Are senior politicians a dying breed?

At least in the Australian context, mature-age politicians seem to be a dying breed (figuratively speaking, of course!). Many of our MP's have young children. Thus they are still preoccupied with raising a family while attending to the affairs of state. Finance Minister Penny Wong has just become a mother (or father?). Prime Minister Julia Gillard seems to be getting younger and younger on TV (botox or plastic surgery not discounted). She is 52. Her nemesis Tony Abbot is slightly older at 61. However, both Julia and Tony are like overgrown babies, judging by the name calling and mud slinging matches they display with gusto in Parliament.

Here is my point, seriously. Surely we have a wisdom deficit situation. From Federal Parliament to State Parliament, and down to the local councils, the average age of politicians is getting lower and lower. One (and there may be more) local councilor in my area was fresh out of university. Surely we could use people with more experience and wisdom that comes with age.

The Victorian State government recently awarded itself a 15% pay rise, while the state is travailing in growing unemployment and budget deficit. This monkey-see-monkey-do business is simply apeing what the Federal government is doing. Just three months after awarding itself a hefty pay increase, the federal MP's were awarded another 3% increase*. The justification? It could not be for a job well done, or for balancing the budget, or for building a better future for all Australians (writer's opinion). Back to my point; when you expose kids to a cookie jar, they are going to help themselves big time.

I categorically deny that older politicians will automatically make better politicians. My point is that surely we could use more wisdom in our leaders, and wisdom normally takes time to develop in a person. I, for one, would love to see that our local council is staffed with mature-age, experienced, and wise people who are more keen to promote community welfare than their own career. Likewise the State and Federal parliaments. Would you rather travel in a plane flown by a matured, experienced pilot, or by someone who is still clocking up flight time?

*see: http://www.smh.com.au/opinion/political-news/anger-over-mps-pay-rise-20120704-21gfu.html

Should Greece have voted out of the Euro?

By voting to stay with the euro and complying with austerity measure, Greece will face widespread unemployment and other hardship due to budget cuts. More crucially, however, what is really saved are the lending banks, not the future of the Greeks. The way I see it, the bailout of Greece is actually a bailout of the banks in Germany and France. The banks (mostly privately held, I presume) will stand to lose a lot if the euro collapses. So the clever governments of Germany and France choose to use its taxpayers' money to save Greece, in order to stabilize the financial system based on the euro, so as to benefit those in high places (which most likely includes themselves).

Of course, this is no bailout for Greece. Think of it this way. If a man owes the bank a lot of money and is insolvent, the bank stands to gain nothing if the man declares himself a bankrupt. Assuming the man is still capable of earning an income, the bank would want to keep him alive so as to recover as much money as it can. Yes, give him just enough to stay alive and make him pay back 90% of his income each month. He will be denied any luxury - austerity measure. Isn't this exactly what is going to happen to Greece?

In the business world, when a company is insolvent, the logical thing to do is to declare bankruptcy and then start business again as a new entity. But if the bank is allowed to take over as administrator, the bank's sole intention is to recover as much money as it can, even at the expense of running down the company. Isn't this the same fate facing Greece now that it has voted to stay with the euro?

In summary, the winners are the fat cats in Germacy, France, and Greece. The losers are the taxpayers in Germany and France and the hoi polloi in Greece.

What I think of Wayne Swan's budget proposal

I think it is a farce. Everyone is so hung up about the budget; perhaps it is because we all want to see what the proposal has in store for us. But then THAT is the problem isn't it? When we are so carried away by "what's in it for me," we forget that the government has gotten away with enormous deficit for the last four years of Labor government (that is not to say John Howard did a fantastic job; he sold government assets to keep the budget balanced).

Last year alone the fiscal deficit was $44bil. Now Wayne Swan is trying to convinced everyone he is a good financial manager, based on his budget proposal to create a surplus of a puny $1.5bil. Mind you, that is just a proposal and nothing more. Come next year, people will forget what he promises now and they will be looking at another new budget proposal. Who will be paying for all the deficits?

