Wednesday, March 18, 2009

Governments that are strangers to business

PICK the odd man out: Barack Obama, Kevin Rudd, John Key. Only one of them, New Zealand’s Prime Minister Key, has any material personal experience of how to make a dollar in the private sector. Rudd may be the wealthiest Prime Minister Australia has had, because of his wife’s admirable business acumen, but even that business is built on government contracts. Rudd’s experience is that of a lifelong public servant and politician, with a short stint as a consultant with KPMG. Obama is the world’s most famous community organiser, lawyer and, since 1996, full-time politician. Only Key - who was a manager at a clothing manufacturer and then moved into currency trading - has worked in a wholly private enterprise for any meaningful period of time.

This is not to denigrate the public service or community sectors. They do important work. But a lifelong immersion in the public sector creates a government-focused cast of mind and blind spots about the private sector. Obama and Rudd are in the business of pursuing growth by government programs, which demonstrates a dangerous ignorance of the role of growth led by productive private enterprise, small business in particular. No wonder Obama gave Rudd the thumbs up last week for the PM’s approach to the global financial crisis. But if there was ever a time when we needed those who understand the importance of growth in the private sector, it’s now.

If you doubt that blind spot, here is how US Vice-President Joe Biden explained the Obama administration’s strategy to help small business. He was asked on the CBS Early Show by a viewer who had laid off most of her staff last year how the US President’s trillion-dollar stimulus package would help small business. Biden was plainly stumped. After buying time by suggesting the woman contact his office, he then spluttered that “it may very well be that she’s in a circumstance where she is not able, her customers aren’t able to get to her, there’s no transit capability, the bridge going across the creek to get to her business needs repair, may very well be that she’s in a position where she is unable to access the - her energy costs are so high by providing smart meters, by being able to bring down the cost of her workforce”.

This is not a spoof. Either Biden is a buffoon who does not know his stuff or there is no stuff to know. The best Biden could conjure up for a small business owner was to build a bridge to improve her customers’ “transit capacity” and smart meters so she can count her energy costs.

Closer to home, addressing the NSW Chamber of Commerce in Sydney a few weeks ago, Rudd had nothing much to tell small business either. Small business men and women waited in vain for Rudd’s vision for small business. All they got was Rudd’s standard helicopter made-for-television view of the GFC and Australia’s response to it. There was no chance for questions and answers. “It was all spin and no substance,” said one businessman at the luncheon.

Rudd’s appointment of Craig Emerson as Small Business Minister was promising. Yet the Government as a whole demonstrates no understanding that, with two million small businesses employing about 4.5 million people, according to the Council of Small Business of Australia, small business is the key to real growth.

Now ask yourself why the Obama administration and the Rudd Government have nothing much to offer small business. Given that both are committed to industrial relations reforms that boost the power of unions, perhaps they have very little interest in small business where unions have no hold? Or could it be that neither is focused on growth derived from private enterprise, preferring to forge ahead with growth by bigger government? A bit of both perhaps.

Key, on the other hand, understands what is needed to make businesses hum: lower taxes, smarter regulation and a flexible labour market. He has recognised that a one-off sugar hit - or cash splash - won’t help business employ people for any longer than it takes to spend the cash. Permanent tax cuts help business employ more staff - permanently.

He told The Wall Street Journal’s Mary Kissel a few weeks back that he is determined to stop the slide that has seen NZ fall to the bottom half on the Organisation for Economic Co-operation and Development’s per-capita gross domestic product rankings. “We have been on a slippery slope ... so we need to lift those per capita wages, and the only way to really do that is through productivity growth driving efficiency in the country.” Key is cutting taxes, reforming regulations that inhibited foreign capital and tackling environmental legislation that has been misused by green groups to stop private sector investment. Oh, and he is undertaking a line-by-line review of every government department as part of his Government’s commitment to capping spending.

