The negotiations over distributing the $ 42 billion stimulus package bear a strong resemblance to carrion birds fighting over road kill !
The Liberal/National party rejects the scheme outright on the grounds that it is too much - too soon, and will leave the nation with an unsustainable debt.
Deadlock in the Senate - with the bill's passage in the hands of the Greens and the independents.
The Greens have five Senators, plus Family First Steve Fielding and South Australian independent Nick Xenophon.
The Greens caved in first, bought off for a paltry few million to construct bicycle paths. Fielding also got his " pot of gold ", but Xenophon demanded big money for the restoration of the Murray/Darling river system - and the government baulked. Xenophon held firm - and the bill was defeated.
Panic in government ranks. A hasty session of the lower house and the bill was back in the Senate - and this time Xenophon got double the original offer - and the bill passed into law.
Now the feeding on road kill progresses. The big money to be spent on restoration projects like refurbishing primary schools will be handled by the state governments, and politicians of both persuasions will have their hands in the process of calling tenders and distributing the money.
It is simply beyond the capacity of the political mind to see the big picture and act like statesmen and stateswomen. That is the nature of politics.
Hopefully this huge experiment with the debt to be passed on to future generations will stave off an expected surge in unemployment - and leave the country far better off with improved infrastructure.
If it degenerates into " pork " that blows out costs and diminishes the benefits then the future of Australia will have been dealt a mortal blow.
The omens are not good - considering the spectacle of those holding the balance of power ignoring the greater need and squabbling to obtain benefits for their own political area in exchange for the political power they were able to wield.
It simply reinforces the stereotype image of all politicians as birds of prey !
Saturday, 14 February 2009
Friday, 13 February 2009
Insurance premiums.
There is a certain inevitability about the coming rise in insurance premiums for home and contents cover.
The Victorian and South Australian fires will cost many millions of dollars, but this cost will be dwarfed by the settlements for the floods in Queensland.
In property loss Victoria will need insurance compensation for well over a thousand homes, a huge number of motor vehicles and stock and infrastructure associated with four hundred and fifty thousand hectares of burnt out farmland.
Two thirds of Queensland went under water in one of the greatest floods ever recorded, and that means flood damage to homes running into the hundreds of thousands, spread from the coast inland - and including many areas not previously known to flood.
Not many homes were actually destroyed, but the cost of replacing the contents damaged by two metres of water will be enormous. Consider what a day or so of muddy water in the average home will do to the contents. Basically, all carpets, furniture, electricals and Gyprock wall linings will need to be dumped - and replaced. Cars that have been inundated may be restored, but at a considerable cost.
Not all of this cost will be borne by local insurance companies. Major disasters such as this are spread by way of " reinsurance " - whereby the risk is contained by local insurance companies taking out their own insurance with overseas companies and thus spreading the risk on a world wide basis.
Despite this, February's trials by fire and flood will lower insurance company profits, cost them a mint of money - and surely result in a premium hike.
It couldn't come at a worse time. We are heading into a recession and many people are on the cusp of losing their jobs - and one of the first things that happen when money is short is a reduction in discretionary spending.
Even in relatively good times some people take the risk of going without home and contents insurance. We can expect a surge in lapsed insurance when the premiums fall due this year, and that means that when the next disaster happens a lot more people will have to rely on charity to survive.
This is one area where the government could help. Insurance premiums are bloated with add on costs such as the Goods and Services Tax ( GST ) and hefty fire brigade levies.
Basically, the people who insure are subsidizing those that don't - and a fairer distribution of risk would be for the government to waive the GST on insurance premiums - and accept the costs of providing the services of the fire brigades.
It would be a worthwhile inclusion in the proposed $ 42 billion stimulus package !
The Victorian and South Australian fires will cost many millions of dollars, but this cost will be dwarfed by the settlements for the floods in Queensland.
In property loss Victoria will need insurance compensation for well over a thousand homes, a huge number of motor vehicles and stock and infrastructure associated with four hundred and fifty thousand hectares of burnt out farmland.
Two thirds of Queensland went under water in one of the greatest floods ever recorded, and that means flood damage to homes running into the hundreds of thousands, spread from the coast inland - and including many areas not previously known to flood.
