The good Senator now has a Facebook page.
Tags: barnaby joyce, facebook
The Single Biggest Reason Why I Will Vote For Bob Katter’s Australian Party
18 Feb
The Australian Dollar.
It is way too high relative to all our major trading partners’ currencies.
About 30% too high, in fact.
No Malcolm Farr, it does not prove that the Aussie Dollar is a “safe haven”.
No Wayne Swan, it is not because we have an economy that is “the envy of the world”.
Yes Alan Kohler, it is because speculators are borrowing billions in Zero Interest Rate Policy (ZIRP) money in the USA, UK, EU et al, and using it to gamble on the relatively high interest rate Aussie Dollar. To make easy, fast profits.
It is called the “carry trade”.
Or “hot money”.
And it seems that no one … repeat NO ONE … in Australian politics has the brains to recognise that fact. Or, the balls to do anything about it.
Now, let me be the first to say that I do not agree with how Bob wants to weaken the currency.
He advocates forcing the RBA to slash interest rates to 2%.
I think we should follow the lead of China … and Switzerland … and introduce a currency peg.
Nevertheless, despite this difference in preferred method, the simple fact that Bob has loudly proclaimed that he wants to weaken the dollar, and, that he is prepared to dismantle the RBA if necessary in order to do so, places him a country mile ahead of any other politician in the nation.
(Yes, including my beloved debt-warning prophet Barnaby Joyce, whose office has to date not even responded to my communications on this matter. He has been very busy with a drowned home town though, so we shall wait and see…)
A little historical background on our present currency dilemma.
Remember the year prior to the GFC crescendo in September-October 2008?
Remember how the AUD turned sharply down in July 2007, falling 9c (10%) in less than a month, when the warning signs began in the USA with the collapse of two Bear Stearns’ hedge funds? And remember how the AUD turned sharply up again, when the RBA lifted interest rates for the first time in 9 months, in August 2007?
GFC begins July 2007 in USA | Click to enlarge
Remember how the RBA kept raising interest rates into the teeth of the oncoming storm, and the AUD climbed from less than 80c US in August 2007, to nearly 98c US in July 2008 … a 21% appreciation in less than a year?
Remember how the AUD fell off a cliff when the GFC peaked? Indeed, it fell so far so fast – a near 40% collapse from 98c to 60c in just a few months – that the RBA intervened in foreign exchange markets to prop up the dollar:
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“Safe haven” currency, you say (Malcolm Farr)?
Utter ignorant nonsense!
The Aussie Dollar is a “speculative play”.
A profit-seekers’ gamble.
That rushing tide of “hot money” driving up the AUD exchange rate is just as likely to race out again, exactly as it did in the GFC.
But until it does, and the AUD returns to a reasonable and sustainable level, vital sectors of the Australian economy are rapidly being white-anted … and jobs destroyed in the process.
Manufacturing. Tourism. Retail. Education (ie, foreign students). To name but a few.
Many of those industries and the jobs they provide, once lost, will never come back.
And despite this disaster occurring all around us right now, both “sides” of Australian politics have done a Pontius Pilate impersonation, washing their hands of the problem, proclaiming that there’s “nothing we can do” about the dollar. That’s up to the “independent” RBA, you see. And woe betide anyone daring to question the sanctity of the RBA’s “independence”. So instead, we have an escalating, puerile argument over whether or not (and how much) to financially support affected industries.
With more borrowed money, of course.
Idiots. Invertebrates. Sans testicles.
In stark demonstration of the clueless eunuch status of both “sides” of Australian politics – and indeed, of the “independent” Reserve Bank of Australia – on the matter of dealing with a speculator-driven appreciation in your national currency, let us examine a favourite example of mine.
Norway.
Unlike the RBA’s Glenn Stevens, the Norwegian central bank governor recognises the dangers of a government over-relying on the nation’s commodities wealth, spending too much money, and putting its manufacturing industry at risk (sound familiar?):
Feb. 16 (Bloomberg) — Norway’s central bank Governor Oeystein Olsen told the government to spend less of the country’s oil money and avoid an over-reliance on its commodities wealth or risk killing manufacturing jobs.
The government should tighten its fiscal policy guidelines and limit the use of petroleum revenue to 3 percent of Norway’s sovereign wealth fund from the current 4 percent, Olsen said today in the text of his annual speech on the economy and monetary policy.
“Even though petroleum revenues are phased in gradually, a phasing out of manufacturing and other private industries may not be as smooth,” he said. “Entire industries could be lost. If spending proves to be excessive, such structural changes may be difficult, or impossible, to reverse.”
The world’s seventh-largest oil exporter, which boasts the biggest budget surplus of any AAA rated nation, has largely been shielded from the global financial crisis, in part after spending a record amount of its oil money.
Witness the stark contrast to our own Reserve Bank board of governors.
They have repeatedly indicated that they believe in crowding out (ie, screwing) the rest of the economy, to “make room” for the mining boom. Your non-mining industry and job be damned.
The high Australian dollar is actually great news to the RBA. It is helping their goal of hollowing out the rest of the economy, to “make room” for more mining.
And the high dollar is also great news to the village idiot of our national government, Treasurer Wayne Swan. With little else of substance to boast of, he proudly and deceitfully points to the high dollar as somehow representing “proof” of his own wonderful economic management!
But it is not just concerns about how the government is running the country, short-sightedly squandering its natural advantages, that show parallels between Australia and Norway.
The Norwegians too, have been faced with the problem of speculator-driven “hot money” driving up the value of their currency.