Back to Wayne Swan and Julia Gillard's management of the economy. Last year alone, they managed to spend $44bil more than the amount they collected. Nobody, except the opposition party made any noise; for vested interest, of course. If Wayne Swan and Julia Gillard were to manage a public listed company, the company would have faced a riot from the shareholders. The shareholders would not be so keen to see what they propose to do next year. No, they would be asking how the duo have managed last year's profit and loss account. Gillard and Swan would have been given the sack rightaway.

Occupy Wall Street protests

This movement started last month in New York, and has now spread to 1500 cities throughout the world. People are finally voicing out what all of us have slowly come to realize: there is something inherently wrong with the economic system in the world today. Bankers and financiers are the target of this growing wrath. As the protesters say, the financial systems benefit a handful of banks at the expense of the taxpayers.

I wish the protesters well. During the GFC (Global Financial Crisis) of 1988,  the US government used its taxpayers' money to bail out the banks, with very little of the US$800bil directly benefiting the man in the street. As the crisis in Europe unfolds today, it is again clear that governments all over Europe are more concerned about keeping the banks safe than letting the banks pay for their years of recklessness and greed.

In Australia, the four major banks are now saying they are going to retrench workers, in spite of the fact that they are forecasted to have profit increases of between 10% to 21% in 2011. Here is what the news report* says: "Australia's major banks are under pressure to cut jobs in response to flagging demand for credit despite being on track to deliver a record combined annual profit of more than $23 billion. Three of the big four lenders - ANZ, Westpac and National Australia Bank - will release their results in the coming weeks, and analysts warn they may unveil cost-cutting plans." It is all greed, greed, and more greed. If the banks are not retrenching staff, they are always looking for ways to increase charges to their customers. Where is the line drawn, I wonder?

*see Herald Sun Oct 16th, 2011: http://www.heraldsun.com.au/business/banks-feel-pressure-to-cut-jobs-but-profit-on-track/story-fn7j19iv-1226167113119

Cost of processing asylum seekers in Nauru

Tony Abbott proposes that asylum seekers be processed in Nauru. Julia Gillard's quick rebuttal is that it will cost the taxpayers AUD$1bil; therefore implying that her own Malaysian deal is less costly at AUD300mil. Now, take note that even though these figures are not well defined, Julia Gillard must be thinking we are a bunch of ignoramuses.

Let's assume that cost of living is a good indicator in this case. Just a quick check reveals that the cost of living indicator (where New York = 100) is 91.16 for Yaren, Nauru, and 71.82 for Kuala Lumpur, Malaysia*.  I can safely say that the cost, while slightly higher in Nauru than in Malaysia, is not three times, my dear Prime Minister. If you must exaggerate, please do it more plausibly.

* see: http://getrichfast.in/Chinese/nauru-international-cost-of-living-comparison-global-trends/

Consitutional budget deficit cap

Many governments are on a drunken spending spree. America is a stark example of how a great country can be brought to the brink of bankruptcy within one generation. Many other countries did the same and are also facing the same consequences of a potential meltdown. In the gloom and doom that fill the front pages of our newspapers these days, I am glad to read that there is still hope that politicians will do the right thing. Germany already has a legal limit on its budget deficit level, while France is still exploring the idea. Spain, instead of trying to spend its way out of trouble, is now moving closer to institute a cap on how much budget deficit the government is allowed to incur.

Unfortunately, that wisdom has not permeated the brains of Australia's Gillard and Swan. I wouldn't heap praises on the previous government of John Howard and Peter Costello either for keeping the budget deficit down, because they did so by selling state assets. Swan is just as blatant. While promising a return to surplus, he is simultaneously pushing the deficit to a record $250b, at a time of record tax revenue from the mining boom... and still promising to return to surplus next year. Oh wait, since time is running out, he is now looking at illegally "borrowing" from the Future Fund to keep his election promise. What a joker. Only that the laugh is at the expense of the future generations, who are now too young to defend themselves or to vote.

