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EYE-BALL’s Guru on – Australia’s Parliamentary Remunerations – Part III – Superannuation – “The Future Fund”

April 4, 2013 1 comment
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Latest GURU Posts:


- 3rd Apr – Government not happy about its tax collect – Claims Tax Minimisation deserves ‘Naming and Shaming’ -


- 31st Mar – The Cyprus Bail-out -


- 31st Mar – Australia’s Debt – and the idiots Managing the Treasury -


- 20th Feb – Australia’s Parliamentary Remunerations – Part II – Entitlements and Allowances -


- 13th Feb – Australia’s Public Sector Remunerations Part I – Parliamentarians “Base-Salary” and “Additional” entitlements -


- 31st Jan – The Devil is in the Detail, there is none – Gillard chooses shock, awe & Spin over Policy -


- 23rd Jan – The Turmoil is Already here – We just have to accept what is coming -


- 22nd Jan – The Turmoil is beginning – Japan’s Economic Stimulus to tip the scales -


- 20th Jan – Wayne Swan Tips his hat at New Yorker’s -


- 10th Jan – The ANZ Whitehaven Hoax -


- 5th Jan 2013 – Financial ‘Ghosts’ from the Past – Hawke and Keating v Gillard and Swan -


- 29th Dec – The Great Big Financial Swindle – Part II – The ‘Budget Surplus’ Backflip – Swan tells his own Porkies …


- 22nd Dec – The Great Big Financial Swindle – Part 1 – The ‘Budget Surplus’ Backflip – Swan serves up Senator Wong


- 14th Dec – The Walls are crumbling – Government admits High A$ policy is hurting -


- 4th Dec – Retailers and bureaucrats don’t understand – high A$ value responsible for off-shore purchases -


- 19th Nov – Government Expenditures Part I – Department of Prime Minister and Cabinet – DPMC – STAFFING -


- 3rd Nov – Shareholders – Holding back the world – scared money – scared boss’s -


To see more GURU posts: – click here …


Title:
– Australia’s Parliamentary Remunerations -
– Part III – Superannuation – The Future Fund -
| Author: EYE-BALL Guru | 4th Apr 2013 |
Continuing the Series – Australia’s Parliamentary Remunerations:

  1. Part I … Parliamentarians “Base-Salary” and “Additional” entitlements – and …
  2. Part II … Entitlements and Allowances -
  3. Part III … Superannuation – “The Future Fund” continues below:
  4. Part IV … Superannuation – MP’s and Senator benefits … coming soon.

For a long time there has been a desire to dissect and examine the Parliamentary remunerations structure, and the perks attached to being a ‘Member of Parliament, and a Senator – in Federal and at State levels.

Superannuation – ‘The Future Fund':

Some interesting data has come forth from a long-term research investigation into Superannuation and in particular,  the ‘Future Fund’, and other Public Service Superannuation Funds, namely Federal, State, and municipal.

Before we go to the ‘Future Fund’ – I want to put the macro jigsaw puzzle in play and how this research is endeavoring to put the pieces of that puzzle and how it relates to the Australian Public Sector Superannuation landscape.

A well respected Financial Markets source in wrote an article in the ‘Business Speculator‘ published in Oct’ 2012.   The story provides commentary about the total ‘$’ value liability of Australia’s ‘unfunded’ Public Sector Superannuation schemes.

Mr Gottliebsen’s numbers paint a frightening landscape for Australian taxpayers whose task it will be to donate the revenues to provide for these future liabilities – i.e. Parliamentarians and other Public Servants retirement pensions.   His story appears below:

Canberra’s great superannuation rort


| Author: Robert Gottliebsen | Date: Oct 1st, 2012 | Link to On-Line Story. |

Former superannuation minister Nick Sherry has blown the lid on Australia’s greatest rort – the $210 billion unfunded public sector defined benefit superannuation schemes.

The Canberra public service beneficiaries of this rort are often the very people who are attacking legitimate savers in the private sectors who put money aside to pay for their retirement.

As we all know the public servant rorters are mounting another attack on legitimate private savers. This has led former ACTU boss Bill Kelty to demand that the public servants and their weak ministers stop attacking Australian savers. Now in The Australian, Nick Sherry advocates scrapping the generous super scheme enjoyed by public servants and politicians, pointing out it will raise billions of dollars in budget savings.

Defined benefit superannuation – particularly pensions – is a huge burden on the community because returns are now much lower than expected (the looming interest rate reductions will make returns even worse) and in the case of unfunded pensions people are living much longer.

State and federal public servants until the last decade enjoyed one of the greatest superannuation schemes ever devised. While they put money into a conventional fund there was a much larger benefit provided by future taxpayers which promised benefits irrespective of returns. In the private sector, savers take the return risks. In these bonanza schemes public servants were guaranteed benefits linked to their salary and/or the CPI irrespective of returns.

For a long time no money was set aside. Later former treasurer Peter Costello set up a future fund and state governments put money aside. Moreover, in most jurisdictions the bonanza defined benefit schemes have been frozen to new members but new pensions are still available to certain groups including politicians, judges and military personal.

Most senior public servants still have their enormous entitlements and appear oblivious to the irony that they are attacking those whose retirement benefits depend on the returns on the money they have set aside.

According to Joelle Fong, John Piggott, and Michael Sherris of the ARC Centre of Excellence in Population Ageing Research at the University of New South Wales, unfunded liabilities of Australian state and federal public service pensions rose from $136 billion in 2007 to $210 billion in 2011. With interest rates and returns falling my guess is that they will soon rise beyond $250 billion.

In the US and Europe public servants also went on sprees to commit future taxpayers to fund their retirement with unfunded schemes. These schemes are coming unstuck. The latest group in the US to find that they can’t pay is the US Post Office.

In Australia our wealth has enabled us to keep up the payments but as the University of NSW research shows we are falling behind.

That’s why it is outrageous that “protected” public servants should be plotting against private savers whose level of retirement savings depends on investment returns. If the public servants succeed in convincing weak politicians (who have their own defined benefit schemes) to attack genuine savers then its only fair that the public service unfunded liabilities be capped at $210 billion and that the public servants be told that their pension entitlements will be reduced in years when returns are down.

They will then be in the same position as those in the private sector and be required to use their own money. There will then be no more Canberra plotting against private superannuation funds.

Yip-pity-doh-dah-day – are you now sufficiently engaged and understand how much you and every other Australian owes to our illustrious Political Leaders …   $210 billion … maybe up to $250 billion by now … divide that by the 14 million eligible voters and it equates to $18,000 – yes that is right … $18,000 smackaroos is how much each one of us eligible voters owes our MP’s, Senator’s and other leeches feeding of the Federal Superannuation system.

This is the mother of all ‘Ponzi’ schemes.  It makes all others pale into significance … Madoff’s efforts were kindergarten stuff and they jail him forever …

The meaning of a ‘Ponzi’ scheme in the true sense of the word – ‘the future liabilities for present day entitlements’, and how does the Parliamentary Superannuation not fit this meaning.  All MP’s and their superannuation like entitlements are to be paid for by future taxes stripped from future taxpayers to pay for decade old superannuation schemes,  as legislated and voted for by these same MP’s who are to benefit from the scheme.

You – the taxpayer already donated $60+ billion to the Future Fund in 2006-07  when Treasurer Costello handed over Telstra shares and sale proceeds, and again in 2008 under Treasurer Swan when more Telstra shares were handed over.

Before these payments were made to the newly formed ‘Future Fund’, the previous superannuation entity only had $123 million in assets to cover the $91 billion liability – hence the ‘Ponzi’ scheme analogy.

A statement made in the 2005-06 ‘Future Fund’ Annual report allows speculation and opinion that up until 2005-06 – the Federal Government had not been funding is future superannuation obligations.   This in a corporate sense would have been pursued by regulators as criminal intent and a breech of employer employee guarantees.

That ‘Future Fund’ statement appears in highlight below:

Establishment of the Future Fund

The decision to maintain a CGS market while continuing to achieve a number of budget surpluses has allowed the Australian Government to accumulate significant financial assets, which have been used to assist in meeting within year financing requirements and to reduce the cost of its debt portfolio.

The outstanding stock of CGS is not the only significant liability on the Australian Government’s balance sheet. The Australian Government has never fully funded its superannuation liabilities which are now valued at around $91 billion. To offset these superannuation liabilities, the Government will use budget surpluses to build a dedicated financial asset fund — the Future Fund (the Fund). This will reduce calls on the budget in the future, at a time when significant intergenerational pressures are expected to emerge.

The Fund is expected to be established later this year with seed capital sourced from the 2004-05 Budget surplus and from previous surpluses held on deposit at the Reserve Bank, once the Final Budget Outcome for this financial year is known. The Fund will be invested in a broad range of financial assets and will be managed by an independent statutory agency governed by an appropriately qualified board. Contributions to the Fund will be made from future budget surpluses and assets sales with the aim of offsetting the superannuation liability by around 2020. Details of the financial implications of the Fund are in Statement 2.

The decision to establish the Future Fund will not affect the issuance strategy adopted by the Government as a result of the review of the CGS market in 2002-03. Issuance in 2004-05 and planned issuance for 2005-06 reflects the continuing policy stance consistent with maintaining liquidity in the CGS market. The transfer of assets to the Future Fund is likely to necessitate some additional use of Treasury notes to manage the Government’s within year financing requirements… continues

Very interesting indeed – the comment – ‘has never fully funded‘ – I would ask why The Federal Government would not cover its obligations in funding the Superannuation liabilities of all those covered under the Parliamentary Superannuation schemes – up until Costello and Swan stripped taxpayer owned assets/funds to do so in 2006-08..

Who is a member of the Future Fund:

Superannuation Schemes for Federal employees from the Site index above are listed below:

  • Arrangements for Australian Government employees – There is a variety of superannuation arrangements applying to Australian Government employees and statutory office holders. The linked page above describes the superannuation options available with links to the relevant Acts and further information on the superannuation schemes available.
  • Commonwealth Superannuation Scheme,  [CSS] – is a superannuation scheme for employees of the Australian Government and other participating employers… is largely ‘unfunded’.
  • Commonwealth Superannuation Corporation [CSC] – provides superannuation services and products to Australian Government employees and employers through nine Schemes covering the public sector and the defence forces.
  • Public Sector Superannuation Scheme [PSS] – provides defined benefits that are usually based on the average of the member’s superannuation salary on the member’s last three birthdays, multiplied by an accrued benefit multiple (which is dependent on the level of the member’s contributions and length of membership). The PSS was closed to new members from 1 July 2005,
  • The Defence Force Retirement and Death Benefits Scheme [DFRDB] – is a fully defined unfunded superannuation scheme which was closed to all new members on 1 October 1991. The Scheme is administered by ComSuper.
  • The Military Superannuation and Benefits Scheme [MSBS] – was established by the Military Superannuation and Benefits Act 1991 (the MSB Act). The MSBS is a defined contribution/defined benefit scheme administered by ComSuper.
  • ComSuper – ComSuper administers the major superannuation schemes available to Australian Defence Force members and the majority of Australian Government employees, under authority from the Commonwealth Superannuation Corporation.
  • The Public Sector Superannuation Accumulation Plan [PSSAP] – is set up to provide superannuation to employees of the Australian Government and participating employers.
  • Govenor General’s Superannuation Scheme – The Scheme is unfunded and no assets are held. Benefits are financed from Consolidated Revenue as they become due for payment. Current and former Governors-General do not contribute to the Scheme and the Commonwealth meets the costs of benefits.
  • The Judges Pensionn Scheme – the Scheme is unfunded and no assets are held. Benefits are financed from Consolidated Revenue as they become due for payment. Judges and retired Judges do not contribute to the Scheme and the Commonwealth meets the costs of benefits. The scheme covers the following office holders:

The Fed’s have a superannuation deal where the taxpayers pay 15.4% of their salary as a superannuation entitlement.  Whether this includes the 9% employer contribution is still a question not answered.   If it is – that means a 6.4% super windfall that no Australian workers can count on.   Why not … that is one of my questions – with many more to come.

For information purposes to help with what follows -

  • an ‘Unfunded’ Superannuation scheme is a scheme funded by employer contributions,
  • a ‘Funded’ superannuation scheme is one funded by employee contributions.

Linked here is a Government website offering an indexed Superannuation Site map.

Parliamentary Superannuation Act 2004:

Overview …

  • The Parliamentary Contributory Superannuation Scheme (PCSS) was closed to new members from 9 October 2004 and superannuation accumulation arrangements were established for Parliamentarians joining Parliament on or after that date.
  • The accumulation arrangements were established under the Parliamentary Superannuation Act 2004 (2004 Act) and involve a Government contribution of 15.4% which is calculated on total parliamentary salaries. The Government contribution is payable into a superannuation fund chosen by the Parliamentarian.
  • The 2004 Act arrangements apply only to Parliamentarians joining the Parliament who were not sitting Parliamentarians on 31 August 2004. They also apply to such Parliamentarians who return to the Parliament after a break in service.
  • Existing members of the PCSS may not transfer to the 2004 Act arrangements.

The 15.4% employer funded [Unfunded scheme] is by far the best Superannuation scheme in Australia.  Why?

