Tristian,

I am constantly astonished with the guff that you write in these columns of yours. There are parts of what you've written which just come out as a lefty making lefty statements (which is fair enough - different people look at things differently), however there are times when you're of in the ideological wilderness.

"Enabling workers to bargain collectively must be part of this strategy - including acceptance of the legitimacy of pattern bargaining"

The legitimacy of pattern bargaining? Are you serious? One person getting (presumeably) and increase in pay becaue they work in an industry, irrespective of how (a) they personally perform; and (b) how the business they belong to is performing; is legitimate? I would love to see you justify why a person A, who works (poorly) for company ABC should recieve a payrise because they work in the same industry as person B who excels for company XYZ.

Let't take a simple example: Person A works for a corner deli. They don't work hard, however the deli (which is struggling financially) needs to keep them on because we have a labour shortage.

However Person B works for the IGA up the road and the IGA is profitable. Under pattern bargaining, the corner deli would have to pay the increase that Person B gets, irrespective of whether they can afford it.

Is this really your stance? In your crusade for "compassionate and just response to inflation" you'd just trample all over small business - the largest employer in the country?

There are plenty of other things to pick on in this 5 page piece of guff, however if this is indicative of your stance on things then your poosition is riddled with these impracticalities. We must all get on our knees and thank the lord that you're not in charge. I pity your students.

BN - the problem of prohibiting pattern bargaining is that the 'law of the jungle' can lead to a 'race to the bottom'. Without solidarity, it is difficult to maintain standards - especially with the weakened - and less-comprehensive - system embraced by the Federal government.

There are many ways of supporting business - without depending on the 'race to the bottom'... (eg: tax incentives) The problem with labour market deregulation - is that who knows where it will end? Take the US example - minimum wage approximately $6/hour...

most sincerely,

Tristan

Sorry Tristian, but that's rubbish.

Sparate employee groups negotiating outside of a "pattern" does not equate to a race to the bottom. There is no truth in that whatsoever. As an example, look at the mining industry where the average (or was it mean?) salary is now more than 100K a year inspite of individual negotiations. There is no race to the bottom there.

And you haven't answered my question from my previous comment: Are you willing to trample over small business in the name of a "compassionate and just response to inflation"?

You mention tax incentives: How is that going to help the small business in the scenario I outlined above? If they're already on the fringe of going backwards then what's the incentive going to be? An offset of the additional wage cost? How then do you work out which businesses will get that "incentive" and which ones shouldn't get it, and how much they should get?

What you're really suggesting is a bloated and inefficient government loaded with interventions into what is a private enterprise (the corner shop), all in the name of an unrealistic practice which has no place in the modern world (pattern bargaining). Think about the reporting load you'd need to put on the small business to meet the calculations so that the government would work out how much of a "tax incentive" they'd be entitled to.

As I said in my previous comment, it's hopelessly impractical and really belongs in ideological la-la-land.

It is astonishing that an article loke this can be published in 2008, as anything but satire.

It contains nothing of substance, just mealy-mouthed cant about the evils of capitalism, set about with a miasma of supposition and emotional dross.

This article is, at base, a form of Schadenfreude. Gloating over the present economic gloom, confident that it was caused by capitalism, and must perforce require a return to loony-left socialism.

But hold on. Where exactly is the fire?

For an article dedicated to a "cost of living crisis", it provides precious little by way of evidence that a crisis even exists at all.

But let's assume for a moment that we are enduring some form of crisis. What does the author offer as a cure?

To counter the high cost of oil?

"tax and welfare reform, and reform of industrial relations"

Yeah, that should do it.

Against the high cost of housing finance?

"investment in public housing stock could increase supply, bringing housing back within reach of ordinary Australian families, and also for the poor and vulnerable"

Gee, that was pretty easy.

Where are these homes to be built, by the way? Close to work, of course. And just who will subsidize them? The taxpayer, presumably, following the "tax and welfare reform".

That's all right then.

>>A revolution in transport infrastructure, and in the adoption of hybrid and electric vehicle technology - can provide better value and efficiency even while reducing greenhouse gas emissions.<<

Taxpayer-driven technology revolution?

Of course, government is renowned for encouraging innovation.

>>abandoning “Public Private Partnerships”, and turning to public debt financing and provision of infrastructure, can provide better value and fairness for consumers and taxpayers.<<

Back to the taxpayer. You're going to need him more and more, as interest rates zoom skywards.

Livin' is so easy, in a social paradise.

If it wasn't so sad, it'd be funny. Every single "remedy" offered will mire the country deeper into recession.

What is really needed is a lower-taxing regime that encourages innovation.

Regrettably, none of these concepts appears in the socialist economic lexicon.

Pericles - you make a real mess of my arguments there - cutting and pasting out-of-context to serve your own purposes...

Of course welfare reform isn't going to rectify peak oil... As I think I mention, this is now factored into economy structurally... In the long term reform of the transport sector is necessary. (see an earlier article of mine dealing with a 'transport revolution'....

ON the other hand, the most vulnerable will only be compensated for such developments by labour market regulation, tax and welfare reform, and a stronger social wage...

This isn't 'loony-left' stuff here - for many people it is a matter of survival...

And in no way do you deal with the fact that public finance is cheaper to secure than private finance..and that it is both more effecient - and can be fairer - than the PPP system...

You also mock the notion of expanding supply in the housing market - but have no reasonable alternative to offer...

That an $8 billion injection is seen as too much - or the domain of some 'loony left' - shows where we're at in this country... The economy - remember - is now valued at over $1 trillion... If we cannot afford $8 billion - considered in that context - what can we do?

There are several 'big ticket' infrastructure and service projects - that government can still provide more fairly - and more efficiently - than the private sector...

And that you deny a crisis - in face of skyrocketing oil, grocery, housing prices - and 'user pays' private infrastructure - I think you should be looking carefully at your arguments...