Malaysia tipped for reform?

We had a group discussion yesterday about whether one is an optimist, a pessimist, or something in between. Where we stand can make us a believer or a skeptic. Take yesterday's article in The Age newspaper, for example. It says "Malaysia tipped to opt for reform." Malaysia's Prime Minister Najb made an announcement about wanting to repeal the Internal Security Act, which has been frequently abused by his government to incarcerate its most outspoken political opponents and to instill fear in people against voicing any anti-government sentiments.. 

I am a pessimist when it comes to political views. I view political statements like the above as yet another attempt to win votes with no intention of keeping the promise. The general election is coming up in 2012. The government knows that it has to start its election machinery now. It is totally out of character of Najib, as far as his political life has demonstrated. Out of the blue comes this shot. If there is any desire for true reform, much work would have already been underway. It is bewildering to think that all of a sudden Najib has woken up and decided to act. Call me a pessimist.

On the other hand, you can be an optimist and say that all the mass rallies in KL has made finally reached the ears of Najib. That the Arab Spring uprisings has made him sit up. That he is genuinely interested in carrying out reforms. You have the right to your opinion. Cast your vote - wisely.

Telling lies in parliament

Rupert Murdoch stands to go to jail if he is found to mislead parliament during the recent enquiry into the phone hacking scandal in the UK. I assume the same law applies in Australia. However, it appears that the law does not apply to parliamentarians. They can and do intentionally mislead one another and the public by selectively quoting certain survey results, studies, and modellings that fit their agenda while rejecting those that do not.

A recent article in The Australian newspaper (Open your kimono and show us your modelling*) highlights the carbon tax deception by Gillard and Wayne Swan. The modelling is designed to mislead the public by underestimating the costs. Here are just a few extracts from the article:

"...the model does not provide for the mandated decommissioning of the Hazelwood and possibly Yallourn power stations in Victoria. ..... Treasury's modelling seems to defer the cost until at least 2025 and maybe until 2040. That conveniently reduces the estimated hit to electricity prices."

"...The modelling assumes emitters can borrow permits from the future. And borrow they do, on a scale that puts Greece to shame. By 2050, emitters worldwide have borrowed four years' global permit allocations from the future. Using Treasury's estimate of future carbon prices, that is equivalent to a net debt of $10.7 trillion in 2011 dollars, or 10 times Australia's current national output. And the total value of those net borrowings would rise at 6 to 8 per cent a year, far exceeding the growth rate of world incomes."

 "....without access to the model no one can say by how much. And that suits the government. For Treasury's modelling presumably reflects assumptions determined by the government, such as that all industrial countries have carbon taxes in place by 2016 or behave as if they did."

Surveys, studies, and modellings can be very misleading. They all have some commonalities: the result is fully dependent on the underlying assumptions, how the work is framed, and how the results are analysed. If not properly done, the result will be biased at best. Julia Gillard and Wayne Swan could be using a "biased modelling" approach to mislead the public. Ask yourself; should that be a jailable offence?


*See: http://www.theaustralian.com.au/national-affairs/commentary/open-your-kimono-and-show-us-your-modelling/story-e6frgd0x-1226099303275

Carbon Tax and Emissions Trading Scheme

Someone asked me what the Carbon Tax is all about. Also, closely related to that is the ETS, or Emissions Trading Scheme. Here is a link which will give you a very clear idea of what these are about: http://www.low-impact.net/index.php/20080707/what-is-an-emissions-trading-scheme-ets/

Briefly, Carbon Tax is just a tax on the amount of carbon dioxide that an industry produces, while ETS is like the COE (certificate of entitlement) practised in Singapore. Like the COE, the government issues permits for X amount of carbon dioxide that can be emitted. If the permit is used up, the company has to buy more permits, perhaps in the open market, where permits can be freely trade.

