June 28, 2010 | Graham

Mining not that profitable afterall

Phil Ruthven is the custodian of some of Australia’s most precious corporate information. His IBIS World group has comparative data on Australian industry which allows sensible comparisons to be made. What it shows is that mining in general is not particularly profitable, and not significantly more profitable than many other Australian industries.

In Ruthven’s view, there is no valid argument for putting a “super profits tax” on mining.

In the BRW of June 10-16 (subscription required) he has a table which shows that the most profitable industry with a return on shareholders funds of over 60% is Wholesale/marketers. Mining comes next, but is closely followed by Hospitality, Retail trade and Communications, all showing return on shareholders’ funds of just over 20%.

However this is a recent development, and for the five years to 2006 mining only had a “weighted ROSF of 6.6%, which was less than half the average of all large companies over that period (13.7%)”

One of the most bizarre benefits claimed for the proposed “super profits tax” is that it will make marginal operations more viable. This is a like claiming that our Olympic team will be better because we have devised a scheme to include less gifted athletes in it.

Australians are richest when our industries earn the highest possible returns on our savings. We need a system which encourages them to neglect low growth alternatives and rewards those that are good at finding high growth opportunities.

A tax system which rewards the less successful penalises us all. A Treasury head and a government who think this is a good idea obviously don’t understand economics. If the government really wants to sustainably fill the hole in the budget, rather than just mugging whatever industry seems to be profitable at any particular moment, it will find ways to encourage high return industries. That approach might not return $9 billion the year after next, but over time it will return much more.

Posted by Graham at 1:57 pm | Comments (11) |

June 27, 2010 | Ronda Jambe

Neither the forest nor the trees

Time to focus on the key issues, as an election may be sooner now than later. Only open, evidence based policy should be allowed. The spun has begun: we now have a minister for ‘sustainable’ population, with heaps of blather from Tony Burke to reassure anyone who chooses to feel reassured. Don’t think the new education revolution, or whatever they called it, will deliver the skills to boost our internal employment. That is in a different policy silo.

As foreshadowed, I’m passing along my current understanding of some of the issues around carbon accounting. I’m hoping some of you can fill in more bits of this puzzle. It is complex and shrouded in political decisions disguised as reasonable assumptions.

As I predicted (actually my mate Blind Freddy told me), the Gillard gov will now have to seriously come up with some goods on climate change. Some of that argy-bargy was reported in the SMH:


Clearly, any commitment to address climate change must be underpinned by an accurate, transparent and internationally effective means of counting what has been saved, spent, and documented. (Just as someday I will have to set up spreadsheets for tax time, a personal goal that keeps falling to the bottom of the pile.)

At a weekend workshop on carbon accounting, people who have studied this informed me that while national economic accounts take into account both stocks and flows, the current models for greenshouse accounting only consider flows. This allows great distortions in the way stocks are depleted and most importantly, does not include the time component.

We all know, again from our personal financial accounting, that time matters for our planning. For example, a long term loan such as a mortgage has to be at a lower rate than a short term car loan, and we take into account the risks of either capital growth or asset depreciation. (That’s why I’ve never bought a new car.)

All accounting and planning also has irrationalities built in, along with assumptions. (Like buying new cars.) Carbon accounting, it was explained, doesn’t include forests, although they are vast stores of carbon. It also doesn’t look at the time scale, meaning the time we have to keep CO2 from hitting the tipping point: within the next 5 years, according to Australia’s Chief Scientist Penny Sackett.

The time scale for a plantation forest to mature and store vast amount of carbon is in the hundreds of years, and fossil fuels are clearly irreplacable over human time as stores of carbon. A native undisturbed forest can store up to 1300 tonnes per hectare apparently, although those measurements also have a lot of fiddle and built in assumptions.

Arguments about bio-char being the replacement for our slowing wood chip industry are misplaced, if we take into account the time storage ability and the added transport and processing costs. And it was argued with data that China will not be picking up our wood export slack.

Now we go for a walk in the woods: the fed gov has been the main driver of forestry policy, and the forestry schools, unions and govs have been playing team tag forever. Ergo: the CFMEU, and its combined forestry and furnishings divisions in Victoria, along with the NSW building industry, will have major influence on how Australia approaches this key store of carbon as part of any serious emissions reduction scheme. You may recall Jared Diamond found deforestation was a key underlying factor in the collapse of many civilisations, in his seminal book Collapse.