Thanks to the ongoing European debt crisis, in 2010-11 “investors” (read also, “speculators”) had been selling (borrowing) the near zero-interest-rate Euro currency, and investing (speculating) in the traditional “safe haven” currency, the Swiss Franc. As a result, the Swiss Franc had been rising precipitously, causing problems for their economy. So, in September last year, the Swiss central bank acted to protect their economy, by pegging the value of the Franc to the Euro.
Result?
With the Swiss central bank effectively having put a cap on their potential profits, the European “hot money” went looking for profits elsewhere. They turned to Norway, with their strong economy, budget surpluses, vast nationalised commodities wealth, and AAA rating.
Now, witness the contrast between Norway’s central bank response to “hot money” flowing their way, and our RBA’s response to exactly the same situation:
Feb. 17 (Bloomberg) — Norway’s central bank is monitoring the krone after its recent gains and remains ready to act should the currency’s appreciation warrant a response, Governor Oeystein Olsen said.
“We follow closely the krone developments,” he said yesterday in an interview in Oslo. “We have observed, of course, the recent development of the krone, we’re close to the level” in September, when it touched an eight-year high, he said.
The central bank, which in December lowered its main rate by half a percentage point to 1.75 percent, will respond to krone swings to the extent that they affect inflation. The currency this week touched the highest level since Sept. 8, when the Swiss National Bank’s decision to peg the franc to the euro prompted investors to seek alternative havens…
The exchange rate continues to be a “challenge” for the government, Trade Minister Trond Giske said Feb. 13. The central bank in September signaled it was ready to take steps to curb the krone’s appreciation. Those comments helped weaken the exchange rate, triggering a 4.8 percent decline from a Sept. 8 peak through a trough two weeks later.
The Norwegian central bank acted promptly, to “talk down” the Krone back in September. It worked, for a little while. Then they slashed interest rates by an effective 22.2% (2.25 to 1.75) in one hit in December. And now that their currency is appreciating again, they are attempting to “talk down” their currency, by reminding markets that they stand ready to act again, to protect local jobs and industry.
Our central bank is doing nothing.
Indeed, they are happy that we have an over-valued dollar that is squeezing (ie, wiping out) the “old economy” sectors.
Because it wants the non-mining sectors of the economy to shrink (ie, die), in order to “make room” for mining, which the RBA mistakenly believes will enjoy a multi-decade boom.
This is your rapidly approaching future, dear reader.
Gillard’s “New Economy”.
Australia. “Poor white trash” quarry to the world.
There are some in the Australian (alternative) financial media who have written on this problem.
The estimable “Houses and Holes” – whose clever nom de plume sardonically depicts the long-running economic policy/vision of both “sides” of Australian politics – and his team at Macro Business is a standout example.
Unfortunately, it is apparent to this humble blogger that few if any in the mainstream financial commentariat have any greater “vision” than the clueless eunuchs in Canberra for whom they act as Press agents.
So if anything is going to be done about the Aussie Dollar, it will only happen if you, dear reader, are concerned enough about the future of this country (and your job) to take action yourself.
You can start by doing as I have been doing.
Contact the invertebrates in Canberra.
Educate.
Inform.
Complain.
Harass.
Abuse.
Point out to the self-interested, overpaid, trough swilling imbeciles on both “sides” of Australian politics that there is no excuse … none … for Australia’s government and Reserve Bank deliberately failing to act to address the root of the problem – a speculator-driven AUD exchange rate.
Other “safe havens” have done it.
Switzerland has done it.
Norway has done it.
Indeed, one of the keys to China’s economic success story, has been its use of an adjustable currency peg, which has allowed their industries time to adapt to changing economic and market conditions:
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You see, dear reader, our politicians, Treasury bureaucrats (looking at you, Martin “Mini-me” Parkinson!), and Reserve Bank governors are simply too beholden to flawed and failed economic ideologies.
Neo-Keynesianism.
Laissez faire capitalism.
“Free trade”.
“Free markets”.
Globalisation.
“Government debts don’t matter, if you have your own currency … you can just print, and inflate your debts away”.
They fail to recognise that the world has fundamentally changed since 2008.
Thirty-plus years of global debt-binging is over.
The masses have had their long overdue big fright … and have begun to wake up.
Debt is not the new black. It is the old red.©
And as a result, an over-leveraged debt-laden world economy, is now de-leveraging.
And in the inevitable race to the bottom, “currency wars” (ie, devaluing your currency) are a key factor.
Australia’s major trading partners are Japan and China. Both protect local industry, with a weak currency. Zero Interest Rate Policy (ZIRP) for Japan. A currency peg for China.
The USA, UK, and the European Union are all trying to protect their economies, to support and restore their manufacturing sectors, by weakening their currencies through ZIRP, QE (Quantitative Easing ie, printing money), and similar schemes via their central banks.
As usual, Australia is roughly 3 years behind the rest of the world.
But the currency wars is not a game that one can win by coming from way way behind.
Accept no excuses from our political “servants”.
Every other major “developed economy” on the planet is supporting local industry and jobs, by acting to ensure and maintain a weak currency.
Only Australia is doing nothing.
Call, write, or email our politicians now.
And if they give you the same (indeed, any) pathetic, close-minded, imbecilic excuses for not acting on the over-valued, speculator-driven Aussie dollar?
KAP the useless bastards.
Vote 1 Bob Katter.
Vote 1 Katter’s Australian Party.
If the “old” parties won’t act on the most urgent issues facing the nation … I will vote for someone who will.
And will loudly proclaim my intent, all the way to the next election.
