Month: May 2003

Suburb 2001 2003 2001-02 2002-03 2003-04 2004-05 2004-05 rates new owner new owner%
name AUV AUV rates rates rates rates new owner surcharge surcharge
Ainslie $147,700 $235,833 $1,306 $1,344 $1,387 $1,422 $1,996 $574 41%
O’Connor $155,400 $240,833 $1,367 $1,406 $1,451 $1,488 $2,035 $547 38%
Deakin $231,267 $340,100 $1,960 $2,017 $2,081 $2,133 $2,811 $678 33%
Kingston $159,967 $239,833 $1,402 $1,443 $1,489 $1,526 $2,027 $500 34%
Chifley $89,200 $152,933 $849 $874 $902 $924 $1,347 $423 47%
O’Malley $197,100 $278,267 $1,693 $1,742 $1,798 $1,843 $2,327 $485 27%
Stirling $84,267 $131,733 $810 $834 $861 $882 $1,182 $299 35%
Weston $78,867 $119,900 $768 $790 $816 $836 $1,089 $253 31%
Charnwood $39,367 $63,233 $459 $473 $488 $500 $646 $146 30%
Hawker $122,467 $176,767 $1,109 $1,141 $1,178 $1,207 $1,534 $326 28%
Spence $47,733 $74,533 $525 $540 $557 $571 $734 $163 29%
Fadden $82,067 $125,500 $793 $816 $842 $863 $1,133 $269 32%
Kambah $62,600 $91,967 $641 $660 $681 $698 $871 $173 25%
Ngunnawal $50,100 $78,333 $543 $559 $577 $591 $764 $173 30%
Palmerston

Not much above the ground is interesting in the French town Epernay.

Hoons in Renaults break the peace of the square. A woman waits for her poodle to poop. Very few old houses or churches – the legacy of war.

But underground is a different story. Since 1743 a vast system of tunnelled cellars has been continuously hewn out of the chalk. Now there are 28 kilometres of cellars storing 108 million bottles of Moet and Chandon champagne in various stages of production.

The undistinguished Epernay – 120 kilometres north-west of Paris – is the centre of the French champagne-producing area. The grapes come from kilometres around, but it is here that the vast portion champagne is produced by a score of producers, Moet and Chandon the best known.

The chalk rock has significant advantages. First, it is easy to cut through. Moet and Chandon began in 1743, well before mechanisation. Secondly, the chalk provides temperature and humidity control – absorbing water more readily than other rocks. In the cellars it is a constant 10 to 12 degrees.

In this environment, champagne – a cold-climate wine – can be stored.

Moet and Chandon (incidentally, impress your friends with the correct pronunciation; the Moet has a pronounced hard T) use three grape varieties: chardonnay, pinor noir and pinot meunier. Others, especially Australian wine-makers find no need for pinot meunier because their chardonnay gives enough roundness and bouquet. Incidentally, Australian producers are not allowed to use the word “champagne” on their labels under a Federal Court ruling that says the word describes wine from the Champagne district in France. Consumers of Australian product have to guess the contents of those strong bottles with wired-in corks.
Continue reading “2003_05_may_moet and chandon”

There is one sure way of destroying Medicare – prevent timely, reasonable changes that ensure Medicare fits changing circumstances.

Labor, the Democrats and the Greens seem to have a mindset that questions the motives of everything the Government does – and along with much of the media commentary, they assume everything the Government proposes must be bad.

Instead, they should look at the merits of what is being proposed. They should look at what is likely to happen if we continue on our merry way not adapting to circumstance. They should look at what is likely to happen if what is proposed is put in place and they should look at what is likely to happen if other proposals are put in place.

Since its inception 20 years ago, Medicare has never come near paying for itself. Last year it cost about $8 billion. The Medicare levy raised about $1.3 billion – just 16 per cent of the cost.

It would be more realistic to reduce income tax by 7 percentage points and increase the Medicare levy by 7 percentage points, so that the resulting 8.5 per cent levy would cover the $8 billion cost. People would then see on their tax returns the true cost of Medicare.

Of more importance, though, is setting out public – as distinct from political — aims for health spending, and getting the system to match these ends.
Continue reading “2003_05_may_medicare changes may 1”

It is harder to find a better example of all that is marvellous and all that is wrong with the Japanese economy than Kansai International Airport.

It is the main airport for Osaka and has become a overnight stop for many Australians using Japanese Airlines to fly Europe.

At once it is an engineering marvel and a catastrophe. At once it gains huge passenger numbers in the air-travel business but is running at an effective loss. It has swallowed up huge amounts of public money and caused massive debt – largely disguised in government-guaranteed bonds.

It was built on a made-made island 5km off the coast and some 50km out of the centre of Osaka. Instead of all the political buck-passing on Sydney’s aircraft noise and new airport, the Japanese Government just poured the money in to create an island in the ocean.

Work began in 1987. The island was finished by 1989 as the Nikkei index hit a record 40,000. The airport opened in 1994. The cost was a staggering $28 billion. Some came from the private sector, but the lion’s share came from local and national governments.
Continue reading “2003_05_may_kansai airport for foum apr 17”

There are advantages to having a Lower House of 650 or so members. The greater number means greater diversity and the more change of far-left and far-right odd-balls to turn up to cause great distraction and amusement.

One of these is George Galloway, the Labour Member for Glasgow Kelvin, or the Member for Bagdad Central as his detractors call him.