Early Access to Superannuation Entitlements:

How do politicians get the nerve to vote themselves such a generous pension scheme, allowing themselves full pension access from whenever they leave parliament regardless of age.   The debate is of course about when an MP is voted out and has to re-establish a career and needs seed capital – you tell me how the public differ when loss of career happens through natural market place events, and often caused by Government policy.

Why are they denied superannuation entitlement access yet parliamentarians are?

It was reported in a news story that Treasurer Swan would need a private Superannuation scheme with a $5.6 million balance for him to be able to draw his $166k per annum pension.   Because he is a Federal politician he does not have to contribute a cent to earn his Parliamentary pension.   Does anyone think that fair?   [See story link here.]

A further story on Gillard’s pension entitlements can be read here … this really will blow your mind in how much the MP’s superannuation is costing the Australian public.

Pre 1992 Superannuation:

Before 1992 – a great number of employers made tax deductible superannuation contributions to their employees as superannuation contributions.   Post 1992 the 3% Superannuation levee was introduced – i.e. award wage increase decisions were used as superannuation contributions as opposed to salary increases.

Laws on underfunded superannuation payments:

The laws pertaining to under-funding employee superannuation entitlements in the Private sector are quite specific.

… Where an employer fails to provide the minimum level of support, the employer is liable to pay a nondeductible charge called the Superannuation Guarantee Charge (SGC).

The ATO is charged with the general administration of SGC and collects the charge where employers do not provide a minimum level of superannuation support for their employees and redistributes the charge to the super fund of the employees impacted. Rules require employers to pay this penalty to the ATO if they don’t pay enough super or don’t pay within 28 days of the end of the quarter or don’t direct the contribution into the employee’s chosen fund.

Non-complying employers must lodge a statement and pay a penalty known as the Superannuation Guarantee Charge (SGC). SGC is the equal to the amount of required contribution, plus interest at 10% p.a. on the amount outstanding plus an administration charge of $20 per employee. It is important to make special note that the SGC is not a tax deductible business expense, unlike employer contributions that are paid fully and on time to the correct funds.

read more

Determining what component of the ‘Future Fund’s’ under-funding is a result of the employer employee contribution, and/or the penalty component as reference above is an impossibility.

A story published with detail about the Future Funds’s obligations had this to say:

Feb 06, 2013 …

… THE Future Fund’s healthy return of 12.8 per cent last year has boosted its coffers to more than $82.3 billion.

But this leaves it more than $8bn short of where it would have been had it met its official long-term target rate of return. And it still leaves the fund well short of meeting the federal government’s superannuation liabilities of more than $138bn as of June last year.

read full story on-line

This comment suggests the Future Fund is still some $56 billion short of funding the total obligations of the Public service superannuation entitlements.

In an extract from the 2011-12 Annual Report background the following is claimed: [Page 11 of Report.]

… Contributions totalling $40.4 billion in cash were made to the Fund in the period from May 2006 to June 2007 with a further $10.9 billion being contributed by June 2008. This brought the total cash contributions to the Fund to $51.3 billion. No further cash contributions have since been made.

In addition, 2,105 million shares in Telstra (ASX:TLS) were transferred to the Fund in February 2007 and a further 57 million shares were transferred during 2007 and 2008. The total value of these shares on their respective transfer dates was $9.209 billion. All transferred shares were subject to a restriction that they could not be traded until 20 November 2008, subject to certain limited exceptions including disposal through a dividend reinvestment plan (DRP) initiated by Telstra. 126 million shares were disposed of via this mechanism during the Lock-up Period. During the 2011/12 year the Board announced that it had completed its strategy for rebalancing the portfolio and reduced its holding in Telstra to market weight or 100 million shares.

Under the Future Fund Act 2006 withdrawals may not be made from the Fund (apart from meeting operating costs) until at least 1 July 2020 unless the value of the Fund exceeds the target asset level (TAL). This is the amount that is expected to offset the present value of projected unfunded superannuation liabilities. The office of the Australian Government Actuary, in its 2010 report, specified the TAL for the years to 2013/14. The assets of the Future Fund at year end were below the TAL and, at this stage, no withdrawal before 2020 is expected. …

link to Annual Report

Again referring to  report above – his report of a $91 billion ‘Future Fund’ shortfall refers to the gap from the start balance of the transferred funds to the Future Fund in 2005-6 of less that $200 million, and the outstanding liabilities.

In the first year of the ‘Future Fund’s‘ operations the Federal Government handed over $18 billion in May 2006,  the June 2006 balance date showed total assets of $18.163 billion.

Another $22.2 billion in cash was transferred in 2007, along with 8.1 billion Telstra shares worth $8.9 billion. In 2008, another $10.9 billion in cash, and 57 million Telstra shares worth $309 million was transferred from the Federal Government. This made the total Federal Governments cash contribution a total of $51.3 billion – and the share value of the Telstra stock valued at $9.209, totaling $60.509 billion of taxpayers funds was used to part fund the 2005-6 underfunded estimated of $91 billion.

There is irony here – politician’s voted themselves these very generous ‘unfunded’ superannuation schemes over time – they chose not to fund the scheme to its obligations on an ongoing basis, and then when a few Politicians get a little nervous they might miss out and their change of career entitlements – they legislate to strip taxpayer funds to cover the liability.

The Howard Government had control of both the Upper and Lower Houses, and this allowed them to push through this legislation.  Was it an abuse of the political position the Howard Government was given?  Some $60 billion of taxpayers fund used to provide retirement pensions for so few Federal Government employees.

Would it have happened if the Senate was not controlled by Howard at the time?   Did it have bipartisan support?

There have been no more funds transferred to the ‘Future Fund’ since the 2008 transfers.

The 2005-06 establishment of the ‘Future Fund‘ was only about addressing the Federal $91 billion under-funded problem.  The States and Local Government Superannuation form the balance of the $210 billion Gottliebsen talks about in his article above.   [Note: The $91 billion is a Federal 2005-6 estimate - the 2007 $136 billion used in Gottliebsen article above is an unconfirmed number - as is the 2011 $210 billion number.]  

Is this not frightening – some $210 billion – that is 80% of the total Government debt owed at the moment – the $210 billion could be as high as the current $265 billion Federal debt as no funds have been paid into the ‘Future Fund‘ since 2007.

If one was to add the Superannuation obligations to National debt – the current 25% Debt/GDP ratio that Wayne Swan and Treasury use as a reason to compare Australia favourably with the rest of the World, and a basis to justify more borrowing programs – suddenly looks less creditable.

Again – how did our State, Council, and Federal Leaders allow this taxpayer obligation to get so far behind?  On whose watch did it start – and why does this liability not form part of the State and Federal Budget structures as a debt liability owed by all State and Federal taxpayers?

We’ve known for decades the ‘rich vein of gold’ – i.e. apathetic taxpayers our Politicians draw from to create their own ‘super-duper’ pension entitlements –  has always been a contentious issue.  Perhaps by not exposing the depth of the unfunded problem they felt they could hide it forever.  Is it a case that the entitlements are just not sustainable?

Again – one of the claws that sticks is why are Parliamentarian’s allowed to trigger their pension payments when they leave the Parliament and not when they turn 55 or more?

Why do they only have to serve a minimum of 8 years if thrown out, or a minimum of 12 years to be eligible to receive a lifetime indexed pension linked to their remuneration at the time of their exit?

Available answers to questions like these are hard to find – or to find someone prepared to talk and answer questions like those being raised hereto.

This report shows some 67% of all investments are invested off-shore as at 30th June 2012. This investment strategy is wise if an expected fall in the A$ was imminent – the dividends off these off shore investments are subject to currency fluctuations and whilst the A$ remains high their value in A$ terms are neutral but driven by a higher rate of return that what is available in Australia.

I do find a conflict with the structure of the Future Fund – it has a targeted rate of return some 4.5-5% above the rate of inflation or around 8% as a benchmark. Investment has been driven off-shore to chase those types of returns.

This is the conflict – given the precarious Global Financial markets and the on-going GFC fallout – the risk attached to having 67% invested across Northern Hemisphere regions carries a risk greater that the shortfall in investment returns offered in Australia.

The other issue is that the Legislation provides no controls over how the investment portfolio is to be structured, either in a geographical nor ethical context – i.e. the Future Fund currently has a significant investment in American tobacco stocks.  This at a time when the Government is wagering a war against the effects of tobacco on health costs across the Nation.

There is much at play here – the research has uncovered so many abnormalities and further research is ongoing. Part IV will get a little bit more into the individual MP’s entitlements to super and pension …

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Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.


The EYE-BALL Guru …

EYE-BALL’s Guru on – Australia’s Parliamentary Remunerations – Part II – Entitlements and Allowances -

February 20, 2013 1 comment
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Latest GURU Posts:


- 13th Feb – Australia’s Public Sector Remunerations Part I – Parliamentarians “Base-Salary” and “Additional” entitlements -


- 31st Jan – The Devil is in the Detail, there is none – Gillard chooses shock, awe & Spin over Policy -


- 23rd Jan – The Turmoil is Already here – We just have to accept what is coming -


- 22nd Jan – The Turmoil is beginning – Japan’s Economic Stimulus to tip the scales -


- 20th Jan – Wayne Swan Tips his hat at New Yorker’s -


- 10th Jan – The ANZ Whitehaven Hoax -


- 5th Jan 2013 – Financial ‘Ghosts’ from the Past – Hawke and Keating v Gillard and Swan -


- 29th Dec – The Great Big Financial Swindle – Part II – The ‘Budget Surplus’ Backflip – Swan tells his own Porkies …


- 22nd Dec – The Great Big Financial Swindle – Part 1 – The ‘Budget Surplus’ Backflip – Swan serves up Senator Wong


- 14th Dec – The Walls are crumbling – Government admits High A$ policy is hurting -


- 4th Dec – Retailers and bureaucrats don’t understand – high A$ value responsible for off-shore purchases -


- 19th Nov – Government Expenditures Part I – Department of Prime Minister and Cabinet – DPMC – STAFFING -


- 3rd Nov – Shareholders – Holding back the world – scared money – scared boss’s -


To see more GURU posts: – click here …


Title:
– Australia’s Parliamentary Remunerations  -
– Part II – Entitlements and Allowances -
| Author: EYE-BALL Guru | 20th Feb 2013 |
In ‘Part I’ of this – ‘Australian Parliamentary Remunerations’ series, the focused was on the Parliamentary ‘base-salary’ structure – read that post here.

In this ‘Part II’ post – additional Parliamentary allowances and entitlements are the focus.  In addition to their base-salary structures, MP’s and Senators are further guided by a ‘Members Handbook’ that explains all their additional entitlements.

  1. Click here to read full ‘Ministers’ entitlements.
  2. Click here to read full ‘Members’ and ‘Senators’ entitlements.

The Headline Index in the ‘Members and Senators’ Handbook of Allowances and Entitlements is listed below:

Part 2: Salary -

  1. - Salary – [The base-salary has already been covered in Part 1]
  2. - Electoral Allowance – see below … and
  3. - Resettlement Allowance – see below … and
  4. - Superannuation, – ['Superannuation' will be covered in 'Part III' in more detail.]

Electoral Allowance:

  • All Senators $32,000 per year …
  • Members representing electorates less than 2,000km2 in area $32,000 per year …
  • Members representing electorates between 2,000km2 and 4,999km2 in area $38,000 per year …
  • Members representing electorates greater than or equal to 5,000km2 in area $46,000 …

Handbook Explanation: -

Each Senator and Member is paid an electorate allowance for expenses necessarily incurred in the performance of a Senator or Member’s duty. The taxation requirements relating to electorate allowance is a matter between the Australian Taxation Office and the Senator or Member. The Australian Taxation Office has issued a ruling on what may be claimed as an exemption for income tax purposes. … continues …

Resettlement Allowance: -

Handbook Explanation: -

A Resettlement Allowance is paid, under limited conditions, to certain Senators and Members who retire involuntarily from the Parliament. In order to be eligible for the allowance, a Senator or Member must ‘retire involuntarily’ from the Parliament by:

  1. choosing not to stand for re-election following loss of party endorsement, for reasons other than misconduct; or
  2. being defeated at an election (including an election where the Senator or Member has campaigned to be elected to represent a different electoral division, or to the other House of the Parliament).

The Senator or Member must also have been:

  1. first elected before 9 October 2004, and whose retiring allowance under the Parliamentary Contributory Superannuation Act 1948 is not payable immediately on retirement because of the deferral provisions of that Act; or
  2. first elected on or after 9 October 2004, and declare in writing to the Clerk of the relevant House of Parliament that it is his or her intention to seek employment on leaving Parliament.
  3. A retiring Senator or Member who meets these conditions will be paid a Resettlement Allowance equal to three months of the base salary at the rate current on the date that the Parliament is prorogued prior to the election.

If a Senator or Member receives a Resettlement Allowance, he or she will also be paid an additional three months of the base salary at the same rate as the Resettlement Allowance if he or she is:

  1. a Senator for a state and has served more than three full years in the Parliament; or
  2. a Member, or a Senator for a territory, and has served more than one full term in the Parliament.

For the purposes of the payment of the additional allowance, the period of service referred to is the period of continuous service that ceases when the Senator or Member retires involuntarily. The Chamber Departments are responsible for paying the Resettlement Allowance to eligible Senators and Members. Any queries relating to the Resettlement Allowance should be referred to the relevant Chamber Department. Contact details are available to Senators, Members and their employees from the Ministerial and Parliamentary Services help desks or on the Senators and Members’ Portal on the Extended Parliamentary Network.


