Tuesday, August 17, 2010


In his latest offering, conservative Australian cartoonist ZEG does not think much of the Labor party proposal for doctoring over the internet

Physician heal thyself

That sure applies to the head of the Australian Competition & Consumer Commission, Australia's business regulator. He knows so little about business that he allowed all or most of his money to be put into the shares of just one company -- apparently oblivious of the most basic rule of stockmarket investing: Spread your risks. But what can we expect from bureaucrats?

I have had investments in companies that went broke but my bottom line remained fine because they were only a small part of my portfolio of over 50 companies -- and the other companies continued to grow -- JR

THE future of the Direct Factory Outlets shopping centre chain is in doubt, with expectations one project could be placed into receivership as early as today.

If the chain collapses, ACCC chairman Graeme Samuel, an investor through a blind trust, stands to lose most of his personal fortune, a sum of more than $50 million. "This is most distressing indeed because it affects the interests of my children and grandchildren as beneficiaries of my estate," Mr Samuel told The Australian yesterday.

The chain operates eight centres across the eastern seaboard offering discounted brand clothing and household goods. As recently as February, the business boasted of growing sales as price-conscious consumers flocked to its discount centres for branded products.

But it is understood that four relatively successful DFO sites have been used to back expansion into five other less successful locations, including Canberra, north Queensland and Hobart.

Austexx, the group behind the DFO chain, is understood to have total debts of $1.2 billion. The debt problems led to a consortium of bank lenders calling in insolvency firm KordaMentha to assess Austexx's financial position less than six months ago.

A report at the weekend said the four-bank syndicate had refused to provide any further credit to the DFO group, stalling work at the South Wharf site at Docklands in Melbourne. The Melbourne project, which owes between $500 and $550 million, could be placed in receivership as early as today.

It is less than six months since Austexx disclosed it was looking for a $1.5bn buyer for the debt-ridden business. Austexx is 50 per cent owned by Melbourne rich-listers David Goldberger and David Wieland.

Arnold Bloch Leibler partner Leon Zwier, on behalf of Mr Goldberger and Mr Wieland, said his clients were working on a solution to the Austexx crisis. "The two Davids, as equity owners of Austexx, have been vigorously attempting to maximise the position of all stakeholders," Mr Zwier said.


Leftist contempt for the will of the people again -- though more graciously put than usual

Just a few years ago, around two thirds of Australians voted for Australia to continue as a monarchy

AUSTRALIA should move to be a republic when the reign of Queen Elizabeth II ends, Prime Minister Julia Gillard says. Ms Gillard today said the Queen should be Australia's final monarch, despite the nation's "deep affection" for her.

"What I would like to see as Prime Minister is that we work our way through to an agreement on a model for the republic," she said in Townsville. "I think the appropriate time for this nation to move to be a republic is when we see the monarch change.

"Obviously I'm hoping for Queen Elizabeth that she lives a long and happy life, and having watched her mother I think there's every chance that she will." [The Queen mother died at the age of 101 and was performing public duties even at age 100. Adolf Hitler described her as "the most dangerous woman in Europe"]


A lying cop gets fired!

A SENIOR South Australian police officer has been sacked for helping to set up a fake internet dating profile that offered his ex-girlfriend for sex.

Detective Sergeant Darren James Clohesy was fired yesterday after he failed to attend a disciplinary hearing with Police Commissioner Mal Hyde. He received an 18-month suspended sentence and orders to perform 320 hours of community service last week after he pleaded guilty to offensive behaviour, breaching his bail conditions and improperly accessing the police computer system.

Clohesy, 41, helped to set up a fake profile on an adult internet dating site after his girlfriend, Tania Milsom, also a police officer, ended their relationship last year. The profile, dubbed "SexyMillie888", provided Ms Milsom's phone number and address, asking men to contact her for sex. A number of men went to Ms Milsom's home with plans of her house, with at least one knocking on her bedroom window.

"The commissioner determined Mr Clohesy's offending was of a serious nature and his behaviour unacceptable and incompatible with the service expected of a police officer," a police spokesman said yesterday. "Mr Clohesy did not attend today's hearing, nor was he represented."

Chief Magistrate Elizabeth Bolton said in sentencing Clohesy that he had provided personal information about Ms Milsom for a nasty, hurtful and malicious scheme. Ms Bolton said the plan had been designed to embarrass, frighten and degrade the woman who had rejected Clohesy.


Difficult school gets a capable principal for once -- so the bureaucrats fire her

They should have stood up for her but were too gutless

SUSPENSIONS have almost tripled and truancy has doubled at Coober Pedy Area School since the ousting of principal Sue Burtenshaw. Figures obtained by The Advertiser, have shown an alarming decline in student attendance, with almost half the school's 230 pupils not attending on a regular basis.

In 2009, 31 students were suspended under Ms Burtenshaw, who was removed from her role this year following complaints over her tough stance on students and treatment of parents. But under the leadership of interim principals this year, behaviour has "swung out of control" with 86 students suspended and three excluded while only half-way into the school year.

