The Australian government is moving quickly to apply new migration laws to avoid overseas money being invested in industries that are vital to our trading position. In a carefully worded speech, Treasurer Josh Frydenberg did not mention China, but it was cleary obvious that this was the prime target.
Frydenberg made it clear that new rules will now apply and the government will have the power to order disinvestment even after a sale has been approved. Preserving our national interest is the test that will apply and that is likely to run counter against a tactic of the Chinerse Communist party which adheres to a policy known as " yi shang, hi zhang " which translates into "using business to pressure governments ".
All this harks back to the 2018 decision to ban Chinerse electronics firm Huawei from having any connection with out 5G communication network upgrade. It was feared thast allowing Huawei to blend both its expertise and its technical innovations into 5G would allow China to eavesdrop conversations and intercept coded messages to the detriment of our business commuinity.
China is out biggest trading partner and it is clear that they intend to use the advantage this gives them to pressure Australian government decision making. The export of Australian beef and barley to China has been reduced and the ever growing market for Australian wines is under threat. All this is coming at a very bad time as we struggle to emerge from the isolation caused by the coronavirus.
There is another aspect of Chinese trade and Chinese migration to Australia that will distort our new approach. Back in the days when the British lease on Hong Kong was being negotiated in a return to China a lot of very rich Hong Kong families established a bolt hole in Australia in case the situation deteriorated.
The estblishment of that " One country, two systems " solution eased tensions but there are many Hong Kong Chinese who have citizenship rights here and right now China is in the process of rolling back that agreement with Britain and forcing Hong Kong to toe the Communist line. It is likely that Hong Kong residents with entry into Australia will be moving their money and their family here as a safety measure.
We would not want to slam the door shut if Hong Kong deteriorated into a blood bath but it is quite clear that Hong Kong is not going to go peacefully without a fight. Millions of the city citizens have taken to ther streets in noisty demonstrations and it seems inevitable that eventually China will send in the PLA, and there is still the threat of an invasion hovering over Taiwan.
It seems that Chinese people and Chinese money pose problems. We need to diversify our over balanced reliance on Chinese trade and that will be difficult. But we need to remember that not all Chinese are Communists.
Sunday, 7 June 2020
Saturday, 6 June 2020
A Fair Business Tax !
We are in a recession and it is abundantly clear that the way ahead is going to be painful. The isolation needed to combat the coronavirus is being slowly lifted and we await to see what sort of economy emerges, but there is the expectation that we will have to endure both unemployment and under- employment.
It is the average employee who is being asked to delay a long awaited wage rise and in particular, civil servants in NSW are asked to accept a twelve month wage freeze and that includes the very people who put their lives on the line to keep hospitals and medical services running during the pandemic.
It is galling to read reports that indicate the biggest businesses in this country continue to use both the accounting and the legal system to install systemic tax avoidance. Once again the tax office is going after them and again it will be a long running battle in the courts, with the big end of town using its wealth to recruit the brightest and sharpest cover to avoid paying their fair share of the tax burden.
This becomes a legal battle between the best minds in Australia with the very letter of the law being manipulated to gain a tax advantage. The ATO is involved in a fight with one of this country's biggest accounting firms and the advice they have given three of Auistralia's biggest corporations which allowed them to move thirty billion dollars of international shares into offshore tax structures which put them out of range of the tax office.
This plan was allegedly designed by the mandarins of PwC Australia as an accounting exercise, but much of the documnentation was carried out by law firms - which allowed it to claim legal priviledge. It then had to survive the judgement of the highest court in this land and that was a matter of legal argument being used to advantage.
The business world had developed into a very complex miasma. Intellectual property has become a factor in assessing profit and in many cases the process involved was developed in one country, manufactured in another and exploited in the products sold in a third. Unscrambling that profit into individual components can become a nightmare.
What needs to apply is a very simple maxim. If profit is made in Australia it needs to be taxed in Australia and no other exemptions should apply. The fee for using intellectual rights should be established and registered prior to manufacturing and the value of that which is manufactred outside Australia and imported determined by the courts and not the trading enterprises involved.
We need a simplified tax system. The one in place allows the companies with the biggest bank accounts to employ the minions that are simply not available to the average Australian business to do battle with the tax office. Surviving this recession will be harder unless all aspects of the business world pay their fair share of the tax burden.
