Tag Archives: Australia

Science In Australia

The Cause Of Science

This one came in from Pleiades, and I’d meant to post it up but I’ve been mightily distracted. It’s basically a rebuttal to all the people who run around with economic rationalist notions that science budgets should be cut.

There is a view in this country that too much thinking about the sort of Australia we want gets in the way of the “market signals” – the invisible rays that persuade 15 year olds to study physics, or not, that attract graduates into science teaching, or not; and convince the market to wear the risk of bold new ideas, or not.

It adds up to the message that she’ll be right. And it would be an easy message for a chief scientist to sell – if it wasn’t contradicted by the evidence.

Yes, logic says Australian businesses have an incentive to innovate. Three in five of them still say they don’t, while just one in five say that they have introduced new or significantly improved goods or services. Yes, all the research demonstrates that industry and researchers benefit from working together. Our record on collaboration is now one of the poorest in the OECD.

Yes, it makes sense to study a science at senior levels. Australian schools show a decline in the rates of participation in “science” subjects to close to the lowest level in 20 years.

If you really want an in-depth look, here is the actual recommendation tabled. I’ve spent most of my working career in the arts, and it still incenses me that this government has made very little provision to keep R&D going or for the CSIRO to continue doing the important things it does. I know the government wants to cut everything, but it’s clear they have been much too cavalier about the cuts they’ve made to science and technology. Starting from the disavowal of the NBN down, this government has been a disaster when it comes to developing anything cerebral as a future direction for this country. Instead they’ve fixated upon more roads.  That, and doing he bidding of whoever lobbies with the most dollars.

 

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View From The Couch – 06/Sep/2014

Lessons For A Saturated Economy

I found this commentary about the impact of the property bubble in the Sydney Morning Tabloid this week. it’s written from the perspective of the younger people who cannot get into the market. A lot of people seem to think it’ young people whining, but there are lessons in history from all this property bubble business (that all these banks are denying exists here). The experience in Japan in the late 1980s through to earl 1990s was pretty instructive. The Bubble and the aftermath of the Pop created economic havoc on the Japanese Gen-X who were coming into the workforce at the time. This resulted in high youth unemployment as well as low rates of marriage and birthrates – and effectively brought forward the peak population date of Japan. The resulting impact of that event was that all the projections the government had made about pension plans and how the labour force was going to support the retiring Baby Boomers went out the window. Much of the low growth and sluggish economy of Japan in the aftermath of The Bubble can be put down to a generation of working people essentially placed out of options and never finding the traction that earlier generations had.

I have friends who are basically economic refugees from Japan. They got out because there were no immediate options that were rewarding or befit their education. Many ended up without kids, others delayed having kids. The 90s and early 2000s saw a remarkable exodus of young, educated Japanese people, who are now not over there contributing to economic growth.

The process of writing off and paying down debts in Japan has been grueling, and worse still government intervention into what they called PKOs – price keeping operations for assets – has distorted the markets leaving what can only be called zombie companies.

The PKO money came out of the government to shore up the asset values of shares and property which is to say, they socialised the debts. The Japanese government under Ryutaro Hashimoto argued that this was necessary to stop a disorderly exit, which is to say, it allowed some investors to keep their bubble profits to pay off the bubble debts instead of getting wiped out. You wonder how those parties got to enjoy such favourable treatment, but then if you see how entwined Japanese heavy industry, banking and the old MITI was in its day, it was one of those things that people acknowledged tacitly without putting up a big fight. After all, what happens to Japan should Mistubishi or Sumitomo should fail? The option cost of bailing out those companies essentially ate the future of Japan.  And that’s just Japan. The GFC has exposed the same problem in advanced economies across Europe and North America as well as Australia and New Zealand.

The point of all this is to say, private sector debt has a way of becoming public sector debt, and “too big to fail” essentially eats the future. A few things are very clear from the property bubble in Australia is that the private sector debt is bigger than it has ever been, and should it get called in, it would wipe out our four major banks (BASEL II and III notwithstanding). Because those banks are still in the TBTF category, the government will socialise those losses by bailing them out, and then we’ll see our future spending go up in smoke to preserve the inflated prices everybody paid for their houses.

