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Category: Economics

19/11/2022

The Myth of Liberal Competence-1

19 November 2022

One of the enduring myths of politics is that conservatives are better money managers. This is the case in the US, where the Republicans, who enthusiastically dismantle government programs that help poor people and the UK Conservatries who do the same. And it is the case here with the Liberals.

Perhaps the logic is that since they are rich, they must be better with money. But I wonder at the influence of Christianity. The key message is that you must suffer to be redeemed. Suffering is worthy and will later be rewarded. This seems to play into notions that the country will benefit if we all suffer now, ‘we’ in this case being those more dependent on welfare, or those at the bottom of the heap.

The other overarching fact in a market economy the more wealthy people can set the prices, which effectively means they set their incomes. At the bottom of the social pyramid, those at the bottom compete for the jobs and wages set by others. In short, the rich get richer and the poor get poorer. The game ‘Monopoly’ was designed to illustrate this. People play Monopoly, and when they win or lose, they stop the game and go on with life. But what is the game were real and never ended? The losers would get poorer and poorer until they had nothing else to give. That arguably is what a market economy will do without some intervention from an outside force, like a government, to intervene in the cause of those going backward.

Arguably the world’s leading economist is Thomas Piketty. He is a Frenchman who, as he rose, was offered a post in Harvard. He did not take it, opining that economics in the US was theoretical and not based on hard data, as a science should be. Records of national income and death duties going back for 400 years in 4 countries had been put together and he analysed it. His book, ‘Capitalism in the 21^st Century’ is a towering work. It is long, but it is very well-structured with concise conclusions at the beginning and the proof in the later chapters for those who want to read more. He observed that the wages of the population go up at the inflation rate, and the income of the rich who loaned money go up at the interest rate, but the interest rate was always higher than the inflation rate, otherwise there would be no profit in lending. So the income of the rich would always go up faster than the rest of the population, so social inequality would increase in the absence of other interference.

It has always been known that money goes round, and to stimulate the economy people have to spend more. But Piketty points out that poor people spend a greater percentage of their money than rich people. Very poor people spend all the money they have, rich people save about a third. So if you want to stimulate an economy, you should give money to poor people. This is of course not what conservative governments do. They give money to infrastructure, which these days means big private contractors or have industry assistance packages. But these initiatives are giving money to the rich, on the assumption that it will generate more jobs in the long term than the extra consumption would have generated.

(You might ask why Piketty has not got a Nobel Prize for being the first economist to use real data over centuries and come to such a profound conclusion. If you did ask that you might wonder if the Nobel prize economics committee are all neo-liberal economists and you might be right).

The point is without government intervention, the rich will get richer and the poor will get poorer. The best way to minimise this is to have as much shared wealth as possible in the form of park and public facilities, such as transport, health, education and essential services that blunt the significance of income disparities, as a base-line is set without it having the stigma of charity.

But conservative governments, like the Nobel committee want to ignore Piketty and the obvious facts as they do not suit their ideological agenda. A cynic would say that the ideological agenda from right wing ‘think tanks is merely an endless list of convenient reasons to keep the money flowing to the top end of town, to lessen government ‘interference’ which might act for fairness, and to commodify everything such as housing, transport and education so they can become profitable, increase inequality and profit those at the top. How can this agenda ever be considered the foundation of good financial management?

But as Treasurer, Morrison was not even clever in his management of his own revenue. Here is a tale of how his GST deal with Western Australia was out by a factor of almost 10 times over 3 years. Yet the legacy of this shambles is contracts and deal that other have to grapple with.

One of the modest contributions that I am seeking to make to political discourse is to sheet home the blame for failures to the people responsible for them. Here is a start, from the SMH:

Cost of Morrison’s WA GST deal blows out by $20 billion as debt hits record high

By Shane Wright SMH November 14, 2022 — 5.00am

A deal put in place to placate Western Australia when its share of GST revenue was tumbling is on track to cost the nation’s taxpayers 10 times more than originally forecast, helping drive up federal government debt and interest payments to record levels.

Pulled together by then-treasurer Scott Morrison in 2018 before being put through parliament by his successor, Josh Frydenberg, the deal that was originally expected to cost $2.3 billion is now on track to cost more than $24 billion.

WA, which delivered four seats to Labor at the May election on the back of a 10.6 per cent swing, is vowing to fight to keep the arrangement, due to expire in 2026-27.