UPDATE:
By the way … do not fall for the Coalition’s line, that job losses and business shutdowns are due to businesses preparing for the carbon “tax”. Regular readers know that I have been and remain a vehement opponent of the banksters’ CO2 derivatives scam … and even I don’t buy that bullshit.
Sure, job losses will inevitably mount when the derivatives scam launches.
But right now, job losses and business shutdowns are primarily a result of the speculator-driven AUD:
Death knell looms for Caltex jobs
The global dance of death could come quickly to Caltex’s two refineries after it slashed the value of its refining assets by $1.5 billion due to a confluence of factors strangling profits in this part of its business.
It is another example of Australia’s manufacturing going to the wall due to the strong Australian dollar, rising costs and stiff competition from Asia.
The rise of big Asian refineries with an overcapacity of product is turning the screws for local operators and has prompted Caltex management to announce a strategic review of two key refineries of its own – the Kurnell plant in Sydney and Lytton in Brisbane.
And this comes on the heels of Caltex closing one of its petrol-making units at Kurnell last year.
The review was instigated six months ago and is expected to take another six months before investors and customers know the verdict, which could include the sale, closure or further investment in the business.
Given today’s writedown of $1.5 billion of assets due to expectations of a prolonged period of pain, the market is expecting the review will recommend closure of at least one of these two plants which convert oil into petrol and diesel.
Indeed, Caltex supplies one third of Australia’s transport fuels, so the review will need to make sure it does not adversely impact its customers.
Soon, we will not only have given up our food security, by selling the farm to foreigners.
We will not only have sold off our mineral wealth and sent the profits abroad, thanks to a disaster-in-waiting “mining tax” that will actually help the Big 3 multi-national miners to grow their oligopoly.
Soon, we will have given up fuel security too.
And with no manufacturing sector left either, well, any future war would be fun, wouldn’t it?
Carbon permit face-slapping, anyone? To the death?
Oh wait … they’re not even paper.
They’re just electronic digits.
Exactly like your “cash” in the bank.
UPDATE 2:
Lighthouse Securities’ Greg McKenna, aka “Deus Forex Machina” at Macro Business, has written an excellent overview on this problem too:
The Australian Dollar is higher than it has been in decades. Indeed it is more than 30 cents higher than the average since it was floated in December 1983. Yet while we see businesses constantly in the news contemplating or actualising job losses and off shoring the arms of government and policy makers here in Australia can’t, won’t or don’t want to do anything about it.
This is at a time when most countries in the globe seem intent on manipulating there currency to the best advantage that they can.
…
I still call the Aussie Dollar “the battler” – its a legacy of it past when it always caught pneumonia at the first signs of the slightest global cold. But back then we didn’t have China, a mining boom and a central bank, our beloved RBA, with a structural bias to tighten in a world necessitating the exact opposite for most countries ( if you are interested why here’s a blog I did last April which explains why the RBA has a bias to tighten ).
It doesn’t battle much anymore though does it, well except for supremacy.
But what to do?
…
We know the RBA and Australian Treasury are on Board with a multi-decade China boom but do they really want to napalm the rest of the economy and just leave us with an economy full of houses and holes.
I hope not but I fear so.
Please read his article. Greg agrees that action to alleviate the impacts of the high AUD is vital. He also has some important insights on the views expressed by Treasury Secretary Martin “Mini-me” Parkinson. But (unlike myself) Greg does not favour a currency peg, and instead prefers and explains an alternative solution.
This is a debate that must be had. And urgently.
I thank Greg for his contributions to stoking the fires of that discussion.
Tags: AUD, australian party, barnaby joyce, bob katter, central bank, China, currency peg, currency wars, exchange rate, houses and holes, KAP, macro business, manufacturing, norway
I Wonder How Much These “Experts” Pull?
16 FebBack in December, your humble blogger published a comprehensive critique of the Green-Labor-Independents’ disaster-in-waiting dubbed the “Minerals Resource Rent Tax”.
Or “mining tax” for short.
Today, Professors’ Carey and Fargher of Deakin Uni and the ANU respectively, have combined their scintillating intellects to do the same.
This will all sound very familiar to regular readers.
From the Age (emphasis added):
Illustration: John Spooner | Source: The Age
Flaws in the mineral tax mean Australia may profit little from its resource wealth.
Could Australia end up with little to show for its mining boom – as an echo of what happened to Nauru once its considerable phosphate wealth was exhausted?
Close examination of the proposed minerals resource rent tax reveals serious flaws that could leave the federal government well short of the forecast revenue. It is conceivable that some large and highly profitable mining companies could reorganise their affairs to pay little or none of the tax.
The first and most obvious shortcoming of the MRRT, in terms of its revenue potential, is that it applies only to coal and iron ore. All other minerals are exempt. But it is the design of the tax as it applies to coal and iron ore miners that could leave the government facing an unanticipated multibillion-dollar shortfall.
The main problem is that the tax is based not on an objective measure such as tonnes of material mined, but on ”super profit” (mining profit less allowances). Profit at the best of times is a highly flexible concept that can allow accountants to apply creative techniques to minimise a company’s tax obligations. With the MRRT, the incentives and opportunities for creative avoidance appear even greater than those applying to company tax.
…
The minerals tax is not based on audited company profits from statutory accounts, but on a narrow portion of profits from particular mining activities. It requires the taxpayers (that is, the mining companies) to determine the amount of proceeds and costs that relate to these activities.
Ruh roh!
Does that sound familiar?
