Implications of the backpacker tax

The Australian Federal government is currently wrestling with the political problem of what the appropriate rate of taxation should be for itinerant labourers, aka backpackers. These are predominantly young, European and Kiwi travellers having a working holiday in Australia.


They are essential to the fruit industry as they provide a source of cheap labour during the picking season.  In addition to this, they also fill a gap in the labour market that Australians are not prepared to fill, primarily because the work is itinerant.

The government and the farming lobby are proposing a tax rate that is much lower than the one that working Australians would pay.  The argument is that the farmers are under financial pressure from supermarkets and need the tax concessions for their workforce to remain viable.  The causal loop diagram explains the dynamics of this argument.


In effect, the argument from the farming lobby is that the survival of the  seasonal fruit  industry is dependent on tax concessions. It’s a form of protection for fruit growers. It is also a policy runs completely contrary to Malcolm Turnbull’s expressed enthusiasm for free trade.


The reason for the pressure on fruit growers is fairly obvious. Price wars between the two major supermarkets, Coles and Woolworths, form a reinforcing loop that drives prices down to the detriment of the farmers.


The farming lobby would argue that the price for inexpensive high-quality food is disproportionately borne by the producer rather than the consumer.


It is probably a pretty fair argument given the monopoly powers of the two major supermarkets.

This situation also has some fairly important long-term consequences for food security in Australia. As the price pressure  on farmers increases and their profitability declines, people will exit the market. The supermarkets response to this will be to increase food exports.

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And here’s the crunch.

The implications of these tax concessions are clear. If the Australian consumer wishes to have the benefit of inexpensive food in supermarkets, then it will be necessary to subsidise the farmers who provide it.


The slow erosion of pretty much everything under Malcolm Turnbull.

When Malcolm Turnbull came to power, he was trumpeting the use of Australia becoming  agile and innovative. Quite rightly, he saw the education system being able to deliver on the STEM subjects (Science, Technology, Maths.)

But like so much of what Malcolm Turnbull says, it has turned out to be hot air.


Things just seem to fall apart,
String bags full of oranges
And things within the heart;

Calamities evaporate and memories depart.
People laugh at anything
And things just fall apart.

Things just seem to fall apart
by Michael Leunig
(Poems 1972-2002)

Australian students have plummeted in the latest international maths and science rankings, with countries such as Kazakhstan, Cyprus and Slovenia leapfrogging us over the past four years.


The latest Trends in International Mathematics and Science study, released on Tuesday, shows Australia dropping from 18th to 28th out of 49 countries in year 4 mathematics.

Australia is plummeting down international education rankings – beaten even by Kazakhstan.

Australia fell from 12th to 17th in year 8 Maths and from 12th to 17th in year 8 Science while remaining steady at 25th place in year 4 Science.

This poll does not necessarily suggest that standards are slipping in Australia, although they might be. What it does demonstrate is that Australia is falling behind the rest of the world and this will lead to a weakening of Australia’s competitive position in global markets.

This is likely to happen slowly and the deterioration in the skill level of the Australian workforce may not start alarm bells ringing until it is too late.

We need to start thinking seriously about how much money we are prepared to invest in public education.

Kazakhstan, which has a GDP per capita of $US10,546 ($A14,100) compared to Australia’s $US54,718 ($A73,174), placed significantly below Australia in maths and science in 2011 but now outperforms us.

Fixing this problem requires complex and long-term solutions.

Simply mimicking the education systems of the top nations (all of the top five are Asian) is unlikely to be the case. The Singaporean schooling system with its highly regimented approach is unlike unlikely to work Australia. The human costs of education in Hong Kong  Korea and Japan a well-documented.

Nonetheless, Education Minister Simon Birmingham is going to need to come up with a long-term plan and preferably one that will not be fraught with the political shenanigans that surrounded Gonski.

Don’t hold your breath.

From the Guardian; International maths and science rankings: keep calm but change direction


Latest poll shows the trend away from major parties is accelerating.

One of the interesting trends in Australian politics is decline of the major parties and increase in support for the GIMPs.  As the trends in this graph show, this has been going on for some time.


While this graph makes their situation look quite clear, in fact it is not quite so simple. Approximately 50% of GIMP vote goes to the Greens, with the rest of it spread out over a number of Independents, One Nation and Team Xenophon, none of whom can be expected to vote either consistently or as a bloc.

