EDITORIAL FRIDAY 27.03.09.
There is something terribly attractive about the whole bikie mythology. It starts with the motorcycles themselves; big powerful machines, often customized to the point of being impressive and even beautiful examples of craftsmanship and artistry. The power and the freedom they both provide and represent have all the appeal of a Hollywood movie. Then there’s the outlaw image, the lifestyle of living free and bowing down to no man. This is especially appealing to our seemingly endemic Australian distrust of authority, and it’s one of the reasons why Ned Kelly remains a popular hero long after his time. They are fiercely independent, relying on no one to settle their scores on their behalf. Finally, there is the camaraderie. Bikies are brothers and are bound together in a way that is perhaps similar to soldiers, or others who have shared common adversity. Altogether, it is a powerful package which provides tremendous allure. The trouble is it’s all hogwash.
What we are seeing now in Sydney is so far removed from the “Easy Rider” fairytale that it should finally alert us all to the reality that if such a fairytale ever did exist it has long ago been supplanted by the thugs and hoods who are in it for the money that comes from drugs and prostitution. Apparently these so called outlaws are nowadays investing in property, wearing jewelry and fancy clothes, and getting about town as if they are rap stars. Well, some of them anyway. If there is anyone left these days who genuinely lives to ride and rides to live, they have been left in the shade by the gangsters.
Even if we were to be tempted to believe in the merits of rough justice and bikies dealing with their own disputes in their own way it should now be clear that such a state of affairs inevitably leads to chaos. Any use of force in a dispute inevitably leads to retaliation, and retaliation leads to escalation, until critical mass is reached and we see the kind of explosion of violence which took place last weekend at Sydney Airport. It’s not an isolated incident, and it won’t be the last until the fundamental problem is dealt with.
There are many issues arising out of this week’s events which need to be examined thoroughly. Airport security is one. Police powers and legislation is another. But the fundamental problem is that too many people fall for the false allure of the outlaw image, and too many believe that fear is the same thing as respect. The fundamental problem is that it is too easy to accept the existence of so called outlaws so long as they leave us alone, while in reality that only encourages them to flourish.
Friday, March 27, 2009
Tuesday, March 24, 2009
Bikies Who Choose To Be Outside The Law Can’t Claim To Be Unfairly Targeted
EDITORIAL TUESDAY 24.03.09.
In the wake of the bikie brawl at Sydney Airport and the spate of shooting attacks in the past week, it would be entirely reasonable to ask if we are safe in our own streets anymore. It certainly appears that there has been an escalation of violence which has now gotten so far out of hand that it randomly and unpredictably threatens the safety of innocent bystanders. That being the case, it is equally understandable that the government’s first response is to dedicate more police officers to the task, and to follow up with new laws to confront the problem.
At the same time, those who call themselves outlaws now seem to be angered that the law is focusing its attention on them. People identifying themselves as either bikers or associated with bikers have called my program to complain that they are being unfairly targeted by the authorities because of an incident which was unplanned, and got out of hand. They have said it was a mistake. While it may have been a mistake, it is a mistake which cannot be undone.
While it would be unfair to describe all people who love bikes as thugs and criminals, it is clear that criminal activity is well entrenched inside the gangs calling themselves clubs. While they keep their activities within the confines of their own circle many people would be happy to leave them to their own devices. Traditionally, this is exactly the attitude that bikies have encouraged through a combination of fear and myth, which leads to a kind of “leave us alone and we’ll leave you alone” trade off. The problem is that such an attitude does nothing to change the fact that the drug dealing, the prostitution, the thuggery all remain illegal.
Having allowed matters to get so far out of hand that the public is now fearful for their safety, it should be no surprise to the bikies that the public is ready to strike back. To whinge about being unfairly targeted is to deny any responsibility or culpability for belonging to a world where being outside the law is seen as an honor, and breaking the law as a lifestyle choice. Well, it may be a choice, but it is a choice which carries consequences, and one of those consequences is that the community commands the right to curtail those activities.
While the move to outlaw gangs who already consider themselves to be beyond the law anyway may meet with criticism for undermining civil liberties, the Premier has announced that he is proceeding with introducing those laws as soon as possible. Along with the other controversial legislation currently before the parliament to extend covert search and surveillance powers to police, the Premier claims these laws will assist the police in putting a stop to bikie violence.
As I have said many times before, we need to be very careful about laws which increase police powers and undermine our rights to privacy and liberty. For that reason it is essential that appropriate checks and balances are imposed including judicial approval of warrants after presentation of evidence to indicate reasonable grounds for secret searches, and even then there are no guarantees that the privacy of innocent people will never be breached through error or abuse of power.
Nevertheless, it seems that the mood of the community is such that people are prepared to accept that risk if it means that random outbreaks of violence and drive-by shootings are stopped.
