FFS! Is Abbott for real?

When I first heard this masterful piece of economic nonsense last Thursday I couldn't believe my ears.
When asked about foreign mining companies and the money they derive from Australia's non-renewable resources, Tony Abbott said; "We’ve got to remember that foreign investors take millions out of our country but they put billions in first"
It seems Abbott refuses to recognise that he has no capacity for basic economics.
Rio Tinto alone produced net profit after tax of A$37.4 billion in Australia in the 10 years to 2009. That's about 3.74 billion annually that it probably took home to head office in a brown paper bag.
As for the tax these multinationals pay, well that's quite frankly laughable.
In the 2007-08 financial year 4,290 mining companies had combined incomes which totalled $160,323,192,189 with combined taxable incomes of $29,010,243,407.
Net tax actually paid was $8,068,463,15 after all allowed deductions had been made.
Of course the royalties mining businesses paid in the past were all tax deductible, and as exporters these same companies get such a whopping collective GST refund that it all but wipes out the financial impact of money paid in taxes by the industry as a whole.
Any fool can see that foreign mining companies are on a sweet deal here. So what does that make Tony Abbott - a specimen lower than a fool or simply a Lib?

Monsanto's GM canola? Can't give the stuff away in WA

The following may be read while softly humming that old song Who’s sorry now?

The West Australian on December 16, 2010:

Harvesting a WA record 13,000-hectare genetically modified canola crop is a time-critical challenge for man and machine.

Monsanto plays hard in the West Australian on April 21, 2011:

GM canola seed company Monsanto estimated GM canola crops would surge from about 70,000 hectares to 100,000ha in WA this year.

On GM Canola seed costs for farmers in the West Australian on May 18, 2011:

“The seed is about $70 a hectare, but home-grown seed is about $12-$18 a hectare….. GM canola growers need to pay seed developer Monsanto a $3 technology fee on top of the seed and an end point royalty of $13.20 when they deliver the product. GM canola is also discounted on the world market, with growers receiving about $20 a tonne less than regular varieties.

The West Australian on May 26, 2011:

Two of Australia’s biggest grain traders say they have no plans to take genetically modified canola this season.

Elders-Toepfer Grain acting WA accumulations manager Ben Noll said the company was not currently taking GM canola and that was unlikely to change as the season progressed.

“From where we sit at the moment, we’re all non-GM, ” he said.

“We’re in the process of being involved in certification for the sustainability of canola products.”

Under the European Union Renewable Energy Directive, canola for the European premium-paying biofuel market requires International Sustainability and Carbon Certification (ISCC), which means sustainably produced canola is in and GM canola is out.

Glencore Grain, both Australia and WA’s second-biggest grain exporter, is not taking GM canola either — at least for the moment.

The company is also in the midst of ISCC……

Mr Haddrill said 95 per cent of WA’s canola went to Europe last year and given the dry conditions across much of northern Europe, demand would likely be high again this season……..

Gavilon currently has a $40 discount for GM canola and AWB has a $30 discount.

Viterra has GM canola bidding at $45 below non-GM and Emerald at $30 below.

The Hon. Peter Collier representing the West Australia Minister for Agriculture in the WA Parliament on June 23, 2011 in response to questions from Lynn McLaren MLC:

Question: How much GM canola was produced last year?
Answer: 49, 000 tonnes.

Question: How much of this GM canola has been sold and to whom?
Answer: I am advised that none of this canola has been sold at this point….