It is the average employee who is being asked to delay a long awaited wage rise and in particular, civil servants in NSW are asked to accept a twelve month wage freeze and that includes the very people who put their lives on the line to keep hospitals and medical services running during the pandemic.
It is galling to read reports that indicate the biggest businesses in this country continue to use both the accounting and the legal system to install systemic tax avoidance. Once again the tax office is going after them and again it will be a long running battle in the courts, with the big end of town using its wealth to recruit the brightest and sharpest cover to avoid paying their fair share of the tax burden.
This becomes a legal battle between the best minds in Australia with the very letter of the law being manipulated to gain a tax advantage. The ATO is involved in a fight with one of this country's biggest accounting firms and the advice they have given three of Auistralia's biggest corporations which allowed them to move thirty billion dollars of international shares into offshore tax structures which put them out of range of the tax office.
This plan was allegedly designed by the mandarins of PwC Australia as an accounting exercise, but much of the documnentation was carried out by law firms - which allowed it to claim legal priviledge. It then had to survive the judgement of the highest court in this land and that was a matter of legal argument being used to advantage.
The business world had developed into a very complex miasma. Intellectual property has become a factor in assessing profit and in many cases the process involved was developed in one country, manufactured in another and exploited in the products sold in a third. Unscrambling that profit into individual components can become a nightmare.
What needs to apply is a very simple maxim. If profit is made in Australia it needs to be taxed in Australia and no other exemptions should apply. The fee for using intellectual rights should be established and registered prior to manufacturing and the value of that which is manufactred outside Australia and imported determined by the courts and not the trading enterprises involved.
We need a simplified tax system. The one in place allows the companies with the biggest bank accounts to employ the minions that are simply not available to the average Australian business to do battle with the tax office. Surviving this recession will be harder unless all aspects of the business world pay their fair share of the tax burden.
Friday, 5 June 2020
A " Tradie " Recovery !
The building industry in Australia changed massively after the end of the second world war. Prior to that change a builder employed a lot of men who constructed a new home from raw material. They put in the foundations, cut and nailed up the frame and the builder needed the skill to calculate the roof structure they put together on the job. It was time consuming and costly, and the average home took months to reach completion.
When change occurred it took a " builder " to the new height of a " building manager " because he or she now managed the construction of a house by sub-contractors. Homes were now built on a concrete slab and this was put in place by specialised crews who dcveloped the skills to do that quickly and cheaply. The house frame came from a factory, as did the roof trusses and the building trade diverged into specialists who contractedf to deliver their services. All the associated work was undertaken by a vast army of " tradies " who were generally self employed and skilled in their particular trade.
The Federal government is hoping that we can emerge from the recession caused by the coronavirus by a " tradies " led recovery. It is considering offering a $25,000 grant to people who order a new home to be built or who order renovations that come close to a new home category. Construction of a new home or the start of renovations must be contracted to begin from July 4 to December 31 to be eligible for the grant.
It is also required that this work be contracted to commence within three months of the contract signing to avoid a blow out in house prices. It looks to provide a powerful incentive to get the building industry moving and it is today's building industry that generates vast employment in the factories that contribute the merchadise that goes into home construction. The reckoning is that if the building industry makes a move the effect will be widespreaed across all sections of the manufacturing industry and this will have a positive effect on employment.
Figures from the Australian Bureau of Statistics underline the parlous state of our building industry.Building approvals fell by 1.8% in April and 2.6% in March. Over the past year 174,719 new homes were approved by councils and this was a twenty-two percent decrease on the average of the past ten years.
It is thought this plan ticks all the boxes. We have a housing shortage and we badly need a constant supply of new homes to keep the price of homes stable. Too many people chasing too few homes is certainly one of the causes of the rapid accelleration in house prices to unsustainable levels. In the building industry of today, the number of " tradies " who supply their services number in the millions and are essential in providing construction, painting, pumbing and electrical work.
If this vast workforce is making money, they and their families are also spending money and that is something we badly need to get the rest of the economy moving. It seems to be a practical step that will deliver an outcome.
