Crispin Hull

It was a busy weekend, so it was good to slump in front of the TV news on Monday night. In Sydney.

I had been helping my daughter buy a car. She had trawled several internet sites and listed the possible cars according to price, make, model, kilometrage, suburb, picture, and half a dozen other elements in the advertisements. She had clipped a few newspaper ads, though they had less detail.

At the tailend of the news came the finance. Job ads were up, according to the ABC’s finance reporter, quoting the ANZ job advertisement index.

The unemployment rate rises and falls and the ANZ job advertisement index usually shows trends a couple of months in advance. But, unknowingly, it is showing another more profound change – again well in advance.

For several years now, the index has measured both newspaper and internet job advertisements. The trend is unmistakable. The number of newspaper ads are falling as a proportion of total job ads, and in some places falling in absolute numbers despite the increase in the labour force.

The most recent figures show 100,700 jobs advertised on the internet per week compared to just 21,413 in newspapers. It was a record for internet job advertisements – a record that seems to be broken with each new month’s figures. A year ago the internet jobs were around 65,000 a week.
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The Canberra property market has been ensnared in the legal system on two counts in the past week: tax treatment and the anti-gazumping legislation.

First to tax.

It would be difficult to devise a more expensive, cumbersome, time-consuming and unsatisfactory system of dispute resolution than the English-Australian legal system.

A week ago a Canberra couple’s taxation matter was resolved in the High Court – eight years after they put in the tax return.

It was not a difficult case. The facts and issues could be explained in half an hour. The couple borrowed some money to buy an investment house and a house for themselves. Each house had, say, a $200,000 mortgage on it. The interest on the investment house mortgage was tax deductible. The interest on the residence mortgage was not. All the bank cared about was that the total debt never exceeded the $400,000 and the total interest on that was paid each year. Let’s say the interest was 10 per cent, for ease of explaining what the couple did. In the first year, they paid $40,000 to the bank – the notional total interest. But they told the bank to apply all of that money to paying off the capital on the residential loan while allowing the investment loan to blow out. So in Year Two the investment loan outstanding was $240,000 and the residential loan $160,000. At the end of five years, the residential loan would be cut to zero, but the investment loan would have blown out to $400,000. In Year One their tax deduction was just $20,000 (only the interest on investment loan). By Year Five, however, their tax deduction was $40,000 because according to the bank all the $400,000 owing was on the investment property.
Continue reading “2004_06_june_forum for saturday property tax”

Not much can be done about housing affordability, but something could be done about fairness in property tax.

Labor cannot make much out of housing affordability, even though the Government said this week it intended to do nothing.

The Government was responding to the report by the Productivity Commission that it commissioned in August last year.

It rejected changes to capital gains tax and negative gearing that, combined with high marginal income tax rates, the commission pointed to as major drivers of the surge in house prices since 1996.

Labor cannot do much about this because it, too, has rejected changes to those taxes for fear of a backlash by aspirational voters. Further, the commission got stuck into state and territory governments over stamp duty and all of those governments are Labor and all have presided over increases in those duties.

Any attempt by Labor to appeal to people shut out of the housing market will be met with the obvious response that Labor presided over hideously high interest rates in the 1980s and is therefore not in a position to talk.

In all, it is not a bad result: both sides of politics agreeing to do nothing about a so-called crisis. It is not a bad result because when governments do something they almost invariably make it worse or cause a whole range of other unforeseen adverse consequences.
Continue reading “2004_06_june_forum for saturday productivity comm”

You had better watch out for yourself. And watch what you eat.

The law of negligence continues to turn in Australia. It is turning away from insisting people and corporations look after others to a regime of greater personal responsibility to look after yourself.

Mind you, no-one is out there screaming about judge-made law or about unelected judges usurping the rule of law and the elected Parliament. But in the past four or five years the judges have quietly gone about the business of changing the law.

This week the High Court held that a licensed club was not liable to woman who got massively drunk and got hit by a car while wandering in the middle of the road on her way home.

The reason for the silence about judges making law is because most people would think the ruling made good sense. You only get screams about judges making law from people who disagree with the result, as distinct from the way the result was achieved.

But unelected judges do make law, and they make it in a social context. Some judges deny this. They say they merely apply the law. They say they never respond to cries in the media and elsewhere about events in the world. But how else do you explain the changing direction of the Titanic of the common law in recent times?
Continue reading “2004_06_june_forum for saturday drunk loses”

This column is written by a journalist. We rank 22 in a list of 26 in an Australian Readers’ Digest survey published this week about Australia’s most trusted professions.

Politicians are at the bottom, just above them are car seller and real-estate agents. Lawyers are on 21. Ambulance officers, fire-fighters and assorted medical and help-giving professionals are on the top.

The poll sampled 1500 Australians in a population of 20 million. Pollsters were not rated among the professions. Perhaps that is because the vast majority of the population, asked about the accuracy of a poll of a mere 1500 people in a population of 20 million, would laugh at the poll’s obvious absurdity.

