Thursday, August 13, 2015

U.S.-based tech entrepreneur goes on epic Facebook RANT about what's wrong with Australia

He's pretty peeved that his exchange-rate bets went wrong. In the way of these things, the Oz dollar was for a while greatly overvalued and he still doesn't realize that.

His comments on negative gearing show a complete ignorance of normal accounting practice but I entirely agree that Australians tend to be "apathetic".  "Relaxed" and "laid back" are other words for that.  It is however probably a large part of the reason why Australia's rate of homicide is a fraction of America's.  A pretty good price to pay, I think.

Our friend seems to be a tech nerd so he has probably never heard of German philosopher Gottfried Leibniz.  Leibniz put forward the provocative thesis is that we live in "the best of all possible worlds".  It's probably not true but it draws attention to the fact that bad things can sometimes be preconditions for good  things.  Hence the probable association of an apathetic population with a low rate of per capita homicide.  If nothing much bothers you, you are probably not going to be bothered enough to blow somebody else's brains out.

Similarly, the curfew on nightclubs was put in place after a lot of late-night drunken brawls killed a few people and made the streets at night generally unsafe.  The probabilities are that there are some people alive today who would not be if a nightclub free-for-all had remained in place.  Mr Holmes à Court has a Leftist naivety about the causes of things

An entrepreneur who left Sydney to found a San Francisco start-up has slammed 'lazy' Australians in a long Facebook rant about the government and economy.

Nick Holmes à Court, founder of tech companies including BuzzNumbers and GoodCall, took to social media to question the changes to Australia he has noticed over the past two years while living the U.S. in a post that has been shared more than 1000 times.

Mr Holmes à Court, a distant relative of one of Australia's richest women Janet Holmes à Court, criticised everything from the property industry, to internet censorship laws, to Sydney's nightclub lockout laws.

'Can anyone explain to me WTF is going on in Australia...' he wrote.  'In the 2 years since we left Sydney, institutions like [Kings Cross nightclub] Hugos have closed, Gowings has opened, and you cant buy wine after 10pm or enter a nightclub after 1am (hint, the purpose of a nightclub is in the name).

Mr Holmes à Court went on to criticise the people of Australia for being too apathetic. 'But no one in Australia gives a f***. The lucky country? More like the lazy country.

'We are about to get f***ed so hard by global corporate interests, but the average Australian still thinks "she’ll be right mate".

'At the same time - housing pricing are up 20% in the last 2 years, and $5BN in annual tax losses are thrown to the gutter in negative gearing to make baby boomers richer at the expense of our generation whilst we cut all investment in innovation and future jobs.

'And what is worse, to keep the bubble rolling, Australia is giving away Visas to Chinese investors if they buy property - lets keep the party going baby!'

Mr Holmes à Court said he predicted 'tough times ahead' but that he hoped to be wrong. 'I love Australia, it’s my home, and I hope to grow old and die there. And it really saddens me to see how badly we are f***ing ourselves over as a nation,' he said.

'Paul Keating once argued this was "the recession we had to have" in the 80’s. I wonder what recession Australia needs to have this time to re-correct this unprecedented property and credit bubble.'

Mr Holmes à Court founded social media monitoring company BuzzNumbers in 2007, and it was acquired by Sentia Media in 2012.

In 2013 he founded email automation company GoodCall, which he operates from San Francisco. He also works with Startmate, an organisation that aims to help young Australian entrepreneurs get venture capital in the U.S.


China's devaluation is a big deal for Australia

China devalues the yuan by 1.9 per cent, Australia devalues by the same: as a result the AUD/CNY exchange rate this morning was the same as it was yesterday morning. And after China devalued by another 1.6 per cent earlier today, the Australian dollar followed the yuan lower.

That’s the trouble with competitive devaluations -- everyone else adjusts and you quickly lose first mover advantage, not that yesterday's or today's Chinese devaluation were aimed primarily at Australia.

