Month: October 1995

The Commonwealth snatched income-tax power from the states in 1942 using some artful legal arguments and the war. The theory was that the Commonwealth would give the power back after the war, but it never did. Legally and constitutionally, it still possible for the states to levy income tax, if the Commwealth will let them.

This week Prime Minister Paul Keating said he would propose a referendum to change the Constitution to cement in an exclusive Commonwealth income-tax power so no future conservative government could give any income-tax power back to the states.

The Commonwealth shut the states out of income tax in 1942 with several Acts of Parliament which were upheld by the High Court. Essentially the Commonwealth demanded that the states hand over their income-tax records; that all state income-tax officials be transferred to the Commonwealth and that if any state dared raise an income tax the Commonwealth would impose a 100 per cent tax on that state’s citizens, thus excluding any room for a state tax. The Commonwealth would then return to the citizen any part of the income it did not need. The Commonwealth agreed to give back to the states a share of the tax collected in the form of grants.
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When the head of Australia’s monopoly steel producer, BHP, comments on the state of the Government’s running of the Australian economy, a fair amount of the business community, some politicians but only a few ordinary voters take notice. Incidentally, all of the middle executive of BHP take notice. The political fall-out, in terms of changed policy or a changed perception by voters of the Government is not profound. Indeed it is quite small. In that context, it does not matter that BHP is a virtual monopoly. Nor would it matter much whether the head of one or other of a dozen monopoly or duopoly producers joined the political debate.

It is of consequence, however, when the head of News Ltd, Rupert Murdoch makes political assessments. News Ltd is the monopoly or dominant supplier of print news in Adelaide, Brisbane, Darwin, Hobart, Melbourne and Sydney, owning the major-circulation daily in each. News Ltd also owns the highest-circulation daily national paper. Further, the Murdoch controlled Foxtel is a partner with Telstra in a cable pay television venture that is being rolled out now to Australian homes. It will carry a news channel supplied by a venture dominated by Kerry Packer’s Nine Network. It also owns 14.9 per cent of Channel Seven, the partner in the pay TV news venture.
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He couldn’t help himself. Is that a cop out, or is it in the nature of things? Adrian Powles, respectable lawyer of the respectable and distinguished Sydney law firm, Allen, Allen and Hemsley, was jailed in January for defrauding his clients of nearly a million dollars. He was also engaged in organising an investment plan for Nauru Government bodies which at one stage stood to lose $40 million.

This week, three men pleaded guilty in New York to their part in the Nauru scam which involved banks in Antigua, Singapore and Switzerland. Next week sees the publication of The Allens Affair, by Valerie Lawson, which traces Powles’s life from womb to jail.

On the public plane, the affair resulted in some questioning about the way law is practised in Australia. While looking at that, Lawson’s book engages in the deeper question that has engaged writers for millennia … what causes those deep flaws in human nature that cause such destruction to self, family and friends, bringing shame and ignominy when only a modicum of self-restraint and self-discipline would have resulted in respect and applause.
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The Constitution and the Electoral Act provide the rules about election timing, but there are other practicalities such as school holidays. The Act says an election can only be held on a Saturday.

The writs for an election can be issued at any time the Governor-General accepts the Prime Minister’s advice to dissolve Parliament. It would take no more than a day. Malcolm Fraser in 1983 was made to wait a few hours.

Once the writs are issued, a minimum of 11 days must be given for candidates’ nominations to be received. A further minimum of 22 days must be allowed between nominations and the election day.
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The erosion of my faith in the Anglo-Saxon system of justice began on February 2, 1986, and the O.J. verdict has merely confirmed its loss. On that day, people searching for the body of an English tourist found a baby’s matinee jacket at Ayers Rock. It was identified by Lindy Chamberlain as that of her daughter, Azaria.

I had been part of the media ruck that had covered the case. I hadn’t covered the trial itself, but I covered the Federal and High Court appeals and reported and commented on the many sideshows.

During the Federal Court appeal I became convinced of her guilt. Ian Barker, QC, for the prosecution re-plaited the rope of circumstantial evidence, much of it scientific. His argument was so powerful, I can remember much of it now without going back to the files.
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The Governor-General Bill Hayden made statements this week about the position of the president in a republic. They follow comments about euthanasia, same-sex marriages and his change of mind and heart on democratic socialism.

