Sunday, April 12, 2015

Australia is on a road to economic ruin unless politicians can act in national interest, business groups warn

THE political crisis that has engulfed the federal parliament for the past 18 months will lead Australia down a “road of economic despair”, the nation’s leading industry and business groups have warned in an unprecedented call to action.

With the Reserve Bank considering another interest rate cut today as a result of collapsing iron ore prices and fears the economy was stalling, the country’s largest employer groups have issued an extraordinary joint statement demanding all sides of politics start acting in the national interest.

Warning that Australians’ standard of living was in jeopardy because of a lack of political courage to engage in reform, the statement petitioned all sides of politics to govern in the tradition of the “reform giants” — Hawke/Keating and Howard/Costello.

Taking aim at the Abbott government for signalling it would pull back from further reform in the May budget, the group of nine also criticised Labor for focusing solely on “budget fairness” and cited past senates as contributing to Australia’s economic welfare, rather than wilfully damaging it.

Rather than continue to focus on spending cuts — more than $20 billion of which Labor and the senate continue to block — Treasurer Joe Hockey is signalling regressive measures such as tax hikes to balance the budget, including cutting tax concessions for superannuation.

“With the Prime Minister signalling a ‘dull’ budget and the Opposition Leader continuing to focus almost exclusively on budget ‘fairness’ you could be mistaken for thinking there is no significant problem with the state of the nation’s finances,” the statement said.

“It’s a comforting thought that growth is somehow automatic and that year in, year out, despite our many challenges we will continue to improve our lot.

“The reality of where prosperity comes from, however, is much more sobering and if neglected will set us on a path to economic despair.“

The joint statement was authored by business groups including the Australian Chamber of Commerce & Industry, Australian Food & Grocery Council, Australian Industry Group, Australian Pipeline Industry Association, Business Council of Australia, Minerals Council of Australia, National Farmers Federation, Property Council of Australia and Restaurant & Catering Australia.

They represent the largest employers in the country and the bulk of Australia’s economic and industrial activity.

“There is no escaping that reform is hard and often unpopular in the short-term, but Australians are vastly better off for the actions of a previous generation of leaders,” the joint statement said.

“ ... Our message to today’s leaders is simple: governing is not just the responsibility of government, it is the duty of all members of parliament, and we must stand on the shoulders of reform giants ­before it is too late.”

The group cited the fiscal disaster facing the government — spiralling debt and deficits — as even more reason for parliament to act.


Labor’s legacy could build up union corruption

SOON another political landmine will explode. It was planted long ago by federal Labor. On May 30, under a legislative sunset provision, the anti-corruption body in the construction sector, the Fair Work Building and Construction agency, will lose some of its crucial powers.

The construction unions must be excited. Final control over any resisters, the remaining honest construction businesses in the sector, will be theirs. All large-scale projects — “union jobs” — will be built in total union compliance, under a system of corporatised corruption.

We are already regarded as the most expensive construction destination on the planet, but the cost of our infrastructure will rise even higher. Timeframes for completion will blow out. Domestically, people will wait even longer and pay even more for their roads, hospitals and apartment complexes.

Dodgy deals done in the boardrooms of our biggest building companies will be implemented right down the supply chain, to the smallest subcontractors. Tony Abbott’s infrastructure plans will be seriously under question. In all good conscience, how will any politician hand any taxpayer money over to this sector after May 30?

Our international reputation — already woeful in this area — will plummet even further; more capital will avoid our shores. In 2012, Lend Lease, operating overseas, paid $US56 million in fines, the largest construction fraud settlement in New York City history. Why would anyone want to invest in a country where corporate cowboys with questionable reputations partner with unions that are basically criminal gangs to rip off investors, especially when those unions are above the law, more powerful than the police, own a large slice of the retirement savings sector and exert great control over the political party likely to be next in power?

But I don’t want any of you to worry, because Jacqui Lambie is going to step in and save the day. Even though the government has put forward legislation to tackle all this, Lambie thinks it’s unfair, will vote it down and has proposed a solution. She is going to stand tall and read out in parliament any sworn statements of allegations of corruption, violence and thuggery that scared Tasmanians (no one else, just Tasmanians) may make to her.

Union corruption is vastly misunderstood. The government’s proposed legislation to replace the FWBC by reinstating the Australian Building and Construction Commission is vastly misunderstood. Lambie’s speech in the Senate this week displayed stunning ignorance and put forward absurd propositions. Union propaganda has been swallowed hook, line and sinker.

The government’s proposed solution goes a long way towards addressing our problems. It contains four elements:

Instead of lapsing on May 30, powers to compel people to provide information about corruption and protect whistleblowers will stay in place. The unions make out workers will be kidnapped, held in a “star chamber” and tortured until they speak. Rubbish. These powers already exist and that doesn’t happen. Whistleblowers who come forward to provide information prefer to say that they had to talk, they were legally compelled. This gets them off the hook with the union, and protects their safety and that of their families.