So we need to get past the rhetoric of greenies and the 1 million women wanting real policy on climate change as obstructive. Look instead to the unions and industry players and government agencies and make them put real, measurable economic cards on the table. Or would you leave our future to the Australian equivalents of BP?

Posted by Ronda Jambe at 11:50 pm | Comments Off on Neither the forest nor the trees |

June 25, 2010 | Ronda Jambe

She’ll have to dance with them that brung her

By chance I was at a breakfast for 300 women in Canberra yesterday. It was part of the ‘one million women’ campaign, which seeks that number in Australia to unite in personal and political action to combat climate change.

Penny Wong spoke, then dashed off to caucus at Parliament House. Greens Senator Milne also spoke, along with the ACT Commissioner for the Environment, Dr Maxine Cooper. All these women, supported by many more, all committed to getting real results and real reductions on emissions. Wendy McCarthy reminded us of how basic activism can be, how local and effective.

Of course we were all waiting to hear the news at 9, and soon enough it was clear that Australia’s first female Prime Minister had arrived via a bloodless change. You couldn’t call it a coup, and what a refreshing change from the months of speculation and media chatter that accompanied, for example, the night when Keating finally overthrew Hawke. My Canberra memories go back that far, because that night I was part of a staff performance at the annual Christmas Party for the Department of Prime Minister and Cabinet. It was at the Ainslie Olim Hotel, and we didn’t know who was going to walk through the door. In the end, neither Hawke nor Keating showed up, and our cheerful performances, including my rendition of Rap Song of the Eco-fems was recorded on video for the victor. Wish I had a copy, it was a hoot.

So Julia has a chance now to bypass rancor and be what we all want her to be: a fine and courageous leader. She has dealt with the  same  career challenges that the women in that huge room at the Hyatt have faced. She could never have expected this to happen as it has, and she gives every impression of being both smart enough to run with it, and humble enough to listen and learn.

We all know that one of the main reasons Rudd was deposed was his inaction on climate change. Along with many others, I sent her a congratulatory email, and asked her to act decisively on climate. The room full of climate changing women were encouraged to do this, and we all wish her well. She was part of those decisions, and she can now get it right. We’ll be holding her accountable.

Afterthought: On Radio National this morning Julia is being compared with NZ’s Helen Clark, also an open atheist. She didn’t swear on a Bible, she affirmed. More importantly for Australia, this isn’t a media or public beat-up. Try that in the USA.

Posted by Ronda Jambe at 7:26 am | Comments (5) |
Filed under: Australian Politics

June 22, 2010 | Ronda Jambe

Naomi Klein on the Gulf oil disaster

A writer of exceptional  insight and clarity, Naomi Klein also expresses the compassion and sorrow many of us feel about this ongoing catastrophe. Below is a link to her Guardian article ‘A hole in the world’, and the accompanying video. Her observations about the political context and the natural world are equally powerful.

My questions: why aren’t we seeing this on our televisions at home, either here or in the US? How different is Australia’s policy on oil and gas? Do you really think the aquifer under NSW will be treated as the treasure it surely is? And who offers a different approach, either at a state or federal level?


Posted by Ronda Jambe at 11:15 pm | Comments (1) |

June 17, 2010 | Ronda Jambe

An Aussie sport worth cheering

Only rarely I forward intact a message from another site, usually this one, the Institute for Public Accuracy (which incidentally really needs a correlate in OZ). A big tip of the hat to Australian Julian Assange and his team at Wikileaks.

Although I laugh heartily at Stephen Colbert, he is often the best comentary available on US televison. It’s not just Robert McChesney who are concerned about media freedom and democracy. Is Julian just a clever Aussie larrikin or a crack in the armour of the corporate media’s dance with the devils of silence and public impotence? Don’t hold your breath to see him interviewed on Fox.

Here it is, complete with links:

Rowley, McGovern and Ellsberg — Statement on Wikileaks

The British Guardian reports: “The whistleblowing website WikiLeaks says it plans to
release a secret military video of one of the deadliest U.S. air strikes in
Afghanistan in which scores of children are believed to have been killed.”