But they are designed to get China’s basket of currencies back into line, since pegging only to the rampant US dollar has meant the yuan has become overvalued against its other trading partners, such as Australia. That over-valuation has resulted in Australia’s housing boom, tourism boom and mining bust.

So while the adjustment by China of its exchange rate was pretty small -- more a statement of intent than a big deal in itself -- it is definitely a big deal for Australia.

China is trying to resume its role as an exporter of deflation to the rest of the world, in particular the US. The PBoC’s move will put pressure on the Federal Reserve to hold off from raising interest rates next month, as it apparently plans to do.

At the very least, it means the US rate increase, if it happens, will be small, symbolic and a one-off for a while.

Over the past few years, the world has become mired in low growth, low inflation and low asset returns as a result of supply gluts, especially oil, and a shortage of consumer demand and thus business investment.

Germany and Japan have resorted to beggaring their neighbours with currency depreciations but China has been doggedly pulling on the infrastructure capex lever and clinging to the US dollar, with the result that its economy has become horribly burdened with excessive debt and capital spending and an overvalued currency.

It now seems the Chinese authorities are planning to deal with both of those problems, which has massive implications for Australia.

The boom in Australian house prices has partly resulted from the 35 per cent devaluation of the Australian dollar against the China yuan since 2011: Chinese investors have become the marginal pricers of Australian real estate but have been coming to the auctions with different calculators to the rest of us.

It’s only a bubble if it stops, and if China seriously depreciates its currency as opposed to yesterday’s 1.9 per cent and today's 1.6 per cent, that may put a cap on Chinese real estate demand in Australia and make it stop.

However, going by this week's action, the Aussie might follow the yuan wherever it goes, so as far as we’re concerned it’s likely to be a zero sum game (as all currency wars are in the end).

Meanwhile, China’s massive debt-fuelled investment binge over the past few years, which produced that final burst of Australia’s mining boom and lulled us into a false sense of security, has left its financial system in a precarious state and its steel industry unprofitable and burdened with debt.

The pressure on the steel industry and other basic export industries is now tremendous, with exports and prices falling and losses rising. It was for that reason that the yuan was devalued yesterday and today and why interest rates are being cut as well -- to release some of the pressure.

But the basic problems remain: excess capacity, rising real wages, much tougher environmental controls and high real interest rates since wholesale price deflation is now 5 per cent.

The prices of Australia’s commodities, as measured by the RBA commodity price index, have already fallen by almost half since 2011, resulting in an ‘income recession’ in this country (flat real wages and government deficits), but commodity export volumes have held up so far, which has kept GDP growing.

If volumes start falling as well because of the adjustments going on in the Chinese steel industry, then we need to hope Chinese people keep turning up here, either as tourists or property buyers.

Either way, Australia’s future, for good or ill, looks Chinese.


Tony Abbott to put homosexual marriage question to the people
Mr Abbott last night outlined plans for a "people's vote" on marriage equality after the next election following the Coalition meeting that blocked attempts to legislate for change.

Speaking at a press conference this morning Mr Abbott said: "The only way to successfully and satisfactorily settle this matter, given that it is so personal, and given that so many people have strong feelings on either side of this, the only way to settle it with the least rancour, if you like, is to ask the people to make a choice because all of us are instinctive democrats, we don't always get what we want but we accept in our country that the people's vote settles things.

"I've always said that the Indigenous recognition referendum should be dealt with on its own merits and it wouldn't be my disposition, I've got to say, to hold them concurrently. I think out of respect for Indigenous people we need to make that particular day, that particular decision, all about them frankly.

"My disposition, likewise, would not be to hold this people's vote concurrently with an election because, again, I think that people ought to be able to focus on the differences between a strong and competent government and an opposition which hasn't learned and can't change.

"Nevertheless, these are simply my dispositions. We haven't finalised what we'll do. Our strong disposition is to take it to the people in the next term of parliament while maintaining the position we took to the last election for the duration of this parliament."

