Money only represents human potential.It is just an idea or the oil that lubricates the economic engine.With Globisation came the enticement of cheap goods and the loss of manufacturing in the West.So the concept of free trade has put many western countries in serious debt.

We have a Balance of Payments debt over $600 billion,even with record sales of resources.For very working person we have a foreign debt of $60,000.00.Just the interest alone is almost $6,000.00 pa for each working person.The cheap products from Asia have a surrepticious price which we have ignored at our peril.This debt is compounding every year.

Our failure to nurture home grown industry in the persuit of hedonestic short term gratification is reflected in this present reality.

China actively backs and encourages home grown industry,we put every legal,union and Govt obstacle in it's way to ensure it's demise locally.We are in so much debt that we cannot afford basic infrastructure.The surplus in the future fund used to be $90 billion.It is now halved.$700 billion would be needed just to back bank deposits.

Our debt per person is very similiar to that of the US.We should not be too smug in assuming that our more regulated banking system will save us.

Money actually represents debt because that’s how money is created in the modern monetary system.

The concept of money (as most understand it) is fundamentally incorrect and has changed over time.
Cash is no longer a token that is backed up by Government-held gold or silver and each dollar of capital now supports (and represents) somewhere between 20 and 30 dollars of debt. Only 3% of America's capital exists in hard currency. The rest is on paper or in cyberspace.

The notion that this global financial calamity has been brought on soley by a number of people who couldn’t meet their mortgage obligations is not seeing the big picture. It's the property bust that brought the overall problem out in the open.
The assets (subsequently of lesser value) are still there and effectively owned by the lending institutions. It is they who have lent more money than they had but it’s we who now have to shoulder the burden and bail them out.

Globalisation is just one of the things that made this possible. Greed and consumerism is another – but it’s the system itself that’s flawed. We have just witnessed an era where the media actively promoted a “get in now or miss out” and “get rich quick” sentiment and corporate CEOs remuneration over the last 25 years has risen from representing 45 times to 400 times the average workers annual salary.

It was never going to last.

Now where the Banks are going to get all this bail-out money?
When the US government wants money, it issues Bonds to their Reserve Bank. The Reserve in turn "creates" the money on their behalf.

Therefore the bail-out money comes from the Banks themselves, with a new era of rising inflation as a result.

I have always considered "money" to represent "deferred consumption".

Problem is the deferrment comes with some inherent costs called "inflation".

One way of avoiding the "deferment costs" is to borrow up and consume in advance.

During times of inflation the net beneficiaries are those who can borrow, such as house owners. They watch the value of their house increase with time, a hedge against living in a rented house and leaving their residual savings in a bank account.

Again the whole basis of Negative Geared investment applies a similar rule of an inflationary benefit hedge.

For those with "balls of steel", they can even borrow up big and pursue a margin scheme, investing heavily today in share which are down along way from where they were yesterday and selling tomorrow at a handsome profit.

Be a wicked speculator, you might clean up and you will be doing a public service in stabalising share prices which have been in freefall.

On the other hand you might loose all you have and them some.

(Like I said, Balls of Steel)

The difference between a boom and a recession is the amount of confidence ordinary people have in their immediate future.

Krudd and Co are managing by knee jerk,

Just last March it was "the devil inflation" and we must trim spending by building a budget surplus and hiking up interest rates to take the heat out of the bursting economy.

Today it is totally the opposite,

reduce interest rates as fast as possible and Our Kev playing lady bountiful with $10billion worth of taxpayer sweeteners, to pump-prime and restart "the ailing economy".

Well the helcian days of Liberal financial management are further in the past, Kev and Co are getting used to doing donuts in the vehicle of state.

They say a week is a long time in politics.

I wonder what next week will bring?

More 720 degree spin outs and knee-jerks from the all-pro team of Jerks.

wobbles,

The system you describe was turbo-charged in 1974, when the World moved from Brenton Woods (1944)to protect the US from offshore liabilities.

Arjay, you have to separate our current account and our trade
account here. Our trade account is actually not so bad, but our
current account is bad, due to Australians not saving much.

