Category Archives: Other Issues

Leyonhjelm on OPM

Finally someone in Australia standing up for taxpayers and liberty. Politicians addicted to OPM (Income Tax alone is $183.6 bn for 2014-15!).

Monetary policy is failing Australia, just like it has for other countries

Australia’s central bank, the RBA, like all central banks, are artificially lowering interest rates to manipulate the marketplace. Australia’s housing market bubble is one of the few in the world which hasn’t popped spectacularly yet. Some of this is due to the RBA lowering interest rates, Government’s offering home owner grants and other manipulations, but above everything is foreign buyers coming to the market and China reinflating the commodities boom after the GFC hit in 2008.

Australia’s housing market:
house_prices_rainbow_spaghetti_kohler_april2014
house_prices_capital_city_prices_kohler_april2014
As most money in the economy is created through fractional reserve banking, that is, when people get new loans at a bank, central banks will continually tinker with the rate of interest to manipulate people’s decisions to get ever-higher loans. In particular, the RBA wants to get more home loans signed. As the following chars show, house prices have really only taken off again in Sydney and Melbourne. The rest of Australia has a flat housing market or a contracting housing market. House prices in Hobart have contracted for over six years; Adelaide’s prices has flat-lined for the same period, as has Brisbane. Most parts of regional Australia haven’t fared much better.

So here’s one of the big faults of having a central bank manipulating interest rates. If Tasmania, South Australia and Queensland were independent countries, the RBA would be halving the current interest rates to try to stimulate those housing markets. Whereas, if Victoria and NSW were independent countries, the RBA would be lifting interest rates right now to try to take the wind out of their property markets. In essence Tasmania is quickly becoming the Greece of Australia. Tasmania’s employment prospects are weak (really only 4 major manufacturers left in the State) and this reflects in its housing prices.

Under the managed economy Australia has there is little the States can do to stimulate investment in their economies. They can’t lower the company tax rate. They can’t alter the GST rate. They can’t manipulate interest rates. These are all managed at a national level. As such, the states earning all the wealth, such as Western Australia heavily subsidise the underperforming states such as Tasmania. For instance, in 2011-12, the Commonwealth derived $49.5 billion from W.A., while expenditure back to W.A. totalled only $29.5 billion, a difference of $20.0 billion. I think most Australia’s take for granted the amount of wealth and taxes that flow from Western Australia to the east coast.

Eventually the wealthy states get tired of bailing out other regions after a while. This has been the cash in Europe for centuries, and now several regions are looking for a way out. Barcelona is doing the heavy economic lifting in Spain, and Venice want’s to be out of Italy (Venetians pay 61 bn euros in tax and gets 21 bn euros back from Rome for services).

How much evidience does one need to show that central planning doesn’t work and leds to inefficient big government?

household_financesHousehold debt has peaked which is a huge warning sign to the RBA that people are more unwilling to take on larger loans.

housing_saving_ratioPeople are tighting their belts as economic uncertainty increases job insecurity. Households are holding onto cash even though the 9 members of the RBA board think interest rates should be low and people shouldn’t be increasing savings. Low interest rates punishes savers.

The RBA can’t manipulate interest rates and get away with it forever. People are waking up.

Treating non-voters as criminals… Pay $20 or else

Compulsory Voting in Australia is a complete farce and needs to go.

Hundreds of thousands (probably millions) of people go to polling booths to vote because they do not want to get fined for not going. Many of these simply get their name ticked off and put empty voting slips in the boxes. State coercion to vote clearly does not work. State coercion to simply show up works on some people. If people want to take part in voting in a democracy than that’s their choice.

Check out this notice given to persons who failed to vote at the recent Federal Election (click to enlarge)failure_to_vote

Look at the no holds barred language…

  • “it is a criminal offence to fail to vote with a valid and sufficient reason”
  • “a criminal conviction may be recorded against you”
  • In other words… “the State has control over you, so don’t f*#k with us”

    What a joke. Australia’s compulsory voting system (along with compulsory preferential voting) is a laughing stock of the western world. Where else could an ordinary citizen be treated as a suspected criminal for a small sum for not voting (or choosing not to participate in democracy)?