My say: the intent is good, which is to force industries to be more conscious of the amount of CO2 it produces, and to take steps to reduce it. That is where all the good stops: just good intent. The implementation of it is pure nonsense; it is just another tax revenue for a government that has lost its ability to manage the country within a given budget. Don't listen to all the spin Wayne Swan and Julia Gillard are busy churning out. When any country has to make a choice between polluting the air or keeping factories running, which country will sacrifice for the environment? Julia Gillard will tax Australian companies into oblivion while every other developing country will happily keep their factories running at lower operating costs (no carbon tax). No other country has agreed to do this in their own country, so why does Julia Gillard think she is so "clever"?

Before Labor Government implements this harebrained scheme, I would like to see what comprehensive plans it has for saving the environment. Is it going to build an efficient public transport system, so that people are less reliant on cars to go to work? Is it willing to penalize owners of gas guzzlers by increasing the road tax for big capacity engines while subsidizing "green" cars? Is it going to make all government vehicles small and "green", to show that it is serious? Will it build bicycle tracks and encourage the use of motorized bicycles to replace cars for commuting? Enough of carbon tax spin. This is worse than a direct form of tax because not only will the general public eventually have to pay its cost, but manufacturing industries themselves may perish in the process. In a twisted way, perhaps this is the fastest way to reduce emissions.

Swiss bank privacy (piracy?) laws

The world is very tolerant of Switzerland's banking industry, while frowning on Somalia's piracy industry. Yet there is a strong similarity between these two countries' economy. Both governments do not directly carry run the industry (banking, piracy) but both are heavily reliant on criminal activities that generate employment and revenue for the country.

Swiss whistleblower Rudolf Elmer must be one of the most conscientious man in the world. He used to work for one of Switzerland's largest private banks. He took the courage to provide Wikileaks with two CD's containing 2000 bank clients suspected of tax evasion. The list has not been made public yet. Meanwhile Elmer is undergoing prosecution for breaching Swiss banking laws - the laws that are protecting people who have amassed fortunes out of other people's misery.

The Swiss banking privacy laws could be the single most important factor that contributes to the rise of corruption all over the world. It provides a an important facility for big scale corruption, while pretending that it is providing a legitimate service. Billions and billions of dollars from rich and impoverished countries alike are channeled into Swiss banks, allowing this country to enjoy prosperity at the expense of worldwide suffering.

This is what Elmer said:
"I want to talk about the Swiss (banking) secrecy system which is damaging our society. The short story is simple: I was in the Cayman Islands and there was a mouse tail and I started to pull on it. The tail got bigger, looked like a dragon tail, I went back to Switzerland and it became bigger, a fire breathing dragon with several heads. One head was the bank's, the other the Swiss press to an extent, and they all came after me and my family."

Note that Elmer mentioned the Swiss government and the press are also involved in this game. He is a very brave man indeed.

Democracy in the developed world

The developed countries generally think of themselves as defenders of the democracy. In a way that is correct; these countries make sure that everyone has the right to vote and every vote carries equal weight. Apart from the voting machinery, these countries are anything but democratic - in my opinion.

A democratic system is supposed to make decisions that favour the wishes of the majority of the population. These days, the population only choose who they want to represent them and the people voted in office quite often do things contrary to the wishes of the majority of the people. True democracy has long ceased to exist. Countries are now run according to the wishes of Big Supermarkets, Big Banks, Big Miners, and Big Mouths.

As for the individuals, yes they still have a voice. It is called Individual Rights. When you wield this weapon, it doesn't matter if the majority of the population is pissed. The odd ones are appeased. Think of shutting down Christmas music in public places, so that "individual rights" are preserved. Is that democracy?

Selling out Australia

Australia is being sold off and sold out by the very people who have been trusted to run the government. State after state is selling off public utilities in a hurry, often against the wishes of the people. The latest in this scandalous and immoral assault on the public family jewels is the NSW government. Due to go for re-election early next year (in which the incumbent government is widely believed to stand a huge loss), the NSW government is rushing to privatize the state's energy retailers and electricity generation. This is to boost the election war chest by up to $5 billion in order to shore up its re-election chances.