Not many homes were actually destroyed, but the cost of replacing the contents damaged by two metres of water will be enormous. Consider what a day or so of muddy water in the average home will do to the contents. Basically, all carpets, furniture, electricals and Gyprock wall linings will need to be dumped - and replaced. Cars that have been inundated may be restored, but at a considerable cost.
Not all of this cost will be borne by local insurance companies. Major disasters such as this are spread by way of " reinsurance " - whereby the risk is contained by local insurance companies taking out their own insurance with overseas companies and thus spreading the risk on a world wide basis.
Despite this, February's trials by fire and flood will lower insurance company profits, cost them a mint of money - and surely result in a premium hike.
It couldn't come at a worse time. We are heading into a recession and many people are on the cusp of losing their jobs - and one of the first things that happen when money is short is a reduction in discretionary spending.
Even in relatively good times some people take the risk of going without home and contents insurance. We can expect a surge in lapsed insurance when the premiums fall due this year, and that means that when the next disaster happens a lot more people will have to rely on charity to survive.
This is one area where the government could help. Insurance premiums are bloated with add on costs such as the Goods and Services Tax ( GST ) and hefty fire brigade levies.
Basically, the people who insure are subsidizing those that don't - and a fairer distribution of risk would be for the government to waive the GST on insurance premiums - and accept the costs of providing the services of the fire brigades.
It would be a worthwhile inclusion in the proposed $ 42 billion stimulus package !
Thursday, 12 February 2009
Protectionism !
The one sure way to escalate this recession into a full blown depression is for countries to retreat into the fortress of protectionism !
That is exactly what happened in 1929. Government's rushed through laws intended to protect their industries - and therefore their jobs. It quickly developed into a tit for tat race that closed down international trade - and left each country with unsold and unwanted goods - and millions unemployed.
The concept certainly has appeal - and it is rearing it's ugly head both here and in America !
The Electrical Trade Union of Australia is calling for Kevin Rudd to include a " Buy Australian " clause in the proposed $ 42 billion stimulus package battling it's way through parliament.
The American steel industry asked Barak Obama to ban foreign steel from the the infrastructure renewal component of his national stimulus bill.
To many people that concept makes sense. What is the use of spending money to keep jobs functional if the material used is from a foreign country and the local industry is shedding jobs because of lack of orders ?
The sticking point is committing " buy local " to law. The moment that is done we have fired the first shot in a trade war.
There will be a natural tendency to use local products in tough times, but the deciding factor will be price. If competitor's products are banned the local industry has no incentive to keep it's prices reasonable.
Governments must be vigilant to ensure foreign goods are not dumped here but local suppliers must be just as competitive as in good times. Open competition is the great leveler - and the sure way to disaster is to close the door to competitive trade.
America rejected the idea of only allowing American made steel to be used in it's stimulus package - and we need to be equally dismissive of protectionism !
If not - the lesson of 1929 is about to be repeated !
That is exactly what happened in 1929. Government's rushed through laws intended to protect their industries - and therefore their jobs. It quickly developed into a tit for tat race that closed down international trade - and left each country with unsold and unwanted goods - and millions unemployed.
The concept certainly has appeal - and it is rearing it's ugly head both here and in America !
The Electrical Trade Union of Australia is calling for Kevin Rudd to include a " Buy Australian " clause in the proposed $ 42 billion stimulus package battling it's way through parliament.
The American steel industry asked Barak Obama to ban foreign steel from the the infrastructure renewal component of his national stimulus bill.
To many people that concept makes sense. What is the use of spending money to keep jobs functional if the material used is from a foreign country and the local industry is shedding jobs because of lack of orders ?
The sticking point is committing " buy local " to law. The moment that is done we have fired the first shot in a trade war.
There will be a natural tendency to use local products in tough times, but the deciding factor will be price. If competitor's products are banned the local industry has no incentive to keep it's prices reasonable.
Governments must be vigilant to ensure foreign goods are not dumped here but local suppliers must be just as competitive as in good times. Open competition is the great leveler - and the sure way to disaster is to close the door to competitive trade.