    ABC shamelessly using our tax dollars to continually spruik globalist green agenda

    The Australian Broadcasting Corporation (ABC) currently receives around $1.2 billion per annum to operate countless TV, radio, online and other media services. When I say countless I mean 54 radio stations, a 24 hour news network, Network Australia (for overseas audiences), ABC1, ABC2, ABC3, ABC4 and of course a constantly updated online ABC website (in competition with Australian newspapers and other online sites).

    Over a billion dollars a year in handouts in an era where more and more Australian’s get their news from all over the world through the internet. What would the far left say if $1.2bn was taken from taxpayers backpockets and given to the Murdoch press each year? It’s time to end the subsidies. If ABC has a product people want, then it can stand on its own two feet. The blank cheque must stop.

    Now days, day-in day-out the ABC group-think continues to peddle it’s far left-wing propaganda. None worse is the ABC continually linking every localised flooding/bushfire/cyclone/heatwave to “climate change” (used to be called global warming remember?)

    The last week the ABC has particularly ramped up the number of stories it dedicated to “climate change”, by attempting to frame the New South Wales bushfires as being “unparralled”, “unprecendant” and a sign of “climate change”.

    Monday
    7:30 (Report), a 7 minute segment claiming:

    Scientists say climate change link to bushfires demands action

    The Drum on ABC24 also dedicated about 20-30 minutes last night talking to a NSW Uni climate lecturer about the ‘unparalled emergency’ with the current bushfire.

    • Nevermind that 11 of 48 major bushfires in NSW between 1926 and 2006 occurred in October or earlier.
    • One of the largest bushfires occurred way back before people were concerned about global warming:
    The ‘Black Thursday’ fires of 6 February 1851 in Victoria, burnt the largest area (approximately 5 million ha) in European-recorded history and killed more than one million sheep and thousands of cattle as well as taking the lives of 12 people (CFA 2003a; DSE 2003b).
    They are considered the largest Australian bushfires in a populous region in recorded history, with approximately 5 million hectares, or a quarter of Victoria, being burnt.

    Tuesday

  • UN climate chief Christiana Figueres calls for global action amid NSW bushfires

    The United Nations says the New South Wales bushfires are an example of “the doom and gloom” the world may be facing without vigorous action on climate change.

    Wednesday
    7:30 (Report) gets everybodies favourite alarmist… (somehow an expert on Australian bushfires and localised weather events)

  • Former US vice-president and environmentalist Al Gore says there is a proven link between climate change and bushfires.

    All week the Australian public get lectured by the ABC about climate change and bushfires. All 100% bollocks.

    Logic, reason? Other views?

    Why doesn’t the ABC have a balance of opinions from actual bush fire experts or climate sceptics with opposing views like David Evans, who submitted his article to the Age, but was refused at the last minute.

  • Fuel Loads Not Climate Change are Making Bushfires More Severe

    People have been burning off to keep fuel loads low in Australia for thousands of years.

    Current fuel loads are now typically 30 tonnes per hectare in the forests of southeast Australia, compared to maybe 8 tonnes per hectare in the recent and ancient pasts. So fires burn hotter and longer.

    Aparently the ABC spoke to some bushfire experts, like this one, who had a 35 minute interview with 7:30 but they only used 69 words, because he said the bushfires were NOT linked to the bushfires.

    Least there is a few journalists left in Australia prepared to call out all the BS that the ABC peddles:

    The ABC is a national disgrace. Today, the ABC is nothing more than a loudhailer for the Green movement and other Globalists who want to take away our liberties and the sovereignty of nations to decide on their future. It’s time to sell the ABC or cut it (likewise the SBS).

  • Time to take on the green energy myth

    Terry McCrann:

    The latest effort from its so-called ‘chief climate commissioner’ really takes the cake with his absurd claim that Australia could be powered “almost entirely by renewable energy.”

    Oh yeah. Renewable energy now provides about 10 per cent of our electricity. Sounds like we’ve got a running start? We’ve ‘only’ got to expand it tenfold?

    Except what people like Flannery never tell you in all the headline flummery, is that the overwhelming majority of that comes from hydro power. And nobody’s building dams any more.

