Mining tax, who needs a mining tax?

ASX 200 company tax avoidance bleeds Commonwealth coffers of billions a year, report finds

There’s an interesting set of villains in this particular sordid little saga.

Tax

Two of the top offenders  are our two biggest mining companies: BHP Billiton and Rio Tinto. There was limp-wristed  effort to make these companies pay their fair share when the Labor government introduced the mining tax. Unfortunately, it was introduced by someone who really didn’t make it into the top ranks of Australian Treasurers.

wayne-swan-200x0

In fact, a mining tax is not the answer to this problem because the villains are not all miners. They are international companies that leverage massive debt onto their Australian subsidiaries. It’s beautiful in its simplicity. A company which is based in a jurisdiction that has a lower tax rate (or no tax rate at all) than in Australia lends money to its Australian subsidiary at an interest rate that wipes out all its profits. As it makes no profits, it pays no tax. Brilliant!

So what we need is a regulation that ensures that there is a tax equalisation scheme whereby heavily leveraged debt, which funds international operation to outside Australia, is not tax-deductible in Australia. The legislation would simply require companies to show how much profit they have made in Australia before they deduct their internal transfer interest payments.

This becomes their taxable profit. Simple. So simple that even Joe hockey should be to understand it.

Joe should get this one if he concentrates

Joe should get this one if he concentrates

Land of contrasts

Having been out of the country for seven days and holidaying in a country where the most important issue is whether Richie McCaw will lead the All Blacks to the next world cup, it’s great to come back home and find the big issues are still at large.

In the same newspaper, we can have these two headlines

Julie Bishop says Australia could join air strikes on IS in a matter of days

FA - 18 Super Hornets

FA – 18 Super Hornets

 Australian Government investment in science reaches 30-year low

We are ahead of Slovakia and Greece (and presumably the Glorious Nation of Kazakhstan) in science spending

We are ahead of Slovakia and Greece (and presumably the Glorious Nation of Kazakhstan) in science spending

Perhaps it’s time that we took a step back and questioned some of our national priorities. Sending fighter-bombers to the Middle East is a quick (and probably not very effective) fix. Investing in science is a long-term proposition with the paybacks (particularly in the case of  science education) often not becoming obvious for a generation.

Most people don’t understand how expensive fighter-bombers are. The FA-18 costs around $60 million and the maintenance costs, which typically skyrocket during active service, are huge. We could easily see bills in excess of $100 million to support this operation in the very short-term.

The Federal Government is making  decisions on going to war without significant debate in Parliament. Bill Shorten has decided to support the government’s war agenda to make himself a small target politically because he knows anyone who opposes the war will be labelled unpatriotic, un-Australian and certainly someone who is aiding  the cause of terrorism.

In the current environment, the voices of rationality and reason, the voices that would argue that we do need to spend money on science and not on war, have no chance of being heard.

Best versions ever

Sometimes a singer puts their stamp on a song such that it makes all other versions pale by comparison.

This is my shortlist (in no particular order)

van Morrison

Moondance

Eva Cassidy

Autumn Leaves

Roberta Flack

The first time ever I saw your face

Killing me softly with his song

Jackson Browne

Load Out and Stay

Annie Lennox

A Whiter Shade of Pale

Is the PM scaremongering?

Tony Abbott cannot resist getting on the bandwagon at every opportunity to distract the Australian public from the ongoing shambles of this government. Think taking on Putin in the Ukraine, the Malaysia airlines tragedy, the Middle Eastern war, and now terrorism in Australia. Every time, Tony Abbott is on television, making commentary (informed or otherwise) endeavouring to give the impression that he is in control of events which in at least two of these cases, he wasn’t.

So far, Abbott’s interventions and public pronouncements have made little or no difference to the turn of events. The situation in Ukraine is still unresolved and Abbott has gone strangely quiet. We still have not yet found MH370 despite Abbott appearing on television on an almost nightly basis endeavouring to give the impression that he was co-ordinated international activities.

So is this going to help? the situation in Australia in relation to perceived terrorist threat

“All you need is a determined individual who will kill without compunction, a knife an iPhone and the whole country, I regret to say, is at risk ” he told the Nine Network

There is no doubt there may be a small group of people Within Australia who may be inclined to do the bidding of their religious masters in the Middle East. But things are happening in a remarkably predictable way. The head of ASIO announces proceeds rise in the terrorist threat, Australia dispatches troops to deal with terrorists in the Middle East who pose a threat to Australia, ASIO, the federal police and the New South Wales police conduct a concerted by 800 police to uncover a terrorist plot. And all of this goes to demonstrate that our intervene in the Middle East is entirely justified.

As our engagement appears more and more difficult to justify and listen less successful, we can expect that Abbott will ramp up the rhetoric around the internal threat and anyone who who accuses him of political grandstanding will be accused of endangering the entire population of Australia.