In April, Wikileaks — http://wikileaks.org — released the “Collateral Murder”
video showing U.S. soldiers in Iraq killing civilians including a Reuters
photographer and then shooting at people, including children, in a van attempting to
rescue the wounded. http://www.collateralmurder.com

The following statement was released today by Coleen Rowley, an FBI whistleblower
who was one of Time Magazine’s people of the year in 2002; Ray McGovern, CIA analyst for 27 years; and Daniel Ellsberg, who leaked the Pentagon Papers (top-secret
government documents that showed a pattern of governmental deceit about the Vietnam War):

“Today, Washington is trying to shut down what it clearly regards as the most
effective and dangerous purveyor of embarrassing information — Wikileaks, a
self-styled global resource for whistleblowers. It is a safe bet that NSA, CIA, FBI
and other agencies have been instructed to do all possible to make an example of
Wikileaks leader, Australian-born Julian Assange, and his colleagues. Much is at
stake — for both Pentagon and freedom of the press.

“Those who own and operate the corporate media face a distasteful dilemma, both in
terms of business decision and of conscience. They must choose between the easier
but soulless task of transcribing government press releases, on the one hand; or, on
the other, following Wikileaks into the 21st century by adapting high-tech methods
to protect sources while acquiring authentic stories unadulterated by government
pressure, real or perceived.

“Deference to the government seems largely responsible for the failure to explore
the implications of particularly riveting reportage that gets millions of hits on
the Web but has been, up to now, largely ignored by mainstream media. The best
recent example of this is the gun-barrel video showing a merciless turkey-shoot of
Baghdad civilians by helicopter gunship-borne U.S. soldiers on July 12, 2007. Like
the humiliating and graphic but actual photos of Abu Ghraib, the publication of
which Pullitzer-prize winning Seymour Hersh repeatedly defended as necessary to the
story of Iraqi prisoner abuse, such raw footage is essential to people’s
understanding of what is happening. Like Daniel Ellsberg’s copying of 7,000 pages of
the ‘Pentagon Papers,’ such whistleblowers are a great means of exposing the lies
upon which the current wars are based.

“Assange went public this week with an email announcement that Wikileaks is
preparing to release a classified Pentagon video of a U.S. airstrike in Afghanistan
in May 2009, which left as many as 140 civilians dead — most of them children and
teenagers. He added that Wikileaks has ‘a lot of other material that exposes human
rights abuses by the United States government.’

“Wikileaks has also published a secret U.S. Army report of March 2008 evaluating the
threat from Wikileaks itself and possible U.S. countermeasures against it. This will
undoubtedly prompt American officials to redouble efforts to find Assange and to
prevent Wikileaks from posting additional information they have classified to avoid

“Americans have a right to know what is being done in our name, and how important it
is to protect members of the now-fledgling Fifth Estate so that it can continue to
provide information shunned or distorted.

“Assange ended his email with an unabashed appeal for donations for his website.
‘Please donate … and encourage all your friends to follow the example you set;
after all, courage is contagious.’ His words sounded a bit like those of Edmund
Burke: ‘When bad men combine, the good must associate; else they will fall one by
one, an unpitied sacrifice in a contemptible struggle.’

“For the good to associate effectively, they need to know what is going on. It’s our
hope the old Fourth Estate press will recall the good and high-calling that Burke,
Jefferson and other leaders of democracy have extolled through the centuries and
catch some of that ‘contagious courage’.”

See on http://www.ellsberg.net: “Daniel Ellsberg Fears WikiLeaks Founder Julian
Assange’s Life In Danger”; (on MSNBC)
http://www.ellsberg.net/archive/daniel-ellsberg-fears-assanges-in-danger and today
on Democracy Now: http://www.democracynow.org/2010/6/17/wikileaks_whistleblowers .

Available for interviews:

RAY McGOVERN, rrmcgovern@gmail.com
    McGovern was a CIA analyst for 27 years.