Part 3: Accommodation and Office Facilities -

  1. - Electorate Offices,
  2. - Electorate Office furniture and fittings,
  3. - Electorate Office equipment,
  4. - Electorate Office Information Technology Services and training,
  5. - Telephone services in the Electorate Office,
  6. - Telephone services in Residences,
  7. - Office requisites and stationary,
  8. - Publications,
  9. - Printing and communications,
  10. - Privately Funded Electorate offices,
  11. - Commonwealth Parliament offices,

Again, the Handbook explains the entitlements and guidelines under which expenditures can be made. Handbook Link Here.


Part 4: Travel -

  1. - Travel in Australia by Senators and Members,
  2. - Travel on schedules services ,
  3. - Entitlements to travel by car,
  4. - Private plated vehicles,
  5. - Private vehicle allowances,
  6. - Charter entitlements,
  7. - Special purpose aircraft,
  8. - Travelling allowance,
  9. - Family reunion travel within Australia,
  10. - Overseas travel,
  11. - Overseas study travel,
  12. - Overseas delegation travel,
  13. - Travel after retirement,

Again, the Handbook explains the entitlements and guidelines under which expenditures can be made. Handbook Link Here.


Part 5: Staff Matters: -

  1. - Electoral employees,
  2. - Salary matters,
  3. - Electorate staff allowance,
  4. - Leave and Public Holidays,
  5. - Other Employment Matters,
  6. - Electorate employee travel,
  7. - Training and Professional development,
  8. - Workplace practices,
  9. - Employment of Trainees in electorate offices,
  10. - Liability for volunteers,
  11. - Cessation of employment,

Again, the Handbook explains the entitlements and guidelines under which expenditures can be made. Handbook Link Here.


Part 6: Other Matters: -

  1. - Supplement of capped entitlements in exceptional circumstances,
  2. - Interests and gifts,
  3. - Personal compensation for accidents,
  4. - Authorisation of Powers,
  5. - Badge of Office/Electorate medallion,
  6. - Photographic services,
  7. - Awards and National symbols,
  8. - Constituents’ request program,
  9. - Management of electorate office records.

Again, the Handbook explains the entitlements and guidelines under which expenditures can be made. Handbook Link Here.


To get a grip on the extent of Ministerial and MP’s expenses, the scope, the actual cost, and the reporting procedures, it is best to look at a published report of a six month summarised snapshot of MP, Senator, and Ministerial Expenses. As an example of of MP and Senator expenses for the period – [Jan '12 - Jun '12] – can be viewed using this link.

This method of public reporting the Ministerial, MP and Senator expenses has only been in vogue since 2009. In 2008 only Travel expenses claims are available on-line. This Link will take you to the APH Dept Finance website where all the links provided below can be accessed independently.

These links cover six monthly expense claims between Jan 2009, and Jun 2012 by all current and former MP’s and Senators. The report for July – Dec 2012 is not yet available.

  1. Current MP’s and Senators – 1st Jan – 30th Jun 2012 …
  2. Former MP’s and Senators – 1st Jan – 30th Jun 2012 …
  3. Current MP’s and Senators – 1st July – 31st Dec 2011 …
  4. Former MP’s and Senators – 1st July – 31st Dec 2011 …
  5. Current MP’s and Senators – 1st Jan – 30th Jun 2011 …
  6. Former MP’s and Senators – 1st Jan – 30th Jun 2011 …
  7. Current MP’s and Senators – 1st July – 31st Dec 2010 …
  8. Former MP’s and Senators – 1st July – 31st Dec 2010 …
  9. Current MP’s and Senators – 1st Jan – 30th Jun 2010 …
  10. Former MP’s and Senators – 1st Jan – 30th Jun 2010 …
  11. Current MP’s and Senators – 1st July – 31st Dec 2009 …
  12. Former MP’s and Senators – 1st July – 31st Dec 2009 …
  13. Current MP’s and Senators – 1st Jan – 30th Jun 2009 …
  14. Former MP’s and Senators – 1st Jan – 30th Jun 2009 …

[Further Explanatory Notes on these expenses can be read here ...]

Despite exhaustive efforts and requests to have the data contained in the above linked ‘expense’ ledgers to be made available as a ‘database’ file, the Department of Ministerial and Parliamentary Services – [MAPS] – have advised that the data used to compile the  PDF expense files linked above, is extracted from a host of different sources, thus rendering a single file option impossible.

Advice was also given that there is no central registry where all expense claims are processed and accessible as a single database.

Despite the obvious ‘red flag’ indicators a central database would offer to any Audit assessment, it was further explained that the budget for ‘IT’ type upgrades to allow for a centralisation of the MP and Senator expense register to has not been allocated.

This is so hard to accept or believe at face value.  More investigative work is being done – there just has to be a central data base file and if it takes an FOI application to obtain such a file – that endeavour will be pursued.

The mind boggles at a manual type extraction … and if this is how the Dept Finance, MAPS produce the above expense files … no wonder it takes a cast of thousands.   At the moment I have my Local Federal Member looking into a specific request to retrieve this data in a database format.

Just thinking about extracting all the data manually from the above summary links, i.e. 6 fines of 230 MP’s and Senators spread across 12 different categories,  would be a time exposure nightmare.  Yet ‘MAPS’ has confirmed this is how they do the extraction for the above files … unbelievable!!!

The above data in a functioning database file that allowed ‘filters’ and the like to be applied, would produce some very interesting research data.

How does an Audit committee do or perform their task?

The next installment – ‘Part III’ – is on Superannuation, the Future Fund, and whether the whole superannuation is a construct based on a ‘Ponzi Scheme’ with a current $300 odd billion liability on the future generations of Australian’s to fund.

Please – if you found this story to your liking and would like to promote it to your social media contacts – i.e. Twitter, Facebook, or other icon linked account below – please click your favoured Icon(s) to promote the story.  Thank you.


Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.


The EYE-BALL Guru …

EYE-BALL’s Guru on – Australia’s Parliamentary Remunerations – Part I – “Base-Salary” & “Additional” entitlements -

February 13, 2013 1 comment
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Latest GURU Posts:


- 31st Jan – The Devil is in the Detail, there is none – Gillard chooses shock, awe & Spin over Policy -


- 23rd Jan – The Turmoil is Already here – We just have to accept what is coming -


- 22nd Jan – The Turmoil is beginning – Japan’s Economic Stimulus to tip the scales -


- 20th Jan – Wayne Swan Tips his hat at New Yorker’s -


- 10th Jan – The ANZ Whitehaven Hoax -


- 5th Jan 2013 – Financial ‘Ghosts’ from the Past – Hawke and Keating v Gillard and Swan -


- 29th Dec – The Great Big Financial Swindle – Part II – The ‘Budget Surplus’ Backflip – Swan tells his own Porkies …


- 22nd Dec – The Great Big Financial Swindle – Part 1 – The ‘Budget Surplus’ Backflip – Swan serves up Senator Wong


- 14th Dec – The Walls are crumbling – Government admits High A$ policy is hurting -


- 4th Dec – Retailers and bureaucrats don’t understand – high A$ value responsible for off-shore purchases -


- 19th Nov – Government Expenditures Part I – Department of Prime Minister and Cabinet – DPMC – STAFFING -


- 3rd Nov – Shareholders – Holding back the world – scared money – scared boss’s -


To see more GURU posts: – click here …


Title:
– Australia’s Parliamentary Remunerations -
– Part I – “Base-Salary” & “Additional” entitlements -
| Author: EYE-BALL Guru | 13th Feb 2013 |
For a long time the desire to dissect and examine the Parliamentary remunerations structure has been something that I wanted to do.   This series of posts is an in-depth expose on the remunerations and perks of our Federal and State Parliamentarians,  and other senior Public Servants. 

Introduction:

The research was prompted by the 35% increase in the base-salary scale in late 2011 and 2012.

The nagging issue has been whether the quality of Candidate we have in positions to ‘Lead’ our Nation, our States and Territory’s, are good enough. A lingering question is whether the Candidates coming into the Parliament have come because of the generous pay scales, the superannuation schemes attached to post Parliamentary life,  and all the additional perks available.

This then leads to more questions about whether the pay scales on offer are adequate to attract the best people, people with demonstrated Leadership skills?

An outcome of this research might lead to some recommendations and suggestions that provide a different perspective.

When Prime Minister Kevin Rudd froze Parliamentary remunerations at their then levels when the GFC fallout began to impact in 2008 – his popularity as the Prime Minister was at record highs.  The electorate responded to the restraint.

This decision went through both Houses unchallenged.   Rudd’s demise is linked to this legislation and the ‘perceived’ angst of backbenches  who saw Rudd making no real sacrifice because he was married to a very wealth wife, where most of his fellow parliamentarians depended on their salary to cover their living costs.  

Rudd’s demise bought forward an immediate change to the ‘restraint’ mandate and within weeks the new regime was preparing for a substantial overhaul of Parliamentary entitlements and remunerations.    The outcome of this Remuneration Tribunal overhaul resulted in 35% increases to the ‘base-salary’ levels.   The Prime Minister’s salary went to almost $500,000 p/a from $370,000.  

This compared with the American President’s then and current salary of US$400,000 p/a.

What is the ‘Base Salary’ and how it came about:

Can be read in detail here … to quote in part from this source -

… Since 1901, the Parliament has enacted legislation to define the parliamentary base salary for the purposes of Section 48 of the Constitution.

The Remuneration and Allowances Act 1990 defines a parliamentary allowance which is consistent with the arrangements whereby the Remuneration Tribunal determines the remuneration of parliamentarians.2 Section 8 provides that salaries and allowances are to be paid out of the Consolidated Revenue Fund. … continues …

… 1901–1973

At the Constitutional Convention at Sydney in 1891, Sir Samuel Griffith said:

“One of the first things to be done by the parliament of the commonwealth in its first session would be to settle the salaries of ministers, and a great number of other matters of that kind. We have, therefore, given them power to deal with this subject. We did not think it necessary to make this in any sense a payment of members bill. We lay down, however, the principle that they, are to receive an annual allowance for their services, and we thought that it should start in the first instance at £500.”

At the Adelaide Convention, however, the draft constitution bill debated specified an amount of £400 and this was the annual allowance subsequently enacted in the Constitution.

In 1907 parliamentarians made themselves liable to the payment of State income taxes. Tax concessions for electorate expenses were allowed from 1925.

Between 1901 and the establishment of the Remuneration Tribunal in 1973, Parliament adjusted allowances following decisions of executive government or as the result of recommendations from committees of inquiry.

Justice Kerr in 1971 noted that during this time there was ‘no fixed pattern of approach’ to the timing and method of reviewing base salaries—a process that invariably attracted criticism. In 1971 the Kerr Inquiry suggested the establishment of a ‘Salaries Tribunal … authorised by legislation to review salaries and report at regular stated intervals.’

Kerr also wrote:

Nothing … should prevent the Parliament or the Government from rejecting recommendations or from taking action not in accordance with what is recommended.

Remuneration Tribunal:

From its establishment in 1973, the Remuneration Tribunal, using a range of evidence and indicators, determined the ‘base-salary’ with reference to second division officers of the Commonwealth Public Service. Adjustments were then made by applying National Wage Case decisions. In 1979 the Government legislated to remove the Tribunal’s recent determination that these adjustments be automatic.

In 1987 the Tribunal convened a conference for interested parties to examine parliamentarians’ salaries. An independent review was consequently conducted for the Tribunal in 1988. The resulting report recommended increases based on work value and community pay standards. The review strongly recommended that there be no linkage between the base-salary and APS salaries. Increases determined by the Tribunal at that time were deferred.

With the Remuneration and Allowances Act 1990, the Government removed the Tribunal’s power to determine base salaries and allowed a phased increase to the allowance over three years. The legislation also provided a link with SES Band 1 salaries in the APS—in contrast to the recommendation in the 1988 review. Adjustments to the base salary were made by means of national wage case decisions and, from 1992, agreements between the Government and public sector unions.

Legislation enacted in 1994 ensured that the base salary was equivalent to the minimum APS SES Band 2 salary level. The then Workplace Relations Act 1996 enabled SES salaries to be set through individual Australian Workplace Agreements (AWAs), thereby removing the standard against which the base salary was determined. With the expiry of the final APS Enterprise Agreement at the end of 1996, the mechanism by which adjustments were made to the base salary ceased.

Legislative changes to the APS in 1999, among other matters, amended the Remuneration and Allowances Act 1990 and the Remuneration Tribunal Act 1973.

Prior to 1901 there was no ‘base-salary’ for Members serving as Governor’s and the like.

History of the ‘Base-Salary':

[The APH website database has been used in compiling the following information.  Links have been provided to documents used where applicable.]

The following Table provides Parliamentary increases in ‘base-salary’ increments since the late 1960’s through to the current ‘base-salary’ level of $190,500 p/a.

Links used to compile the above Table: Excel Spreadsheet – APH Data- , APH PDF file, and ABS Spreadsheet.

The Headline outcome in this Table is the ‘male average wage’ comparison with the ‘Base-Salary’ of parliamentarians.

