Capitalism and democratic choices are a distant memory in Australia

Remember how, back in the mists of time there used to be a clear choice for voters; a party of the free markets and less government spending versus a party representing the working class and unions?

Perhaps we’re looking back with rose tinted glasses and t’was always thus. Nonetheless, Australians were given a very clear glimpse of what lies ahead should the economy take more than a minor dip over the coming months and years; the federal government becomes lender of last resort to crap businesses.

No. Really.

Treasurer Josh Frydenberg and Small Business Minister Michaelia Cash will announce the small business funding policy on Wednesday, promoting the soon-to-be-established Australian Business Securitisation Fund as a way to overcome banks typically only lending to the self-employed when they pledge their personal home as collateral.

To summarise the announcement; “if the banks looked at your business and decided it was a poor bet and you didn’t have enough skin in the game, we’ve just decided the Australian taxpayer and their superannuation funds will lend you the money anyway“.

It’s very easy to be generous with other people’s money, isn’t it?

This is bound to end well.

The irony is that this policy wasn’t announced by either of the openly Socialist parties but by one of the two parties that historically claimed to be champions of free markets and minimal government intervention.

At a state level, similar disconnects have been shown between expressed and revealed preferences. Here’s a “free markets” politician bailing out rent-seeking taxi medallion speculators.

The $2bn fund to lend money to businesses judged by commercial lenders to be poor risks is an interesting development though, coming as it does so soon in to the worst housing crash in a generation, but particularly after this little legislative gem was snuck through onto the statute books with hardly any media coverage or explanation; insolvent banks can be rescued by confiscating deposits.

Bill’s Opinion

Will a “bail-in” of superannuation funds or bank deposits ever happen in Australia?

Unlikely, but not impossible. The risk isn’t zero.

There’s a great and often quoted dialogue in Hemmingway’s The Sun Also Rises;

‘How did you go bankrupt?’ Bill asked.

‘Two ways,’ Mike said. ‘Gradually and then suddenly.’

Perhaps this is the “gradually” part for Australian depositors. If so, it might be an idea to know how quickly you could act to not be caught out by the “suddenly“.

“Mental Slavery”

India’s current ruling party, the BJP, is almost the definition of a “broad church”, with moderates such as Prime Minister Modi but also complete loons and extremists such as the Hindu nationalists.

This is the sort of nonsense they tend to get up to when they’ve got half a chance; Shimla to be renamed Shyamala to end “mental slavery”.

This is the latest in a series of renaming activities that have been occurring since Shiv Sena (a really loony Hindu nationalist party, not amateurs at it like the BJP) renamed Bombay to Mumbai in 1995.

Some of these name changes have more historic justification than others.

The etymology for “Madras”, for example, referred to it as “black town” in the local language with “white town” reserved for the Europeans.

When Bombay was founded by the Portuguese, it was a collection of fishing huts. The reference back to some ancient temple to “Mumba Devi” is tenuous at best.

As for Calcutta being renamed Kolkata, I challenge anyone not paying extremely close attention to distinguish between the two pronunciations. That’s an expensive change of spelling.

Bill’s Opinion

71 years after Indian independence, what is meant by “mental slavery” is anyone’s guess. Are they suggesting that a name that most residents of Simla/Shyamala wouldn’t associate with the British still has some dangerous colonial issues? Given that the vast majority of Simla residents were born after the British had already left, this seems quite unlikely.

It’s comforting to note that the Indian government has solved all of the pressing higher priority issues facing the country already to be able to allocate any intellectual or more tangible resources to addressing this problem.

Finally, it’s going to be fun observing the inevitable debate about what to rename the country to.

No, seriously, “India” didn’t exist as a country prior to the East India Company’s foray from mercantilism into military expansion; “the Indies” and “India” were European nouns for swathes of territory far greater than the lands of the Deccan.

Most locals would have associated themselves to their local language, religion, ethnicity, region and ruling maharajah, rather than a supra-national identity.