But at least you decided to make your opinion plain - that being one of the roles of this site I believe - and it's good to have an open exchange...

sincerely,

Tristan

Tristan

I agree there are solutions of sorts within the capitalist framework. But they will always be inadequate. For example how do we address the fact many people are low paid? Your suggestion - to increase their pay - is one temporary solution. But only with the aboliton of human labour as a commodity can we really address this - and become truly human.

The real issue to me is the wage slave relationship. Until that is overthrown and with it the manic and destructive drive to accumulate, we cannot move to a society based on satisfying human need and full democracy.

Born 1942, father walked out 1944, grew-up in poor single-parent family in post-war Britain; I know about poverty. And now I'm a low-income pensioner [although I own my home]. I've always lived frugally, and I ask: what cost-of-living crisis? The problem, if any, is hidden from me. Living standards both in general and for low-income groups have been rising for a long time, but not thanks to left-wing policies.

"Races to the bottom" in a high employment economy where employers need to attract and retain workers? Absolute nonsense. Growth in the economy and wages depend on firms succeeding in competitive markets, something which is hindered, often impossible, with restraints such as pattern bargaining which are not related to company circumstances and employee productivity. My children have had no difficulty finding employment and their employers work to retain them, e.g. with early promotion. (And their income doesn't flow to me, so doesn't affect my cost of living assessment.)

"Where will it all end?" With lower incomes and employment if Tristan prevails.

Tristan, do you really believe that government can spend $8000,000,000 taxpayer generated wealth on public housing which will then, not have a negative effect on current and future housing values, considering town planning practice.

Tristan, I take mild umbrage at the suggestion that I was "cutting and pasting out of context".

I used your closing paragraphs as the basis for my own snapshots

"Some problems - such as the cost of petrol - are embedded structurally now in the world economy. Only investment in alternatives will ease demand for oil. But tax and welfare reform, and reform of industrial relations - can spread the burden more fairly."

Which I summarised as:

"To counter the high cost of oil? 'tax and welfare reform, and reform of industrial relations'..."

Given you appreciate the cost of petrol is "embedded", how exactly did I misrepresent your proposed solution?

>>And in no way do you deal with the fact that public finance is cheaper to secure than private finance...<<

Only for a while. And at the expense of the taxpayer.

If you went into a bank and asked for a billion dollars, they would examine the risks associated with the loan, and charge you accordingly. If you are going to give it away to those in need, that is a very laudable objective, but the rate at which you "borrow" will not reflect the zero financial return on investment.

After a while, this source of funds will cost more, since your actions are fiscally irresponsible.

>>You also mock the notion of expanding supply in the housing market - but have no reasonable alternative to offer<<

No, I mocked the notion that expanding supply on its own, and in the way you suggest, would have the effect you anticipate.

Where we fundamentally disagree is that you appear to believe that if you can impose some order on other people's lives, all will ultimately be well. If you build houses here, give money to pensioners there, "regulate" the labour market, mandate a higher "social wage" and so on, everyone will somehow magically be better off.

This is why I described it as "loony left". The discarded ideas and ideals of the failed twentieth century experiment of communism, prettied up and presented as new and shiny.

It. Won't. Work.

pericles

your stereotyping continues. You say Tristan's ideas are loony left.

First, there is nothing inherently leftist in state intervention. Stalinism was the ultimate expression of statised capitalism. Europe after the second world war was dominated by the State.

But my real objection is to the use of the word loony. Stalin had people put in psychiatric wards when they questioned the "workers paradise" he was creating.

The phrase loony left (apart from avoiding discussion of ideas) seems to follow the stalinist tradition of attacking the sanity of those who differ with you.

Address Tristan's arguments.

For example, is there a need for more housing in Australia? Has the market been a failure in satisfying people's needs here? Is there not a role for the State in addressing this, as it did after the second world war. (To quote a British Tory of the time, we must give the people reform or they will give us revolution.)

Are PPPs efficient? Is privatising electricity a great idea? (Iemma and Costa might not think so now.)

Pericles:

The 'embedded' and structural nature of the oil crisis must be understood in context... Looming peak oil, and instability in the Middle East - mean that oil prices are creating substantial cost-of-living pressures...

There is no simple way of dealing with this... But what we CAN do is to compensate the people who are hit hardest - those on low incomes and welfare... And if by restructuring welfare, taxation, social wage provision - we can shift the burden of the crisis - then we should do so as a matter of decency. For many decisive action is needed now - and the alternative is more and more Australians sinking into poverty...

There is nothing 'magical' about boosting the social wage - but as Medicare shows - social provision of core services can provide both universal access - with greater efficiency... And that's in everyones' interest...

re:PPPs - you bemoan the 'cost to the taxpayer' - but the user-pays fees which apply for the use of private infrastructure - is like a kind of 'private tax' anyway - but it is imposed at a flat rate - which means those on lower and middle incomees must pay a higher proportion of their income than those who are wealthy... Where's the justice in this?

Dallas - you need to get $8 billion into perspective...Firstly, this is less than 1% of GDP...And yes there would be losers - those who sought to capitalise on the bubble - but housing in Australia is less affordable than it has been literally for decades...Expanding supply is an important policy lever to neutralise the legacy of the housing market bubble...And there are 100,000 Australians homeless on any given night - who need such investment desperately..

Not enough room to respond to everyone else...But thanks Passy for providing an alternative perspective from the Left...(wish there was more Left participation in OLOs forums'...)

most sincerely,

Tristan

Tristian,

I have noticed that you haven't responded to my previous comment. From that I must read into it two things (given that you've responded to other comments):

1) That there is no logical, reality based reason for your statements on pattern bargaining
2) That your stance is purely ideological

Point 2 isn't necessarily a problem, so long as you recognise it and accept that ideology isn't the best basis for policy decisions.

Onto other things:

"Variable interest rates of Australia’s banking oligopoly, in particular, have been rising well above official RBA (Reserve Bank of Australia) rates. The banking sector should be expected to exercise social responsibility - especially in the face of probable economic contraction."