    Yes, the body of his report does note that some 65 per cent of that 10 per cent comes from hydro. It’s arguably closer to 80 per cent in non-drought years.

    That means barely 2 per cent of our total electricity comes from what the average person would think as ‘renewable’… Wind and solar…

    That means even using his optimistic numbers for current wind and solar generation, we would have to increase our installations of wind and solar by at least forty times what they are today to get 100 per cent of our electricity from these two “plentiful” sources….

    But that’s to produce today’s power. Flannery’s talking about some decades ahead, when our demands will probably have doubled. So make that a 160-fold increase in windmills…

    Solar and wind could even be the cheapest sources of power for retail users by 2030, Flannery trumpeted. As carbon prices rise, he added.

    Yes, the greatest half-truth of the climate propagandists. Make real power sources ridiculously, unnecessarily expensive and suddenly wind and solar become “cheap.”

    When we look at the energy produced in Australia, we are going through the biggest energy boom in our history – it’s just that we are exporting the once “cheap” competitive advantage our country had – cheap uranium, black coal and gas.

    Australia’s energy production by fuel type (total):

    Australia’s energy production which is exported (by fuel type):

    Australia’s actual energy consumption (by fuel type):

    To put this all into perspective… a flow chart showing how much energy Australia exports.

    The rest of the world is happy to buy our high quality black coals, uranium and cheap gas… yet we are being flooded with the “green energy” religious left… Many in this camp are anti dam building, anti nuclear, anti coal, anti methane gas, and… many are anti wind towers cause they kill birds…. The hypocrisy.

    The renewable madness needs to stop. No mandates. No Government hand outs. No carbon taxes. No false sciences. No globalists agenda. Let the free market once again determine the cheapest source of energy.

    – Scott

    Retirement of a libertarian great

    A great last speech by Ron Paul – arguably the most influential libertarian of all time, thanks to his hard work and the freedom of the internet.

    His books well worth reading, particularly Liberty Define and End the Fed.

    Kohler: Australia’s super system is a national disgrace

    On my previous blog, I wrote about the major structural flaws of Australia’s Super industry – handing tens of billions in guaranteed revenue to the pockets of financial planners every year – regardless of market conditions. Looks like Kohler has similar views:

    Australia’s super system is a national disgrace

    It doesn’t take more than a few moments of thought to understand that Australia’s superannuation system is not the paragon it’s cracked up to be.

    Savers and retirees are fully exposed to both market and longevity risk, there is very little regulation around where the money should be invested and virtually no regulation of fees.

    In other words, Australians are required by law to save 9 per cent of their salaries in an effectively unregulated privately managed system.

    The industry will argue that it is, indeed, tightly regulated, but not where it counts. Other utilities’ prices are set according to the returns on capital of the providers; in super, not only are fees essentially unregulated, but few customers even know what they are.

    Those who can actually work out the dollar amount by multiplying the basis points by the amount in their fund, which is not very many people, would have to make sure they include all the different fees in their statement – administrative and investment fees. It’s virtually impossible.

    So the superannuation industry is in the happy position of providing a service that is mandated by law where the price is both unregulated and effectively unknown.

    No wonder there are 400 super funds in this country and many more investment managers fighting to manage the $1.4 trillion in super and $9 billion a year in inflows, and little wonder that the fastest growing sector is self-managed super.

    I met an English investment manager for a coffee yesterday who, unsolicited, expressed amazement at the levels of investment fees in this country. “How long has this been going on?” he wanted to know.

    But that’s not the worst thing about our superannuation system. The worst thing is the brutal risks to which Australians are routinely exposed.

    Between about 1985 and 2000 all capital, both private and public, was removed from the support of retirement pensions. Up to that point most corporations, life offices and governments allocated part of their capital to guarantee their employees a certain retirement income.

    But in the space of a few years they all rushed out of “defined benefit” super, as it was called, to “defined contribution”, or accumulation, funds. Billions in capital was given back to happy shareholders or deployed elsewhere by even happier managers and politicians.

    It has taken about a decade for the risks of this process to become evident. For the first 10 years the fact that Australian super funds had over-exposed their unknowing clients to equities was not a problem because the stockmarket boomed.

