax Media: "NAB can confirm it does not have any current controlled entities registered in Labuan in Malaysia." 

Another intermediary named is accounting firm Grant Thornton, which acted for Canyon Commercial SA, listed in the jurisdiction of the British Virgin Islands.
PwC in Australia is listed in connection with officer Roman Wolfgang Berg in the United States. 

And former Reserve Bank board member Robert Gerard is listed as the sole shareholder of Mayfair Land Management, a BVI company he acquired from Gerard Corporation in May 2010.

BHP Billiton, Westfield, Rio Tinto and NAB aren't just any old companies - they're some of the top 10 firms Senator Sam Dastrayi charged as running Australian policy formation, some months ago.  It stands to reason that these companies would be behind lobby attempts to defund and disempower ASIC and the ATO. It certainly passes the cui bono test, because nobody else could possibly benefit from those Coalition moves but these tax dodging companies. 

It's kind of sickening that the same companies would have been directly influential in forming the recent Coalition policy of cutting company tax - especially because they've already been minimising their tax through tax havens, all the while letting revenues for the Government shrink, and pushing for cuts to health, education and welfare. Can there be any less stench of corruption to the links between the big end of town and the Liberal and National parties? How is this materially different to the links between the unions and the ALP, that they have to go and put in the ABCC but not a Federal ICAC? If anything, the Panama Papers pertaining to Australia reveal the depth of corruption inherent in the relationship between the Liberal and National Parties, big business and organs like the IPA who keep coming up with Thatcherite Trickle-down agendas to suit these big companies the most and damn the rest of Australia. 

Frankly I'm surprised there isn't more general outrage in the wider community. It's like we're all Stockholm Syndrome sufferers when it comes to how the big end of town and the conservatives gang up and beat us around.  I guess there's plenty of outrage already with Kelly O'Dwyer sticking her foot in her mouth on Q&A, but still it never seems enough and the pundits still talk about this government like they're somehow sensible people when they're clearly no such animal. 

but... 

What do you do? Vote out these fuckers.

Quick Shots - 10/Apr/2016

Torrie the Superb Parrot - (?-2016)

Look, I know this is kind of weird if you're not one for pets, but our Superb Parrot passed away. She was very old. well over 25years, so it wasn't surprising. She was very frail towards the end so it was even less surprising, but grief is grief. It's knocked me around for the last few days.

We got this parrot at a specialist shop out in Smithfield. She was already well mature and never really tame. God only knows how long she had been in the small cage because she really was freaked out about our larger cage when she moved in. I never thought I'd end up being in the caged bird thing, but things happen in your life, and suddenly that's where you find yourself - looking after an animal that is safer in a cage. At the moment an animal needs your help, the ideological thing tends to take a back seat. It's not a good excuse, but it is what happens.

I don't know who's idea it was to name Polytelis Swainsonii the 'Superb Parrot', but they really are wonderful company. Torrie was a funny thing. She was haughty and shy, regal and proud to the end. She had so may expressions that would keep you watching, and she would watch you right back, ever observant. I remember the one time she made the 'happy face' of excitement. It was the time I took her outside in the big cage for the first time, early one morning. The sun light hit her face directly and she lit up with elation - her pupils constricted and her head feathers stood on end. Majestic, she spread her wings and stood tall on her perch for a moment. Then the moment passed and she went back to being her cool self.

Anyway, having Torrie made me think of a lot of issues surrounding the species and the environment in which they live. That you can't just hope to save the species if you don't look after the whole habitat. You can't just save an animal here and there or a tree or even a river. You have to save the whole damn lot; The bush, the waters, the land, the oceans, the atmosphere, the Great Barrier Reef, all of it connected. In an anthropocentric civilisation it's easy to think of it as being about us. But for many a moment I sat and pondered the depth of the whole connection centred around the Superb Parrot.

I'm really going to miss the old bird. She was unique and profound as any sentient soul I'd ever met. Anyway, I share this because I don't know what to do with the grief today.

Of Course They Can Sort It Out (If They Wanted To)

Speaking of things climate change, here's this article. The Grattan Institute thinks that there is a workable bipartisan position on Global Warming and Climate Change by developing existing mechanisms.

A bipartisan approach to tackling climate change is still possible if Labor and the Coalition can get past their "policy bonfire" and develop existing mechanisms to curb carbon emissions, a Grattan Institute report finds. 

While an economy-wide carbon price remains "the ideal preferred future climate policy", the political reality excludes that prospect winning bipartisan support for now. Still, sufficient flexibility exists within the major parties' platforms that a "sustainable policy phoenix can yet arise", the report argues. 