Are you aware that the cost of money has increased in recent times? Banks face higher and higher costs for the very thing that they trade in: cash. You statement "The banking sector should be expected to exercise social responsibility" is tantamount to asking a small grocer not to pass on increased costs for "social responsibility reasons".

Predictably, you'll say "you can't seriously compare a bank and a corner store", however what you're really objecting to is businesses having a consistent playing field, irrespective of the type of business.

This sort of position is consistent with the notion of the "Anti dog eat dog" law (google it). It is indeed a slippery slope you're suggesting.

It's easy to score points against the banks: everyone does it when their profits come out. However I challenge you, Tristian, to come up with some policies which don't pander to "tall poppy syndrome" and which arne't based in pure ideology. This piece of yours fails on both counts.

BN

A couple of responses.

The cost of loans between banks inceased becuase they don't trust each other after the sub-prime loan crisis and other implosions. Why should consumers pay for bank failures and the failures of their system? Second, that pricing gap has been falling in recent times in any event yet banks have not passed it on, ie they are gouging.

Pattern bargaining enables workers to maintain their living standards. In a class divided society where profit comes from the labour of workers, this is uenquivocally a good thing.

The argument for pattern-bargaining is that a worker should be paid a similar amount for performing a similar function, no matter who he performs it for. Businesses are the ones that should wear the risk of not being competitive, not expect their workers to (productivity of the individual workers is a seperate matter). That's why is generally accepted that businesses generate more income than wage earners - its the capitalist risk and return scenario. Dont get me wrong, I am an advocate for small business and the problems that they face, but your arguements against pattern-bargaining dont stack up.

As I said, productivity is another issue, and productive workers should be able to be rewarded over and above others doing the same job. Base acceptable pays though really should be relatively consistent across a particular field. If not, businesses chossing to pay less for whatever reason will put themselves in the position of not being an attractive employer, not being able to attract the best and most productive staff, leading to lower profitability and impacting on long-term viability.

Passy first.

>>there is nothing inherently leftist in state intervention. Stalinism was the ultimate expression of statised capitalism<<

Yeah, right. Russia under Stalin was part of the worldwide capitalist conspiracy. Who'd 'a thought it.

Fair point about "loony", though.

I'll have to find another word that crystallizes the concept of an ideology that is fundamentally impractical, in that it ignores everything we know about people as individuals, and how they act in the groups we call "society".

Might take some time, but. Meanwhile...

>>is there a need for more housing in Australia?<<

I have not seen any convincing evidence that there is. Do you have any statistics on the volume of unoccupied housing compared to the number of people without housing? Excluding the voluntarily homeless, of course.

>>Has the market been a failure in satisfying people's needs here?<<

It seems to have been fairly efficient, on the available evidence. Prices are falling at the moment, which is what you would expect in the current economic environment. Do you have non-anecdotal material that contradicts this?

>>Is there not a role for the State in addressing this, as it did after the second world war.<<

Not an economic one. It would create more problems than it would solve.

There might be an ideological one, but it is not practical right now, unless you are willing to dismantle and rebuild the entire financial system - superannuation, taxation, investment. All that tedious detail that tends to be ignored.

>>Are PPPs efficient? Is privatising electricity a great idea?<<

I believe that most PPPs are an abomination, as they are conceived here in Australia. Apart from anything else, they seem to be a magnet for institutionalized corruption.

Incidentally, this is a bit rich:

>>Address Tristan's arguments<<

As I pointed out, Tristan's "arguments" are in face merely political soundbites.

>>tax and welfare reform, and reform of industrial relations... a revolution in transport infrastructure... adoption of hybrid and electric vehicle technology<<

These are not arguments, Passy. They are the pipe dreams of the loo...

Nope. Still can't think of a better description. I'll keep working on it though.

Passy,

"The cost of loans between banks inceased becuase they don't trust each other after the sub-prime loan crisis and other implosions. Why should consumers pay for bank failures and the failures of their system? Second, that pricing gap has been falling in recent times in any event yet banks have not passed it on, ie they are gouging."

What makes you think it's the banks fault? Independent ratings agencies (Moodies, S&P etc) often gave the debt ratings of AAA etc. If banks were to stop investing in AAA rated products, they wouldn't be investing in much!

And we have seen NAB and ANZ (for starters) already committing to reducing rates. There's not much gouging going on. So your argument doesn't stand up.

"Pattern bargaining enables workers to maintain their living standards. In a class divided society where profit comes from the labour of workers, this is uenquivocally a good thing."

Is that right? To you and Countrygirl: How then does that statement stand up in the scenario I painted in an earlier comment? Patently, it doesn't.

Society has been divided by class for as long as we have had a post-nomadic society. The Romans, Greeks, Ancient Chinese and Japanese societies all had classes. That's not going to change.

Countrygirl:

"Base acceptable pays though really should be relatively consistent across a particular field. If not, businesses chossing to pay less for whatever reason will put themselves in the position of not being an attractive employer, not being able to attract the best and most productive staff, leading to lower profitability and impacting on long-term viability."

This is why we have awards to set minumum conditions. That, however is not an argument for pattern bargaining. Different groups of workers can be covered by the same award and with good reason, however pattern bargaining is a very bad notion which is recognised by the major parties and isn't in their policies.

BN, I dont agree with the comment about pattern bargaining allowing workers to maintain living standards - that has not merit at all. It may help, but it doesnt make it happen.

Pattern bargaining has some role to play in the absence of a strong award system. I agree that awards have a great role to play in assisting both employers and employees, and I think that this has in the past not been suitably recognised. The move to AWA's and Workchoices has dismantled a lot of the benefits of the award system for large and corporate businesses. Many small businesses still operate as non-corporate entities, that are required to comply with State awards, which doesnt level the playing field for small business, it makes it much worse. Pattern-bargaining CAN play a role in addressing the inequalities here (whether it does or whether it is abused are different issues). I'm getting off topic a little, but if your arguement is fairness to small business, then you should acknowledge that an activity that can level the playing fields between corporates and small business would be a good thing...

firstly - re: housing crisis -

see: http://www.theage.com.au/news/in-depth/the-housing-crisis/2008/03/03/1204402367492.html

"Last year, Australians borrowed $217 billion to buy homes"

"12 times more than we were borrowing for the same goals 20 years ago."