A Bengali and a Keralan would not have recognised themselves as countrymen prior to the 1800s, as witnessed by the lack of support the southerners offered the easterners during the Mutiny of 1857.

The Indians can use whatever place names they want, of course, but using a colonial history as an excuse for driving a Hindu nationalist identity is an act of convenience not logic.

Pax Kiwi

The Gladiator bloke did much to perpetuate the cross-Tasman rivalry this week by suggesting that Australia and New Zealand should unite as a single country under the leadership of Jacinda Ahern, the Kiwi version of Justin Trudeau, except without testosterone (but I repeat myself);

At first blush, this looks like another case of an uniformed lefty Luvvie (again, I repeat myself) projecting their utopian world view on a reality that is incompatible.

But wait, there might be something in this combined Australasian Über Country…..

A casual reading of the Australian Constitution reveals the following clauses;

Australian Constitution, section 6: Definitions;

The Commonwealth shall mean the Commonwealth of Australia as established under this Act.

The States shall mean such of the colonies of New South Wales, New Zealand, Queensland, Tasmania, Victoria, Western Australia, and South Australia, including the northern territory of South Australia, as for the time being are parts of the Commonwealth, and such colonies or territories as may be admitted into or established by the Commonwealth as States; and each of such parts of the Commonwealth shall be called a State.

Curious. So, according to the Australian Constitution, New Zealand is already defined as a State of Australia.

Really? How do the Kiwis feel about this?

More importantly, what does it mean and what relevant precedents are there?

Well…. Western Australia was not an original member of the Commonwealth, joining 3 weeks after Federation following a state-wide referendum. Interestingly, the time lag between the west and east of Australia has since grown, with Perth now preparing fireworks to celebrate seeing in the Millennium next December 31st.

Interestingly, from my research, it would seem the process for WA to join the rest of Australia was a referendum; by voting “Yes”, the State was granted automatic membership in the newly-federated country. If any students of history can confirm this, I’d be grateful, but it would seem the national parliament didn’t have a subsequent vote to confirm/reject the application.

This has a significant implications for the citizens of New Zealand….

Bill’s Opinion

If New Zealand were to hold a referendum and the majority of Kiwis vote to join Australia, there isn’t a damn thing the Aussies can do to prevent them from joining the federation.

Why would they do this?

Let’s answer that question with another question; hey Kiwis, how would you like a heated pool in your backyards, a speedboat and a new German SUV….. and get the Aussies to pay for them?

Clauses 105 and 105a allow for the Commonwealth to take over States’ debts. So, rack up the credit cards, hold a vote and then ask the neighbours to pay the bill.

Lastly, Clause 25 is, erm, interesting….

“Something must be done”

And something, therefore, shall be done.

Some complete and utter idiot stuck pins into strawberries somewhere between the farm and the supermarkets in Australia a week or so ago.

Because the idiocy is contagious, there then followed a spate of copycat cases and other soft fruit was tampered with, presumably by other parties.

The culprits and their motivation have yet to be identified but significant police resources have been mobilised to apprehend them and throw the full force of the criminal law against them.

“Fair enough”, one might think, “a bad actor commits a crime that deliberately risks bodily harm of others. There’s definitely a law against that with a penalty to fit the crime. Let the police get on with their job and let justice be done”.

Except it’s never that simple in Australian politics.

No, in Australia when something bad happens at a state or federal level, a brave and decisive politician must rush to the nearest phone booth (increasingly harder to find these days), make a rapid change of clothes and emerge, Superman-esque, and announce plans to change or write new law.

And that’s precisely what This Month’s Prime Minister ™ has done;

Ten years in the clink isn’t enough disincentive to not tamper with people’s food, so we’ll make it 15 years.

This prompts just a couple of questions from curious minds such as ours;

1. How many cases of deliberate food contamination do we think an extra 5 years in jail will prevent? ie will those extra potential years of incarceration be a factor in the mind of a person who has decided to bring needles to work and deliberately stick them in to soft fruit?