So we borrow huge amounts offshore, on which we have to pay interest,
or dividends from Australian companies, which are paid to investors
offshore.

IMHO one reason why Australians don't save much, is because our
taxation system gives them no incentive to save, so they would
rather spend it.

If the bank pays you 7% on your fixed deposit, inflation will
take half of it, taxation the other half. So you are effectively
left with nothing in real terms.

If Govt allowed for inflation in their calculation of taxation,
there would be a real incentive to save, but they don't, as they
make too much money from it. So instead, we borrow those funds
from nations where there are plenty of savers, like SE Asia.

The more we borrow, the larger our current account deficit.

Arjay,

According to the Bureau of Statistics, our current account deficit, as of the June quarter 2008, is $12.8 Billion. http://www.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2008/097.htm&pageID=003&min=wms&Year=&DocType=0

I'm not sure where you got your figures but they don't seem right at all.

Secondly,

You say >> " failure to nurture home grown industry ... "

Absolute rubbish. From federation until the Keating Era, Australian gov'ts sought to give local industries an advantage by instituting tarrifs. This protection from the real economy meant not only did Australia have to pay higher prices for our manufactured goods. But our industries, which no longer needed to be competitive, rusted away. No one looked at new and better ways to do things because they were insulated from competition. When they were finally exposed to competition many failed. The rest caught up fast and today we can compete globally. The manufacturing sector has GROWN from 10.1% in 1983-1984 to 17.8% in 2003-2004.

Your analysis of the global economic crisis is off the mark. Debt which finances capital growth is an investment and a good and proper use for that facility. The problem, as pointed out by others isn't so much that the lenders were allowed to lend way more than they had on deposit, it is that the bottom fell out of housing market. The assets which the bank held to secure the loans were no longer sufficient to cover the coast of the loan. This caused a chain reaction.

The other problem was the mortgage backed securities, which separated the borrower from the holder of the loan. Banks and other financial organisations did not know to what extent they were exposed to the American mortgage market and hence to the subprime fiacso.

Without the subprime lending, which is the fault of the banks and their customers, and the repacking of these mortgages into MBS securities we would not be in this predicament today.

Col,

I usually agree with you on economic matters, however I wonder how you can suggest that we should let the banks etc collapse when it could lead to a collapse of the entire financial system

Paull "I usually agree with you on economic matters, however I wonder how you can suggest that we should let the banks etc collapse when it could lead to a collapse of the entire financial system"

the Collapse of the entire system, I am not sure that would have been the outcome.

I certainly prefer the recent words from GWB that they consider the US funding to be tactical and not strategic and are seeking to have it repaid and the SU government interest in banking removed.

Governments have too much influence and power over what we do.

Whilst some might like the idea of a safety net, one wonders what would happen if government stayed out of it compeletely?

For the USA, instead of encouraging or organising loans for people who banks would not normally extend to, if they left it in the hands of the bankers to resolve and balance the "opportunity" with the "risk" on a case by case basis?

I recall in UK the government got involved in managing mortgages during a credit squeeze, which meant when I moved house to work in London, I could not get a conventional mortgage because all available funds were only available for first time buyers (Duhhhh) and those like me had to find alternative solutions to our borrowing needs.

It was all a load of bollocks, "government" by stupid dogma and decree and bugger individual merit.

Paul.L.Permo Drive an Aust invention has recently had a propsed grant of $5 million cancelled by the Rudd Govt.Similtaneously Toyota has been given 20 times this amount for the development of their Prius which is not fully developed.The US Govt want Permo Drive which is proven technology that makes diesel motors 20% more efficient by recycling brake energy.The Rudd Govt just ignores the reality.It will be financed by foreign forces.

There are numerous examples of Aust inventions being bought by foreign powers because our Govts are just too stupid and lack the capacity to recognise real innovation.We were recently leading the world in solar technology but our Aussie born chinese star was offered a deal he could not refuse by China and we just sat idlely by consumed by our impotence.