The 2012 number – 35.16% – is the lowest number since 1968 – giving rise to a debate that Politicians have never been better paid in comparison to those they seek to govern.   It can also be said that a large portion of this ‘base-salary’ increase came in the period after the worst of the GFC when wage outcomes in the private sector, job security, and industry shutdowns are at their worst in 20+ years.

The restraint imposed under Rudd has not been replicated under the current Government.  The Opposition, the Greens, and the Independents could have blocked the passing of the new Tribunal recommendations – it would appear that Mr Rudd’s initiative was not long on the conscience of Members and Senators.

The Remuneration Tribunal who provide the advice on increases to the ‘base-salary’  are themselves public servants and in turn also benefit from any increase to the ‘base-salary’ increments.  

This has to be considered a ‘conflict of interest’.  

Any productivity or other scale used to warrant or benchmark these increases – i.e. CPI and the like, ultimately become self-fulfilling.   There has never been a year of negative inflation in the Table above – nor GDP growth, nor Parliamentary ‘base-salary’ level.   This is the same for private sector wage outcomes.   But those outcomes often have productivity based clauses – Parliamentarians do not have that exposed accountability.

‘Base-Salary’ Multipliers:

The ‘base-salary’ is used to measure all annual remuneration salaries of Parliament and other senior Public Servant appointments.

A schedule of the multipliers used for Federal Parliamentarians is delivered below, bearing in mind that everybody serving as a MP or Senator earns the base-salary.  These multipliers are additional remuneration.

Various Federal Parliamentary Positions/Offices: [As a percentage of the base salary, per annum.] – see on-line source here for Non-Ministerial MP’s … and here for Ministers

  1. Prime Minister – 160% – Julia Gillard
  2. Deputy PM – 105% – Wayne Swan
  3. Government Leader of the Senate – 87% – Stephen Conroy
  4. Leader of the Opposition – 85.0% – Tony Abbott
  5. Leader of the House – 75% – Anthony Albanese
  6. Other Minister in Cabinet who is also Manager of Government Business in the Senate – 75%
  7. President of the Senate – 75.0%
  8. Speaker of the House of Representatives – 75.0%
  9. Other Ministers in Cabinet – 75%
  10. Other Minister who is also Manager of Government Business in the Senate – 67.5%
  11. Other Ministers – 57.5%
  12. Deputy Leader of the Opposition – 57.5%
  13. Leader of the Opposition in the Senate – 57.5%
  14. Leader of a recognised party of more than 10 members of Parliament, other than a party whose Leader is the Prime Minister or the Leader of the Opposition – 45.0%
  15. Leader of a recognised party of at least 5, and no more than 10, members of Parliament – 42.5%
  16. Manager of Opposition Business in the House of Representatives – 27.5%
  17. Chief Government Whip in the House of Representatives – 26.0%
  18. Shadow Minister (see clause 2.4) – 25.0%
  19. Chief Opposition Whip in the House of Representatives – 23.0%
  20. Shadow Minister (see clause 2.4) – 20.0%
  21. Deputy President and Chair of Committees in the Senate – 20.0%
  22. Deputy Speaker in the House of Representatives – 20.0%
  23. Deputy Leader of the Opposition in the Senate – 20.0%
  24. Chief Government Whip in the Senate – 20.0%
  25. Chief Opposition Whip in the Senate – 18.0%
  26. Second Deputy Speaker in the House of Representatives – 13.0%
  27. Whip in the House of Representatives of a Government party with more than 10 Members in the House 13.0%
  28. Whip in the House of Representatives of an Opposition party with more than 10 Members in the House – 12.0%
  29. Head of a recognised party, not being a party whose Leader is the Prime Minister or the Leader of the Opposition, with at least five members in each house, sitting in the house other than that in which the Leader of the party sits – 11.0%
  30. Whip in the House of Representatives of a party with at least 5, and no more than 10, Members in the House – 9.0%
  31. Whip in the Senate of a recognised party of at least 5, and no more than 10, Senators – 9.0%
  32. Government Deputy Whip in the Senate – 5.0%
  33. Opposition Deputy Whip in the Senate – 5.0%
  34. Deputy Whip in the House of Representatives of a Government party with more than 10 Members in the House – 3.0%
  35. Deputy Whip in the House of Representatives of an Opposition party with more than 10 Members in the House – 3.0%
  36. Member of the Speaker’s Panel in the House of Representatives – 3.0%
  37. Temporary Chairman of Committees in the Senate – 3.0%
  38. Deputy Whip in the House of Representatives of a party with at least 5, and no more than 10, Members in the House – 2.0%
  39. Chair of the Joint Statutory Committee of Public Accounts and Audit – 16%
  40. Chair of the Joint Statutory Committee on Public Works – 16%
  41. Chair of the Joint Standing Committee on Foreign Affairs, Defence and Trade – 16%
  42. Chair of the Joint Standing Committee on Treaties – 16%
  43. Chair of a Joint Statutory Committee or Joint Standing Committee, not otherwise specified (except the Joint Standing Committee on the Parliamentary Library) – 11%
  44. Chair of a Senate Legislative and General Purpose Standing Committee – 11%
  45. Chair of a House of Representatives General Purpose Standing Committee – 11%
  46. Chair of a Joint Select Committee or Select Committee in the Senate or the House of Representatives – 11%
  47. Chair of an Investigating Standing Committee established by resolution of either House – 11%
  48. Chair of the Senate Standing Committee of Privileges – 11%
  49. Chair of the House of Representatives Standing Committee of Privileges – 11%
  50. Chair of the Senate Standing Committee on Regulations and Ordinances – 11%
  51. Chair of the Senate Standing Committee for the Scrutiny of Bills – 11%
  52. Chair of the House of Representatives Standing Committee on Procedure – 11%
  53. Deputy Chair of the Joint Statutory Committee on Public Accounts and Audit – 8%
  54. Deputy Chair of the Joint Statutory Committee on Public Works – 8%
  55. Deputy Chair of the Joint Standing Committee on Foreign Affairs, Defence and Trade – 8%
  56. Deputy Chair of the Joint Standing Committee on Treaties – 8%
  57. Deputy Chair of a Joint Statutory Committee or Joint Standing Committee, not otherwise specified (except the Joint Standing Committee on the Parliamentary Library) – 5.5%
  58. Deputy Chair of a House of Representatives General Purpose Standing Committee – 5.5%
  59. Deputy Chair of a Joint Select Committee or Select Committee in the Senate or the House of Representatives – 5.5%
  60. Deputy Chair of an Investigating Standing Committee established by resolution of either House – 5.5%
  61. Deputy Chair of the Senate Standing Committee of Privileges – 5.5%
  62. Deputy Chair of the House of Representatives Standing Committee of Privileges – 5.5%
  63. Deputy Chair of the Senate Standing Committee on Regulations and Ordinances – 5.5%
  64. Deputy Chair of the Senate Standing Committee for the Scrutiny of Bills – 5.5%
  65. Deputy Chair of the House of Representatives Standing Committee on Procedure – 5.5%
  66. Chair of the Senate Standing Committee of Senators’ Interests – 3%
  67. Chair of the House of Representatives Committee of Members’ Interests – 3%
  68. Chair of a Parliamentary Committee concerned with public affairs rather than the domestic affairs of Parliament not otherwise specified – 3%

Can you imagine the accountancy required in keeping track of these appointments and the additional perks that go with the Committee members and the like?

There is no private sector job where any Senior Executive like an MP of Senator gets paid additional remuneration for time and effort spent. What they do have is a bonus opportunity and that is negotiated and contingent on specific profit outcomes.

A senior MP or Senator might serve on three or four committees, have a Parliamentary appointment as well, and boosts their ‘base-salary’ by 50% or so.

Base Salary of other Senior Government Appointees:

  1. Judges: High Court, Federal, State, etc … see link here
  2. Chief of the Defence Force – see Link here.
  3. Commissioner of Taxation – see Link here.
  4. CEO of Australian Customs & Border Protection Service – see Link here.
  5. Auditor-General for Australia, Australian Statistician – see Link here.
  6. To see CEO Remuneration scales for APRA, ASIC, ACCC, Federal Police, DPP, FWA, and the Management line under these Departments – see link here.

There is a lot more to Members and Senators entitlements – to read a full list contained in the Members Handbook 43rd edition use this – link here[this file is almost 4MB and will take a few moments to load.]

Superannuation:

In addition to the above base-salary and other MP and Senator entitlements, there is of course the employer contribution to the Members and Senators personal superannuation scheme – some 15.4% of the annual salary – [i.e. base salary plus all other entitlements as outlined above.] –

The next Part of this series will be about Parliamentary ‘Superannuation’ schemes and the ‘Future Fund’,  now considered to be a Sovereign Wealth Fund. 

 

Please – if you found this story to your liking and would like to promote it to your social media contacts – i.e. Twitter, Facebook, or other icon linked account below – please click your favoured Icon(s) to promote the story.  Thank you.


Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.


The EYE-BALL Guru …

EYE-BALL Guru on – Financial ‘Ghosts’ from the Past – Hawke and Keating v Gillard and Swan -

January 5, 2013 Comments off
The-EYE-BALL-Opinion-Header-2
Latest GURU Posts:


- 2nd Jan 2013 – The Great Big Financial Swindle – Part III – GFC Bailout has only postponed the inevitable -


-29th Dec – The Great Big Financial Swindle – Part II – The ‘Budget Surplus’ Backflip – Swan tells his own Porkies …


- 22nd Dec – The Great Big Financial Swindle – Part 1 – The ‘Budget Surplus’ Backflip – Swan serves up Senator Wong


- 14th Dec – The Walls are crumbling – Government admits High A$ policy is hurting -


- 4th Dec – Retailers and bureaucrats don’t understand – high A$ value responsible for off-shore purchases -


- 19th Nov – Government Expenditures Part I – Department of Prime Minister and Cabinet – DPMC – STAFFING -


- 3rd Nov – Shareholders – Holding back the world – scared money – scared boss’s -


- 31st Oct – Finally – RBA bubble head opens his mouth – He says – $A intervention not needed -


- 25th Oct – Foreign Minister Bob Carr & Wife – An Australian asset -


- 25th Oct – Communications Minister Stephen Conroy – one of Gillard’s Lap-dogs – untrained and unleashed -


- 24th Oct – Climate Change Minister Greg Combet – The Carbon Tax – emissions Trading scheme -


- 24th Oct – Treasurer Wayne Swan – Mini Budget Part 3 – The Clangers keep coming …


- 23rd Oct – Treasurer Wayne Swan – Mini Budget Part 2 – Mortgaging Australia’s Future to appease his ego


- 22nd Oct – Treasurer Wayne Swan – Mini Budget Part 1 – paints a false mirage to protect his legacy –


- 21st Oct – Penny Wong – On the mid-year accounts –


- 16th Oct – The First Home Owners Grant – the fallout and a reflection on a stupid stupid Government policy …


- 10th Oct – Tony Abbott Talks the Talk – but he is on empty when it comes to detail -


To see more GURU posts:

- click here …


Title:
– Financial ‘Ghosts’ from the Past -
- Hawke and Keating v Gillard and Swan -
| Author: EYE-BALL Guru | 5th Jan 2013 |
The release of Cabinet documents from the Hawke/Keating era continue and make for most interesting reading and comparisons.  The Australians’s David Uren wrote a very enlightening article for the Weekend Australian and is recommended reading – it appears below:

The old masters and ordinary apprentices


| Author: DAVID UREN, ECONOMICS EDITOR | Date: Jan 5th, 2012 | Link to On-Line Story. |


PAUL Keating says achieving economic reform is hard political work. “People think there’s a reform token and you just put it in the reform slot machine. Well, there’s no reform token”.

The intensity of economic reform under the Hawke government is in the spotlight with this week’s release of the 1984 and 1985 cabinet papers .

Having floated the Australian dollar and removed capital controls that essentially made it illegal for Australians to invest offshore in 1983, government then took on the deregulation of banking, allowing banks to set their own deposit and lending rates and granting licences for 16 foreign banks to operate in Australia.

It picked up an agenda for tax reform lying in a pigeonhole for a decade and introduced capital gains tax, fringe benefits tax, dividend imputation and, though it took several years to implement, the petroleum resource rent tax.

The reforms kept rolling, including the lowering of tariffs, the development of a tightly targeted means-tested welfare system, liberalisation of foreign investment, the creation of Medicare and national superannuation and, under the Keating government, the replacement of centralised wage fixing with enterprise bargaining and the implementation of competition policy, which revolutionised the delivery of state government services.

None of it was easy, says Keating, with proposals having to be argued through the factions, the cabinet, the parliament and the public at large.

“It was the political skill in the melding of ideological and political interests and forming it into an adoptable, internally consistent package,” he says.

It is a record that inevitably invites comparison with the halting progress of the current government on issues ranging from tax, to foreign investment, workplace relations and industry protection. Gary Banks gave vent to his frustration in his final speech as chairman of the Productivity Commission outlining the reforms he believed should be undertaken but which government found too politically difficult.

They included measures such as abolishing remaining tariffs and industry subsidies, subjecting public infrastructure investment to transparent cost-benefit analysis and also assessing the costs and benefits of labour laws.

Banks conceded most of the almost 50 items on his “to do” list were not popular. “Most of them involve arrangements that currently provide significant advantages to particular groups who naturally take more interest in resisting reform than the wider electorate takes in supporting it,” he said.