Other postings

The turning of the personal worm

I have a theory that everybody has a personal worm, as in the worm that turns. Many people who do not deserve to, do well in life and many who don’t do well, deserve to.

But eventually, our personal worm turns and, by and large, we wind up getting what we deserve. For Linda Paston’s family their personal worms are about to turn

Marks by Linda Pastan

My husband gives me an A
for last night’s supper,
an incomplete for my ironing,
a B plus in bed.
My son says I am average,
an average mother, but if
I put my mind to it
I could improve.
My daughter believes
in Pass/Fail and tells me
I pass. Wait ’til they learn
I’m dropping out.

untitled 2

Who is doing the heavy lifting in Iraq?

Obviously, the United States is playing the major role but from the table published in The Age, Australia appears to be making a contribution that is entirely disproportionate to the threat posed within our region.

The FA -18 super Hornet is not well equipped to do humanitarian aid drops. Perhaps we sent the wrong plane

The FA -18 super Hornet is not well equipped to do humanitarian aid drops. Perhaps we sent the wrong plane

The table does not mention the Australian commitment of eight FA 18 super Hornets but does mention “humanitarian aid drops”

What should be of great concern to Australians is that, without knowing exactly what our contribution to the airstrikes will involve, Australia is contributing approximately 30% of the fighting capability at what Tony Abbott estimates will be around $1 billion per year. We can certainly expect this to increase because the commitment is going to be subject to incremental increases as the war on the ground intensifies.

The US top military commander, General Martin Dempsey, opened the door to a deeper combat role on the ground for coalition forces, and former chief of army Peter Leahy said the Abbott government should be ready to consider expanding ground operations if military commanders said it was needed.

The now-retired senior defence insider, who spoke on the condition of anonymity, said it was an accepted fact within the Australian Defence Force that special forces troops were being deployed because they are the ADF’s most lethal force.

“You don’t send in the SAS to run seminars and give white-board presentations back at headquarters,” the former top tactician said.

“These guys are our most highly trained killers, and that’s what they will be doing.”

He said the claim that they will be used purely as “advisers” to the Iraqi security forces and the Kurdish Peshmerga was “pretty absurd”.

What we’re seeing here is very carefully orchestrated campaign of “media creep” where the commentary of selected individuals associated with the military prepares the public for announcements for increased military engagement.

The Australian government would be well advised to make its ongoing commitment to this conflict to be dependent upon other nations, particularly those in the region, doing some of the heavy lifting.

Like Saudi Arabia. They’ve got an extremely large air force, over 600 combat-ready fighters.

Some of Saudi Arabia's airforce. The planes in this photo equal Australia's total strike power

Some of Saudi Arabia’s airforce. The planes in this photo equal Australia’s total strike power

Australia by comparison has 100 combat ready fighters, 24 of which are FA-!8 Super Hornets.

Australian GDP is 1.561 trillion USD twice that of Saudi Arabia (745.3 billion USD). Yet Saudi Arabia has an air force that is six times the size of Australia’s and to date they’ve committed none of it to the conflict in the Middle East.

Looking at the list of countries that are participating, one significant absentee is Indonesia which has a population of 200 million and the largest Muslim population in the world. When I was in Indonesia a few years ago I was reassured that “only about 1% of the population is radical Muslim.” That’s 2 million people if this estimate is correct. So why isn’t Indonesia concerned about the threat posed by ISIS? It’s interesting that a country that has been plagued by sectarian violence (seven terrorist attacks since 2010) is sitting on its hands.

Other postings

Edward Hopper: travellers going nowhere

The metaphor of the journey creates a common theme in Hopper’s painting. He frequently paints his subjects in mid-journey, paused in a hotel room, in a lobby or on a hotel bed. These pauses are often disconnected from both the past and future.

Often Hopper will paint people who are engaged, or appear to be engaged, in the journey as in the Chair Car .

edward-hopper-chair-car

Here a woman is seated in what is ostensibly a railway carriage but which looks more like some kind of vault with a blank door sealing the exit. The characters are flooded with yellow-green light and, strangely, the woman on the right-hand side of the car does not appear to cast a shadow. There is no landscape to be seen outside, the windows giving the impression that the characters travelling through space with no connection to any other reality.

The woman on the left appears to be directing an intense gaze at the red-head who’s reading a book and either oblivious of, or studiously avoiding, the attention. The absence of an exterior landscape makes attention between these two women the central focus of the painting. Like so many of the situations in Hopper’s paintings, we have no idea what’s gone before or what is likely to happen after. The moment is suspended in time.

The next painting, Intermission, is thematically related to Chair Car. The woman, (is it the same woman?)

untitled 7

is sitting at the front of a row of seats, similar to that in an aircraft or a train. There is a stillness and indifference about her that detaches her from her surroundings. The door next to her is neither an exit nor an entrance but this does not matter to her as her indifference appears to isolate her from any sense that she is interested in moving.

