Australia: Corporate tax cuts are not the answer

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The Australian government wants to give corporations a $48 billion tax cut believing this will help growth and the budget. It will help neither. I posted the following to an article at The Guardian today. See https://www.theguardian.com/australia-news/2017/jan/27/australia-doesnt-need-to-chase-donald-trump-on-corporate-tax-cuts?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+AUS+v1+-+AUS+morning+mail+callout&utm_term=210611&subid=11379209&CMP=ema_632#comment-92056553

The main effect of a $48 billion tax cut for corporations would be to blow the deficits and debt out even further. There would be no guarantee that companies would invest more or hire more staff if they had a tax cut. Companies will only do this if there is an increase in demand for their goods and services. But with wage increases at a historical low and consumer confidence fairly low, it’s not going to happen. Besides, imagine the banks opening more branches and employing more staff if the banks paid less tax. There’s no way. The banks have made billions in profit for years, yet they close branches and lay off staff. The extra money from tax cuts would probably largely find its way into shareholders’ pockets and a fair chunk will probably be spent on additional overseas holidays (where the money of course leaves Australia) and on more investment properties (which would mean these people pay less tax, and the rich become richer and the poor become poorer paying ever higher rents). 

There is no evidence that corporate tax cuts work. Indeed, the UK and Canada have reduced their corporate tax rates about half a dozen times in eight years but it hasn’t done much at all for growth. The US and Germany have kept their rates the same and their growth, if anything, has been better than the UK and Canada. If there was evidence that corporate tax cuts worked, then everyone would be doing it. GDP would grow and deficits would fall due to more tax revenue. It just doesn’t work like that. The only place it works is in the minds of the hard right. 

It’s no use copying what Trump plans to do. Trump has no idea when it comes to money. When his casino got into trouble in the 1990s (largely due to Trump), the banks had a meeting and one banker was later quoted as saying that Trump didn’t know numbers and it was like he hadn’t taken any economics or accounting courses at college. 

We also should keep in mind that the Coalition’s tax cuts policy is tax plan C. Plan A was to hike the GST from 10% to 15%. That was abandoned when the government realised that nobody liked the idea. Plan B was state income taxes. But that wasn’t popular either and was abandoned within days when it became clear that the idea was impractical and the states didn’t want a bar of it. Then we ended up with plan C: the corporate tax cuts plus cuts for wealthy individuals. 

The Coalition government doesn’t seem to have much more idea than Trump.

Short story: All that glitters

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Here’s a short story I wrote sometime ago …

It was my first job after university. I had worked hard for three years. And now this. No explanation, no farewell lunch, no gift, just a slip of paper in my pay packet. I’d copped a bad appraisal, but so had most other staff. I sat at my battered little desk, stunned. My heart sank. The lump in my throat got heavier. How could they?

I lit a cigarette. You could still smoke in the office in those days. I drew long and hard, tossed my head back and exhaled. In front of me, my reports and notes on interest rates and customer service and the housing market were suddenly like distant memories. I had been a good employee. Sure, I’d stuffed up once or twice, like the time I caused the computer system to collapse. Staff couldn’t get into their databases. Customers couldn’t withdraw their money.

Perhaps it was all a big mistake, I thought.

“It’s no mistake,” my boss Jim Henderson said. “The chief told all managers to cut back.”

“But why me? My pay’s next to nothing.”

Henderson slouched in his leather chair and gazed out the window. His view of the city and across the suburbs to the bay was unsurpassed. An original oil painting hung on the wall of his office, a room bigger than most lounges. The top of his huge mahogany desk was empty except for a box of cigars and a fake gold astray. I had never seen him do much work. But his job seemed safe.

“The market’s so competitive these days. We’ve got to reduce our costs,” he said, shrugging.

I stood next to the door, ankle deep in plush maroon carpet. “But that’s what I’ve spent the last three years doing,” I said to him, “finding ways to cut costs and get more business. I’ve saved millions and made millions for this place and that’s the thanks I get.”

“Let’s face it,” he said, “most of those things were my ideas.”

