It has been 45 years since Neil Armstrong first set foot on the moon in 1969. The official date was the 20th of July, but with the time difference, it was actually the 21st here in Australia.
With so much going on in the world today, it would be easy to forget the anniversary, but at the time it was a monumental event.
An estimated 600 million people watched the television coverage of Armstrong and Aldrin walking on the moon, setting a record that would not be broken until the televised wedding of Prince Charles and Lady Diana 12 years later.
Australia played an important role in the moon mission with the Deep Space Tracking Stations at Honeysuckle Creek and Tidbinbilla helping to maintain communications.
The famous Parkes Radio Telescope was also a key facility, as portrayed in the Australian feature film “The Dish.”
Of course, we all remember Neil Armstrong’s famous words: “That’s one small step for man, one giant leap for mankind.”
The line was supposed to be “one small step for A man…” and there was controversy for years about whether Armstrong made a mistake, or if the radio link just dropped out momentarily.
Either way, history was made that day, 45 years ago.
Neil Armstrong passed away in 2012 at the age of 82, but his Apollo Eleven colleagues Buzz Aldrin and Michael Collins are alive and well... Which is more than you can say for the US space program at the moment.
Since the retirement of the space shuttle, American astronauts are currently forced to hitch a ride on Russian space capsules to get the International Space Station….
I’m not sure how much longer that can go on, considering the current friction between Russia and pretty much the rest of the world.
Private companies like Space-X are expected to fill that void in the future, but for the time being, the once mighty NASA has no manned flight capability of its own.
I suspect Neil Armstrong would be disappointed about that.
Monday, July 21, 2014
Wednesday, July 9, 2014
12 Facts About Asylum Seekers
Just in case you want to weigh in to the argument, you might as well start with the facts, not the BS.
12 Facts About Asylum Seekers
1. It is not illegal to arrive in Australia and ask for asylum.
2. The Refugee Convention specifically states that asylum seekers cannot be penalised for arriving by means which might otherwise be considered illegal.
3. In Australian law, arrival without documentation is “unlawful” or “irregular” but not illegal so long as an asylum seeker presents himself or herself to the authorities to make a claim for asylum.
4. The Refugee Convention stipulates that any claim for asylum will be given proper consideration.
5. The Refugee Convention prohibits “refoulement” or the return of refugees to the jurisdiction from which they are fleeing persecution.
6. UNHCR has stated this week that it has no problem with people being returned to their home country provided it has been established that they are NOT refugees.
7. Those who are found to be genuine refugees are guaranteed protection, but not resettlement. Under the Refugee Convention, the resettlement program is conducted by signatory nations as a voluntary measure.
8. Those who are resettled in Australia are LESS likely to become employed than other immigrants, with about 40 per cent having a job of some sort after the first 4 years.
9. Those who are resettled in Australia are MORE likely to engage in education than other immigrants, with 23 per cent earning a university or technical college qualification after the first 5 years, and about 40 per cent of refugees earn some sort of qualification.
10. Those who are resettled in Australia are MORE likely to receive welfare benefits, with about 85 per cent receiving some sort of payment after the first four years. This compares to about 30 per cent of Australians overall. However, more than 50 per cent of refugees are categorised as either studying full time, setting up a business which is not yet profitable, working as an unpaid carer or simply retired.
11. Those who are resettled in Australia are LESS likely to commit a crime, with a crime rate of about 0.04 per cent compared to the community average of about 1.9 per cent.
12. There are up to 50 million displaced people in the world right now. About 20 million are considered refugees. About 10 million are registered with the UNHCR. In the 38 years from the beginning of 1976 until the end of 2013, a total of 69,445 asylum seekers arrived in Australia by boat.
http://www.unhcr.org/3b66c2aa10.html
http://www.dss.gov.au/sites/default/files/documents/01_2014/settlement-outcomes-new-arrival_access.pdf
http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2012-2013/AsylumFacts
http://www.smh.com.au/federal-politics/political-news/few-asylum-seekers-charged-with-crime-20130228-2f98h.html
http://www.refugeecouncil.org.au/r/stat-as.php
12 Facts About Asylum Seekers
1. It is not illegal to arrive in Australia and ask for asylum.
2. The Refugee Convention specifically states that asylum seekers cannot be penalised for arriving by means which might otherwise be considered illegal.
3. In Australian law, arrival without documentation is “unlawful” or “irregular” but not illegal so long as an asylum seeker presents himself or herself to the authorities to make a claim for asylum.