Tax reform provides the clearest contrast between the current government and the Hawke government of the 1980s. In both cases there was a blueprint setting out what needed to be done.

The McMahon government had commissioned a comprehensive review of the tax system – known as the Asprey Review – which was delivered in 1975, recommending broadening the tax base with a consumption tax and the broadening of the income and company tax bases with capital gains tax and fringe benefits tax. The proceeds would finance lower marginal tax rates.

The Whitlam government was preparing to introduce capital gains tax when it was dismissed from office, and the Fraser government let the Asprey report lie fallow for its eight years.

Hawke sought to defuse a scare campaign over capital gains tax during the 1984 election by promising a tax summit. Keating was sceptical about the summit, but seized the initiative.

Treasury rolled out a white paper, picking up the recommendations of Asprey and adding a few ideas of its own, including dividend imputation. The summit was presented with three options. The first, which was essentially the status quo, the second which included sweeping reform but not the consumption tax and Keating’s preferred “Option C”, which included the lot.

Hawke concluded that there was not the support for a consumption tax, with neither unions, welfare groups nor business endorsing the “Option C” but left it to Keating to push through the remaining large tax reform agenda.

Keating says dividend imputation and lowering top marginal tax rates appealed to the right while capital gains tax and fringe benefits tax appealed to the left. In arguing the case through the ministry, there was enough on the table for everyone to put up with the things they didn’t like.

At the media release of the cabinet documents, former Hawke minister Susan Ryan paid tribute to Keating’s powers of persuasion.

“Keating led the charge and instructed us all. He was at his best. He would explain the complex things. He’d be dramatic, he’d draw graphs and diagrams about what would happen. I found it totally persuasive,” she said. “Not every member of cabinet did, but he educated us about tax, how it worked and why it had to be reformed.”

The University of NSW’s Professor Chris Evans says this is the most important difference between the tax reforms of 1985 and 2010: the presence of a champion for the cause. Tax reform is always difficult and is never seen as a likely winner for the politicians. In both Hawke and Keating, there was someone willing to push and willing to go out on a limb.”

“When you look at Julia Gillard and Wayne Swan, you don’t see the same urgency. You don’t see them having the same big picture of tax reform that was there at the 1985 summit.”

Evans says Swan and Kevin Rudd gave the reform process a bad start when they sat on the Henry Report for six months after it was delivered in December 2009. “It made people suspicious and edgy about what the government would do.”

When, without notice, they came out with the massive Resource Super Profits Tax (RSPT) that was to finance a showbag of tax giveaways, such as an concession on the tax paid on interest, a 2 percentage point reduction in the company tax rate and a shift to 12 per cent superannuation, it was a political debacle.

The gains for any of the groups being rewarded were not sufficient to galvanise support that would counter the wrath of the resource sector, which believed it faced the effective expropriation of 40 per cent of its assets.

The bulk of the 138 recommendations from the Henry review were ignored, while 27 were ruled out for all time.

“It looked like the government had cherry-picked the Henry Report and made a grab for the measure that brought significant revenue,” says Evans.

In some respects, the government’s response made future tax reform more difficult. The Henry Report had identified the hopeless mess in the taxation of savings, with investors in rental property, shares, and bank deposits all taxed at different rates, particularly if debt was involved.

He recommended a package in which the concessions for capital gains and negative gearing would be reduced, but there would be gains for property landlords through lower tax of rent. For all forms of investment income, only 60 per cent would be taxed at a person’s marginal tax rate.

Swan destroyed the package by ruling out any changes to capital gains and negative gearing while offering a token rebate on the first $1000 of interest income.

“He queered the pitch for future tax reform with this reaction,” says Evans. By contrast, although the Hawke government did not put up a consumption tax, it did nothing to stop one being implemented in future and allowed the debate to be aired.

“I see Swan as reacting rather than pushing or taking a proactive approach to tax reform. It is a very careful and cautious approach. It may be that tax is so politicised now. It is so easy to knock anything down from the other side with the ‘big new tax’ syndrome.”

The knife-edge nature of Labor’s hold on parliament and the give-no-quarter approach of Tony Abbott to opposition is seen by some as a reason for the government’s caution on economic reform. The government denies that its policy agenda has been influenced by its lack of parliamentary majority or that it is cautious on reform.

Ministers point to the passage of the carbon tax, the (bare bones) mining tax and the cigarette plain packaging law among a full legislative agenda as evidence of the effectiveness of the government.

This suggests the failure to act on issues identified by Gary Banks reflects a lack of shared vision on economic reform, rather than political weakness.

This becomes clear in the government’s attitude towards the manufacturing sector. Kevin Rudd famously said he didn’t want to be prime minister of a country that “didn’t make things”, and this sentiment is reiterated by Julia Gillard.

The government is establishing a new “anti-dumping commission” to apply more focused resources to stopping the sale in Australia of goods for less than their home market, while it has already set up an advisory body on import barriers dominated by import-competing interests who stand to benefit from increased barriers. Consumer interests are not represented.

Similar examples where the Gillard government’s actions depart with contemporary economic thinking include the new protections for coastal shipping, and the resistance to any cost-benefit analysis for the National Broadband Network.

The reforms of the 1980s were assisted by the groundwork of a group of politicians, economists and public officials through the 70s and early 80s.

Together they railed against the inactivity of the Fraser government and articulated the case for rolling back protection, deregulating labour markets and opening financial markets.

The Hawke government did things in its own way, but there was a vision for reform already there. Australian National University’s Professor John Wanna says the Labor government was implementing a largely Liberal agenda.

“There were some things they dithered about, such as privatisation. In the end, they were influenced by (finance minister) Peter Walsh saying if we don’t do it, the others will the moment they get in.”

Although there was bipartisan support on some reforms, measures such as capital gains and petroleum resource rent taxes were strongly opposed by the Coalition.

Wanna says there was also strong opposition in the business community to the “corporatist” approach of the Hawke government, which sought to overcome the divisiveness of the Whitlam government’s reforms by getting both business and unions to sign off on policy, particularly the series of “accords” under which the unions traded real wage cuts for social benefits such as superannuation, healthcare and education funding.

However Geoff Allen, who was the founding executive director of the Business Council, says the Hawke government was helped by the strong intellectual input from the business community.

This emerges in the cabinet papers, with Keating citing Business Council submissions in arguing for the liberalisation of foreign investment.

Allen says business leaders were much more closely engaged in public policy then than they are today. They funded internal policy groups, including economists.

“BHP, for example, was a largely Australian company. Its board was all Australian and so was its focus. It is now substantially focused on the global market, the leadership is largely not Australian and the board is made up of people from five countries.”

“There is a thinning out of those corporate resources and the incentive system is all about short-term profit performance. There are now different parameters for business engagement in the reform process.”

Allen makes the point that the Hawke government had a strong mandate for reform. It had been elected as the economy was emerging from recession, and as leader Hawke had huge popularity ratings.

The Gillard government has nothing like that level of political capital. The little it has, it is focusing on a few select areas like education and climate change.

The Hawke government had huge political capital and, with treasury in the hands of Keating, had someone ready and able to spend it.

I lived these times as a Financial Markets Treasurer managing a $500 million liquidity portfolio – in those early to late 80’s times Keating was a champion of the Markets … so many changes, so many opportunities for smart savvy operators who could see the big picture and make monkeys of those who struggled to deal with the new opportunities financial deregulation created.

The ‘cowboys’ were aggressive traders who saw Keating’s market initiatives – i.e. floating of the A$, the deregulation of the Banks allowing new overseas licences, the lifting of off-shore investment … they all provided large gaps in experience and knowledge that gave the markets plenty of entrepreneurial type opportunities.

It was 10 years or so before the markets calm down and became more rigid due to regulators themselves becoming educated as to where they should be operating in stabilising market volatility and opportunities. Of course they missed heaps and the ‘cowboys’ were still able to operate as they always do by thinking up schemes the regulators had not even thought of at the time.

In Australia – it was not until APRA in the early 2000’s that Australian markets really got themselves a ‘watchdog’ with any teeth or the ‘smarts’ to take on the market players seriously.

You won’t find a market operator from the 80’s and early 90’s era who will have a bad word said about Keating … how and why he lost to a neanderthal by comparison in Howard in the 1996 election is a subject that creates much debate within market operatives of the era.

Howard and Costello took 5-6 years to understand what Hawke and Keating had achieved with their market reforms.  They began to dismantle the good done in workplace reform with ‘workchoices’ and the like.  To this day Costello still does not understand the nuances of how a floating A$ dollar impacts on Australian commerce and industry over the longer term …  Swan and his Treasury advisors even less so …

I quite often live in this era of past glories … a time where one could see Australia’s future as bright and full of opportunities … comparing it with todays globalisation and where Central Banks intercede in currency markets to give their domestic economies a competitive edge – is a far cry from the natural forces of global markets during the 80’s.

To make the summer reading complete, there is an excellent article by a global think-tank called – Petersen Institute of International Economics – it is a new-found research center for this author and it is highly recommended for financial markets research purposes – an extract quotes:

More than 20 countries have increased their aggregate foreign exchange reserves and other official foreign assets by an annual average of nearly $1 trillion in recent years. This buildup — mainly through intervention in the foreign exchange markets — keeps the currencies of the interveners substantially undervalued, thus boosting their international competitiveness and trade surpluses. The corresponding trade deficits are spread around the world, but the largest share of the loss centers on the United States, whose trade deficit has increased by $200 billion to $500 billion per year. The United States has lost 1 million to 5 million jobs as a result of this foreign currency manipulation.

This article I refer to and highlighted by Colin Twiggs from ‘Gold Stocks and Forex‘ fame  is titled: ‘Currency Manipulation, the US Economy, and the Global Economic Order’and linked here … it was published in Dec 2012 and I highly recommend its reading, particularly for those interested in financial markets, and/ or managing a Superfund or other proprietary funds.

This ‘policy’ document provides opinions that challenge the long-term impact to economy’s where the practice of currency price-fixing, or manipulations result in domestic repercussions not always in the best interest of local economies – i.e. for every action there is always an opposite and equal reaction – the laws of physics as they say.

The problem is that Politicians have short attention spans – they are always focused on the next election result as the most important agenda … this focus has them completely out of touch with the cycles of economic reality and responses.   Domestic economic activity often takes decades to prepare and then decades to play out.

The volatility of markets during the 80’s financial markets deregulation under Keating had their cause and effect in the ‘recession ‘ we had to have’ in the early 90’s.   When one looks at the global marketplace on a post and continuing GFC fallout – anything is possible as Nations fight for survival.

Government’s are on a ‘war-type’ footing as they strategise economic policy that best suits their needs – the Bankers to those Nations in the most peril are extracting high returns in exchange for sovereign debt … the world investment community is demanding and receiving high returns in exchange for Government to grow even larger debt … the recent American ‘fiscal-cliff’ deal was no deal, merely a postponement of  a fate nobody wants to deal with in any harsh reality.   Politicians of the modern era should never be put in charge of a Nation’s debt creation and management … yet that is where it lies …

Once in a generation you will get a Leader with vision and the will to make changes for the better … at other times the Leaders think they are a the one but their capacity and deeds prove them otherwise.   We don’t know when vision and accomplishment is great until well after the event … in other words at the time nobody can really see the future in its full focus … look to Hitler in the 30’s … the Nixon decision to abolish the ‘gold standard’ … the Central Banks and Government’s responses to the ’87 crash …  the Bush decision to go to war after the 9/11 attacks … they have all led to ’cause and effect’ debates and none of them measure as positive’s on a ledger …

There are thousands more policy decisions that can be used to highlight the ineffectiveness of policy makers and the thinkers behind the scenes who formulate the policy with longer term objectives in mind.   Take the debate on ‘carbon tax’ to deal with the ‘climate change’ debate when as pointed out by the EYE-BALL Opinion in his post titled –  Climate Change & The Human Factor  – The Silent Debate nobody wants to talk about – where he highlights that in a debate where everyone is in agreement that humans are effecting ‘climate change’ – why is nobody talking about population control.

It’s a ‘too hard’ debate and would lead to wars and hostilities … Leaders abdicating from their responsibilities is how this site would argue the point.

Returning to on-topic matters … Hawke v Gillard and Keating v Swan …

Firstly – Hawke and Gillard have similar paths to the Prime Minister role – Hawke knifed Hayden to become the Opposition leader weeks ahead of the election that history shows ‘a drovers dog could have won’ … Gillard knifed Rudd as a first term sitting PM … that is about the only similarity that can be found … in every other way Hawke trumps Gillard on any level … Gillard can’t even walk in Hawke’s shadow … she is a dilation, a pretender, a Unionist’s mole, a criminal, and of all other things a woman so far out of touch with her own gender, she has ruined it for all future and aspiring women who want to become the PM.

As for the Keating v Swan … Keating is ‘god-like’ whereas Swan could not even qualify to be Keating’s whipping boy, or his shoe-shiner, or his coffee fetcher … Swan is to financial management as Madoff is to Ponzi schemes … he is just too stupid to realise it and that is being insulting to Madoff –  at least he knew what he was doing and had a purpose … Swan is a goose who does not know how to lay any eggs …

Do you all get the message … Swan and Gillard represent a doomsday scenario for the future of all Australian’s for decades to come … wake up Australia !!!