The longer big parties threaten to dismantle their opponent's policy once in office, the less likely companies will have the confidence to fund long-term investments in low-emissions technology, making it harder for Australia to meet its carbon goals. 

"We know we'll all pay eventually, whether it comes from the left pocket or the right pocket," Tony Wood, the report's lead author and director of Grattan's energy program, said.

Common ground to build on includes the remaining bipartisan goal to meet a 5 per cent reduction on 2000 levels by 2020. That target is likely to be reached in part because of favourable accounting but also because of some success in the government's purchase of emissions reductions, cheaper than the carbon tax, he said.

God, would it were so. It's hard to imagine the LNP even admitting to itself that there is an issue that needs to be dealt with. The way they carry on about what a positive thing it was to dismantle the carbon tax merely emphasises the point that deep down they don't believe it's going on or that anything really needs to be done. The mining sector is in denial about it because a big chunk of the mining sector is into fossil fuels so turning away from fossil fuel is literally about losing their meal ticket. The energy sector is equally into it up to their eyeballs but they too just want prolong things before they have to shell out on the capital investment to switch out of fossil fuels and - unsurprisingly - their present is still tied up with the fossil fuel companies that are fighting to keep their meal ticket going as long as possible. The banks are tepid and feigning neutrality, but they too have too much money and derivatives exposure to the mining companies.

It's all too easy to keep denying and putting off doing things, whether it be the corporate chiefs or the governments. It's what happens when you let the major parties play politics with the important policy areas. 

Unaoil AND Panama Papers

Here's a Doozy.

It was only a matter of time before the Panama Papers controversy and the Unaoil bribery scandal overlapped. 

Leaked emails obtained by Fairfax Media show the owners of oil industry bribe master Unaoil, the Ahsani family, used the Panama law firm Mossack Fonseca – just like thousands of other super-rich around the world – to establish companies in tax haven locations. 

As the fallout from 2016's two biggest international finance stories continues to reverberate, Fairfax Media can also reveal that one of the biggest donors of Britain's ruling Tory party, property tycoon Javad Marandi​, was involved in Unaoil's Azerbaijan affairs and also a Mossack Fonseca client. 

In 2008 and 2009, Unaoil's finance unit exchanged a series of emails with Mossack Fonseca's Panama office regarding the power of attorney arrangements between Unaoil founder Ata Ahsani and the company's two top executives, his sons Cyrus and Saman Ahsani. 

The emails related to Unaoil companies established in the Caribbean tax haven of the British Virgin Islands. It is not illegal to use tax havens to create companies or hold accounts.

That's unsurprising, isn't it? That people capable of bribes around the world would use Mossack and Fonseca to move bribe money around and with it avoid paying taxes? Really, lots of heads should roll. David Cameron really should lose his job as PM. The ATO should be jumping all over these things. I could rant on about it tonight, but I won't. You'd think this should end with more resignations and admissions of culpability.

News That's Fit To Punt - 05/Apr/2016

The Panama Papers

This business of the Panamanian leaks is turning out to be quite the treasure trove. It is, to be blunt, quite a spectacular outing of a whole bunch of people who can now no longer deny they are tax-dodging crooks.

Caught in the web of leaked emails so far are:

• Vladimir Putin, and all his crony Kleptocrats in Russia. The Russians have hit back and said this is 'Putinphobia".
• Xi Jinping of China. Turns out it is no ordinary sum that he' got sheltered in the Mossack and Fonseca network. Naturally the topic of these Panama papers is blocked in China.
• David Cameron's father. David Cameron won't disclose if he or his family still have money offshore with Mossack and Fonseca.
• The Prime Minister of Iceland Sigmundur Gunnlaugsson. 
• President Mauricio Macri of Argentina
• Petro Poroschenko of Ukraine. 
• Prime Minister Nawaz Sharif of Pakistan
• King Salman of Saudi Arabia
• the former emir of Qatar, Hamad bin Khalifa al-Thani, and its former prime minister, Hamad bin Jassim bin Jaber al-Thani; FIFA; 
• and the Argentine soccer star Lionel Messi
• Not that he's all that important but...Paul Hogan. Who had money with Mossack and Fonseca that he needs to payback the ATO for his tax settlement. 

I think it's quite excellent to see these people exposed. All these people probably thought they were as safe as banks with the security surrounding their dealings but in this digital age that's proving to be illusory. it's not even ironic that the first entry after my 'Mr. Robot' entry is to do with a massive data leak that essentially changes our understanding of global tax avoidance by the rich and powerful. 

If you want more detail, here it is.

