Wednesday, May 5, 2010

Placing your trust in govt and mining CEOs

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You might have expected a defense of our freedoms from a Liberal Party. Rhetorically they are the people one would tend to look to for such a defense. But the best they can do comes from Andrew Robb, Liberal Party President (if I'm not mistaken):
"This is a monstrous action and my expectation is that this won't come to the parliament until next term. My expectation is that it would be either dumped or fundamentally changed".
You have to understand that 'explicit' ideology is so old-fashion. They prefer instead the pragmatic, behind closed doors approach which does not alienate voters who are morally ambivalent about principles. The problem is that parliamentarians are going to love the idea of government controlling the extra cash. The idea that its negotiable is a problem. The fact that Liberals are ideologically non-committal is a problem. This is despite the fact that Liberals have all the rhetoric about freedom on their website, but note how it does not translate into action. They just describe it with adjectives like 'abhorrent'. It never leads to any 'verbs' or education. That is what this website is about. We place the ideology back in liberalism.
This is why representative democracy ultimately leads to fascism. Its all about numbers and not about principles. Principles are so 1960s. Well ok, 1920s since the principles of the 1960s were arbitrarily constructed.
The justification for this intervention by the government is of course to take what is readily available, and what can otherwise not be withdrawn. You cannot move mines. Really its extortion. Consider that the tax will mean that the mining industry will be paying 55% in the dollar, whilst based on reports, Google is paying almost zero tax in Australia, by transferring profits using clever accounting to Ireland.
We have long complained about the unfairness of the taxation system and the arbitrariness of it, and the fact that one arbitrary measure leads to another as business finds loopholes. You can patch up arbitrary law which have no context. The arbitrary is arbitrary because it does not relate to the facts of reality. That's why there are always holes in it.

The government has suggested that the 40% tax would be levied upon the excessive or 'super' profits of miners from 2012 onwards. The proceeds will be used to finance corporate tax cuts, boost retirement pension savings and build infrastructure.

The problem with this is that there is no need for government intervention on these matters. These companies can fund their own infrastructure, and should be required to do so. Why do we want governments, with no business acumen, to be building railways and ports. In their hands it will be simply corruption of people and the system. Retirement savings are the concern of retires...why should miners fund these. By their very existence mining companies are already funding savings in Australia by pushing up incomes, property prices, etc. Mind you, the government is artificially doing that all by itself. This policy is itself an effort to force savings in the country. If land was freely subdivided, the value of your house would probably halve.

Clearly the mining industry should not be used to finance tax cuts, as they already pay the most tax, and are only targeted because the government is too lazy to make tax cuts. It does not have management skills, so it passes the costs onto taxpayers....usually the weak and vulnerable. In this case the mining industry because they cannot shift their mining projects offshore.

My problem is the approach of the mining industry. The government likes to deal with BHP Billiton and Rio Tinto and Fortescue Metals. Why? Well, because these companies represent:
1. Big business - manager 'CEO' class running global conglomerates
2. Hugely wealthy individuals like Andrew Forrest
Why would voters have any sympathy for this class of people. There are so few 'Twiggy's', so why care? The reason is that this is why government is un-principled and gets away with this type of behaviour, because it targets minorities, who it thinks you will have no consideration for. I have no idea whether Andrew Forrest has any principles, I just think that his life means something to him, so if we are going to have empathy for animals in this day and age, why don't we have any for people, no matter how rich. Because I suspect, and maybe I'm wrong that business is more than money to Mr Forrest, just as your career is more to you than just money. In fact given that Andrew Forrest has more money, I'm willing to guess it means relatively less to him than you. This might make you think, all the more reason to take it from him. But lets ask what impact that might have on his estimate of the parasites who expropriate his money. Ask yourself that, and you will understand why business ethics sux in this country, and everywhere else. Its because you have no respect for their interests, so why should they have any respect for yours. By engaging in this 'dog fight' we all risk moving towards anarchy or fascism. Look at the street riots in Greece because of government debt debacle.
Another problem is having a 'manager' class of CEOs, i.e. The CEOs of Rio Tinto and BHP Billiton, controlling your money as investors. They ultimately have no interest in this outcome. You might think they do because they have share option incentive schemes. The problem is that they have little control over government policy. My guess is that their options incentive will be adjusted to reflect the higher taxes these corporations will make. The implication is that shareholders have no voice....just Twiggy. That lone individual. My guess is that he's been too busy making money over the years to develop any grounded & coherent abstract principles. We live in hope, because I have no confidence in the other 2 CEOs heading this industry 'representation'.
I wanted to be a CEO like Andrew Forrest when I was 13yo. I studied geology, mining, finance, accounting. But I also studied philosophy, and learnt how pathetic people think and could not see myself surviving living on their terms. So I just became an investor, and when I knew what I was talking about ....I started writing. In those days, the Australian Financial Review used to have detailed news about how these corporate entrepreneurs did their deals. The newspapers are simply press releases and mindless editorial these days. No investigative journalism. Industry-prepared pieces with advertising.
Andrew Sheldon
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