In the wake of the bikie brawl at Sydney Airport and the spate of shooting attacks in the past week, it would be entirely reasonable to ask if we are safe in our own streets anymore. It certainly appears that there has been an escalation of violence which has now gotten so far out of hand that it randomly and unpredictably threatens the safety of innocent bystanders. That being the case, it is equally understandable that the government’s first response is to dedicate more police officers to the task, and to follow up with new laws to confront the problem.
At the same time, those who call themselves outlaws now seem to be angered that the law is focusing its attention on them. People identifying themselves as either bikers or associated with bikers have called my program to complain that they are being unfairly targeted by the authorities because of an incident which was unplanned, and got out of hand. They have said it was a mistake. While it may have been a mistake, it is a mistake which cannot be undone.
While it would be unfair to describe all people who love bikes as thugs and criminals, it is clear that criminal activity is well entrenched inside the gangs calling themselves clubs. While they keep their activities within the confines of their own circle many people would be happy to leave them to their own devices. Traditionally, this is exactly the attitude that bikies have encouraged through a combination of fear and myth, which leads to a kind of “leave us alone and we’ll leave you alone” trade off. The problem is that such an attitude does nothing to change the fact that the drug dealing, the prostitution, the thuggery all remain illegal.
Having allowed matters to get so far out of hand that the public is now fearful for their safety, it should be no surprise to the bikies that the public is ready to strike back. To whinge about being unfairly targeted is to deny any responsibility or culpability for belonging to a world where being outside the law is seen as an honor, and breaking the law as a lifestyle choice. Well, it may be a choice, but it is a choice which carries consequences, and one of those consequences is that the community commands the right to curtail those activities.
While the move to outlaw gangs who already consider themselves to be beyond the law anyway may meet with criticism for undermining civil liberties, the Premier has announced that he is proceeding with introducing those laws as soon as possible. Along with the other controversial legislation currently before the parliament to extend covert search and surveillance powers to police, the Premier claims these laws will assist the police in putting a stop to bikie violence.
As I have said many times before, we need to be very careful about laws which increase police powers and undermine our rights to privacy and liberty. For that reason it is essential that appropriate checks and balances are imposed including judicial approval of warrants after presentation of evidence to indicate reasonable grounds for secret searches, and even then there are no guarantees that the privacy of innocent people will never be breached through error or abuse of power.
Nevertheless, it seems that the mood of the community is such that people are prepared to accept that risk if it means that random outbreaks of violence and drive-by shootings are stopped.
Monday, March 23, 2009
Laws Don’t Make Any Difference To Outlaws
EDITORIAL MONDAY 23.03.09.
Life within a bikie gang is an entirely different world to the one which most of the rest of us know, and I am not going to pretend that I have any kind of special insight into what goes on, or how the extraordinary events in Sydney up to and including the fatal brawl at the airport can best be dealt with. Most of the time that world and ours are separated by the choices that we make in our lives, but when violence between rival outlaw groups begins to randomly spill over into public places where we usually feel safe then the safety of our own illusions is quickly shattered. At this point the threat to public safety has become completely unacceptable.
It would be tempting to resort to heavy handed tactics, both at the operational police level and at the government level in seeking to address this challenge. One option often discussed is a change to the law making it possible to nominate particular clubs or gangs as being unlawful, making it an offense even to be a member. This approach has been tried in South Australia and has proven to be more difficult to put into practice and still is not actually working. Another approach is to increase specific police powers to facilitate their investigations. Such a law, although not specifically introduced to deal with the bikie gang problem, is the bill to increase the police powers for covert searches.
There are difficulties with both of these approaches. The problem with increasing police powers is that care needs to be taken as to how those powers can be exercised and against whom. It sounds good to say that secret surveillance will be used against thugs and murderers, but the truth is those same powers can be used against ordinary people who may have made a mistake or even done nothing wrong at all. The bill which is currently proposed makes it possible for a suspect to have his premises entered and searched without his knowledge, without the police having any conclusive evidence of wrongdoing. When the word suspect is used it makes it sound easily justified, as if it’s better to be safe than sorry, but there is no protection for the wrongfully accused.
The government is not claiming that this proposed new law is specifically aimed at bikies, but it Police Minister Tony Kelly has said that it is the sort of power that would be useful to police in this case. Perhaps it would, but we should not allow ourselves to fall into the trap of being scared into approving a law which undermines our right to privacy on the spurious grounds that it somehow increases our safety and security. The risk is that in making the police more powerful so that they can protect us from criminals we make them so powerful that no one can protect us from the police, should they ever be tempted to abuse their powers.
As for the South Australian approach of literally outlawing outlaws, it would seem to be a waste of time. Any criminal gang, by definition, already has no regard for the law, and while such a move might make their existence more difficult, it is not going to make any difference to their criminal activities. While I said that I have no special insight into that particular world, it would seem from various reports that there is a new element inside that world which not only has no respect for the law, but also for the existing bikie culture. As long as that is the case the authorities will continue to confront an enormous challenge, regardless of how many laws they pass, although in the long run it is the motorcycle clubs themselves who have the most to lose. In the long run it is their continued existence which will be threatened, not that of the general community.