 

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The EYE-BALL Guru …

EYE-BALL Guru on – The Great Big Financial Swindle – Part III – GFC Bailout has only postponed the inevitable -

January 2, 2013 2 comments
The-EYE-BALL-Opinion-Header-2
Latest GURU Posts:


29th Dec – The Great Big Financial Swindle – Part II – The ‘Budget Surplus’ Backflip – Swan tells his own Porkies …


- 22nd Dec – The Great Big Financial Swindle – Part 1 – The ‘Budget Surplus’ Backflip – Swan serves up Senator Wong


- 14th Dec – The Walls are crumbling – Government admits High A$ policy is hurting -


- 4th Dec – Retailers and bureaucrats don’t understand – high A$ value responsible for off-shore purchases -


- 19th Nov – Government Expenditures Part I – Department of Prime Minister and Cabinet – DPMC – STAFFING -


- 3rd Nov – Shareholders – Holding back the world – scared money – scared boss’s -


- 31st Oct – Finally – RBA bubble head opens his mouth – He says – $A intervention not needed -


- 25th Oct – Foreign Minister Bob Carr & Wife – An Australian asset -


- 25th Oct – Communications Minister Stephen Conroy – one of Gillard’s Lap-dogs – untrained and unleashed -


- 24th Oct – Climate Change Minister Greg Combet – The Carbon Tax – emissions Trading scheme -


- 24th Oct – Treasurer Wayne Swan – Mini Budget Part 3 – The Clangers keep coming …


- 23rd Oct – Treasurer Wayne Swan – Mini Budget Part 2 – Mortgaging Australia’s Future to appease his ego


- 22nd Oct – Treasurer Wayne Swan – Mini Budget Part 1 – paints a false mirage to protect his legacy –


- 21st Oct – Penny Wong – On the mid-year accounts –


- 16th Oct – The First Home Owners Grant – the fallout and a reflection on a stupid stupid Government policy …


- 10th Oct – Tony Abbott Talks the Talk – but he is on empty when it comes to detail -


To see more GURU posts:

- click here …


Title:
– The Great Big Financial Swindle -
– Part III -
- GFC Bailout has only postponed the inevitable -
| Author: EYE-BALL Guru | 2nd Jan 2013 |
The most recent OECD report on Australia’s economic outlook was released on the 14th Dec 2012. The report represents some 140 pages of reproduced ABS and other domestic think-tank compiled data.   It’s front page presents a summary of the collected data and highlights some interesting statistics.

[Click here to download the report as a PDF file ...]

The Front Page Snapshot: [Click on image to enlarge in a new window.]

We all hear how Mr Swan loves to talk up the GDP growth numbers and boast his and the Government’s achievement in producing those numbers.

Under Labour GDP has grown to $1.487 trillion – see snapshot above – he often chides the Opposition over whether they have the ability to manage a $1.5 trillion dollar economy … meaning that he does and they don’t.

The GDP that gets the figure to $1.5 trillion is GNI – Gross National Income + Imports + exports.  The GNI is $353.6 billion as at Sept 2012 – the national debt stood at $250.1 billion – source linked here – that represents a debt/GNI ratio of 71%.

I hear economists and other ALP supporters arguing that Australia’s financial position is so much better that the rest of the world.  They based this calamitous comment on the fact that the Australian debt/GDP ration sits at around 26%, when most of our major trading partners is near 100% and above.   Those same economists argue that this is reason to allow the Government to spend more money to save the economy from slipping into recession.

What absolute tripe … Australian commerce is coming to a screeching halt – not because of a lack of Government stimulus since the GFC – some $300 billion in new debt confirms this … but all because the rest of the world sees us as too expensive a Nation to deal with.

Our labour costs, our currency value, our trade imbalance, our reliance on others to produce the goods we want … Australia has never been more vulnerable to an economic Armageddon than is is right now … and yet the so-called elite of economic forecasters have no fear of what lies ahead.

The GFC impact was delayed here in Australia – that delay can no longer be held at bay – it is coming and the spending firstly by Rudd, and then the gluttonous irresponsible splurges by Gillard and her gang of bohemian snot-noses, has now place Australia smack in the middle of the ‘overflow’ equation.  We have ventured too close to the cliff edge and gravity is working us closer – we will not nor cannot stop what is about to happen in this Nation.

The OECD report commentary is ‘dunny’ paper for the future … it’s based on past numbers and forward estimates provided by the Australian Treasury and ABS – the Treasury no longer has any creditability on economic forecasting given the so-called $160 billion in erroneous predictions of revenues the Government blame as the reason for the most recent budget surplus backflip.

The ABS use the Treasury numbers and modelling to form a great many of their numbers … it’s all tainted – and this OECD report is about as useful as a torch in a dark room with flat batteries.

Here is a fact – in the 2012-13 year the Government has forecast the interest cost in servicing the debt owed at $12 billion, up from $11.4 billion in 2011-12.  That is assuming interest rates stay where they are or fall further.

A 1% rise in interest rates adds $2.5 billion to the current interest cost,  5% adds $12.5 billion and more than doubles the budget forecast.

To access the chances of future interest rate increases one has to be a realist – economic growth will not drive up interest rates – nor the threat of inflation indicator increases, but as Australia’s economic woes  becomes more visible to the rest of the world, foreign capital inflows parked here because of the decade long resource ‘cash and carry’ trade will take their profits and move on the the next safe-haven.

This can be explained further when we revisit the reasons why the Government saw th need to guarantee the Banks during the height of the GFC crisis in early to mid 2009.   During this period the A$ fell from near parity to below A$0.60c … in a matter of weeks – this was foreign investors withdrawing their investment funds in a panic move because they saw the ‘resource trade’ as finished.  The Government had to issue the guarantee to stop ‘moms and dad’s’ also withdrawing their funds …

Bank security is a fickle thing – panic throws all logic out the window … yet that panic only comes when everyone realises they are at risk on being the last cab off the rank to act.

The only thing that will keep those off-shore funds on-shore is a rise in interest rates here at home – or a fear that where-ever they take their funds will increase their risk exposure.

When Mr Swan boasts about his ‘pipeline’ of future investments he proves his stupidity … Brazil, Mongolia, and Africa are months away from providing everything Australia provides in its mineral wealth and export volumes to the rest of the world – at a fraction of the cost to produce the same ore here in Australia.

If other Nations around the world stabilise as Australia begins its own economic meltdown, interest rates will rise very quickly in competition to try and keep those off-shore funds here.

None of the economic forecasters are expecting interest rate increases – but during the late 70’s and 80’s we had interest rate rises from single digits to in excess of 20%.   This triggered the Keating ‘recession we had to have’ and that killed the ‘inflation’ fueled pressures and allowed interest rates to fall.

It took another five odd years to have commercial Bank interest rates safely back under 10% and since then it has been steady as she goes …

A hiccup here and there and the whole equation balance of global investment flows becomes a dogs breakfast fight for those funds.

With the ‘thick-tanks’, not ‘think-tanks’ at Treasury and the RBA,  who by the way wear all the responsibility for the mis-management of the high A$ policy over the last 10 odd years,  are all hoping for events to fall their way, as opposed to researching and advising policy that will assist insulating this Nation from the impending disaster.

THE TRADING ECONOMICS CHARTS:

Trading Economics is a global resource and provided free or paid-for economic data for Nations and their economic performances – use this link to view a summary page of all Australia’s economic indicators and a further reflection of the OECD data – again provided by the ABS and the Australian Treasury.

The chart and summaries below present some of the OECD data – [click all charts to enlarge in a new window]:

  • Gross Domestic Product [GDP] growth – not to be confused with Gross National Product [GNP], or Gross National Income [GNI].   The ABS produce A$ value numbers, whereas Trading Economics produce US$ value numbers.
  • The below GDP chart shows Australia’s GDP growth has almost doubled during the worst financial crisis ever in history. How can that be … nobody talks about Government spending and its impact on GDP numbers – when Politicians boast about economic growth when GDP numbers are released – one has to laugh at their claims of responsible economic management.
  • The GDP growth numbers since 2008 are a result of ‘credit card’ type debt accumulation.
  • Be very wary of Mr Swans claims that he saved Australia from the GFC … in his own mind he thinks he is the ‘greatest Treasurer ever’, the reality is that he is the dumbest ever because he ‘does not understand what he does not understand’.

GDP Chart [US$]:

  • The A$ v US$ relationship … please note the rapid depreciation in early 2009 in the chart below when global investors unwound their ‘cash and carry’ resource based trades.

A$ v US$ chart:

  • Movement of official interest rates by the RBA … in the aftermath of the initial GFC impact that saw the A$ fall because of the flow of capital out of Australia, [see the 2009 area on the above chart] – the RBA was spooked at the ferocity of the capital outflow.
  • They feared a crisis in Banks being able to raise funds given the lack of confidence in the Banks as seen in off-shore Nations.
  • You will recall the 2009 deposit guarantee introduced by the Federal Government to give depositors confidence in Australian Banks and to try and hold deposit levels – but how to replace the foreign capital was their bigger challenge.
  • Make no mistake – the RBA was desperate to contain the capital outflows – so much so that they felt the only way to induce the foreign capital back to Australia when markets began to stabilise was to create an interest rate buffer margin between Australia, and the rest of the investment world.
  • The A$vUS$ chart above shows the dive in the A$ value and the evidence of the capital outflow.
  • In response to the A$ fall and as seen in the Australian Official Interest Rate chart below – the RBA first moved to reduce interest rates in the face of the GFC crisis as did every other Nation – but then in later 2009 it began to increase official interest rates as a response to attract the funds back on-shore.
  • Make no mistake – this interest rate ‘buffer’ differential was deliberate and as a result, the inflow of off-shore funds again created a massive currency capital appreciation for those brave enough to take the opportunity.
  • Let it further be made clear – the RBA decided to sacrifice home owners and the cost of their mortgage interest to attract this off-shore money. A line can be drawn and stated that the off-shore investors profited whilst the domestic housing market paid the price of the ‘higher interest rates’ put in place to keep the off-shore funds on-shore.
  • The RBA has not disappointed off-shore investors since, guaranteeing at every opportunity with media releases that lower interest rates were not an option during 2009 – 2011. Once the world again saw China importing Australian ore – the flood gates opened for this off-shore capital in-flow … as things turned out the GFC was to be a Western economic disease …

RBA Official Interest Rates:

  • As the above chart shows the 2012 reduction in official interest rates is matched with the holding pattern in the A$ appreciation – i.e. A$1.10 to A$1.00 trading range.
  • One might venture to say that the RBA is testing offshore investor’s resolve – because as sure as eggs break when you drop them, if the RBA fumbles this cat and mouse game with off-shore investors where the interest rate differentials is the only current reason for off-shore investors to remain in A$’s – if they get it wrong, then the outflow of capital will happen all over again.
  • Perhaps not at the same rate as happened in 2009 – it can be said the world is a much more dangerous place now when it comes to assessing risk/reward investment.  Where could this capital go and remain safe if it exited Australia?
  • Australia’s AAA rating whilst eagerly sought in good times, has for the last few years been the attraction for these volatile off-shore investors. It has been a monster negative for domestic borrowers resulting in $100’s billions in interest costs alone being passed onto Australian mortgage holders.
  • This is something Mr Swan could never get his head around nor explain to the Australian public. His continuing beefcake performances as an ALP man working for the ‘Aussie battlers’ could never conceded that he oversaw one of the biggest modern international heist of wealth ever in the history of financial scams.
  • The real cost of this RBA imposed interest rate differential will never be known – the equation of how domestic Banks would have had to pay for funds on international markets to replace the capital outflows has too many variables to consider. Instead the RBA took the bullet and responsibility to save the Australian economy.
  • The reality of this ‘game’ is still being played out … Australia’s GFC crisis is still ahead of us and if the RBA and Swan continue to play silly buggers for too much longer, the housing bubble will burst here as it did in the US and other places, placing the Banks under immense pressures as almost 70% of their loan book in in residential mortgages.
  • To highlight the interest rate differential between Australia’s rate increases in the post GFC period – compare the RBA moves with that of other Nations …

USA Interest Rates:

UK Interest Rates:

EuroZone Interest Rates: [Data series only goes back to 1998 - when €Euro commenced.] – note the small period post GFC when they lifted Official Interest Rates for a short few months to try and attract capital to the region …

Swiss Interest Rates: [Data series only goes back to 2000.]

Japan Interest Rates:

China Interest Rates: [Data series only goes back to 1996.] – a different story altogether – has the highest official interest rates of all the above series -

The biggest issue associated with the interest rate differential game being played out is the RBA’s persistent concerns over inflation re-emerging.

This is 80’s and 90’s thinking and an overflow from old style economics.   This highlights the archaic methodology of the RBA ‘think-tanks’ … they fail to understand that inflation is now a global infection – not so much about domestic policy but about global trade – and that trade being completely linked to labour costs and the domestic cost in currency terms to trade with one another.

There is no risk of inflation in Australia with the current value of the A$ – reducing interest rates on the back of this knowledge risk’s the off-shore investor funds exiting … given the value of the capital appreciation i.e. profits – in their A$ position they will jump at any reason to.   The RBA had blundered badly and they continue to fail in their economic policy advice to the equally dumb Treasurer Wayne Swan.