    Now the funds have been going backwards for five years and suddenly the nation’s retirement savers are exposed to what is politely called “sequencing risk” – that is, if you want to retire when the market is down, bad luck!

    In general, very few people in Australia now know what they will have to live on when they retire. It is a lottery. In the space of two decades we have gone from knowing and not having to worry, to not having faintest clue, and worrying like hell.

    Many people, realising late in life that they won’t have enough, start taking bigger and bigger risks as they approach retirement to improve their returns, when the opposite is recommended. For some this pays; for many it is a disaster.

    Meanwhile, when we retire we are left to our own devices with a lump of money. Usually, but not always, we consult an adviser. Sometimes we give the lot to a nice man who then runs off with it.

    The advisers used to be paid commissions by investment managers, as well as unscrupulous shysters, to ensure that the money found its way back to them.

    Those commissions are now banned, in the face of a ferocious campaign from the industry, but the money still mostly goes back into “balanced” investment portfolios – that is, shares, property, hedge funds, private equity, bonds and cash – using expensive managers for each category.

    As during the saving years, retirees are thus playing the asset markets once again; nobody is guaranteeing them anything.

    So once they retire, Australians are exposed to the greatest risk of them all: that they will have the misfortune to live a long time.

    According to the Bureau of Statistics average life expectancy in Australia is now 79.5 years for males and 84 for females. But that’s an average – half the people will need to fund a retirement of more than 15-19 years (assuming retirement at 65), and many will live much, much longer than that. It’s another lottery.

    Moreover, the crackdown on smoking, the advent of effective anti-cholesterol drugs and advances in cancer research, among other things, will ensure that life expectancy increases dramatically from here.

    The cost of retiring, already enormous, is set to soar. Yet just as nobody know what fees they are paying to have their savings lost, nobody knows what it will cost them to retire and whether they will be able to afford it. Mind you, it’s usually better not to know, because you can’t afford it.

    As Winston Churchill would say, superannuation in this country is a riddle wrapped in a mystery inside an enigma.

    It is a national disgrace.

    US navy miltary in perspective

    Came across this visual. The US empire still reigns large.

    Australian houses worth less than loans on them

    In February 2009 I wrote on my previous blog that:

    Housing prices, just like the sharemarket go through cycles between boom and bust. However, in Australia I believe we have become very complacent. We think property is a sure fire way to wealth. We believe its normal for prices to increase 5 percent or 10 percent per annum (just like we believe we are recession proof because we haven’t had one since 1991). Throughout history house prices have always busted after times of major credit (debt) expansion. A crash will come to Australia soon – its just a matter of timing. Timing is everything.

    Last week the Daily Telegraph reported:

    Houses worth less than loans on them

      * Since 2008, the number of mortgages written each month has fallen by 15,000 properties.

      * More than one third of those who bought a house in 2008 now owe more than the house is worth.

      * Queensland is the state worst affected, with NSW house prices holding up the best.


      MORE than 35 per cent of homebuyers who purchased the properties after 2008 are facing the prospect of being in negative equity.

      And analysts warn that those homeowners with negative equity – their house being worth less than they owe on it – are likely to stay in that scenario for up to six years as property values remain “soggy” for some time to come.

      The damaging JP Morgan report, released yesterday, comes as the Reserve Bank released the monthly minutes from its October meeting, which points to further rate cuts on Melbourne Cup Day.

      The report shows large numbers of aspiring buyers are being locked out of the market as banks lift their lending requirements post-GFC. The level of new monthly mortgages being written has dropped from about 60,000 pre-GFC to about 45,000 this year.

      Digital Finance Analytics principal Martin North warned house prices are likely to remain weak for years to come and may even fall as they are still at historically high levels compared to the average income.

      The report defines negative equity as any house that has seen its value grow by less than 10 per cent – below inflation – in the past four years.

      Queensland is the worst hit state, with 54 per cent of properties purchased since 2008 in negative equity. NSW is least affected with just 24.5 per cent of homes affected.

      Since 2008 the national average home price has risen almost 10 per cent from $375,000 to $412,000, according to RP Data.