2. Will the legislation go against Common Law precedent and be retrospective, or will the current culprits not be subject to the new penalties?

3. How long will it take for this legislative change to be made and will it be in time to be applied in the prosecution of the current culprits?

Bill’s Opinion

There are two ways of looking at this lunacy.

The first and most obvious way to view this is that it is pathetic virtue signalling that will have absolutely no effect, positive or negative, on the current spate of crimes. It’s an incredible piece of Dunning Krugerism by the government to think that, after 803 years of Common Law, suitable legislation doesn’t already exist to cover a situation of deliberate bodily harm.

But let’s ponder more on the situation; consider how much time and resources will be expended to plan this change of law, announce it to the press, have the legal team draft the new legislation, plan the parliamentary time to debate it, sign the legislation and communicate the change to the judiciary.

Now consider what that big parliamentary machine could be doing instead. It could be employed to create far more intrusive laws in areas that would actually impact the general population, ie, the people who wouldn’t stuff needles into fruit. Laws like a tax on energy production, or to force bakeries to bake cakes for same sex marriages, etc.

No, as daft as This Month’s Prime Minister’s idea is, it’s far better that he and his team are spending their time amending previously adequate laws rather than imposing their incompetency into other areas of public life.

Please, carry on!

On banana republics

Banana republic:

A small state that is politically unstable as a result of the domination of its economy by a single export controlled by foreign capital.

Australian voters were handed a new Prime Minister this month in yet another bloodless party coup.

That’s 8 in 11 years….

6 in 8 years….

5 in 5 years…

What on earth is going on?

Well, perhaps the first conclusion we can draw is that it is self-evident the office of Prime Minister can’t be very important to the national interest otherwise there’d be frantic debates about how greater stability might be achieved.

Any further conclusions will require more analysis. Hopefully what follows adds a new dimension of thinking to what currently passes as intelligent commentary in the Australian media.

The hypothesis we are putting forward today is that the revolving door on the Prime Minister’s office is a function of three factors in combination, two of which are systemic, the third is economic.

Reason One – Mandate Illusion

Australia is a member of a very exclusive but not particularly salubrious club; the group of nations with compulsory voting laws.

Here’s the global view (from Wiki);

Apart from those countries mainly being in the Southern Hemisphere, what else do they have in common?

To borrow an expression I can’t recall the source of, most have “green on their flag“. i.e. they are shitholes.

The list of countries that mandate voting by law is almost exclusively made up of places you’d think twice about visiting for a holiday, let alone considering emigrating to.

Why do countries such as Uruguay enforce laws to make people vote? Perhaps because the politicians are afraid of the result if the voters had a choice to stay away from the polls?

The result is a false mandate. 98% of Australians vote so the winning party convinces itself it has a mandate to govern.

Here’s an idea; hold a general election and announce that the law isn’t going to be enforced. Who believes more than 40% will be bothered to turn up and vote for a Prime Minister who is unlikely to last longer than 18 months before being rolled by their own party?

Reason Two – Voting Complexity

So, you’ve arrived at the polling booth, under the threat of a fine, what are your voting choices?

Here’s an example from an internet search;

Believe it or not, but this is a simple example. Some can be as wide as 2 pages of A4 in landscape.

You now have two options to complete the form; “above or below the line”.

Marking your choices “below the line” requires you to number at least 12 candidates in order of preference. Marking “above the line”, requires 6 choices.

What you are, in effect, doing by choosing the simpler option is outsourcing your secondary choices to the 6 candidates who will allocate these to whomever they’ve already made a deal with should they be elected.

Of course, nobody wants to hang around in a school hall on a weekend writing War and Peace on a voting form so 95% choose the outsourcing option.

For an example of what can happen with this complex system of preferential side deals, research the Australian Motoring Enthusiasts Party.

This is democracy, Jim, but not as we know it.

Reason Three – The Miracle Economy has Made Australians (and the Australian political class) Fat and Happy

There’s not been a recession in Australia since 1992. Well done Australia! Although some unkind commentators might suggest this stellar run of the economy might have more to do with the economic foresight of geological forces laying down iron ore under the Australian earth several million years ago than the careful and prudential management of modern politicians.