The finer point of all this is, if you don’t think there’s a housing bubble, then that’s one problem. If you do thing that there is a housing bubble but think it’s just a matter of the market correcting itself, then you’ll be in for a surprise.

Ross Garnaut Says There Is a Bubble – But So What? Cut Rates

This one‘s related but really interesting. Ross Garnaut thinks there is indeed a bubble going on in the housing market, and that the Reserve Bank of Australia is keeping a close eye on it. Basically, Garnaut is saying the rest of the economy outside of housing could do with the lowering of rates. The rates being as they are keeps the Australian Dollar too high, and makes Australia’s economy less  competitive. The only thing keeping the rates where they are, is this deep concern that there is a housing bubble going on, so the rates need to sit at as high a place a possible given the parameters. Instead Garnaut is saying if the RBA cuts rates, then the rest of economy would be able to compete and grow, and the housing bubble should be dealt with specific measures. He also says governments should stop favouring housing for the purposes of capital adequacy.

“It is ludicrous to be worried about lending risks in the housing sector on the one hand while at the same time requiring banks to put more capital aside when they are lending to BHP,” he said.

“And there are several reasons to do something about negative gearing. There are budget reasons, and reasons to do with keeping within reach the old Australian dream of widespread home ownership.

“It would also contribute to putting a lid on the housing bubble so we could reduce interest rates and the exchange rate as required by the rest of the Australian economy.

“But the problems can’t be solved by the Reserve Bank alone. It requires co-ordination of prudential regulation, monetary policy and fiscal policy.”

It’s an interesting idea that evokes the old definition of inflation. Inflation, is essentially too much money chasing too few assets. This explains exactly why housing bubbles happen. Given that housing is given a privileged position in measuring capital adequacy, banks are better off lending out mortgages than lending out business loans for capital expenditure. The money headed to mortgages become much easier money by dint of a definitions for capital adqaucy. This devalues businesses against property ownership, even though property ownership in of itself – especially home ownership – can’t contribute to the economy in the way that a productive business can. Things like negative gearing simply make it worse. So all the money goes into the property market but of course the overall supply side of the property market itself can only grow at a certain rate. As more money gushes into the property market, it can do nothing but create a condition where the prices of homes inflates. Too much money chasing too few assets.

Is China Finally Wobbling (Just A Little bit?)

It’s been like five and a half years since the market bottom following the Lehmann Shock which triggered the GFC. Since then the world has looked on… make that Australia… Australia has looked on to China to keep its economy afloat. China in turn obliged by doing massive stimulus spending, which resulted in it sustaining its 7%+ annual GDP growth rate. There are some who think China has been inflating its GDP figures for years to get more investment, and think there is a 30%discrepancy between what China’s real size as an economy is and what the stated size is. That would explain the vast lack of growth in consumer spending that China has so needed to move from an export-driven economy to a consumer driven economy.

China subsequently pushed all levels of government to take on debt and give stimulus to the market and that has resulted in a massive ballooning of debt in China to fund this 7+% growth. Since the GFC, year after year, economists, investors, traders ad analysts of all persuasions have pointed at China and said it is unsustainable. Somehow China never imploded or popped or collapsed. All those ghost cities built in the middle of nowhere with speculation money? No problem. All that re-hypothecated collateral minerals that went missing? No problem. All those companies that started going sour and failed to pay their bonds? Government intervention has saved the day. If you had bet on China to unravel in the last few years, you would have lost money on all those bets.  It would’ve been hard losses to take too, because rationally speaking, China had every reason to come unstuck. The proof was in the pudding, and the pudding’s been magic so far.