Morrison struck the deal at a time WA’s share of the tax pool had fallen to an all-time low of 30 cents for every dollar of GST raised within the state. Its iron ore royalties were effectively being redistributed among the other states and territories based on a Commonwealth Grants Commission formula that takes into account each state’s revenue sources and expenses.

Under Morrison’s deal, from 2022-23 WA must receive a minimum of 70 cents in the dollar before increasing to 75 cents in 2024-25. When the policy was put in place, it was expected iron ore prices would fall and WA’s share of the GST pool would therefore rise. Instead, prices have soared.

The Morrison government ensured other states and territories wouldn’t be worse off, which requires the top-up funding for the deal to come from outside the $82.5 billion GST pool.

It was originally forecast to cost federal taxpayers $2.3 billion over three years, including just $293 million in 2021-22, but the surge in iron ore prices has meant more top-ups and for longer.

The October budget revealed that last year, the deal cost $2.1 billion and is forecast to jump to $4.2 billion this financial year. By 2025-26, the cost of the entire deal is on track to reach $22.5 billion, with another $2-3 billion likely the year after that.

Throughout the entire period, the budget is expected to be in deficit, forcing the extra cash to be borrowed. In percentage terms, the blowout in cost is larger than the NDIS, aged care, health or defence.

Independent economist Chris Richardson said the deal had been ill-conceived from the beginning with the cost to be borne by future taxpayers.

He said all significant spending programs needed to be properly assessed, including the GST deal.

“Yes, the politics of it are difficult. But we have a whole host of other issues, like the NDIS, and the economics of them have to be dealt with,” he said.

Any change to the GST deal would create enormous political problems in WA which is likely to gain more political power with an additional seat in a looming federal electorate redistribution.

WA Premier and Treasurer Mark McGowan, who reported a $5.6 billion budget surplus for the 2021-22 financial year, told this masthead he expected the GST deal to remain.

“I have made it very clear that West Australians will not accept any changes to the GST distribution,” he said.

“Those on the east coast who are demanding WA lose out still do not realise that under the reforms, WA will receive 70 per cent of its population share of the GST next financial year. In complete contrast, no other state has ever received a share of the GST lower than 83 per cent.

“WA will continue to subsidise all the other states into the future under this arrangement. No state has lost a dollar under these reforms.”

The extra borrowing for the GST deal has contributed to the lift in gross debt, which on Friday reached a record $909.4 billion.

Ahead of the COVID-pandemic, gross debt was expected to reach $576 billion this financial year. Instead, it is now forecast to reach $927 billion before reaching $1 trillion in 2023-24.

Treasurer Jim Chalmers said the cost of servicing the debt was getting more expensive and was now the budget’s fastest-growing expense.

“We’ve made good progress in a very short space of time. We’ve found $22 billion in savings and kept real spending growth flat across the forward estimates,” he said.

“[But] it will take more than one budget and more than one term of government to make up for a decade of missed opportunities and messed-up priorities.”

05/11/2022

The Twitter Story- and the bigger subtext

5 November 2022
Elon Musk likes to play in every game. His car company existed on hope for many years, but has at last ramped up production. He is in software, AI, batteries, cars infrastructure with tunnelling and trains, space rockets, investments, and now politics.

Twitter has established itself as the world’s political events exchange platform. A new concept like Twitter, which allows direct person to person contact was a good idea. Naturally if there is to be a conversation, everyone has to be in it, so a monopoly system is favoured if the system is new and is seen to work. So Twitter has become unique and immensely powerful. But the technologies that have everyone able to have an equal voice enable radical and socially damaging perspectives to be aired and publicised, legitimised by their ubiquity. Radical groups can link up with others anywhere, adding strength to isolated opinions and tending to lead to discussions that become even more radical and may lead to action.

So the social effects of the new technologies have created new and effectively unaccountable power structures. The regulation of these can be by government edict, as in China, or left to the corporate owners as in the West. Both these regulatory actions and the lack of them are controversial and many have long term political and social effects.

Now Elon Musk seems to have offered to pay too much for Twitter. He tried to withdraw his offer, but was forced to honour it. Having paid too much, he now wants to cut staff numbers radically. I was under the impression that social and political pressure was making Twitter more responsive to concerns about its social and political effect and its staff were part of an effort to minimise any harm it might do. If this is so, it is likely to be, no staff = no action.

So looking at Twitter as purely a financial entity verges on the absurd, but that is what is happening. And a financial mistake by Musk, and his corrective action in sacking people may have considerable effects. Commentators are already talking about the polarisation of US politics and the rise of violence with the storming of the US Capitol and the easy and unsophisticated attack on Paul Pelosi.

