The sudden and unexpected demise of Kleenmaid came as a shock to most people. This popular and well respected manufacturer of electrical goods was an icon and the brand name stood as a symbol of all that customers look for.
The failure serves notice that the safety of buying a known brand is no longer the guarantee that it once was.
There is no longer an enterprise that is simply too big to cease trading and call in the receivers - and if that happens any money already paid as a deposit on goods - and any warranties on goods already purchased will cease to have legal application.
That applies right across the whole spectrum of manufacturing, and that includes motor vehicles, the second biggest ticket item on the public's shopping list. These days a five year warranty is usual on cars and light trucks, but the problems being faced by General Motors gives an implication of what shaky ground underpins trading giants.
The day has come in which potential purchasers would do well to think long and hard before signing on the dotted line. Long warranties should be taken with a grain of salt, and under no circumstances should deposits be paid until the selected item is in the store and ready to be delivered.
We are in a recession and more company failures are to be expected.
The wise will protect themselves as much as possible by weighing in the risk factor - and proceeding with big ticket purchases only after eliminating the logical loss that could arise should undelivered goods be pre paid.
The old maxim of " cash on delivery " could be a wise purchase plan !
Monday, 13 April 2009
Sunday, 12 April 2009
The money trail !
The financial machinations of government are hard to understand by us poor buggers who are not accountants or denizens of the stockbroker set.
The state government is going to sell off our lotteries ! We always understood that the lotteries were a pot of gold delivering a steady money stream which financed things like our hospitals, the fire brigade and a whole heap of other government services.
We know that the state government is desperate for money, but surely if we sell the lotteries we only get a one off payment - and then that river of gold ceases ?
The only reason private buyers will pay money for the lottery franchise is if they can make huge profits from that gamble. Surely that means that we have reduced a steady profit and exchanged it for the short term solution to an immediate money problem ?
Selling off electricity can be understood. We need more generating capacity and that is an expense the government can not afford. A private buyer can hike electricity prices beyond what we would accept if done by the government and can therefore afford to expand the system - but there is no such gain by selling the lotteries.
After the lotteries - what comes next ?
It's a bit like pawning the family silver. One day the cupboard will be empty.
But then - this government will be out of office - and it will be someone else's problem !
Strange are the mental workings of those we elect to represent us !
The state government is going to sell off our lotteries ! We always understood that the lotteries were a pot of gold delivering a steady money stream which financed things like our hospitals, the fire brigade and a whole heap of other government services.
We know that the state government is desperate for money, but surely if we sell the lotteries we only get a one off payment - and then that river of gold ceases ?
The only reason private buyers will pay money for the lottery franchise is if they can make huge profits from that gamble. Surely that means that we have reduced a steady profit and exchanged it for the short term solution to an immediate money problem ?
Selling off electricity can be understood. We need more generating capacity and that is an expense the government can not afford. A private buyer can hike electricity prices beyond what we would accept if done by the government and can therefore afford to expand the system - but there is no such gain by selling the lotteries.
After the lotteries - what comes next ?
It's a bit like pawning the family silver. One day the cupboard will be empty.
But then - this government will be out of office - and it will be someone else's problem !
Strange are the mental workings of those we elect to represent us !
Saturday, 11 April 2009
Paradise lost !
Fiji was a popular holiday destination for Australians - but today visitors go there at their peril !
Following a military coup led by Commodore Voreqe Bainimarama many months ago, the Fiji court of Appeal ruled that his administration was illegal. Immediately the President of Fiji, Ratu Josefa Iloilo dissolved the nation's constitution, appointed himself head of state - and sacked all judges and introduced " a new legal order ".
It is proposed that Fiji will face an election in 2014 to return to democracy, but Bainimarama has made similar promises before - and reneged on all of them.
Basically, Fiji is now a military dictatorship and joins such similar countries as Burma and North Korea. The rule of law has vanished - and been replaced by the law of the gun in the hands of a dictator.
The reason for unrest is not hard to find. When the British arrived over two centuries ago they imposed a colonial regime. They saw a commercial opportunity to establish sugar as a crop - and imported workers from colonial India.
Today - the mix of people of Indian origin and original Fijians is about equal and the Fijian people bitterly resent Indians being elected to parliament. There is a strong movement to reserve Fiji for the Fijian people.