Now, there are signs the magic pudding isn’t going to hold up. I don’t know how China is going to kick the can down the road next time, but they may yet have a way of doing so. After all, one of the interesting aspects of the great recession has been the way things just keep going on in spite of the numbers. If China can’t kick the can down the road, this is going to be it for the 23 long years of economic growth in Australia. The cracks are already showing up in commodity prices. Iron ore – the biggest corollary to the health of Chinese industry has sunk to a five year low. This is going to hit our export figures. Falling commodity prices should bring the value of Australian Dollar down. Things are about to get very bumpy.

I can report to you that the money-go-around in Sydney has stopped to a snail’s pace. There are a lot of companies sitting on unpaid bills, the companies themselves waiting to receive payment to pay those bills. I have to say it hasn’t been this slow since August 2007, which was exactly the peak of the market before the GFC. I’d start selling shares this month if I had any to sell.

 

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News That’s Fit To Punt – 03/Sep/2014

Why? Because Fuck You

Everything this Federal Government does is tainted by a sort of grubby conflict of interest. Of course that’s not confined to the Federal Government, because the greater conflict of interest might actually be Clive Palmer who owns a dirty big mining company, gets to make deals where a tax like the mining tax can get repealed. It’s hard to imagine a more egregious and gratuitous case of helping yourself because you can.

The deal has meant that the government will halt the rise of superannuation. Naturally, with the sensibility of a cheesy movie villain, Tony Abbott tried to sell this as more cash in hand for employees which, frankly made me choke on my lunch. I’m sorry to tell you Mr. Prime Minister, but that’s money that’ll stay in the pockets of companies. Paul Keating has lambasted the government but honestly, if he wanted to still have a meaningful voice, he should’ve stayed on in parliament after 1996.

The repeal of the Mining Tax was of course one of the platforms of the Coalition so we ought not be surprised, but really, it is pretty disgusting how the Coalition are totally happy to sell out Australian citizens in favour of a gaggle of mining billionaires – Clive Palmer among them – and try to sell it as being good for the worker. Can it get any worse?

Yes it can. Here’s how.

An Inconvenient Ruse

The emissions for energy generation jumped the most in eight years, since the end of the carbon tax.

So much for Al Gore coming to lend a hand in fighting the good fight against global warming. Thanks to the repeal, polluters have gone back to a kind of burn-baby-burn mentality and now it’s out of control. Of course the plan by this government is also to smash the renewables industry, and directly pay these polluters to stop polluting.

It’s like government by stupidity. You’d never have guessed thing would get this bad. No sane mind would have guess it would get this bad. But this unrelenting awfulness – “Operation Ongoing Enormous Clusterfuck” according to FDOM – was their platform! Grin and bear it.

Pink Batts Coming Home To Roost

Pleiades swung this one at me today. The best bit of news might be how the Royal Commission into the Pink Batts has yielded interesting results. In as much as it was a blatant witch hunt, it looks like it delivered a result that was assumed by the proponents of the Commission. Here’s something from Crikey which is behind a pay wall:

 

First, Hanger found the training regime and regulations at the time of the first of four fatalities in October 2009 to have been seriously inadequate:
“With the exception of South Australia, which had a licensing regime for insulation installers, there was no insulation-industry specific regulation beyond the generally applicable occupational health and safety regulation.”
But here’s the thing: then-minister for the environment Peter Garrett and his staff had spent most of 2009 tightening regulations and procedures. Hanger listed more than 40 interventions to address safety deficiencies — all completed before October. So if the safety framework was still deficient by then, it must have been woefully, if not criminally, inadequate prior to 2008. Having presided over industry growth to the level of about 200,000 new and existing houses insulated annually, the previous Coalition government cannot escape culpability.

Secondly, Hanger opened wide the door to those wanting compensation for the program’s sudden termination:
“I find as follows:
“… the effect of the losses was to devastate many long-standing businesses … and to cause as well personal financial collapse and severe despair and emotional harm;
“that harm and such circumstances justifies pre-existing businesses being compensated.”
If compensation is won, it will be the Abbott government scrambling to find the funds.
This has a certain rough justice about it, of course. There is an argument that the scheme was not intrinsically dangerous and was not failing, rather that it suffered from extreme misreporting from the outset, by both Coalition MPs and a feral media.