So the most reasonable conclusion to be drawn is that the voters who are deserting the major parties are fragmented in their support for GIMPs.

The latest Fairfax/IPSOS shows that this trend is continuing and accelerating.


These trends need to be taken with a grain of salt. The poll was based on a sample of 1400 voters which means rather less than 20 per electorate.  When you think of it in these terms it’s very difficult to project what a poll like this for me in terms of representation in the Lower House. However, these numbers are likely to play out in the Senate and if they are anywhere near accurate, neither major party will have any chance of controlling that chamber.

The poll also showed Labor ahead of the Coalition 51%/49%, a difference well inside the margin of error.

Nonetheless some conclusions can be drawn.

The first is that the primary vote is becoming increasingly fragmented.

The second is that, given this fragmentation and the way in which will be manifest in the Senate, we are likely to see an increase in the number of GIMP senators with the concomitant legislative difficulty for the government of the day.

The third is that the two major parties will be increasingly reliant on second preferences to gain government and this will inevitably mean making policy concessions to an increasingly disparate volatile and fractious cross bench in the Senate.

The fourth conclusion is that Labor is losing ground to the Greens whose primary vote in this poll was 18% to Labor’s 30%.

Someone in the Labor Party who can add up beyond the point of having to take off their shoes and socks is going to work out that 30%+18% = 48% and that is a bigger primary vote than the Coalition’s.

It is interesting that the vote in the US presidential election has been described as  a result of disillusion with mainstream politics. But when push comes to shove, one of the two major parties has won the presidency and has a clear majority in both Houses of Congress.

Interesting times.

Will David Hamilton be remembered as a modern day Charles Lutwidge Dodgson?

The announcement of David Hamilton’s death and the circumstances surrounding it came as a shock to many people.

David Hamilton and Mona Kristensen

David Hamilton with muse and model Mona Kristensen

In life, David Hamilton divided public opinion. Many saw him as one of the great fashion photographers of the late 20th century. Others, a smaller group, had a less flattering view.

David Hamilton’s legacy will be forever tainted by the nature of his death. His suicide in Paris followed allegations by one of his young models, Flavie Flement, that he had raped and sexually abused a number of his young models.


Flavie Flement said the photographer’s apparent suicide left her devastated that justice would never be done

Naturally enough, this will prove grist to the mill for the  Hamilton haters.

We have an ambiguous relationship with artists who have dubious sexual reputations. Woody Allen is an excellent example.  While he has strenuously denied any allegations of impropriety, many people regard his relationship with his stepdaughter as slightly creepy.

He certainly  attracted a number of beautiful young muses, none of whom have ever said anything against him.  Well, except Mia Farrow and she was pretty vitriolic.


But in Allen’s case, as will be the situation in Hamilton’s case, the evidence of misconduct was circumstantial and debated.

One of the inherent difficulties in this type of situation is that the artistic achievements of the alleged perpetrator are often concatenated with the nature of the accusations.

Hamilton is likely to suffer the same fate as Alice in Wonderland creator Lewis Carroll.  There is a strong circumstantial case to be argued that Charles Dodgson (Carroll’s real name) was a pedophile.


Carroll with Alice Liddell (aged 7)

And it’s difficult to see much “artistic merit” in his photos of naked young girls.

However, it’s a pretty grey area as I argued in Charles Lutwidge Dodgson (Lewis Carroll) a paedophile, a pornographer, or both ?

Hamilton’s legacy is likely to be overshadowed by the nature of his death and the allegations that immediately preceded it.

Hamilton created many of the iconic images of the 1960s and 70s.

bicycle 2Farm and doves

The innocent eroticism of Hamilton's early work

His bored and unhappy looking models got younger over time.

Bored and unhappy, Hamilton's models have also got younger

Perhaps, as time went by everybody was getting a bit jaded.

The sad thing about any discussion of David Hamilton’s artistic legacy will now be forever  tainted with a debate over whether or not he was a paedophile.

Was Charles Lutwidge Dodgson (Lewis Carroll) a paedophile, a pornographer, or both ?


Tony (no sniping) Abbott’s latest round of self-indulgent, self-deluded hypocrisy

Mr Abbott told Sky News on Sunday morning; The “last thing” he (Abbott) wanted to do was “offer public advice to the prime minister”


Listen. mate!!