Galloway caused distraction and amusement this week after The Daily Telegraph revealed that its reporter in Bagdad had turned up what the reporter alleged were documents showing that Galloway had siphoned off about $900,000 a year from the UN-run Iraq oil for food program and the Iraqis had allowed this in order to buy influence. The Iraqis were obviously unaware that the influence of one maverick MP was perhaps not worth the money.

Galloway denies it and has issued a writ for libel against The Daily Telegraph. He says the documents are forgeries and it is all a plot by a pro-Zionist right-wing newspaper to discredit the left and the anti-war movement.
Continue reading “2003_05_may_galloway for forum apr 24”

This week’s spat between the Government and the ABC over bias and funding is a side show to the real policy question – digital television.

Scraps over bias and funding happen regularly. But when the ABC’s Managing Director, Russell Balding, told a Senate Estimates Committee that the ABC would close two digital services, Fly TV and ABC Kids, because of a funding shortfall, we got an insight into what a monumental foul-up the Government’s digital television policy has been.

Sure, it was a smart bit of politics for Balding to go for the jugular to prove his point on funding. It is a common bureaucratic tactic by statutory authorities when squeezed by Government – cut things which will have a huge impact and make the voters squeal. Kids don’t vote; but their parents and grandparents do. And the young audience of Fly votes.

But the significant point was not the going for the jugular. Rather it was what a pitifully small amount of money the ABC would save by closing these services – just $7 million.
Continue reading “2003_05_may_forum for saty 31 may abc digital”

Access Economics’ David Chessel has a dry sense of humour, even for a dry economist.

We are indebted to him for reminding us this week of the quote from Louis XIV’s Finance Minister Jean Baptiste Colbert. Chessel likened ACT Treasurer Ted Quinlan to Colbert who said that the art of taxation was to pick the maximum amount of feathers from the goose for the least amount of hissing.

Chessel thought that Quinlan’s new revenue measures would create little hissing – the bushfire levy (temporary) and the extra water and gambling imposts on gambling and water (environmentally and socially responsible) and so gave Quinlan a mark of 77 per cent.

Maybe that is true in the short term. But in the longer term this week’s Budget has some contradictions and flaws. Most are not of Quinlan’s making. As he has plucked the goose’s feathers, he was probably pushed too much by the forces of Commonwealth-State (and Territory) financial relations and demands from his colleagues for goose down to feather their portfolio nests.

Trouble is, pluck the goose too much and it will fail to lay golden eggs.

It is a theme of Australian politics that Labor overspends on the right things and the Coalition controls spending with the wrong priorities.

But back to the ACT Budget.

Let’s look at the contradictions.

The socially responsible extra gambling taxes are supposed to discourage gambling. But gambling expenditure for the addicted is not discretionary. The extra tax will merely reduce the time in which the addicted gambler becomes penniless. On the other hand, the extra environmentally sensitive water charge will responsibly reduce water consumption. A portion of water consumption is discretionary and can be controlled (as we have seen in the past few months).
Continue reading “2003_05_may_forum for saturday mayl 9 budget”

As the end of the financial year looms and with the publication last month of every suburb’s average unimproved values we should get a clearer picture of Treasurer Ted Quinlan’s new rates system.

In the past week Quinlan very commendably has taken on board some criticisms and suggestions.

You will have to forgive the figures in the rest of this article, but if you want to go beyond the politicians’ adjectives and adverbs of “fair”, “just”, “reasonable”, “best” etc to the nouns and verbs of what it really means, you cannot escape some arithmetic.

June 30 is the big cut-off date. Those people who settle on their new dwelling after then will be as much as $8,000 worse off over the average stay in a dwelling of 11 years. Even in average suburbs you will be $5000 or so worse off.

This is because those people who have lived in their house for the whole 366 days of the 2003-2004 financial year will continue to have their rates for 2004-05 and subsequent years adjusted by the consumer price index. Those people who buy (and settle) on their new house part way through the year will have their rates for 2004-05 calculated according to the average unimproved value of the previous three years and only in subsequent years will their rates go up by just the CPI. The catch is that in the subsequent years their rates adjustment will be off a higher base. Let’s call the extra a surcharge.

The surcharge, coming off a higher base, has a compounding effect. So someone who buys in Deakin after July 1 will have a surcharge over the neighbours of about $680 in the first year. In the 11th year it will be about $940.
Continue reading “2003_05_may_forum for saturday may 24”

There was no income tax cut in this week’s Budget. In fact, there was an increase in income tax.

It is just a question of the way you look at it: through smoke and mirrors or with a dose of reality.

The so-called tax cuts introduced by Treasurer Peter Costello come into force on January 1, 2004. They nowhere near compensate for inflation. Yes; we had some commentary about bracket creep, but a lot less about the exact extent of it.

The Howard Government came to office with a charter of Budget honesty. It should expand this to include an honest account of bracket creep for each year.

Doing the exercise over the period since the existing rates were introduced on July 1, 2000, to when the new ones come into force on January 1, 2004, reveals that for the past three budgets, Treasurer Peter Costello has INCREASED income tax by a total of about 9 per cent for the vast bulk of people – those on incomes between about $50,000 and $70,000. He has increased tax on the real strugglers on around $25,000 by a whopping 15 per cent. These increases are AFTER taking into account his so-called tax cuts.

The tables tell the story. The figures took a moderate amount of number crunching on an Excel spreadsheet and getting statistics from the Australian Bureau of Statistics publicly available material. Skip the next three paragraphs if you don’t like numbers.
Continue reading “2003_05_may_forum for saturday may 15 bracket creep”