We were the leaders in computer technology in the 50's,nothing came of this because Govt is just too self serving and focused on short term advantage.

I know people who are competing against the likes of Taiwan in machining,they will spend hundreds of thousands on a few machines that have to run 24/7 with almost no profit.Even with low tarrifs they have our Unions ,OH&S the legal disease,insurances,Govt regulation and taxes that don't exist in these Asian countries.The only advantage they currently have is language ,being local and perhaps quality.

Regardless of the classification of current account deficits and our terms of trade,we are in serious debt no matter how much spin we conjure up to justify our stupidity.

*There are numerous examples of Aust inventions being bought by foreign powers because our Govts are just too stupid and lack the capacity to recognise real innovation*

Arjay, what you are saying is that Govt should have the talent to
pick winners and I have yet to see any Govt officials with that
ability. Usually it lands up with lots of taxpayers money, being
peed up against walls.

There is quite a bit of venture capital in Australia, but you need
to have a good story to tell and to tell it well. Personally I
prefer investors to make those judgements, where their money is
on the line, then some Govt. bureaucrat spending my money and he
risks nothing.

As Kerry Packer pointed out, Govt has yet to show that if we
give them any extra, that they will spend it wisely.

Yabby,
Kerry Packer at least had the power of choice as to whether he paid his share of taxes and it seems that he preferred that his money went toward Accountants fees rather than to the community that financially supported his business interests.

No matter, we paid the bill for his share ourselves.

Arjay is sadly correct about the trail of lost opportunities - as well as semiconductor and computer technology to aeronautics and black-box flight recorders, the story is always the same. How much drug research have we given to the big Pharmaceutical companies for free to develop into expensive drugs to sell back to us over the years?

Then again, who in Government is qualified to make such decisions?

Rache “his money went toward Accountants fees rather than to the community that financially supported his business interests.”

Accountancy is a recognized and honourable profession.

The costs of acquiring professional business advise is an historically recognized and legally deductible expense of business.

Lord Chief Justice Denning (at a time when the UK House of Lords was still the Supreme court of Australia) is on record for declaring
(paraphrase) Taxation is an imposition and of every individual is entitled to engage in whatever legal arrangements avoid or minimize their liability to pay tax (tax avoidance is not tax evasion).

So I fail to see what criticism you can possibly make of Kerry Packer for doing everything he did to avoid paying tax, particularly as he is no longer alive to challenge you.

As to the loss of Australian innovation to Australian manufacturing, well its like this

I supply services to (among other sectors) Australian manufacturing and have been here long enough to understand, Australia has both a physical problem and a perception problem.

The physical problem is Australia has a domestic population of 20 million, USA has a domestic population of 300 million.

Physically, the economies of scale and the market opportunity which anyone, balancing the risks of a commercial venture, will realise them more readily in a market 15 times the Australian size and hence reducing their risks on innovation in “getting it to market”.

Perceptively, much of Australia’s manufacturing has been set up as the subsidiary of overseas entities. Much of the belief of Australian manufacturing is entrenched in the misperceived belief that they are here to service only the local market. Few have invested in acquiring real understanding of overseas markets.

Regardless of that and independent of innovation, we have a massive opportunity in the business of secondary processing of the stuff we presently sell as raw material, however, a lot of wussies play the “environmental” card against some of these secondary processes, so less demanding overseas nations benefit from Australia’s intransigent attitude and inability to challenge the tree huggers and similar travelers.

*No matter, we paid the bill for his share ourselves.*

Rache, I once saw somewhere how much tax that Kerry in fact still
paid, despite minimising his tax. It was still in the hundreds
of millions of $, so I doubt that you paid for his share :)

Col Rouge: << So I fail to see what criticism you can possibly make of Kerry Packer for doing everything he did to avoid paying tax, particularly as he is no longer alive to challenge you. >>

All the ethics of an amoeba.

This from someone who refers to less fortunate people as "swill".

CJ Moron “This from someone who refers to less fortunate people as "swill".”