Maximum penalties for prohibited conduct, cut by two-thirds under Labor, will be restored to be a meaningful deterrent. These are still miles below penalties in the corporate sector, even though the unions are running a ridiculous line about ordinary workers being subject to penalties while white-collar fat cats get off lightly.

When unions cannot get their way, sometimes they send strangers to block people’s driveways and intimidate workers trying to get to work. When this happens, the police refuse to act. The law contains remedies to deal with “unlawful picketing”.

An anti-corruption building code will be administered. This code does not apply to unions, only to businesses, and is designed to commercially punish corrupt employers.

Union corruption in construction could not exist without collusion from the big businesses at the top of the food chain. Before a project built in a corrupt fashion goes ahead, the firm building the project signs a contract with the union. There is no warm and fuzzy collective bargaining process with workers, just a perfunctory meeting between company executives and union officials over a document that sets out wages and conditions for people that neither party will employ.

Once that contract is signed, the firm advises or agrees with the unions on the names of businesses they will be hiring on the project, and the unions contact those businesses and tell them if they want to work on the project they must sign up to the contract and pay all their staff the wages and conditions in the contract. Often, businesses have to pay bribes to sign, too.

Senators should ask themselves: why should smaller companies be forced to pay their workers wage levels that are dictated to them by their client, who uses the union as a paid enforcer? Further, why should they pay bribes just so they can win work?

Finally, senators should remember this: our economy is looking for a new growth area. With the right regulation, that growth area could be our construction sector. It really could. But, without it, it won’t be.


Our Constitution and the Senate

The system is broken

James Allan

Most of the journalists in this country, and pretty much all of the ones who work for the ABC, basically haven’t got a clue when it comes to our Constitution. Here’s the sort of line we’ve been hearing of late: ‘Tony Abbott is to blame for not getting the government’s budget and other matters through the Senate. He should be compromising more. He should be negotiating more. He should be reaching out to all the Independent Senators. The blame for all the blocked budget measures lies with Big Tony.’

Now if that’s a caricature of the general journalistic attitude, it is barely a caricature. On some parts of the ABC it understates the hostility to Abbott and the underlying desire to find a way to blame him for every failing going.

But here’s what you need to realise about our Constitution. Firstly, in the Westminster world that includes Canada, the United Kingdom and New Zealand, Australia is unique in having an Upper House that has any sort of power at all. New Zealand has no upper house whatsoever. And both Canada’s and the UK’s are today, in 2015, not elected legislative bodies. The people that staff them both are wholly appointed in Canada and overwhelmingly appointed in the UK, with a handful there who get their spots on an hereditary basis.

This means two things. First off, unelected Upper Houses have next to no legitimacy in today’s world. To call them a joke is apt. More pertinently, when prime ministers in Canada and the UK win an election (which by definition means they have the confidence of the Lower House) they get any budgetary measures they want passed into law. Always. An unelected Senate blocks virtually nothing. And the same is true in New Zealand where there is no upper house.

On that model Mr Abbott’s government’s university reforms would have sailed through. So would all the budget savings. The Prime Minister would have three years to do what he and the government thought best and then the ultimate arbiters in any democracy – the voters – would have their say. That means that any comparisons of Abbott to any of those other prime ministers is nonsense.

It gets worse. The drafters of our Constitution here in Australia explicitly opted to copy the US Constitution. Indeed, we have the most American of constitutions in the Westminster world. That means they chose to have an elected Upper House. It was meant to be a House for the States, to check and balance.

So notice how inconsistent it is for some ABC hack to criticize the Republican Congress for blocking an Obama legislative initiative and at the same time see our Senate as rightfully being the arbiters of what legislation ought to pass into law.

Secondly, notice too that in democratic terms – in terms of the democratic legitimacy of the two bodies – our Senate is massively less legitimate than our House of Representatives. For the Lower House we basically count everyone in Australia as equal and divide the country into districts of the same size, or as nearly as practicable. Your vote counts the same as mine. That is democratic legitimacy.

For the Senate we give each State the same representation whatever its population, a direct copy from the US. That means voters in Tasmania have votes that are worth about 18 times as much as NSW voters. All the smaller States are massively over-represented. Which was by design. But it was, as I said, a federalism trade-off to protect the States that is now defunct. And the idea was never that the Senate would be more important in making public policy decisions. It was to be a House of second thought, not the predominant decider of public policy.