4. The Refugee Convention stipulates that any claim for asylum will be given proper consideration.
5. The Refugee Convention prohibits “refoulement” or the return of refugees to the jurisdiction from which they are fleeing persecution.
6. UNHCR has stated this week that it has no problem with people being returned to their home country provided it has been established that they are NOT refugees.
7. Those who are found to be genuine refugees are guaranteed protection, but not resettlement. Under the Refugee Convention, the resettlement program is conducted by signatory nations as a voluntary measure.
8. Those who are resettled in Australia are LESS likely to become employed than other immigrants, with about 40 per cent having a job of some sort after the first 4 years.
9. Those who are resettled in Australia are MORE likely to engage in education than other immigrants, with 23 per cent earning a university or technical college qualification after the first 5 years, and about 40 per cent of refugees earn some sort of qualification.
10. Those who are resettled in Australia are MORE likely to receive welfare benefits, with about 85 per cent receiving some sort of payment after the first four years. This compares to about 30 per cent of Australians overall. However, more than 50 per cent of refugees are categorised as either studying full time, setting up a business which is not yet profitable, working as an unpaid carer or simply retired.
11. Those who are resettled in Australia are LESS likely to commit a crime, with a crime rate of about 0.04 per cent compared to the community average of about 1.9 per cent.
12. There are up to 50 million displaced people in the world right now. About 20 million are considered refugees. About 10 million are registered with the UNHCR. In the 38 years from the beginning of 1976 until the end of 2013, a total of 69,445 asylum seekers arrived in Australia by boat.
http://www.unhcr.org/3b66c2aa10.html
http://www.dss.gov.au/sites/default/files/documents/01_2014/settlement-outcomes-new-arrival_access.pdf
http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2012-2013/AsylumFacts
http://www.smh.com.au/federal-politics/political-news/few-asylum-seekers-charged-with-crime-20130228-2f98h.html
http://www.refugeecouncil.org.au/r/stat-as.php
Friday, February 28, 2014
Conroy Must Go
Conroy Must Go 270214
Whether Senator Stephen Conroy eventually apologises for insulting Lieutenant General Angus Campbell or not, his position as Shadow Minister for Defence must surely be called into question.
When Senator Conroy impugned the integrity of General Campbell, he may have been suffering from a momentary lapse of judgement, or a fit of frustration, but such lapses of judgement are not acceptable from someone who is the alternative Defence Minister.
But reports suggest it was no momentary slip. Instead, it has been revealed that his own colleagues warned him in advance not to pursue such a tactic. It should be no surprise that he chose to press ahead regardless.
Senator Conroy has a reputation for being a tough operator, which might be all very well for the internal politics of the Labor Party, but it is entirely out of order when it comes to dealing with senior officers in the Defence Force. Not only should he apologise, but he should resign from his position as Shadow Minister for Defence.
But I doubt it will happen.
Senator Conroy is one of the most powerful factional leaders within the Labor Party. In fact he is sometimes referred to as a “BOVVER BOY.” As such, he has been instrumental in the back room wheeling and dealing that decides the fate of the party, and its leaders.
Senator Conroy isn’t exactly a “faceless man,” but he was one of the cabal of conspirators who knifed Kevin Rudd in the back in 2010, and we all know how well that worked out. The party lost its grip on government, was forced to endure a hung parliament for three years, and is still struggling to overcome the fallout.
It was Stephen Conroy who was instrumental in getting Bill Shorten into the Parliament, and subsequently installed as Leader of the Party. So don’t expect Bill Shorten to be too tough with Senator Conroy… he’s hardly likely to bite the hand that feeds him.
But back room politics is one thing… running the country is another. Conroy’s record as a parliamentarian is just as disturbing as his efforts within the party.
As Minister for Communications in the previous government, Senator Conroy promised to deliver the world’s best internet, at an extraordinary cost, and then set about trying to censor it.
The results of the effort were farcical, when a trial of the proposed filtering system blocked perfectly innocent websites belonging to businesses such as dentists and doctors.
He was accused of conducting a scare campaign when he suggested that Google could be collecting people’s internet banking details.
But the pinnacle of Senator Conroy’s foolishness, at least until now, was his ill-judged effort to impose draconian restrictions upon the media in the dying days of the Gillard Government.
The proposed legislation was widely condemned as an attempt to gag media criticism of the government, and an assault on the principle of a free press.
Senator Conroy has demonstrated time after time that he is a clown… but unfortunately his antics are not funny.
His latest brain explosion, attacking the integrity of General Campbell, has rightly been condemned by everyone, except his own colleagues, who apparently are too frightened of him to say boo.