Gene Ethics list of known West Australian commercial GM canola growers in 2010:
A. Tom Powell, Binnu The Countryman 10-6-10
B. Andrew Messina, Mullewa The West Australian 13-4-10
C. R & M Appleyard, Northern Gully The Countryman 24-6-10
D. J&B Bagley, Mingenew The Countryman 25-5-10
E. Bill Crabtree, Morowa Farm Weekly 4-2-10
F. Brian Ellis, Bindi Bindi Farm Weekly
G. John Shadbolt, ,Nungarin The Countryman 15-4-10
H. Jason Haywood, Goomalling The Counyry Man 17-6-10
I. Mervyn Burges, Meckering The West Australian 22-5-10
J. John Snooke, Meckering The West Australian 9-4-10
K. David Fullwood, Cunderdin The Countryman 18-3-10
L. Les Thompson, Wagin thecountryman.com.au/article/2912.html
M. Chris Hockey, Gibson thecountryman.com.au/article/2805.html
N. Michael Shields, Wongan Hills
1. Bodallin
2. Wongan Hills
3. Kojonup
http://fw.farmonline.com.au/news/state/agribusiness-and-general/general/huge-gm-canola-planting-at-bodallin/1874316.aspx?storypage=0
O. Craig Simpkin, Binnu 2ha 5ac The Countryman 1-7-10

* This post is part of North Coast Voices' effort to keep Monsanto's blog monitor (affectionately known as Mr. Monsanto) in long-term employment.

Saying it with pictures for the benefit of Tony Abbott

Tony Abbott told the 55th Federal Council of the Liberal Party of Australia on 26 June 2011; As I said in my maiden speech and have been repeating ever since, middle income families with children are Australia’s new poor.

Leaving aside both the fact that Tony Abbott entered Parliament seventeen years ago and the suspicion that he is using this tired old argument to advocate tax cuts for comfortably off families like his own - it is immediately obvious that this statement by Abbott is not true.

So for the benefit of this shabby economic illiterate politician I will say it with pictures.

The mean weekly equivalised disposable household income has been rising for the entire time Tony Abbott has been the Member for Warringah and, the number reporting financial hardship had fallen to below twenty per cent of total households by 2009:


Individuals and families with low household incomes remain the poor - period.
Individuals and families on middle incomes fare better and, have been doing so consistently for at least the last twelve years.

According to the Australian Bureau of Statistics in 2010; The headline indicator shows that the middle income group had a slightly greater gain in real income between 1997-98 and 2007-08 than the low income group (46% compared with 41%) and middle income households have maintained around a seven percentage point lead on low income households when it come to a percentage share of total income received by persons between 1994-95 and 2007-08.

Those most likely to experience financial difficulties are not middle income individuals and families:
By 2009-10 there were 2.9 million families with children living at home. In 2011 The Australian Institute of Family Studies stated; Of all four groups, families comprising couples with dependent children were in the second best financial position, with an average disposable income of $810 per week, and with 19% of people reporting the experience of at least one of the seven financial hardships.

The Report for National Families Week 2011 included the observation that in 2010 couples with children were more likely to have one of the parents in paid employment than lone women with children:

Don't zap the Zac!

It's not just charities which depend on the five cent coin. A lot of self-funded retirees and pensioners know that they will be on the losing end if Swan and Combet give in to the Royal Australian Mint.
Many remember that everyone lost out after 1990, when the abolition of the one and two cent coins saw pricing slyly creep upwards.
You know that low income earners will again be losers not winners when the Australian Vending Association is boldly coming out in favour of eliminating this coin and the Australian Retail Association straddles the fence while its executive director Russel Zimmerman happily opines that; "it was likely the price of such products would be put up to the nearest 10 cent value, making smaller items more expensive for consumers".
Suck it up you Canberra fellas and keep the zac.

The strange logic residing between Tony Abbott's ears

Consumer Price Index figure for the March 2011 quarter have been released this week and they show a rise of 3.3% through the year to the March quarter 2011, compared with a rise of 2.7% through the year to the December quarter 2010. A change of 0.6% compared to last year.
According to the Australian Bureau of Statistics; The most significant price rises this quarter were for automotive fuel (+8.8%), vegetables (+16.0%), deposit and loan facilities (+4.6%), fruit (+14.5%) and pharmaceuticals (+12.5%).