So the subtext of the situation is that an unregulated world market allows the immense concentration of power such that when the world’s richest man corrects what is for him a relatively minor financial error a major world information system is significantly disrupted and may become dysfunctional. (Whether it was considered dysfunctional before is a matter of opinion- it is hard to get an exact understanding of how much power the Twitter information model has).

One of the more ridiculous features of our society is that those with money, or who know about it are assumed to know about everything. They know about money, and have usually specialised in making it to the exclusion of other concerns. Often, it is dubious that they have the faintest idea about the implications of their actions.

Because the world’s economy advisers have allowed the world to become just a market we have the equivalent of elephants in China shops and we wait and wonder which way they will turn. A more cynical view would be that we have a situation where the playthings of the rich can have massive uncontrolled consequences and there are no regulatory mechanisms that have either the will or the power to influence the situation in the public interest.

The jobs of the Twitter employees are the tip of a very large iceberg, and the stories of Twitter’s share price have a much larger subtext. Here is an article from today’s SMH:

Twitter staff shut out as global purge starts
Zoe Samios, Nick Bonyhady

Twitter Australia staff were being locked out of their company accounts yesterday as billionaire Elon Musk’s job cuts hit the local office in Sydney, which employs about 40 people.
Musk told confidants he planned to eliminate half of Twitter’s workforce to slash costs at the social media platform he acquired for $US44 billion ($70 billion) last month.
Local staff in marketing and news curation were shut out of Twitter’s systems after receiving an email signalling layoffs but without any official confirmation that their jobs were being axed. Others were waiting to see if they would still have a job come Monday.
One employee said there was a sense of relief. ‘‘It’s not the company that we joined, and it’s not the app that we all love any more,’’ they said.
Others familiar with the company said the news team, which selects articles on topical moments in the national discourse, is among the largest local units and had about 10 staff. Some communications staff for the Asia-Pacific region have also been locked out.
Twitter’s local public relations representative declined to comment.
Australian staff received an email yesterday morning saying Twitter would ‘‘go through the difficult process of reducing our global workforce’’. Staff were to be told whether they still had a job via email by 9am Pacific Standard Time, or 3am AEDT yesterday, but the lockouts started early.
‘‘We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward,’’ the email, which was obtained by the Herald, said.
The Herald revealed in July that Twitter was closing its Australian office in Sydney, with staff to work from home.
All told, Musk wants to cut about 3700 jobs at San Francisco-based Twitter, people with knowledge of the matter said this week. The entrepreneur had begun dropping hints about his staffing priorities before the deal closed, saying he wants to focus on the core product.
‘‘Software engineering, server operations & design will rule the roost,’’ he tweeted in early October.
Twitter was sued over Musk’s plan to eliminate the jobs, with workers saying the company is doing without enough notice in violation of federal and California law. A class-action lawsuit was filed on Thursday in San Francisco federal court. The federal Worker Adjustment and Retraining Notification Act restricts large companies from mounting mass layoffs without at least 60 days’ notice.
Security staff at Twitter’s San Francisco headquarters carried out preparations for layoffs, while an internal directory used to look up colleagues was taken offline on Thursday afternoon, people with knowledge of the matter said.
Employees have been girding for firings for weeks. In recent days, they raced to connect via LinkedIn and other non-Twitter avenues, offering each other advice on how to weather losing one’s job, the people said. with Bloomberg

16/10/2022

‘It’s the Monopoly Game Stupid’