      But in the same period the national level of negative equity jumped almost six-fold, from about 6 per cent of homes bought before 2008 to a whopping 35.6 per cent of homes acquired in the past four years.

      JP Morgan banking analyst Scott Manning said despite the Reserve lowering interest rates to their lowest level in three years borrowers are finding it harder to get funds.

    I called the debt cycle over back in 2008. Trillions of dollars, yen, euro, yuan etc (assets covered in debt) are yet to be liquidated. The Federal Reserve system and its banks are still covering up trillions of dollars of toxic derivatives. The Sub Prime meltdown was only just one small part of the picture. More people are slowly waking up and moving into precious metals. It’s not too late, just yet, to preserve wealth. There is a massive wealth transfer coming from debtors to savers.

    – Scott

    Australia’s compulsory voting system to be challenged at High Court

    It’s great to see this will finally be challenged on a constitutional basis. State cohesion is never the answer. Freedom of choice is. What is the difference between Mr Holdmdahl receiving a fine for not voting and 730,000 other Australia’s that reluctantly showed up at a polling booth to submit a blank vote? Both camps chose not to make their vote count.

    Supreme court rejects Adelaide man Anders Holmdahl’s fight for right not to vote

    AN Adelaide man says he will take a legal challenge against compulsory voting to the High Court, after the state’s Supreme Court today rejected his argument that voting should be optional.

    Anders Holmdahl said he was “not surprised” that the Full Court of the Supreme Court had ruled against his appeal against a conviction for failing to vote in the last Federal election.

    Mr Holmdahl, 65, set up his legal challenge by deliberately failing to vote and then refusing to pay a $20 fine.

    Chief Justice Chris Kourakis and Justices John Sulan and Tom Gray today unanimously rejected Mr Holmdahl’s argument that compulsory voting went against the nation’s constitution.

    Mr Holmdahl argued that the constitution stated it was the right of every Australian to vote, while the electoral act stipulated it was a duty.

    After the ruling, a defiant Mr Holmdahl said he was determined to pursue his case in the nation’s highest court.

    “We suspected that this was going to happen because there is too much political pressure at the moment and we will take it to the High Court,” he said.

    “Compulsory voting is definitely unconstitutional … what is the difference by putting in a blank vote which about 730,000 Australians did at the last election and not turning up at all, the result is exactly the same

    “Why shouldn’t we be treated as adult people and be given a choice on whether we want to vote or not?”

    Former Liberal Senator Nick Minchin was in the court for the judgment and said he supported Mr Holmdahl’s crusade.

    “I’ve always said that compulsory voting is an infringement on the democratic rights of Australians so I am delighted this case was brought to court,” Mr Minchin said.

    “I hope it will be taken to the High Court. I think the Australian Electoral Act’s requirement on Australians to vote whether they want to or not is wrong and I think it should be tested in the High Court.”

    Which reminds me of this Julie Bishop article at the last election:

    Vote – or else?

    What does Australia have in common with Argentina, Brazil, Chile, Cyprus, Ecuador, Fiji and Greece? How about Liechtenstein, Luxembourg, Mexico, Nauru, Peru, Singapore, Turkey and Uruguay?

    According to the Australian Electoral Commission, these are the nations that, along with Australia, have compulsory voting in national parliamentary elections and enforce it through fines, sanctions and other penalties. …

    Some argue that democracy confers rights and responsibilities, and if you have the right to vote, then it is your responsibility to do so. That may be so, and we also have a right to free speech but that doesn’t mean we are compelled to exercise that right.

    In my view voting doesn’t equate with other intrinsic obligations. It doesn’t seem fair to force people to vote for candidates they don’t know or care about or want to support.

    Australia’s first nine federal elections were held under voluntary voting, with compulsory voting first enforced in 1925. Since then, Australians have become used to compulsory voting.

    Turnout has never been below 90 per cent and while the number of informal votes can vary, there is little evidence as to what extent this represents acts of error, apathy or protest.