This is Tony Abbott on Wednesday 27 April 2011 courtesy of his own website:

The latest CPI figures show that families are under considerable pressure. I think that it just makes it all the more urgent that the Government reign back its own spending because families under pressure obviously don’t need the kind of interest rate pressure which the Government’s spending spree is contributing to. The other point that ought to be made is that, why make a bad situation worse with a carbon tax and a mining tax? This is a government which is adding to the cost of living pressure on families, particularly with its carbon tax…….
I think that if you look behind the headline statistic you see that one of the big impacts has been fuel, one of the other big impacts has been power. Now, fuel and power haven’t been impacted by the floods and the cyclones. Fuel and power prices will be impacted by the Government’s carbon tax and that’s why I think it’s so important that the people understand that this carbon tax is toxic, this carbon tax will make cost of living pressures worse and what we want from government is sensible decisions, not decisions that make a bad situation worse

Er, run that by me again? Forget that floods and cyclones have resulted in expensive fruit and vegetables across the board or that pharmaceuticals have risen yet again. It is rising interest rates, fuel and power costs that have really pushed up the latest CPI figures according to Tony’s calculations. And those last two categories? Well, domestic economic reality that has seen electricity costs rise inexorably for years or those international market forces driving the price of a barrel of oil are not part of the Abbott equation - these current rises have no structural cause he can see and any future rise will be all the fault of a carbon price mechanism that hasn’t even been introduced to the Australian Parliament as a bill yet.

One of the most offensive aspects of the Leader of the Opposition’s political character is the fact that he obviously thinks the average voter is so stupid that any old lie told often enough will get him into The Lodge by 2013.

A tongue in cheek look at the ethics of found money

 

Jessica Irvine, journalist, in The Sydney Morning Herald 6 April 2011

There's an old economist joke: an economist is walking with a friend when they both notice a $100 note lying on the footpath. As the friend bends to pick it up, the economist shakes her head and says: ''Don't bother! If it were a real $100 note, someone would have picked it up already.''

Col Shephard, Yamba identity, in The Sydney Morning Herald 7 April 2011:

About that economist and the $100 note lying on the footpath: if the economist, in a fleeting moment of total irrationality, picked up the note and found it was genuine, he or she would immediately say there are only two things that can be done with it. Spend it or save it.
On the other hand, the economist's friend would look for its rightful owner.

Education revolution falls at the first hurdle

It has always been hard to ignore the fact that federal government funding of non–government schools comes at the expense of our public schools and the new My School financial info confirms this. Take two Lismore high schools with the same postcode – one receives a grand total of $6,917 in federal funding per student and the other receives $1,467 per student from the same source. No prize for guessing which is the public secondary school with a higher number of disadvantaged students and which is the school backed by a wealthy religious organisation.

Will

Lismore

What is it about Tony Abbott that drives his constant desire to cut public health infrastructure & spending?

Still playing politics with flood, bushfire and cyclone victims, Australian Opposition Leader Tony Abbott has released proposed budget cuts, with dodgy statistics gratuitously included.
These 'cuts' are presented as an alternative to the Gillard Government's proposed twelve-month flood levy and contain a desire to rip the hope of future GP Super Clinics away from one rural/regional community somewhere in Australia by re-directing $10M away from the clinic program. Perhaps it will be Mackay in Queensland (currently in the consultation process) which would not see a super clinic if Abbott had his way?
Or does Mr. Abbott sees his budget cuts coming at the expense of Emerald, Wynnum or Caboolture whose community consultations have been put on hold because of the Dec 2010-Jan 2011 floods?

Click on image to enlarge

Proof positive that ethical investment and consumption has a strong influence on business practice?

Walking up and down supermarket aisles looking for food products that guarantee non-GM ingredients or have a low-carbon footprint, flicking though racks of clothes or rows of shoes in search of the now almost mythical Australian-made label and generally trying to avoid purchases from companies known to exploit their workforce or the environment, can leave one feeling that perhaps the attempt to be an ethical consumer is costing one time and money with little effect on the industries involved in producing a wide range goods on display in this country.

Then along comes a letter like this one from the beleaguered Gunns Ltd, linked to online at Tasmanian Politics and Other Stuff, which clearly shows that the combined weight of individuals attempting to act ethically does eventually bring big business closer to the desired outcome:

PNC 2010 Christmas Price Index

Peter Martin found and posted this first and here is the YouTube version of PNC Wealth Management's annual Christmas offering for your amusement...