What! I could hardly believe it. What an a###hole My hackles rose. “Let’s just say you took the credit for them,” I said.

He glared at me. “You can finish this afternoon. Your final pay will be in your account.”

“Then I may as well finish now,” I said, and stormed out of his office. No use arguing with him. He had an answer for everything. Gift of the gab type, he was.

“Suit yourself,” he called out as I hurried along the corridor and back to my desk.

I wish I’d told the chief about him ages ago. But all the managers were the same. And they stuck by one another.

I tidied my desk and packed my bag. Two other blokes working in my area got redundancy slips too. We consoled each other. One had been there twenty years. At least I was single and didn’t have a mortgage.

I decided to jam the computer again, this time on purpose. They wouldn’t suspect me. They’d think it was just another breakdown. The system was old and falling apart. But they worried about costs too much to replace it. I knew what to do to stuff it up so no one here could fix it. My mate in the computer room had shown me how. They’d have to fly a contractor up from the capital. And it was too late to do that until next day.

Just as I was about to tap the relevant keys on my terminal, Henderson strolled in. “I thought you were going,” he said.

“Er, yes, I am,” I said. “I’m tidying up a few computer files and I’ll be gone.”

He folded his arms and stood behind me. I sensed him looking over my shoulder. Did he suspect? I doubted it. He didn’t know the first thing about computers. But I’d got him wrong before. So I fiddled around swapping files between directories. He stayed put. Damn him. I swivelled from side to side in my rickety old chair, hoping the squeaking would send him away. It didn’t. He picked up Business News from the next desk and started to read it. Didn’t he have a meeting or something to go to? He was probably making sure I wasn’t going to nick anything before I left. Or did he want the personal satisfaction of actually seeing me out the door for the last time?

He was soon engrossed in the newspaper. I arranged the shutdown for half past six that night. Just before sunset. Staff would be long gone by then. It’d give Henderson and the other managers something to do, I thought, while they stayed back till all hours for the sake of it, trying to impress the chief by being last to leave the car park.

The very moment I finished, he threw the paper aside and said, “Come on, I want you gone, now.”

Phew! I’d made it. “Alright, alright, I’m going. Can’t you see I’m packing my stuff.”

There wasn’t time to photocopy any of my reports to take with me. He wasn’t even going to give me a chance to sign the underneath of my desk. I grabbed my bag and left.

“Good luck,” Henderson said. “I’ll give you a reference if you need one.”

What! He gives me a lousy appraisal, fires me, and then says he’ll give me a reference. He was just trying to soften me up, the useless b##tard, scared I’ll dob him in to the chief.

I got into the escalator, yanked off my tie and pressed ‘B’ for basement. The contraption grated and wobbled its way down. Henderson’s gleaming white Fairlane and other executives’ cars were parked in large well-lit bays. I walked down the ramp to the lower basement. No lifts to this level. I ducked under the air-conditioning pipe and fumbled in the darkness to get the key into the door of my trusty old Datsun. I opened the door as far as the concrete pillar would allow and squeezed in.

I drove up to the exit and spoke into the speaker. I’d already handed in my swipe card needed to open the huge iron gate to the outside world.

“Wait a minute and someone will come,” a voice said.

I lit a cigarette and waited a few minutes. No one came. I activated the speaker and spoke into it again.

“Name please, sir,” a different voice said.

I gave my name.

“Sorry, sir, there’s no one by that name on my list. Are you a visitor?

They’d struck me off already! Proof they could do things quickly when they wanted to. “No, I’m not a bloody visitor. I’m a long-suffering inmate trying to escape once and for all,” I yelled into the thing.

Before anyone came, another car appeared from the lower basement. I reversed and let it through, following closely behind. I glanced in my mirror as the gate shut. Freedom.