And they would be wrong.

The problem with polling is not so much whether the sample is representative of the whole, but whether the opinions extracted are worth anything.

A sample of 1500 people, if selected randomly, will provide a chillingly accurate assessment of the opinion of 20 million people’s often-worthless opinions.
Continue reading “2004_05_may_forum for saturday professions”

Are you an outward-looking, achievement-oriented professional with excellent representational skills? Can you provide strategic advice on complex issues? Have you a proven track record in management and leadership?

This is a direct quote from a job advertisement from the Department of Employment and Workplace Relations for a Senior Executive Band 1. It appeared in The Canberra Times last Saturday. The advertisement told us that the department “is recognised world leader in the field of innovative employment policy and service delivery using advanced technology to support a major national network of contract service providers”.

The person who gets this job “will manage a Branch within one of the Groups focussed on increasing labour market participation, maximising employment outcomes, or reducing frictional unemployment, through strong policy development and managing a wide range of employment services . . . ”.

And so the sludge goes on.

It is almost impossible to tell what the job is. We are told it pays an astonishing $160,000 a year.

Next to this advertisement, the Health Insurance Commission advertises for “team leaders”. The advertisement says: “Focus: Lead a small team responsible for undertaking HIC’s financial management functions with strategic focus on internal management reporting or business pricing and modelling in accordance with the Branch Business Plan.”
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The laudable aims of the 1970s and 1980s tax changes are now a mess of inefficiency and political corruption, as the Budget highlights.

The Government will bombard households with cheques in the next few months.

“Look what a wonderful Government we are. Vote for us before you realise it is all a mirage.”

What were these laudable aims?

The way the Government treated families with children changed.

Before, a taxpayer with a dependant child got a tax deduction. Usually, the higher-earning member of a couple (usually the man) took the deduction. The theory was that because it was controlled by the man it did not go to children, or at least not without a fuss, so it should go directly to the mum – sorry, principal carer.

The Government also recognised that sole parents had special difficulties which the tax system should provide for.

Nowadays both these benefits have been directed to the person (usually the woman) who does most of the bringing up of children – more accurately directing the help. Very laudable.
Continue reading “2004_05_may_forum for saturday budget tax”

I was privy recently to a conversation between two recently retired women (mid to late 50s).

They were complimenting each other on their hairdos. Before long each had admitted she no longer used fancy shampoos and conditioners, but just soap.

The conversation then went to clothes, household gadgets and all the paraphernalia of the modern consumer world. It seemed they were impervious to the babbling of advertsing. Since then, I have noticed that retired, partially retired and portfolio workers in general consume much less though they are capable of treating themselves to something special every now and then.

The portfolio workers are those who no longer work in a full-time job but have several part-time jobs or consultancies and have to wonder where the next dollar is coming from.

It is difficult to get detailed spending habits according to age and employment status, but the anecdotal evidence suggests the obvious.

What this means for government worth looking at especially in this week of Budgets (Federal, ACT and Victorian).
Continue reading “2004_05_may_forum for saturday ageing and the gst”

Australian elections are usually very close.

Last election the Coalition won 50.95 per cent to Labor’s 49.05 per cent, on a two-party preferred basis. That, is after you distribute all the preferences from voters who voted for minor-party and independent candidates. In 1999 the Coalition managed to win more seats even though it polled fewer votes than Labor: 49.08 per cent to 50.92 per cent on a two-party preferred basis. A similar thing happened the other way in 1990. If just a few votes in a few seats change hands, the destiny of the nation changes, too.

Even when the difference in the number of seats won by the main parties indicates a landslide, their popular vote is still quite even – rarely more than a few percent apart.

So it is difficult to say what might tip a political party over the line.

In these circumstances the ABC’s Lateline host Kerry O’Brien should have been less off-hand when he said during an interview with Opposition Leader Mark Latham: “When it comes to the crunch, supporting a republic isn’t going to win you the next election. It’s much more likely to be bread and butter issues like tax, isn’t it?”
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Labor’s plan to slash the National Capital Authority has ACT Ministers and officials rubbing their hands with glee. Developers are also quietly chortling.

The people of Australia and the people of Canberra, however, should be mightily concerned.

Labor plans to restrict the NCA’s role to the Parliamentary Triangle and the Australian War Memorial. It argues that a wider role would result in unnecessary duplication and that ACT authorities answerable to the ACT electorate are capable of doing the job.

But the national elements of Canberra are more than the triangle and the Australian War Memorial. These wider elements are not the property of just the people of Canberra; they are the property of all Australians. They require a national body with planning expertise answerable to the national parliament. A local body answerable to only the local Parliament and voters can easily ignore national questions to the detriment of the broader Australian community which has an interest in the national capital.

One of the best examples came on the very day that Federal Labor announced its plan to slash the NCA. The ACT Supreme Court halted work on the Gungahlin Drive Extension.
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