"On the outskirts, shortages of serviced land in some cities, coupled with heavy state government charges to supply infrastructure, have been blamed for driving prices up."

One commentator:

"forecasts that the deficiency in residential stock will hit 60,000 in June this year and 129,000 by June 2009."

http://www.theage.com.au/news/national/shortages-fuel-housing-crisis/2008/03/27/1206207302370.html

(although demand is also undermined by the numbers of young Australians who have - for now - given up on a home of their own...)

And then there's the homelessness crisis:

http://www.smh.com.au/news/national/shame-on-us-rudd-pleads-for-homeless/2008/01/27/1201368945676.html

"About 100,000 people a night are homeless, "

Again: Rudd promises to do something "over 10 years"...

Increasing supply would drive prices down - and provide desperately needed shelter for vulnerable Australians. Investing in housing, though, must addressed now - not just promised "over 10 years".

And such moves must be accompanied by regional and urban consolidation, and provision of services and infrastructure.

Tristan, you quote from an opinion piece that has holes you can drive a bus through.

>>The average Australian family can no longer afford to buy the average Australian home<<

Oh, please.

There are thousands of house sales a month. Therefore thousands must be able to afford it.

The fact that we are able to dedicate an increasing percentage of our income to house purchase is an indicator of material prosperity, not the reverse.

Incidentally, the "deficiency in residential stock" in the article you quote was in relation to the underlying demand, and its impact on prices, not homelessness.

And what about them there homeless?

"About 100,000 people a night are homeless, including 10,000 children under age 12 who are forced to sleep outside or in crisis accommodation, boarding houses or with family and friends."

Note very carefully the context here, and refer yourself also to the ABS definitions of the degrees of homelessness.

The gross figure includes what they term "voluntary" homeless people, who would have a place to stay - e.g. a family home - if they chose to do so.

This is not to diminish the problem. If I was thrown out of the family home, say, because I beat my daughter (hi Boaz) I'd be categorized a "voluntary" homeless person too.

"the biggest cause of homelessness is domestic violence, and other causes include mental health problems, drug abuse, unemployment, family breakdown and rising rents."

Is it the government's job to find me a house to live in, or to provide temporary shelter while I sort myself out?

"Mr Rudd said Labor would fulfil its election pledge to spend $150 million on new places in crisis shelters and will use the white paper to fund further policies aimed at prevention, such as tackling mental health and education problems."

See. Kev and I say "no houses".

You say:

>>Increasing supply would drive prices down - and provide desperately needed shelter for vulnerable Australians.<<

I say:

Decreasing demand will drive prices down. Providing desperately needed shelter for vulnerable Australians is a totally separate issue.

Pericles

As to the state, stalinism et al I suggest you read Tony Cliff's State Capitalism in Russia. Conspiracy? No. Marxist analysis? Yes.

Marx was about workers smashing the capitalist state, and predicted the workers' state withering away as class withered away and plenty replaced want.

On another issue, one solution to address the homelessness of many would be to mandate the openning up of vacant rooms in hotels and motels (plus free meals) and in the richer suburbs.

Passy,

"On another issue, one solution to address the homelessness of many would be to mandate the openning up of vacant rooms in hotels and motels (plus free meals) and in the richer suburbs."

Apparently private property rights do not exist in your world. If I own a small bedsit or small hotel, why should I be forced to give that accomodation away? If I've sacrificed to pay for it, why should I be forced to do anything with it?

This is one aspect of the far left that I find very unappealing - the complete disregard for private property rights. Tell me Passy, why shouldn't I just lob on your front door and expect you to put me up and feed me ad infinitum? If private property rights have no meaning for you, then that shouldn't be a problem.

Countrygirl:

"... but if your arguement is fairness to small business, then you should acknowledge that an activity that can level the playing fields between corporates and small business would be a good thing"

Sure, I think that things that help small business are a very good thing. However I am yet to see any example of pattern bargaining being in anyway a boost to small business. If you have an example, I'd love to hear it

There is a reason why none of the political parties holds pattern bargaining as part of its IR policies - it's bad for business, it's bad for the economy (look at the 70s/80s wage spiral) and it's rife for abuse because it's forcing an employer to pay for a rise which is in no way related to the performance of the workers for that business. Employment is a 2 way street.

AWAs and individual agreements have a place in the workforce. I wish in my last one that I had've had the opportunity to cash in my LSL entitlements: as someone whose longest stint with an employer is 3 years, LSL is of no inerest to me and would love to cash them out.

We live in a world of private property, BN. That or communalised private property.

I fail to see why you feel threatened by forcing the major hotels to provide free lodgings to the homeless. An out might be for those hotels etc which charge less than $50 per person.

And if private property (which is the legal expression of wage slavery) prevents the homeless having adequate shelter, then private property is a problem. Huge houses on the North Shore with few people in them are unused homes and could easiy be made available without threat to anyone for the homeless.

An alternative to trading in LSL might be to have a universal and portable scheme. LSL was won to help workers get a break from the grind of work and bring them back refreshed after a few months off. Frankly, it is not yours to sell. Why should an individual have the right to trade off soemthing the collective action of workers over the years has won?

"I fail to see why you feel threatened by forcing the major hotels to provide free lodgings to the homeless"

It's your thorough lack of disregard for the hotel owners private property rights which astonish me. I'll repeat my question from my previous comment:

Why shouldn't I just lob on your front door and expect you to put me up and feed me ad infinitum?