According to Carey and Fargher, the companies who are supposed to be “taxed” are the ones who will do the measuring (accounting) that determines how much tax they will pay!
That’s exactly like the Clean Energy Future “carbon tax” (see “An OSCAR For The Clean Energy Future”), where the entire scheme relies on “encouraging” the “biggest polluters” to “self-assess” their emissions … and the “audit” procedure by the government is quietly but openly admitted to be nothing more than an exercise in managing the public’s “perceptions” of compliance by the “polluters”.
This reliance on the miners themselves to determine the appropriate proceeds and costs creates a significant incentive to estimate profit from taxable activities in the most tax-efficient manner. For example, the MRRT requires the miners to split revenue between the taxable value earned to the point of producing a stock of coal or iron ore and revenue earned after that point. Transfers within the company also need to be valued. Losses can be offset between operations.
This point yielded a key insight in my detailed critique of the mining tax (see “GilSwan Conned – Mining Tax The Greens’ Pit Of Despair”).
The design of the MRRT actually creates an incentive for the Big 3 multi-nationals to buy out their smaller competitors – including loss-making junior miners and explorers. Why?
Because they can claim numerous deductions against their MRRT liabilities from existing mines, by gobbling up smaller, locally-owned competitors.
In other words, far from “spreading the wealth” of the mining boom, the design of the mining tax will actually help the Big 3 to increase their monopoly, thus sending even more profits offshore.
At numerous points, opportunities exist to reduce revenue estimates and increase costs so as to minimise the taxable profit reported. Volatility in commodity prices could also allow strategic timing of the recognition of revenue and expenses. All these factors, combined with any decline in the underlying commodity price from the record levels seen when the tax was first envisaged, could greatly reduce the expected proceeds to government coffers.
So, too, could the generous and sometimes unconventional allowances built into the tax. There are more than 50 pages of allowances that can be used to reduce a firm’s tax liability. While most allowances have their foundation in generally accepted accounting principles (e.g. royalties paid to state governments or pre-mining exploration expenditure), other are less conventional.
For example, under division 75, miners can choose between the ”book value” or ”market value” of an asset, which will be allocated against revenue over the productive life of a mine in order to calculate MRRT liability. Depreciating assets based on market valuation is not generally accepted accounting practice, yet it is allowed in the legislation. In simple terms, a mining asset that cost $100 million to bring to production might today be worth $350 million if sold on the open market. A miner could use this higher valuation to calculate depreciation, which would reduce the profit subject to the tax.
Business transactions can be complex, and legislation must therefore contain a range of provisions that require subjective interpretation. The mining tax legislation adds a further layer of complexity, which at times defies conventional accounting and can be used to aggressively minimise the amount of tax payable.
…
Even at this late stage in the process, key improvements might be made if there were full transparency in the revised revenue estimates, the underlying assumptions and, in particular, the ability of the tax office to monitor and collect the minerals tax. It is not surprising that critics have begun to question Treasury’s revenue estimates, which are based on private information supplied by the mining companies that is not on the public record.
Mining companies are entitled to make a profit, but if the nation decides it is also entitled to a return on the exploitation of national resources, then it is important to design a tax that is effective. Once the resources are gone, they are gone for good…
Well done Professors.
Better late than never.
I wonder what a “professor of accounting at Deakin University’s faculty of business and law” pulls?
Indeed, what does a “professor of accounting at the Australian National University’s College of Business and Economics” pull?
One thing’s for sure. The Big 3 multi-national mining companies pulled the wool over Swan’s eyes in their backroom, closed door deal.
Unsurprising really.
Since Wayne Swan’s intellectual power wouldn’t pull the skin off a custard.
(h/t @CaroChristie )
Tags: gilswan, mining tax, MRRT, RSPT, wayne swan
Shorten Truth
16 FebProfessor Sinclair Davidson at Catallaxy Files spots a tiny inconsistency:
The newspapers are full of the problems facing the aluminium industry. The basic problem as I see it is that the government has adopted a policy – the carbon tax – that should see the industry closing down (or at least massively reduced in size) but doesn’t want to admit to it. The AFR reports Bill Shorten explaining why the Treasury modelling doesn’t really show the industry collapsing (emphasis added).
Employment Minister Bill Shorten also rebuffed concerns based on the carbon tax modelling.
“It’s how you use that modelling – and that modelling depends upon the rest of the world doing nothing,” Mr Shorten said. “And the reality is the rest of the world is moving to lower emissions, greater carbon efficiency.”
An equilibrium global permit price emerges to clear the global permit market.
…
The modelling assumes an eventual shift to a lower cost coordinated international policy framework, recognising that this is ultimately in all countries’ best interests. By 2016, a more coordinated international policy regime allows countries to trade either bilaterally or through a common central market. As a result, a harmonised world carbon price emerges in 2016.
That must be the exact opposite to what Shorten is saying.
Indeed. But then again, as regular readers of this blog know, Treasury modelling is a farce anyway. So maybe that is why it does not bother Bill Shorten to blatantly lie about the critical base assumptions used by Treasury in their CO2 derivatives scam modelling … since the predicted outcomes (just like global warmists’ “models”) won’t be anywhere near reality anyway.
This propensity to lie seems to be endemic amongst Labor’s leading politicians.
Perhaps I should have titled today’s earlier post, “Labor’s Deficit Of Moral Hygiene”.
Tags: bill shorten, carbon tax, treasury modelling
An OSCAR For The Clean Energy Future
11 Feb
How appropriate.