13 August 2022
In case you missed it, that is a misquote of Bill Clinton’s 1992 election mantra, ‘It’s the economy,
stupid’. (He beat George W Bush when the US economy turned down).
Other apposite quotes are Stalin’s ‘The only thing I believe in is the power of the human will’ and
Mao Tse Tung’s ‘Power comes out of the barrel of a gun’.
The Stalin and Mao quotes relate to the power of governments, Clinton’s the power of economic
forces. It seems that the economy is more powerful than governments, as it was responsible for the
collapse of the Soviet Union, and the current rise of China is partly because they have a new model
where they set the rules for the economy.
The other variable more powerful than governments is technological innovation as it totally changes
the way we live, but this is not a point I want to discuss now.
The two Wars last century were over access to markets, so at the Bretton Woods Conference in 1944
that set the rules for a post WW2 economic system the object was to eliminate trade barriers so that
countries that were doing well would rise, and those doing poorly would fall, all this happening
gradually and without wars. This has turned the whole world into a market, and because money
crosses borders so easily, big companies can take over smaller ones, and governments, being
restricted by their borders have their powers limited. The ability to move jobs offshore makes
workers compete globally.
As governments’ power has fallen relative to big companies and the best brains in the nation go into
companies rather than into government, many governments do not believe that they can defy big
corporations. The Australian governments following the interests of the mining lobby and the
Murdoch press are just a couple of examples. Another is the tax and (non-)royalty system, and yet
another the drive to privatise public utilities as Capital wanted the returns from performing certain
functions that had previously been done by the public service for no profit. The governments did
not have the courage to say ‘No’, particularly as the companies were generous donors to the
political parties.
As in a Monopoly game, the rich get richer and the poor get poorer unless there is government
intervention, and even this has limits.
As we struggle with rising inflation rates, falling relative wages, house prices supercharged by 40
years of negative gearing and manifestations of rising inequality, we need to look at the root causes
and to what extent they can be modified. Governments need to rattle their cages domestically and
cooperate more internationally. Is Albanese up to it?
www.thesaturdaypaper.com.au/news/politics/2022/08/13/how-tax-bludgers-are-ripping-their-
fellow-australians

16/10/2022

An Optimistic View of Australia

22 July 2022
It is nice to have some sensible optimism.

Spanish tycoon tells our fortune
David Crowe SMH 15/7/22
A global green energy mogul sees Australia as a sure bet. Other money will follow his.
The bulls were running through the streets of Pamplona when a young Jose Manuel
Entrecanales encountered some of the first Australians in his life – and promptly got into a
fight. The Spanish businessman, now one of the biggest investors in Australian clean
energy, is hazy on what the fight was about. He was in his late teens at the time and had
joined thousands of others at the San Fermin festival in northern Spain. Was alcohol
involved? No doubt. But he remembers settling the argument at a pub.
It turns out that the way Australians settle their arguments is one of things Entrecanales likes
most about the country. In short, he respects a place with a solid court system. It is one of
the reasons he is planning a pipeline of projects here worth $26 billion over the next few
years.
Australians are prone to putting their country down. Or complaining about the politicians who
have messed it up. So the view from Europe might help explain why Australia still has
immense opportunities ahead. Entrecanales was born into money but knows how to make a
lot more of it. And he is placing big bets on Australia becoming a powerhouse in renewable
energy.
‘‘From an objective point of view I find that you have, by far, the best variables for growth
and for stability,’’ he says when asked if he is happy with Acciona investments here since

‘‘I mean, you are a legally binding country. Which is, in fact, a show of legal maturity
because people need the resources of law and legal arbitration because it is very efficient. In
other countries you cannot do that because, in the first place, it is not fair and, secondly, it is
not efficient. So that is, to me, one of the
biggest assets you have, that you are naturally a very solid democracy. Then you have the
biggest amount of natural resources in the world.’’ He is not just talking about oil and gas
and coal: his investment plan is all about wind and solar.
‘‘And then you have something that, I’ve noticed, you Australians don’t see so much as an
asset and you’re very worried about, which is the infinite capacity to attract talent. I mean,
you have a line standing outside your borders of probably three billion people just waiting
outside to be allowed in. And you can select who comes in. ‘‘That asset, together with all the
other elements – space, resources, the rule of law, democracy, political stability – all of that
is just unheard of. Think about where you can find that. Maybe Canada,
despite the fact they have lousy weather most of the year.’’
Why should Australians care what one of Europe’s elite thinks about investing here? Parts of
Australia, including most of the Nationals, are convinced Europe is wasting its time on
renewable energy. Their scepticism about the Acciona boss would only rise if they learned
he has been advocating a price on carbon for years. To make things worse, he plays polo
and his family is worth about $5 billion, which puts him at No.4 on the El Mundo rich list for
Spain.
Yet Entrecanales has made that fortune by being smart enough to anticipate the change in
global energy over the past three decades. He inherited a construction company and turned
it into a renewable energy giant. He put money into the wind farms in Spain in the 1990s.