Figures show that in May and June, student absences ranged between 86 to 124 students a day, compared to 36 to 66 students at the same time last year under Ms Burtenshaw.

Coober Pedy Area School assistant principal Kym Taylor has chosen to speak out on the issue, saying the school is in a "state of chaos" following the departure of Ms Burtenshaw, who joined the school in 2008 after the school had employed seven principals in nine years. "The school is in a state of chaos with kids not coming to school, children not staying in class and running in and out of classrooms, and swearing at teachers," Ms Taylor said.

"What we are doing is creating a generation of children at risk here. "We had policies in place, but because the policies were implemented by Sue and some people didn't like (them), there is now nothing in place."

After a six-month investigation into alleged misconduct, Education Department chief executive Chris Robinson announced last month that it was in "the best interests of the students, staff, community and Ms Burtenshaw that a new principal be appointed to Coober Pedy Area School".

But Opposition education spokesman David Pisoni said he found it "extraordinary" that a principal who was able to improve attendance, reduce suspensions and improve NAPLAN results was removed from the school in the "interest of the students".

Education Minister Jay Weatherill said: "We now have a principal appointed for the rest of 2010 and are working to ensure there is a permanent principal appointed as soon as possible to start next year."

Ms Burtenshaw has appealed the decision.


The economics of immigration

By Henry Ergas

Given present birth rates, population growth will depend mainly on immigration. By what criterion should we judge how high our immigration rate should be?

The logical criterion is the wellbeing of those already here. We should, in other words, maximise the welfare of existing Australians, taking into account their interest in the prosperity of future generations and humanitarian concern for the rest of the world.

That our focus should be on the preferences and welfare of present Australians may seem obvious but is crucial. For example, higher immigration would increase our national output. But it could diminish output per capita, and assuming foreign investors owned some of the added output, reduce per capita national income even more. And it might diminish the welfare of present Australians and their progeny, depending on how any increased national income was distributed between those who live here now and the new arrivals.

As a result, the choice of objective matters a great deal. The building industry wants to maximise the number of homes that need to be built and the mining industry the rents that can be extracted: but those objectives may not coincide with maximising the welfare of present Australians.

This point was stressed by economist Donald McDougall in a classic article he wrote while visiting Australia in the late 1950s. Those were years of record foreign investment. McDougall's question was whether that influx required a correspondingly higher rate of immigration.

McDougall argued that the increase in foreign investment had two effects: it made capital more abundant, lowering profits (as capital was invested in ever more marginal uses); and it made labour more productive, which increased wages. A matching rise in immigration would increase labour supply, causing wages to fall from that higher level. Total output would increase, but local incomes would not rise by as much, because some of the increase would go in higher profits to foreign investors.

In other words, output would rise, but unless a (potentially high) share of the resulting increased income was transferred to the initial residents, greater migration could make them worse off.

The risk of well-being declining is magnified if there are some resources that are costly or impossible to expand, such as roads in densely populated areas. Added congestion then harms users, aggravating any fall in living standards.

It is simply wrong to claim, as many economic commentators have, that proper pricing of those congestible assets (say, through road charges in CBDs) will avoid that fall.

To see why, imagine a swimming pool whose usage doubles. Assume also that prices are set fully efficiently, so that the lanes are always allocated to those who value them most highly. When demand doubles, prices must rise, and the more difficult it is to expand capacity, the greater the increase. The owner of the pool is better off but unless the increased income goes to the original users, they are unambiguously worse off. Indeed, if the pool is foreign owned, the gain will accrue overseas, while the costs will be borne entirely by local users.

The issue is even more acute with resources that are difficult to price (such as the untrammelled enjoyment of open spaces) or where political and social constraints make proper pricing unlikely (as in education and health). Then the costs of congestion may be high, and will fall largely on those users who can't afford any uncongested, more efficiently priced, alternatives. In Yogi Berra's deliciously illogical phrase, at a certain point "it's so crowded, no one goes there anymore".

Nor is building more infrastructure a panacea. To begin with, infrastructure decisions have never been more poorly made than at present, with decision-making pathologies so deeply entrenched as to be encrusted. But even were investments better chosen, the unit costs of expanding infrastructure are often higher than those of the capacity already in place. If expansion is efficiently priced, prices must then rise, making existing users worse off.


Ergas goes on to say that the entrepreneurial spirit of immigrants can be beneficial enough to outweight the costs -- and that is a reasonable comment on the past. The present is different, however. When many of the present immigrant intake are illiterate or semi-literate Afghans and Africans with very low skill levels and a subsistence farming background, it is hard to see any such benefit from their presence in Australia

Some shocking recent posts on my Queensland Cops blog

1 comment:

Paul said...

"it is hard to see any such benefit from their presence in Australia"

Lots of overtime for Police and Corrections officers?