I think it is utterly irresponsible of any government sell off any major public asset without going through a referendum. Public assets belong to the public. The political party elected to run the government should not assume they have a mandate to sell off what does not belong to them. If a family's fortune is placed in the hands of a trustee and the trustee starts selling off the assets, wouldn't anyone immediately put a stop to that? In the same way, the ruling party should be seen as only a trustee of the state's assets, without any right to sell off any public property without the owner's (in this case, the general public's) permission.

Finally, I question the timing of the sale. Australia is not going through a financial crisis now. I can understand if Ireland, Spain, or Portugal were to resort to such a move at this time, but goodness gracious... not Australia! If public utilities are sold off in a time of plenty, what do we have left to sell when bad times fall? Our best farmland? Our richest mines? (er, brace yourself... that has already been going on....)

Watch out for the National Water Commission

In today's The Australian, it is reported that the federal government is considering linking prices to dam storage levels and opening the water supply in cities and towns to further competition. I am alright with the first part. It makes sense that water bills rise when storage levels go down, as long as water bills also go down when storage levels go up.

What worries me is the second part: in order to boost competition, it is reported that the government may dismantle some public monopolies that control supplies in big dams. We have seen that all the so-called "free competition" that is supposed to result from selling off of public monopolies has only resulted in private monopolies. Even where more than one player exists, there seems to be a collusion going on between Woolworth and Coles, Telstra and Optus, Shell and Caltex, the Big Four Banks, etc, etc. The government needs to gain back more control over the supply of essential goods and services, not less. The government should set up a government-run bank to compete against the big four banks. The government should set up a housing development unit to lead the way in bringing down house prices. Yes, in this era, we need more government control, not less. Private companies are having a party making record profits, while pretending to be victimized whenever any policies are in place to take away their freedom to print money.

Watch out for more spin form the NWC. James Cameron, the acting chief, is going to tell you how good it is to privatize the remaining controls Canberra has over water supplies. Perhaps the federal budget is running into deficit again.

Is money the solution to all problems?

As the state election draws near, it seems that the only election pitch our politicians know how to make is to pitch in more money into every problem. Crime rate high? Have more policemen. Declining educational standard? Have smaller classes and hire more teachers. Long waiting list in hospital? Build more hospitals and hire more doctors. The list goes on and on. Just keep promising more funds for every problem that excites the voters.

I dare say that many problems arise from poor conception and design, poor implementation (bad project management, like the Myki project), and subsequently, poor administration. Basically, many problems are due to putting incapable people to manage and to lead. That is why the election process is designed to replace all who are past their used-by date. Instead of addressing the root causes, what we see is both major political parties doing their porkbarreling best in the run up to Election Day. In a real-world corporation, under such a system of management the company would have folded a long time ago.

Campaign spending promises

The Victorian state election is coming up in a couple of week's time. Politicians are busy making promises on what they will spend money on if elected. Australian politicians seem to know how to sing only one tune when it comes to campaigning for an election. They will tell you that if elected, they will build the much-awaited for railway extension, or inject more money into the health system, or pump more funds into the school system, etc, etc.

I have this to say to incumbent Premier John Brumby: stop making spending promises on an ad hoc basis. Just present the next year's budget and let everyone see how you are going to cut the budget cake. Whatever spending promise you make each time is going to mean something else will be taken out, if balancing the budget is important to you. Therefore I won't be taken in by the line "if elected, I will build this, or that..." You already have had 3 years to do that, and much more, if including the time you served as Finance Minister under the previous premier.

By the way, if you cannot manage one project - the Myki - how do you think you have been managing the state of Victoria? Myki project is behind by 4 years now. Your only way out of this mess is to keep paring down the project deliverables. If you have business sense (important for a premier, isn't it?), this project should be scrapped long ago. Of course, it does not look good on you. How did all the budget blowouts happen in the case of the desalination plant and the road improvement works? Did you even try to manage the utility companies that seem to be having a free run at increasing prices now? What ARE you managing?