Life within a bikie gang is an entirely different world to the one which most of the rest of us know, and I am not going to pretend that I have any kind of special insight into what goes on, or how the extraordinary events in Sydney up to and including the fatal brawl at the airport can best be dealt with. Most of the time that world and ours are separated by the choices that we make in our lives, but when violence between rival outlaw groups begins to randomly spill over into public places where we usually feel safe then the safety of our own illusions is quickly shattered. At this point the threat to public safety has become completely unacceptable.
It would be tempting to resort to heavy handed tactics, both at the operational police level and at the government level in seeking to address this challenge. One option often discussed is a change to the law making it possible to nominate particular clubs or gangs as being unlawful, making it an offense even to be a member. This approach has been tried in South Australia and has proven to be more difficult to put into practice and still is not actually working. Another approach is to increase specific police powers to facilitate their investigations. Such a law, although not specifically introduced to deal with the bikie gang problem, is the bill to increase the police powers for covert searches.
There are difficulties with both of these approaches. The problem with increasing police powers is that care needs to be taken as to how those powers can be exercised and against whom. It sounds good to say that secret surveillance will be used against thugs and murderers, but the truth is those same powers can be used against ordinary people who may have made a mistake or even done nothing wrong at all. The bill which is currently proposed makes it possible for a suspect to have his premises entered and searched without his knowledge, without the police having any conclusive evidence of wrongdoing. When the word suspect is used it makes it sound easily justified, as if it’s better to be safe than sorry, but there is no protection for the wrongfully accused.
The government is not claiming that this proposed new law is specifically aimed at bikies, but it Police Minister Tony Kelly has said that it is the sort of power that would be useful to police in this case. Perhaps it would, but we should not allow ourselves to fall into the trap of being scared into approving a law which undermines our right to privacy on the spurious grounds that it somehow increases our safety and security. The risk is that in making the police more powerful so that they can protect us from criminals we make them so powerful that no one can protect us from the police, should they ever be tempted to abuse their powers.
As for the South Australian approach of literally outlawing outlaws, it would seem to be a waste of time. Any criminal gang, by definition, already has no regard for the law, and while such a move might make their existence more difficult, it is not going to make any difference to their criminal activities. While I said that I have no special insight into that particular world, it would seem from various reports that there is a new element inside that world which not only has no respect for the law, but also for the existing bikie culture. As long as that is the case the authorities will continue to confront an enormous challenge, regardless of how many laws they pass, although in the long run it is the motorcycle clubs themselves who have the most to lose. In the long run it is their continued existence which will be threatened, not that of the general community.
Friday, March 20, 2009
Freedom Of Speech Has A Cost
EDITORIAL FRIDAY 20.03.09.
In our supposedly free society, just exactly how free are we? We profess to believe in freedom of expression, freedom of movement, freedom of association, freedom of political and religious beliefs. In reality of course all of these freedoms have some restrictions, essentially because all liberty carries with it a responsibility and those who have difficulty with being responsible make it necessary to have those restrictions to protect both themselves and others.
For example we are free to hold whatever religious belief makes sense for us, but if that religious belief dictates that non believers must suffer or die then that is no longer acceptable to the community, and laws are imposed to prevent that belief being acted upon. It’s a simple and easy to understand example, and almost everyone accepts that as a sensible approach. But what about freedom of expression? That’s an area which can become much more complicated.
The explosive growth of the internet has created a revolution in free speech and freedom of expression which is unprecedented in human history, transcending national boundaries, and of course the boundaries of both good taste and common decency. As a phenomenon it is perhaps the powerful force for cultural and social change in the world, as well as for education and business. But it comes with a dark side; a world that begins with dodgy marketing scams, unregulated gambling and pornography, and extends to encompass pretty much every imaginable aspect of human behavior no matter how extreme.
It is these more extreme elements which have prompted efforts to impose censorship on the world wide web. No matter how firmly we might believe in the merits of free speech it’s very difficult to confront the reality of ten year old kids discovering necrophilia or bestiality without asking if the price of free speech is too high. It would seem reasonable to take steps to head off that kind of exposure of young children to material which is so extreme. And so we have the plan by the federal minister for communications Stephen Conroy to filter access to the internet for all Australians by compiling a blacklist of websites and blocking access to them. The only problem is it won’t work.
