Doctor and activist
22/04/2020
22 April 2020 The COVID-19 crisis highlights the failure of market mechanisms. The lack of good health care in the USA will highlight how private medicine simply does not deliver the health care people need. The same can be said in Australia, though we still had a bit more public system to build on. But […]
22/12/2019
22 December 2019 ‘The God Delusion’ had been on my ‘to read’ list for years. Having been through years of boarding school I had heard all the arguments about the existence of God debated ad nauseam I was a bit chastened that I had not written the book myself and I assumed that I knew […]
20/09/2019
20 September 2019 I grew up convinced that as knowledge spread humanity would advance. Society would become more secular and decisions would be evidence-based. I studied medicine, which tries to be a science and the people I worked with mostly had a regard for truth and willingness to listen to sensible arguments. Then I found […]
02/08/2019
Recession Alert! A Law is Coming to Get Ready for Negative Interest Rates, but it being sold as just another move against the ‘black economy. The bill is the ‘Currency (Restriction Use of Cash) Bill 2019’.
Cash is used in the black economy to avoid tax. But when the GST came in, the obvious time to restrict cash transactions, this was not done. Now it is coming in the above bill, banning cash transactions over $10,000 apart from a few exemptions which can be turned off by regulation, (i.e. without going back to Parliament). This bill was announced last Friday afternoon 26 July, and not picked up by the mainstream media. The consultation period is very short- 26/7/19 to 12/8/19.
It begs the question; ‘Why restrictions on cash now?’
It seems that the answer is that when the economy will not grow, interest rates are lowered. They are at 1% now, so cannot go much lower till they get to zero. How do you stimulate the economy when the interest rates are zero?
One way is to tax people who are not using their money and give it to the banks, who presumably will give people money to take the stored cash and use it.
Some countries already have restrictions on cash. The 500 Euro note was withdrawn by the European Central Bank. France has banned transactions over 500 Euros, Italy 3000, Spain 2,500. Some long-term interest rates are already negative.
From the public’s point of view, if you are going to lose money by putting it in the bank, it would be better to keep it in cash and put it under the mattress or in a home safe. Even bullion has a storage cost. How retirees will manage is hard to say. They will be losing cash just by holding it and they simply have to spend their capital to survive. Naturally it means that all the cash in the world will be available to stimulate industry as the owners of cash will have immense financial pressure to put it into investments.
There is an IMF paper ‘‘Enabling Deep Negative (Interest) Rates to Fight Recession- A Guide’ IMF Working Paper April 2019 by Ruchir Agrawal and Miles Kimball’ which is a ‘how to’ guide for governments to use negative interest rates. At a political level the advantage pointed out is that people will blame the private banks rather than the government. The paper also suggests that a short sharp shock with ‘deeply negative’ rates might get a better response than a longer period of mildly negative rates. This gives an idea of the thinking- it is all about countering recessions. The IMF paper even canvasses the possibility of the abolition of paper money transactions!
The convenience of cards has been lessening cash use, but this new bill looks as though it is following the IMF guide and getting ready for the possibility of negative interest rates. It is not really about stopping the black economy.
The government put out a call for a discussion of this bill on the Treasury website last Friday afternoon, the crowded news day, presumably in the hope that it would not be noticed. They seem to have succeeded- There has been nothing in the mainstream media, apart from old articles referring to controlling the black economy. The Treasury seems to want people to believe that this is all part of counteracting the ‘black economy’ the email address for submissions is blackeconomy@treasury.gov.au. But it would seem that this is simply dishonest. The IMF is worried about a long-term global recession. Presumably our government is also, so they are getting their legislation in place on the IMF recipe. They just thought that you had better not know. It says a lot about how we are governed.
This information was given to me by a ‘freedom group’ called, ‘In the Interests of the People’. At youtube.com paste ‘/watch?v=770M2s6ZD8Y’ to see the video. I do not want to be the vector for conspiracy theories, but the implications of this really need to be understood and discussed. It really is not just about stopping the black economy.
The Treasury website that gives the bill has no discussion- merely explanations of the Bill, and even this is quite incomplete as the Part 2 which has the penalties is missing.