Regardless of the cause, this has produced marvellous levels of national and personal prosperity for the population. Many issues that in other countries would be the source of great public debate and contention have simply had money thrown at them as the solution in Australia.

The net result; there’s not much fundamentally wrong in Australia, people aren’t dying of hunger, unemployment is down to levels that can be explained by the IQ bell curve.

Politicians, therefore, feel no sense of urgency or need to concentrate on bigger issues other than their continued ability to use publicly-funded chauffeur-driven cars and expense overseas “research visits”.

Self-absorbed navel-gazing, in other words.

Bill’s Opinion

Australia’s political system is fundamentally dysfunctional whilst having the illusion of an engaged voting population.

To find a solution requires acceptance of the possibility that compulsory voting and a Byzantine voting form outsourced to politicians to complete are not signs of a healthy democracy and, in fact, can mask the symptoms of a disengaged population.

The political class are simply responding to the opportunity to avoid doing their job as one would expect in any other country. To accuse them of lethargy and venality is to misunderstand the nature of those who would seek office.

A banana republic indeed.

In which universe does this make sense?

Remember the Government boondoggle that is Australia’s National Broadband Network?

Not content with landing the taxpayer with at least twice the original bill, a likely never ending implementation and terrible customer service, the genius politicians are now going to fine the taxpayer for the poor customer service.

No, really they are.

Let’s just step you through the order of events of which this is the latest installment;

  1. A Prime Minister and Minister, whilst enjoying a business class flight at taxpayer expense, concocted a plan to deliver broadband to the nation and decided on the technology to achieve this.
  2. When costed, this personal branding exercise was estimated to total around $50bn… at taxpayer expense. A mitigation was offered that the project should make a profit so therefore not costing the taxpayer any money.
  3. The “profit” would be made from the subscribers of the service, i.e. the taxpayer.
  4. Through the usual Ministerial interference and large government project incompetence, the final bill will land at upwards of double the estimate, the project won’t make a profit and the people who the free market wouldn’t have serviced still won’t be serviced…. all underwritten at the taxpayer expense.
  5. In response to the delays and legendary poor customer service, the likely incoming government have decided that they will fine the NBN Co. (i.e. the taxpayer) and compensate the customers (i.e. taxpayers).

Bill’s Opinion

It isn’t in the interest of any major political party to stop, take a moment and think about the logical fallacies and insanity involved to get to this situation and realise the continuation of this insanity is a terrible outcome for the taxpayer.

The correct thing to do about the NBN Co. is to close it down, further deregulate the telecommunications’ industry to encourage more suppliers to the market, sell the NBN assets and use what little residual value is realised to pay for a tendered contract to provide high speed internet to the 3% of the population that aren’t living in a metropolitan area.

Oh, and tar and feather every politician who signed off on the original and subsequent NBN legislation.

Australia’s NBN; where taxpayer’s money goes to die

National Broadband Network chief executive Bill Morrow has warned there may never be a time when all Australians get the fastest available internet speeds, as such a project would cost “billions and billions” of dollars.

For those unaware of the Australian National Broadband Network, it is a national government initiative to deliver fibre optic internet to 90% of homes and business in the country and satellite or high speed wireless internet to the remainder.

No, really; that was the ambitious stated deliverable of the programme when it was launched in 2009 and it would only cost 43 billion dollars and take 8 years to complete.

So, imagine everyone’s surprise to learn, a year past the original scheduled completion date, NBN won’t actually deliver its objective and won’t be able to connect everyone.

In fact, the scope of the deliverable has atrophied whilst the cost has increased. Most dwellings won’t be receiving fibre to their home but that bleeding edge technology known as copper wire, the stuff Alexander Bell used to summon Mr. Watson over.

In addition, depending on which source you go to, the cost has blown out to nearly double the original estimate. Then there’s the lived experience of those consumers who have been connected; a Google search illustrates a potential systemic level of service delivery failures.