It has been reported that already the supposedly secret list has been leaked, and along with the catalog of depravity there are perfectly innocent websites which have apparently been caught up in the sweep. Senator Conroy has claimed that the leaked list is not in fact the official ACMA list, but even so it does highlight the real difficulties that arise in drawing up such a list. On the now disputed list, a dentist in Queensland, a business which provides tuckshop and canteen management services, a tour operator, a boarding kennel, and even Christian websites have apparently somehow been labeled as being so offensive they deserve to be made illegal. If such businesses were to be affected by the censorship plan, it would have serious consequences. Quite aside from interfering with these legitimate enterprises’ abilities to market their services on line, there is the more serious consideration that they are being defamed by virtue of being listed alongside child pornographers as a threat to society.
On top of that is the reality that no list of offensive websites will ever be complete because it is constantly changing and growing faster than anyone is likely to be able to keep track. No sooner than one site is blocked than its URL will be changed, possibly even shifted to a different country, and in any event a dozen more will spring up to take its place. At the same time there are also concerns that the whole process of attempting to filter the internet will actually slow down the network for everybody. It’s not practical, and while it will block access to a great many sites, it won’t and can’t stop them all. Worse, it will stop sites which are not a legitimate threat.
Ultimately, the benefits of freedom of expression far outweigh the risks, and attempting to impose a blunt form of censorship is not desirable for an open democratic society. However, given the legitimate concerns about addressing the most extreme material and the potential impact on children, it is an important debate, and one in which it is worthwhile attempting to find a more practical solution.
That might centre around negotiating an international agreement of minimum standards with reciprocal agreements for enforcement, making the internet world a bit more like the real world where you are free to break the law, but if you do you will caught and punished. Obtaining such an international agreement obviously carries some challenges, but if there is any jurisdiction which still insists on allowing truly dangerous material to be freely available it should be possible to simply block that whole country from being accessed by the rest of the world.
At least that way the boarding kennel in Maroochydore would still be able to advertise its services.
In our supposedly free society, just exactly how free are we? We profess to believe in freedom of expression, freedom of movement, freedom of association, freedom of political and religious beliefs. In reality of course all of these freedoms have some restrictions, essentially because all liberty carries with it a responsibility and those who have difficulty with being responsible make it necessary to have those restrictions to protect both themselves and others.
For example we are free to hold whatever religious belief makes sense for us, but if that religious belief dictates that non believers must suffer or die then that is no longer acceptable to the community, and laws are imposed to prevent that belief being acted upon. It’s a simple and easy to understand example, and almost everyone accepts that as a sensible approach. But what about freedom of expression? That’s an area which can become much more complicated.
The explosive growth of the internet has created a revolution in free speech and freedom of expression which is unprecedented in human history, transcending national boundaries, and of course the boundaries of both good taste and common decency. As a phenomenon it is perhaps the powerful force for cultural and social change in the world, as well as for education and business. But it comes with a dark side; a world that begins with dodgy marketing scams, unregulated gambling and pornography, and extends to encompass pretty much every imaginable aspect of human behavior no matter how extreme.
It is these more extreme elements which have prompted efforts to impose censorship on the world wide web. No matter how firmly we might believe in the merits of free speech it’s very difficult to confront the reality of ten year old kids discovering necrophilia or bestiality without asking if the price of free speech is too high. It would seem reasonable to take steps to head off that kind of exposure of young children to material which is so extreme. And so we have the plan by the federal minister for communications Stephen Conroy to filter access to the internet for all Australians by compiling a blacklist of websites and blocking access to them. The only problem is it won’t work.
It has been reported that already the supposedly secret list has been leaked, and along with the catalog of depravity there are perfectly innocent websites which have apparently been caught up in the sweep. Senator Conroy has claimed that the leaked list is not in fact the official ACMA list, but even so it does highlight the real difficulties that arise in drawing up such a list. On the now disputed list, a dentist in Queensland, a business which provides tuckshop and canteen management services, a tour operator, a boarding kennel, and even Christian websites have apparently somehow been labeled as being so offensive they deserve to be made illegal. If such businesses were to be affected by the censorship plan, it would have serious consequences. Quite aside from interfering with these legitimate enterprises’ abilities to market their services on line, there is the more serious consideration that they are being defamed by virtue of being listed alongside child pornographers as a threat to society.
On top of that is the reality that no list of offensive websites will ever be complete because it is constantly changing and growing faster than anyone is likely to be able to keep track. No sooner than one site is blocked than its URL will be changed, possibly even shifted to a different country, and in any event a dozen more will spring up to take its place. At the same time there are also concerns that the whole process of attempting to filter the internet will actually slow down the network for everybody. It’s not practical, and while it will block access to a great many sites, it won’t and can’t stop them all. Worse, it will stop sites which are not a legitimate threat.
Ultimately, the benefits of freedom of expression far outweigh the risks, and attempting to impose a blunt form of censorship is not desirable for an open democratic society. However, given the legitimate concerns about addressing the most extreme material and the potential impact on children, it is an important debate, and one in which it is worthwhile attempting to find a more practical solution.