Around the time others were inventing the worldwide web, he was commercialising clean
power.
That makes his opinion count. And if he thinks Australia is a good place to build more clean
power, you can be sure others will reach the same conclusion. Some will do it for the good of
the planet. Others will do it to boost their bank accounts. Either way, the change is coming.
The Acciona chairman believes there is a solid rate of return on Australian renewables when
measured in the basic unit of global finance, the basis point. He evaluates everything by
whether it can deliver 300 or 400 basis points, which is to say 0.3 per cent or 0.4 per cent in
returns above the cost of finding the capital to build the project. He says 300 points would be
‘‘a reasonable objective’’. In Australia it might be between that and 400 points. That might
not sound like a lot, but it suggests Australia may have a slight edge in attracting investment.
What is next? Probably hydrogen. The commercial barriers are significant. But Europe is
putting immense amounts of time and money into making green hydrogen work as a way to
store and
transport energy created by electrolysis that is powered by electricity from renewable
sources.
In the Netherlands, the Port of Rotterdam has struck deals with companies including Shell to
import and generate hydrogen to send by pipeline into Europe.
In Spain, the company that builds the trams for Sydney’s inner west light rail, CAF, has built
a hydrogen train using fuel cells from Toyota. It will be tested on the country’s rail lines at the
end of this month. Navantia, the company that built three air warfare destroyers for the Royal
Australian Navy (and wants to build three more), is developing a submarine powered by
hydrogen.
Entrecanales says Australia would be a natural exporter of green hydrogen. But he thinks
the trade in hydrogen will only happen at large scale when the price is cut in half from the
current $12 or so per kilogram.
‘‘We’re living a moment of truth in trying to develop this technology,’’ he says. ‘‘I think we’re
close, meaning I’ll see it in my shift – meaning, my professional life.’’
So Entrecanales is betting on Australia. He is running with the bulls. Some of the crowd will
be mauled, of course. Some will get into a few fights.

24/04/2022

Huge Corporate Rort with Petroleum Resource Rent Tax

24 April 2022

Foreign companies are paying no tax due to deficiencies in the Petroleum Resource Rent Tax (PRRT). You may recall that the Rudd government tried to bring in a realistic tax based on the one that they have in Norway with a sovereign wealth fund set up to tide the country over a rainy day (like a COVID epidemic perhaps). The extent of the tax avoided is currently 13% of GDP!

Rudd was targeted by a combination of the miners and Murdoch, who he was trying to stop getting a virtual monopoly of the Australian media.

When Rudd fell, Gillard came in and introduced an alternative tax, which allowed her to save face, but one commentator some time later noted that the increase in miners’ profits that year was almost exactly what Rudd’s tax would have raised, and the new tax raised almost nothing. It was also said that the Tax Office had not modelled the new tax, and it came from the miners. This fits the theory that it was a face-saver so that Australians would still think that the government was actually in control.

Here we are a few years later, with a whole election debate is about tax, tax cuts, handouts and the cost of living, yet neither of the major parties have the guts to call out the real tax avoiders, who actually changed the legislation in their favour. The Greens do and for that they are called radical lefties!

The government takes credit for the COVID bounce-back recovery, which has nothing to do with their policies, and for the low unemployment rate which relates to the lack of backpackers and students, who usually do the dirtiest and least safe jobs for sub-award wages, not to mention the definition of ‘employment‘ as having at least one hour of work a week. The claimed 4% unemployment rate is actually a bad joke.

Here is an article in Crikey from Bernard Keane:

www.crikey.com.au/2022/04/20/prrt-could-be-biggest-theft-in-history/

24/02/2022

Loneliness and its solutions

25 February 2022

I sometimes watch Foreign Correspondent on ABC TV and by chance on 15/2/21 I came across this excellent programme on loneliness in Japan.

The ABC correspondent there looks at loneliness in the Japanese population from older folk dying alone, to younger people simply withdrawing from society.

Some of the older ones had no family or jobs. Some of the younger ones were so pressured to succeed and felt that they had failed, so simply withdrew from society. It seems that the pressure on kids all to be CEOs is an absurd and unachievable objective.

I am not sure that the situation in Australia is as bad, but I thought about some of my patients and could think of half a dozen immediately. With some of them , I am one of the only two or three people in the world they have any contact with, their relationships are tenuous.

None of them started with mental health problems. Here are some examples:

A 60 year old man worked for a security company looking after an insurance company. He was doing surveillance for them, but it took over his life as he was contacted 24 hours a day for various crises. Case management employees having conscience over what they were doing had to be rescued from self-harm in the toilets. Enraged claimants with refused claims threatened to blow up the company offices with cans of petrol. He saw staff high-fiveing as some claimant got a derisory settlement when they deserved and needed a lot more. It went on like this for years. When he said that he could not do this anymore he was treated as badly as any of the people he had dealt with. He told me this story, and I had hoped that with his considerable management skills and experience, he could be put into a less stressful position. But he deteriorated. Everything reminds him of the corruption of the world. He is estranged from his wife and they communicate with post-it notes on the frig. He goes for a walk at 11 at night so he will not have to speak to people in the street. One son has stuck by him and visits daily, and will build him a self-contained unit in his new home.