The key, mission-critical system used by the Department of Climate Change and Energy Efficiency for reporting and calculation of “emissions” by the “biggest polluters”, is called OSCAR.
And now, with just over 4 months till the carbon ‘tax’ begins, the “science” is in.
OSCAR is trash.
As indeed was the government’s $20 million taxpayer-funded advertising campaign for the carbon “tax”, which according to the Auditor-General:
“.. contained facts which were not properly sourced and seven breaches of financial management regulations.”
Last year, we closely followed the unfolding story … fairytale … of the Green-Labor Clean Energy Future legislation.
Regular readers know that close examination of the legislation, and the government’s ever-changing claims about the number of “biggest polluters”, and the comments from the bankster industry, and the comments from the banksters’ “expert” talking head economists, clearly show what the Clean Energy Future really is.
An unconstitutional, bankster-designed, CO2 derivatives scam.
With a ticking time bomb carefully hidden inside.
They also know that the government released a Regulatory Impact Statement (RIS). It tacitly conceded that Government emissions audits are nothing more than a propaganda exercise, to maintain “public confidence” in the scheme. Because without public con-fidence that the scheme is actually monitoring emissions accurately, and that companies are actually complying with the scheme, then the whole charade would collapse -
“If there was a perception of widespread non-compliance, community support for the scheme would be much harder to maintain (in the absence of community acceptance and support, the long term future of the scheme could be called into question).”
Indeed, the Government’s RIS actually admitted that “perceptions” of the scheme’s effectiveness are more important than whether or not it actually is effective:
“In closing, it is important to note that, in considering impacts on the credibility of the scheme, perceptions of non-compliance can be more important than the actual level of non-compliance.”
Last week, the Auditor-General released an “independent performance audit” by the Australian National Audit Office (ANAO), into the Department of Climate Change and Energy Efficiency. The report is titled “Administration of the National Greenhouse and Energy Reporting Scheme”.
It is a fascinating read.
Now for lazy “give me the headline” readers, you can see the lamestream media’s lazy summary in The Age here – Audit Finds Errors on Emissions.
For more intelligent readers, or for those passionately and sincerely deluded folk who are placing their (blind) faith in the Government’s “carbon tax” to save the world from Warmageddon, you may find the following excerpts discomforting.
A forewarning – there are quite a few excerpts here. The Auditor-General’s report is 124 pages long. I’ve stripped out only the most interesting items, and highlighted them in yellow.
Rest assured, it is well worth your time to go through this. Especially if you wish to have a much clearer understanding of just what a total farce … and money-sucking fraud … the Clean Energy Future regime and its government department actually are.
I’ve done the tedious work.
And to make it a little more entertaining for you, I’ve sprinkled comments throughout.
Enjoy:
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To “encourage” compliance is code for, “Pleeeease go along with our scheme … pretty please?” At least this thinly-veiled begging makes a change from, say, The Goose’s impotent posturing towards the banks.
“Significantly higher” costs for compliance by business, ‘eh?
Hmmmm. How much higher?
Patience, dear reader. Remember, this is just the ‘Summary’ at the beginning. The ugly details come later.
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“Currently, the department does not verify the reported data”.
Ummmm … so it could all be total crap.
Or at the very least, riddled with even more errors than the ANAO audit discovered.
Remember, these (self) reported emissions by the “biggest polluters” are the basic, critical data relied upon by Treasury to “model” the impacts of the carbon “tax”.
How apropos was the title of my July 2011 blog post just days before the announcement of the draft legislation – A Disturbance In The Farce
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Hmmmmm.
Just how big is a “significant error”?
Naturally, we have to look in the fine print for that:
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So in the Clean Energy Future, a “biggest polluter” has only made a “significant error” if it is “greater than 40%” of the total annual emissions that qualified you as being a “biggest polluter” in the first place.
Would that we all could cruise through life with such a generous standard for (in)accuracy in our work.
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She’ll be right mate. We’ll get around to submitting a report of our self-assessed “emissions” … eventually.
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Hark!
Hear that sound?
That’s the sound of Treasury’s “modelling” on the impacts of the carbon “tax” losing any remaining vestige of credibility.
It’s also the sound of your wallet getting emptied at an even faster rate than you thought, as corporations pass on “significantly higher” costs than Treasury had “modelled”.
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Great big new “tax”.
No tangible benefit.
Quelle surprise!
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Funny how there is such a lack of “progress” under a new global tax regime being instituted by … progressives.
Ok, that’s enough from the “Summary”. Yes, all 31 pages of the “Summary”.
It’s probably more than enough for anyone with an IQ above room temperature to get the picture.
That even according to the Auditor-General, the government’s scheme for monitoring and reporting the emissions of the “biggest polluters” is a farce.
But if you want more … and the really good stuff is yet to come, because as every Yes Minister fan knows, the Summary is for the gormless ministers and the media, and you always hide the stuff you don’t want people to know in the endless pages of tedious detail … then here’s selected excerpts from the remaining 93 pages of detailed subject areas:
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And thus, dear reader, we have official confirmation – from the Auditor-General, no less – that your humble blogger was right throughout 2011, in his numerous blogs exposing Gillard’s “1,000 biggest … 500 biggest … more in the order of more like 400″ “biggest polluters” lies.
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Meaning … if you believe in the accuracy of the government’s data, which of course, as we have seen, you can’t … almost half of Australia’s total “emissions” won’t be directly covered.
Hmmmm … bushfire season coming up again.
Pushing on a string, anyone?
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Sheesh!
$472 grand to tell us that the emissions reporting regime is a farce?
Great use of taxpayer dollars.