Bill Shorten has framed same-sex marriage as an election issue, saying the strongest show of support for equality is to vote Labor at the next election.  The Opposition leader said he believes millions of Australians will have woken up this morning disappointed with Mr Abbott after last night's decision by the Coalition party room to refuse a conscience vote on gay marriage.
"The choice in this country is clear. You either have Tony Abbott or you have marriage equality; you can't have both," the Opposition Leader said.

"I don't think we should have to wait for a referendum ... which by the by would cost tens of millions of dollars. Mr Abbott just needs to move with the times."

However, this morning in the Senate Labor joined the Coalition to shut down a Greens attempt to force a debate on same-sex marriage, criticising the move as a "stunt" by the minor party.

Greens leader Richard Di Natale moved to suspend debate on establishing the Medical Research Future Fund to force a debate on discriminatory nature of the Marriage Act.  "Think of the signal that the Prime Minister's actions send to the young people right across this country who are being told `you are different . the way you feel is not normal'," Mr Di Natale said.  The motion was defeated 36 votes to 12.

Australian Marriage Equality national director Rodney Croome [a prominent homosexual] also urged a plebiscite to coincide with the next election "to give the next government a clear mandate".

"Any further delay is totally unacceptable, and any public vote must be at the next election so this issue is resolved as quickly and cheaply as possible," Mr Croome said.

Australian Christian Lobby managing director Lyle Shelton praised Coalition MPs for maintaining their position. "However we know the opponents of marriage will not rest. This is a much-needed reprieve; it is not a final victory," Mr Shelton said.

"Coalition MPs are likely to face a torrent of abuse and vitriol from some noisy same-sex marriage campaigners over the coming days."

A furious dispute over the issue put the Prime Minister at odds with key cabinet colleagues in a partyroom meeting that crushed an attempt to allow a conscience vote on the controversial social change in this term of parliament.

Mr Abbott prevailed in a hard-fought debate during which a convincing majority of MPs spoke against a conscience vote and many argued for the traditional definition of marriage.


Another attack on refrigeration and airconditioning

Banning CFCs because of their alleged effect on the Ozone hole meant that other more difficult-to-use chemicals had to be used in refrigeration, bumping up costs.  One of the alternatives was HFCs.  Now the nutters want that banned too.  There are of course still other approved alternatives -- such as propane -- but again converting to them will bump up the costs of refrigeration and air conditioning.  And here's a thing:  The remaining approved alternatives are derivatives of fossil fuels!  Horror!  How long before they are banned too?

The proposal below is also sneaky.  They want to ban HFCs under the Montreal protocol, even though it does NOT affect the ozone layer.  They want to do that because it is in theory a greenhouse gas.  But they are not game to expose it to climate change negotiations

The article below is written by an Australian refrigeration guy.  He is no doubt looking forward to the extra work he would get from a requirement for new refrigeration gases

The Montreal Protocol is famous for being perhaps the most successful environmental treaty anywhere.  It has assisted countries in phasing out CFCs and other ozone depleting substances (which are also very strong greenhouse gases).  With current controls on track, the ozone hole is closing and will be largely repaired by the 2040s.

The Montreal Protocol and action to control CFCs has spectacularly successful in reduced greenhouse gas emissions.

According to the CSIRO, emissions in Australia were reduced from the equivalent of more than 50 million tonnes of carbon dioxide per year in the early 1990s to less than 10 million tonnes today.

Given its positive experience in managing down CFCs and HCFCs (similar gases) five countries have proposed that the Montreal Protocol manage the phase down of HFCs.  HFCs are potent greenhouse gases and primarily used as replacements for ozone depleting substances.  The first of these draft amendments was forwarded six years ago.  

The proposals discuss a phase down that could reduce emissions by a further 85%.

There is broad support for this phase down: the US, EU, the Pacific countries, China, India, every African country, other developed countries and more support it.  Australia has pledged its commitment as well.