No wonder Key is the odd man out. And it is a shame that NZ will not be attending the G20 meeting in London next month, the latest effort by world leaders to confront the global financial crisis. Spend big and all will be in order is Obama’s resounding theme. It’s all stimulus this and stimulus that. Is it too much to hope that G stands for growth, not group-think?

Yet real growth - through the private sector - is not a concept you hear much about these days. We have a Government that talks incessantly about the dangers of the GFC yet is steadfastly committed to industrial relations policies that will, through their unfair dismissal laws, discourage small businesses from employing more people. And a Government that only accidentally supports small business when it suits some other agenda, cherry picking small business stimulus winners to push Labor’s green credentials and its education revolution. Good for those who sell insulation batts and a small band of workers who will build new school halls. But there is no broader vision to encourage growth in the small business sector as a whole.

There is plenty the Rudd Government could do if encouraging jobs growth was its genuine focus. Banking on rising unemployment and focusing on retraining is not enough. For example, the PM, keen to stamp his influence on state governments, ought to be paying the states to abolish payroll taxes - which have the direct effect of hindering employment - rather than funding this year’s sales of plasma TV sets. And that’s just for starters.

This could be the Liberal Party’s moment in the sun, reminding us it stands for encouraging real growth in small businesses, in the same heartland that once delivered it government


The Islamic Assault on Free Speech

It is one of the many benefits of Christianity that the West enjoys religious freedom and freedom of conscience. The properly understood notion of the separation of church and state arose from the Christian worldview, and goes back to the words of Jesus: “Render therefore unto Caesar the things which are Caesar’s; and unto God the things that are God’s”.

Islam of course knows of no such separation. Church and state are one in Islam. There is no sacred-secular distinction in the Muslim world. Everything is religious and everything is political. As Rodney Stark wrote, “Muhammad was not only the Prophet, he was head of state. Consequently, Islam has always idealized the fusion of religion and political rule, and sultans have usually also held the title of caliph” (The Victory of Reason).

Or as Dinesh D’Souza put it, “The prophet Muhammad was in his own day both a prophet and a Caesar who integrated the domains of church and state. Following his example, the rulers of the various Islamic empires, from the Umayyad to the ottoman, saw themselves as Allah’s viceregents on earth” (What’s So Great About Christianity?).

As Bernard Lewis explains, “In classical Arabic and in the other classical languages of Islam, there are no pairs of terms corresponding to ‘lay’ and ‘ecclesiastical,’ ‘spiritual’ and ‘temporal,’ ‘secular’ and ‘religious,’ because these pairs of words express a Christian dichotomy that has no equivalent in the world of Islam” (Islam and the West).

It is the genius of the West to have run with the Christian version of events in this regard, and not the Islamic one. But these cherished freedoms are ironically now being whittled way in the West as we increasingly seek to appease militant Islamists.

In many parts of the Western world Muslims are demanding, and getting, preferential treatment. And in the process, freedom of religion is slowly being eroded. A classic example of this can be seen in Victoria’s Racial and Religious Tolerance Act. This bit of scurrilous legislation has been used to silence Christians from proclaiming their faith, and from making rational criticism of Islam. The nefarious Victorian law effectively cramps real freedom of speech and religious diversity.

Of course hyper-sensitive Muslims around the world are seeking to implement such censorship on all non-Muslims. At the UN level, for example, Muslims are hoping to use UN Resolution 62/154, which has to do with "combating defamation of religions” to allow Islam to be above all criticism and critique.

A number of people have written about this recently, expressing their concerns. Atheist Christopher Hitchens for example wrote in the Australian warning of “so-called mainstream Muslims, grouped in the Organisation of the Islamic Conference, who are now demanding through the UN that Islam not only be allowed to make such absolutist claims, but that it be officially shielded from any criticism as a result.”

The Resolution is full of typical UN balderdash: “For example, paragraph five ‘expresses its deep concern that Islam is frequently and wrongly associated with human rights violations and terrorism’, while paragraph six ‘notes with deep concern the intensification of the campaign of defamation of religions and the ethnic and religious profiling of Muslim minorities in the aftermath of the tragic events of September 11, 2001’.”