America rejected the idea of only allowing American made steel to be used in it's stimulus package - and we need to be equally dismissive of protectionism !
If not - the lesson of 1929 is about to be repeated !
Wednesday, 11 February 2009
Business as usual.
A lot of people are having doubts about Barak Obama's recovery plan in the US - just as some wonder if Kevin Rudd's forty two billion dollar handout will bring a permanent answer to this recession.
A worrying sign is the attitude of the big American banks and finance houses. They are the very people who caused this problem with their greed and doubtful ethics, and now they have been bailed out with public money they are heading right back into the same practices - and rewarding executives who should have been fired with huge bonuses.
The danger is that we could see a similar outcome to the ten billion giveaway to pensioners and families that Rudd conducted last December 8.
There was a jump in pre-Christmas retail sales and this saved the jobs of huge numbers of employees - and then retail feel off a cliff !
This new incentive is a mixture of giveaway and money for projects. Work on projects such as the refurbishing of schools will return a benefit and work will be extended over a period of time - but when the money runs out and the work finishes - will we return to where we are now ?
The gamble is that this injection of money will kick start the economy, the banks will resume meaningful lending, people will have jobs and be able to pay their mortgages - and the economy will gain strength and return to health.
If it doesn't we will have imposed a crushing debt for our children and grandchildren to repay - and all we will have achieved is to delay the inevitable !
If nothing will stave off a depression then we would be wise to tackle it head on - take the pain that an army of people out of work will suffer and let natural forces restructure the economy and allow a healthier system to emerge.
Tinkering with an ageing and corrupt economy is only going to perpetuate the cause of this crash - and the actions of the Greens and independent Senators in pushing their political barrows as a bribe to passing legislation is part of that decay.
Maybe now would be a good time for all sections of politics to meet in goodwill and put together a plan to get us out of this mess.
The wisdom of many is preferable to action courses dictated by political dogma !
A worrying sign is the attitude of the big American banks and finance houses. They are the very people who caused this problem with their greed and doubtful ethics, and now they have been bailed out with public money they are heading right back into the same practices - and rewarding executives who should have been fired with huge bonuses.
The danger is that we could see a similar outcome to the ten billion giveaway to pensioners and families that Rudd conducted last December 8.
There was a jump in pre-Christmas retail sales and this saved the jobs of huge numbers of employees - and then retail feel off a cliff !
This new incentive is a mixture of giveaway and money for projects. Work on projects such as the refurbishing of schools will return a benefit and work will be extended over a period of time - but when the money runs out and the work finishes - will we return to where we are now ?
The gamble is that this injection of money will kick start the economy, the banks will resume meaningful lending, people will have jobs and be able to pay their mortgages - and the economy will gain strength and return to health.
If it doesn't we will have imposed a crushing debt for our children and grandchildren to repay - and all we will have achieved is to delay the inevitable !
If nothing will stave off a depression then we would be wise to tackle it head on - take the pain that an army of people out of work will suffer and let natural forces restructure the economy and allow a healthier system to emerge.
Tinkering with an ageing and corrupt economy is only going to perpetuate the cause of this crash - and the actions of the Greens and independent Senators in pushing their political barrows as a bribe to passing legislation is part of that decay.
Maybe now would be a good time for all sections of politics to meet in goodwill and put together a plan to get us out of this mess.
The wisdom of many is preferable to action courses dictated by political dogma !
Tuesday, 10 February 2009
A lesson to be learned.
When Cyclone Tracy ravaged Darwin on Christmas day, 1974 it was one of Australia's major national disasters. Seventy one citizens died and over eighty percent of homes were destroyed. As a result the city was evacuated and a commission of enquiry held to plan rebuilding with the aim of ensuring that this level of destruction could never happen again.
The tragedy that struck Victoria in the past few days raises a similar set of questions. Summer bushfires are a natural phenomenon of this continent and in particular topography seems to ensure that Victoria and South Australia are the focus of extremely intense fires.
In Darwin a new building code ensured houses were fitted with upgraded bracing to withstand cyclonic winds and a host of further detail regarding materials used and site improvements made for highly improved homes capable of withstanding the extremes of nature.