No

I have never used such a description or anything like it, to describe people because they are in circumstances less fortunate than my own.

However such misrepresentation is typical of what we have come to expect from you, a midget among men.

Concerning "Swill" I have attached that description to those who deliberately flaunt the Laws of Australia, by attempting to migrate here “unlawfully”.

I see no merit in extending to them any courtesy or benefit because of their complete and selfish disregard for our legal system.

They have, through their arrogant lawlessness, qualified for the contempt of every law abiding Australian and therefore are well suited to be considered “Swill”.

This “fetid swill”, who pay people smugglers money with intent to evade Australia’s lawful migration controls

risk our health from the introduction of communicable diseases, like tuberculosis,

risk the introduction of criminal activity by professional criminals and gang members sneaking into Australia,

as well as selfish “queue jumping”, which increases the suffering of those genuine refugees who stoically wait in line in the most dire of conditions to be accepted for migration properly.

They qualify for the title "fetid swill" because of their attitude and conduct, not their circumstances.

Like I said of you previously, you are giving morons a bad name,

And I note a few other posters are offering you similar feedback.

However, I do believe you are too arrogant and stupid to take it on board, so doubtless I have not heard the last of your inane misrepresentations and drivel.

as to the "ethics of an ameoba",

"Ethics" is something which your sort of swill usually limbo dances under and

An Ameoba is a life form which, if you worked hard, you might one day aspire to.

Keep em coming, Moron

Col Rouge

"Concerning 'Swill' I have attached that description to those who deliberately flaunt the Laws of Australia, by attempting to migrate here 'unlawfully'."

The overwhelming majority of people you refer to so contemptibly as 'swill', or unbelievably as 'fetid swill', are refugees in desperate circumstances whose endeavours to seek asylum are perfectly legitimate. The only laws they are 'breaking' are those imposed by a fearful and vindictive government, itself in contravention of longheld and widely-accepted international conventions when enacting those laws. You have no understanding of refugee issues at all. Your ignorance is exceeded only by your arrogance and rudeness.

"And I note a few other posters are offering you similar feedback."

Well, I'm not noticing it. If it is occurring, it would have to be in the order of a 99:1 ratio compared with the amount of negative feedback directed towards yourself. For most of us I'm sure, the more you swipe at CJ, the taller he stands.

Bronwyn

I tire of Col's constant referencing to refugees as 'swill' or CJ as a 'moron', combined with his regular doses of self-aggrandisement, makes his posts vile and devoid of any credibility.

That he now blames low-income people wanting a home of their for the Wall Street melt-down is further indictment of his ability to blame everyone, thinking that he is making himself appear superior.

WRONG!

Col, you could easily be mistaken for a Flat Earther:

"For the last month, most of the world has been watching the Wall Street gang drowning in their own greed as they threaten to pull the rest of us down with them. However, while we have been distracted, the Flat Earth Society has developed its narrative to explain the crisis.

In the Flat Earth version, the real villains in the story were the public/private mortgage giants Fannie Mae and Freddie Mac. Prominent Congressional Democrats like Senators Charles Schumer and Chris Dodd, and Representative Barney Frank, are cited as accomplices. According to the Flat-Earthers, the problem wasn't sleaze bag bankers pulling down tens of millions a year pushing predatory loans to people who didn't understand them; the real problem was Congressional Democrats, who wanted the government to help the poor and minorities buy homes...

....no one should shed any tears over the collapse of these two giants - the top management and shareholders got what they deserved - it is equally ridiculous to lay the blame for the financial crisis on the shoulders of Fannie and Freddie...

...Fannie and Freddie made a conscious decision to dive into the junk in order to protect their market share, which was being seriously eroded by the aggressive tactics of private giants like Citigroup and Merrill Lynch..."

Blaming low-income people (the most vulnerable) for a clearly market driven phenomenon is nonsense. This is especially true because the crisis is obviously due to neo-lib lack of government regulation and oversight. Most of the players in this greedy game are in the private and not the public sector.

Ooops.