Leave river to flow free says local media

From the pen of David Bancroft, The Daily Examiner Editor, 18 October 2010

Click on image to enlarge

We'll all be rooned!

Even before the Murray Darling Basin Plan was released or widely read last week (in an Australia which currently has a population of 22 million plus and produces food for around 50-70 million people annually) the doomsayers were bellowing across the land, and as usual the Oz meeja were happy to give them column space......

Water cuts would lead to riots: warning Sydney Morning Herald 7th October 2010

Jobs, farms to be hit under river plan Sydney Morning Herald 7th October 2010

'Huge cost' in returning water to Murray The Australian 7th October 2010

Plan will 'save river, kill towns' The Australian 8th October 2010

The water fight The Australian 10th October 2010

Cities will suffer from Murray-Darling cuts‎ ABC Online 10th October 2010

Not to be outdone the rightwing pollies joined in......

Murray Darling Basin plan rewards the inefficient: Nick Xenophon Adelaide Now 8th October 2010

The plan will destroy communities, said the opposition's water resources spokesman, Barnaby Joyce. ''The ultimate goal of a plan such as this seems to be that we wish our nation to be fed by somebody else,'' he said. Sydney Morning Herald 9th October 2010

BOB KATTER, INDEPENDENT MP: We will now be a very, very big net importer of food. We will be one of the very few countries in the world that will be a large net importer of food. The Insiders 10th October 2010

DANNY O'BRIEN FARMERS FEDERATION (to press): The plan that's been released today would be a dagger to the heart of regional Australia. The Insiders 10th October 2010

And of course a perennial climate change sceptic/lobbyist added her tuppence worth......

The Murray Darling Basin Authority released a 'Guide to the Proposed Basin Plan' yesterday which had been touted as an independent scientific report. My impression of the document, however, is that it is an audacious grab for more water based on popular myths....there is enough water in the MDB anyway – no need to take water from anyone. Jennifer Marohasy 9th October 2010

Well this little wood duck's response is straightforward. For generations we've been robbing the environment of water it could ill-afford to lose and (town or country) we've all been complicit in ignoring what farmers and primary industries have been doing in the Murray Darling Basin. Now it's time to pay the piper, suck up the pain and give that water back in big measure.

Gold star for the Australian economy

In coming weeks it shall be interesting to see how the Opposition's Abbott and Hockey work a negative political spin on the International Monetary Fund and the Reserve Bank of Australia's consistently positive view of the national economy.

International Monetary Fund's Australia—2010 Article IV Consultation Concluding Statement September 15, 2010:

This statement contains our preliminary policy recommendations following discussions with the Australian authorities and a range of private sector institutions. The discussions focused on the pace of exit from macro stimulus, managing the mining boom, and addressing vulnerabilities related to high household and external debt.

1. Despite growth slowing due to the global financial crisis, Australia was one of the few advanced economies to escape recession in 2009. This reflected strong demand for commodities from China, a prompt and significant macro policy response, a healthy banking sector, and a flexible exchange rate. With a mining boom now driving the recovery and dissipating spare capacity, policy stimulus is appropriately being withdrawn.
2. Australia’s growing integration with emerging Asia also underpins its favorable medium-term growth prospects. However, it brings with it vulnerabilities to which policy will need to respond. The impact on Australia’s terms of trade from industrialization and urbanization in China and the rest of emerging Asia is expected to be long lived. Careful macroeconomic management of the mining boom could permanently raise household incomes in Australia. However, shifting resources to the mining sector without giving rise to inflationary pressures will be challenging. Moreover, the growing dependence on mining may amplify the business cycle, as the economy will be more vulnerable to swings in the terms of trade.

