Australia For Sale

In the midst of Australia’s worsening Energy Crisis and the debate around extending the life of old ‘dirty coal’ Power Stations, many Australians are asking: why does Japan pay less for Australian LNG (gas) than Australians do?

You would think that this ridiculous situation would be ringing alarm bells in Australia but not so, as Australians don’t tend to be too concerned or worried about the sustainability of their country’s long-term natural assets and resources. Meanwhile, our Asian neighbours are taking full advantage of our complacency. They act to secure their own nations’ future by implementing inter-generational food security plans, by purchasing productive farmland courtesy of Australian’s ignorance and stupidity.

Take China for example: they have a population of approx. 1.4 billion people with an increasing demand for a nutritious, secure, clean, and sustainable food supply.  They could purchase agricultural produce from Australia, but soon won’t need to, because Australia is selling their prime farmland instead.

I’m not against balanced foreign investment, clearly it’s a necessity, however, I do question the wisdom of allowing one country to increase its stake in Australia tenfold in the short space of 12 months, with China now owning 25% of Australia according to the Australian Tax Office’s Agricultural Land Register.

What happens if this trend continues? Should Government act immediately to control Australia’s sovereignty?

This shift in the ownership of agricultural land in Australia is of critical concern as it means that a proportional amount of local agricultural produce may no longer be available for supply and consumption in domestic markets. The new owners are not interested in making commercial profits in Australia, nor do they intend to trade produce on local markets. They are only interested in producing, processing and transporting the finished product directly into China to meet their growing consumption needs.

Not only are we losing ownership of the land, but also the food it produces. It is also an effective loss of future export revenue for Australia which has been surrendered for short-term capital gain on assets we now have no chance of ever owning. We have been continually warned of the consequences of accepting excessive Chinese investments by the likes of world-leading economist Professor Niall Ferguson yet we choose to blissfully ignore the bleeding obvious.

At the current rate of change, Australian agricultural produce will be unavailable to Australians in much the same way as Australian LNG is restricted or in limited supply for the domestic market, because Australians have sold off control of their own natural resources.

Can you imagine not being able to buy an Australian Prime Steak in Australia unless you can afford to import it from China? If Australia keeps ‘giving away the farm’, we’ll end up with massive food inflation or more likely, Australians just won’t be able to buy food produced in Australia.

It will be a sorry reminder for those old enough to remember the restrictions imposed on Australians under the old British-Australian Meat Agreement when you couldn’t source or afford to buy locally produced meat: only this time the arrangement will be permanent.

Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity. Martin Luther King Jr.

17 October 2017

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Why Australians Feel Good About Higher Taxes

In last month’s Federal Budget, the Government announced the introduction of an additional tax on the Financial Services Sector, or at least on five of the larger banks operating in the sector. This comes at a time when the Government is on one hand, advocating policies to reduce company tax, while increasing taxes on the other. (So unlike Governments to have contradictory agendas!)

The Liberal coalition Government is ‘banking’ on this new tax levy being more popular than Labor’s failed Mining Tax, which the coalition Government subsequently repealed. This new populist policy is the Government’s attempt to leverage off the creed that all Australians hate banks, apparently because they are well managed global businesses whose apposite profits are too big.

Therefore, the thinking is that the public will be happy if the so-called ‘greedy’ banks are taxed more than other companies and as a consequence, the Government gains a popularity lift from you, the electorate. This is a desperate ‘socialist solution’ by a Government who is supposed to be encouraging private enterprise to grow the economy; no wonder we are confused about what this Government is supposed to stand for!

The Government is taking advantage of the public’s naive ‘bank bashing’ mindset by virtually condoning hatred against a small number of profitable institutions just so they can pass their bias, uncompetitive and oppressive policies unimpeded. The Government is counting on the gullibility of the public who have been conditioned by successive financially incompetent Governments, and the media, to believe we have been ripped off when in fact the Bank’s ‘Return on Equity’ is somewhat moderate compared to many other publicly listed companies (see below).

I keep hearing the media and politicians say that the Banks should pay this new levy and not complain because they (the banks) are so hated and more unpopular than politicians, (if that’s possible). But who are they? Well, ‘they’ is essentially you, whether as an individual shareholder or more likely in your superannuation fund, or if you have a bank mortgage or a bank account, not to mention if you have exposure to any of these banks’ subsidiaries.

Anyone with any relationship, direct or otherwise, with the Banks will pay for this new levy/tax. If there is an additional cost to business, someone pays and in the final analysis, the people who own and deal with the banks will pay the additional tax the Government has conned you into feeling good about.

Let’s face it, I don’t think that getting a dividend yield of 6% as a shareholder of a Bank is an ‘obscene’ return, in fact, far from it given the ‘capital risk’ you carry. So this ‘clever’ new policy is only a slick revenue grab, that somehow ‘the constituency’ has been duped into thinking they’ll love!

If Government-cultivated hatred and loathing is driving a prejudicial policy agenda in Australia, where we single out and indiscriminately penalise certain groups or sectors in our community; then we are on a slippery totalitarian slope with despotic overtones. 

Another consideration in this subterfuge is the randomness of the policy, there is no reasonable basis for the new tax. Apparently, the Australian Government supports a Fair Taxation System unless the ignorant decide the industry is so unpopular that it justifies a discriminatory socialist policy. If you implement a tax just because you make a large profit, then why not apply the new tax to companies that make larger ‘returns’ than the Banks do and if not, why not? Would that not be a reasonable and equitable basis to apply a tax, with a just ‘outcome’ for all Australians under the ‘Fair Taxation System’?

I have scanned the various market segments and randomly identified 14 companies with a higher ‘Return on Equity’ (RoE) than the five banks targeted. Should companies like those listed below also be identified as ‘bad profitable corporate citizens’ to be singled out and penalised for being commercially viable?

What is going on in Australia when you virtually need to apologise for being successful and profitable? Talk about the tall poppy syndrome; it’s economic emasculation of epic proportions! If making a profit is so obscene and offensive that we need to disincentivise success, then it is a crippling legacy to pass on to the youth of Australia: a future of limited opportunity courtesy of a pathetic, lazy, short-sighted, spiritless and tired leadership.

Return on Equity:

  • Amcor 86.9%                          
  • CSL 41.5%
  • JB Hi Fi 37.8%
  • Woolworths 32.1%
  • Rea Group 28%
  • Sirtex Medical 27.7%
  • Telstra 26.8%
  • McMillan Shakespeare 23%
  • ResMed 21.2%
  • Breville Group 20.4%
  • Flight Centre 20%
  • Ainsworth 18.2%
  • BHP 16%
  • Corporate Travel 16%
  • CBA 15.7%
  • MQG 14.2%
  • WPC 13.2%
  • NAB 12.2%
  • ANZ 10.1% 

‘He knows nothing; and he thinks he knows everything. That points clearly to a political career’ – George Bernard Shaw

3rd June 2017