    Numerous surveys and polls reveal strong public support, with generally more than 70 per cent in favour of compulsory voting. That is not so surprising given that Australia has had no other system for the past 85 years. …

    Those against compulsory voting argue that it is inconsistent with the freedoms associated with democracy. It is argued that political parties and candidates take the public for granted and rely on laws of compulsion and enforcement to get voters to the ballot box, rather than enticing them through attractive policies. …

    What I’m also against is the compulsory preferential voting (full allocation of preferences) which is used for the lower house elections across most states in Australia and for the Federal Election. Why should one be forced to number every box, when perhaps only one candidate stands out (and the rest should get nothing)? Last federal election my electorate only had 3 candidates and preferencing wasn’t so attractive…

    In comparison, in the New South Wales state elections, there is optional preferential voting. You can choose to either number ever box or just allocate a 1 to the candidate you most prefer. This is a huge difference, and makes it harder for the political parties to simply rely on preferences to get their candidates elected. Voters should have the chose to allocate or not to allocate, if indeed they choose to donate time from their lives to vote in the first place.

    It is clear that our voting system in Australia is anything but perfect. A serious debate is needed, and we have every right to question existing systems.

    ~ Scott

    The Drones are coming

    This Foreign Correspondent feature was on a couple of weeks ago, and worth a look. Huge questions about personal liberties and privacy… and then there are prying Governments. Full version can be seen >here<

    The Real Ron Paul Revolution

    Ron Paul’s race for the 2012 US Presidential Election is all but over. The result wasn’t unexpected. Romney (backed by Goldman Saches and the Federal Reserve banking system) may have used every trick in the book (and then some) to secure the official Republication nomination, but the lasting change Ron Paul has had on the US political landscape will be felt for generations to come. Millions of people world wide have woken up and released that the US foreign policy is completely wrong and blow back is inevitable. Millions have released that the two party Republican-Deomcrats system is corrupted by insiders and lobbyists (particularly the banking aristocracy) and that both major parties will do anything to uphold the Federal Reserve System of control. Millions now know that 70 years of Keynesian (big government) economics has failed and that the answers lie in substantially less Government intervention and through the principles of Austrian Economics (sound money). Millions want Government out of their lives, wasteful spending on pet projects to end and personal liberties protected.

    Ron Paul is arguable the most influential libertarian of all time (thanks in a huge part to the freedom of information on the Internet – which we must fight to maintain). His books have been highly influential, and would recommend them to anyone who wants less Government and banking control in our lives.

    Ron Paul video just before the Republican National Convention (his own venue)

    The Real Ron Paul Revolution – 31 August 2012 – Ludwig Von Mises Institute

    If there was any doubt that Ron Paul was not going to win the Republican nomination for the presidency, it was undeniably removed when on Tuesday Mitt Romney received the 1,144 delegates needed to clinch it.

    Does that mean Ron Paul failed? No. It is an open secret that the campaign was really about education all along. And in that regard, Ron Paul’s campaign was wildly successful. Chances are, any young libertarian you meet today will tell you that their chief influence in becoming a libertarian was Ron Paul. Ron Paul has swelled the ranks of the liberty movement to a greater extent than perhaps any other individual in history. If that’s not success, I don’t know what is.

    Where should the energy of the Ron Paul rEVOLution be directed next? What cause is the most appropriate successor to the Ron Paul campaign? Another national political campaign? No, because, again, the Ron Paul campaign was never chiefly about winning office in the first place. Moreover, real, lasting progress toward liberty cannot be achieved through the offices of a gargantuan state. The most appropriate successor to a campaign of ideas is another campaign of ideas.

    And which nonprofit, educational organization is most in harmony with Ron Paul’s message? You’re looking at it. Ron Paul is an ardent adherent of the Austrian School of economics, a champion of private-property rights, and a fierce critic of the Federal Reserve, fractional-reserve banking, and militarism. And the Ludwig von Mises Institute has been at the forefront and on the same side as Paul with all these issues for 30 years. That is why Ron Paul will be speaking at our Supporter’s Summit this October.

    Ron Paul’s legacy is not in his legislative record but in the number of minds he changed. The way to perpetuate his legacy, then, is to continue — and ramp up — the “Paulian” educational campaign. And the most Paulian nonprofit educational organization in the world is the Ludwig von Mises Institute.

    Must read Ron Paul books:
    * Liberty Defined
    * End the Fed