Bill Shorten might try to gloss over it, claiming that the criticism is directed at the government who is issuing the orders, rather than the military officers who are following them, but that just doesn’t cut it.
Unfortunately for Mr Shorten, Senator Conroy scored a spectacular own-goal by attacking the wrong man. The fallout from this error has left the Opposition Leader floundering in the Parliament, when he should have been in a position to nail the Government to the wall over their obsession with secrecy.
Instead of calling the Government to account, not only for its iron grip on information, but also for its clear failure in maintaining the peace on Manus Island, it was the Opposition who was targeted with a motion to admonish Senator Conroy.
In the meantime, the strange state of affairs arose where the only person who seemed to realise just how far off the rails the debate had run, was the Greens MP Adam Bandt.
Mr Bandt said after Question Time, “Parliament has once again missed the point. A man has been killed while in our care. We should be debating why this happened and how we can stop it happening again, not wasting time in another Liberal/Labor tit-for-tat.”
It should be hard to disagree with a statement like that, but such is the extraordinary state of affairs that we are currently witnessing a Coalition Government implementing a policy introduced by a previous Labor Prime Minister in a desperate attempt to be re-elected.
The upshot is that the new Opposition Leader, Bill Shorten, is unable to attack the Government on the policy itself, only the way it is managed. Both sides of the Parliament support off-shore processing, both sides embrace Manus Island, and both sides should be held accountable for the debacle that is unfolding.
In the meantime, we have been left with the spectacle of witnessing the Shadow Minister for Defence confronting a senior general, of unquestioned integrity, and directly accusing him of participating in a political cover up.
There is absolutely no way that Senator Conroy will ever enjoy the trust and the confidence of the military leadership after such a monumental insult. He can never become Defence Minister, when or if the Labor Party somehow miraculously returns to government.
His position as Shadow Minister for Defence is untenable, and the longer he stays in any senior position, the longer the Labor Party will remain unelectable.
Whether Senator Stephen Conroy eventually apologises for insulting Lieutenant General Angus Campbell or not, his position as Shadow Minister for Defence must surely be called into question.
When Senator Conroy impugned the integrity of General Campbell, he may have been suffering from a momentary lapse of judgement, or a fit of frustration, but such lapses of judgement are not acceptable from someone who is the alternative Defence Minister.
But reports suggest it was no momentary slip. Instead, it has been revealed that his own colleagues warned him in advance not to pursue such a tactic. It should be no surprise that he chose to press ahead regardless.
Senator Conroy has a reputation for being a tough operator, which might be all very well for the internal politics of the Labor Party, but it is entirely out of order when it comes to dealing with senior officers in the Defence Force. Not only should he apologise, but he should resign from his position as Shadow Minister for Defence.
But I doubt it will happen.
Senator Conroy is one of the most powerful factional leaders within the Labor Party. In fact he is sometimes referred to as a “BOVVER BOY.” As such, he has been instrumental in the back room wheeling and dealing that decides the fate of the party, and its leaders.
Senator Conroy isn’t exactly a “faceless man,” but he was one of the cabal of conspirators who knifed Kevin Rudd in the back in 2010, and we all know how well that worked out. The party lost its grip on government, was forced to endure a hung parliament for three years, and is still struggling to overcome the fallout.
It was Stephen Conroy who was instrumental in getting Bill Shorten into the Parliament, and subsequently installed as Leader of the Party. So don’t expect Bill Shorten to be too tough with Senator Conroy… he’s hardly likely to bite the hand that feeds him.
But back room politics is one thing… running the country is another. Conroy’s record as a parliamentarian is just as disturbing as his efforts within the party.
As Minister for Communications in the previous government, Senator Conroy promised to deliver the world’s best internet, at an extraordinary cost, and then set about trying to censor it.
The results of the effort were farcical, when a trial of the proposed filtering system blocked perfectly innocent websites belonging to businesses such as dentists and doctors.
He was accused of conducting a scare campaign when he suggested that Google could be collecting people’s internet banking details.
But the pinnacle of Senator Conroy’s foolishness, at least until now, was his ill-judged effort to impose draconian restrictions upon the media in the dying days of the Gillard Government.
The proposed legislation was widely condemned as an attempt to gag media criticism of the government, and an assault on the principle of a free press.
Senator Conroy has demonstrated time after time that he is a clown… but unfortunately his antics are not funny.
His latest brain explosion, attacking the integrity of General Campbell, has rightly been condemned by everyone, except his own colleagues, who apparently are too frightened of him to say boo.