Intermission

The final explicit picture of a traveler is Compartment.

compartiment-c-voiture-193-edward-hopper-1938-collection-i-

The tone of this painting is quite different from the others. In Hotel Window, there is a tension between the woman and some unseen point outside. A similar tension exists in Western Motel between the woman sitting on the bed and whoever is entering the room. No such tension exists in Compartment. The young red-haired woman sits relaxed and reading a magazine. There is no tension between her and any point outside the frame of the picture. She is oblivious to the landscape that she is passing through and to the garish green compartment in which she was travelling.

Like the woman in Intermission, she is alone but seems contented and self-sufficient in her concentration on her magazine. Unlike the women in the other paintings, she does not appear to be caught with no apparent connection at some nexus between the past and the future.

An interesting and disconcerting version of a non-journey is the enigmatic People in the Sun

People In The Sun

There are hints of an aircraft or train in the way the people have been arranged as people appeared to be sitting in rows waiting for the plane or train to arrive. There is certainly a sense of anticipation, of people who have dressed for a journey and are waiting to go somewhere (will know where). But, as in so many of Hopper’s paintings, the landscape is devoid of detail and of interest, suggesting that no one would wish to go there only travel through. There’s also an absurd sense of people sitting in a solarium, soaking up the rays. But why are a group of well and fully dressed people sitting out the sun? again this painting is reflection of Hopper’s unique ability to be able to separate his subjects from the past and from the future, and in this case from cause-and-effect as well.

Other Hopper Blogs

Sunlight and structure: Hopper’s Sun Watchers

Hopper’s Sunlight Paintings: Ideal Forms and Shadows

Edward Hopper: the Sunlight pictures (i)

Hopper’s travellers (ii)

Edward Hopper’s Travellers

Edward Hopper – “Lighthouse at Two Lights”

Edward Hopper: Couples at Crossroads

Bombs, Terror and Facebook

Prime Minister Tony Abbott has stated the obvious:

Tony Abbott warns Australians fighting for Islamic State could be targeted by RAAF bombs

The difficulty is he doesn’t actually understand how this is going to play out.

Those who were killed fighting for the cause of the slam regarded as martyrs and as an inspiration to others. Our security forces are probably well aware that each one of these potential matters has a Facebook page on which they may list your achievements their aspirations and the religious ideals. They will also have followers of the Facebook page, how many users impossible to say. What we can be certain of is that their followers will be sympathisers to the cause and highly susceptible to the arguments for terrorist activities.

If you wished to recruit potential terrorist within Australia all you would need to do is log on to the Facebook page of one of those was fighting overseas, see who the most rabid supporters are and contact them.

We do not need these jihadist warriors to return to Australia to encourage home-grown terrorism. Social media will be doing this already and you can be certain that the camp followers will be trolling these websites looking for potential recruits.

We should be in no doubt that the mindset of the people fighting for the glory of Islam. The greatest contribution they can make is to die a martyr and to inspire other people to join the cause in the fight against the infidel (however widely that might be defined).

We can be certain that the combination of this fanaticism, Australia’s engagement in the Middle East and the ubiquitous reach a social media has created perfect storm.

Other postings

How best to deal with a homegrown terrorist threat

In recent days, the Australian public has seen an increase in ASIO’s assessment of our internal terrorist threat from returning jihadist and the allocation of a $680m budget to combat the effects of some 10-20 young radicals.

We have now seen that the Abbott government is committed to providing ground troops and air strike capability for the US led coalition in the Middle East. We have been warned that “this is not the task of weeks or even necessarily, just a few months” President Obama’s advisers are already suggesting at least three years. Certainly, the cost will run to hundreds of millions if not billions of dollars.
]
One of the arguments that has been put by the government is that the participation of young Australian Muslims in the war in Syria will further “radicalise” them. One would have thought that the preparedness to take part in an armed conflict overseas, with a good chance of being killed, is a pretty complete definition of radicalised. The concern really is that these young Australians will return home with military skills that could be used for terrorist activities on home soil.

Ironically, this is a problem that is being faced in New Zealand with Afghanistan veterans returning to join Maori gangs with a much better training than could possibly be provided by the ragtag militias in the Middle East.

At very superficial level, this argument is very compelling, but it should be accepted with some caveats. Why would someone who has gone to fight to establish “pure Islam” in the caliphate want to come home? Wouldn’t they want to live in the political system that they risked their lives to establish? It may well be that they will become profoundly disillusioned with life under such a regime and wish to return to Australia. It may also be that they see Australia as the next frontier for the terrorist activities. But we should not accept this assumption purely at face value.

One thing that we can be relatively certain about is that the radicalisation of these young Australians will be far more complete as result of their being attacked by an overwhelmingly superior air capability comprising, in part, of Australian FA-18 Super Hornet fighters.

iraq-airstrikes-isil

It is unlikely that those that survive this are going to return to Australia to live happily ever after.

Other postings