If only this fiscal disaster at the expense of the taxpayer could have been predicted in some way….

Bill’s Opinion

Australia’s NBN is a case study of why government spending is always, I repeat; ALWAYS inefficient and results in sub-optimal solutions. There is a list of mistakes as long as the cables they aren’t installing with this programme, but some stand outs include;

  1. The wrong “exam question” was asked. Instead of, “how will the government provide high speed connectivity to the entire country?“, the question should have been, “how does the government provide high speed connectivity to the 3% of the population that the telecommunications providers will find uneconomical to connect?
  2. The politicians behind the creation of the programme determined the solution not the problem statement by initially stating that the high speed connectivity would be via fibre optic cable. In the meantime, the global market in wireless technology has introduced 5G which is capable of speeds close to those selected by most NBN customers.
  3. Rather than deregulate the telecommunications market and local planning laws to allow multiple new telecommunications providers to compete for business and then oversee their services to ensure quality and value, the NBN programme opted for a central planning approach. The clear evidence around the globe of large, centrally-planned programmes is that they spiral out of control.

Government programmes take on a life of their own, regardless of the good intentions at the outset, and eventually become a siphon direct from the wallets of the taxpayers to the employees of the programme. The NBN is likely to be the case study of this in future.

We screwed up. You pay.

We shouldn’t be surprised by this news, after all, the modern response to a political scandal is always to make the taxpayer suffer and never for the responsible to resign or be fired;

The Northern Territory government’s response to a Royal Commission’s damning findings on juvenile criminal custody is to throw more money at the problem.

Perhaps most galling for those few suckers taxpayers who are net contributors in the Northern Territory is that this recent splurge of their cash is being pitched as an “investment”.

If that noun were truthful, perhaps it’s not unreasonable for those taxpayers to ask what the return was for previous such “investments” and whether or not they were receiving value for money?

Let’s examine the “investment” claim a little further, what will they get this time?

The money is going to buy;

  • Upgrades to two existing detention centres ($71.4m)
  • An IT system ($66.9m)
  • “Improvements” to detention operations ($22.9m)
  • “Coordination hubs” ($11.4m)
  • “Support for kinship and foster carers” ($5.4m)

I bet the NT taxpayers must be so excited, like a year full of Christmas and birthday mornings have arrived at once…..

Speaking of taxpayers, how many net contributing taxpayers (i.e. those who put in more than they receive back in benefits, childcare vouchers, medicare, etc.) are there?

Numbers are hard to ascertain but we could make an informed guess that it’s probably about 50% of the total population (supported by this article), so about 100,000 souls.

Bill’s Opinion

The press conference announcing the response to the Royal Commission’s findings could have been shortened considerably by reading out the following statement;

Good afternoon taxpayers of the Northern Territories.

The Royal Commission has found that this government and our predecessors have consistently failed to achieve our stated results, regardless of how much of your money we threw at the problem. Therefore, we will be removing another $200 each from your wallets and will be buying more stuff with it. We haven’t made any material changes to how we measure return on investment so please do not expect any change to the outcomes.

Nobody responsible for the past mistakes will lose their job or be subject to further investigation“.

If you are a Northern Territory taxpayer, you may want to consider the possibility that you are being farmed.

Sometimes it IS less about the argument than the person making it

The UK’s ex-Prime Minister, John Major, has lent his considerable gravitas (where’s the irony font when you need it?) to the punditry around the Brexit negotiations, urging the current Prime Minister to allow MPs a free vote to ratify the final negotiated position.

Around the same time, another ex-Prime Minister, Tony Blair, has suggested that the peace in Ireland was being placed at risk by the Brexit negotiations and their focus around the border arrangements between Northern Ireland (which is part of the UK, for those who live under a rock) and the Republic of Ireland.