Things of late, though, have got out of control in this country. With the increased number of Senators per State to 12, and the proportional voting system, we are today in the position that James Madison’s idea of a checks-and-balances Upper House of the sort we copied has descended to the point that people like Jacqui Lambie and Clive Palmer and some Motor Enthusiast (whatever that means) are doing the checking and balancing. Never in his wildest dreams did Madison envisage or desire that.

In addition, the Americans keep their Senate a two party affair. You have the ‘In’ party and the ‘Out’ party. The President’s party will sometimes control the Senate (as was the case for President Obama’s first two years) or it will not. But the voters will always know who to reward or punish for a recalcitrant Senate.

That is far better than the rubbish situation here in Australia where a handful of people who at the last election won some miniscule fraction of the voter support as compared to the Coalition are elevated by journalists into being legitimately on the same plane as the Abbott government. And when they do block Bill after Bill after Bill we voters are not able to punish them. They are not accountable, especially when some fraction of a fraction of the vote can get you back into Parliament.

I would change the Senate voting system to deliver two party dominance. But as that is not an overly popular point of view, let me just say this: journalists should at least be clear that there is nothing obviously desirable in wanting a prime minister who won well over half of all voters last election to have to bargain and compromise and kowtow (on every single Budget provision mooted) to people who won the support of next to no Australians at all.

Think about it. Seven or eight puffed up, pompous Independents decide that they know more about higher education than the government (and 40 of 41 Vice Chancellors), and worse, feel no obligation at all to let a government get its spending measures through so that the voters can have the last word.

Worse again, journalists blame Abbott for this. True, maybe ABC journalists would be less forgiving of the Senate were it a Labor prime minister being stymied. Okay, forget that ‘maybe’. We all know that the ABC would be ruthlessly attacking the Senate if it were stopping a left wing government from enacting – take your pick – same sex marriage or higher taxes or new carbon taxes or whatever.

But the point here is about democracy. Whoever is in government, our Senate has gotten too big for its comparatively undemocratic boots.


Why The Dallas Buyers Club Piracy Letter Won't Matter

The Australian Federal Court has ruled that a group of Australian Internet Service Providers (ISPs) will have to hand over the identities of some 4726 of their customers. The ISPs involved were Dodo, Internode, Amnet Broadband, Adam Internet and Wideband Networks. Strangely, customers of the major ISPs Telstra, Optus and TPG were unaffected by this ruling and it is not clear why these particular companies have been spared (so far).

The Dallas Buyers Club LLC who have brought the action to the courts, used technology from German company Maverickeye to detect people who had participated in sharing the film between April 2 to May 27, 2014.

The technology to detect the downloaders worked by participating in the process of torrenting a particular movie file. Torrenting works by every computer being able to share bits of a file between them. As soon as a computer has downloaded a bit of a file, it then (usually) makes it available for other computers to upload. The software from Maverickeye simply took part in this process and recorded the IP address of every computer that was willing to share, or upload, parts of the movie.

Technically, those downloaders who had switched off the upload feature of their BitTorrent software would not have been of interest to the Dallas Buyers Club LLC. They were apparently only interested in those customers how had “made the film available online to other persons; electronically transmitted the film to other persons; and made copies of the whole or a substantial part of the film”.

The tactics of the Dallas Buyers Club LLC have been strange to say the least. For a start, the number of infringers that they are pursuing is relatively small. They avoided customers of the major ISPs like Telstra, Optus and TPG. There has been a long held belief that if you want to avoid infringement notices from downloading, it was best to be with one of these ISPs rather than the smaller ones that could be pushed around. The Federal Court judge Justice Pereman ruled that Dallas Buyers Club LLC will have to pay the ISPs legal costs and also the costs of providing the customer information.

But most importantly, any letter that the Dallas Buyers Club LLC wants to send to customers will need to be reviewed by the court. This is very significant because the judge is seeking to avoid what is called “speculative invoicing”. This is where a company sends a threatening letter which asks the customer for a large amount of money instead of taking the matter to court. iiNet has argued that the cost of the download to the film owners is of the order of $10 but as in other cases, the Dallas Buyers Club LLC are likely to want to go for fines in the hundreds of dollars. The exact price will be set by the judge and of course this is likely to dampen the overall amount of money it gets from the exercise.

Taking these points into consideration, it is hard to see what Voltage Pictures, the owners of the film, will have gained by this entire process. If the fines are insubstantial, they will not serve as any form of deterrent for future torrents and in any event, Voltage Pictures does not have any particular interest in the more general issue of people torrenting content.

In any event, with the introduction of streaming services like Netflix in Australia, it is likely that torrenting is going to become less of an issue which is what downloaders have been arguing all along. Once the movie industry actually provides a country with a reasonably priced and easily accessed service, the need to obtain content without paying goes away. In the meantime however, they seem intent on creating their own live theatre through the Australian courts.


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