Another patient is a 62 year old ethnic taxi driver who was so badly bashed 11 years ago by a gang stealing his takings that he lost an eye, has never worked again and never recovered mentally or physically. He was divorced; lives alone and sometimes will not even answer the phone.

One is a 42 year old foreign student who came to study theology, wanting to become a pastor. Her English is not great. She is a trifle unworldly, and thought that the world is basically kind and people look after each other. She had a casual job in a motel and her boss asked her to move a bed down the stairs between floors. She said it was too heavy and she could not, but he threatened to sack her. She did it and got an injury to two discs in her back. She was frightened to have surgery, so was in agony for a couple of years and eventually agreed. She had minimal surgery, which was not successful. The insurer decided that she was not complying with what they wanted so refused to pay her. She was effectively broke and homeless, so an old lady from her church offered her a bed and food. But she lives a long way away and up a drive that is hard for my patient to walk up. She was effectively trapped. As a foreign person she did not even have Medicare for the minimal psychological help it offers (6 visits a year). Her mental health deteriorated and she shunned all outside contact, and would not even answer the phone. She has gone home to her family- I can only hope she improves there.

One is a 39 year old from a religious and teetotal family with a high sense of ethics. He was a top salesman of a computer company and became aware that they were ripping off some customers. He drew this to management’s attention, but they declined to do anything and he was labelled a whistleblower. Management supported him by putting out an email asking that he be supported for his mental health issues. He felt that this ostracisation was the end of his career, because he had asked them to behave ethically. He was certain that no one in his tight top group will now employ him, so he withdrew and started to drink to lessen the pain. His family then rejected him because of the drinking and his sales friends are estranged also. The psychologist gives him Cognitive Behavioural Therapy exercises and I try to get him to drink less and somewhat ironically counsel him that you cannot withdraw from the world merely because the baddies generally win. He lives alone, answers the phone and is just able to do his own shopping, but is not improving much.

These are just some examples that I know. Coasting home as GP at least keeps you in contact with life. The point is that many people have broken lives, but just keep living. None of these examples have done anything wrong themselves. Is a sense of ethics a mental illness?

As everyone has to ‘look after themselves’ in a consumer-oriented society, more people will fall through the cracks, especially as the gap between rich and poor is enlarged by pork barrelling which puts resources into areas that need them less, tax breaks for the rich, subsidies for private schools and private health insurance, derisory welfare payments, and insurers allowed simply to refuse to pay without penalty.

People need basic support with universal housing and universal health case. They need jobs or at least occupations and an adequate income to survive. And we need outreach and support services that can be called upon.
When people say, ‘There are not enough jobs’, they are taking nonsense. Anyone can think of many worthwhile things that need doing. And there are plenty of people who would be happy to do them. The problem is that in a world where nothing can be done that does not make a profit, a lot of things that need doing are not done. That is where the policy change are needed. We cannot simply look at the money and see to what level existing activities can be maintained. We need to look at what needs to be done, and then work out how to achieve it. We need to decide that everyone has a right to live and those who have a good life will live in a better society if everyone can share at least a basic quality of life. There has to be recognition that the ability to be profitable need not be the overwhelming criterion for what is done. Tax may go up, but if there is real re-think of priorities, it is not likely to be all that much.

The link to the ABC program that initiated this tirade is below.
https://iview.abc.net.au/show/foreign-correspondent/series/2022/video/NC2210H002S00

13/01/2022

NDIS- An Unsuccessful Privatisation of the Welfare System

13 January 2022

I was never in favour of the National Disability Insurance System as I saw it as a defacto privatisation and reliance on a ‘market’ which would have another layer of assessors, who may or may not get it right in a single interview, the award of ‘packages’ of money which may or may not be enough and/or may or may not be wisely spend. The greatest problem was that as a ’market’ it would be always liable to have glossy marketing to vulnerable families, with services delivered as cheaply as possible, by unqualified people and profits skimmed off. The government coffers were topped up by increasing the Medicare levy, which just ensured that the private sector was given huge amounts of public money.

When I was in the NSW Parliament’s Social Issues Committee which looked at the issue, a key problem was that there was no actual numbers of what the needs were for disability services. There were two ways of calculating it. The first was to add up all the people on benefits on the assumption that everyone who needed benefits was getting them. The other way was to ask the Australian Institute of Health and Welfare (AIHW), the government-funded research body what percentage of the population had a disability and multiply that percentage by the population. Their answer was many multiples of those on welfare, presumably either because their relatives or support networks were looking after their problems, or there was unmet need.