Bill Shorten might try to gloss over it, claiming that the criticism is directed at the government who is issuing the orders, rather than the military officers who are following them, but that just doesn’t cut it.
Unfortunately for Mr Shorten, Senator Conroy scored a spectacular own-goal by attacking the wrong man. The fallout from this error has left the Opposition Leader floundering in the Parliament, when he should have been in a position to nail the Government to the wall over their obsession with secrecy.
Instead of calling the Government to account, not only for its iron grip on information, but also for its clear failure in maintaining the peace on Manus Island, it was the Opposition who was targeted with a motion to admonish Senator Conroy.
In the meantime, the strange state of affairs arose where the only person who seemed to realise just how far off the rails the debate had run, was the Greens MP Adam Bandt.
Mr Bandt said after Question Time, “Parliament has once again missed the point. A man has been killed while in our care. We should be debating why this happened and how we can stop it happening again, not wasting time in another Liberal/Labor tit-for-tat.”
It should be hard to disagree with a statement like that, but such is the extraordinary state of affairs that we are currently witnessing a Coalition Government implementing a policy introduced by a previous Labor Prime Minister in a desperate attempt to be re-elected.
The upshot is that the new Opposition Leader, Bill Shorten, is unable to attack the Government on the policy itself, only the way it is managed. Both sides of the Parliament support off-shore processing, both sides embrace Manus Island, and both sides should be held accountable for the debacle that is unfolding.
In the meantime, we have been left with the spectacle of witnessing the Shadow Minister for Defence confronting a senior general, of unquestioned integrity, and directly accusing him of participating in a political cover up.
There is absolutely no way that Senator Conroy will ever enjoy the trust and the confidence of the military leadership after such a monumental insult. He can never become Defence Minister, when or if the Labor Party somehow miraculously returns to government.
His position as Shadow Minister for Defence is untenable, and the longer he stays in any senior position, the longer the Labor Party will remain unelectable.
Thursday, October 17, 2013
Roxon Is Out Of Line
Boy am I glad I am not a member of the Labor Party. I think I would be pretty fed up with the whole damn lot of them. The latest outburst from former Attorney General Nicola Roxon is yet another example of the rot that has been going on for the past six years… and far longer if you look at the record of Labor in New South Wales.
For a former senior minister to make use of a speech to denigrate a sitting member of her own party, regardless of who he might be, is plain obnoxious. This applies to Roxon, as well as to Craig Emerson before her, and all the other gravy train ticket holders who leapt off the bandwagon rather than face sitting on the opposition benches.
So these clowns think Kevin Rudd was rude. They think he was dysfunctional. They think he is an ego maniac. The fact is that whether these claims are accurate or not is immaterial. None of these characteristics have ever disqualified anyone from being Prime Minister before.
They might call Kevin Rudd a bastard, but that is tame compared to the labels applied to his predecessor. According to political journalist Mungo McCallum, John Howard was given a much worse nickname by some of his own colleagues. The C**t. And yet he is widely acclaimed as the most successful Liberal Party Leader since Menzies.
So, before we succumb to the temptation to fall for the narrative thrust forward by Mr Rudd’s critics, perhaps we should take a look at the people who are making the accusations. Ms Roxon in particular spent much of her time as Attorney General behaving as if she was much better qualified to manage my life than I am. In the nanny-state existence forced upon us by Labor, Nicola Roxon was the chief nanny.
Like her good friend Julia Gillard, Ms Roxon previously worked as an industrial relations lawyer for a prominent legal firm, in her case Maurice Blackburn. Like Ms Gillard, she also has very strong ties to the union movement. It’s not surprising that Roxon is a staunch Gillard supporter, and it’s not surprising that she is one of Rudd’s critics. But if she had any regard for the Party she previously served, she would refrain from such inflammatory commentary, as would all those other erstwhile colleagues who have volunteered their opinions.
Most notably, this includes Craig Emerson, who was once romantically linked to Julia Gillard and remains a close friend. Another is Senator Stephen Conroy, the former Communications Minister who should have retired, but didn’t. This is the character who wanted to give Australia the world’s best internet, and then censor it. The same man who thought he could regulate the editorial content of newspapers.
Conroy’s incompetence was repeatedly a source of embarrassment for the Labor Government, and yet he remains as Senate Leader of the Opposition. Why? Because he is one of the faceless men. He remains one of the elite power-brokers who decide among themselves what is best for the Party, despite their atrocious track record. These are the people who would have absolutely loathed any attempt to democratise the Labor Party and strip them of power.