COLEEN ROWLEY, rowleyclan@earthlink.net
    Rowley, an FBI whistleblower, was named one of Time Magazine’s people of the
year in 2002. She recently co-wrote the piece “Wikileak Case Echoes Pentagon
Papers.” http://www.consortiumnews.com/2010/061510.html

Wired reports: “An Army intelligence analyst suspected of leaking classified
information to Wikileaks has still not been charged with any crime, three weeks
after being arrested and put in pre-trial confinement.

“PFC Bradley Manning, 22, is being held at Camp Arifjan in Kuwait and has been
assigned a military defense attorney while the Army and State Department investigate
claims Manning made to an ex-hacker in online chats that he disclosed classified
information.” http://www.wired.com/threatlevel/category/bradley-manning

The New York Times reports today: “Iceland’s Parliament, the Althing, voted
unanimously in favor of a package of legislation aimed at making the country a haven
for freedom of expression by offering legal protection to whistle-blower Web sites
like WikiLeaks, which helped to craft the proposal.”

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167

Posted by Ronda Jambe at 11:30 pm | Comments (1) |
Filed under: eDemocracy

June 17, 2010 | Ronda Jambe

Opps! Rudderless forgot the D word

As escaped public servants, partner and I were shaking our heads last December about the Henry Tax Review. We were familiar with the release of reports to a generous consultation period, followed by a draft government response and further argy-bargy with the affected groups.

But only the Government got to see the Henry report, and it was only released when the government response was released. That ain’t the way it is supposed to work in a real democracy. Surprises like the resource tax are not good for consensus.

Maybe Rudderless has taken a leaf out of Hugo Chavez’ songbook. Good intentions maybe, bad administration certainly.

The public clearly was insensed on behalf of the mining industry, although on the face of it the new tax is reasonable. Last time I looked, I was taxed on my total income, minus all legitimate deductions. Whether you call that profit or anything else is besides the point. And if you add up all the territory and federal taxes, my rate of tax in semi-retirement is closer to the 30% mark than 10 or 15.

But process is everything, and a government that fails to heed the most basic principles of partnership, planning and politeness deserves the big clobber it is now getting. Shape up, mate!

Posted by Ronda Jambe at 1:07 am | Comments Off on Opps! Rudderless forgot the D word |
Filed under: Australian Politics

June 16, 2010 | Graham

Getup and Budgie Smugglers

Has GetUp decided that the budgie smugglers are a net loser for Tony Abbott? How else to explain their fascination with Abbott and the beach. First they were running billboard against his position on global warming by showing him on the beach in a pair of Speedos. (more…)

Posted by Graham at 9:46 pm | Comments (4) |
Filed under: Uncategorized

June 11, 2010 | Graham

Will Kevin Rudd see out his term?

This morning former Queensland Labor Treasurer Keith de Lacy called for Kevin Rudd to be replaced because he is an “item of ridicule”.  This is the first eruption from Labor, but the tectonic plates have been grinding for a while.

Greg Rudd, Kevin’s older brother, isn’t too keen on his political skills either. During the week Simon Crean appeared to undermine Rudd’s position on the RSPT, and Gary Grey gave an interesting interview to Fran Kelly on Radio National Breakfast.

Robert Gordon Menzies was the last Australian Prime Minister not to make it to his first election as PM after winning the preceding one. Will Kevin Rudd follow in his steps?

You’d have to rate it a reasonable chance this morning.

Posted by Graham at 11:48 pm | Comments (5) |
Filed under: Uncategorized

June 10, 2010 | Graham

IPCC an unreliable witness

Just came across this fascinating paper http://www.probeinternational.org/UPennCross.pdf by Professor Jason Scott Johnston of University of Pennsylvania .

Posted by Graham at 12:30 pm | Comments (2) |
Filed under: Environment,Legal

June 08, 2010 | Graham

Rudd tries to do a Westfield

There’s a reason that Frank Lowy is the richest man in Australia – he knows how to screw a good deal out of a tenant, without actually killing their business. Arguably if he were less rapacious there’d actually be more business, and probably more shopping centres.

What Kevin Rudd is doing with his RSPT is trying to emulate Lowy, but he needs to pay more attention. Frank wouldn’t have got so rich if he’d structured his rents like Kevin wants to structure his tax.


Posted by Graham at 1:30 pm | Comments (7) |
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