What happens next is a witch's cauldron of possibilities !
Fiji will be strongly censured and possibly expelled from the Commonwealth of Nations - and punished by the United Nations for breaking with democracy.
Depending on how desperate the junta ruling it becomes, it could evolve into a tax haven, just as other tax havens are starting to disappear, or it could develop into a narco state !
It could become susceptible to overtures from terrorist groups such as al Qaeda to allow training camps and facilities on it's territory in exchange for protection - and money !
It is likely that the treatment of it's Indian population will become harsh and more extreme with the perception that they will become second class citizens. How this would be viewed by India - their country of origin is an enigma.
India is a fast growing world power with a formidable navy. Intervention by way of invasion would not be out of the question, and if that happened the spectre of annexation could be an issue.
The future for Fiji appears traumatic and once again it is a case of the man who commands the military controlling the people by the rule of the gun. The only thing that is certain is that as a paradise for those seeking a holiday in the sun Fiji is now a place of uncertain safety.
Sadly, tourism was it's main economic base. Bainimarama shot himself in the foot with his coup - and it looks like he is taking the country on a trip down misery road as a result !
Following a military coup led by Commodore Voreqe Bainimarama many months ago, the Fiji court of Appeal ruled that his administration was illegal. Immediately the President of Fiji, Ratu Josefa Iloilo dissolved the nation's constitution, appointed himself head of state - and sacked all judges and introduced " a new legal order ".
It is proposed that Fiji will face an election in 2014 to return to democracy, but Bainimarama has made similar promises before - and reneged on all of them.
Basically, Fiji is now a military dictatorship and joins such similar countries as Burma and North Korea. The rule of law has vanished - and been replaced by the law of the gun in the hands of a dictator.
The reason for unrest is not hard to find. When the British arrived over two centuries ago they imposed a colonial regime. They saw a commercial opportunity to establish sugar as a crop - and imported workers from colonial India.
Today - the mix of people of Indian origin and original Fijians is about equal and the Fijian people bitterly resent Indians being elected to parliament. There is a strong movement to reserve Fiji for the Fijian people.
What happens next is a witch's cauldron of possibilities !
Fiji will be strongly censured and possibly expelled from the Commonwealth of Nations - and punished by the United Nations for breaking with democracy.
Depending on how desperate the junta ruling it becomes, it could evolve into a tax haven, just as other tax havens are starting to disappear, or it could develop into a narco state !
It could become susceptible to overtures from terrorist groups such as al Qaeda to allow training camps and facilities on it's territory in exchange for protection - and money !
It is likely that the treatment of it's Indian population will become harsh and more extreme with the perception that they will become second class citizens. How this would be viewed by India - their country of origin is an enigma.
India is a fast growing world power with a formidable navy. Intervention by way of invasion would not be out of the question, and if that happened the spectre of annexation could be an issue.
The future for Fiji appears traumatic and once again it is a case of the man who commands the military controlling the people by the rule of the gun. The only thing that is certain is that as a paradise for those seeking a holiday in the sun Fiji is now a place of uncertain safety.
Sadly, tourism was it's main economic base. Bainimarama shot himself in the foot with his coup - and it looks like he is taking the country on a trip down misery road as a result !
Friday, 10 April 2009
Unhappy Easter !
In the next four days quite a lot of people are going to have a thoroughly unhappy Easter !
Some are going to be pulled over by the police and some are going to be snapped by speed cameras for exceeding the speed limit by a tiny degree - and all of them will face the loss of half the points necessary to retain a driver's license !
Those who already have demerit points will probably have their license cancelled, and with it will go their means of getting to work - and in some cases - the loss of their job because it requires a driving license to be viable.
The state government agrees that it has been too heavy handed in fining drivers three demerit points in normal times for slightly exceeding the speed limit - and doubling that impost during holiday periods - and it has set in motion the means of reducing the points loss from three to one.
That decision was made a month ago - but it will not come into force for another five months because it takes six months for the bureaucracy to creak into action and do the necessary paperwork.
This is a perfect example of the sloth that passes for government. All that it would take is for the government to make an announcement that tells the police and the magistrates that a single loss of a point will now apply for minor speeding offences.
As a result, all such cases would be put on hold and not proceed through the courts until such time as the paper pushers get their act together - and put the necessary legislation in place.