A similar enquiry is needed in the fire ravaged areas of Victoria and South Australia before the first rebuilding brick is laid. Both states have had previous destructive fires - and now is the opportunity to have a plan in place to ensure that the fires that will eventually occur in the future do not create the death and destruction we have just witnessed.
Unfortunately this will mean the loss of some civil liberties. Some sites may be just too dangerous to be considered for rebuilding. House designs may not please everyone but the factors that make them fire resistant are more important than aesthetics.
It may be that villages that have been destroyed should not be rebuilt on that site. If the topography surrounding them creates a wind tunnel effect to concentrate a fire storm then maybe the land should be resumed, and owners compensated by free land paid for by the government in a less dangerous location.
It is important that this opportunity be used to try and minimise future death and destruction by fire. We did it successfully in Darwin after 1974. Now is the time for both state government's to act - with full backing by the Federal government.
No rebuilding should be permitted until that plan is in place !
The tragedy that struck Victoria in the past few days raises a similar set of questions. Summer bushfires are a natural phenomenon of this continent and in particular topography seems to ensure that Victoria and South Australia are the focus of extremely intense fires.
In Darwin a new building code ensured houses were fitted with upgraded bracing to withstand cyclonic winds and a host of further detail regarding materials used and site improvements made for highly improved homes capable of withstanding the extremes of nature.
A similar enquiry is needed in the fire ravaged areas of Victoria and South Australia before the first rebuilding brick is laid. Both states have had previous destructive fires - and now is the opportunity to have a plan in place to ensure that the fires that will eventually occur in the future do not create the death and destruction we have just witnessed.
Unfortunately this will mean the loss of some civil liberties. Some sites may be just too dangerous to be considered for rebuilding. House designs may not please everyone but the factors that make them fire resistant are more important than aesthetics.
It may be that villages that have been destroyed should not be rebuilt on that site. If the topography surrounding them creates a wind tunnel effect to concentrate a fire storm then maybe the land should be resumed, and owners compensated by free land paid for by the government in a less dangerous location.
It is important that this opportunity be used to try and minimise future death and destruction by fire. We did it successfully in Darwin after 1974. Now is the time for both state government's to act - with full backing by the Federal government.
No rebuilding should be permitted until that plan is in place !
Monday, 9 February 2009
Arsonists !
Yesterday eighty four people died a terrible death and seven hundred and fifty homes were destroyed when fire ravaged Victoria in a day of extreme heat and strong winds.
Bushfires are a natural hazard in this country - but what is mind numbing is the reality that most of these fires were deliberately lit.
When someone lights a fire on a day of extreme fire danger that is attempted murder. When a person dies as a result of that fire - that is murder !
Which raises the question of crime - and punishment !
There are some crimes which deserve capital punishment - and the citizens of this country have never been permitted a vote on that subject. Death by hanging was virtually abolished simply because in the eyes of some it became politically incorrect - and judges ceased handing down death sentences.
Few would support capital punishment for all murders. Crimes of passion committed in a rage can be understood, but there are some crimes that are just so horrible that the perpetrator has crossed a line and deserves to die.
An arsonist who deliberately seeks the death of fellow citizens and the destruction of their property is guilty of an act of terrorism - and no time in a prison will atone for that action.
It is time that Australian citizens were permitted a referendum to decide this issue.
The case for a death penalty should not be encased in misleading terms that allow only a single outcome - as was the case in the Monarchy or Republican decision.
It should spell out precisely what crimes would attract the sentence of execution - and allow the judge presiding at that trial the final decision on it's imposition.
The thought that the arsonists who caused yesterdays mass murder may get a life sentence - and be out in about sixteen years under the parole system - is good reason to put the question to the people of what penalty should apply !
After all, the choice of the people is the corner stone of a democratic society !
Bushfires are a natural hazard in this country - but what is mind numbing is the reality that most of these fires were deliberately lit.
When someone lights a fire on a day of extreme fire danger that is attempted murder. When a person dies as a result of that fire - that is murder !
Which raises the question of crime - and punishment !