Let’s just pause for a moment and consider the rise of the faceless men. While the NSW Right faction has long been a dominant force in Labor Party politics, the rot really began to set in when party secretary Mark Arbib and his successor Karl Bitar began picking and choosing who could be Premier of New South Wales. Arbib went on to become a Federal Senator, and Bitar took up the role as Federal Secretary. They brought with them to Canberra the internal practices now known as “the New South Wales disease.”
Together with other powerful right wing interests, and Bill Shorten’s AWU affiliations, the faceless men took control of Canberra, and the democratically elected Federal Labor government. Paul Howes, who is still the head of the AWU, wasn’t even a member of the Parliament, but as one of the faceless men he had a significant influence over Kevin Rudd’s fate.
Regardless of how rude Kevin Rudd may or may not have been, the fact is that he made no secret of his intentions to introduce reform to the Party. Rudd was not a member of any faction, and he made it his mission to reduce the influence of unions over the party. He openly stated that he wanted to end the power of the factions. Now, any fool can tell you that people who hold power, and face having it taken away from them, are not likely to politely hand it over.
The factional warlords, such as Stephen Conroy, Mark Arbib and David Feeney, along with the AWU’s Paul Howes and his colleague in the Parliament Bill Shorten, would have seen their grip on the reins slipping away from them. It was Kevin Rudd’s plan to restore more grass roots democracy to the party that was supposed to represent ordinary workers, but instead had evolved to become the plaything of overfed unionists.
Kevin Rudd may have many faults. No doubt one of them is that he knows most of his colleagues are intellectually inferior to him, and it would not be surprising if he couldn’t help treating them that way. But once they pulled the rug from under his feet, there was never any doubt that, in his mind at least, the evils of factionalism and union influence had prevailed.
Former Treasurer Wayne Swan is not one of the faceless men, but he has been complicit with their machinations. His record as Treasurer is not a glorious one. Although it is true that the Labor Government successfully steered the nation through the Global Financial Crisis, they did so with the benefit of good luck in the form of a healthy surplus left to them by their predecessors, along with good advice from the Department of Treasury which told them to pump stimulus into the economy.
The stimulus from the cash handouts, along with the money spent on school halls and home insulation certainly filtered through the economy, and there’s no doubt that jobs and businesses stayed afloat that might otherwise have been lost. But the program was not without its controversies. Specifically, the management of the home insulation scheme and the BER has been the subject of well publicised criticism for wasteful and chaotic implementation. In short, it was right to spend the money, but how it was spent was very poorly managed. Chief architect of the stimulus plan was of course Wayne Swan.
Mr Swan should also accept responsibility for the ridiculous watered down version of the mining tax which failed to collect any substantial revenue. In an effort to appease the mining sector, it was Mr Swan who destroyed any chance of the mining tax ever fulfilling its intended purpose of sharing the wealth of the minerals boom.
It would seem self-evident, although surprisingly few people have noticed, that the loudest critics of Mr Rudd, the ones loaded up with the greatest vitriol, are in fact the least competent of his former colleagues. Mr Swan as Treasurer exhibited lack-lustre performance at best. Ms Roxon as Health Minister and later Attorney General attempted social engineering experiments that provided little if any benefit to the community, such as the alco-pops tax and plain packaging for cigarettes.
Conroy, as previously mentioned bumbled his way through the National Broadband Network, and wasted inordinate time and effort on fighting an impossible battle with the media simply because they had the temerity to criticise the government. Craig Emerson lost any semblance of credibility when he tried to sing a cover version of a Peter Garrett song.
And these people expect to be taken seriously when they say that Kevin Rudd was the problem?
Those who have left the parliament should bite their tongues. If they wanted to help the party, they should have stayed in office to continue the fight. Of course, they had every right to retire if that was their wish, but it is hypocritical in the extreme not to recognise Kevin Rudd’s right, some would say responsibility, to continue to represent the people who elected him. Those who are still in the Parliament, including Kevin Rudd, would be best advised to look to the future instead of wallowing in the past.
There is some irony to the fact that Bill Shorten, once the leader of the faceless men, is now the Leader of the Opposition, elected by the method introduced by Kevin Rudd’s reforms. However, it is important to note that, regardless of what his personal feelings might be, Mr Shorten has resisted the temptation to join the chorus of clowns calling for Mr Rudd to depart.
That might just indicate that he’s not an idiot.
