Posted by: jkirkby8712 | November 12, 2011

Saturday, 12th November 2011 – a bit of Saturday news and other issues!

The Test cricket match referred to yesterday, ended overnight, in South Africa, two days early, with a humiliating loss to the Australian team! Less said the better, I think –  final Innings scores were:-  Australia: 284  and  47.  South Africa: 96 and 2 for 236. South Africa won the 1st Test by  8 wickets.

Meanwhile, these are the kind of news reports that really upset this writer – this happened around lunchtime, apparently……………….’Five people have been killed in a fiery crash between a car and truck in Victoria’s western district.Rural Ambulance Victoria says paramedics raced to the scene around 12.45pm (AEDT) at Penshurst, near Hamilton, at the intersection of Hamilton-Chatsworth Road and Blackwood Dunkeld Road. Both vehicles burst into flames on impact, RAV spokesman John Mullen said. He said five people were confirmed deceased. A sixth person trapped in the car was in a critical condition and was being flown to hospital. It is understood that the driver of the truck is one of the five deceased people and the remaining four were occupants of the car. The ages and further details of the victims are not yet available’. These things happen, all too often, best I not dwell on them, when there is nothing I can do to change the event.

It was a relatively lazy Saturday –  bit of a ‘tired walk’ this morning, bit of gardening without too much enthusiasm, washed the car, cleaned the kitchen area, and a bit of reading, etc, etc. There was one thing I read today, that I believe is a step in the right direction in legal circles.

The Victorian Coalition Government has introduced legislation into the Victorian Parliament to reform the law of double jeopardy.  The reforms will mean that a new trial can be ordered where there is compelling new evidence that a person previously acquitted of a serious crime was in fact guilty. The new law will apply in cases such as where there is fresh and compelling DNA evidence, where the person acquitted subsequently admits to the crime, or where it becomes clear that key witnesses have given false evidence. NSW, Queensland, Tasmania and South Australia have already legislated to modify double jeopardy law to allow retrials in such cases, as have the UK and New Zealand.   Double jeopardy laws have prevented a person from being tried more than once for the same alleged offence. In most cases these laws perform a valuable role in protecting an innocent citizen against being the subject of multiple prosecutions, and they provide certainty and finality in the courts. But has been seen in various examples, justice has not always been served through that system. Presumably, the new law will not be retrospective to the nth degree!!

 

The other recent announcement by the State Liberal government that I like the sound of relates to the teaching of languages in our schools. I’ve always felt that Australians travelling abroad, in general present a poor reflection of our nation in that most [of the Australian English speaking population] can in fact only speak the one language, that being English. On the other hand, one finds a much higher percentage of people from European and Asian countries are able to communicate in two or more languages. I’m as guilty of this as anyone, having struggled at secondary school for four years studying French, failing my studies in the end, and basically retaining little of what I learnt!  Now, we read that  Prep students in government schools will be learning a language by 2015. New languages scholarships will be available to government school teachers and teacher trainees as part of the Coalition Government’s plan to increase and improve the teaching of languages in Victorian schools.  Education Minister Martin Dixon  said the Coalition Government was serious about its commitment that all government school students from Prep to Year 10 learn a language by 2025. “Reforming languages education and reversing the decline in languages teaching over the last decade is one of our major

challenges,” Mr Dixon said. “The number of government primary schools offering a language has declined by almost 30 per cent in the past 10 years, which just isn’t good enough”.  I agree completely. These days, if at school, I would be expecting that the emphasise would be on the teaching of Asian languages such as Indonesian, Chinese or Japanese, our nearest neighbours, and amongst the nations where our greatest future spheres of business, culture and other forms of contact can be expected.