He then proceeded to urge Malcolm Turnbull:

  • to revisit some of the aspects of the infamous 2014 budget
  • toughen up his message on power prices
  • stop talking about innovation and agility because, Quite frankly, he said, that loses people”
  • to resurrect the brutal anti-carbon tax campaign
  • to focus on power prices as a point of difference against Labor
  • not to change the Coalition’s position on same-sex marriage
  • not to allow a conscience vote on the issue without first going to an election

Abbott has been arguing for some time now that he should be given a Cabinet Ministry. The only coherent reason that he can advance for his promotion is that if he is a cabinet minister he will stop criticising Malcolm Turnbull in public.

untitled“Not listening”

Julie Bishop summed up the attitude of the senior members of the government: “There are no vacancies.”


Abbott is also adopting a “holier-than-thou” attitude on promises.

He concluded his interview by saying; “If you make a solemn pledge to the people you can’t break it,”

So here is his record on promises as of May 2014.


  • “…no cuts to the ABC or SBS.” (Tony Abbott, September 2013)

Treasurer Joe Hockey announced $43.5 million in cuts over four years in Tuesday’s budget.

  • “No cuts to education, no cuts to health…” (Tony Abbott, September 2013)

Tuesday’s budget imposed an $80 billion cut to health and education spending over next decade.

  • We are not shutting any Medicare locals.” (Tony Abbott, August 2013)

All 61 Medicare Locals will now be scrapped and replaced with new local health networks.


  • “No one’s personal tax will go up” (Tony Abbott, March 2012)

The Treasurer confirmed a deficit levy would be imposed on people who earn incomes over $180,000.


  • “No changes to pensions” (Tony Abbott, September 2013)  

Tuesday’s budget confirmed age and disability pensions will fall behind wages growth from 2017 after they are instead linked to inflation.

Foreign Aid

  • “From 2014/15, the $5 billion aid budget will grow each year in line with the Consumer Price Index” (Foreign Minister Julie Bishop, January 2014)

The Treasurer revealed foreign aid would be frozen, leading to a massive  $7.6 billion cut over next 5 years.

Indigenous affairs

  • “The Coalition will continue the current level of funding expended on Closing the Gap activities.” (Coalition policy document, September 2013)

Tuesday’s budget cut $500 million through the consolidation of 150 programs.


  • ‘‘ARENA will have over $2.5 billion in funds to manage.” (Industry Minister Ian Macfarlane, November 2013)

The ARENA (the Australian Reneweable Energy Agency) has been axed.

  • “The Coalition will promote the use of solar energy by Australian families and households. It will ensure at least one million additional solar homes or community centres by 2020.” (Greg Hunt, December 2011)

Does he take us all of mugs?

Done like a dinner – Turnbull Govt caves on backpacker tax.

The Turnbull government has agreed to set the backpacker tax at 15% after a weekend of wrangling with key Senate crossbenchers.

Scott Morrison summed up the deal when he described a conversation (where he told One Nation leader Pauline Hanson that the rate would be set at 15%) as warm and convivial. “I wished her a merry Christmas, as she did me.” ….. “like a dinner.”


The government is now facing the reality of negotiating with a semi-hostile cross bench and Scott Morrison is not a happy man.

Media circus on Great Barrier Reef complete with (very unfunny) clowns

Pauline Hanson and her climate denying colleagues visited the Great Barrier Reef to show that it wasn’t under threat.


They were taken to parts of the reef that have not yet to be affected by coral bleaching and this demonstrated that the proposition that the roof was at risk was completely preposterous.

Hanson also your affinity of blaming climate change scientists for destroying the business of the man who owned a boat she was diving from because they are spreading lies about the reef that were stopping the tourists coming.


 I blame Richard Attenborough

All this allowed the One Nation spokesman and chief fruit loop on climate change to say:

“All I need is the empirical evidence that we are affecting the climate. And there is none.”



  Professor and superstar Brian Cox with empirical evidence

At the end of the circus, Hanson gave this succinct summary of One Nation’s position on climate change

“We are being controlled by the UN and agreements that has been done for people smug um.. and self-interest and where they are driving’s economy as a sovereignty and the economics of the whole lot.”


Presidential conflict of interest: be happy, don’t worry


Trump refused to publicly release his tax returns because he was being audited by the Internal Revenue Service – but who confirmed with some pride during the campaign that he had paid no personal income tax for almost two decades, because of dubious losses worth almost $US1 billion.