I’d have told you that for one one-hundredth of the price.
Indeed, I have been telling you that … for free.
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Translation: The technical requirements being asked of corporations in order to report emissions are too bloody difficult.
Doubtless explaining why so many have either (a) failed to report, (b) reported months late, or (c) screwed up their report.
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Arguably the most amusing quote in the entire audit.
The Department of Climate Change and Energy Efficiency (DCCEE) actually defines “compliance” with the scheme as the ability to “encourage” corporations to comply. Its own definition recognises that the onus for compliance “rests primarily” with the corporations.
Oh yes, dear reader … I have no doubt whatsoever that corporations are very much “encouraged” to comply with the Clean Energy Future regime … particularly when they can see how impotent and farcical the DCCEE and its systems actually are.
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“because of resource constraints”.
Public ‘service’ (vomit) code for “give us more money”. Sir Humphrey Appleby would be proud of this report.
“a fully functional compliance capability is not yet in place” … “a critical capability to have in place prior to .. July 2012″
Better get a wriggle on then, fellas. You’ve got about 18 weeks.
Oh that’s right. Silly me.
That’s just the coded threat underlying the appeal for more taxpayer money.
“Quick quick La Gillardine, give us another few billion, or we won’t be ready to ‘encourage’ corporations to ‘comply’ in time.”
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Just in case you missed our department’s appeal/threat for more funding the first time.
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Translation: the DCCEE will only tell the responsible Minister what the department heads decide that he “needs to know”.
Don’t believe that’s what they mean?
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Translation: The DCCEE has not been telling the responsible Minister (Combet) that the department is waaaaaaaaaay behind the eight-ball in implementing the basic (and critical) emissions reporting bureaucracy.
Sir Humphrey Appleby would be so proud of this department.
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Data integrity is critical.
And yet, how exactly are emissions determined?
Well now, that’s in the fine print, of course:
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Translation: The corporation tells us how much electricity they used, or generated, and/or how many tonnes of dirt they dug up. And our special black box called OSCAR “automatically calculates” the number of tonnes of “emissions”.
Sounds like a Great Big New FUDGE FACTOR to this humble blogger.
And since the audit also goes on to demonstrate just how appallingly agricultural (pun intended) the OSCAR software system is, one would have to be wilfully ignorant (or a vested interest) to believe that this system will actually generate and report accurate emissions data.
Don’t believe me?
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The “biggest polluters” own record-keeping is not up to par. Indeed, some corporations admit that they are passing this task off to junior staff or “third party providers” (read: the accountant).
But it gets worse, because …
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… even the DCCEE doesn’t actually know how poor the “biggest polluters” record-keeping is, because the department’s own auditing program still isn’t finished, and so they didn’t have any documentation to show the Auditor-General, aside from their own “guidelines” handed out to corporations!
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Difficult for the construction sector to get the necessary records to report emissions, you say?
Contractors, you say?
I can smell a RORT-A-THON coming on.
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Independent third party verification of the “biggest polluters” annual reports?
Never mind. We’ll take your word for it.
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OSCAR, ‘eh?
Given the quality of data going into, and out of this system, one wonders if some nerdish wag in the DCCEE wasn’t thinking of this Oscar when they chose the name:
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Someone left the lid off the trash can.
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And the trash can is full of holes.
So, what do we do when the trash is leaking out of the trash can?
Why but of course … we stuff it back in again:
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How much trash is leaking out … that we know of so far?
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Oh, only 22% and 9% of total reported emissions for 2008-09 and 2009-10.
Or, about 77 million and 30 million tonnes of CO2-e.
At $23 tonne, that’s only about $1.7 Billion and $900 million dollars worth of “carbon credits” in error.
And let’s not forget the fine print caveat at 101 , telling us that there may yet be a further rise in resubmissions for those years … so, we can’t even rely on the DCCEE regarding error rates!
Billions of dollars for a massive department of sloth and gross ineptitude … money very well spent.
And speaking of costs, now we get to the Auditor-General’s assessment of costs of compliance with the Clean Energy Future scam:
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Fair enough.
If the actual compliance costs are not similar to those estimated when the legislation was passed through Parliament, then “Houston, we have a problem.”
And indeed, we most definitely do.
For those readers who have not yet been enlightened to the woeful record of Treasury “modelling” (see Why Would Any Sane Person Believe Treasury’s Carbon Tax Modelling When Its Budget Forecasting Record Is This Bad? ), then now might be a good time to close your eyes:
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And of course, as always, it’s vital to check the fine print:
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Translation: we did our best to make the cost of compliance for corporations appear as low as possible, by ignoring the “outliers”. But sadly, we couldn’t fudge the headline “result” any more than this.
And the reason why the costs for corporations is so high, is because complying with the reporting requirements is a major pain in the arse:
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Thank you, Mr Auditor-General.
That’s another $472K of borrowed money well spent by the government.
To check up on the (lack of) progress of … the government.
I wonder just how much more money the DCCEE will insist that they “need”, in order to get their “self-assessment” emissions reporting system ready by July 1st?
And I wonder how long it will take the government’s propaganda unit to prepare their next “education” campaign, to ensure that those oh so critical “perceptions of compliance” in the community are favourable?
After all, if we the people begin to have doubts that “big polluters” are fully complying with the scheme, then the “long term future of the scheme could be called into question”.
Wouldn’t that be terrible.
As the inimitable Senator Joyce said recently:
“The carbon tax is the biggest scam since … a pyramid scheme that if I mention its name I’ll get a suit”
Barnaby is right.