Because it's an impingement on your private property rights. I have no right to impose on you (unless you invite me in) and neither do you have a right to "expect" business to open their doors for free.

"Why should an individual have the right to trade off soemthing the collective action of workers over the years has won?"

So, what are you saying here? That the only legitimate changes to working conditions are those won by collective action?

I see the race to mediocricy is live and kicking with you Passy. Why would a high performer chose to work under those conditions? There are plenty of employees out there who will happily trade conditions for either other conditions or money. Why should someone like me who chooses not to have kids retain maternity/paternity conditions? Why would someone like me want LSL conditions when I change employers all the time?

"An alternative to trading in LSL might be to have a universal and portable scheme"

Yeah right. Like an employer is going to take on an average employee with a lot of "banked" LSL. You're consigning people to the scrapheap with a statement like that.

Yes, the race to mediocricy is live and kicking in the uber-left. Thankfully Rudd has distanced himself from them

Thanks BN.

Property rights are regulated in all sorts of ways. Society can and does impose restricitons on the property rights of business as it sees fit.

The development of caplitalism saw the destruction of the rights of the many to property in the name of the few. We in our democratic society can redress that by feeding and sheltering the poor (surely an aim of a so-called Christian society, or has Christ's love they neighbour dictum been abolished under capitlaism too, in the name of property rights for the super rich)?

John McCain and his family have seven houses. Why not open up some of them for the poor fleeing New Orleans?

Some neo-conseervatives argue that tax itself is an attack on private property rights. Do you agree, BN?

The left is leading the race to mediocrity? What if the way we currently organise society encourages medicority? Those who rise to the top are those who sole idea of betterment is individual greed and aggrandisement. Eddie Groves, Adler, Wheatley, George W are hardly shining examples of outstanding leaders. In fact the list goes on and on and on...

There is a more fundamental question. Who elected these busines leaders? Who elected Packer, Murdoch, etc. No one. Why is there no democracy in the conomic sphere. Way can't we as a society decide what is invested and where, for the common good? (And as an aside often these "non-mediocrities" are powerful because their dads were.)

Your previous dismissal of my comment about the bank's gouging looks pretty lame in light of Wizard's annoucement that it would cut home loan rates today since the cost of borrowing cash is now below the RBA rate.

If the RBA cuts by 25 basis points, banks should cut home loan rates by more than that.

As to trading off conditions, if an indivdual can do that in the long run it undermines those conditions. If you can trade off LSL then LSL is under threat for other workers. By individualising entitlements you weaken the ability to defend them in the best way - collectively.

Your suggestions are becoming increasingly bizarre, Passy.

>>to mandate the openning up of vacant rooms in hotels and motels (plus free meals)<<

The cost of this would be astronomical.

Think of the complexity of the process.

How would you determine whether a room is available or not. What time of day would you ascertain this? To whom would you allocate the room i.e. against what criteria? How would you arrange transport? How would you pay for it? Who would cover the insurance?

Given that this would necessarily be a day-by-day exercise, how many people do you think it will need to administer and run the programme? To whom would they report, and how would their success be measured?

Wouldn't it be simpler and cheaper just to provide more accommodation as per Kev's proposal?

>>An alternative to trading in LSL might be to have a universal and portable scheme.<<

You may see LSL as being designed "to help workers get a break from the grind of work and bring them back refreshed after a few months off". The employer views it as a reward for ten years of commitment to the company.

Why would I want to reward years of loyalty to someone else?

As an employer, I start accruing LSL on my balance sheet after five years, and encourage that leave to be taken after ten.

If someone fronts up for a job carrying with them nine years of accrued LSL, will I be allowed to take that into consideration?

After all, if he's on $50k, I would immediately have to take on board a balance sheet liability of $13.5k, and only a year later, let him go on over two months of paid leave.

Seems a touch unfair, especially as his previous employer would be able to write back the same amount into his P&L.

And don't even think of suggesting that the liability must travel between jobs. While it sounds superficially do-able, what happens when there isn't an immediate next employer? The opportunities to rort would be legion.

Totally impractical.

You've never worked in business, have you Passy?

“may find themselves in a situation very soon where they're sitting on negative equity”.

Not the first time tnhat has happened…. Look back to the last time the socialist swill were the fede3ral government and you will see the early 1990s were when prices fell and negative equity happened.

The wage share of GDP – not much to comment on when the important figure is not the wage share of GDP but the discretionary component of that income value… left in peoples pockets and the Liberals were working to leave more there, the swill are hell bent on increasing taxation as they have done already (luxury car tax, alcohol mix drinks tax) and intend for the near future… carbon tax… despite the massive surpluses being generated following a decade of liberal fiscal responsibility (but for how much longer?).

“But tax and welfare reform, and reform of industrial relations - can spread the burden more fairly.”

No point in pretending the government taking a bigger share of the national economy, through taxation will increase the size of the economy. Aggressive taxation regardless for the noblest of aims or the most venal, like making sure no one can aspire to higher than that proclaimed by the socialist levelers, only stifles the spirit and reward of those with the ability to invent and create.

The very source of the innovation and new jobs which will employ people is murdered in the crib… but do not worry, we will all share, equally in the misery of socialist squalor.

Back to the drawing board Tristan, I know it is hard, using crayon, but do your best and present again... but if you offer more of the same we can respond with more of the same....

Pericles, no reason why a system like the construction industry LSL system cant work. Pay into a central bank, then take-out as compensation while you take your leave. Problem would be entitlement increasing over the time period. But I agree with you - LSL was always a REWARD for long service. It cant be taken until 10 years, and is lost even at 9 years unless the employee is made redundant. Annual leave is designed to refresh workers, and smart employers encourage use of annual leave for this purpose (not to mention the increasing payout liability if leave is not taken regularly).