There are some crimes which deserve capital punishment - and the citizens of this country have never been permitted a vote on that subject. Death by hanging was virtually abolished simply because in the eyes of some it became politically incorrect - and judges ceased handing down death sentences.
Few would support capital punishment for all murders. Crimes of passion committed in a rage can be understood, but there are some crimes that are just so horrible that the perpetrator has crossed a line and deserves to die.
An arsonist who deliberately seeks the death of fellow citizens and the destruction of their property is guilty of an act of terrorism - and no time in a prison will atone for that action.
It is time that Australian citizens were permitted a referendum to decide this issue.
The case for a death penalty should not be encased in misleading terms that allow only a single outcome - as was the case in the Monarchy or Republican decision.
It should spell out precisely what crimes would attract the sentence of execution - and allow the judge presiding at that trial the final decision on it's imposition.
The thought that the arsonists who caused yesterdays mass murder may get a life sentence - and be out in about sixteen years under the parole system - is good reason to put the question to the people of what penalty should apply !
After all, the choice of the people is the corner stone of a democratic society !
Sunday, 8 February 2009
Politically incorrect !
Howls of rage because a senior police officer, speaking about a new documentary series " Gangs of Oz ", commented that " Middle Eastern crime gangs " have perfected crime " !
The objection is to the naming of criminals as belonging to an ethnic group
It is no longer politically correct to refer to suspects of crime by terms such as " of Middle Eastern appearance ", " Aboriginal " or " Asian ".
Purists consider that using such terms infer criminality on all people who broadly fit that description. Taking such an attitude to the extremity of political correctness it would be necessary to ban words such as " tall " or " short " in describing suspects - and of course " male " or " female " could also be considered denigrating to innocent members of that particular sex !
What an interesting exercise in constructing a " wanted " poster to alert the public if such nonsense became accepted procedure.
These days it seems we are breeding an army of nit pickers who mull over every aspect of life in an attempt to neuter black and white - and reduce everything to a shade of gray.
If the authorities need to alert the public to look for a person it helps if specifics narrow the criteria. It could be argued that such a specification absolves those not of that appearance of being suspected of the crime !
Critics maintain that using terms such as " of Middle Eastern appearance " tend to suggest that all people of that nationality are criminals - because it is used often when referring to perpetrators of crime.
This ignores the fact that a percentage of such are people are criminals - just as a percentage of every race, colour and religion engage in criminal activity.
Appearance characteristics differ sharply between many races and they are a legitimate means of narrowing the description of the wanted person.
The danger is that political sensitivity may result in racial characteristics being barred by police and the media, resulting in the loss of help from the public because no reasonable description can be given to allow identification of a suspect at large.
If that happens, criminal elements have won a major battle in the war against crime !
The objection is to the naming of criminals as belonging to an ethnic group
It is no longer politically correct to refer to suspects of crime by terms such as " of Middle Eastern appearance ", " Aboriginal " or " Asian ".
Purists consider that using such terms infer criminality on all people who broadly fit that description. Taking such an attitude to the extremity of political correctness it would be necessary to ban words such as " tall " or " short " in describing suspects - and of course " male " or " female " could also be considered denigrating to innocent members of that particular sex !
What an interesting exercise in constructing a " wanted " poster to alert the public if such nonsense became accepted procedure.
These days it seems we are breeding an army of nit pickers who mull over every aspect of life in an attempt to neuter black and white - and reduce everything to a shade of gray.
If the authorities need to alert the public to look for a person it helps if specifics narrow the criteria. It could be argued that such a specification absolves those not of that appearance of being suspected of the crime !
Critics maintain that using terms such as " of Middle Eastern appearance " tend to suggest that all people of that nationality are criminals - because it is used often when referring to perpetrators of crime.
This ignores the fact that a percentage of such are people are criminals - just as a percentage of every race, colour and religion engage in criminal activity.
Appearance characteristics differ sharply between many races and they are a legitimate means of narrowing the description of the wanted person.
The danger is that political sensitivity may result in racial characteristics being barred by police and the media, resulting in the loss of help from the public because no reasonable description can be given to allow identification of a suspect at large.
If that happens, criminal elements have won a major battle in the war against crime !
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