We also have a grave injustice present in the system that needs correction. Should a motorist fight a speeding charge and win - the fine then does not apply and no conviction is recorded - but the loss of those demerit points still stands !
It would be similar to a person being cleared of a murder charge by a court - but having the prison system go ahead with a hanging anyway !
This Easter the justice system is going to hand out penalties that the government agrees are unjust and grossly unfair. As a result, some people are going to fall foul of license loss - and further down the track some will get a double whammy by being caught driving while unlicensed - because they have no other option if they want to earn a living.
And all this simply because the people who run this state are incapable of making things happen without half a years notice !
Some could say that it's " a helluva way to run a railroad " - but then have a second though and shudder - because they also do run a railroad !
Some are going to be pulled over by the police and some are going to be snapped by speed cameras for exceeding the speed limit by a tiny degree - and all of them will face the loss of half the points necessary to retain a driver's license !
Those who already have demerit points will probably have their license cancelled, and with it will go their means of getting to work - and in some cases - the loss of their job because it requires a driving license to be viable.
The state government agrees that it has been too heavy handed in fining drivers three demerit points in normal times for slightly exceeding the speed limit - and doubling that impost during holiday periods - and it has set in motion the means of reducing the points loss from three to one.
That decision was made a month ago - but it will not come into force for another five months because it takes six months for the bureaucracy to creak into action and do the necessary paperwork.
This is a perfect example of the sloth that passes for government. All that it would take is for the government to make an announcement that tells the police and the magistrates that a single loss of a point will now apply for minor speeding offences.
As a result, all such cases would be put on hold and not proceed through the courts until such time as the paper pushers get their act together - and put the necessary legislation in place.
We also have a grave injustice present in the system that needs correction. Should a motorist fight a speeding charge and win - the fine then does not apply and no conviction is recorded - but the loss of those demerit points still stands !
It would be similar to a person being cleared of a murder charge by a court - but having the prison system go ahead with a hanging anyway !
This Easter the justice system is going to hand out penalties that the government agrees are unjust and grossly unfair. As a result, some people are going to fall foul of license loss - and further down the track some will get a double whammy by being caught driving while unlicensed - because they have no other option if they want to earn a living.
And all this simply because the people who run this state are incapable of making things happen without half a years notice !
Some could say that it's " a helluva way to run a railroad " - but then have a second though and shudder - because they also do run a railroad !
Thursday, 9 April 2009
The " Broadband " decision !
The provision of a high speed Broadband service across Australia will not go to tender. Instead - the Federal government will lead a consortium of private investors and hold a 51% stake in this $ 43 billion undertaking.
For over a decade Broadband plans have not progressed because of Telstra. The original idea was to implement fibre optic cable to the node - meaning that this form would terminate at telephone exchanges and be carried from there to homes and businesses by the existing copper cable network - owned by Telstra.
Telstra played hardball. It refused access to this copper cable system - unless the government agreed to it's own terms, which would have placed a Telstra strangehold on access and pricing - and excluded meaningful competition.
The government bit the bullet and has now decided to take fibre optic cable all the way to homes and businesses - bypassing Telstra's copper cable and making it obsolete. As a result, the way will be clear for telephone companies to provide a direct and better phone service in this country via Broadband.
The loser is Telstra. It's prime asset just turned into a liability and it looks like being trampled into the ground by a stampede of competitors. Clearly - a plan of brinksmanship to emerge in control of Broadband has backfired - and the company lost the pot of gold in the middle of the jackpot table !
But - this is politics !
A lot of things can happen in the months ahead. Telstra will soon have a new CEO and it's shareholders must be angry at the disaster that has overtaken their investment. There is a very good chance that it will grovel and come whining back to the government - pleading to agree to any term the government chooses to offer and at any price that will allow it's copper cable to be used.
The government may change tack and thus reduce costs by returning to a " to the node " strategy.
At least the stranglehold is broken - and it is vital that Australia get high speed Broadband so that we can not only compete - but move far ahead of the rest of the world.
It is not without commercial danger. At the moment optic cable is a clear winner, but we should remember that several decades ago that copper cable was the only way to run a phone service - and now it is obsolete.
Mobile phones and wireless access are making giant strides - and thinking people need to keep their eye on the ball and project their thoughts into the future.
