Kookaburra

Plug for an eco-friendly furniture maker

The team at Sydney based Three-of-a-kind make beautiful looking furniture using recycled Australian hardwood and other recycled timber. I spotted them via a Google ad and am impressed with their designs. Some day soon I will head over to see their work first hand.

They source timber from Ironwood Australia, who specialise in recycling Australian hardwood timbers. Some beautiful projects which ensure that trees that took 60 plus years to mature are enjoying are enjoying multiple reincarnations.

Bush's Rating Falls to Its Lowest Point, New Survey Finds

Summarised from New York Times article

A majority of respondents in the poll, conducted before yesterday's transfer of power to an interim Iraqi government, said that the war was not worth its cost in American lives and that the Bush administration did not have a clear plan to restore order to Iraq.

The survey, which showed Mr. Bush's approval rating at 42 percent, also found that nearly 40 percent of Americans say they do not have an opinion about Senator John Kerry, the likely Democratic presidential nominee, despite what have been both parties' earliest and most expensive television advertising campaigns.

...The 42 percent of Americans who say they approve of the way Mr. Bush is handling his job is the lowest such figure in a Times/CBS News survey since the beginning of Mr. Bush's presidency in January 2001; 51 percent say they disapprove.

...Yet the survey found little evidence that Mr. Kerry has been able to take advantage of the president's difficulties, even though Mr. Kerry has spent $60 million on television advertising over the past three months. [Full article at CommonDreams.org]

Rates are low but housing prices aren't

Recently the Productivity Commission tabled a report on Housing Affordability. In summary, housing in Australia is becoming dramatically less affordable. Prices have been driven up by a speculative boom in these low inflation, low interest rates time. That boom has been encouraged by the effective halving of capital gains tax rates in 1999.

As Ross Gittins, sainted economics editor of the Sydney Morning Herald neatly summarises – "we're left with a system that taxes speculative gains at half the rate it imposes on honest labour." (hat tip to David from Manly for referring me to this article). Ross Gittins: Costello's part in property boom excesses

It remains to be seen how this speculative bubble works its way through the system. Who will lose their shirt in the process? What will be the effect long-term on housing affordability? It's not very clear what the outcome will be but there will be tears before bed time.

The pain of working this all through will demonstrate all too painfully why residential real estate is not a great investment - it is illiquid for starters and typically if you have an investment in a single property you are dangerously lacking in diversification and thus you have a high risk investment. I should have had a blog 2+ years ago when I was espousing my '10 Reasons why real estate is a lousy investment'.

As Gittins has previously written, the present first home buying (well trying) generation is the first to have been hindered not helped by their parent's generation. In the past wealth has moved down the generations assisted by shorter life spans and generally consistent housing prices. It's changed this time. The baby-boomers and beyond are living longer and are massively speculating in negatively geared real-estate (encouraged by a real-estate friendly tax system). The resulting speculative boom has shifted wealth from the young to the old.

Here are some more articles which illuminate this painful situation.

SMH: Housing eats up 40% of income

SMH: Call to tax profits on family home -- a suggestion to do as they do in the USA. Make interest payments deductable on the family home but apply capital gains tax on any sale.

Alan Kohler, SMH: How tax system egged on property speculation

The Economist has a string of articles on Australian Housing [registration required]

You should be so lucky to retire with a Gold Pass

In further examination of Australian Federal Parliamentarian's perks we have the Gold Pass.

The Life Gold Pass entitles eligible former parliamentarians to travel within Australia at government expense for their lifetime. There is no entitlement to overseas travel.

It is not only former Prime Ministers who enjoy this privilege. Serving as a Minister for more than six years or serving in parliament for more than 20 years will get you a gold pass. There are other combinations which you can read about here.

With your Gold Pass you become entitled to the following

• An entitlement to a cap of 25 domestic return trips annually for former eligible parliamentarians


• An entitlement to a cap of 40 domestic return trips for former eligible Prime Ministers


• Travel to be "not for a commercial purpose"


• Travel is by scheduled air, rail, bus, tram, ferry or vehicular service or on a combination of these scheduled services


• Travel is at the class determined for serving parliamentarians, currently First or Business Class. The Remuneration Tribunal determines the class of travel for serving parliamentarians

In a move for the better John Howard amended these entitlements in 2002 to remove free access to a ComCar fleet car and driver.