How Bad Is Abbott's Legacy? Catastrophic

Peter Hartcher had this article here today. 

"It's only a hypothesis, but I think there's been a peaking of interest or concern" in matters related to climate change. 

"It's seen as something a bit from the past, as if getting rid of the carbon tax meant we'd got rid of climate change. It's a funny one." 

This is partly an achievement of Tony Abbott and the climate change sceptics and deniers who were among his most fervent supporters. 

Australia had a bipartisan consensus on climate change under John Howard, Kevin Rudd, Brendan Nelson and Malcolm Turnbull. The consensus was that climate change was real and that pricing carbon through an emissions trading scheme was the best way for Australia to respond. 

Abbott shattered the consensus. He rode to power a conservative reaction against climate change action. He used it to destroy Turnbull's leadership and then Rudd's and, finally, Julia Gillard's. 

Together with his footsoldiers in politics and the media, he succeeded in muddying the public's understanding of climate change in the process. The conservative reaction intimidated some scientists, news editors and commentators. And Turnbull, in fear of reviving an angry conservative rearguard, has bound himself to the Abbott policy.
The net result today is Australia's muted debate and confused response to climate change.

Actually, the whole 'debate' seems to be on ice, and is going to stay on ice until after the election. The electorate's fatigue about the issue is palpable, and while the need to do something has only increased, everybody is aware that Malcolm Turnbull at least is not in any position to do much about it - and that being the case, it's a waste of breath to even start discussing what the Coalition need to do about it because they got elected on the ticket of deny it was even a problem and dismantling the carbon price. 

That Tony Abbott managed to wreak so much havoc upon the consensus is at once alarming but also strange. Especially because back in 2007 Kevin Rudd came to power with a solid mandate to do something. In the 9 years since, we've gone from that mandate to this current abysmal arrangement of paying polluters to stop, while not enforcing any accountability. It's hard to see where things can go from here because if Turnbull wins the next election, he's still going to have his hands tied by his right-wing-loony colleagues, while if the ALP manage a win, it's anybody's guess how they setback to an ETS without the Coalition behaving like utter wreckers once again. 

It's staggering that the current Coalition don't want to do what is right. They want to fight tooth and nail for the vested interests of the fossil fuel lobby instead. You sort of wonder why they even have an Environment Minster when they clearly don't believe in any science. 

That being said, hope springs eternal;. The ALP slipped ahead of the Coalition in the polls, apparently. 

Laughable It Has Come To This

Yes, that's right. None other than the Murdoch rag the Daily Telegraph is concerned that we've become a nation of Anti-Intellectuals. 

When asked what they want to be when they grow up, kids reply: “famous.”
And what about the number of people who brag they haven’t read a book since leaving school? 

My heart breaks. 

Topical TV discussion shows use celebrities, sportspeople or someone from the station’s stable of stars to discuss controversial issues eschewing experts and reducing complex subjects to clickbait. 

Why aren’t academics and other experts used anymore? 

Simmonds explains “…as a country we are hostile to those who are well-educated. We prefer homespun wisdom to years of research. Our language is peppered with vitriol reserved for those who think for a living: ‘chattering classes’, ‘latte-sipping libertarians’, ‘intellectual elites’.” 

Universities are changing as a consequence of anti-intellectualism. Instead of teaching students the joy of learning and critical thinking, we train them for jobs. 

An anti-intellectual society is a fearful one. Lacking reason, it seeks action and reductive explanations, abandoning emotional maturity and, as Niose notes, is “prone to violent solutions”.

I've never heard of 'latte-sipping libertarians' myself. That's a bit of a new one right there. 

The predominant anti-intellectualism as characterised by the likes of Kyle Sandilands has always been around. The Daily Telegraph complaining about it is ironic because they themselves exercise the very same anti-intellectualism in their editorials. Not to mention Rupert Murdoch owning other things in their stable like Fox News which spreads anti-intellectualism very happily. 

Most days, it suits the right wing to have an uneducated unquestioning populace who buy all the bullshit sold by the media owned by the wealthy. To that end, these same powers have lobbied their conservative politicians to cut education and make it less inaccessible to the majority of people. The same media outlet that pushes that wheelbarrow for those interests can't very well complain about the anti-intellectual landscape it worked very hard to creating its own interest. 

I mean, really... It's nothing short of laughable. 

Lois Lane Rides Again

Here's something completely different!

Pleiades sent this one in. It's actually long and it's a doozy. It's a piece written by Margot Kidder, about how the Clinton campaign bought state Democratic Parties wholesale. 33 of them, to be exact.  