Reserve Bank's 30 September 2010 Financial Stability Review :

The Australian financial system remains in relatively strong condition, as does the broader economy. The effects of the global crisis on the Australian economy and financial system were quite mild, and economic growth has now broadly returned to trend. This performance reflects several factors including the greater scope that existed for macroeconomic policy action in Australia to moderate the impact of the crisis, the comparatively strong balance sheets of the domestic banks in the period leading into the crisis, and the high exposure of the Australian economy to trade with the Asian region.
Indicators of the financial strength of Australian banks have generally continued to improve recently.
In aggregate, Australia’s banking system remained profitable during the crisis period, and profits have increased further in the latest half year. The flow of bad debt charges has generally peaked, while the stock of non-performing assets on banks’ balance sheets appears to be stabilising at a level that remains low in comparison with previous cyclical experience. Loan impairments and losses have been concentrated mainly in lending to businesses, particularly for commercial property. There has been some upward drift in arrears rates on the housing portfolio, though these remain fairly low overall......

The financial position of the household and business sectors in Australia remains sound. Household incomes have been growing at a solid pace and unemployment has been declining. Households continue to exhibit a somewhat more cautious approach to debt than prior to the crisis, with welcome signs that the recent housing market strength led by first-home buyers has cooled.
Notwithstanding recent cyclical variations, housing prices have shown little net change as a ratio to incomes over several years, following an earlier structural increase in this ratio associated with financial deregulation and the shift to a low inflation environment. Within the national housing market, there has been some significant regional variation, with market conditions particularly strong recently in Victoria.

In the business sector, there has been considerable deleveraging in the post-crisis period, bringing average debt-to-equity and interest-payment ratios to levels close to their lowest in three decades.
Businesses have made use of both new equity issuance and strong internal funding during this process. While this shift in business funding was in part demand-driven, there was also a notable tightening of supply in 2008 and 2009; the availability of debt funding to businesses now appears to be improving, though credit availability for some sectors, including commercial property, remains quite constrained.....

Old age redefined as a budgetary measure in 2010?

Click on table to enlarge

Now those demmed demographers (acting more and more like insurance adjusters) are telling us that old age doesn't begin after 65 years of living on this earth.
Well, I know my mind is still clinging to middle-age, holding onto the kitchen door jamb for grim life and screaming "No, noooo, don't take me yet!" - but my joints and back are saying that they're old, old, old after years of hard graft, my eyesight isn't too crash hot, everyone is complaining that I need the teev volume up too loud these days and most nights the car keys find a new place to hide.
Though I was half expecting to hear that I was no longer considered to be all that old, indeed that I could move mountains if only I really stirred myself. How else are governments going to cut back on public health services and cash transfers to retirees once the younger taxpayers consider that greybeards are too great a burden?
Or as the abstract to "Remeasuring Aging" succinctly puts it:
"Population aging is an international concern, in part because of consequences of coming age-structure changes, e.g., growth in the number of elderly, decline in the number of youth, and accompanying economic and social costs..."
And the authors' 9th September 2010 media release ends:
"And such measures have policy implications because, “slow and predictable changes in pension [retirement] age justified by an increased number of years of healthy life at older ages, may be more politically acceptable than large, abrupt changes justified on the basis of budget stringency.”
Work longer and prosper Gen Y!

Stimulus package debate - so who do you believe?

Still wondering if Tony Abbott and Co are right about the Rudd-Gillard Government stimulus packages?
This might assist..........

On ABC TV Q&A Opposition last night Leader Tony Abbott said this:

Well, again, it's horses for courses and don't expect miracles. Now, if spending was the sure fire answer to any problem like this, why is it that the Americans are in recession? Why is it that the British have been in a recession, because their stimulus packages were roughly the same as ours and it didn't work? What got us through the global financial crisis was not fundamentally the stimulus package. It was fundamentally the strength of our economy and I've got to say that that owes far more to the reforms of previous governments, including the Hawke Keating Government, than it does to the spending spree of the current one.

Yesterday John Quiggin also published this:

An Open Letter

We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the Australian economy from a deep recession and prevented a massive increase in unemployment. Unlike most OECD economies we have come out of the Global Financial Crisis and the subsequent world recession with only one quarter of negative GDP growth and a smaller increase in unemployment.

We note that during a recession automatic stabilizers (increase in total unemployment benefit payments and decreased tax revenues) lead to an increased government budget deficit. In almost all the OECD countries there has been a massive increase in unemployment and in budget deficits. In Australia both have been trivial by comparison.