It seemed obvious that:

There would be a huge increase in demand when more resources were (at least in theory) available
There would be a lot of bureaucracy that would waste a lot of money
Those actually doing the job and who knew the needs at a practical level would have less control so the decision making would worsen
There would be a lot of profiteering
Disability workers would face a race to the bottom in pay and conditions.

It might be noted that NDIS cuts out when you are 65, so the whole process restarts with recipients having to apply for a Disability Support Pension (DSP). The current government has boasted that it is putting only a third as many people on the DSP as formerly. My experience was that when the NSW government stopped all Workers Comp payments after 5 years, many people who had been on this support for 5 year at least had to apply for the DSP. Figures were rubbery as the NSW government did not want to know how many people were simply tipped off income support, but the best estimate was that about 20% got the DSP and the rest had to go on Jobseeker. I wrote a lot of detailed medical reports for people who were still unable to get the DSP, and then the government wrote to me and said that I could only charge a very modest Medicare amount to write such reports, so presumably doctors will not be able to take much time on them. I cannot write them in the time that the allowance pays. I had one patient who was 61, ethnic, unskilled and illiterate in English who had been on compensation for a back injury 13 years and was carer for an invalid wife and was refused the DSP despite my best efforts and put into the ‘mutual obligation’ multiple job application system.

But to get back to the NDIS itself, I recently chanced across this article recently from an old issue of Green Left Weekly- a personal story. It seems very credible.

My view is the NDIS needs to be abolished, but it will be very hard to rebuild a public welfare support system against a well-funded and established private lobby that is making a fortune and has at least one major party ready to undo any efforts in this direction.

NDIS is also making life harder for disability workers

Janine Brown, Melbourne, February 8, 2019, Green Left Weekly Issue 1208

I am employed as a disability support worker by a council and, since the introduction of the National Disability Insurance Scheme (NDIS), I will soon lose my job. This is my story.

I am in transition to becoming “self-employed” with an ABN (Australian Business Number), which makes me a small business, and enables me to sign individual contracts with each client.

The other alternative was to become an employee of a private company that has contracts with NDIS clients.

From these two bad choices, I decided to go with the former.

We have been told that NDIS will be much better for hundreds of thousands of Australians. But is it?

Once families receive NDIS funding, it is their responsibility to make the choices for their child or adult family member and manage their finances over a 12-month period.

The idea that they are in control of the life choices of their family member may sound appealing. But the stress levels rise with the amount of bookkeeping required and when it is difficult to clearly define their needs.

Parents are encouraged to employ an advisor, but that person is paid for by the funding for their family member. That NDIS planner will recommend “one of theirs”, someone who will ask many questions and tick many boxes but who doesn’t really know the needs and interests of the person concerned.

I was once supporting a child at home when the NDIS planner was interviewing his parents. One of the questions was “Do you own your home?” I invited the planner to meet the child but she declined, saying it wasn’t necessary.

As much as I agree with giving parents options in choosing a carer for their child, the options being presented are often inadequate to the task at hand.

By privatising the disability sector, many people are obtaining an ABN (which is easy to do online) and presenting themselves as a qualified support worker. They do not need background checks and parents who search online for support workers only see promotional material.

I am qualified and have many years of experience, but l am now in competition with an untrained person who is willing to provide “services” at a cheaper rate. They call it business. I call it a dangerous rort.

NDIS has also meant that our work is now casual: we no longer have permanent employment with leave benefits, superannuation and union support.

A few weeks ago a parent asked me to do a buddy shift with a potential new carer as she lives near the client. Having a carer nearby is appealing for parents who may need to call on you at the last minute.

l agreed to do the shadow shift. I found that the inexperienced carer had no idea about the work responsibilities or the safety measures. She had no knowledge about supporting someone who is non-verbal with behavioural difficulties, who needs support in all aspects of daily life. She appeared to be more interested in the times of shifts, rather than the child’s needs.

It is easy to be blinded by the NDIS marketing, but just as the privatisation of the aged care sector has led to cuts in staff, quality meals and wound management, the same is true for the disAbility sector.

There are also many grey areas concerning the care of people with a disability.

Statistics show that as the number of people being diagnosed with autism (done by general practioners) has increased in the past few years. This adds to the NDIS budget.