An interesting scenario to ponder ! What innovation is taking shape in a mind somewhere that will provide the successor to the Internet ?
For over a decade Broadband plans have not progressed because of Telstra. The original idea was to implement fibre optic cable to the node - meaning that this form would terminate at telephone exchanges and be carried from there to homes and businesses by the existing copper cable network - owned by Telstra.
Telstra played hardball. It refused access to this copper cable system - unless the government agreed to it's own terms, which would have placed a Telstra strangehold on access and pricing - and excluded meaningful competition.
The government bit the bullet and has now decided to take fibre optic cable all the way to homes and businesses - bypassing Telstra's copper cable and making it obsolete. As a result, the way will be clear for telephone companies to provide a direct and better phone service in this country via Broadband.
The loser is Telstra. It's prime asset just turned into a liability and it looks like being trampled into the ground by a stampede of competitors. Clearly - a plan of brinksmanship to emerge in control of Broadband has backfired - and the company lost the pot of gold in the middle of the jackpot table !
But - this is politics !
A lot of things can happen in the months ahead. Telstra will soon have a new CEO and it's shareholders must be angry at the disaster that has overtaken their investment. There is a very good chance that it will grovel and come whining back to the government - pleading to agree to any term the government chooses to offer and at any price that will allow it's copper cable to be used.
The government may change tack and thus reduce costs by returning to a " to the node " strategy.
At least the stranglehold is broken - and it is vital that Australia get high speed Broadband so that we can not only compete - but move far ahead of the rest of the world.
It is not without commercial danger. At the moment optic cable is a clear winner, but we should remember that several decades ago that copper cable was the only way to run a phone service - and now it is obsolete.
Mobile phones and wireless access are making giant strides - and thinking people need to keep their eye on the ball and project their thoughts into the future.
An interesting scenario to ponder ! What innovation is taking shape in a mind somewhere that will provide the successor to the Internet ?
Wednesday, 8 April 2009
No win situation.
The Reserve bank has lowered official interest rates to three percent. Those hoping for a drop in mortgage rates will be disappointed. One bank has refused any change - another has agreed to a partial drop - and the other two are " considering their position ".
There is another side to interest rates. The return our investments bring and this is critically important to self funded retirees.
There is a huge pool of people who do not draw an aged pension - and an even bigger pool who draw a part pension because they made provision for their retirement. The drop in interest rates will further erode the dividends they live on - and that will have dire consequences for welfare payments.
Getting a pension depends on two things - the value of the assets you have - excluding the family home - and the amount of income you receive from those assets. A sliding scale of values either bars you from any pension - or entitles you to a part pension.
Once income drops because of lower interest rates the self funded find themselves dipping into capital. As capital dwindles more and more become eligible for a part pension - and those on a part pension move closer to a full pension.
And so the boomerang comes full circle !
To fund those additional pensions the public purse needs more money - and the only source of money is an increase in taxation across the whole tax spectrum.
At the same time, government policy would have no option than to slow warranted pension increases - and subject pensioners to a lower standard of living.
We certainly need to provide relief for mortgage holders, but we should also be fully aware that there is a flow on effect from cuts in interest rates - and eventually that will affect every man, woman and child in this country.
There is another side to interest rates. The return our investments bring and this is critically important to self funded retirees.
There is a huge pool of people who do not draw an aged pension - and an even bigger pool who draw a part pension because they made provision for their retirement. The drop in interest rates will further erode the dividends they live on - and that will have dire consequences for welfare payments.
Getting a pension depends on two things - the value of the assets you have - excluding the family home - and the amount of income you receive from those assets. A sliding scale of values either bars you from any pension - or entitles you to a part pension.
Once income drops because of lower interest rates the self funded find themselves dipping into capital. As capital dwindles more and more become eligible for a part pension - and those on a part pension move closer to a full pension.
And so the boomerang comes full circle !
To fund those additional pensions the public purse needs more money - and the only source of money is an increase in taxation across the whole tax spectrum.
At the same time, government policy would have no option than to slow warranted pension increases - and subject pensioners to a lower standard of living.
We certainly need to provide relief for mortgage holders, but we should also be fully aware that there is a flow on effect from cuts in interest rates - and eventually that will affect every man, woman and child in this country.
Interest rates can be a mixed blessing !
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