This is, of course, sophistry of its purist form by both elder statesmen. Major, for example, is quite aware that the vast majority of MPs of all political hues were in favour and actively campaigned for the Remain option, despite 17 million of their constituents getting out and voting the opposite. How does he feel they will vote when offered a chance to critique the final Brexit negotiation?

Blair also is quite aware that hostilities are not going to reoccur because the UK leave the EU but because the IRA or split-off factions decide to commit violence. One absolutely does not have to follow the other, it’s a choice the erstwhile terrorist will have to make. It would be a very interesting choice too, in these post-911 days.  One suspects NORAID might not be such an efficient fundraiser these days and would most likely attract unwelcome attention from the Homeland Security agencies. Certainly, the first shots in “The Troubles 2 ™” won’t be fired by British or Irish troops or police.

So why the interventions at this stage in their retirements and who exactly are they trying to persuade?

Major, for example, left office as a laughing stock, with a series of failed and insipid policies (motorway traffic cones hotline, anyone?) behind him as he handed over to Blair with a record majority.

Blair’s “New Labour”government started well, aping the economic policies of the Conservatives, managed to broker a peace deal with the IRA (at what cost, we might still ask, however) but then threw his legacy away by blindly following George W Bush into Afghanistan and, more egregiously, Iraq.

The general public in the UK have not forgotten either. In addition, the core membership of the Conservative Party and the Labour Party hold Major and Blair in contempt respectively.

Let’s pause for a moment and consider the irony of two elder statesmen calling for the sovereignty of the UK Parliament to be maintained as paramount whilst being opposed to Brexit, a policy which will return much of the power previously handed over to the European Parliament. Deep down they must both understand that their positions have a logical inconsistency, surely?

So, the question remains, who exactly are they hoping to persuade?

Bill’s Opinion

It’s probably a different answer for both.

Major, for example, has no grassroots support from the public or his party’s membership, his party’s MPs are likely ambivalent about him at best (many weren’t adults during his premiership) and has little credible legacy to protect from his time in office. He seems to spend a lot of his retirement at the MCC watching cricket.

It’s most likely that Major is appealing directly to the Prime Minister to allow MPs to vote on the final deal because he hopes they will moderate the extent of a divorce he’s opposed to.

Blair similarly is the recipient of little public love and is openly criticised by his party’s membership and MPs. He has, however, amassed an incredible personal wealth since leaving office from various ventures and positions within the very institutions Brexit is terminating the UK’s relationship with.

It’s most likely that Blair is virtue signalling to his European colleagues that it will be business as usual for his wife and him following Brexit; i.e. he’s reapplying for his current job.

Mexican standoff… in Australia!

A week or so ago, I wrote the following;

And now for some speculation; this will blow up in the Australian Prime Minister’s face as it is highly-unlikely that this will be the final sexual dalliance to be or have been occurring at senior government levels. By writing his moralistic code of conduct, he’s just given a green light for these stories to emerge.

Today a journalist tacitly admitted there’s a battle underway between those who now believe they should be reporting matters sexual in the Australian Federal parliament and those who would keep the status quo code of silence;

Politicians (and men of public stature more generally) are fearful of what past misdeeds might be uncovered next.

Journalists are at internal war over what is in the public interest and what is not.

Note the subtle men of public stature dig there.

Unless all of the latent scandals being prepared for public consumption are about gay sex, presumably there’s a significant ratio of women involved in these rendevous cinq à sept, and not all of whom are Foreign Minister?

Yesterday a minister, Michaela Cash, made some unsubtle hints about two senior opposition MPs which she was then pressured into retracting. But, of course, the inferred allegation they were both adulterers is now out there permanently.

Shots have been fired, it will be interesting to see if the response is a return volley.

Bill’s Opinion

This is pure Game Theory being played out in public;

Journalists are contemplating whether or not they can claim a public interest angle to publishing details of politicians’ sexual dalliances.

Politicians are using parliamentary privilege to make allegations about their opponents.

As both groups have individuals break ranks and start letting the information flow into the public domain, there will be less reason for others to maintain their silence.

In other news, Australian popcorn futures have suddenly doubled in value.