“You see how the trick is pulled? In the same weeks this resolution comes up for its annual renewal at the UN, its chief sponsor-government (Pakistan) makes an agreement with the local Taliban forces to close girls' schools in the Swat Valley region (a mere 150km or so from the capital in Islamabad) and subject the inhabitants to sharia law. And this capitulation comes in direct response to a campaign of horrific violence and intimidation, including public beheadings.”

One reason why the Victorian legislation is so fatally flawed is that it mixes two quite different things: racial or ethnic vilification, and religious vilification. There may be a case to seek to reduce wrongful discrimination based on race, but to seek to isolate religious views from theological scrutiny and public debate is ludicrous. This is just what is happening in the UN Resolution:

“Yet the religion of those who carry out the campaign [of Islamist violence] is not to be mentioned, lest it ‘associate’ that faith with human rights violations or terrorism. In paragraph six, an obvious attempt is being made to confuse ethnicity with religious allegiance. Indeed this insinuation (incidentally dismissing the faith-based criminality of September 11 as merely tragic) is in fact essential to the entire scheme. If religion and race can be run together, then the condemnations that racism axiomatically attracts can be surreptitiously extended to religion, too. This is clumsy, but it works: the useless and meaningless term Islamophobia, now widely used as a bludgeon of moral blackmail, is testimony to its success.”

The muzzling of free speech is the sure outcome of this: “See where the language of paragraph 10 of the resolution is taking us. Having briefly offered lip service to the rights of free expression, it goes on to say that ‘the exercise of these rights carries with it special duties and responsibilities and may therefore be subject to limitations as are provided for by law and are necessary for respect of the rights or reputations of others, protection of national security or of public order, public health or morals and respect for religions and beliefs.’ The thought buried in this awful, wooden prose is as ugly as the language in which it is expressed: watch what you say, because our declared intention is to criminalise opinions that differ with the one true faith. Let nobody say that they have not been warned.”

The five-year-long court case involving two Christian pastors should suffice to demonstrate the lunacy of Victoria’s anti-vilification laws. The entire case was a travesty of justice, and was simply an attempt by Muslims to silence Christian voices which dared to question Islam.

To have such laws on an international scale would achieve as much for the Islamists as 9/11 ever did. As always, eternal vigilance is the price of freedom, and this goes for religious freedom as well. The question is, will the West resist this clampdown on freedom of speech, or will it instead submit to appeasement and dhimmitude?


Negligent social workers and the tragic death of a boy in inappropriate care

A TODDLER in foster care died of unexplained head injuries after his father had pleaded with authorities to move him. The boy, Luke, died on January 12 after living with a 74-year-old pensioner who also looked after three other children, all of whom were also state wards, The Australian reported. Luke's mother and father were drug addicts. But his father, who cannot be named, said he knew from supervised visits that the house Luke lived in was overcrowded and that the carer could not look after four children at once.

A coronial inquest is being held into Luke's death. He slipped into a coma after suffering head injuries and died six days later in his father's arms. Luke's father told the coroner he did not believe his son was properly cared for - neither by the 74-year-old foster parent or by Queensland's Department of Child Safety. He said he tried to have Luke moved elsewhere five times before he died. "I disagreed with the decision to place my child with a 74-year-old woman who was already burdened with three older children, all at home on school holiday," he wrote to the coroner. "This would make it virtually impossible to show the care and attention needed for a two-year-old."

He said Luke was "constantly" injured while at the home, including severe bruising to his head and body and a burn to his hand. He said he pointed out scratches on Luke's face to the DOCS supervisor on his last visit with his son. He said Luke's foster carer told him Luke also had bruises on his buttocks from jumping off his bed and that "she could not control him".

A few days later, Luke was in the hospital in a coma. "They (the department) didn't even have the decency to call me the night it happened," the father said.

The department's director-general Norelle Deeth [Death?] said she could not discuss specific cases, but added: "It must be remembered that children are only removed from their families ... because the parents abuse or neglect them." [The bitch is trying to blame the concerned father whom her Department ignored] She said the circumstances of Luke's death would be extensively examined.