The latest figures released from Department of Finance show that former parliamentarians spent $480,000 on domestic travel in the second half of 2003.

The nation's former prime ministers were the biggest spenders. Together, former prime ministers Gough Whitlam, Malcolm Fraser, Bob Hawke, and Paul Keating spent more than $50,000 on domestic air fares and car travel between July and December last year. Gough Whitlam came out on top using his Life Gold Pass for $17,000 worth of travel. [Source: ABC News]

The Western Australian Remuneration and Allowances Tribunal discontinued all retirement benefits except superannuation for WA state parliamentarians in 1999. Independent Peter Andren points out this same approach could be applied in the Federal Parliament. Thus allowing members to opt out of the old scheme and into a new scheme in line with community standards. However this opt out option is not supported by any of the major parties. [Andren media release 17 June 2004 as PDF]

Latham: Coalition should pay for Gov't political advertising

Mark Latham has raised the stakes on advertising close to elections with a proposal to independently assess advertising retrospectively against new guidelines. If it fails the 'test' then the political party will wear the cost of these ads offset against their electoral allowance. Sounds fair. We will see if it is applied fairly. Latham singled our these sorts of ads in his press release.

Government advertisements that should be particularly closely scrutinised include those which:

• widely promote a benefit people automatically receive. That is, where there is not a need for the information to be broadcast;
• are timed to coincide with election campaigns; or
• are self-serving positive commentary on Government policy without useful factual information.

Look for more local election spending

It appears that each sitting member receives an annual electoral allowance of $125,000 Printing Allowance and $27,500 Communications Allowance (spotted via this Crikey.com.au article)

There was a push to increase this limit and allow a larger portion of unspent amounts to be rolled over into the next year. This motion was defeated (see debate in Senate 20 Aug 2003)

During this debate Senator Murray made the following point

In 2003 regulations were introduced which essentially increased the cap on printing entitlements for members from $125,000 to $150,000 and allowed 45 per cent of the entitlement to move from one year to the next. Consider that 10 years ago the average spending on printing was $5,000 and only three years ago the printing average, as recorded by the auditor, was $37,287 a year. If each member of the House of Representatives were to be given a capped maximum $150,000 printing allowance—and it will not happen—and if all members were to use that, you would find that there would be $22 million spent on legitimate usage plus propaganda.

Can we expect to see a flood of local printed materials from our sitting members? Bet your life you will.

Senator Abetz in this media release makes it very clear that sitting members can use their allowance to get re-elected -

My spokesman made it quite clear to the Herald-Sun prior to the publication of the story that it was an accepted convention that MPs could use their entitlements to campaign for their own re-election

Finding out what the allowances are is proving a little challenging.

Independent Peter Andren has been a long standing critic of the largesse of electoral allowances. Here is an interview he did with the Bulletin in 2001. The rules for superannuation have changed for new members elected at this next election. That was Howard's compromise in reaction to Latham making some headway on this issue. Personally I figure we should pay the hard working members of parliament commercially sound salaries with no hidden benefits on the side. It's the only clear path to accountability.

Here is Andren again on the 'Trish Draper affair' on ABC Radio [Transcript]

Federal government travel costs

If you are an Australian taxpayer you should be carefully scrutinising where your money is being spent. It's not only being wasted on advertising.

Struggling to find how much is being spent on the VIP Fleet but here is some interesting quotes from a Department of Finance report on airline travel.

Agencies generally have a strong preference for fully flexible fares, largely because bookings tend to be changed frequently (on average, around twice per booking). In the corporate sector, best practice is apparently to use deeply discounted fares for up to 40 per cent of flights.  By contrast, in the Australian Government sector, deeply discounted fares seem to be under-utilised. 

It's simple really. Choose low cost fares from Virginblue.com (or Qantas but there are less to choose from) and stop changing bookings so frequently. Two changes per booking! Can't they organise themselves better?

Reading the report further sugggests there has been some efforts to maximise savings on airfares. My quick calcs show savings of $6M a year would be available on the Sydney-Canberra route alone if they could hit a 40% mix of deep discount fares. As SYD-CAN is 16% of total flights this could gross up to annual savings of over $30M ( the final figure has been discounted back to allow for Government discounted rates).