Tags: ANAO, auditor general, barnaby joyce, clean energy future, DCCEE
A Man In Touch With What’s Real
9 FebSenator Joyce writes from his flood-besieged home town of St George, for the Canberra Times:
Muddy waters sets the real tone
I am at a friend’s place staring out at the peak of the flood. In my town, St George, the hydraulic pressure of the river is forcing its way back up the storm water drains into the centre of town creating menacing pools of brown water inside the levy bank. The water trucks normally used for dust suppression are sucking up the water and taking it to the edge of the levy. Outside the levy bank is the bitter frustration of yet another flood, the third in two years.
It is the awesome spectacle of the energy required to lift billions of tonnes of water thousands of kilometres inland for which only a fraction ends up in the flooded river. The energy that is required is beyond comprehension. The temper of the town oscillates between community fervour to an understandable silent brooding, frustration and anger. The juxtaposition is stark between a house on a lawn, and just down the street, a house in the water.
The Local Disaster Management Group finds its own rhythm. They call for a mandated evacuation, and most go, but those with a job to do stay and some who are more scared of going than staying hide while others just completely ignore the order. The day for me starts with a quick look around town, public meetings and media and then either sandbagging, getting on the phone and chasing issues through or heading out to where help is required. The smaller towns feel they are forgotten in the shadow of the larger ones while the people on the farms feel they are forgotten by both.
All know that sympathy is usually temporary as the world moves on and the logistical exercise of repairs, insurance and getting the cash back into the house to bring back balance is a task that is self reliant with the support of a few friends as other issues will be on the news.
However, support during the crisis is overwhelming and genuine. Help just turns up as neighbours see people needing help, neighbours being anybody who see it in their heart to help. Teams of people swarm around houses to try and protect them from the fact that they know that the level of the house is below the oncoming flood. Miraculously some endeavours against all the odds succeed while others stand testament to a forlorn struggle.
The media look for the picture or the line that sells the story and we are happy, generally, to deliver it in the belief that it raises the prospect of public support. The media look for the hero or the rogue and if they cannot find it they will create one for you. Public figures, such as myself, have to show their wares of public service as you will be more noticed by your absence than by your participation, and of course this leads to a symbiotic, sometimes parasitic, relationship with those that hold the keys to the nightly news.
The most incongruous issue during the flood was watching the opening of Federal Parliament. It could have been happening on the moon, as it was so totally irrelevant to what was going on in the diluvium landscape that currently surrounds us. It is sobering to sit with others on their lounge in front of their TV and see how they see us. They giggle, laugh, frown and then say in the middle of the scripted punch line, ”Oh I better serve dinner; want a beer?”
Surely they should have more respect; don’t they realise we are vastly more important than curried sausages? All those media advisers and news producers being bumped by curried sausages. I am listening to a cacophony; the river, ominously loud at the window, Chris Uhlmann throwing to Heather Hewitt on TV and the clang of cutlery in the kitchen as my host and other flood refugees have left the TV to an empty lounge and all have moved to talk about other things in the kitchen.
The Balonne River will hit 14m overnight and houses will sit silently in the moonlight with the river running through them. Ladies will cry with frustration and sit with their husbands and partners and ask where the money will come from this time to repair the damage and bring back balance. Wayne Swan is talking in the background, something about the NBN.
A Twitter friend this evening described your humble blogger as “pensive”:
pen·sive/ˈpensiv/
Adjective: Engaged in, involving, or reflecting deep or serious thought.
Synonyms: thoughtful – reflective – wistful – meditative
I would suggest that the above essay demonstrates this to be an attribute clearly shared by the good … and eloquent … Senator Joyce.
A man who, after sending his own family on to safety, has stayed behind to help his townsfolk, and opened his own home as a refuge for emergency services and those in need:
On watch: Senator Barnaby Joyce keeps an eye on a temporary levee at the flood waters in his home town of St George, missing the start of the political year in Canberra. | Source: Weekly Times Now
The out-of-control kindergarten we call “Parliament” resumed this week, did it?
Parliament be damned!
Barnaby for PM.
Tags: barnaby joyce, eloquence, honesty, man of the people, pragmatism, priorities
Think You’ve Got Cash In The Bank? Think Again
5 FebFrom the Reserve Bank of Australia (RBA) website:
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That’s $53.2 billion in Australian notes on issue.
Sounds like a lot, right?
According to the Australian Bureau of Statistics (ABS), in December 2011 there were 11.441 million employed people in Australia.
So $53.2 billion in notes equals just $4,655 per employed person.
Doesn’t sound like so much now, does it?
But wait. There’s more.
According to the RBA’s spreadsheet titled “Assets – Selected Assets and Liabilities of the Private Non-financial Sectors”, it seems that “Households and unincorporated enterprises” have $668 billion in “Financial Assets – Deposits.”
And “Private non-financial corporations” supposedly have another $318 billion in “Financial Assets – Bank Deposits.”
So that’s $986 billion in “Deposits” for households and private (non-bank) businesses … combined.
Versus a grand total of only $53.2 billion in actual Australian notes issued by the RBA.
Confused?
If so, then it is probably because you have not yet seen through the biggest, longest-running con in the history of the human race.
It used to be called “money-lending”.
Now it’s called “banking”.
In a nutshell, the “money” that most people think is in the bank … isn’t.
That’s why, during the peak of the GFC in October 2008, the RBA was printing up billions in extra cash, trying to keep up with a silent bank run:
The private banks keep reserves of cash distributed in 60 storerooms across the country with an average of about $35 million in each. They get topped up by the Reserve Bank before Christmas, when demand for cash typically rises by about 6 per cent, and at Easter, when there is a smaller increase.