Nevertheless, the fact remains that Conroy, Shorten, Feeney, Howes, and all the rest still have their hands on the controls. As I said at the beginning, I’m glad I’m not a member of the Labor Party.
Friday, February 18, 2011
Cooking the Books
Even though I am not on air at present, I cannot resist the temptation to comment on this disgrace...
Customers are furious, and staff are in fear of losing their jobs after one of Australia’s oldest and proudest retail firms was placed into the hands of administrators this week. Angus and Robertson was established in 1886 and has been an iconic part of Australian life ever since, but all that now hangs precariously in the balance as the accountants and lawyers attempt to breath life into the firm’s struggling owner, the Red Retail Group, which also controls Borders Australia. Perhaps it will be possible for the administrators to trade through the difficulties and restructure the business so that it might return to prosperity in the future, but that’s little consolation to those angry customers or those fearful employees who will now to some degree be made to pay for the mistakes of others.
That anger has been manifested most prominently by the response from customers who have been told that the gift cards they may have received for Christmas aren’t really a gift at all. Customers have been told that gift vouchers will be honored only if they are matched by an equal or greater amount of cash. In other words, if you have a Borders or Angus and Robertson gift card for $20, you can combine it with $20 cash to buy a $40 book. This grab for cash has been seen by customers as greedy, unfair and unjust. After all, they or someone they know has already paid cash to the face value of the voucher on the expectation that it will be exchanged for merchandise. It’s as if I have paid in advance for a hotel room, only to be told when I check in that I must pay again because the hotel has run out of money. It’s not my fault, and it shouldn’t be my problem. But unfortunately, gift cards are not what they appear to be.
It turns out that they are unsecured financial instruments, as determined by a Federal Government ruling, which means that they are not subject to consumer law. Instead they are governed by securities and investment law, effectively meaning that a gift card is worth less than an I. O. U. Under securities law, people who hold gift vouchers are no longer customers when a company goes broke. Instead, they become unsecured creditors and must line up behind the bankers and the lawyers before they can expect to get even one cent. In that context, the Red Group offer to redeem gift cards when presented along with a matching amount of cash could be viewed as a generous method of ensuring that customers still get value, while the company offloads some of its stock and makes a few more dollars all at the same time. But, of course, that’s not the way customers are seeing it at all. Instead, customers are outraged. And I don’t blame them… if anything, they’ve been dudded by the regulations as well as by the company.
More importantly, the damage to whatever remains of the company’s goodwill could well have a material impact on its chances for survival. By angering customers, the administrators are likely to drive them away, an outcome in which there are no winners.
If the business is to survive, it should go without saying that it will need to keep its customers happy, and hopefully even attract some new ones too. But that really just begins to touch upon the heart of the problem. Why is the company in trouble in the first place? Falling retail sales. Why are sales falling? If more people are turning to on-line sales, why are they doing that? Is it, as the company claims, a result of import restrictions and tax exemptions for on-line purchases? Or is there something else going on? The truth is that Red Group’s goodwill was already taking a beating before this debacle arrived. Comments posted on-line on the Sydney Morning Herald website have reflected customer views that Borders prices are not only more expensive than on-line competitors, but they are more expensive than bricks and mortar competitors such as K-Mart and Big W. One reader even complained that prices are higher than recommended retail.
Of course, if Amazon and E-bay can be successful, surely there’s nothing stopping Borders and Angus and Robertson from running their own on-line operation, and in fact that’s exactly what they do. So, problem solved, or so you would think. But actually, no. Even on the bold new frontier of the cyber world, Red Group retailers have been accused of failing to match the customer service of dedicated on-line operators. Prices are still not competitive, but far more importantly, deliveries are reportedly slow. While there is some substance to the claim that import restrictions disadvantage local operators, and the G. S. T. rules favour the off shore operators, that is only a part of the story. A small part, in fact, but also a clue to some of the components of a much bigger picture.
An alternative view of the downfall of the Red Group has been given by author Di Morrissey, who told John Laws on 2SM that in her view the company ran into trouble because it was badly managed. She acknowledged that there had been a downturn in book sales in traditional stores, but claimed that the decline was broadly in line with the overall retail sector. And it’s true… retail sales figures across the board have been in the doldrums ever since the Global Financial Crisis. Consumers are exhibiting a new pattern of behaviour, less likely to spend recklessly, and when they do spend they are looking for bargains more aggressively than ever. Why should it be any different with books? Consumers have become more frugal across the board, so if any business is going to persuade them to part with their hard earned dollars it will be the one offering the best value and the best service.