Billions for Australian car-makers now looking worse than stupid

It was meant to be a bold statement in troubled times when Prime Minister Kevin Rudd and Industry Minister Kim Carr launched their New Car Plan for a Greener Future last November. The Government hailed the decision to provide $6.2 billion to the Australian car industry as "the most comprehensive plan ever devised for this vital sector of our economy". Their plan was designed to cover the industry until 2020. Only four months later, it is obsolete and dangerous.

The plan did not make sense when it was launched and makes even less sense now. It should have been obvious that the Australian car industry was facing existential difficulties. German newspapers were already discussing the end of General Motors' Opel and Vauxhall when Rudd was presenting his grand car plan. It is odd, to say the least, to exclude petrol from the planned emissions trading system while trying to make transport greener by giving subsidies to domestic car producers. You don't have to be Einstein to realise this amounts to nothing but old-fashioned protectionism hiding behind a green smokescreen.

The Government has a far easier option to make us drive more fuel-efficient cars. Instead of paying GM Holden or Toyota Australia to develop four-cylinder or hybrid engines, simply scrapping import duties and abolishing the luxury car tax (which strangely sets in at about the price of a European premium sedan) would make Australians think twice before buying a thirsty Holden Commodore rather than a more fuel-efficient BMW, Mercedes or Honda.

The drama surrounding Holden's US parent, GM, makes the Government's plan look ridiculous. What's the point in planning the long-term future of a sector when one of the biggest players may go under next week? When they launched their car plan last year, Rudd and Carr emphasised how important car manufacturing was to Australia. Rudd declared only about 15 nations in the world today could create a car from scratch, and Australia had to be one of them. [Why?] With such naive political backing the troubles of GM will be an enormous challenge not only for Holden but for the Government.

European politicians were far quicker to realise a GM insolvency would render their local GM subsidiaries unviable. In Germany and Britain, the homes of GM's Opel and Vauxhall, they feared a collapse of GM would lead to the collapse of the local car industry.

For months German and British politicians, trade unionists and car workers have been desperately trying to find a way to separate their companies from the moribund GM, only to discover that this is close to impossible. Not only do their cars share technologies and platforms with other GM companies but even the patents developed in Germany for Opel have been transferred to a US company, which in turn used them as collateral for the US Government's emergency loans to GM. So the taxpayer subsidies Rudd is giving Holden may end up in the coffers of its ailing parent in Detroit.

This leads to the next problem, the role of the US Government in GM's future. When the US Government agreed to provide emergency funding, the 294-page legal document outlining the terms and conditions contained a clause that in effect put the US Government in charge of GM's strategic policy. It says any transaction in excess of $US100 million must be approved by President Barack Obama. Moreover, in its restructuring plan, GM states that without Australian taxpayer support the company will quit the Australian market. So the fate of Holden must be on the agenda when Rudd meets Obama in Washington next week.

GM's auditors have raised substantial doubt about the company's ability to continue as a going concern. An insolvency would almost inevitably trigger the liquidation of GM's foreign assets, including Vauxhall, Opel and Holden. But it is unlikely that in the present economic climate -- with global excess capacity in car manufacturing estimated at 20 to 30per cent -- a private investor would be brave enough to buy these failing companies. And if Vauxhall and Opel are too small to survive as independent entities, then Holden won't succeed either.

When Rudd finally realises the dire straits Holden is in, he will probably nationalise it faster than you can say Commodore. So, after the Rudd Bank prepare for the Rudd Car. Then, just like their European counterparts, Rudd and Carr will find themselves in difficult negotiations with GM to do a deal that will depend on Obama's approval. Committing $100,000 of taxpayer money to saving each job in the car industry was already a prodigious waste of money but this will look cheap compared with the cost of nationalising Holden. In time, Australians will come to rue the day Rudd decided to treat the car industry as an issue of systemic significance.


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