 

Finally, on this quiet Saturday, there was another item of a serious nature concerning the mining industry which attracted my attention. A viewpoint, expressed by an organisation called ‘The Australia Institute’ and which appeared in an ‘E’ newsletter put out by my Superannuation Fund organisation [the Australian Ethical Investment and Superannuation Coy], while probably pushing specific agendas of those two organisations, I found presented an enlightening perspective on the affects of our ‘so-called’ mining boom. Of course, statistics can be used to push any particular argument – that may be the case here, however I’ve decided to insert this little piece, written by Dr Richard Denniss, Executive Director of The Australia Institute, which is described in Wikipedia as  a ‘left wing Australian think tank’  [ suggesting a concern for those in society who are disadvantaged relatively to others and an assumption that there are unjustified inequalities], which  conducts public policy research, and is funded by grants from philanthropic trusts, memberships and commissioned research.  The Institute began in 1994 to construct and commission research and policy analysis on public debates and political and social issues and trends. The Institute seeks government, business or union grants to  conduct research and analysis. The institute is based in Canberra.  The following is what Dr Denniss had to say, and I’m not going to dispute his statistics because I don’t know how accurate that they are, though one would expect that a research organisation of this nature would have it’s facts right. It’s perhaps the way those facts are used, that is where problems of interpretation can sometimes arise……………………………………….

 

‘Much has been said about the changing face of the mining industry, where the effects of the boom have been both substantial and positive. But until very recently there has been far less discussion of the impact of the mining boom on the rest of the economy, including those areas which have suffered as a result.
While one might assume that any expansion in the mining industry simply adds to the overall size of the Australian economy, in reality the operation of the macro economy is far more complex. Indeed, much of the growth in mining comes at the direct expense of expansion in other parts of the economy.

According to the findings of a survey by the Australia Institute the average Australian thinks that 16 per cent of Australian jobs are in the mining industry and that 34 per cent of GDP comes from mining. In reality only 1.9 per cent of people work in mining and they produce less than 10 per cent of GDP. The mining industry has undergone a huge boom in the past decade with its employment surging from 78,400 in 2001 to around 210,000 today. To put that in perspective, however, there are around 22 million Australians. In Western Australia 88,000 people are employed in mining, and in Queensland it’s around 62,000 or put another way, 97 per cent of Queenslanders don’t work in the mining industry. Nationwide the mining industry employs slightly fewer people than the leisure and recreation services industry, around one third of the number of people who work in the community sector and about one fifth of those who work in manufacturing.

Of course the mining industry also creates indirect jobs – but there is much less acknowledgement of the indirect jobs that are also created when teachers, nurses and retail workers spend their earnings. But while the mining industry is keen to claim credit for the indirect jobs it creates in other industries, it is not so keen to accept responsibility for the impact of the mining boom on the exchange rate and for the decline in employment in other industries. As the world’s demand for our resources has boomed so too has our exchange rate which has risen from an average US$0.74 in 2004 to over US$1 this year. There has been much said about the potential impact of a carbon price on competitiveness but the increase in the exchange rate has been devastating for major parts of the manufacturing, tourism, education and agriculture industries. The mining boom is also largely to blame for Australia’s relatively high interest rates. When the RBA increases interest rates its goal is not to slow down the mining industry but to slow down the rest of the economy in order to make room for the expansion of the mining industry.  This means that both small businesses with an overdraft and families with a mortgage are paying a high price for the big profits of the mining companies. The fact that 83 per cent of those profits are actually paid to foreigners, like the fact that the mining industry pays one of the lowest rates of corporate tax, is strangely absent from the glossy mining advertisements.

So what, if anything, can government do to insulate the bulk of the economy from the surging exchange rate?
The government could broaden the base of its proposed mining tax to include, for example, the enormous profits being made by gold miners. Having done so, if the government were to create a sovereign wealth fund which invested heavily offshore the short-term outflow of money would take some pressure off the exchange rate. By moving money offshore when the exchange rate is high, Australians will receive a substantial capital gain when the money is brought back onshore when the boom begins to bust. They could also slow the rate of mining expansion. The mining industry is currently planning massive new investments in coal, iron ore, coal seam gas and other mineral extraction.  The faster this expansion occurs the greater the pressure on our exchange rate and interest rates will be. That is, the faster the mining boom is allowed to proceed the greater the risks to the broader community will be’.

 

 

 

 

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