I needed some food and things to take home, so I drove to the public car park. At least I’d be able to exit when I wanted to. I trudged toward the main shopping area, sweating under a broiling sun. Dust rose from the roadway as cars sped past. In the distance a heat haze blurred the hills. I went to the ATM to get some money. I keyed in my details and waited. “Balance $6.28,” it said. The mongrels hadn’t put my pay in. Or had the computer failed a few hours too early? I stood aside and watched as the next person withdrew a wad of twenties. The ATM was in order. That meant the computer was working. I withdrew five dollars and bought some takeaway. I’d been too busy sorting out one of Henderson’s stuff-ups to have lunch.

I rang the pay clerk from a public phone. She told me she hadn’t received any advice about my leaving, and so far as she knew my normal pay would go into my account later that night as usual. She’d make enquiries and sort it out as soon as possible. She said she wished she’d got a slip too.

Great. No job and no money. And I was low on cigarettes. I sat on a bench near the mall and watched the world go past. I stared at the steel and glass monstrosity a block away, where I’d slaved every day to make Henderson and his cronies look good. It was the tallest building in town. Gold-coloured windows glowed as they reflected light from the sun. They became brighter as the sun got lower, almost blinding. The windows on the second floor, where the computer was, wavered like a mirage. They were brilliant yellow, with a tinge of orange, blazing. There was a fire in the computer room. Flames leapt high, rapidly engulfing the building. Fire engines wailed, but they couldn’t do much. It was a towering inferno. By dusk it had faded. The building was gone. Nothing was left.

I got my money though, later that night. When I set the shutdown time, I had switched my account to the off-site computer, just in case.

Australia: Don Argus incorrectly blames Labor

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An article appeared in The Australian on 12 December 2016 in which former National Australia Bank CEO Don Argus accused the Labor government of 2007 to 2013 of spending up big and putting a “dead weight” on the country’s finances. He complained about the government’s “cavalier approach to spending” in 2008. Not a scrap of data was provided to back up the claims. See http://www.theaustralian.com.au/business/don-argus-says-ruddgillard-spending-weighs-on-economy/news-story/a89fdbb6f0a4c3b6d94bcd192eaafc05.

For a start, the stimulus packages were not announced until February 2009. They totalled about $52 billion and the reason for them was to keep the economy out of recession in the face of the global financial crisis. Australia’s GDP growth fell to about 1% and without the stimulus packages, the economy would have contracted by around 2.5%. This would have resulted in many more businesses going broke or being in trouble and a considerably higher unemployment rate.

Expenditure as a proportion of GDP in 2007-08 (Labor was in office for the last seven months) was 23.1 %, the lowest it had been since 1989-90. It rose to 25.1% in 2008-09 and 26.0% in 2009-10 with the stimulus packages. It then fell to 24.5% in 2010-11, 24.9% in 2011-12 and 24.1% in 2012-13. Since mid September, the right wing Coalition government has been in office and expenditure rose to 25.6% of GDP in both 2013-14 and 2014-15 and 25.8% in both 2015-16 and 2016-17 (projected).

When the GFC hit, revenue went through the floor. It had been 25-26% of GDP in the years before the GFC. It then fell to 23.3% in 2008-09, 22.0% in 2009-10, 21.4% in 2010-11, 22.1% in 2011-12 and 23.0% in 2012-13. This is the main reason for the deficits and debt in that period rather than the extra expenditure to keep us out of recession. It is sometimes thought that mining and exports to China saved us from recession (rather than the stimulus packages). But gross value added by mining grew by about $3 billion in 2008-09 and exports to China by around $12 billion, which together was about 1% of GDP.

Australia came out of the GFC with the third lowest government debt to GDP ratio of the 34 OECD countries. Many commentators have applauded the Labor government’s efforts during this time. Nobel prize winning professor of economics Joseph Stiglitz of New York said: “You were lucky to have, probably, the best designed stimulus package of any of the countries, advanced industrial countries, both in size and in design, timing and how it was spent – and I think it served Australia well,” http://www.abc.net.au/news/2010-08-06/stimulus-served-australia-well-despite-waste/935002 The article also stated that Stiglitz felt that such programs are “preferable to the waste of human and capital resources that would have resulted if there was no stimulus.” The packages weren’t perfect at such short notice but they did the trick.