If you are ‘long’ Australian property – your have reasons to be concerned – the best advice on offer would suggest to sell A$ assets and buy off-shore – i.e US property looks good and when the A$ crashed as it surely will – you’ll double your money when you consider the fall in Australian house prices, and the incumbent appreciation of your US$ house value.

Please – if you found this story to your liking and would like to promote it to your social media contacts – i.e. Twitter, Facebook, or other icon linked account below – please click your favoured Icon(s) to promote the story.  Thankyou.


Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.


The EYE-BALL Guru …

EYE-BALL’s Herman on: A Chronology of Farce – and of a Government who Wonders Why Their Opinion Polls are so low.

Herman O'Hermitage
Title:
- A Chronology of Farce -
- and of a Government who Wonders Why Their Opinion Polls are so low.
| By: Herman O’Hermitage | 18th July 2012 |
Herman O'HermitageFrom what is set out below, there are many insights. This is but a snapshot of our modern democrazy, where every picture tells a story, in this case quite possibly different stories to different readers.

For a start sharing too much personal information through all social media is lacking wisdom. But that said when existing media do not cover such reality, the only option is to cry to the others. To try to gain some audience, to scream civilly in frustration, “THIS IS NOT GOOD!” “WHY DOES IT REQUIRE A CRISIS TO GET SOME HELP?” “ARE ALL CLAIMS OF SOCIAL SAFETY NETS JUST RHETORIC?” I will conclude with my own observations.

—–Original Message—–
From: {withheld for reasons of privacy}
Sent: Monday, 8 March 2010 4:21 PM
To: A.Albanese.MP@aph.gov.au; Julia.Gillard.MP@aph.gov.au;
Lindsay.Tanner.MP@aph.gov.au
Subject: Mature Aged Unemployed

I was last in regular employment in 1998. I was in the Banking and Finance Industry for over 20 years, and left {withheld for reasons of privacy} in 1998 due to prolonged Family Court Issues. I am qualified in Accounting and Administration. I have resumed studies. I was very successful in my career until 1998 and enjoyed title and salary beyond the average.

I am now 52 years of age and I have lost count of the number of Applications for work I have made since 2002. I have worked as a labourer since 2003 and now my doctor advises me to stop due to meta carpal issues. About job applications I may have made 300 to 500, I truly do not know, and try not to dwell on it as it is so depressive and affects your self esteem. Since mid January this year I have made over 100 applications.

About these 100 odd applications this year I have 3 applications current, applying for work in Department of Finance, others with CRS, I have applied for work with APRA, ASIC and many other government instrumentalities.

Last week I was rejected by Dept of Broadband & CDE (DBCDE), there is still another application in the system with DBCDE. Today I received a letter of rejection from Westpac. That application was made last Thursday and is still advertised, (that commonly occurs – Applied for at least 5 jobs with Coca Cola Amatil in January and I am rejected within an hour).

About Social Security, I am married to an Applied Psychologist, whose

income prevents me from claiming Newstart. I understand that I can access Centrelink’s services all the same, but that too has been to no avail, As access to job network is very very futile. The lack of success applying for work is the biggest single issue in my home environment and relationship. Continued failure will destroy my marriage. Clearly I write in utter frustration.

I ask, what can the government do to help people like me?

I have several friends in similar situations, who have so much to offer society, yet are constantly spurned. Simply by way of example, one colleague was voted fund manager of the year 5 times in the year he was made redundant and has not worked since. He is now 57. I can only deduce that society has lost all respect for the more mature citizens.

This is a plea for help, What more can I say or do?

Yours Faithfully,
{withheld for reasons of privacy}

From: withheld for reasons of privacy
Sent: Wednesday, 17 March 2010 11:16 AM
To: Albanese, Anthony (MP); Gillard, Julia (MP)
Subject: FW: Mature Aged Unemployed
Dear Mr Albanese and Ms Gilliard,

I sent the following expecting a response. It is addressed to Mr. Albanese as my local member, and Ms Gillard as Minister for Work Place Relations and Social Inclusion. (Mr Tanner should be aware of the immorality of the banking and finance industry and was included).

Below [chronologically now above] I ask “I ask, what can the government do to help people like me?” Please respond.

In discussing this issue with another ex colleague, who ran for the ALP

at the last State Election in a safe Liberal Seat, he wrote and I quote “I think it is funny that everyone is supposed to keep working longer: but it is difficult to get a job over 40 and practically impossible to get a job if you are over 50.   One problem is, anyone can tell how old you are by looking at you, no questions are necessary, so age discrimination laws are ineffective.    It is a problem for the community as a whole, because as the population ages our work is actually required.” He has given up looking for work and is studying a PhD.

When I talk with others who are in a similar position, please tell me

what I can offer them by way of hope or enlightenment.

Yours Sincerely
withheld for reasons of privacy

AS the election cycle is approaching a response is received.

From: Albanese, Anthony (MP) [mailto:A.Albanese.MP@aph.gov.au]
Sent: Tuesday, 13 April 2010 4:35 PM
To: {withheld for reasons of privacy}
Subject: RE: Mature Aged Unemployed
Dear Mr {withheld for reasons of privacy},

Thank you for your emails of early March, concerning the challenges that mature age people face in finding employment. I apologise for the delay in responding.

I raised your concerns with my colleague, Senator Mark Arbib, the Minister for Employment Participation, who advised that on 1 February 2010, the Government announced the Productive Ageing Package ($43.3million over 5 years). The Package is designed to help mature age Australians remain engaged in the labour market and to encourage the transfer of their skills and experience to younger generations. From 1 July 2010, the Package will provide practical support to mature age Australians, including through access to free professional career advice and training to support job retention.

The Productive Ageing Package includes a Consultative Forum on Mature Age Participation. The Forum will provide Government with advice on practical solutions to address barriers to employment participation for mature age people, including negative employer and community attitudes; age-based discrimination; re-skilling and career transitions; suitability of training; and retaining the expertise of older workers.

The Forum includes representatives of seniors’ groups (National Seniors Australia, Council on the Ageing, Older People Speak Out), the Australian Council of Trade Unions, employer/industry groups, the National Employment Services Association, and other key stakeholders. The Commissioner responsible for Age Discrimination, Ms Elizabeth Broderick, is also a member of the Forum.

The Forum met for the first time on 18 February 2010. More information about the work of the Forum will be made available through the Government’s Jobwise website (www.jobwise.gov.au).

I assure you the Australian Government acknowledges the valuable contribution that mature age people make to the economy and to the community. The Government recognises that it can be difficult for mature age job seekers to find and maintain suitable employment and is committed to ensuring that the right services, training and opportunities are in place for mature age job seekers and workers.

Thank you for volunteering your considered views on these issues. I hope the information I have provided is of interest.

Yours sincerely,
Anthony Albanese MP
Member for Grayndler

—–Original Message—–
From: {withheld for reasons of privacy}
Sent: Wednesday, 8 September 2010 10:10 AM
To: Albanese, Anthony (MP)
Cc: wilkie.andrew@bigpond.com; robert.oakeshott.mp@aph.gov.au;
bob.katter.mp@aph.gov.au; Tony.Windsor.MP@aph.gov.au
Subject: RE: Mature Aged Unemployed (Marginalised Men)
Dear Sir,

May I start with congratulations to you and the entire labor government (and the independents) on the apparent outcome of our recent election. Prima facie it appears to be a good outcome for Australia.

May I add that I shook your hand on election day (even though you don’t know me) at Leichhardt Town Hall when you were speaking with your staffers.

This brings me to my recent 8 weeks employment with the AEC. It is the first decent work I have had in about 8 years, and is demonstrative of many things.

Since January 17, 2010 I have applied for well over 300 jobs, (maybe even now approaching 400 I try not to dwell too much on the negative) maybe about 1/3rd were in government positions (I have records of every job applied for), and until the recent start with AEC (where I started not with an interview but a short induction and trial) I had obtained only one interview from those applications. Sadly government budgets are such that as the election writ is returned in the next day or so, the entire itinerant work force of the AEC is dismissed.

When we hear about skill shortages and other spin, we simply don’t believe. I speak for many people with similar experience to myself, who are either unemployed or under-employed. Rational economic outcomes can only be more spin, always compromised by politics or private agenda.

Firstly and foremostly I am constituent of the federal division of Grayndler. I live in
{withheld for reasons of privacy}.

Further to a letter from Mark Arbib after our last correspondence, it culminates in null (nothing). I received 2 phone numbers, where quasi counsellors, offered very glib responses like “this phone call is it”, “change your approach”, “get professional appraisal of your resume”, “die your hair” (bovine excretia) and so on. Are people like me denied just a modicum of decency?

As our government, knuckles down to the task at hand for the next 3 years, this and a whole lot more need to be addressed. I would like answers to my issues about corruption at Macquarie University addressed, (previously referred to Julia Gillard in her capacity as DEEWR, soon to be referred to AUQA) and poker machines (previously referred to various state parliamentarians inluding Richard Greene and Lee Rhiannon and other independents).

I do not believe I have all the answers. I do believe we need to set our goals as tackling these more vexed issues. I truly believe that is the attitude of the independents and hopefully an invigorated government.

Any forum that is offered to me to can only be appreciated and embraced. I can and will travel to work or to attempt to really flesh out any element of those vexed issues. My experience with communications like this, is that they are truly dealt with by brikbats. Thank you for your ??? and best of luck.

I truly feel that I am a soldier of Australian democracy, who wants to be proud of our democracy and egalitarianism.

Yours Sincerely
{withheld for reasons of privacy}

—–Original Message—–
From: {withheld for reasons of privacy}
Sent: Wednesday, 7 September 2011 3:49 PM
To: A.Albanese.MP@aph.gov.au
Cc: Sussan.Ley.MP@aph.gov.au; senator.abetz@aph.gov.au
Subject: Mature aged Unemployment and the public service

I am constituent of Grayndler. My address is {withheld for reasons of privacy}. I have written several times before about the plight of the unemployed, particularly the mature aged unemployed. I note my e mail of September 8, 2010 remains unanswered. All previous correspondence is made available to Shadow Ministry if that assists.

This e mail directly addresses the jaundiced application by the Australian Public Service (APS) of “Merit Based Application Process”. The Federal Public Service requires you to address basic selection criteria. Typically they are;

  • ·     Achieves Results
  • ·     Supports Productive Working Relationships
  • ·     Displays Personal Drive and Integrity
  • ·     Communicates with Influence
  • ·     Supports Strategic Direction

When you refer to the APS “cracking the code” they say use recent and relevant examples using a STAR approach. (STAR is acronym for Situation, Task, Approach and Result). About the word recent they define that as 18 months to 2 years.

Today I received rejection e mails in respect of employment applications from Cancer Council Australia and National Industrial Chemicals Notification and Assessment Scheme (NICNAS). Each respectively refers me to Bill Northcote (02) 9357 9431 or Adrienne Adams (02) 8577 8891 (selection Chairperson) for feedback. I phoned Mr Northcote, and have E-mailed Ms Adams. After speaking with Mr Northcote I decided to write about this issue.

This is a problem where APS have skewed the concept of merit towards existing bureaucracy and against those with little or no knowledge of APS inner workings.

My problem is that after a long and distinguished career in finance I have not had regular employment since 1998. This is not about up skilling or re skilling, I am to graduate on September 27, where I am informed that the testamur is to include the words, “Honours – with Distinction”.

Mr Northcote said, amongst other things,”that those who did not strictly address the selection criterion were not considered.” In repartee he said “hey this is government”. I have strictly addressed the selection criterion but with great difficulty because of this concept of recent and relevant. I can make my Statement of Claims available in respect of each application if that assists.

For the sake of all of Australia and efficiency in Government this needs to be addressed. Importantly when Australia claims to have a skills shortage, and increased immigrant intake to address such issues, why is it near on impossible for me to get a job. In every application I attempt to express I would go to extraordinary lengths to get a start. I really don’t ask for much, simply a chance.

Recently I have been dwelling on a subject that I could write a thesis (doctorate) on. I feel it would be so simple to get things moving in respect of mature aged unemploment. I tiny funding within DEEWR or the appropriate place, could lead to efficiencies, within bureaucratic process to streamline and simplify. Actually upskilling the Public Service, and improving motivations. Addressing accountability and transparency. Yesterday I was attempting to deal with similar issues with the Department of Defence. I have many examples across various Government Departments.

I would like to start a dialogue or create change for the better. Your advice would be appreciated. If it assists I can be contacted on

{withheld for reasons of privacy}

About the low opinion polls of all government when such issues are only addressed just before elections that is telling. On first blush government is detached and self serving. If you care to re read Mr. Albanese’s response is it full of rhetoric. Simplistic and only addressing being re-elected. I could easily find just as many other examples elsewhere.

Why does such an issue not attract more real media coverage. The suffering of wild boars in the “pig dogging representing bloodsport” in and around Mackay’s bumper sugar plantations attracts more media interest since exposed yesterday. Are news recipients really the dopes they are taken for by media? The pig dogging expose includes photography of Independent Clover Moore shaking her head in disgust saying “It is just blood sport!”

Does there need to be greater tragedy or violence to attract media coverage? We can’t condone the mayhem in Damascus now, the havoc that is today Libya, or what occurred in the British riots last August. In Sydney the death of an 18 year old youth Thomas Kelly in Kings Cross, has finally drawn sufficient attention to the predatory behaviours of the liquor outlets only acting out of self interest, the half inebriated youths arriving at the Cross late, being patronized and so on. What will it take?