What do billionaires like Esprit Founder Susie Buell of California, and businessman Imaad Zuberi of California, and media mogul Fred Eychaner of Chicago, and Donald Sussman hedgefund manager from New York and Chicago real estate mogul J.B Pritzker, and gay activist Jon Stryker of NY, and NRA and Viacom lobbyist Jeffrey Forbes and entertainment mogul Haim Saban all have in common? 

They all appear to be brilliant business people who have all given millions to Hillary Clinton’s presidential campaign and to her various PACS. And they all gave the Montana State Democratic Party $10,000 each in 2015. It is doubtful that many of them have any interest in Montana politics, or that they have even bothered to visit. 

None of these are awful people; they are simply awfully rich. And they like their friend Hillary and want her to be the president. And if some of their millions will buy her way into the White House then so be it. None of this is illegal. But it makes a mockery of Ms. Clinton’s pledge to further the cause of campaign finance reform. 

And the Hillary Victory Fund’s marriage of convenience with the Montana party negates Governor Steve Bullock’s eloquent insistence that he will do anything necessary to overturn Citizen’s United. And the coldness of the deal’s intention of doing anything it can to further Hillary Clinton’s chances for becoming President brings Senator Jon Tester’s stated neutrality in the Democratic primary into a sharp and unflatteringly hypocritical focus. 

One doubts that most of these one percenters adore fly fishing. Or care much about mountain climbing, or skiing, or collecting morel mushrooms along the edges of the Yellowstone river in the fall. We can safely assume that they will not be raising buffalo for meat in the near future, or buying an organic farm next to Senator Jon Tester’s. In fact we can probably assume that most of them have never been to Montana.

It's kind of cool that Margot Kidders doing this today. I like how she's not writing one-sentence paragraphs either. 

News That's Fit To Punt - 27/Feb/2016

The Rich Avoiding Taxes

I missed getting around to this earlier but this came in from Pleiades about how the globalised super wealthy avoid paying tax. It's from behind the pay wall at the Australian Financial Review so I can't go and post the entire thing, but it is a really interesting read.

Gabriel Zucman, who teaches at the University of California at Berkeley, has two goals in his new book, The Hidden Wealth of Nations: to specify the costs of tax havens, and to figure out how to reduce those costs. While much of his analysis is technical, he writes with moral passion, even outrage; he sees tax havens as a "scourge". His figures are arresting. About 8 per cent of the world's wealth, or $7.6 trillion, is held in tax havens. In 2015, Switzerland alone held $2.3 trillion in foreign wealth. As a result of fraud from unreported foreign accounts, governments around the world lose about $200 billion in tax revenue each year. Most of this amount comes from the evasion of taxes on investment income, but a significant chunk comes from fraud on inheritances. In the United States, the annual tax loss is $35 billion; in Europe, it is $78 billion. In African nations, it is $14 billion. 

The fractions of wealth held abroad are highly variable. In Europe, it is about 10 per cent. In African and Latin countries, it is much higher, between 20 per cent and 30 percent. In Russia, it is a whopping 52 percent. It follows that while tax havens hit wealthy nations hardest in absolute terms, they can have especially destructive effects on poorer or developing countries, because such a high percentage of their money is offshore. Zucman does not explain why this is so, but it is possible to speculate that one reason is rampant corruption within both the public and private sectors. The extraordinarily high figure for Russia might be best understood as involving money corruptly acquired or invested, which suggests an important point: All uses of tax havens are not the same. Sometimes government officials are the ones who are evading taxes, and they do not want to stop that evasion. 

In the aftermath of the financial crisis, you might expect that there would be an international crackdown on the use of tax havens, and, as we shall see, international attention is indeed growing. But the numbers demonstrate that no crackdown has occurred. In Luxembourg, offshore wealth actually increased from 2008 to 2012 (by 20 per cent). In Switzerland, the increase has been comparable; foreign holdings are now close to an all-time high. Disturbingly, the new wealth is coming mostly from developing countries, which poses a serious problem in light of the severe strains on their limited budgets. 

Zucman is the first economist to produce specific numbers of this kind, and, to do so, he had to undertake some creative detective work. In order to identify hidden wealth, he focuses on "anomalies" – situations in which international balance sheets show, in aggregate, more liabilities than assets. To see the importance of that inquiry, Zucman asks readers to imagine that a citizen of the United Kingdom holds an American security – say, stock in Google – in a bank account in Switzerland. In the United States, statisticians estimating U.S. wealth overall will record a liability, because a foreigner owns U.S. equities. But in Switzerland, statisticians will see nothing, and for a good reason: Google stock held in Switzerland by a U.K. resident will be, for Switzerland, neither an asset nor a liability. In the U.K. too, nothing will be registered, but for a bad reason: The UK has no way of knowing that one of its citizens owns Google stock in Switzerland. From this example, we can see the anomaly: On the global level, liabilities will be recorded as exceeding assets. 