That might centre around negotiating an international agreement of minimum standards with reciprocal agreements for enforcement, making the internet world a bit more like the real world where you are free to break the law, but if you do you will caught and punished. Obtaining such an international agreement obviously carries some challenges, but if there is any jurisdiction which still insists on allowing truly dangerous material to be freely available it should be possible to simply block that whole country from being accessed by the rest of the world.
At least that way the boarding kennel in Maroochydore would still be able to advertise its services.
Thursday, March 19, 2009
There’s Gold In Them Thar Parachutes!
EDITORIAL THURSDAY 19.03.09.
If you have taken the time to read the Prime Minister’s essay on the Global Financial Crisis you probably would not be surprised by the announcement from Wayne Swan that the issue of corporate executive pay and bonuses will be investigated by the Productivity Commission. That inquiry will run for nine months, but ahead of any findings it might make the Treasurer has indicated that the government will move now limit any so called “golden parachute” payments to an amount equal to no more than one year’s base pay unless shareholders vote to allow it.
The rhetoric which has come from both the Treasure and the Prime Minister in recent months has been such that stronger measures would not have been a surprise, but the approach which has been announced is both measured and sensible. Critics might suggest that launching yet another inquiry is simply sideling the issue for another nine months, and that if action needs to be taken the government should simply take it. But it would be wrong for the government to do something as dramatic as regulating executive salaries without any proper examination of the potential impact.
Putting the inquiry into the hands of the Productivity Commission means that an independent assessment will be made on the basis of what is good for productivity and for the nation generally, rather than simply making a knee jerk decision to introduce draconian regulations which could very well prove to be counter-productive. All interested parties will have the opportunity to put their case to the Commission, and if there are persuasive arguments for any particular course of action they will be considered.
In any event I seriously doubt that the Commission will ever come up with a proposal to actively regulate salaries as it would be contrary to the proper workings of a free market. But perhaps it might identify areas where the free market has been distorted by corporate practices which leave the ultimate owners of companies, the shareholders, with virtually no power to control what goes on. Either way, there is another far more appropriate instrument available to government to use to influence activity. Tax.
Actually it is the combination of taxes and subsidies together which provide any government with one of its most powerful tools for influencing all forms of community and corporate behavior. If there is a behavior which the government wishes to encourage it can do so with a subsidy or a tax discount, and if there is any behavior which the government wishes to discourage it can do so with a tax. By far the simplest approach to addressing exorbitant salaries is to penalize them with tax.
This is not a new idea. In fact it is the way things used to be. Decades ago the highest marginal income tax rate was 60%, but only those who were paid around 20 times the average wage fell into that tax bracket. Of course in those days there was no capital gains tax, no fringe benefits tax and so on, so there ways to reward high fliers and avoid the higher rate of tax, but at the same time it did mean that there really wasn’t much point in paying anybody a salary 20000 times the average worker as has happened in the most excessive cases to emerge from Wall Street. It was just too inefficient and wasteful to do so, and as such it constituted a regime which actively discouraged unsound business practices without actually banning them. After all, it could be said that any company stupid enough to pay ridiculous money to executives beyond the worth of their contribution deserves to go broke. But not while the shareholders are denied the opportunity to protect their investment by having some sort of control over remuneration, and not while boards of directors are not held accountable for the limp wristed decisions that they make.
As for the matter of the golden parachutes, it’s all very well to limit the size of such payments to one year’s base pay, but even that remains astoundingly generous in the case of executives who are removed because they have failed. Consider the statutory entitlement to redundancy pay enjoyed by ordinary workers. The starting line is six weeks, a far cry from twelve months. Imagine the screams from executives and shareholders alike if every redundant worker was entitled to twelve months pay! It would be considered to be a calamity of biblical proportions, and the obvious reality that no company could afford such a thing would be shouted by the very people who have enjoyed such privileges themselves.
The reality is that none of these corporate executives are in desperate need. If they have been paid a multi-million dollar salary for a number of years and they don’t have something to fall back on then there is something very wrong. So to place a sensible limitation on the ability of such payments to be made without the approval of the people who actually own the company is only sensible. If any individual has done such a great job that he or she deserves a larger reward there should be no difficulty rounding up the shareholder votes to recognize such an astounding achievement.
I have always said that there is absolutely nothing wrong with rewarding people for a job well done. In fact it is essential that achievement is rewarded or else the whole system falls apart. That’s why it is important that the level of remuneration for any position should reflect both the level of responsibility of that position and the skills and qualifications of the person who holds the position, but the problem has been that the buccaneers have been in a position to essentially set their own salaries and the inevitable outcome has occurred.
If you have taken the time to read the Prime Minister’s essay on the Global Financial Crisis you probably would not be surprised by the announcement from Wayne Swan that the issue of corporate executive pay and bonuses will be investigated by the Productivity Commission. That inquiry will run for nine months, but ahead of any findings it might make the Treasurer has indicated that the government will move now limit any so called “golden parachute” payments to an amount equal to no more than one year’s base pay unless shareholders vote to allow it.