Due to word limit & lack of editing function OLO, I forgot to quote my source:

http://www.alternet.org/workplace/102964/the_flat_earthers_try_to_pin_financial_meltdown_on_fannie_and_freddie/?comments=view&cID=1034943&pID=1034298#c1034943

Fractelle,

Maybe if CJ attempted to make a positive contribution to the debate instead of standing on the side lines carping, he wouldn’t find himself a target quite so often.

Whatever Col has said in the past, his categorisation of queue jumpers as swill has some merit. Please tell me why you think it is acceptable to take these people who get granted refugee status over people who are at least as deserving, and who have abided by the law. You socialist types would be screaming bloody murder if wealthy Australians were rewarded for behaving like that. Imagine the uproar if, when you were injured, you could bribe your way into the emergency room at your local hospital, ahead of all the others waiting patiently, by offering money to a facilitator.

That’s what illegal refugees are doing. They are depriving ALL those legitemate refugees, who are waiting in their home countries for their forms to be processed according to the rules, of a fair go. The old system rewarded those who were wealthier and cavalier about the law, and punished those who were poor and law abiding. But by all means tell me why these queue jumpers deserve to be processed before those who wait.

Secondly, I think the “FLAT EARTHER” terminology should rightfully be applied to the socialists who have NO comprehension of economics whatsoever.

You reference this >> “Fannie and Freddie made a conscious decision to dive into the junk in order to protect their market share, which was being seriously eroded ..."

This is ABSOLUTE nonsense. First, Fannie and Freddie owned or guaranteed HALF of all the mortgages in the US. Secondly, the gov’t directed them to give loans to poor people. And they were given rewards for doing so. http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html.

Maybe you should actually have a REAL look into this issue instead of relying upon AlterNet. Unless you’re the sort who believes that all of the media besides the socialist websites is in the service of the “Military industrial Complex”. If that’s the case, let me know because I am wasting my time.

*Spokesman Brian Sullivan said the agency and Congress wanted to increase homeownership among underserved families and could not have predicted that subprime lending would dominate the market so quickly.

"Congress and HUD policy folks were trying to do a good thing," he said, "and it worked." *

Interesting article Paul L. We get these feelgood types in govt
offices, many who wear their hearts on their sleeves. The law
of unintended consequences invariably strikes and bingo, you have
a disaster!

I've seen it time and time again coming from Govt and its a real
problem. Sadly the public service is loaded with them.

Bronwyn “are refugees in desperate circumstances whose endeavours to seek asylum are perfectly legitimate.”

Excepting that they have arrived here with intent on circumventing the migration officials and are “UNLAWFUL” entrants

“The only laws they are 'breaking' are those “ . . .

enacted by the LAWFULLY Constituted Government of Australia

“You have no understanding of refugee issues at all.”

I do not need to understand refugees.

I am simply applying the same legal standards to these UNLAWFULL entrants as I apply to anyone else, myself first.

As for “Your ignorance is exceeded only by your arrogance and rudeness.”

The arrogance of people who ignore the laws which I hold myself accountable to is what is contemptible.

As for rudeness, believe, I have not even tried to be rude to you.

But rest assured, you will know when I do.

Fractelle “I tire of Col's. . . .”

your stamina is something which I do not give a brass razoo about

“he now blames low-income people wanting a home of their for the Wall Street melt-down”
And
“Blaming low-income people…”

Please QUOTE me where I have blamed anyone by either name or social status for the financial crisis.

I have merely criticized anyone (regardless of income or level debt or socio-economic standing) who has accepted a loan which they either cannot or never intend to make the contacted repayments on.

But, inspired by your unwarranted and arrogant criticsm of me, I will rise above the occassion and declare

IF THOSE PEOPLE WHO DEFAULT ON THEIR LOANS,

HAD LIVED UP TO THEIR RESPONSIBILITIES AND NOT WALKED AWAY FROM THEIR FINANCIAL OBLIGATIONS IN THE FIRST PLACE,

THERE WOULD NOT BE A PROBLEM AT ALL.

And I do not give a rats where there are placed on the socio-economic scale.