Thirdly, the Commissioner was scathing about Abbott’s staff in the course of the inquiry:
“The Commonwealth did not suggest one witness that ought to be called. It did not generally volunteer documents that were not the subject of a summons to produce. It did not elicit any evidence of its own volition. All of this is despite the fact that it was the repository of the critical documents and the corporate knowledge of what had transpired.”

Not even Peter Garrett copped such a shellacking:
“Furthermore, the Commonwealth hampered the work of those assisting me by the way in which documents were produced … Other than in response to a specific request from the Commission, there seemed no logic in the order in which documents were produced. The Commission asked that documents be produced chronologically, however the Commonwealth did not oblige.”

Finally, the Commissioner made it clear that if the federal government initiated the program, then safety is definitely its problem. Never mind the long history of state responsibility.
“There was much debate about whether workplace health and safety issues were a matter that was of any concern to the Australian Government, or whether it was more properly the concern of the States and Territories. It was said, by a number of federal public servants, that the Australian Government had no regulatory power in the field of workplace health and safety, and therefore that it was not a risk that the Australian Government could control. In my view, this attitude was deplorable.”

That means occupational health and safety is now firmly a problem for the Federal Government. Every time somebody dies in an accident, he article suggests a ministerial head is going to roll. Worse still, the responsibility for the failure didn’t just get sheeted home to the Rudd Government, it also got sheeted home to the Howard Government, and last I checked Tony Abbott was the health minister in the government. This thing is going to boomerang right back at him.

The Housing Bubble That Isn’t But Of Which We Must Be Wary

For months – no make that years! -we’ve been hearing that Australia does not have a housing bubble problem. All the economists who have come and pointed out the great anomalies of housing prices in Australia have been laughed out of the public discourse while the anomalies only get bigger. As late as last month Glenn Stevens of the RBA was talking down any possibility that what we had on our hands was an actual bubble! No, he simply reiterated that sometimes the property market goes down. This month he’s taking a different tack and saying there might be nasty shocks. Included in that link is a bit covering China where he cites a downturn in China might manifest itself as a nasty shock. If that wasn’t enough, David Gonski of the ANZ Bank told the Australian British Chamber of Commerce that booming prices cannot possibly continue forever (now there‘s a brave call).

And lo an behold there’s news that China’s real estate market is going screwy. Some might even say it is crashing like it was a Global Financial Crisis. Speaking of crashing, the commodities market in China is crashing. I wonder if those things combined would form this so-called ‘Nasty Shock’ Glenn Stevens is talking about? Or will Sydney’s housing prices simply just shrug it off and keep climbing?

Stay tuned for more fun!

 

 

 

 

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Corruption Is The New Governance

It’s Not “Corruption” If It’s Officially Sanctioned? Wow

Pleiades has been sending me material about Dick Warburton and his report. Naturally, as I pointed out yesterday, it is symptomatic of this government that it would appoint a climate change denier to head up a report on Renewable Energy Target. Predictably the Warburton report has recommended the we simply shut up shop on renewable energy. Of course he was savaged by Fran Kelly and promptly lost what little dignity he might have had in pretending he was somehow impartial.

I’ve been thinking about this a little more and it seems to me there is a much bigger problem than just the appointment of the eminently-wrong-person to review something that does not need to be reviewed, especially in the manner that an eminently-wrong-person may review such things. It’s basically handing out policy to be designed by the lobbyists – which is basically as corrupt an enterprise you can have, running a government. We saw this earlier in the year when they handed out the economic policy thinking to the likes of  Tony Shepherd and Amanda Vanstone. Basically, this government doesn’t have a thinking function, and glommed into government through nay-saying. Having put themselves in government it has dawned on them that they haven’t got any kind of coherent policy so they’ve decided to do the classic corporate thing to do and handed out the thinking to subcontractors who are lobbyists, as a company might subcontract out some tricky bit of business.