Zucman puts it this way: "As far back as statistics go, there is a 'hole'; if we look at the world balance sheet, more financial assets are recorded as liabilities than as assets, as if planet Earth were in part held by Mars." For the purpose of producing an accounting of hidden wealth, that is actually helpful, because "money doesn't evaporate randomly into the ether, but instead follows a precise pattern of tax evasion". In 2015, for example, the nations of the world reported $2 trillion as mutual fund holdings in Luxembourg; this is the total of recorded liabilities. But Luxembourg's own statisticians calculated that worldwide, $3.5 trillion in mutual fund holdings were kept in Luxembourg; that is the total of recorded assets. What happened to the missing $1.5 trillion? In global statistics, that amount had no owners. For Zucman's purposes, the anomaly is a revealing one: The amount by which assets exceed liabilities is a measure of wealth hidden in offshore accounts

That is a lot of money leaking out of the system, avoiding tax.  The article goes on to discuss how these rich people might get taxed, but the overarching information is just how much money escapes taxation.

It's galling to think that the government of the wealthy by the wealthy for the wealthy - a.k.a.the Coalition government, wants to re-jig taxation in a way that increases the tax burden on the poor while giving more tax breaks to the rich.

A Different View On The Property Bubble

It would be unfair of me if I didn't put up an article arguing against the Property Bubble being an immediate problem. Here it is in a nutshell:

But the report also caused howls of outrage from local experts, who variously described Tepper's claims as "fanciful" (Australian Bankers' Association CEO Steven Munchenberg) and "as insightful as another work of fiction, Hunter S. Thompson's Fear and Loathing in Las Vegas" (Mortgage Choice chief executive John Flavell). Sure, there may be some vested interests there, but economists point out several reasons why they think Tepper's claims are over the top. The main one is that for a slide of that magnitude to occur, Australia would need to experience a sharp downturn in the economy, causing a spike in unemployment. That's currently not expected. But there are other signs the housing market isn't about to hit reverse, for example credit growth - seen as a key ingredient of a bubble. While housing credit has picked up, it is still a long way from previous highs.

Hmmm. If you go to the linked article, you'll find that average home loan payments look manageable; mortgage buffers are up;  Credit growth is not extreme; mortgage arrears are low; Low-Doc loans have fallen by proportion; and the Sydney marketing particular was merely playing catch up.

Now here's the thing: none of those charts address the fact that Australia's got the highest private sector debt per capita in the world. Just because on average we're managing this debt and not falling into arrears does not mean there isn't a whole bunch of debt money loaded into the system. As with all dynamic systems, the apparent equilibrium being maintained for now does not indicate the equilibrium is going to hold indefinitely into the future. It's hard to imagine what is going to rock the boat, but should something come along that rocks this boat, it is going to be very susceptible to capsizing.

But then one imagines the government will bail out the banks in order bail out the Mum & Dad investors who put their investment money into housing.

Gerry Harvey Thought It Was Nuts Too

More on the Dick Smith stores closing... Gerry Harvey also thought the AnchorageCapital's float of Dick Smith in 2013 was a bit of a joke.

Retail billionaire Gerry Harvey said he thought the "world had gone mad" when investors paid up in the $520 million float of the now-defunct Dick Smith business.
Dick Smith's receiver, Ferrier Hodgson, announced on Thursday that it was closing the electronics retailer's doors, putting about 3000 staff out of work. 

Mr Harvey said Dick Smith's profits evaporated years ago, prompting then-owner Woolworths to sell the business on the cheap to private equity firm Anchorage Capital in 2012. 

"Then five minutes later this bloke [Anchorage Capital] dresses it up and sells it for $500 million [in 2013], and I'm looking at this and saying 'I don't believe this, this business is stuffed'... I'm thinking I wouldn't buy these shares for 10¢, let alone $2," he said.
"I'm looking at all this and thinking to myself: the world has gone mad."

You would, wouldn't you? 

News That's Fit To Punt - 28/Jan/2016

The Republic Debate Again

Back in the 90's I was a Republican. Not the American kind but the Australian kind that wanted a head of state who was Australian. I have to admit that the choice was based on a few factors. One, was the 1975 Dismissal, which left a very bitter legacy in our polity. Another, was the fact that the Queen - with all her trappings and achievements - seemed not just an anachronism but an out-and-out irrelevance. This led me to think the Republican cause in Australia was progressive. The last factor was how Paul Keating as Prime Minister argued the case for a Republic, which was very persuasive.