Expenditure has risen under the Coalition government. Also, it doesn’t seem to think there is a revenue problem, which we’ve had since the GFC. It was 23.5% of GDP in 2015-16, still a couple of per cent below pre-GFC. The Coalition wants to give corporations a $50 billion tax cut, which Argus and others support. But consumer demand for goods and services isn’t there, which means that tax cuts will be unlikely to go to business investment. They will more likely go to shareholders, which is likely to result in more money spent on overseas holidays and more residential investment properties. Any tax cuts will also make the deficits even larger. The UK and Canada have reduced corporate tax rates half a dozen times over the last eight years. The US and Germany hasn’t, but if anything their economies have done better than the UK and Canada.

Overly generous tax concessions (negative gearing and capital gains exemption) to investors in residential property have been another major problem in Australia and an important reason the economy is underperforming and the deficits are larger than they should be. Our housing prices are among the highest in the world and first home buyers have been priced out of the market by speculative investors in property pushing up demand, prices and rents.

Don Argus also said we are “becoming one of the highest-taxing economies in the OECD”. This is simply not true either. We are one of the lowest if company and personal taxes, GST type taxes and others are taken into account. Our GST rate is especially low. He mentions Donald Trump proposing to reduce the corporate tax rate to 15%. This will have a devastating effect on the budget. Deficits and debt will grow. Services such as health, education, law and order, and roads will decline, and the economy will struggle even more than now.

If Argus and a few other commentators on the right had a look at the facts and figures, they might not come up with such outlandish and incorrect statements.

Donald Trump: the system got him there

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Yesterday, an article appeared in The Conversation in Australia: ‘A flawed system delivered Trump victory – and now we brace ourselves for what’s next’. I wrote the following comment …

Yes, I think it was a flawed system that delivered Trump. It took 16 months to find someone that a minority of people voted for. If you win California or Florida or New York by one vote, you win the whole state. The system goes back to 1787 and is crazy in 2016.

Non-compulsory voting tends to bring out the right with their stronger views than those on the left, and also those with transport, the time and the physical mobility, which again tends to be those on the right.

The FBI is partly to blame, for bringing back the email saga and then once again deciding there isn’t a problem.

I think there is also a lack of education which sees people voting in a person with no idea about economics, budgets, climate change, government policy, or much else. It’s perhaps a cultural problem too. A lot of the thinking away from the east and west coasts is from the 19th century: Bible in one hand and gun in the other [or that’s the impression we often seem to get in Oz].

The polls got it right; people wanted Clinton. But the system gave them Trump. It’s anyone’s guess what will happen over the next four years as Trump is all over the place and doesn’t have a clue.

See https://theconversation.com/a-flawed-system-delivered-trump-victory-and-now-we-brace-ourselves-for-whats-next-69142?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20November%2024%202016%20-%206151&utm_content=Latest%20from%20The%20Conversation%20for%20November%2024%202016%20-%206151+CID_8b701dfc28e82e3a56f52016c4d173fa&utm_source=campaign_monitor&utm_term=A%20flawed%20system%20delivered%20Trump%20victory%20%20and%20now%20we%20brace%20ourselves%20for%20whats%20next

Malala Yousafzai

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(updated from the original published to Bubblews writing site a few years ago, now gone)

Malala Yousafzai won the Nobel Peace Prize at 17 years of age, the youngest person to win a Nobel prize. She has also won Pakistan’s National Youth Peace Prize, which has been renamed the National Malala Peace Prize. And she has won the International Children’s Peace Prize, as well as the Sakharov Prize for Freedom of Thought, and numerous other awards. She was on the cover of Time magazine and listed as one of the 100 most influential people in the world. She spoke at a United Nations session on her 16th birthday; I saw the entire speech and was very impressed.

She started campaigning for the education of girls when she was 11 after her father nominated her to write anonymous blogs about life under the Taliban for the BBC, after other, older girls had declined through fear of reprisals. In her home district of Swat, Pakistan, the Taliban had been banning female education, blowing up numerous girls’ schools, as well as banning television and music and preventing women from shopping. At the time, Malala spoke against the Taliban on a Pakistan current affairs television program.