Glib talk

The "wiktionary" define glib as "Having a ready flow of words but lacking accuracy or understanding; superficial; shallow; Smooth or slippery; Artfully persuasive in nature"

There is one glib public servant who recently lost $50 million, nearly all, of his personal fortune by investing in a friend's venture that misfired. His name is Samuel Graeme, chairman of the Australian Competition and Consumer Commission. Ten days ago he says that the NBN (National Broadband Network, costing $43bil to the taxpayer) does not need a cost-benefit analysis. When contested, he says (watch and learn!), "I did not say that a cost benefit-analysis is not needed. What I did not then go on to say is that one was needed." Duh??? Is this guy for real?

Australia's National Broadband Network

NBN was formed as an alternative to Telstra's unwillingness to cooperate to provide highspeed broadband to all of Australia. When the-then Prime Minister Kevin Rudd announced this, I applauded the proposal. Now I think otherwise.

First, it is unnecessary to provide high speed broadband to all over Australia. Remote areas are best served by upgrading existing copper lines to keep the cost down. Think: would rural Australia benefit from having a dual carriage expressway serving the town? Would the people be best served by high speed broadband or by having better school or better medical facilities?

What really takes the cake for governmental wisdom is the fact that Prime Minister Julia Gillard wants to make it compulsory for every household to sign up for NBN's broadband service. Yes, that's reported in the news today. If you don't sign up, you cannot subscribe to the telephone service.

Don't ask about the cost to subscribers yet; Julia is not saying, or does not know. As for the project cost, $43bil is just the indicative price. My bet is that it will be much more before we see the light at the end of the fibre optic.

Soaring utility bills - who benefits?

The Herald Sun reported this today: ".... typical households are paying a staggering $900 more for the essentials compared with 2005."

I used to think that the government is being negligent for allowing utility companies to raise charges year after year, far greater than the annual inflation rate. It appears at first glance that the privatized electricity, water, gas, and telecom companies are gouging the public as much as they can and pretty much getting away with it. Why is it that the government is allowing this free ride?

Perhaps there is a good reason for this laissez faire attitude. When the utility companies reap in a bonanza in extra profits, the government also gains a windfall of extra tax dollars. The government does not get cop a blame from the public. Instead, the utility companies get blamed, but they don't seem to care. After all, EVERY other utility companies are doing the same. Perhaps this is the reason why the government is silent about utility hikes.

Seeing differently

Many have written and expressed their views about how the Chinese and Indian communities in Malaysia are continually discriminated against in Malaysia. I reserve my comments here, as what I want to do here is to present a different perspective, while not condemning or condoning what others have said enough about already.

Consider this perspective: if we remove all talks about racial discrimination, we can concentrate on seeing Malaysia as a "corporation". What kind of CEO do we see? Is the management team effective in achieving the goals of the corporation? As a general public, do we want to invest in the company? Why or why not? Is Malaysia in danger of deflation or stagnation? Is the "corporation" spending more money that it earns? Is it borrowing money that it has no ability to repay? Is it selling off its prized asset in order to pay the management team big bonuses?

Many who emigrate from the country cite reasons of racial discrimination. However, I think that an equally strong motivation is pure and simple economics. I am only surprised that most people choose to dwell on the first reason, rather than discuss the second.

Banned for life over one email

A 17-year old British teenager has been banned from entering the US for life after he sent an email to White House, calling President Obama a "pr*ck". Hurray to the FBI for acting tough; but isn't that using a sledgehammer to kill an ant? How is it that terrorists and their sympathizers can chant death threats against the US openly and get away with it, while a derogatory remark, which is not even a threat, is immediately silenced and crushed? If the FBI were to ban every person who openly shouts threats to the country, I think it will save them much time and money having to deal with it later on.