There is not a shortage of housing in Australia and there is not a price crisis either. Its a matter of perspective. Yes, Sydney prices are pure theft, but that's because all and sundry want to move/live there. Have a look at house prices at say Quandialla (central west NSW), or Barmedman just down the road. Prices range from $8,000 - $90,000 (yes the first one really is 4 figures, not a typo) for a family home. Of course there are few jobs, but there are also plenty of people who dont need a job. Larger centres are not far away, there are local supermarkets, pubs and sporting facilities (albeit country style), visiting doctors. And the cost of buying (see dont even have to rent) is more than affordable. There may not be a huge resale market if you want to move on, but at $8k for the whole price, just abandon it - who cares. What I am basically saying is that if we find incentive for people to repopulate areas that have been largely abandoned, then housing for all will become more affordable - and we will suffer less from the contraction in real means that is yet to come.

Pericles, I have another "bizarre" suggeston. Make public transport free.

And do that as apart of an integrated strategy that taxed the profit bludgers to pay for increased social spending on health, education, transport and housing.

Even more bizarrely, let's democratise society so that production decisions are determined by the majority.

And all this SME bleating about mandated and transportable LSL. Gee, the sky is going to fall in. "I will have to bear someone else's costs if the person I employ has almost ten years service." But swings and roundabouts - you'll also pass on those costs when workers leave your employ before ten years is up.

Pericles asks if I have ever run a business. No Pericles, I just ran the ATO's input into international tax reform very successfully for 4 years.My turn for a question. Have you ever worked in the community sector Pericles?

I certainly don't consider free public transport to be in any way a bizarre suggestion, Passy.

I'd back it.

I assume of course that the existence of free public transport would not preclude the existence of commercial services to supplement it? That's fine, then. And no-one will suddenly decide that those commercial services are barred from direct competition with the public routes? Good. After all, the fact that the public services are free should be disincentive enough to compete with, right?

So, how many routes would you run, Passy? And how much taxpayers' money would you invest in them? I don't mean the exact number, of course. But given that there is no practical upper limit to the volume of service you could provide if you wanted to, what measurement would you use to determine that point at which you say enough, no more?

Where would you draw the line on the lesser-frequented routes, that cost you ten times more per-passenger-mile than the popular ones, but are used by pensioners to get to bingo?

Saying "free public transport" is pretty simple. Providing it to a satisfactory level - given how many definitions of "satisfactory" there can be - is not.

But it's do-able, with sufficient political will, and intelligent planning.

Regrettably, the same does not apply to these other ideas of yours. At least, not in their present form

>>an integrated strategy that taxed the profit bludgers to pay for increased social spending on health, education, transport and housing<<

Define "profit bludger". Then tell us all - because we live in a democracy - what level of increase we are talking about. Then tell us where the money will be spent.

Voilà! You are now an aspiring politician.

I'll ignore the bit about centralizing the means of production, you were probably only teasing.

>>My turn for a question. Have you ever worked in the community sector Pericles?<<

No, only in the commercial world.

But in return, do tell - do you consider running "the ATO's input into international tax reform" to be "working in the community sector"?

Fascinating.

Pericles

Thanks. You are deliberately misunderstanding me. My work in international tax was as an adjunct to big business.
My work in the community sector is separate. Tenancy advice is not international tax.

Some transport figures. Here in Canberra we subsidise the bus system to about $70m per year. Fares bring in $20m, so free bus routes as they currently exist would cost $20m. There would need to be planning for increased use (especially in peak hours), extra buses and drivers and non-hub to non-hub transport. Establish the principle and work from there. If needs be, increase rates on the richer suburbs (including mine) to help fund it.

Profit bludgers are those people who live off the labour of others (ie those who own the means of production, the factories, mines and offices and so on and make the decisions about what to do with the surplus (i.e. profit) workers create.)

I was serious about competition leading to monopoyy. It is the logic of the capitalist system

Passy,

"The development of caplitalism saw the destruction of the rights of the many to property in the name of the few."

No it didn't. What a load of baloney. You need your head read if you think that.

Capitalism meant that if you worked hard and saved your pennies then you could gain more property. This is the basis of the notion of property rights - you earnt it, so it's yours.

A lack of understanding of that basic concept throws your entire argument re property rights out the window.

"Some neo-conseervatives argue that tax itself is an attack on private property rights. Do you agree, BN?"

Firstly, I would never call myself a conservative - neo or otherwise. However I think that there is a place for tax as there are functions that the government should supply.

What I oppose is:

1) Inefficient governments and policies which require the tax take to be higher to support that inefficiency. I.e. I oppose tax churn

2) Governments getting involved in private matters more than absolutely required, and especially if it impinges on private property rights

"Those who rise to the top are those who sole idea of betterment is individual greed and aggrandisement. Eddie Groves, Adler, Wheatley, George W are hardly shining examples of outstanding leaders."

Does that include the gentleman in Qld who has committed to give away his 340 million dollar fortune? You're making generalisations here which simply aren't true.

"Who elected these busines leaders?"

What a stupid question. Are you elected the owner of your house? Don't be so ridiculous.

"If the RBA cuts by 25 basis points, banks should cut home loan rates by more than that."

Why more? They've all cut by the same amount as the RBA. Have their borrowing costs gone down? I don't know, but I'll bet not by much, and that's represented by all 4 having different variable homeloan rates.

"If you can trade off LSL then LSL is under threat for other workers. By individualising entitlements you weaken the ability to defend them in the best way - collectively."

More rubbish! LSL is governed by legislation. If I chose to cash it in then that doesn't change the legislation. Don't be so alarmist Passy.

"Even more bizarrely, let's democratise society so that production decisions are determined by the majority."

After the last couple of comments of yours, I'm beginning to wonder whether you're being serious here or not. And then I come across the comment above... I'm just astonished. You're out there Passy - I'll give you that. Again I'll say it: thankfully Labor distanced themselves from the far left and so we don't have to worry about ideas like this except in this sort of hypothetical debate.

"Have you ever worked in the community sector"

Sure have - I worked for a while with mentally disabled (yes, they use that term) people in supported employment. Those people loved being able to get out and be productive, to gain a level of independance and to earn their own money for which they could do what they wanted.