The contention is that, with prudent management, a good business can withstand the challenges of an economic downturn. The fact is that while all bookstores have experienced challenging conditions, not all of them are going broke. No doubt the management at Red Group is keen to find excuses and explanations such as the fall in sales and the rise in competition, but they are hardly going to blame themselves are they? So is there something wrong with the way the group has been run? Well, funny you should ask that, because it brings us to the real roots of the problem. And it’s not just Red Group that suffers from the afflictions which have landed them in the hands of the administrators.
So, just what is the Red Retail Group, and why has it run off the rails? The Red Retail Group is comprised of Angus & Robertson, along with Borders Australia, Whitcoulls New Zealand, Calendar Club, and Supanews Newsagencies. In turn, the group is owned by a so-called investment company by the name of Pacific Equity Partners. PEP is a private equity firm, which means that neither it, nor any of the companies it operates, is a publicly listed company. So far, the only explanations to have been forthcoming from management have identified a decline in profitability, blamed on a combination of increased competition from on-line sales and the increasing popularity of electronic books. On the face of it, that’s an explanation which seems to make sense. On-line retailing has experienced significant growth across the board, but it has been especially successful for books, which don’t need to be tried on for size, and which can be easily warehoused and shipped without spoilage. So-called E-books too have proven to be popular, and will only become more so as devices such as the i-pad proliferate the market. But what the management has been less vocal about is the nature of their investment and the magnitude of their debt.
Red Retail Group has reported a net loss of $43.6 million on turnover of about $580 million. Debt is said to be in excess of $130 million. On the face of it, that seems like a very large number, but does the debt explain the group’s difficulties? Well, even if an outrageous interest rate of 10% was applied it would only account for $13 million of the net loss, so it would be unreasonable to suggest that the level of debt alone is the cause of this particular disease. However, it is a symptom. While it is generally accepted that debt financing is a legitimate method of funding business activities, it is predicated on the purpose of the borrowing. The principle is that debt funding can be used to finance capital works which will be productive, it can finance stock which will be sold at a profit, and it can be used to finance the acquisition of an appreciating asset. But has anybody stopped to consider the purpose of this particular debt?
Pacific Equity Partners is not a bookselling or publishing firm. Its managers are not “book people”. They are “money people”. Pacific Equity Partners is a private equity investment company run by merchant bankers and lawyers. While you might think that a private equity firm might be in the business of simply managing the money of its wealthy clients by finding worthwhile investments for them, PEP does not exist to acquire and operate robust businesses. It exists to acquire under valued or underperforming businesses, restructure or reshape them, and then sell them to someone else, usually through a public offering and floatation on the share market. The vultures strip the carcass bare, and then fling the remains to the Wall Street wolves. Or in this case Bridge Street in Sydney, but that just doesn’t have the same ring to it.
In order to achieve this, a private equity operator will usually seek to cut costs by restructuring a company, reducing staff, and gouging suppliers. They will then seek to maximize returns either by driving up volume with aggressive marketing and sometimes discounting, or alternatively by increasing margins by pushing prices up. Note that none of these strategies are in fact sustainable over the long term, and therefore none of these strategies are conducive to building a robust business which will thrive in the good times and survive in the down times. But that is not important to the private equity operator, because his goal is to artificially inflate the perceived value of the asset so that it can be sold to unsuspecting punters at the highest possible price, lining the pockets of the private equity operators and their wealthy clients. They have absolutely no stake whatsoever in the long term viability of any such business, and they care even less about the customers who keep that business alive.
The point is that one of the factors, and perhaps the most significant one, contributing to the demise of the Red Retail Group is this agenda to plunder the company of its value in order to enrich the bankers, the wankers, and the lawyers, at the expense of job security and income security for employees and without any regard for actually serving the customers. That’s because in their view, the people buying books at Borders are not their customers. Their real customers are themselves and their financial backers. Of course the glaring weakness in this whole business model is that it relies on UNNECESSARY debt to finance it. The whole trouble is that these modern day buccaneers have not simply reached into their own back pockets to purchase what is an otherwise perfectly good company. They have borrowed the money to buy the company, and it is the company which must shoulder the burden of that debt, even though the company did not require the funds for operational purposes. In short, the company is made to suffer for the benefit of the privateers.