The IMF paper that seems to be the origin of the bill is fairly dry reading also but is at:
www.imf.org/en/Publications/WP/Issues/2019/04/29/Enabling-Deep-Negative-Rates-A-Guide-46598
31/05/2019
31 May 2019 Roosevelt in 1941 spoke of the 4 Freedoms, freedom of speech, freedom of worship, freedom from want, and freedom from fear. This was before the UN Declaration of Human Rights. I spent 10 years in boarding schools from the age of 8 where religion was most definitely in charge. Many of the […]
09/09/2018
9 September 2018 At a recent visit to Berne to look at Swiss democracy, I visited two Einstein museums. I do not propose to give his biography, but merely to point out a couple of points that struck me as his life was proudly displayed. He had been a pacifist all his life and in […]
19/10/2017
19 October 2017
The energy plan proposed by the Lib/Nat government has several major flaws based on either their poor understanding of how an electrical network works or wilful misrepresentation. It is a government sanctioned, long term price fixing agreement.
The current plan is to force energy retailers to buy a minimum amount of energy from “reliable” thermal plant to ensure reliability by reducing the input from “unreliable” renewables. The plan is not a surprise as the thermal plant owners had a big input into it. This effectively puts a base price on energy of about $85 per MWh i.e. the typical wholesale price of power from at thermal plant.
The government confuses reliability with despatchability.
Reliability is a measure of whether a power source will be working over some specified time interval. A better metric is availability i.e. the time period over which the power source is performing within acceptable parameters.
Modern well maintained thermal power stations have availabilities in excess of 95%. But for example if Liddell which has 4×500 MW turbo generators has only been able to keep 3 running consistently its total availability would be 95%x0.75 =70% i.e for 70% of the time over the last few years it has been able to despatch, supply when needed 4×500 MW. Its capacity to despatch 3 x500MW has been 95%. Actually Liddell’s performance has been much worse than this.
Base load is the Coalition’s other favourite subject. It takes about 8 hours to start up a large thermal power station and about 12 hours till it comes up to full capacity. These times are dictated by differential expansion of its components. Hence normal practice is to keep these units running continuously. They also exhibit stability problems when run at less than 30% capacity. At night when the demand for electrical energy drops, continuously running operations like steel mills, aluminium refineries, cement works etc. took up this load generally this was not enough to keep the load above 30% hence the low off peak rates offered for water heating.
The problems of differential expansion also mean that thermal plant cannot respond quickly to changes in load especially load increases.
The above limitations meant that in a system dominated by thermal plant you have to keep enough older plant running at low load so that it could take up the power of the largest unit in your system should that unit be forced to shut down in an emergency i.e. trip. This is system spinning reserve. So the price will be set by the needs of the old fossil fuel plants. This will keep the coal owners happy. It will also keep the renewable generators happy as the high price will give them a massive profit margin. It will keep Labor happy, as thye can make a magnanimous gesture of bipartisanship and when they come in there will be lots of renewables built to get the huge profit levels that have been there for the taking.
The people who will not be happy will be the industries that will go broke because unnecessarily high power prices made them uncompetitive, and the long-suffering homeowner.
Renewable energy power systems and hydro have different characteristics. Hydro is despatchable if you have sufficient water. Australia’s lack of water means that all of our large hydro stations do not operate continuously. They are mainly used to handle short and medium length load peaks as they can respond quickly to load changes. Naturally if the water were pumped up when there was spare power they would act as batteries.
Wind and PV systems are not fully despatchable as their output is dependent on wind strength and sunlight. They can respond quickly to load changes.
Their availability here in Australia is much, much better than the Liberals would have us believe and our ability to forecast wind in the medium term is now very good. Hence their availability is quite high. We can also use concentrated solar thermal plant. Here a heliostat field of several hundred hectares is used to concentrate sunlight onto a boiler mounted in a tower to heat a transfer medium, typically sodium carbonate to about 400 deg.C. The molten salt is pumped into a storage tank and then pumped through a heat exchanger to generate steam which drives a steam turbine. One such plant is planned for the head of Spencers Gulf in SA. Here the energy is stored as heat and the molten salt can be drawn from the hot tank to generate steam on demand i.e. the plant’s capacity is despatchable.
For example a wind farm costs about M$2.00 per MW to install. A 1MW unit running at 40% capacity factor, most wind sites do better, will then generate about 3,500MWh pa at $85 per MWh this will be $300,000. Assuming capital costs of say $85,000 and service and maintenance of $84,000 this leaves a surplus of $207,000 a very good financial result especially when you compare this to a thermal plant which will cost about M$30 per MW to build and take 10 years in the building compared to about 3 years for a wind farm.