Why do you ask?

Interesting terminology.

>>My work in international tax was as an adjunct to big business<<

"As an adjunct to"?

In what way were you "joined to" big business, Passy?

I'm merely curious how an employee of the ATO becomes "joined..."

Your description of a free bus service for the Canberra area is interesting, but incomplete. My concern with services of this kind is not where they start - because you are right, $20m as an additional subsidy to an already loss-making venture is a drop in the ocean - but where they stop.

When you pay for something, it has value.

When you get something free, it becomes a "right".

On day one, everyone will be pathetically grateful.

Day two, they will ask for more frequent services, at different times, and to different destinations. And you no longer have the defence "hey, that would be far too expensive".

You casually refer to "non-hub to non-hub transport" as if it were a trifling add-on, hardly worth mentioning. Once you look into it though, you will find conflicting demands, conflicting priorities, and more disputes on what is "important" than you can shake a stick at.

There are some benefits from working in a commercial environment, and understanding the difference between price, cost and value is one of them.

>>Profit bludgers are those people who live off the labour of others (ie those who own the means of production, the factories, mines and offices and so on and make the decisions about what to do with the surplus (i.e. profit) workers create.)<<

You're kidding, right?

According to you, I am a profit bludger, because I chose to invest all my hard-earned cash, plus take out an overdraft, plus reduce my salary lower than some of my employees, in order to build a business for myself.

That was over ten years ago. I still have the overdraft. I still pay myself less than some of my employees. Over that time I have provided gainful and interesting employment equivalent to over a hundred man-years.

If that's bludging on your planet, mate, then you are beyond contempt.

Pericles

Where does profit come from? The labour of workers. Capitalism is a system in which the value workers create is expropriated by bosses.

The possible (partially untaxed) increase in the value of your business over the last ten years is built on exploitation - of your workers and yourself.

If that puts me beyond your contempt, so be it. I am not here to win your love, but rather to debate and exchange ideas. If my ideas challenge your Weltanschauung, live with it. No doubt the landed gentry had the same reaction in feudal times when their privileged position came under challenge, at first in the realm of ideas and then in the realm of action.

As to my former role, read the Review of International Tax Arrangements (RITA) documents. The basic philosophy of the international tax reforms was to reduce compliance costs for business.

Administratively the ATO could have upset that apple cart. We didn't, in part because of my leadership.

You know too Pericles, there are people who habitually accept change then use the argument - oh but of course, it won't work because... and undermine completely the principle. You seem to be a rainmaker when it comes to free public transport. Let the sunshine in.

I suspect the same arguments your raise arose (and arise) with free public secular education.

BN, the establishment of capitalism in England for example saw the destruction of common property. It involved driving peasants off the land into the cities to become wage slaves. You can see the same process going on today, for example in China, or in times gone by in Stalinist Russia.

My question about who elected the business leaders is an important one. Why should legal ownership of business give you the right to determine what is invested, where, who works, who doesn't and so on. In one sense you prove my point that capitalism is profoundly undemocratic becuase the realm of production is off limits to societal decision making in the interests of society (ie off limits to full democracy.)

Expropriation of surplus value creates a number of conundrums as it relates to liberty and economic democracy...

To beging with - I believe ordinary workers and citizens ought be able to invest their savings as they wish.

On the other hand - this creates a contradiction - between the aim of ending exploitation - and the exploitation by the working class - in the case of pension funds and the like - "by itself"...

Given this - and accepting that ordinary workers should be free to invest as they wish - I don't think the Marxist aim of brining all production - by degrees - into the hands of a worker's state - is possible or desirable...

That said, there are a number of ways of deepining economic democracy, providing for the needs of workers and citizens.

For instance: pension funds/wage earner funds; tax credits and support for co-operative and mutualist enterprise; government business enterprise....These manyfold examples of democratic economic control - can effectively bring economic power into the hands of ordinary workers and citizens - even although the mechanism of explotiation remains...

Thereafter, though, even while exploitation remains - social and individual needs can be provided for through the provision of a social wage; and by the supportitive mechanism of the welfare state...
And the combined, conscious and mobilised citizenry - can challenge 'class rule'...

What bothered me recently - was seeing Brendan Neslon on TV - saying the Liberals supported privatisation 'in principle'... Under Menzies and Fraser the mixed economy was taken for granted...

Today neo-liberal ideology is so-entrenched - that no exception to the rule is even considered - even where natural monopoly in public infrastructure - and competitive enhancement via GBEs - can enhance the economic and demmocratic gains the everyone.

I think you are onto something, Passy,

Sorry, typo.

I think you must be on something, Passy.

You cannot seriously believe what you write, surely? It is all slogan, no substance, no connection with the real world at all.

>>Capitalism is a system in which the value workers create is expropriated by bosses.<<

You have a point, of course, even though "expropriate" is by nature pejorative. What you fail to take into account is that capital simply would not be available without the "expropriation" factor. Which is, when you get down to it, nothing more than taking a percentage.

>>The possible (partially untaxed) increase in the value of your business over the last ten years is built on exploitation - of your workers and yourself.<<

There's that pejorative term again. Exploitation.

I am offering a fair exchange of their no-risk labour - which they are free to apply wherever they wish - for the use of my capital. Which, incidentally, as with every business under the sun, is not without risk.

What, would you suggest, is a fairer alternative? I have the concept of a business that fulfils a need in the community, I take the risk, I employ the people - where's the "exploitation" in that?

The contempt, incidentally, was in response to yet another of your pejorative terms - bludger.

bludge v.t.: to be lazy, idle, inactive; evade work or responsibilities

That's pretty insulting, all things considered.

>>I am not here to win your love, but rather to debate and exchange ideas. If my ideas challenge your Weltanschauung, live with it<<

It is clear that insults inform your concept of a debate. Your ideas are so inept in their construction, they can hardly stand up, let alone challenge anything.