The problem is all these lobbyists are the most vested of vested interests and worse still are not accountable to the public in the way the politicians are meant to be accountable. So now, there is no denying that corporate lobbies pay money into parties to get access, and when they get access to the ministerial level, they return favours by saying. “look, you tell us what you want and we’ll just do it.” It genuinely is government by the lobbyists of the lobbyists for the lobbyists. And there’s no shame at all. There’s no need for corrupt little brown envelopes with cash in them because these Liberal Party government office-holders just want to openly do exactly what the lobbyists want and tell them. It’s like that joke: “what do you call a hamster with its own roll of gaffer tape?” – “A slut”. The only reason it’s not called corruption is because there’s nothing subterfuge about it. It’s a bit like how the hamster in the joke might not be considered a prostitute because it doesn’t take money.

It’s a classic case study in what happens when you substitute actual thinking with ideological slogans. It’s staggering, even if we knew this was exactly what we would get if this bunch of traitorous sell-outs got into power. Yet, that’s essentially what we’ve got – a government busily selling out the interests of its people in the name of doing and being open for business. They’re a truly repugnant lot.

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Coming Out Of Hibernation

Salman Rushdie Speaks At Opera House

It’s not everyday you get to see and hear Salman Rushdie speak live, so I went along to the Festival of Dangerous Ideas. I’m not so convinced these ideas at the festival are so dangerous – they seem more like ideas that would make great clickbait on Facebook, but I’m not really certain they’re so damn dangerous. Mr. Rushdie was speaking to the notion whether Television was the New Novel. He spoke at great length of his experience in development hell for 18months but said “No, it’s not.”

The conversation could have been more interesting but the panel seemed to favour talking about the process whereby television writers are commissioned to write scripts and whether novelists were good at adapting to that challenge or not. Mr. Rushdie indicated he was surprised to find he was more resistant to it than he initially thought. Hardly earth-shattering. I could’ve told him that at the front end before he went into development hell.

He did say a couple of interesting things. One of them was that the bigger a TV series gets, the less likely it would end on a satisfying note. All such series should be finished with a comma and not a full stop, was his observation. The other notable tidbit was that novel writing is entirely processed internally, but script writing for television drags that process out into the open so that it can be shared with other parties. That much is true.

He also told a joke featuring two goats.

Short Film Screening

I attended the screening of a short film up at the Chauvel tonight. My good friend Guillermo managed to finish the film we shot last year. All I did was sound record it, but it was kind of gratifying to see my name in the credits. I hadn’t seen that in a few years.

Anyway, the DOP and I got into a conversation with one of the producers about film funding in this country and I was surprised to find that there is a widespread belief that the funding system in this country is rigged so the same people keep getting grants, and that the better thing would be to stop the government doing direct funding and go back to a 10BA tax driven thing. Everybody’s thinking it. The system is rigged, and it’s part of the problem and not the solution. The belief is so widespread that nobody trusts the government to do the right thing. Now, this is just film making – not medical or legal policy. However, if the government was to screw up the medical and legal industries like they have screwed up the film industry, there would be picket lines and molotov cocktails on our streets. The fact that it doesn’t happen is merely a reflection of how dejected the film industry is about how the government keeps working to make the business smaller in this country – even if it is inadvertent – and how small the business has become.

I’m just reporting this here because others in the business would want to know. And yes, it is always a bitch-fest when filmies get together.

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News That’s Fit To Punt – 11/Aug/2014

Gotta Admit I Was Wrong

Australia’s contingent to the Ukraine went and returned in the last week and a bit. I know I sounded alarms about sending troops but sanity prevailed and nobody got shot at by east Ukrainian Separatists. This is a  good thing. The best thing about it was how Russia was blocked from turning the tragedy into a kind of political football to slam the government in Kiev. Sometimes your side shoots down a third party plane, it’s not the other side’s provocation.