I suggest you read the very sound analogies and advise which PaulL has offered you. Then I suggest you go take a couple of prozacs and have a rest.

I would also observe “Alternet” has another description

“TISH for BRAINS”

and you seem to be living up to it.

Thanks Bronwyn and Fractelle, but I'm afraid Col's beyond redemption.

Interesting that Paul.L refers to "illegal refugees", while the odious Col Rouge continues to screech that they were "UNLAWFULL (sic) entrants". Paul may well be ignorant of Australia's obligations under the 1951 United Nations Geneva Convention on Refugees not to penalise asylum seekers who would otherwise be in Australian territory unlawfully, but Col has no such excuse - I educated him on that very topic only last week.

http://forum.onlineopinion.com.au/thread.asp?article=7899#125099

Since Australia is still a signatory to that convention, Paul's terminology of "illegal refugees" is oxymoronic - if a bona fide asylum seeker enters Australia by whatever means, their presence is not illegal, Col Rouge's bombastic sputtering aside.

Also, I'd suggest that Col invests in a dictionary - poor spelling is even more noticeable when the error is in capitals, and "flaunt" doesn't mean what he seems to think it does.

Since the nineties US GDP has doubled.Only a select few have enjoyed this new wealth.The middle class both here and the the US is shrinking.We have the problem of growing Govt and taxation and a share market that concentrates wealth in too few hands.40% of Aust of working age receive some form of social security.We have over 700,000 on DSP,350,000 single parents and 450,000 on the dole.Where are our workers?The most profitable industries such as banking,insurances, and legal services are our least productive.It is all about an elite just creaming it off the top in both private and Govt circles.NSW Govt has never has so much money,yet we are a basket case economically.

When people are put on the treadmill of survival for too long,they stop trying and crime becomes a social as well as an economic problem.Add to this the fall in education standards and we have a Western Society in serious decay.

They way out is far more discipline,getting people back to work,cultivating our own industries,reduce taxes and giving people incentive to save.We don't have to have debt if we have the discipline to think nationally,instead of swallowing all the Globalisation BS.Our country must come first

*Where are our workers?*

Thats a good question Arjay. Why don't those people out there on
social services, take the jobs on offer and instead we need to
import 457 workers?

I put it to you that Aussies have had it far too good for far too
long. Today, work is optional. Alot of doting parents gave their
kids everything, but no discipline. The net result is working
8 hours a day doing anything manual, is beyond alot of these people.
Its just too hard for them!

I heard of one kid recently, accusing his parents of child abuse,
as they refused to buy him a mobile phone.

*instead of swallowing all the Globalisation BS.*

Globalisation is not BS, its common sense. Lets take a
simple example. Would you be better off, if you had to pay
8000$ for your computer, to have it manufactured in Australia?

I put it to you that your standard of living would go down, as
the cost of goods that you consume, would go through the roof and
their quality would detiorate at the same time, due to lack of
competition.

Australia needs to do those things, where it has a comparative
advantage. As it is, even in those industries, jobs cannot be
filled, as some of them are not 5 minutes down the road from where
some of the unemployed live. Sheesh, how terrible, people would
actually have to get off their butts and move house.

The real problem in Australia is that today expectations are way
too high and we are bringing up a bunch of softies, who don't
appreciate how great they really have it in this country. They
have come to expect life on a plate in fairyland and many are in
for a rude shock one day.

I agree with Arjay that toxic loans are only a symptom and have done some research into the cause which is a complex mix of greed, ineptitude, neo-liberalism and the fantasy of continually increasing profit.

How will Australia fare?

I remain optimistic that we will cope better than America, but I really have no idea just how embedded the Wall Street has been with Australian organisations and government. No doubt the full extent will be revealed over the next two years. I can only hope that new regulation will create greater transparency in the finance sector and less opportunity for exploitation - getting rid of negative gearing would be a good start.

>>>

Col "I do not need to understand refugees" Rouge

And very little else.

Your overreaction to my post was as vindictive as it was pointless. You don't use this forum to discuss you use it to grandstand and boost your fragile ego.