The Government Fiscal Stimulus package that was introduced was carefully crafted and implemented in a clever sequence. The first stage, the payment of $900 to most households, helped to boost confidence in the retail industry.

The second stage of the stimulus package (the Building Education Revolution, and the First Home Owners Grant) boosted the construction industry and created thousands of new jobs. Besides the employment effect, it also provided a much needed increase in the stock of public capital (better and greener homes, better schools) and prevented a sudden fall in house prices.

The last stage of the fiscal stimulus package (as it takes time to prepare plans etc.) was the infrastructure program that increased employment as well as increasing the stock of public capital and helping to overcome the significant short fall in Australian public infrastructure, and hence would increase future productivity, taxable capacity and the ability to repay public debt.

Just as a major corporation goes into debt to invest in its stock of capital, so does a government. Just as many householders have a debt to a bank or mortgage company, so does a government. A government has a budget deficit and a government debt, but it also has capital assets (roads, ports, better equipped schools, Broadband, etc.).

The performance of the Australian economy has been outstanding: the International Monetary Fund (IMF) and the Organisation for the Economic Cooperation and Development (OECD) have show-cased Australia as a model economy.

We hope that the economic achievements of the Australian Labor Government will be recognized by the population.

Signed by:

P.N. (Raja) Junankar Emeritus Professor UWS, UNSW, and IZA

G. C. Harcourt Emeritus Professor UNSW and Jesus College, Cambridge

Peter Kriesler Associate Professor UNSW

John Nevile Emeritus Professor UNSW

George Argyrous Senior Lecturer University Of New South Wales

Harry Bloch Professor Curtin University

Tony Bryant Associate Professor Macquarie University

John Buchanan Director, Workplace Research Centre University of Sydney

Jerry Courvisanos Associate Professor University of Ballarat

Mamta B Chowdhury Senior Lecturer University of Western Sydney

Barrie Dyster Senior Lecturer University Of New South Wales

Corrado Di Guilmi Post Doctoral Research Fellow University of Technology

Geoff Dow Reader The University of Queensland

Steve Dowrick Professor Australian National University

Chris Evans Professor University Of New South Wales

Peter E. Earl Associate Professor University of Queensland

Craig Freedman Associate Professor Macquarie University

Giuseppe Fontana Professor of Monetary Economics LUBS - University of Leeds

James Farrell Senior Lecturer University of Western Sydney

Roy Green Dean, Faculty of Business University of Technology

Boyd Hunter Associate Professor/Senior Fellow The Australian National University

Joseph Halevi Senior Lecturer University of Sydney

Neil Hart Senior Lecturer University of Western Sydney

Sasha Holley PhD student University of Sydney

Michael Johnson Associate Professor University Of New South Wales

Steve Keen Associate Professor University of Western Sydney

Bill Lucarelli Senior Lecturer University of Western Sydney

Bruce Littleboy Senior Lecturer University of Queensland

Marc Lombard Senior Lecturer Macquarie University

Elisabetta Magnani Associate Professor University Of New South Wales

Fiona Martin Senior Lecturer University Of New South Wales

Girijasankar Mallik Senior Lecturer University of Western Sydney

Robert Marks Visiting Professor University Of New South Wales

Stephane Mahuteau Senior Lecturer Macquarie University

Eddie Oczkowski Professor Charles Sturt University

Brian Pinkstone Associate Professor University of Western Sydney

John Quiggin Australian Research Council Federation Fellow, University of Queensland

B. Bhaskara (Bill) Rao Professor University of Western Sydney

Colin Richardson Visiting Professor of Economics Imperial College, London

Tim Robinson Professor University of Technology

Frank Stilwell Professor of Political Economy University of Sydney

Ingrid Schraner Senior Lecturer University of Western Sydney

Michael Schneider Honorary Fellow. La Trobe University

Ruhul Salim Associate Professor Curtin University

Chris Terry Associate Professor University of Technology

David Throsby Professor of Economics Macquarie University

Tim Thornton Associate Lecturer La Trobe

Phillip Toner Senior Research Fellow University of Western Sydney

Roger Tonkin Lecturer Macquarie University

Sean Turnell Senior Lecturer Macquarie University

Michael White Senior Lecturer Monash university

Other Signatories

James Arvanitakis Lecturer, Centre for Cultural Research University of Western SydneyNixon Apple Industry and Economic Advisor Australian Manufacturing Workers Union