What an amazing young person to stand up to a force such as the Taliban. Seems they are still after her. Let’s hope her minders can successfully protect her from these thugs and that Birmingham, UK is far enough away from them. Her efforts are sure to make the world a better place.

 

Is one’s astrological sign based on actual or due birth date?

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(originally published to Bubblews writing site, now gone)

I’m not particularly into astrology but whenever I’ve read a general description of personalities and traits, I seem to belong much more to the sign I was supposed to be born under than the one I was actually born under. Yet when I checked a few forums such as Yahoo answers, I’m told that your sign is based on your actual birth date.

I was born on September 26 which makes me a Libra (Sept 23 to Oct 22), but I was 10 days late and was supposed to be born on September 16 which, on this basis, would make me a Virgo (Aug 23 to Sept 22).

This is some of what the Virgo page at astrology.com (http://www.astrology.com/article/zodiac-signs-virgo-sun-sign.html) has to say, together with my comments:

“picky and critical.” Yes. Those who knew me on the Helium forums would probably agree.

“born to serve.” I was in the public service for 25 years.

“industrious, methodical and efficient.” I would like to think so.

“work for the greater good.” Yes, I’ve always been more interested in this than making a heap of money.

“modesty and humanity.” Yes.

“enjoy indulging their practical and logical side and poring over their projects to the nth degree.” Yes, both in the workplace and outside.

“good at fact-finding.” Yes.

“exacting (… pedantic) behavior.” Often.

“asset in the workplace … no detail will be overlooked.” I think I had a reputation for this.

“brain is in overdrive most of the time.” Seems to be much of the time.

“prone to skepticism.” Yes.

“studious.” Six and half years’ full time equivalent at university.

“careful analysis.” Yes.

“enjoy studying a situation in great detail.” Yes.

“perfectionism.” Often. Hey, I’m an editor.

“extremely health conscious.” Maybe “quite” or “very” rather than “extremely.”

On the other hand, the Libra page (http://www.astrology.com/article/zodiac-signs-libra-sun-sign.html) says this:

“first and foremost focused on others and how they relate to them.” Well, not really.

“do not want to be alone.” I work, study, research, analyze better alone.

“everything is better if it’s done as a pair.” I’m happily married, but we each like our own space and time for a portion of the day.

“true team players at work.” I did better work by myself. Teams sometimes frustrated me (as member and leader) as they often seemed to get bogged down or go in circles.

“abhor conflict.” I wouldn’t say that.

“strategists, organizing groups with poise and getting the job done.” Yes for the first and third parts, but perhaps less strong at organizing groups (though could still do this).

“companionable, sociable.” Maybe not all the time.

“do so well at cocktail parties.” Not really my scene.

“suave.” Doesn’t really sound like me.

Thus I seem to fit much more into the Virgo mold than I do Libra. But then I had a look at a couple of other sites looking at true star signs, such as livescience.com article, “Astrology: Why your Zodiac sign and horoscope are wrong”, at http://www.livescience.com/4667-astrological-sign.html. They indicate that conventional star signs accord with constellation positions over 2000 years ago. The star signs and birth dates according to this web page are now (I’ve added the number of days as they vary a lot):

Capricorn – Jan 20 to Feb 16 (27 days)

Aquarius – Feb 16 to Mar 11 (23 days)

Pisces – Mar 11 to Apr 18 (38 days)

Aries – Apr 18 to May 13 (25 days)

Taurus – May 13 to Jun 21 (39 days)

Gemini – Jun 21 to Jul 20 (29 days)

Cancer – Jul 20 to Aug 10 (21 days)

Leo – Aug 10 to Sep 16 (37 days)

Virgo – Sep 16 to Oct 30 (44 days)

Libra – Oct 30 to Nov 23 (24 days)

Scorpius – Nov 23 to Nov 29 (6 days)

Ophiuchus – Nov 29 to Dec 17 (18 days)

Sagittarius – Dec 17 to Jan 20 (34 days)

According to this, I’m a Virgo. But it seems this version of star signs is far less commonly used than the conventional one. So where does this leave us? Perhaps I should continue to not worry about astrology too much and just get on with things. Anyway, it was an interesting little project.