Another suicide of a senior citizen or a premature death of one afflicted without hope does not attract news coverage. Statistics are buried somewhere, try and find them.

There is much more correspondence that I could include, and I may do so in a Part II, with the authors permission. He has granted me permission to reproduce the above only on the basis that he is not further unduly embarrassed.

The author of these e mails has now called his local member Mr. Anthony Albanese and requested a personal appointment. He has asked my advice. Writing this expose out helps to condense my thoughts.

The 20,000 times $1,000 ($20million) promised in the last federal budget to hire workers over 50 will achieve nothing. It hardly covers the cost of workers compensation for hiring a person for 3 months. How is it any different to Mr. Albanese’s claim in April 2010 before the last election “the Government announced the Productive Ageing Package ($43.3million over 5 years)”.

How was appointing a Commissioner for Age Discrimination (former Senator Susan Ryan) to bolster the role formerly held by Ms Elizabeth Broderick (as set out in E mail of Mr. Albanese) a new initiative. Nothing has changed or likely to change. It is not a mainstream issue, does not attract sufficient public sympathy or awareness.

How about employing a small group of secret shoppers to expose some of the nonsense practices of employer groups including Australia’s totally inefficient and at times inept civil service?

Legislation is not generally efficient. There is simply no point. So too public forums rarely achieve much, it is about trying to change culture. There are many successful examples in recent history of successful attempts to change culture as well as unsuccessful campaigns. The answer lies in some type of micro economic reform. Right now I am still pondering. When I have concluded here I might just try and crystalise my thoughts in a series of question the government might want to dwell on to turn around the fortunes of the govrnment and the long term and mature aged unemployed (underemployed).

I have some time to consider this list, as my friend is unlikely to obtain his appointment with Mr. Albanese this side of Christmas if the responses to his e-mail are any example. Always good to be prepared all the same. With a federal election due round about next August he might get a response from Mr. Albanese maybe 3 months before.

Believing in sanity is indeed insanity.

see also:

http://en.wikipedia.org/wiki/Citizens_United_v._Federal_Election_Commission

________________________________

Click here to read more of Herman’s previous posts …

Herman …

EYE-BALL’s – ‘NONE of the ABOVE’ Campaign – The Consequence of Poor Political Leadership…

The-EYE-BALL-MovieZone
… The Consequence of Poor Political Leadership…
| EYE-BALL’s Australia Votes: “None of the Above” Campaign | 13th July 2012 |
EYE-BALL None of the AboveEYE-BALL None of the AboveThe World limps, mortally wounded after the financial shocks of the 2008-9 GFC. The World’s economy is on life support that can only come from continued Government stimulus programs and bailouts meant to help out the Banks that caused the GFC in the first place.

Citizens, Corporations, and Government’s are bleeding from river’s of ‘debt’ and an ocean of ‘corruption’.  Past and on-going measures taken by Legislators and put in place to shore up the Financial Markets have one purpose in mind – ‘save the Banks‘.   It’s a policy entrenched in the ways of the past – our Leaders still think ‘capitalism’ is the way of the future.

It is just plain wrong … wrong … wrong … and the problem is how does one convince the World they need to change their ways?

True ‘Capitalism” died many decades ago when Government and our elected Leaders sold out on behalf of the people.  Politicians became the front-men and ‘Ken and Barbie’ style sales merchants selling a business based on what we now call ‘Party Politics‘ and the commercialisation of Party policy for sale to the highest bidder with the biggest donation.

100 years ago the ideals of the Political Parties had moral intent and purpose – or that is what we read in history journals.  Their aim was to improve the quality of life for everybody on the planet, not just their own citizens, or their own kind.

In the immediate aftermath of WWII when humanitarian efforts were at their height – the very fabric and intent of what galvanised a World order against tyranny and Imperialism, now lays tattered, torn and faded away.   In the time since successive Administrations have forgotten purpose and the why early Democracy was formed to humanise a Global population.

In recent times Global Wars may not have been fought, but trade-wars are ongoing and impacting on Nations unable to help themselves.   These Wars are economic in nature and are designed to cripple a Nations ability to fund its programs – i.e. the Cold War victory to America came from the price of Oil being pushed down to $10 a barrel and the Russians lost their ‘cash-cow’ export revenues.  That political game forced the end to communism and the world believed it was a better place because of it.

Since then China has reversed the trade-war scenario and used it against America – pegging the Chinese currency to the US$ was the biggest political play in history in the last 60 years.

Returning to post WWII – Africa has been pillaged and raped beyond its own existence –  all in full sight of a so called caring world.  The Arab world has been ‘conned’ into providing the ‘black-gold’ so needed by industrilised Nations.  When it is gone – how will they survive apart from the mega wealth created by Kings and Dictators in those lands?

The ‘Cold War’, and ‘Trade-Wars’ may have not had statistical ‘war-dead’ or civilian casualties of war, but the global civilian body count as a result of the ‘trade-wars’ is still larger that all the military deaths in both World Wars and all the conflict Wars since.

During this period Governments have lost their way – a little over 45 years ago man set a far horizon goal – to land a man on the moon and the Yanks did it and the rest of the World marveled at their accomplishment.   What new far horizon has been undertaken for humanity on this planet in that time since?

Government’s of past era’s displayed integrity and had a moral compass.

America as a World leader has lost its way and is not alone.  Recent Leaders were self-serving egotists – Bush Jnr with his daddy’s wish to finish the War on Iraq he started in the early 90’s and a second term lame-duck President over the WMD fraud – Clinton also with his second term comatose by the ‘Monica Lewinsky’ blowjob in the Oval office and denial,  showed they were both men not worthy of such high office.

In 2001 and after 9/11 – a dark cloud descended upon humanity.  In its aftermath where America and the rest of the Western world practised self-interest, revenge, and an intent to teach others a lesson about attacking America blinded Western Leaders.

Australia was caught up in that when Howard accepted the ‘WMD’ lie perpetrated upon a global population looking for Leadership in the 9/11 aftermath.  The World turned to their Leaders and all that came back was a lie and a descent into a Political abyss that the World has never recovered from.

George Bush Jnr was not the start of the descent into weak and corrupt political times.  He was just a symbol of how far the moral compass of Leaders had turned from what was a righteous crusade started so long ago.

In recent decades political choices and decisions have not been made by the individual or based on their own private and individual moral beliefs – Politics has become a conference of opinions and vested interests groups all pressuring for their own agendas.

Clinton’s attempt to overthrow the Somalia Warlord was the humane thing to do – then why did he abandoned that cause?  It was because of the public opinion about military loss of life and it was too much for the political pollsters – policy driven by poll numbers is a dangerous road to travel yet that is where Democracy now stands.

The foundation of Democracy once based upon the belief that it represents Government of the people, for the people, and by the people, is now about who has the largest cheque book – Political Leadership for sale – going price about US$3 billion if the latest spend on the US Presidential race adds up right.

The business model for Political Leadership is about Party Politics – the scam is to offer bigger and shinier handouts to have people believe in a better option. It is not relevant at the time if it is a lie – it only becomes relevant if it can be proved to be a lie at the same time it is sold to the electorate – i.e. the $11 billion black hole in Abbott’s election promise’s in the 2010 election – proved after the Election to be a lie – Gillard’s promise of ‘no carbon tax under a Government I lead’, and what do we have, a Carbon Tax under a Gillard led Government.

Politicians lie and they do it so well – win Government by any means necessary – because once you are in power, then the promised land becomes your playground and you can spin it anyway you like to a lassoed media so eager to please for their own agenda’s.   Party Politics now comes before the good of the Nation and in that dulled spotlight of media spin – we all find it hard to see the sharks in the waters we are all left to swim with.

With Democracy’s hijack, so went out the capitalist ideals and in came the methods used to corrupt the whole political system.   The way of the World today is to get as rich as you can, anyway you can, and to can those who dare get in your way – and it all starts with the ‘faceless’ men behind the scenes of our Political Leaders and the Parties they represent.

The World has been dying this slow and agonising death for a long time, its been like a cancer eating away at the insides of Society and everybody pretended they were none the wiser.   They’ve all known – just as the electorate have known – nobody was prepared to call it for what it was – just like a patient who knows something is wrong but does not want to go to the doctor to have it confirmed.

All through this comatosed existence – the same people living in far off lands have continued fighting and dying against Warlords over basic needs like food and shelter.   The World now only looks on in mild concern – that concern being that they don’t want it on their doorstep – not the poverty, the children dying, or the murderous genocide, just so long as it stays ‘over there’.

Can anyone count the cost in terms of human life, family and loved ones lost, and all because Leaders of the World have given over responsibility to an underfunded and undermanned United Nations.   Governments have focused on their own needs and in doing so appeased any conscience drag by donating small GDP percentages to the UN to help.   What happened to the humanitarian instinct to help those who cannot help themselves?

The Australian Government has budgeted $370 million to host a G20 summit in 2014.  That’s almost $20 million a delegate and their entourage.  What aid could that $370 million provide – how many lives coud it save … $20 million a delegate – what the hell could they spend $20 million on per person in all good conscience.

The ongoing GFC event is not a natural occurrence – it was nurtured from man-made GREED, and yet more GREED.  It evolved from leadership mediocrity that in-bred more mediocrity and before we realised – the worst of the worst sat upon the dungheap of a political kingdom and played god.

The World is now more dangerous that at any time since WWII – danger from a tsunami of emotive anger all directed at Political Leadership and the perception that they are Government for the elite of society, and not for the people who need Government help the most.   It’s all about maintaining the quality of life for those who were and are living the best quality of lives. The concentration of wealth has always been a condensed and shrinking proportion of the worlds population. Poverty is the rising abyss and Government’s are at a loss to prevent its spread.

The World is undoubtedly headed towards an uncertain future – what do angry people do when a perfect storm forms?  The release valve has always been revolution. When things get to that type of situation – the value of life becomes unimportant for those within the struggle.   Personal sacrifice is the call to arms.   We’ve seen it in Egypt, Libya and Syria all in the last 12 months or so.

The value of any life should matter.   For all of man’s time on this earth, never has life been so cheap in far off distant lands,  who would have thought that the lack of food and water has been the reason why life is lost in this modern world.  The UN talks of humanity, of human aid, of warlords and conflicts where donated aid is the reason people die.  This is the ugly side the World order Political Leaders refuse to act upon.

The rawness that is the African poverty, the desperate plight of millions of people caught in War torn lands where children are stolen to wage war, you would think the World would care!   Yet Western Nations, their populations, and like their Leaders, only concern themselves with their own quality of life.

Past events in Greece and overnight in Spain – [See ABC Spain story here.] – and about to happen in other Eurozone Nations having to take austerity measures,  prove that this poverty disease is now spreading into Nations who 10 years ago were thought to be immuned to the poverty problem.   More and more are slipping below the poverty line, and having to find other ways to support themselves and family, many are learning how to and living lives off the proceeds of crime.

This is the most dangerous of times … when people begin to believe their life has no value,  even to themselves, then anarchy is only a doorstep away.

The demise of political will and morality can be traced back to the advent of Television – TV gave us unlimited entertainment, news, and advertising.   Prior to TV it was not all that important how a politician dressed, how he/she looked, and what their facial features looked like.  It was a time when ugly and awkward people could get elected.  TV and media changed all that.

Politicians began to watch themselves on TV as the News and Current Affairs programs broadcast speeches and Parliamentary proceedings. The Western World was suddenly able to see their Politicians live or on replay and the world of Politics changed.

Some 60 years later society demands that our leaders be youthful looking, they have dress style, and apply makeup to suit the mood and lighting before the cameras.  They are selling themselves as much as the policy they are about to give or debate.

This ‘glass-bottle’ existence is the same for everybody – one poor performance in front of a camera, or a discovered indiscretion can ruin a political career.  So of course they’re never going to expose themselves unless they control the environment and make sure all ‘land-mines’ have been removed.  We will only get to see the public image they want us to see of any of our Political Leaders – that has never changed.

This flows to vote record – never wanting to be seen as the unpopular standout against bad policy. It also galvanises the like minded into block factions within Party’s who will only change their vote in exchange for backroom deals that always have a monetary value for someone.

This is all done out in open and is commented on daily as the normal way democracy is carried out. The reality is that it’s no better than a Gangster meeting of Don’s sitting down to hash over the spoils and areas where they all have vested interests.

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If disenchanted Labour voters don’t want to vote for any other Party and I know how that feels at the moment – vote ‘None of the Above’ on the ballot and deny them your $2.50 vote reimbursement.   You should only vote for candidates you believe in – not the top of the ticket.   We have compulsory voting in this Nation – the ‘None of the Above’ campaign is about a fair choice to express your true want in who to vote for.

The Joint Standing Committee for Electoral Matters Submission for a “None of the Above” ballot box can be read by clicking the link below, (PDF file):

Submission_None of the above Campaign

It this campaign topic and vision interests you – please subscribe for updates via the RSS feed links below and E-Mail links provided in the right hand margin Admin section:

If you want to become an active supporter of the campaign ahead of the next Election due in the second half of 2013 – please get in touch via this E-Mail address:

  • Send E-Mail to the EYE-BALL – “None of the Above” campaign.

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Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.

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The EYE-BALL’s “None of the Above Campaign”

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