The rhetoric which has come from both the Treasure and the Prime Minister in recent months has been such that stronger measures would not have been a surprise, but the approach which has been announced is both measured and sensible. Critics might suggest that launching yet another inquiry is simply sideling the issue for another nine months, and that if action needs to be taken the government should simply take it. But it would be wrong for the government to do something as dramatic as regulating executive salaries without any proper examination of the potential impact.
Putting the inquiry into the hands of the Productivity Commission means that an independent assessment will be made on the basis of what is good for productivity and for the nation generally, rather than simply making a knee jerk decision to introduce draconian regulations which could very well prove to be counter-productive. All interested parties will have the opportunity to put their case to the Commission, and if there are persuasive arguments for any particular course of action they will be considered.
In any event I seriously doubt that the Commission will ever come up with a proposal to actively regulate salaries as it would be contrary to the proper workings of a free market. But perhaps it might identify areas where the free market has been distorted by corporate practices which leave the ultimate owners of companies, the shareholders, with virtually no power to control what goes on. Either way, there is another far more appropriate instrument available to government to use to influence activity. Tax.
Actually it is the combination of taxes and subsidies together which provide any government with one of its most powerful tools for influencing all forms of community and corporate behavior. If there is a behavior which the government wishes to encourage it can do so with a subsidy or a tax discount, and if there is any behavior which the government wishes to discourage it can do so with a tax. By far the simplest approach to addressing exorbitant salaries is to penalize them with tax.
This is not a new idea. In fact it is the way things used to be. Decades ago the highest marginal income tax rate was 60%, but only those who were paid around 20 times the average wage fell into that tax bracket. Of course in those days there was no capital gains tax, no fringe benefits tax and so on, so there ways to reward high fliers and avoid the higher rate of tax, but at the same time it did mean that there really wasn’t much point in paying anybody a salary 20000 times the average worker as has happened in the most excessive cases to emerge from Wall Street. It was just too inefficient and wasteful to do so, and as such it constituted a regime which actively discouraged unsound business practices without actually banning them. After all, it could be said that any company stupid enough to pay ridiculous money to executives beyond the worth of their contribution deserves to go broke. But not while the shareholders are denied the opportunity to protect their investment by having some sort of control over remuneration, and not while boards of directors are not held accountable for the limp wristed decisions that they make.
As for the matter of the golden parachutes, it’s all very well to limit the size of such payments to one year’s base pay, but even that remains astoundingly generous in the case of executives who are removed because they have failed. Consider the statutory entitlement to redundancy pay enjoyed by ordinary workers. The starting line is six weeks, a far cry from twelve months. Imagine the screams from executives and shareholders alike if every redundant worker was entitled to twelve months pay! It would be considered to be a calamity of biblical proportions, and the obvious reality that no company could afford such a thing would be shouted by the very people who have enjoyed such privileges themselves.
The reality is that none of these corporate executives are in desperate need. If they have been paid a multi-million dollar salary for a number of years and they don’t have something to fall back on then there is something very wrong. So to place a sensible limitation on the ability of such payments to be made without the approval of the people who actually own the company is only sensible. If any individual has done such a great job that he or she deserves a larger reward there should be no difficulty rounding up the shareholder votes to recognize such an astounding achievement.
I have always said that there is absolutely nothing wrong with rewarding people for a job well done. In fact it is essential that achievement is rewarded or else the whole system falls apart. That’s why it is important that the level of remuneration for any position should reflect both the level of responsibility of that position and the skills and qualifications of the person who holds the position, but the problem has been that the buccaneers have been in a position to essentially set their own salaries and the inevitable outcome has occurred.
Wednesday, March 18, 2009
Bonus Bungling More Perception Than Reality
EDITORIAL WEDNESDAY 18.03.09.
The federal opposition has been trying for some time now to depict the government as being fiscally irresponsible for splashing too much cash up against the wall in its economic stimulus packages. It has accused the government of plunging the nation into debt, racking up a massive national credit card bill, without delivering sufficient economic benefits to justify the splurge. It has been a message that has met with only modest success, because overall the government has won widespread praise for its response to the crisis and its willingness to take action.
It did seem all the more hypocritical when the opposition was forced to reveal that even if they had been in government they too would have been forced to deliver a budget deficit and accrue a debt which in the larger scheme of things was not much different from the one contemplated by the current government. There is widespread agreement that it is legitimate and necessary for our government to use deficit and debt to fund stimulus packages to both bolster the economy and help shield the vulnerable from the worst of the impact of the global recession.
But it is often the detail which brings even the grandest schemes undone, and so it is with the Rudd government’s decision to dump cash into the economy by way of cash handouts. While it is true that it is quick and can be an effective boost to economic activity, it is an approach that is not without its problems. One of the problems is the risk of upsetting anyone who misses out on the free money. Human nature ensures that there will always be some envy which can accumulate into a political backlash. What’s worse is when those who do receive the handouts are seen to be undeserving.