Of course we know how that ended. At the time, the debates came down to Tony Abbott on the side the monarchists, and Malcolm Turnbull on the side of the Republicans. It didn't matter that Tony Abbott was largely incoherent in his logic, and that Malcolm Turnbull was persuasive; John Howard had managed to split the Republican vote between those who wanted a direct election of a President and those who wanted minimal change in the structure of the government.

More importantly, we find that Turnbull is not so bullish on the moment today. That stands in stark contrast to the new Australian of the Year who wants to push the issue.

I think about that today and a number of striking things pop out. First, there is the obvious strangeness of seeing Tony Abbott and Malcolm Turnbull continue to tussle in the public eye; this, despite being on the same party. Tony Abbott went on to do in Malcolm Turnbull as Opposition Leader back in 2010, and it took until late last year for Malcolm Turnbull to wrest back the leadership role with the Liberals. The rancour remains; Abbott will contest the seat of Warringah and will remain the thorn in Turnbull's side. Another words, the tussle between these two men is likely to continue a little bit longer.

The second, is the persistence of the idea that Australia should become a Republic, and that this symbolic change is somehow vital to our national identity. Thus, notwithstanding the loss, the Republicans aren't going to let it go. Naturally, the Monarchists won't either. But on a long enough time line, the Republicans may well get their way; and once they do, it's hard to conceive of a way back to a constitutional monarchy.

In the mean time, there's research to show that the younger generation are eminently okay with the Monarchy. Those who did not witness the Dismissal simply don't care. The people most wedded to the idea of the Republic are the people who came of age in the Whitlam era. That tells you something about the years since, and how they have slowly obscured the anger, obfuscated the problematic, and hung a veil over the ugliness that was palpable to those present in 1975. Maybe the Republic is not as inevitable as it seems.

Is The Property Bubble Finally Popping?

This is the question.
First off, Sydney house prices dropped 3.1% in the last quarter.

Rising mortgage rates, restrictions placed on investor lending, a surge of new apartments and a slowdown of Chinese buyers in the Sydney market were all behind the sluggish result, AMP Capital chief economist Shane Oliver said. 

“The December quarter was a bit unusual in that a lot of negative things came together in a perfect storm,” Dr Oliver said. 

But this fall “exaggerates the weakness in the market” as it has to be viewed in the context of the huge growth Sydney already experienced, he said. 

Over the past three years, Sydney house prices are up 52.6 per cent or $349,183, Domain data shows, with house prices up 14.8 per cent over 2015.

So there's that account. Of the factors cited, the most ominous might be the retreat of Chinese investors, as it signals some kind of link to the collapse in Chinese economic sentiment. Of course, the Chinese share market is known not to be connected to much, but all the same, nobody believes the official account that the Chinese economy is growing at a 7% clip.

Apart from which, the Chinese markets themselves have popped. Who is doing the lending now to enable Chinese investment in to Australian real estate? That being the case, you have to wonder if the drop in Chinese buyers was a little hesitant drop or a tap turning off.

The Pot Calls

Rupert Murdoch is a funny tweeter. Rupert seems to think Google needs to pay more tax. The problem with Rupert taking such a position is, that his own companies also need to pay more tax.

Rupert Murdoch, whose News Corp paid no UK net tax at all between 1987 and 1999, attacked Google parent's tax deal with the UK. 

"Google et al broke no tax laws,'' Murdoch wrote on Twitter. "Now paying token amounts for p r purposes. Won't work. Need strong new laws to pay like the rest of us.''
He was referring to Alphabet's agreement to pay £130 million pounds in taxes dating back to 2005.

Murdoch's attitude to low tax rates in 2016 put contrasts with data on his company's behavior in the past.
A 1999 report by The Economist showed Murdoch's own company, News Corp, had paid a tax rate of 6 percent over the previous four years.

In the UK, it had paid no net tax at all on £1.4 billion of profits made since 1987.
Fairfax Media reported earlier this month that eight of the 10 media companies that paid no income tax in Australia are linked to the Murdoch family.

What can you say to that kind of brazen hypocrisy? It's sort of funny he thinks there's a tax paying "us" that brackets him with the run of the mill taxpayer who can only dream of a holiday in the Barbados, let alone 23 subsidiaries in tax havens.

Well, here's to you Rupert.

News That's Fit To Punt - 18/Oct/2015

Wealth Is A State Of Mind

Just how well off are we in Australia? Quite a bit, but we don't seem to notice, is the answer.
It turns out that most people out there trying to get into the housing market waving around their deposits upwards of 100k, are very wealthy people already.