The question of what sort of things a Governor-General should say is a tricky one. Like the job itself, it is governed by convention, not rules. Mr Hayden can say what he likes. There are no rules to which he is answerable. Rather, if he is seen by the Prime Minister to go over the top, the Prime Minister can ask the Queen to remove him. Nothing Mr Hayden has said or done to date would warrant that. None the less, at the very least, he has dipped his toe into public debate about matters which are clearly matters which are also being debated in the party political arena. And he is doing it in a way that would annoy many people on the Labor side. It could be argued that he has in fact joined a party political debate by directly attacking the model for a republic proposed as part of the platform of one of the major political parties which is opposed by the other major party.
Continue reading “1995_10_october_leader28oct”

Prime Minister Paul Keating resorted to typical hyperbole when he referred to “”donkeys” in the superannuation industry who invest only in blue chip shares. He called on them to invest less in the top 50 stocks and more in stocks lower down the table, especially of new companies in hi-tech areas.

Mr Keating has a point, but only up to a point. Superannuation is primarily about providing secure retirement incomes. Any spin off in extra savings and investment in new industries is incidental to this. Of course, it does not take a donkey to realise that investment in green chips is more risky than blue-chip investment and fund trustees will be held accountable for losses. That said, it has often been the case in Australia’s stock market history that in any decade the performance of the top 100 companies is worst than the performance of the next 100 down. Some stocks are clearly unsuitable for super. However, it should not be beyond the wit of the funds and the Government to devise a scheme whereby risk can be spread sufficiently to enable more investment into smaller companies which would often turn out more profitable than the blue chips … the high flyers would more than compensate for the crashers.
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The industrial dispute at Canberra’s two main universities is solved … for the time being. All along the universities said they could not give more than 2 per cent. It was a case of could not, not would not. The university did not have the money in its budget and the budget was locked in legislative cement by the Federal Government. All along the unions said they would not settle without substantially more. Now, after weeks of disruptive bans, a arrangement has been arrived at to save the face of both sides after such a destructive battle. The university will pay 7.6 per cent. The difference of 5.6 per cent is to come in federal government supplementation.

What if the Federal Government does not give any supplementation? Who knows. Of course, the universities should never have been put into the situation. They were required to engage the union in enterprise bargaining. But the universities are not an enterprise. They have no profits from which to absorb wage increases, or prices with which to pass them on.
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The ACT should resist any bullying by the United States over the proposed heroin trial. The Federal, Victorian and NSW Governments should also ignore any US threat to Tasmania’s $80 million poppy industry which supplies the US legal drug market, though to date it has only been suggested as a possibility.

For a very long time the United States has taken the prohibition, criminal-justice approach to drugs. It has demonstrably failed. It failed with respect to alcohol between 1918 and 1933. Prohibition resulted in organised crime and corruption while consumption abounded. It has failed with respect to narcotics. It has caused organised crime and corruption, and addiction continues.

The US has pushed for international treaties not only to get other countries to cooperate in preventing drugs from entering the US, but also to get other countries to follow the prohibition route by calling for harsh jail terms. Its elected politicians and appointed officials have engaged in an inexplicable crusade for a policy that does not work.
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On a personal level, Bill Hayden, has not received any of the parliamentary pension to which he would have otherwise been entitled since going to Yarralumla. Also his salary was set at some $20,000 a year lower than it would have been if set on the basis of his predecessor because at the time the Government was appealing to all sections of the community to exercise wage restraint. However, on an official level, the annual report of his office, somewhat exaggerated by some press reports, indicates that the running of Government House is costing a figure that would make many Australians uncomfortable. The stark figures are the $517,000 spent on the trip to Gallipoli and the $12 million it cost last year to maintain Government House. The $12 million includes renovations and extra security, but even without them, the office costs 50 per cent more than in Sir Ninian Stephen’s day.

Most other areas of government have come under heavy cuts and cost pressures. The figures presented in the annual report will make many Australians wonder at the functions of the office and whether it requires this level of funding. Whether the head of state is seen as a representative of the monarch or as a symbol of the nation either now or in an impending republic, Australians still want value for money. They will ask: are the number of functions and number of staff all necessary?