Following on from the revelation that as many as 60 000 pensioners who live overseas received handouts in the December package, comes the news that the tax bonus due next month will be collected by convicted criminals who are behind bars for anything from muggings to murder, along with tens of thousands of foreigners and expatriates who have worked in Australia during the qualifying period. Such revelations would seem to lend weight to the accusation that the stimulus plans have been ill thought out, poorly targeted, and rushed into effect without proper consideration. Handing out money to foreigners is not going to be seen to do anything to help the Australian economy or to protect Australian jobs, while rewarding prisoners in jail for hideous crimes is just an insult to law abiding people who have missed out on th emoney for whatever reason.
While it’s easy to understand how this state of affairs lends credibility to the criticisms, it amounts to nitpicking to suggest that the leakage of less than one percent of the package into offshore bank accounts somehow invalidates the stimulatory effect on the Australian economy. In practical terms it is negligible. But in political terms it’s a whole lot more damaging. It unnecessarily provides ammunition to critics and provokes resentment in the community. The problem is that the political damage is far worse than the fiscal damage.
How hard would it have been to ensure that free money was only handed out to Australian citizens and permanent residents with a current home address in Australia? How hard would it have been to disqualify prisoners currently in jail for serious offences? By failing to address these matters the government has left itself open to the criticism that it has been reckless with taxpayers’ money, even though the damage is more perceived than real. In politics, perceptions are always important, and the perception that the government has failed to pay attention to detail will inevitably lead to the question of what else they might be getting wrong.
The federal opposition has been trying for some time now to depict the government as being fiscally irresponsible for splashing too much cash up against the wall in its economic stimulus packages. It has accused the government of plunging the nation into debt, racking up a massive national credit card bill, without delivering sufficient economic benefits to justify the splurge. It has been a message that has met with only modest success, because overall the government has won widespread praise for its response to the crisis and its willingness to take action.
It did seem all the more hypocritical when the opposition was forced to reveal that even if they had been in government they too would have been forced to deliver a budget deficit and accrue a debt which in the larger scheme of things was not much different from the one contemplated by the current government. There is widespread agreement that it is legitimate and necessary for our government to use deficit and debt to fund stimulus packages to both bolster the economy and help shield the vulnerable from the worst of the impact of the global recession.
But it is often the detail which brings even the grandest schemes undone, and so it is with the Rudd government’s decision to dump cash into the economy by way of cash handouts. While it is true that it is quick and can be an effective boost to economic activity, it is an approach that is not without its problems. One of the problems is the risk of upsetting anyone who misses out on the free money. Human nature ensures that there will always be some envy which can accumulate into a political backlash. What’s worse is when those who do receive the handouts are seen to be undeserving.
Following on from the revelation that as many as 60 000 pensioners who live overseas received handouts in the December package, comes the news that the tax bonus due next month will be collected by convicted criminals who are behind bars for anything from muggings to murder, along with tens of thousands of foreigners and expatriates who have worked in Australia during the qualifying period. Such revelations would seem to lend weight to the accusation that the stimulus plans have been ill thought out, poorly targeted, and rushed into effect without proper consideration. Handing out money to foreigners is not going to be seen to do anything to help the Australian economy or to protect Australian jobs, while rewarding prisoners in jail for hideous crimes is just an insult to law abiding people who have missed out on th emoney for whatever reason.
While it’s easy to understand how this state of affairs lends credibility to the criticisms, it amounts to nitpicking to suggest that the leakage of less than one percent of the package into offshore bank accounts somehow invalidates the stimulatory effect on the Australian economy. In practical terms it is negligible. But in political terms it’s a whole lot more damaging. It unnecessarily provides ammunition to critics and provokes resentment in the community. The problem is that the political damage is far worse than the fiscal damage.
How hard would it have been to ensure that free money was only handed out to Australian citizens and permanent residents with a current home address in Australia? How hard would it have been to disqualify prisoners currently in jail for serious offences? By failing to address these matters the government has left itself open to the criticism that it has been reckless with taxpayers’ money, even though the damage is more perceived than real. In politics, perceptions are always important, and the perception that the government has failed to pay attention to detail will inevitably lead to the question of what else they might be getting wrong.
Tuesday, March 17, 2009
Holidays Are Not Holy Days Anymore
EDITORIAL TUESDAY 17.03.09.
Although we all know that we live in what is increasingly a 24/7 world, it is still quite a significant step to have TAB agencies announce that they will be open for business on Good Friday. Perhaps punters will be pleased that they will be able to relax at their local PubTab and make a few wagers on international events in Singapore and South Africa. They’ll even be able to place bets on the local NRL matches being played on that day. At the same time there is increasing pressure from some retailers to allow trading on Easter Sunday, with the argument even being put forward that it would be good for the economy and good for employees who stand to receive penalty payments at the same time. But aren’t we all missing something?