As President, Trump gets to pick and appoint his own tax auditor, because IRS commissioner John Koskinen’s term expires in November 2017 – or sooner if congressional Republicans succeed in a bid to drive him out earlier.

And naturally he will choose someone who will continue to audit his business affairs.

That one is pretty straightforward.

But the relationship between Trump and overseas governments, particularly when national banks, are in trouble is far more complicated. It

Trump’s newly appointed Attorney-General could be taking over a Justice Department still locked in negotiation with the German Deutsche Bank, with which Trump businesses reportedly hold loans currently worth as much as $US360 million.

US federal regulators reportedly have levied a $US14 billion fine on the bank as punishment for its trading in toxic mortgages during the housing crisis that pushed the US to the brink of financial collapse in 2007.

If, as is mooted, the German government takes over Deutsche Bank there is possibility that this will give them than average over the US government to say nothing of the President.

Bundeskanzlerin Angela Merkel (CDU) gibt am Montag (21.02.2011) im Konrad-Adenauer-Haus in Berlin eine Pressekonferenz zur Hamburg-Wahl. Die CDU kam in Hamburg mit 21,9 Prozent auf das schwächste Wahlergebnis seit Kriegsende. Foto: Rainer Jensen dpa

Sorry, Donald, Deutsche Bank is in a bit of trouble so we have to call on your $360 million loan

Even if the President-elect puts all his assets in a blind trust, it will be very difficult for potential and existing business partners overseas not to know when they are dealing with President and act accordingly.

And what foreign government wouldn’t be keen to curry favour by giving the presidential businesses a special deal.  Already Trump Hotels are being booked out by foreign delegation keen to curry favour with the President.

This problem will not go away for a number of reasons

The first reason is that this is what is known as a “wicked problem” a problem that is difficult or impossible to solve for anyone of myriad reasons.

The second reason is that the President-elect doesn’t regard it as a problem.

The third reason is that his family will be protected by presidential power will be free to operate in an ethnically free and economically advantageous business environment.


 Will this family have financial and political power to rival the Medicis?


The rise of the Medici family started with Cosimo the Elder in the first half of the XVth century, when Florence was a powerful republic.

Letter to my grandson (xxxii)

My last post to you contained a rather long version of a story that I have told you. I think it tells better than it reads. However, I wanted to record because it’s one of the first stories the I have told you that is not from the traditional canon of stories, Goldilocks and the three Bears et cetera.  There are a couple of others I should probably record involving Winton Diggerman which I have told you while you’re in the bath.


Bath time is a particularly happy time that we share together. For me, because I love watching you, engrossed and preoccupied with your toys, pouring water from one container to another, playing with the water filled balloons that Nana has given you or playing with the large plastic pipe which serves variously as a wheel, a didgeridoo or a waterslide for your animals.

I also sing you songs and nursery rhymes and sometimes tell you stories. While I’m doing this you often appear preoccupied with what you’re doing and I sometimes wonder whether you’re listening or not. But then, every now and then, you will join in a nursery rhyme, respond to a question I’m asking or begin to mime some part of the story and I realise you’ve been following all along.

We had a little contretemps a couple of nights ago. You had a large glass of water which you were pouring over the edge of the bath and onto the floor. I said, “No, don’t do that Winton, it is making a mess on the floor.”

I was pretty certain what was going to happen next and it did.  You always like to check and see if I’m serious when I tell you not to do something. You got another glassful and poured it on the floor and turned around and looked at me as if to say, “So, what are you going to do now.”

I stood up and took the glass away from you and said frowning, ” That’s naughty. Papa asked you not to do that so I’m going to take the glass away from you.” Which I did and looked at you with my most disapproving stare. You were quite mortified. It’s pretty rare for Papa to growl. I put the glass out of reach and  said, “Now, you say sorry to Papa.”

You looked down, crestfallen.

“Sorry, Papa.”

“Okay,” I said, “forgiveness kiss.”  I leant over the bath and you came scooting across and lifted your face up for us to give each other a kiss. I’m not certain if you understood who was forgiving who but there was no more water poured on the floor that night and we have remained friends.

You’re great kid to have around and I particularly enjoyed the times when you and I have the house to ourselves.

This week, your mum brought you round while she took the dogs for a walk. After we had put out a number of fires and rescued babies from burning buildings. You are developing into quite a formidable firefighter.

After this, we went upstairs to play. It’s a little ritual that we have, unloading the contents of the cupboards and playing with what is stored there.