Grant Belchamber Economist ACTU

Ross Buckley Professor of International Finance Law University Of New South Wales

Brad Crofts National Economist Australian Workers' Union

Rajinder Cullinan Client Services Accountant University Of New South Wales

Sandra Egger Associate Professor Faculty of Law, University of New South Wales

Rolf Gerritsen Professor, School for Social Policy and Research Charles Darwin University

Alan Morris Senior Lecturer University Of New South Wales

George McFarlane Retired Consultant, Sanders & Associates Pty Ltd

Gillian Moon Senior Lecturer University Of New South Wales

John Milfull Emeritus Professor University Of New South Wales

J. F. Pixley Senior Research Fellow Macquarie University

Ben Spies-Butcher Lecturer Macquarie University

Peter Sheldon Associate Professor University Of New South Wales

2010 Election Campaign Day 22 - A Nobel Laureate trumps a Rhodes Scholar

 

Nobel Laureate and respected economist Joseph Stiglitz reckons the Rudd Labor Government got it right with its fast-acting economic stimulus policy during the Global Financial Crisis according to Aunty ABC:

 

"One of the world's top economists says the fiscal stimulus package delivered in Australia during the global financial crisis was among the best designed in the world.

A report today found there are some valid concerns about the poor value for money on the school spending part of the package.

However, Nobel Prize laureate and Professor at New York's Columbia University Joseph Stiglitz says there will always be some waste with such programs.

He says that is preferable to the waste of human and capital resources that would have resulted if there was no stimulus.

"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," he said."

A hand which definitely beats a Rhodes Scholar who probably hasn't opened a book on economics in half a lifetime.

Rio Tinto releases more RSPT spin and now I'm getting annoyed

Like many other observers of the political scene, I've been waiting on Rio Tinto releasing those figures it has been proclaiming would show that the proposed Resources Super Profits Tax was really the economic ogre the Coalition and mining industry said it was.

Well the media release is out and running across the mainstream media.
But the Rio Tinto wording is rather curious.......

"Corporate taxes amounted to A$14.6 billion and royalties were A$5.7 billion in the period 2000-2009. Rio Tinto's rate of taxation over the 10 years to 2009 averaged 35.6 per cent of its earnings before tax payments in Australia."

Huh? Rio Tinto Chief Executive Tom Albanese and friends are calculating the tax rate on the mining multinational's global business enterprise, not the rate it actually pays in Australia?
A global business that earned around US$50.53 billion between 1999 to 2008 according to Rio's own 2008 financial statement and, had a combined profit after tax in 2007 & 2008 of US$12.35 billion on combined earnings of US$37.48 (before interest, taxes, depreciation, amortisation -restated) for the same two years.

Interestingly, at the time of writing Advfin Australia lists Rio's effective tax rate for the last twelve months as 26.4 per cent.

When it comes to its Australian mining interests we are told that its tax direct tax obligations were A$20.3 billion between 2000-2009 (across its 19 operating mines and smelters etc.) and that Rio Tinto has generated net profit after tax of A$37.4 billion in Australia in the 10 years to 2009.

Hold on - didn't the company write off that A$5.7 billion in royalties as business costs?

After all, Under the Total Tax Contribution framework, petroleum resource rent tax is included as a tax whereas extraction royalties are not treated as a tax. (Refer "Survey for the Business Council of Australia and the Corporate Tax Association").

And didn't the 2007 Business Council of Australia survey also find that Taxes Collected are negative for the mining industry group because as major exporters survey participants reported a significant GST refund which more than offset other Taxes Collected?

I'm sorry Mr. Albanese, I just can't dredge up any sympathy for the mining giant you represent.
Try as I might I can find no justification for the average 35.6 per cent tax figure you complain about.