No doubt there will be a response from the religious community concerned that the spiritual significance of Easter is being overlooked and undermined. But it is probably true that good Christians will be doing something other than visit their local TAB on Good Friday, while those who are not religious, or have a different faith, probably have different priorities. Indeed, the question has been asked as to why those who are not religious should be denied the opportunity to follow their chosen pursuit, whether it is punting or shopping, just because there is a day of religious observance. In fact, Robert Nason from Tabcorp was quoted in the Telegraph as saying “All this is discretionary. People have a choice as to what they do on the day and how they wish to spend it. We are a multicultural society."
But wait a minute. Why are we having a public holiday in the first place? The Easter weekend is certainly a welcome break from the daily grind for Christians and Non-Christians alike. But the whole reason the holiday exists in the first place is because it is a day of religious observance. Those who ask why they can’t spend their public holiday in the TAB have completely overlooked the obvious question: “If you are not religious why are you taking a day off?” Of course, that is a rather extreme position, and of course so long as there is a public holiday, people are entitled to spend their time as they please.
So let’s ask instead, if the public holiday is no longer for the purpose of religious observance, what exactly is its purpose? Do we as a society cling to public holidays in order to provide a scattering of long weekends throughout the year? Is it so that people can have a break now and then? Is there an economic benefit in doing this? Or is there only a social benefit? If there is a benefit, is it worthwhile preserving, or is it outweighed by other considerations such as boosting the economy?
So long as more and more businesses, such as retail outlets and service businesses want to remain open for business on public holidays, obviously the more staff will be required to work on those days. As the trend continues, fewer people will actually get to have the day off, until eventually it could get to the point when businesses ask why they are paying penalty rates for special days that are no longer so special. If the TABs are going to be operating on Good Fridays how long will it be before governments cave in and allow race meetings to take place in Australia in order to give the TAB a justification for remaining open, and therefore requiring even more people to turn up for work?
Bit by bit we really are edging towards a 24/7 world that never lets up, and the risk is that we will lose a part of our way of life which is important to us. Public holidays may not be Holy anymore but most Australians would like to think that they are sacrosanct.
Although we all know that we live in what is increasingly a 24/7 world, it is still quite a significant step to have TAB agencies announce that they will be open for business on Good Friday. Perhaps punters will be pleased that they will be able to relax at their local PubTab and make a few wagers on international events in Singapore and South Africa. They’ll even be able to place bets on the local NRL matches being played on that day. At the same time there is increasing pressure from some retailers to allow trading on Easter Sunday, with the argument even being put forward that it would be good for the economy and good for employees who stand to receive penalty payments at the same time. But aren’t we all missing something?
No doubt there will be a response from the religious community concerned that the spiritual significance of Easter is being overlooked and undermined. But it is probably true that good Christians will be doing something other than visit their local TAB on Good Friday, while those who are not religious, or have a different faith, probably have different priorities. Indeed, the question has been asked as to why those who are not religious should be denied the opportunity to follow their chosen pursuit, whether it is punting or shopping, just because there is a day of religious observance. In fact, Robert Nason from Tabcorp was quoted in the Telegraph as saying “All this is discretionary. People have a choice as to what they do on the day and how they wish to spend it. We are a multicultural society."
But wait a minute. Why are we having a public holiday in the first place? The Easter weekend is certainly a welcome break from the daily grind for Christians and Non-Christians alike. But the whole reason the holiday exists in the first place is because it is a day of religious observance. Those who ask why they can’t spend their public holiday in the TAB have completely overlooked the obvious question: “If you are not religious why are you taking a day off?” Of course, that is a rather extreme position, and of course so long as there is a public holiday, people are entitled to spend their time as they please.
So let’s ask instead, if the public holiday is no longer for the purpose of religious observance, what exactly is its purpose? Do we as a society cling to public holidays in order to provide a scattering of long weekends throughout the year? Is it so that people can have a break now and then? Is there an economic benefit in doing this? Or is there only a social benefit? If there is a benefit, is it worthwhile preserving, or is it outweighed by other considerations such as boosting the economy?
So long as more and more businesses, such as retail outlets and service businesses want to remain open for business on public holidays, obviously the more staff will be required to work on those days. As the trend continues, fewer people will actually get to have the day off, until eventually it could get to the point when businesses ask why they are paying penalty rates for special days that are no longer so special. If the TABs are going to be operating on Good Fridays how long will it be before governments cave in and allow race meetings to take place in Australia in order to give the TAB a justification for remaining open, and therefore requiring even more people to turn up for work?
Bit by bit we really are edging towards a 24/7 world that never lets up, and the risk is that we will lose a part of our way of life which is important to us. Public holidays may not be Holy anymore but most Australians would like to think that they are sacrosanct.
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