On this particular day, you had been playing with some motorcars and blocks when you came over to me and stretched out both your hands which appeared to be holding something that you wanted to give to me. I opened my hands and mimed putting something into my hands.

Then you ran off into the bathroom and walked into the shower. I followed you and said, “I would like some tomatoes today, please.”

“Tomatoes,” you said and you looked around the shower, located the tomatoes on a shelf somewhere, reached up and brought me two handfuls of tomatoes, which I took.

“Now, I would like some blueberries please.” You looked around the shower to find blueberries and brought me two handfuls. We worked our way through the grocery list with you locating each item in a different place in the shower, until I asked for some mangoes.

You went into the shower and looked around for the mangoes and said, “No mangoes today.”

“Okay,” I said, “I’ll have a loaf of bread please.”

You looked around the shop and said “Got bread.” You carried a loaf out and gave it me.

“Thank you,” I said, “that’s all for today thank you.” I carried my groceries through to the bedroom, you followed me, and I put them all down on the floor.

“Now,” I said, “do you think it’s time for the animal friends to have their lunch.”


“Yes,” you said nodding enthusiastically.

“I think we should give Mrs Rabbits some carrots.” You look around on the floor and selected one of your red blocks, picked it up and looked at me.

“I think Mrs Rabbit will love those carrots.” You trotted through to the bedroom and fed the carrots to Mrs Rabbitt.

For the next 15 minutes, we selected various items of lunch for the animals. On your suggestion, Monkey had blueberries (a small bulldozer),  Hippo had apples (a toy car), Bear had brown bread and honey (a number of blocks) and when you were a bit stumped on the Lion, I suggested a sausage and you picked a small car and took it through to the Lion.

You are particularly attentive to the Dragon and decided that the Dragon would like honey for lunch.

After you had fed all the animals I asked if you wanted some lunch now. You nodded

You have a very special way of nodding which says, “That is a very good idea papa. I agree completely.”

And trotted off to the stairs where you slid down counting, “11, 12, 14, 17, 18, 3, 4, 5,” on your way down.

I love creating stories for you particularly because you’re so good at joining in, in a way that shows you completely understand what is happening. I suppose I should not be surprised because you have been telling your own stories almost since the time you first began to talk.

You would sit playing with toys and making up a story that went with what you were doing. It was a time when you had your own special language that nobody else really shared but I’m sure you were creating a coherent narrative. Now you are beginning to develop a language that we all have in common and we are able to share the narratives as we did with the feeding of the animals.

I went into the city to do some work last week and you Nana came to meet me when I got off the tram. As we approached 170 on the way home, you said “Nana, Papa’s house. Let’s go in.”

Nana said, “This is Winton’s house too.”

You trotted across the road holding your Nana’s hand and walked through the open front door.

“Our house,” you said as you walked in.





Pauline (I’m not a racist) Hanson is, to many people, the public face of Australian racism

When Hanson said her maiden speech in Parliament, “I believe we are in danger of being swamped by Asians. They have their own culture and religion, form ghettos and do not assimilate” she became internationally famous as the unpleasant face of Australian racism.

Nothing much seems to have changed over the last 20 years.

Hanson at a Reclaim Australia rally

 But now she seems to be getting a bit sick and tired of herself.

SMH headline: Pauline Hanson declares she is no racist, but she’s fed up with her own tolerance.

“I am fed up with people… calling me a racist when they cannot find one thing that I have said that is racist.”

It’s been a bad week for One Nation and its semi-articulate leader. The laughable shemozzle with Senator Culleton, gleefully covered by the national media,  over the inability of the party leader and one of its members to be able to arrange a time to have a meeting has now been talked of by an extraordinary statement from Hanson.

And then Senator Culleton randomly turned up to the wrong Question Time and was politely escorted out of the House of Representatives today, where Shadow Attorney General Mark Dreyfus came over to have a chat.

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Dreyfus: Rod, this is the House of Representatives, you’re a senator.

Culleton: Uh?

Dreyfus: You’re in the wrong place.

Culleton: Uh?

Dreyfus: C’mon,  I’ll show you (both exit left)

What are the chances of this motley crew being able to maintain themselves as a more-or- this coherent political party?

Not much, given their antics this week.

I blame Malcolm Turnbull who really help them get elected with his Senate reforms. If things go badly, he won’t just have to deal with Pauline Hanson and One Nation, he may have to deal with four independent nutcase sitting on the cross bench.