But you really are kidding, aren't you?

A brief glance at the RITA documentation proves that, quite conclusively.

Paragraph headline: "Attracting equity capital for offshore expansion"

Equity capital, Passy? Surely not?

Nope, sorry, you're just another weekend marxist who enjoys the sound of his own voice.

"BN, the establishment of capitalism in England for example saw the destruction of common property. It involved driving peasants off the land into the cities to become wage slaves. You can see the same process going on today, for example in China, or in times gone by in Stalinist Russia."

Ugh... the oversimplification of the 'estalishment' of capitalism is enough to make me want to lose my lunch. You're inferring that a switch was flicked and suddenly Capitalism appeared. It was nothing like that.

For starters, don't mistake 'common property' with individual ownership, and certainly don't mistake it with 'common labour'. Lots of people worked in these communial areas but that didn't mean that they owned any of it. Also, don't think that'wage slaves' were new 'slaves' - there was plenty of other slavery at the time. This was yet another silly statement of yours Passy.

Speaking of which, I note you didn't respond to my comments on LSL (being entrenched in law) or on banks... why is that?

"Why should legal ownership of business give you the right to determine what is invested, where, who works, who doesn't and so on."

Let me turn that around. Why does your legal ownership of your house give you the right to stop people walking in your front door? I think you'll find the answers are very similar.

"In one sense you prove my point that capitalism is profoundly undemocratic becuase..."

Exactly. You have no business stopping people walking through your front door! You should call a meeting of the local community (read: society) when people want to come in or not - let the community make that decision.

It's preposterous.

I've never said that capitalism is democratic. You can see that with your own ownership of your house. You (and perhaps your family) make the decision who walks in the front door - not society at large, and not democratically.

Methinks your being somewhat hypocritical if you own a house and you don't hold referendum on who should walk in the front door.

Thanks Pericles and BN. I think when different world views clash we can be tempted to respond with name calling. It's time to move on.

Tristan, maybe we are revisiting groundhog day with our discussion about exploitation and superannuation.

Superannuation flows from the exploitative process, from the very nature of the capital/labour divide and the wage relationship which is disguised slavery in the guise of free exchange.

Since superannuation flows from the essence of capitalism it cannot be a tool for the overthrow of capitalism. And if present experience is any guide, so far in Australia it is not even a tool for the reform of the capitalist system.

I know that you will argue it can be, and I guess that might be so, e.g. if there were mass movements of workers demanding radical change for society. But even if superannuation can be used as a pro-worker tool, how does that overcome the very fact of exploitation and all that flows from that?

BTW Passy, I came across this recently and it is about the only way that I can think of you getting to the classless society that you covet:

http://www.youtube.com/watch?v=YKHzFWkH0Po

'... everyone is finally equal... The strong wear weights, the beautiful wear masks and the intelligent wear earpieces that fire off loud noises to keep them from taking unfair advantage of their brains.'

Passy “Where does profit come from? The labour of workers. Capitalism is a system in which the value workers create is expropriated by bosses.”

The equipment, “machines” and “buildings” and “systems”, an employer buys and utilizes to improve the productivity of the “workers” needs to be seen as direct “contributors” (and in many cases competitors) to the total value “created by workers”

The payroll taxes, “expropriated” from the employer by government reduce the value of the workers contribution.

Of course, the “workers” are quarantined from the “risk” costs associated with any capitalist venture.

Passy you talk some garbage sometimes and that is the most simplistic rant of the discredited left that you have come up with for a long time.

BN “everyone is finally equal... The strong wear weights, the beautiful wear masks and the intelligent wear earpieces that fire off loud noises to keep them from taking unfair advantage of their brains.'”

Exactly

Socialism cannot ensure the masses equality with the excellent, except by hindering the excellent to the point we share the mediocrity which is the only promise socialism aspires to.

As dearest Margaret said

“Let our children grow tall, and some taller than others if they have it in them to do so.”

Its like this, we can employ the tall ones to change the light globes but in a socialist society no one is allowed to grow that tall, so everyone suffers and we all live as equals, in the dark.

"Where does profit come from? The labour of workers. Capitalism is a system in which the value workers create is expropriated by bosses."

The other thing that always comes to mind when I read things like this is whether the 'workers' should have to cough up when a business isn't profitable.

You don't hear the lefties decrying this, do you?

Dear Passy...

You're right that superannuation is not ideal... To begin with, it involves risk... Secondly, it reproduces inequality in retirement, and may in the future undermine public pensions...

Instead, I would prefer 'citizens investment funds': working within a social charter...And with pension funds supporting a public pension system with a fair means testing system...(less severe than currently)

And you're right - that such investments can invole exploitation - as understand in the Marxist sense. (extraction of surplus value)

But if there are many policies supporting a mixed democratic economy - then such an economy can develop to the point where there is no longer any coherent economic ruling class...

By this I mean a mixture of GBEs (Government Business Enterprises) citizens investment funds - supporting public pensions, services, infrastructure; co-operative and mutualist enterprise - supported with tax concessions and cheap credit...

And such measures can be complemented by progressive taxation - including inheritance taxes or wealth taxes - to break down class stratification...

Amongst this - so long as individuals have the liberty to invest as they wish - exploitation will not be fully neutralised... But nevertheless, the consequence could be a 'good society': and a genuinely democratic one also...

After all this, I'd love to see Tristan's considered opinion on disbanding the State governments and handing certain powers "up" to the Federal government (such as the Murray Darling, and streamlined national Departments for education, transport, health, child protection and law enforcement), while handing other powers "down" to local councils... either as they are or amalgamated.

Local councils could integrate rubbish collection with Biochar biomass energy generation and local farming support. Australia faces a national emergency with the end of oil, and it's time to consider just how many billions of dollars we are wasting on duplication in the current State system. How about it Tristan? Time for a few weeks off to write another paper? I for one would love it.