When change occurred it took a " builder " to the new height of a " building manager " because he or she now managed the construction of a house by sub-contractors. Homes were now built on a concrete slab and this was put in place by specialised crews who dcveloped the skills to do that quickly and cheaply. The house frame came from a factory, as did the roof trusses and the building trade diverged into specialists who contractedf to deliver their services. All the associated work was undertaken by a vast army of " tradies " who were generally self employed and skilled in their particular trade.
The Federal government is hoping that we can emerge from the recession caused by the coronavirus by a " tradies " led recovery. It is considering offering a $25,000 grant to people who order a new home to be built or who order renovations that come close to a new home category. Construction of a new home or the start of renovations must be contracted to begin from July 4 to December 31 to be eligible for the grant.
It is also required that this work be contracted to commence within three months of the contract signing to avoid a blow out in house prices. It looks to provide a powerful incentive to get the building industry moving and it is today's building industry that generates vast employment in the factories that contribute the merchadise that goes into home construction. The reckoning is that if the building industry makes a move the effect will be widespreaed across all sections of the manufacturing industry and this will have a positive effect on employment.
Figures from the Australian Bureau of Statistics underline the parlous state of our building industry.Building approvals fell by 1.8% in April and 2.6% in March. Over the past year 174,719 new homes were approved by councils and this was a twenty-two percent decrease on the average of the past ten years.
It is thought this plan ticks all the boxes. We have a housing shortage and we badly need a constant supply of new homes to keep the price of homes stable. Too many people chasing too few homes is certainly one of the causes of the rapid accelleration in house prices to unsustainable levels. In the building industry of today, the number of " tradies " who supply their services number in the millions and are essential in providing construction, painting, pumbing and electrical work.
If this vast workforce is making money, they and their families are also spending money and that is something we badly need to get the rest of the economy moving. It seems to be a practical step that will deliver an outcome.
Thursday, 4 June 2020
Wage Freeze Danger !
It was certainly a big ask to request workers on the government payroll to accept a tweve months wage freeze to allow the state government to apply the saved money to job creation as we emerge from this virus lockdown. The bean conters think a public serctor wage freeze would save the government about three billion dollars and this would be better spent on job creation.
That failed to get the numbers up in the parliament with Labor and the minor political parties opposed. It will now be settled in the Industrial Relations Commission and that means endless hearings because the eight million people involved work under a wide variety of public sector awards.
The unknown factor is how the IRC will respond to the cases being put before it. Public sentiment is strongly behind the nurses, doctors and paramedics who have courageously stood shoulder to shoulder at great personal risk to treat patients suffering from the coronavirus. While the rest of the community sheltered in isolation our medical defence stayed on the job with deficient means of self protection.
There is the hope that the IRC will award pay increases where they are due and that our medical professionals will head that queque. The IRC might also look favourably on fire fighters who week after week last summer battled a forest inferno that almost wiped out many small towns and destroyed both homes and lives, but here the division of labour is greatly divided.
Most of the members of the Rural Fire Service are volunteers. In a national emergency, their employers usually grant them leave to fight fires but the only ones on the governmenrt payroll are the members of city fire brigades. They also fought these summer fires but to reward them with a pay increase and ignore the volunteers who turned out in their thousands would be a gross traversty of justice.
It is essential that the national wage structure delivers a living wage and in recent times that has been falling short. Usually, it is a labour shortage that forces employers to pay more to fill vacancies but a" Gig " economy has emerged that has absorbed any excess labourforce and kept job demand unusually stable. As a result, private sector wages have stubbornly failed to move upward despite increased living costs.
There is a danger than if public sector pay is frozen it will signal the private secvtor to resist wage increased and these are essentially overdue. Commerce will face headwinds emerging from this recerssion but keeping business costs artificially low will only distort a healthy market place. If a business has to underpay workers to survive it has no place in a healthy society.
There are many businesses that will not survive this recession and that is nature runnng its course. Using the law to artificially control wage levels is not the sort of society that has long prevailed in Australia.
That failed to get the numbers up in the parliament with Labor and the minor political parties opposed. It will now be settled in the Industrial Relations Commission and that means endless hearings because the eight million people involved work under a wide variety of public sector awards.
The unknown factor is how the IRC will respond to the cases being put before it. Public sentiment is strongly behind the nurses, doctors and paramedics who have courageously stood shoulder to shoulder at great personal risk to treat patients suffering from the coronavirus. While the rest of the community sheltered in isolation our medical defence stayed on the job with deficient means of self protection.