Government goes over the top with advertising

The ABC's Mediawatch tonight highlighted the growing volume of political advertising. In a well researched story it quoted from a recent Australian Parliamentary Library research note:

…pre-election spikes in expenditure on government advertising.
The 1993, 1996, 1998 and 2001 federal elections were preceded by sharp increases in government advertising outlays…
-Parliamentary Library Research Note, 21 June 2004

In calling for the curtailing of Government political advertising Mark Latham is now assuming the role John Howard took in 1995.

In an angry press release, John Howard made the good point that
There is clearly a massive difference between necessary Government information for the community and blatant Government electoral propaganda. Propaganda should be paid for by political parties.
-Prime Minister Howard press release, 5 September 1995…in Government, we will ask the Auditor-General to draw up new guidelines on what is an appropriate use of taxpayers’ money in this area.
-John Howard press release, 5 September 1995

Of course John Howard did nothing to curtail the spending. Members of his government have defended the massive spending on the basis of 'Well Keating did it!'. Yes he did. But that was 8 years ago and on a much lower scale of spending. Besides it seems rather childish and fruitless to justify a present ill deed based on precedents. If we all acted in that fashion we'd still be in the dark ages.

Political donations on the nose

In Senate estimates hearings on 17 Feb 2004, Senator Kerry Nettle (Greens-NSW) enjoyed this exchange with a representative of the Australian Electoral Commission.

Senator NETTLE - Is it correct that currently someone from overseas could be donating anonymously, if they donated through an associated entity?

Ms Mitchell - That is quite possible and there is probably very little we could do about it.

Senator NETTLE - Whereas models in other countries ban such overseas donations.

Ms Mitchell - They do, yes.

Senator NETTLE - The United States being one of those examples. If the Liberal Party of Australia were to donate to the Bush administration that would not be allowed, but if the Bush administration were donating anonymously through an associated entity to the Liberal Party of Australia we would not be aware of that.

Ms Mitchell - It is a possibility.

Seems like a massive oversight to allow this to happen. Perhaps under the forthcoming USA-Australia Free Trade Agreement I might be able to send moveon.org some aussie dollars to help defeat Bush.

The whole issue of political donations is on the nose. There is a lot of money sloshing around. According to this article from the Age in Feb 2004,

The thousands of donations made to the Coalition in 2002-03 totalled $43.2 million. That was well below the previous financial year, when $71.5 million was funnelled into Liberal and National accounts.

Labor, federal and state, received around $35.5 million during the 12 months to June 30, 2003.

The article notes that both the Coalition and Labor have "associated entities" which can be used to launder political donations. For example, there is no way to discover who donated to the Cormack Foundation which in turn contributed $1.8 million into Liberal Party coffers in 2002-03.

The good news is that company donations are not tax deductible. As a private citizen it seems you get to claim your first $100 donations. Now to find someone worth funding.

The bad news ... donations for 03/04 only need to be reported in October 04 and we can expect to see the reports from AEC sometime early in 2005.

Here are some more articles which criticise how political donations are measured and controlled.

Transparency means more than disclosure - Editorial, The Age 2 Feb 2004
All the political donation figures - Crikey.com.au 3 Feb 2002
Media swamped by donations again - crikey.com.au 5 Feb 2004

We need patriots, not cheerleaders

"We need patriots, not cheerleaders", so writes Julia Baird in the Sydney Morning Herald. The article sparks off with the non-debate about flags in schools (or no funding) and discusses the distinction between patriotism and nationalism. She quotes George Orwell.

George Orwell distinguished between patriotism and nationalism, arguing: "By patriotism I mean devotion to a particular place and a particular way of life, which one believes to be the best in the world but has no wish to force upon other people. Patriotism is of its nature defensive, both militarily and culturally. Nationalism, on the other hand, is inseparable from the desire for power. The abiding purpose of every nationalist is to secure more power and more prestige for the nation or other unit in which he has chosen to sink his own individuality."

So we're in the hands of Howard the nationalist trying to tug at the nation's heart strings, seeking to stir our patriotic zeal (hard when we're so apathetic) in order to further his own aims.

Baird continues..

For decades the debate about our national shame has hinged on the past - what we did to the Aborigines to whose shores we sailed, seeking a new home. Now our shame is present - it has become what we have done to those who have sailed here since, seeking refuge. It is about the war we fought in Iraq because we were asked to, for reasons which were false.

Orwell wrote that "The nationalist not only does not disapprove of atrocities committed by his own side, but he has a remarkable capacity for not even hearing about them."