While often seen as a side issue, HFCs have become of significant interest to major countries.  Efforts to control HFCs have been part of several G8 communiqués and bilateral meetings between President Obama, Secretary of State Kerry and their international counterparts.  Foreign Affairs Minister Julie Bishop proclaimed Australia’s support at the UN climate summit last year.

Why are leaders focused on this now? Two reasons: firstly, emissions of HFCs can be managed cost effectively and comparatively quickly and easily through a global phase down. It is also hoped that an agreement could be struck at the major negotiations in early November in Dubai.  Agreement on this issue would provide a useful fillip to the Paris climate talks only a few weeks later.

Industry and environmental NGOs also think a phasedown is good policy as it provides both guaranteed environmental protection and economic certainty, and past experiences with CFCs and HCFCs.

While it is surprising to some at first blush that HFCs are being considered in the Montreal Protocol – after all they are not ozone depleters – the subject is both too technical and quirky for consideration in the climate negotiations.  The practicality of addressing this issue in the Montreal Protocol is simply overwhelming.

The Montreal Protocol has not been able to commence negotiations on a how a phase down would work however.  There are a few countries – mostly from the Middle East – who are yet to be convinced that negotiating a phase down is a good idea.

The rationale for their reluctance is unclear, but likely includes concern that there may not be alternatives that meet the requirements for countries with extremely high temperatures, concern about whether adequate funding will be available, and the precedent that making commitments to protect the climate would set.

The last meeting of the Montreal Protocol’s Open Ended Working Group ended – well adjourned – very late on a Friday evening 2 weeks ago without agreement to start negotiations on an HFC phase down.

After six years, high powered political engagement and extremely long negotiating hours the sense of frustration from most is palpable.

So what happens now?  In scenes reminiscent of the UNFCCC and COP 6 bis meeting, the Open Ended Working Group will again be gaveled into session for a last gasp effort to reach agreement so that negotiations can actually start in November.

Fingers crossed that further urgent discussions will let the real negotiations finally commence and allow a comparatively easy win for the climate.


The Community Looks To Senate To Support The ABCC
Communities will be the beneficiaries if the Senate decides to vote to reestablish the Australian Building and Construction Commission (ABCC) next week.

“The effect of the bill is to ask the building unions, particularly the CFMEU, to behave like normal people,” Wilhelm Harnisch CEO of Master Builders Australia said.

“The damaging evidence of intimidation and coercion presented to the Royal Commission into trade union governance and corruption shows that the building unions, particularly the CFMEU, are out of step with the community’s expectations about how union officials should behave,” he said.

“The CFMEU’s actions have been found to rob the community by making taxpayer funded projects more costly, resulting in less class-rooms, less hospital beds and less childcare places,” Wilhelm Harnisch said. 

“The Senate must look beyond the industrial relations arguments being put by the building unions. The ABCC is about asking building unions to behave normally and in line with community expectations; it’s about improving workers’ rights and it’s about improving safety on building sites,” he said.

“The proper role of unions in advocating workers’ rights and safety is not contested, but building unions are not above the law and the community has a right to expect their elected representatives to act when building union behaviour causes the community to suffer,” Wilhelm Harnisch said.

“In no other industry are ordinary people, when going about their daily work, confronted by overt aggression, denigration and bullying that building union officials regard as legitimate tools of their trade,” he said.

“In no other industry are small business people routinely intimidated and coerced by the threatening behaviour of building union officials,” Wilhelm Harnisch said.

“In no other industry are women subjected to building union aggression and abuse. Behaviour that is not tolerated in the home or any other workplace,” he said.

“Voting to restore the ABCC would single out such behaviour as unacceptable, and not unfairly single out a union. “All that is being asked for is for building union officials to behave like normal people,” Wilhelm Harnisch said.

“What is unfair, is that communities miss out on more class rooms, more hospital beds, more childcare places because the CFMEU and its officials refuse to behave normally,” he said.

“Master Builders calls on the Senate to stand behind their communities and champion their interests by supporting the Government’s bills to reestablish the ABCC,” Wilhelm Harnisch said.

Press release

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