There is the hope that the IRC will award pay increases where they are due and that our medical professionals will head that queque. The IRC might also look favourably on fire fighters who week after week last summer battled a forest inferno that almost wiped out many small towns and destroyed both homes and lives, but here the division of labour is greatly divided.
Most of the members of the Rural Fire Service are volunteers. In a national emergency, their employers usually grant them leave to fight fires but the only ones on the governmenrt payroll are the members of city fire brigades. They also fought these summer fires but to reward them with a pay increase and ignore the volunteers who turned out in their thousands would be a gross traversty of justice.
It is essential that the national wage structure delivers a living wage and in recent times that has been falling short. Usually, it is a labour shortage that forces employers to pay more to fill vacancies but a" Gig " economy has emerged that has absorbed any excess labourforce and kept job demand unusually stable. As a result, private sector wages have stubbornly failed to move upward despite increased living costs.
There is a danger than if public sector pay is frozen it will signal the private secvtor to resist wage increased and these are essentially overdue. Commerce will face headwinds emerging from this recerssion but keeping business costs artificially low will only distort a healthy market place. If a business has to underpay workers to survive it has no place in a healthy society.
There are many businesses that will not survive this recession and that is nature runnng its course. Using the law to artificially control wage levels is not the sort of society that has long prevailed in Australia.
Wednesday, 3 June 2020
Separating the " Sad " from the " Bad " !
It appears that New South Wales is giving up on a plan to to divert those suffering intellectual disabilities and brain injuries from serving time in the prison system,. In 2017 it embarked on the Congenitive Impairment Diversion Programme (CIDP} in Penrith and Gosford local courts. This was extendced to June this year, when funding will expire.
It has now been decided that funding will not be renewed. In the first twelve months of the scheme sixty-eight percent of participants were diverted from the criminal justice system. Just seven percent of the 180 participants appearing before the court received a prison sentence.
Alleged offenders found by the programmes neuropsychologists to have a cognitive impairment are connected with support services, including the National Disability Insurance Scheme ( NDIS ). This helps lower the cost of the prison system and removes the mentally deficient from the stress and danger when hardened criminals impose on their lack of acumen.
Almost forty five percent of participants had an intellectual disability, 22 percent had an acquired brain injury and 13 percent had a borderline intellectual function. Critics of the prison sysem have long contended that prison serves as an alternative to our lack of adequate medical services to treat people with degenerative brain functions.
This was a practical approach to separate the " bad " frm the " sad ". It cost $1.2 million for the fifteen months to September, 2018 and that will be more than matched by the increased number of prisoners held in NSW prisons when the scheme ends.
A Department of Communities and Justice spokesman said "there hase been positive results under the programme" but " the current model is not appropriate to expand to other locations, and deliver other services provided by the government ".
A lot of people are ending up in prison for want of appropriate disability supporty. CIDP workers navigate alleged offenders tjhrough ther hoops of the NDIS and court processes. Some will contend that this programme has become a victim of the spending needs to ease the economy back to work after the ravages of the Coronavirus pandemic.
Sounds like CIDP just got shoved back into the " too hard " basket. The families of the mentally disabled will despair that an uncaring system will again consign them to the prisons, until they do their time and emerge - to reoffend and face another court which sends them back to prison.
It has now been decided that funding will not be renewed. In the first twelve months of the scheme sixty-eight percent of participants were diverted from the criminal justice system. Just seven percent of the 180 participants appearing before the court received a prison sentence.
Alleged offenders found by the programmes neuropsychologists to have a cognitive impairment are connected with support services, including the National Disability Insurance Scheme ( NDIS ). This helps lower the cost of the prison system and removes the mentally deficient from the stress and danger when hardened criminals impose on their lack of acumen.
Almost forty five percent of participants had an intellectual disability, 22 percent had an acquired brain injury and 13 percent had a borderline intellectual function. Critics of the prison sysem have long contended that prison serves as an alternative to our lack of adequate medical services to treat people with degenerative brain functions.
This was a practical approach to separate the " bad " frm the " sad ". It cost $1.2 million for the fifteen months to September, 2018 and that will be more than matched by the increased number of prisoners held in NSW prisons when the scheme ends.