Even by your standards you have reached a new low without contributing a single salient point to the topic.

As for Alternet, it is an independent news service which sources articles from many reputable journalists. But Col wouldn't know this as research has never been his forte.

Fractelle,negative gearing is a legimate business expense.Why should any investor or business pay tax on the interest that banks charge us?Eliminate we negative gearing and you will have no houses.37% of a house land package is made up of state taxes and charges.In NSW we have a shortage of housing already because of taxes.

Would you like the NSW Govt to build your house just like the rest of the failed infrastructure projects in this State?They will build you a cottage for 3 times the cost of private enterprise.Because of all their own regulations and fear of litigation,the few elite private enterprises who are asked to tender,jack their prices enormously.China could do the same contracts for a tenth of the cost.We have ourselves in a stupid bind.Govt waste ,regulation and just plain stupidity.We also lack the courage to do what is right for the common good.I don't think that the term "common good" has tenure or meaning in any of our bureaucracies.

The other factor is the State Govts have restricted supply of land to maximise their own profits.They have become just greedy self serving fat cats whose prime occupation is counting their super and anticipating retirement.

Banks were once a source of loans to buy houses and finance businesses as their prime purpose.Each child at school had a Commonwealth Savings Bank pass book.Now Banks are another share on the Stock exchange.Now some youngsters have never saved anything in their life and credit cards are so easy to come by, they don't have a need to save.When they wanted to buy a house the Commonwealth Bank needed proof of their savings habits to show they had 25% of the loan they required saved as a deposit.So many differing opinions on what has gone wrong now. It's really one word -savings.

Col Rouge,
I apologise if you think I was having a go at accountants. I actually have three in my family and all are ethical and trustworthy people.

I take it that moving manufacturing off-shore to save costs is also a perception problem.

I used Packer as an example of those for who have methods of tax minimisation (if not avoidance) that are not accessible to the average taxpayer and for who the payment of tax is regarded as somewhat optional.

How much money is the ATO currently chasing from that end of town at the moment?

Yabby, I’d like to know your sources. Mine say that KP's personal income tax was embarrassingly low. My sources also have a few things to say about his “Goanna” period dealings which are less than savoury.

Rache.

Packer Company Tax.
10% in 1992
http://www.theage.com.au/news/opinion/the-taxing-art-of-bludging/2006/01/02/1136050387120.html

Nil in 1998
http://www.smh.com.au/news/business/james-packer-weaves-that-old-tax-magic/2007/08/22/1187462357171.html

*Yabby, I’d like to know your sources. Mine say that KP's personal income tax was embarrassingly low.*

Rache, no doubt Kerry's personal income tax was low, for he owned
and controlled all sorts of companies and paying company tax makes
more sense then paying personal tax.

His tax affairs were regularly discussed in the financial press.
Over time, huge amounts were still paid, even though he minimised
what he had to pay.

FYI Kerry simply felt that Govts were not very wise in spending his
money and the present 10 billion$ give away kind of proves him
right.

Yet he was a very generous fellow, when he believed in a cause.
Kerry had a great fondness of animals for instance and I know
personally of one particular project, where he quietly pulled
out his cheque book and signed a cheque for 1/4 million $ and handed
it over, but he did not want it known publicly. I only happen
to know, as somebody whom I know, was passed the cheque to bank
it for the organisation.

Businesses of course don't only pay income tax, they pay huge
amounts of all sorts of taxes and charges to Govt. From payroll
tax to stamp duty on every insurance account, they cough up on
a continuing basis, as Govts know that they can tax business with
relative electoral impunity, something that they cannot do with
the general public.

So Rache, I doubt that you paid Kerry's share for him, for he paid
all sorts of taxes in huge amounts. Did he try to minimise what
he paid? Sure he did, just like most people

Diploman you have defined the crux of the problem.We have replaced the savings account with a debt account called the credit card.We have become slaves to debt and many banks/financial institutions will go down,but their CEO's and directors will take the money and run.