Family history

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(originally published a couple of years ago to Bubblews writing site, now gone)

Anyone into family history? I’ve been researching mine on and off for a few years and am finding it quite interesting. I’ve gone back to the 1400s on a couple of lines on my father’s side and one on my mother’s side, as well as several lines back to the 1500s and 1600s on both sides. [I’ve possibly since tracked one line back to William the Conqueror.] 

One line on my father’s side were Huguenots from France, migrating to London in the 1600s to escape religious persecution. A line on my mother’s side also escaped religion persecution by moving from Germany to London around the same period, but London wasn’t taking refugees at the time and large groups were forwarded to Ireland! 

I haven’t stumbled across any royals as yet, but apparently just about anyone from Europe, including the UK, is related to royalty. Once you find one, it means you’re related to all the others because all the royals are related. [see above]

Records can be sketchy the further you go back and I’ve come across a lot of family trees on ancestry sites that go off in wrong directions due to 1 or 2 people in there that don’t actually belong. Many trees include royals, but I suspect that a lot of them can’t be proved.  

Some trees include a lot of the ancient royals and other famous people, including biblical characters, but again I suspect most are inaccurate somewhere along the line, mainly in getting from the commoners to the royals around the 1000s to the 1500s. One tree has various biblical characters right back to Noah and Adam and Eve and starts with God! 

During my research, I’ve found a number of third and fourth cousins and a sixth cousin who I communicate with.

Today’s cotton wool kids

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(originally published in 2014 to Bubblews writing site, now gone)

In our Sunday Mail newspaper here in Brisbane, Australia, there was an article on today’s cotton wool kids and all the safety rules and regulations and so on. I wrote a letter to the editor for possible publication next week (it got published), below:

I refer to the article on today’s cotton wool kids (SM, Feb 2). In the early 1960s in Melbourne, the 200 or so grade 3-6 boys at my school spent morning play, most of lunch break and afternoon play on a rough, uneven field of dirt and clumps of grass up to a foot long, about the size of a soccer field. There was footy (kick to kick for each grade), a cricket “pitch” in each corner, marbles, chasey, brandy, British bulldog, and general running around.

None of these were organised, other than by the kids. No teacher was ever on duty there. The area couldn’t be seen from any classroom or staff room. Very occasionally, a teacher would join in kick to kick. I can’t recall any serious dust-ups, abuse or injuries, although there were a few bloody scratches and bruises, and plenty of dirty knees, elbows and hands.

And of course nearly everyone walked or rode their bike to and from school. From my second day onwards as a five-year-old, I walked to school, until age 10 when I rode my bike.

It used to be pink for boys and blue for girls

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(originally published to Bubblews writing site, now gone)

These days, we think blue for boys and pink for girls. But it wasn’t always this way. Until the late 19th century, white dresses were the norm for boys and girls up to the age of 5 or 6. Longish hair was in fashion for children and you could hardly tell boys from girls.

New chemical dyes meant colors gradually became more popular in the 19th century as they no longer faded when washed. Pink and blue were worn by both boys and girls up to about the time of World War I (1914-18). Around this time, pink became more popular for boys and blue for girls. In 1918, trade magazine Earnshaw’s Infant Department said:

“The generally accepted rule is pink for the boys, and blue for the girls. The reason is that pink, being a more decided and stronger color, is more suitable for the boy, while blue, which is more delicate and dainty, is prettier for the girl.”

This rule seemed to be promoted by magazines and stores in the 1920s. There were exceptions, such as blue sailor suits for boys, which had been popular since the late 19th century.

By the 1940s, manufacturers and retailers were pushing blue for boys and pink for girls. The main influence may have been French fashion, which was predominant and had traditionally used pink for girls and blue for boys.