Inequality has grown since the global financial crisis (GFC) and the richest 1 per cent now own half of all household wealth in the world, a report has found. 

So much of the world remains relatively poor that it has taken a net worth of just $US3210 ($4400) this year to be among the wealthiest half of all world citizens, according to Credit Suisse's Global Wealth Report 2015. 

And it doesn't take obscene amounts of money to rank among the richest of the world's 7 billion citizens. A net worth of more than $US68,800 puts you in the top 10 per cent of all global wealth holders. Once debts are subtracted, you need $US759,900 to be in the top 1 per cent, the report found.

That's not a great deal of money if you're sitting on a mortgage Sydney. Median prices eclipsing $1million puts that close enough to US$759,900. If you own a house outright in  Sydney, you're in the world's top 1%. Of course this is different to the top 1% for Australia, but from a global perspective, our society is incredibly wealthy.

It's not terribly profound but it goes to show wealth is a state of mind.

Branding It Thrusted Custard

Speaking of wealth, the news this week was talk of Malcolm Turnbull's investments in a hedge fund based in the Cayman Islands. It appears that the hedgefund in the Caymans pays no tax in the USA, but the returns that come to Malcolm Turnbull's holdings are taxed in Australia appropriately according to Malcolm Turnbull. That set the cat amongst the pigeons.

The ALP attack on Turnbull was branded as a ham-fisted 'class war' by defenders of Turnbull, but you have to wonder about this a little bit. Not everybody gets the opportunity to investing a hedgefund in the Caymans, which does benefit from dodging taxes in one major jurisdiction. If the residents of Australia all equally had access to such a fund as an investment vehicle, then Malcolm Turnbull's defence that it is like any ordinary investment would pass the sniff test. As it is, it's not likely that people have the kind of money to buy expensive units in such investments, so just being able to put your money into a fund that dodges taxes in America is a privilege of wealth.

Even without a class war take on it, it's a bad look when the Prime Minister of the land is getting special returns dodging taxes in America. It's made worse when you consider it's contributing to the inequality and not subtracting from it, in the sense that it affirms the investment options for the wealthy would be different to the ordinary citizens.

If we do put on the full class warfare goggles, then it is clear that it is a sign of a system that segregates options based wealth. I think the ALP is correct in pointing out that this is a problem for the Prime Minister to have such holdings as he shields stop companies from tax scrutiny. Russell Brand had an odd simile when he went on TV this week.

"Why do you put really, really rich people in charge of your country for, who want to build a thing called a tax shield?" he said, referring to the Coalition giving private companies that earn more than $100 million a year an exemption from new tax disclosure requirements.

He then went on to criticise Turnbull and revelations - hammered by the Labor party this week - that the prime minister has some of his wealth located in the Cayman Islands. But he did it in a very Russell Brand sort of way, with one of the stranger metaphors ever used in Australian public life. 

"[Turnbull] goes he's got money in the Cayman Islands but there's nothing wrong with it... Having your money in the Cayman Islands is like putting your dick into custard," said Brand. 

"We all want to do it, but there's no rational reason to do it." 

"If your dick's in a bowl of custard you're doing it for a reason."

It's strangely accurate when you parse the logic. It would make us all feel better if we could all do it, but we don't or can't. If he's doing it, caught red-dicked, he's got a lot more explaining to do than simply dismissing it as class warfare. He ought to be embarrassed and desist.

Hiding WestConnex From Scrutiny

The ugly news this week amongst a week of fairly vanilla headlines was the news that the NSW Government shifted the controls for the WestConnex project into the hands of a private corporation which essentially shields WestConnex from public scrutiny. More specifically, information about the Sydney Motorway Corporation and its doings cannot be accessed or captured under the Freedom of Information.

The board of the Sydney Motorway Corporation, now responsible for all aspects of the project, is chaired by experienced engineering executive Peter Brecht, after former chair Tony Shepherd resigned this month. 

Other board members are finance executives Penny Graham, Mary Ploughman and Cameron Robertson, former Boral chief executive Rod Pearse, Treasury representative Leilani Frew, as well as chief executive Mr Cliche and deputy chief executive Peter Regan. The two shareholders of SMC are Treasurer Gladys Berejiklian and Mr Gay.
In a statement, a spokeswoman for the SMC said a 2014-15 financial report would be submitted to ASIC by the end of October, which would disclose information relating to key management compensation. 

The spokeswoman also said that because the corporation is delivering and financing the road on behalf of RMS, RMS "will continue to hold information relating to WestConnex and remains subject to GIPA". 