Now that the Australian contingent is on its way home, Julie Bishop is saying all items are on  the table for applying sanctions to Russia. Of course,it’s easy for Australia to play hard rhetoric because we don’t really rely on oil and gas from Russia, unlike the NATO nations.  Germany in particular has been expertly perched on the fence playing both sides, mainly because the German industrial might is entirely dependent on the flow of energy from Russia. I guess it’s a bit like Frank Herbert’s ‘Dune’ where the catchcry is “the Spice Must Flow”; the oil and gas must flow for Germany to be Germany and in turn for Europe to be Europe.

All the same the smoke has barely cleared from the MH17 crash and there’s a stench in the air where war is being talked about as a possibility. Maybe we’re colouring ourselves into a picture where we might be more open to re-examining the history of the Twentieth Century and deciding that maybe we want to attempt to re-draw the maps. This month being the Centenary of the start of World War I doesn’t seem to have really formed a precautionary consensus about the west avoiding wars, except in Germany.

Irony is running in all directions out of Ukraine. Place names like Crimea and Sevastopol are echoes of Imperial Wars of the Nineteenth Century. Here we are in the 21st Century and we find ourselves challenged by events there. Ukraine was the victim of intense Soviet era collectivisation and purges. So we find an ex-KGB officer ruling Russia wants to re-claim whole tracts of Ukraine as regaining the whole-ness of Russia. Germany was the catalyst for not one but two world wars – something for which it remains the butt of jokes today – and yet is trying its damned best not to start a third one. Vladimir Putin on the other hand is pushing as hard as Hitler once did, and we’re appeasing him. It really is ugly.

Ebola On The Loose

Speaking of ugliness, there’ the Ebola outbreak in Africa. Ebola is a viral disease and there’s no vaccine or cure. So the medical teams working out there are essentially trying to keep patients alive by hydrating them through the illness, administering antibiotics to fend of secondary infections, and that that’s about the sum total of what they’ve got as a way to combat the disease. The good news is that it’s not as contagious as influenza which is a blessing. All the same, the disease is spreading rapidly in Africa and some people returning from Africa have reported in sick with signs of the disease.

Going into this last weekend, the WHO has declared the current Ebola outbreak an international health emergency. It’s hard to get a picture of how this is going to be brought under control.

Back To Bombing Iraq

With ISIS running rampant in northern Iraq, President Obama has approved air strikes against ISIS. It’s hard to say if this is going to benefit greatly, but it’s one of those things the US tries when it can’t solve things diplomatically. The rather unfortunate karmic twist being that it is back to Iraq for America’s military. Having lived through a decade and a half of the mis-declared war on terror which led to the war in Iraq, it seems business is far from finished in the lands formerly known as the cradle of civilisation.  It’s all a multi-layered failure of policy with repercussions that have demanded even worse choices.

Should America gone into Iraq in the way it did? – In hindsight, no.

Did America conduct a good campaign in Iraq? – no.

Should America have pulled out in the way it did?- Probably not.

And so here we are, doing airstrikes in Iraq again – all the bad decisions may have brought the rule of Saddam Hussein to an end, but it has given rise to the current situation which can be described as much worse than the terrifying tyranny of the Hussein family. Steeped in a kind of medieval bloodlust and Sadism, ISIS is busy projecting images of itself as people who do summary executions of prisoners and decapitations to demonstrate how fierce they are. ISIS is hell bent on dragging the world back to a kind of medieval sectarian nightmare. Our resistance to this notion is merely to do airstrikes and no commit troops on the ground. Whatever could possibly go wrong, one wonders.

Just as with Ukraine, the distant source of all this can be traced back to World War I, and how the world was carved up on the map, subsequent to that war. Upon the Centenary of the beginning of World War I, it seems much more vexing  than merely symbolic. That is to say, nothing ever changes, they only ever get worse.

Cowra, 70years On

Somewhere in the last week, Cowra had the 70th anniversary of the breakout. As with the observation above how nothing ever changes, I cannot but help but think about the detention camp they had in World War II being a cultural archetype in Australia, and that is why we detain asylum seekers in the manner that we do. When in a ‘crisis’ (loosely defined), what Australia does is put up a camp in the middle of nowhere with a barbed wire fence around it with security guards. When the RSL types intone lest we forget, one cannot help but think forgetting isn’t a problem for Australia.