[TBI note: That's only $2.1 billion in stored 'reserve' cash at Aussie banks at any time ... or a mere $183.50 for every employed person in the country!]
But in early October, the Reserve Bank started getting calls from the cash centres for more, especially in denominations of $50 and $100.
The Reserve Bank has its own cash stash. It is coy about exactly how much it holds, but it is understood to be in the region of $4 billion to $5bn.
As the Armaguard vans worked overtime ferrying bundles of $10,000 out to the cash centres, the Reserve Bank’s strategic reserve holdings of $50 and $100 notes started to run low and the call went out to the printer for more. The Reserve Bank ordered another $4.6bn in $100s and another $6bn in $50s…
Households pulled about $5.5bn out of their banks in the 10 weeks between US financial house Lehman Brothers going broke – the onset of the global financial crisis – and the beginning of December. That is roughly 80 tonnes of cash salted away in people’s homes. Mattress Bank is doing well, was the view at the Reserve. A year later, only $1.5bn had been put back.
(see Our Banking System Operates With Zero Reserves)
You see, dear reader, the global banking system is a colossal con-fidence trick.
Banksters have a government-issued exclusive licence to operate the most insidious “business” in the history of the human race.
They make a killing by lending us vast quantities of … digits. At interest.
Electronic code, in their computers.
Not actual cash money.
When you sign a form to borrow from a bank, the bank is ‘licenced’ to legally create new “money” to lend you. Right out of thin air.
The “money” loaned to you, does not exist.
It is just a new number, on their books.
Your new “loan”, is their new “Asset”.
What you have signed your working life away for, is nothing more than a new electronic bookkeeping entry.
You are working and slaving away, to pay back borrowed binary code … plus “interest”.
Tragically, most folks worldwide have fallen for this centuries-old con game.
Indeed, we have all been born into it. So, we consider it “normal”. We have known nothing different:
Most folks think that when they borrow from a bank, they are borrowing real money that someone else deposited.
Most folks think that banks pay interest to attract depositors, and then, lend that money out at a higher interest rate to people wanting a loan.
It just ain’t so.
As you can see from the RBA’s own statistics, even the “money” that we think we have deposited in the bank … just isn’t there.
There’s only $53 billion in actual cash notes issued by the RBA.
In total. For the whole country.
Versus $986 billion in “Deposits” that businesses and private citizens – you and I – think we have in the banks.
That’s about one (1) actual dollar in “face value”, for every eighteen dollars fifty (18.50) that we falsely imagine is deposited in the bank under our name.
If the “money” lent to you by banksters was only the money they had on deposit from other customers, then how would you explain the fact that (according to the RBA’s “Bank Lending by Sector”) Australian households owed $1.18 Trillion to the banks at December 2011 (including $721 billion for Owner-Occupier housing) … and Australian businesses owed a further $773 billion?
$53 billion in legal tender cash notes issued by the RBA.
$1.95 Trillion in bank loans to households and businesses … at interest.
That’s $36.80 in bank loans … at interest … for every $1 in actual cash printed by the RBA*.
It’s all bull$h!t folks.
By our lazy, ignorant complicity, in agreeing to allow our governments to grant banksters the exclusive power to create “money” and lend … electronic digits … at interest, we have all agreed to a system of human slavery.
Our own slavery.
We have enslaved ourselves, by agreeing to go along with this “system”.
It’s long past time that we all woke up.
And stopped playing along with the con game of “money”-lending.
And especially, of money-lending at “interest”.
There is a very good reason why so many great wise men – Plato, Aristotle, Cato, Cicero, Seneca, Moses, Philo, Buddha, and many many more – all denounced the evil of money-lending at interest. Indeed, it is the same reason why the only Biblically-recorded instance of Jesus Christ resorting to violence, was when he chased the money-lenders out of the Temple with a whip.
The wisdom of the ancients is even more relevant today.
In our modern technology-driven world – where “money” is now not even real gold and silver laboriously dug out of the ground, but mere electronic digits created at the tap of a keyboard and click of a mouse button – there is simply no intellectual or moral justification for the vast majority of mankind to continue allowing a tiny minority to profit from the life and labour of everyone else, by lending “money” at “interest” under government licence.
It is time to demand that our governments enact a single, simple, real reform that would change the whole world for the better.
For everyone.
(Except banksters)
It is time to ban usury … in the original meaning of the word.
And if our elected representatives refuse to act against the banksters’ interest, in our best interest?
Then the following essay outlines my suggestion for one way to beat the bastards at their own game -
* Some may correctly point out that Australian banks do not only take “deposits” from Australians; they also borrow “money” from abroad, in order to lend in Australia. Indeed, this gives rise to the ever-controversial topic of the banks claiming that increases in the cost (ie, interest rate) they are paying for “wholesale” money they have borrowed from abroad supposedly justifies their refusal to pass on the full value of “official” interest rate cuts by the RBA. Nevertheless, the central point of this article remains unchallenged. According to the RBA at December 2011, AFI’s (All Financial Intermediaries) held $308.6 billion in “Offshore Borrowings” – a very far cry from the $1.95 Trillion in loans-at-interest to Aussie households and businesses. More important to note is that these “Offshore Borrowings” too, are mere electronic digits … not actual cash.
Tags: 99%, bank run, banksters, endogenous money, fractional reserve banking, notes on issue, occupy wall street, ows, RBA, usury
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