The bottom line is that I'm more inclined to believe the Federal Treasurer's estimation that; "In Australia, wholly-domestic mining companies paid an effective tax rate of only 17 per cent and multinational mining companies paid an effective tax rate of only 13 per cent".
Because these are somewhat similar percentages to those my own calculator spits out (without benefit of Shakelford and Markle).

Nor do I believe all the gloom and doom Rio Tinto predicts; with regard to this week's annual general meeting it was reported that "China's demand for iron ore, copper, coal and aluminium is expected to continue to grow over the next 15 years, after which time we expect to see increasing commodity demand from India," Mr du Plessis said. Mr Albanese said industrialisation, urbanisation and increased productivity would double demand for iron ore, aluminium and copper in that time.

In fact the longer Rio Tinto and the rest of the mining industry continue this tawdry exercise in spinning figures the more irritated I've become and, that irritation may inform my federal election vote later this year.

Australian Securities Exchange graph of Rio Tinto monthly share activity over ten years:

Target Australia isn't making Maud feel good....

Maud up the Street pointed out to me that some of the clothing she's brought from her local Target store (owned by Wesfarmers) is labelled "Target MADE IN CHINA from Australian fabric".

Seems the stuff her knickers are made of is probably grown and definitely woven here, rolled into bolts and shipped overseas - only to return as clothing items.

Can't think of any reason other than employee wages are in all likelihood much lower in China.

Bit naughty of Wesfarmers, isn't it.

Graphic from Wikipedia

'The Australian' & Melbourne Institute's Road to Recovery Conference apparently was a doozy

The Melbourne Institute currently has the The Road to Recovery: Restoring Prosperity After the Crisis 5-6th November 2009 conference program (along with speech and presentation downloads) available on its website.
Almost everyone who is anyone in the field of economic and social policy appears to have been there.
Below is a slide that Access Economics put up during the presentation Will the Budget recover alongside the economy?
Now it's been obvious for a while that Chris Richardson loves to craft statements which toss a live one to the meeja, but this is getting a bit over the top even for him:


















Oh, and thanks Malcolm for that universal tweet alerting all us plebs to this conference - from Richardson's power points to your next sound bite I'm guessing.

The ups and downs of online paywalls for an American small town newspaper

It is starting to look as though Rupert Murdoch is determined to hide much of the news content on his media websites behind paywalls, no matter how many times he's told that this is rather a bad idea.

He will not be the first to do so.

Here is The Newport Daily News June 2009 paywall pricing strategy courtesy of Nieman Journalism Lab:

The 12,000-circulation Rhode Island newspaper is old school — it still publishes afternoons on Mondays through Fridays, with a morning edition on Saturday. Last month, the newspaper announced a new three-tier pricing structure for subscriptions. Want home delivery of the print paper? That's $145 a year. Want home delivery and online access? That's $245. And if you want just online access — to an electronic edition that duplicates the appearance of the print product — it's a whopping $345.

While some online content is still currently free on the website of this unashamedly parochial newspaper, there has been an initial significant drop in daily unique online reader numbers to a mere 500 - around a quarter of the former online readership.

What circulation growth there is appears confined to casual readership via the news agent (which may not survive adverse weather conditions normal in northern hemisphere winter months) which is rather mixed news for featured advertisers as its new circulation figures only roughly equate with where the paper was ten years ago.

The sudden fall in online readership saw The Newport Daily News offer readers (from outside the county) a yearly limited time online news subscription for about $129.

Taking advantage of the fact that online readership was up for grabs, a month after the paywall went up, Island Communications Inc. launched a free online news website, Newport-now.com.

This blog-style site presents its own version of local news but also pokes its tongue out at The Newport News by running a short daily sidebar rundown on TNN's major stories under the banner Other Headlines.

It does the weather and obits which are standard fare in print newspapers and, it is likely to attract those advertisers following any changing online allegiance.

Newport-now is not the only free local site out there - a celebrity gossip website is also available.

All in all, a rather unpromising scenario Australian regional newspapers might have to take into consideration if they foolishly decide to jump on the paywall bandwagon - there's always someone else ready to offer local news for free.