A Department of Communities and Justice spokesman said "there hase been positive results under the programme" but " the current model is not appropriate to expand to other locations, and deliver other services provided by the government ".
A lot of people are ending up in prison for want of appropriate disability supporty. CIDP workers navigate alleged offenders tjhrough ther hoops of the NDIS and court processes. Some will contend that this programme has become a victim of the spending needs to ease the economy back to work after the ravages of the Coronavirus pandemic.
Sounds like CIDP just got shoved back into the " too hard " basket. The families of the mentally disabled will despair that an uncaring system will again consign them to the prisons, until they do their time and emerge - to reoffend and face another court which sends them back to prison.
Tuesday, 2 June 2020
End to Shonky Aparartment Buildings !
At long last a bill is on its way to both houses of the New South Wales parliament which looks likely to curb those who buy apartments off the plan from being forced to complete the contract when the finished structure is found to have faults.
It will come too late for the owners caught in the repair bills for both Opel Towers and Mascot Towers but if it survives the progress promised it will give the NSW Building Commissioner new powers to stop the rorts that are encompassing ever higher numbers of apartment owners with the need to finance repairs to new buiildings.
What makes this so promising is the bill has the support of the Berejiklian government, the Australian Labor Partty and the Greens. Despite the failure of previous bills to gain accord this one was put together with the three parties finding issue on common principles.
Called the Residential Apartment Building Bill it would give the Commissioner the power to order builders rectification and stop work orders. One of its strongest powers would be the ability to withhold occupation certificates, which would stop buiilders or developers from forcing buyers to settle on properties with defects.
There is now the prospect that this will introduce a statutory duty of care allowing owners to sue those involved in the construction of a building with defects. This has been what was sadly lacking and which led to the problems in Opel Towers and Mascot Towers.
Giving the Commissioner the necessary powers is one thing. Ensuring that those powers are used to effect change will require the setting up of inspections to ensure standards are being met and that means access to the buiding in all stages of construction. The Commissioner will need to have inspectors with the right grade of skills and this was welcomed by Professionals Australia which said " the earlier this is put in place the better ".
This parlous building situation emerged when short cuts became customary on building sites and stress loads were often ignored. The laws were already in place to stop this problem occurring, but the implementation of checks was weak. We are about to enter a new regime and it is vital that everty stage of the building process meets thr accepted standard. A law is only as good as the necessary input tio police it.
The end of shonky building practices seems to be in sight, provided the Commissioner is given the tools to do the job !
It will come too late for the owners caught in the repair bills for both Opel Towers and Mascot Towers but if it survives the progress promised it will give the NSW Building Commissioner new powers to stop the rorts that are encompassing ever higher numbers of apartment owners with the need to finance repairs to new buiildings.
What makes this so promising is the bill has the support of the Berejiklian government, the Australian Labor Partty and the Greens. Despite the failure of previous bills to gain accord this one was put together with the three parties finding issue on common principles.
Called the Residential Apartment Building Bill it would give the Commissioner the power to order builders rectification and stop work orders. One of its strongest powers would be the ability to withhold occupation certificates, which would stop buiilders or developers from forcing buyers to settle on properties with defects.
There is now the prospect that this will introduce a statutory duty of care allowing owners to sue those involved in the construction of a building with defects. This has been what was sadly lacking and which led to the problems in Opel Towers and Mascot Towers.
Giving the Commissioner the necessary powers is one thing. Ensuring that those powers are used to effect change will require the setting up of inspections to ensure standards are being met and that means access to the buiding in all stages of construction. The Commissioner will need to have inspectors with the right grade of skills and this was welcomed by Professionals Australia which said " the earlier this is put in place the better ".
This parlous building situation emerged when short cuts became customary on building sites and stress loads were often ignored. The laws were already in place to stop this problem occurring, but the implementation of checks was weak. We are about to enter a new regime and it is vital that everty stage of the building process meets thr accepted standard. A law is only as good as the necessary input tio police it.
The end of shonky building practices seems to be in sight, provided the Commissioner is given the tools to do the job !
Monday, 1 June 2020
An Eerie Prediction !