As a result, NDIS bureaucrats are thinking of using “their people” to make the diagnosis. If this happens, we can expect a decline in the numbers of people being diagnosed with autism and many who need support will not be eligible for funding for appropriate services.

Another grey area concerns supporting people transitioning from childhood to adulthood, and teaching them to become more independent.

It is sometimes possible to teach a person to take public transport to an activity. However, it becomes a crisis situation when the bus/tram/train is late or cancelled and the person has lost all points of reference and they have to navigate replacement measures.

The NDIS planner may have ticked a box for someone to take public transport to an activity when things are going well, but an unexpected or crisis situation which causes the person anxiety is not factored into the plan.

It is imperative that we continue to support vulnerable people in our community. We must not be blinded by the NDIS hype when the reality is vastly different.

www.greenleft.org.au/content/ndis-also-making-life-harder-disability-workers

04/11/2021

Australia at Glasgow COP26

4 November 2021

Just when you think it could not get any worse- it does. There has been relatively little about Australia’s appearance and presentation at the Glasgow climate summit and the reaction to it; the media being preoccupied with the fact that President Macron of France called Scott Morrison a liar, and chasing abducted Cleo Smith in WA.

Australia has had a SANTOS stall at its exhibition at the Glasgow Climate Summit. Santos is spruiking its carbon capture and storage, subsidised by guess who? You and me as taxpayers, facilitated by Energy Minister Angus Taylor who is charged up with a $2.3 million donation from Santos to the Liberal Party.

Carbon capture is a complete nonsense. Coal is more or less solid carbon. To do some basic chemistry, a mole of carbon weighs 12gm and occupies 5.3 cubic centimetres. When it combines with oxygen it weighs 44gm and becomes CO2, a gas which takes up 22.4 litres which is 22,400 cubic centimetres or 422.6 times the volume of the original carbon at atmospheric pressure. To capture the CO2, and then compress and store it will almost certainly take more energy than was released in burning it. To halve the volume of a gas, you have to double the pressure, which takes 101 Joules of energy per litre per atmosphere. The carbon dioxide is also able to penetrate barriers, such as going through solid concrete, and the sites suggested for the carbon storage are at 31 degrees, when carbon dioxide does not become a solid until minus 78 degrees. So the whole process cannot be economic or sensible, and no ‘technology’ will make it so.

Everything in the above paragraph is high school chemistry, so no great knowledge is required here. Only those venal or wilfully ignorant can dispute this. How the myth of Carbon Capture and Storage can still be peddled is beyond belief, excepting the explanation attributed to Napoleon, ‘In politics, absurdity is no impediment’.

The fact that Australia could have a Santos stall in its display in Glasgow shows the extent to which the Morrison government is willing to make us an international laughing stock for the sake of their $23 million, not to mention the subsidies, the greenhouse effects and the delays caused by this policy.

The other quote that seems apposite is Greta Thunberg’s, ‘Blah, blah, blah’.

www.theguardian.com/australia-news/2021/nov/03/australia-puts-fossil-fuel-company-front-and-centre-at-cop26?fbclid=IwAR3x1hmLa5dbh7nJ8i_IFx8PyZEAyzSIuIeJVMQOlZfLQfY0-nt9wXE1Wgs

15/09/2021

An OECD Analysis of the Federal Government’s Policies

16 September 2021

This is a good and reasonably comprehensive article in The Guardian where the OECD looks at Australia with some interesting graphs and international comparisons.

The OECD also wants to review the role of the Reserve Bank. One might comment that the Reserve Bank might have more power in other countries and the OECD might either think it has more power here, or is pushing for it to have such. The RBA here had traditionally kept out of politics, finally made some very sensible comments and been roundly ignored.

www.theguardian.com/business/grogonomics/2021/sep/15/australias-climate-failures-are-costing-its-economy-and-scott-morrisons-government-is-being-blamed?CMP=Share_iOSApp_Other&fbclid=IwAR0HPjSa-z0Esu7GklbLRl3IrvAzJnjsBdMNX7VhWFbCcOsNbNBTYGpZO2U

08/09/2021

What Has Gone Wrong in Australia?

8 September 2021

John Quiggin gives a good, insightful summary in The Monthly.

www.themonthly.com.au/issue/2021/september/1630418400/john-quiggin/dismembering-government?utm_medium=email&utm_campaign=The Monthly Today – Wednesday 8 September 2021&utm_content=The Monthly Today – Wednesday 8 September 2021+CID_77319af0620e0ea97965a0e5af6e7e60&utm_source=EDM&utm_term=The Monthly#mtr