Cowra and its story was part of my life for a good decade as I researched the story but I will never forget the one night working with Brian A Williams and Geoff Murphy when Geoff pointed to a figure of those who died at Cowra, but not in the breakout. It turned out that there were on average 2 summary executions per week at Cowra. Japanese POWs were being shot – for whatever reasons – at the pace of roughly two a week. Given that communications were rudimentary I imagine the Japanese POW population had no understanding of why so many people were being executed. It might have even looked like a weekly lottery of death to those who did not understand English – and there were many of those.

This would explain the desperation felt by the POWs. If they were going to die, picked off one by one in summary executions, then it would be better to go out in one big blaze. Until that moment the motive for the breakout eluded me. I didn’t understand the testimony by the surviving POWs that they felt like cornered rats. It rang hollow and untrue. Overwhelmed by the feeling of hopelessness, they said they decided to commit to an action that was by design and definition, futile.  Some climbed over the fence, and once outside, committed harakiri. Explaining that took some doing, except it’s very easy. It was an act of defiance – that if one had to die, then at least one could control the means of that death by oneself. What would drive all that? Loyalty to the Emperor has been the explanation in official accounts, but I’ve never really been able to digest it as a fitting explanation.

Consequently, the understanding of the meaning of the Cowra breakout in Australian popular culture is grossly lacking. What remains of the Kennedy Miller rendition is filled with cultural stereotyping cliches, as well as an absence of logic to why the breakout took place or what it meant. It really is a terrible bit of film making and it’s a shame nothing else got made. Other narratives over the years have skipped the brutal management of the camp. One imagines that if one poked too deeply into the nitty gritty of how Cowra camp was really run, one may find cause to think gross violations of some military codes – or even war crimes – were a regular thing and this in turn would be waking up terrible ghosts. In other words, nobody wants an honest discussion about what happened and why. The whole thing can’t be consigned to historical obscurity and myth soon enough.

Today there is the garden. Reconciliation has taken place; yet mutual understanding probably remains a long way off.

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Vested Interests In Negative Gearing

Why Negative Gearing Won’t Get Repealed

Something that is not exactly on people’s minds is just what kind of assets our politicians own, and how that might influence how they vote. Turns out only 13 of the 226 MPs in the Federal parliament do not own properties. Of those who do own property, many of them own multiple properties and the best way to describe it is that it is their favorite investment vehicle. This would likely be because of negative gearing, which is a wonderful thing if you have investment properties but is one of those policies which is contributing to the property bubble in Australia – yes, the one everybody has a vested interest in denying and of course we’re starting to see why.

The article goes on to tell you how deeply invested our federal MPs are in the property market and so draws the conclusion that they are such beneficiaries of negative gearing that they are highly unlikely to vote for an end to negative gearing. one would imagine that there would be a corresponding number of people invested in property working for the Treasury and the Reserve Bank. Add in the banking bosses who are also likely to be in the same boat and you have  picture of people who like having high prices and would like to keep the prices high and not have to cash it in.

It’s funny because in the American ‘House of Cards’ Kevin Spacey’s Frank Underwood tells us that a man who chooses money over power is a man who chooses a flimsy MacMansion over a solid house built of stone and made to last. It appears that in Australia the sole purpose of power is to gain more wealth. It’s hardly exciting that real life pollies in Australia think with about as much imagination as your local slum lord, but evidently that is what we have got going. Our politicians favour real estate as an investment vehicle over equities or bonds, venture capital projects or for that matter manufacturing and services. If you combine it with the fact that figures such as Clive Palmer are heavily invested in mining, there is a prosaic materialist tenor to all of this that bodes ill for culture and the arts as well as science and technology.

It’s pretty hopeless. Especially when you consider that the point of capitalism is to bring capital to bear to produce things. Producing houses is one thing, but that’s not what they’re doing. They’re literally rent-seeking on their investment properties while minimising their tax obligations. Does that sound like the sort of group of people who might have a view to the future industries of this country?

 

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