In America, most of the people are afraid of their police. Even a minor confrontation with a citizen will bring a convoy of police cars with lights flashing and sirens wailing. Their policing methods are heavy handed and they have progressively adopted the stance of an army of occupation rather than a force tasked with protecting the public.
Once again an incident has inflamed the citizens to revolt and set a city ablaze. The ever present cameras in public hands recorded the arrest of unarmed black man George Floyd. He was wrestled to the ground and a policeman used his knee to his throat in a choke hold. There were four police present at this arrest and when the knee pressure was removed the victim had lost conscionce. He was put in an ambulance and taken to hospital, where he was pronounced dead.
The aftermath was predictable. " Black deaths matter " supporters looted shops and burned down the police station. The unrest spread to other cities and President Trump escalatedf the violence with an incendiary remark that related this crime to violence that once rocked Miami.
Three centuries ago, America fought a bloody civil war to end slavery in the southern states. The victor passed laws to achieve that objective, but simply walked away and made no effort to implement them. The white people of the south maintained coloured segregation in what became known as the " Jim Crow "era. Coloured people were protected by a law they could not access because the KKK promised a lynching to anyone who tried.
Both Washington and state governors are afraid of the power of their police because that is what stands between them - and the mob ! Strong police unions have used that power to insulate officers from murder charges where unreasonable force being used has caused death. Either the state has refused to prosecute, or the hearing before a Grand Jury is moved to an area where white prominence will assure an acquittal.
America is probably the most heavily armed country in the world. There are more hand guns in the community than people, and America has a population that exceeds three hundred million. A clause in the constitution means ordinary citizens can buy and own the same assaut rifles as used by the American armed forces. America used the draft to require its young people to fight in many wars and there are now vast numbers of veterans with the military skills - and the weapons - to confront the government if it chooses to do so.
It is clear that gun control is not going to happen. It seems inevitable that civil unrest will eventually cascade into an armed confrontation with the police, bringing the spectre of civil war. No worse catastiophe can befall a society. The might and money of American business can come crashing down in a welter of burning cities.
That could become a reality if America lacks the goodsense to bring its police back under control asnd implement the reasons it fought a civil war back in the 1800's. Otherwise its place in history may be similar to that of the Roman Empire. When that collasped, the world was plunged into what is called the " Dark Ages " !
Once again an incident has inflamed the citizens to revolt and set a city ablaze. The ever present cameras in public hands recorded the arrest of unarmed black man George Floyd. He was wrestled to the ground and a policeman used his knee to his throat in a choke hold. There were four police present at this arrest and when the knee pressure was removed the victim had lost conscionce. He was put in an ambulance and taken to hospital, where he was pronounced dead.
The aftermath was predictable. " Black deaths matter " supporters looted shops and burned down the police station. The unrest spread to other cities and President Trump escalatedf the violence with an incendiary remark that related this crime to violence that once rocked Miami.
Three centuries ago, America fought a bloody civil war to end slavery in the southern states. The victor passed laws to achieve that objective, but simply walked away and made no effort to implement them. The white people of the south maintained coloured segregation in what became known as the " Jim Crow "era. Coloured people were protected by a law they could not access because the KKK promised a lynching to anyone who tried.
Both Washington and state governors are afraid of the power of their police because that is what stands between them - and the mob ! Strong police unions have used that power to insulate officers from murder charges where unreasonable force being used has caused death. Either the state has refused to prosecute, or the hearing before a Grand Jury is moved to an area where white prominence will assure an acquittal.
America is probably the most heavily armed country in the world. There are more hand guns in the community than people, and America has a population that exceeds three hundred million. A clause in the constitution means ordinary citizens can buy and own the same assaut rifles as used by the American armed forces. America used the draft to require its young people to fight in many wars and there are now vast numbers of veterans with the military skills - and the weapons - to confront the government if it chooses to do so.
It is clear that gun control is not going to happen. It seems inevitable that civil unrest will eventually cascade into an armed confrontation with the police, bringing the spectre of civil war. No worse catastiophe can befall a society. The might and money of American business can come crashing down in a welter of burning cities.
That could become a reality if America lacks the goodsense to bring its police back under control asnd implement the reasons it fought a civil war back in the 1800's. Otherwise its place in history may be similar to that of the Roman Empire. When that collasped, the world was plunged into what is called the " Dark Ages " !
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