However Labor's roads spokeswoman, Jodi McKay, said the WestConnex changes were "all about shutting down scrutiny." 

"I do not understand how they can call themselves a private corporation when they have two minister shareholders," Ms McKay said. 

"It is government money, it is clearly a government organisation."

They're in a mighty hurry to build this thing. So far there isn't a business case to build it, the Environment Impact Statement is being carried out by the company that is contracted build it; there are no concrete plans open for discussion for the public, but they are furiously buying land to make this thing. The people who have analysed the bones of the proposal that has gone to the public have come to the conclusion that it's not worth building because there is no net benefit for having built this series of roads - which makes it a complete and utter waste of $15.4 billion. Nick Greiner who chaired the group who came up with the crazy proposal has resigned because even he can't see the point of building this thing.

But by all means, please, hide all this from public scrutiny and pay your crony capitalist lobby group friends to go ahead with this cockamamie plan, Mr. Baird. Something tells me you'll live to regret it.

Vanishing Point Of Politics

Paul Keating popped up today he still wants a treaty and a Republic.

On the republic, Mr Keating blamed John Howard for the defeat of the minimalist model that was proposed by the advisory committee chaired by Mr Turnbull that he appointed in 1993. "That's the great mark against Howard in respect of the republic: he will have now, probably forever, denied the country the right model," he said. 

The model provided for a president appointed on the recommendation of both houses of parliament with the same reserve powers as the governor-general. Mr Keating sees the alternative of a directly-elected president as shifting the balance of power and authority away from the cabinet and the House of Representatives. 

Asked if he would join Mr Turnbull on a platform if the Prime Minister revived the model, Mr Keating replied: "Of course I would." 

Asked if this might represent the "best and last opportunity" to get that model up, he replied: "That's entirely likely."

Over the years, I've developed a more detached view. I don't need a Republic for Australia to be truly a self-respecting nation; I certainly don't mind that the British Crown has a place at the table in Australian politics. I certainly would've liked to have seen Sir Peter Cosgrove sack Tony Abbott, but that was not to be. I don't want to expend money trying to change the flag and I won't feel better about this country just because we have a President and not a Governor General. On a simple pragmatic level, the republican debate is actually not that relevant to the day-to-day running of Australia.

Australia is in many ways a very strange country. Its penal colony roots and then the manufactured consensus on the meaning of nationhood through the 20th century has framed up national identity as the kind of topic through which all cultural discourse runs. Hence the big project to have an 'Australian' theatre or literature or cinema or music has driven the various arts funding for many years. Australian Identity is our of necessity - quite simply - a bun-fight for grants.

And it is through this distorted cultural prism that we come to the republican debate which pits on one side those who wish Australia to remain part of the vast British colonial past, and those who consider it somehow progressive to make the head of state a President and not the appointed representative of the British Crown. It is, to put it bluntly, the identity politics played by the political class of this country who largely remain, distinctly white.

To give you a picture of how disjointed the Republican debate is, consider that most Australians under the age of 40 were not alive at theme of the Whitlam Dismissal. If ever there was an incident which cast great doubt about the structure of the government of this country, it was the Dismissal, and  all discussions of the Republic in fact stems from the constitutional shock that the Prime Minister of the land could be sacked by the agent of the British Crown. It is so opaque, we have no idea what Queen Elizabeth II thought about this incident that was carried out in her name, but there it is, the inscrutable event that robs Australia of its sense of independence - and anybody under 40 was not there to see it.

It is somewhat curious that the middle ground of politics finds an overlap between the ALP's right as represented by Paul Keating, and the Liberal Party's moderate/wet faction as represented by Malcolm Turnbull, who are both "republicans" and important figures to the Republican movement. You find to the right of these figures John Howard who screwed the referendum; and further to the lunar right resides the rump that is Tony Abbott who was the face of maintaining the monarchy. If you add the fact that Whitlam and Fraser made up before their deaths, and that Fraser renounced his membership of the Liberal Party, you get a pretty crowded view of who's who in this on-going discussion, and how the Republic sits on strange fault line in the political alignment. All these men who were instrumental in forming the framework of the debate have passed through the Lodge, which tells you that for the political class of Australia, it was a debate of paramount importance - but the point of that debate is vanishing before out eyes. Quite simply, we're no longer the Australia of 1993 or 2003 (or even for that matter, 2013).

It's interesting that Paul Keating sees it as unfinished business, but it might just be the case that the issue itself has ceased to mean what it once did in the heady days of Keating's prime ministership.  After all it seems like a heck of a long time ago that Australia's first Baby Boomer Prime Minister got up and pushed for a Republic.