Older thermal stations like Liddell are worn out especially their boilers which from a large part of the capital cost the boiler tubes suffer from stress fatigue and start developing fractures. Coal and ash handling plant starts to wear out and even the turbine blades erode due to the aggressive operating temperatures. Eventually the combination of wear and loss of availability makes them uneconomic. Try keeping a 40 year old car road worthy if you use it as a taxi.
01/07/2017
1 July 2017 I have grave fears for this system. I am unsure even of the goodwill of some of its advocates. I was on the Social Issues Committee of the NSW Parliament and we looked at Disability services and the way that these were delivered. Basically if you ask how big the disability problem […]
15/05/2017
15 May 2017
Since the last two world wars were over markets, it was assumed at the conference at Bretton Woods that if there were free markets everywhere there would be no wars and countries who did well would prosper. It worked. Germany and Japan traded in markets that had been denied to them pre-war and ‘won the peace’. The dogma was that because there was efficiency in production we would all be better off as goods would be available all over the world quickly and cheaply. And, helped by the overwhelming dominance of Milton Friedman’s economic theories the market has spread into every aspect of life. The fact that when Friedman’s theories were actually implemented in South America that they failed miserably was merely a blip ignored.
Now the market is assumed to be better than anything else as a way of allocating resources efficiently. It is better than government, better than planning, hey it is infallible, and probably inevitable as well!
Governments do not have to manage anything; they can sell it, even if they do not need the money. Inner city buses are the latest.
If you read Chapter One of most economics books, it tells you about competition and how you cannot charge too much or a competitor will uncut you, so prices are kept down.
The rest of the economics book tells about monopolies or oligopolies, where there is poor competition and you can charge what you like, or there are high set up costs as barriers to competition, or regulatory hurdles, artificial training or registration requirements, geographical limitation, existing facilities, impractical duplication costs etc etc, which make monopoly or ‘supernormal’ profits a certainty. Yet Governments plough on creating private monopolies and compliant political parties are rewarded by campaign funding to keep on winning elections.
What I am writing is not new or original and is known by anyone with even the most basic grasp of economic theory. Do the politicians not read past Chapter One? Do they never think that they are creating uncontrolled monopolies as they transfer assets from ownership by all the society to ownership by a moneyed elite? Are they so ideologically committed to privatisation that they no longer think at all? Do they not care, or will they do anything for their own short-term interest? It seems that the answer to all these questions is YES!
They have sold the airport, the sea port, the water supply (an endless subsidy to an unused desalination plant), the railways, the electricity, the road network and easements under it, the world standard database of land titles registration, the small councils power to control development, the list goes on and on. The health system is being sold by stealth. Medicare is being starved to death, as private health insurance is just subsidised inefficiency, and NDIS disability services will go the same way, no government services, oligopolies for profit paid for by the ‘Medicare’ levy rise, which is not even committed to Medicare. The education system no longer produces tradesmen to do the job and private education rip offs abound from dodgy day cares to non-Gonski funding to schools to post-TAFE colleges selling dubious certificates to phantom colleges ripping off visa-seeking migrant students.
The public service is being ‘hollowed out’. It no longer retains centres of expertise as it can always buy ‘consultants’ who carry briefcases and impressive CVs and have no interest except the public good. It closes offices, hires short term workers, relies on PR driven websites and replaces people with knowledge by ‘Services NSW’ which has someone who might know which department might do what you might want.
Our existing political system seems unable to govern in our interest. The interest of the political parties no longer coincide with the public interest. Our governments’ decisions have been bought like everything else. I do not think that money can be held at bay by electoral funding law reform. When we fought the tobacco industry, it sponsored sport and culture to get political allies. When that was banned, it sponsored ethnic groups, rescue boats and helicopters, any worthy cause that could lobby for it, and that was without gifts in kind, dodgy ‘foundations’ or other less visible influence-buying.
The only answer that I can think of is Swiss-style democracy where major decisions are taken by referenda of the people, and Parliaments merely implement decisions that the people have made. Any other suggestions?
26/11/2016
26 November 2016 Power, Injury and Awards. I work in medicine, treating mostly third party motor vehicle injuries and workers compensation injuries. There are much fewer of the latter because there are less employees. Many people working as couriers are ‘self employed’ contractors. One man had to pay $75,000 for the right to deliver parcels […]