In fact, these corporate hyenas should not be permitted to call themselves “private equity” firms in the first place, because the bulk of the money they use is not equity at all. It’s debt. But of course, calling yourself a “private debt company” just doesn’t have the right kind of sound to it, does it? The amazing thing is that this has all happened before. Does anybody remember the eighties? Gordon Gekko… anybody? Back in those days the smart thing to do was to put together what was known as a “Leveraged Buy Out” or LBO. It was, to all intents and purposes the exact same thing. Anybody who did not have enough money to buy a company simply borrowed somebody else’s money to do it. Then, as now, everything was fine while assets kept appreciating and the market kept rising. Then, as now, everything turned to a particularly lumpy kind of custard when the market took a tumble. You would think that people would learn, but apparently it is enough to get rid of the word “leveraged”, which is after all a dead giveaway about what you’re up to, and simply call the same thing a “private equity investment” instead.
The whole process has been demonstrated over and over again to be something akin to pyramid marketing or the aeroplane game, where it is possible for a handful of shysters to make truckloads of cash relatively quickly, but the dupes who are left holding the bag risk finding nothing left in it for them. But don’t just take my word for it, look at the track record. Texas Pacific Group did it to Myer. They cut staff numbers, destroyed customer service, flogged off the shares at almost $4 each, and today you’d be lucky to sell them for $3.30. And as for Pacific Equity Partners, well they also have runs on the board. One of their most infamous misadventures was the aborted LBO, sorry private equity takeover of Qantas in 2007. Of course, they were just small players in a much larger syndicate run by Macquarie Bank and Texas Pacific Group, but they had a seat at the table ready to push their snouts into the trough.
The attempted takeover of Qantas is a fascinating tale of greed on a grand scale, which, if successful, would have destroyed the company Australians have held dear for so many decades. Even today, I believe, some of the current challenges confronting the airline stem from that debacle. It was only saved because the deal collapsed after institutional shareholders became reluctant to sell out. Shortly after, the Global Financial Crisis ravaged the world and put an end to any possibility that the deal could ever be revived. At the time however, the pirates, sorry the private equity consortium, were offering $5.45 a share. Today Qantas shares closed at $2.54. Just imagine what would have happened to a consortium which had borrowed billions of dollars to pay for a company which subsequently lost more than half its value… It makes you feel sick in the stomach when you think about it. The heritage, the tradition, the pride, all gone on a whim. But far worse than any of that, the jobs of thousands could have been lost.
Sadly, even though Qantas was spared a horrible death, its employees still confront a new world of demands for productivity increases in the face of shrinking wages. In 2006, during the lead up to the private equity bid, Geoff Dixon, then the C. E. O. of Qantas, said “All legacy airlines suffer from the burden of inflated 20th-century cost structures, especially labour costs”. There is no other way to interpret this remark than to believe that it says people are paid too much. That view remains prevalent in the corporate world, with employees considered to be nothing more than an inconvenient expense, rather than a productive asset. Companies are no longer considered to be corporate bodies which serve the interests of their constituent members; rather they serve only their owners… a particularly feudal view of the world.
While it is a sad sight to see a once great Australian icon such as Angus and Robertson at risk of disappearing, or at least falling into disrepute, it is symptomatic of a much deeper flaw in modern business philosophy. It is a philosophy which says that the customer does not come first, that a fair day’s work does not deserve a fair day’s pay, and which falsely assumes that people who are good at managing money are automatically good at managing everything else. It is a corporate philosophy which ultimately must fail, for it cannot be sustained while increasing numbers of stakeholders, employees and consumers, are disenfranchised. It is not possible to run a consumer economy unless you have consumers… or perhaps that’s the whole idea. Perhaps we are entering the era of 21st Century feudalism, where we are all beholden to corporations one way or another, unless we are among the lucky few who actually own them.
So, if you’ve been wondering why Angus and Robertson, Borders, and the others are going down the gurgler, it’s not just because of on-line competition. It’s not just because of the G. S. T. And it’s not just because people are spending less. If that were true, they would all be going broke. No, it’s because the people who are running the business don’t really understand the business. It’s because the people who are running the business are not doing so for the right reasons, with the right motivation, or the right approach to delivering customer service. They have borrowed $130 million and assumed that somebody else will pay. Even the name of the company is surely some sort of joke: why on earth would they call it the Red Retail Group when we all know that red ink means bad news? They don’t care about saving the business, they only care about saving their own bacon.
They’re not in the business of selling books, they’re in the business of cooking them.
Customers are furious, and staff are in fear of losing their jobs after one of Australia’s oldest and proudest retail firms was placed into the hands of administrators this week. Angus and Robertson was established in 1886 and has been an iconic part of Australian life ever since, but all that now hangs precariously in the balance as the accountants and lawyers attempt to breath life into the firm’s struggling owner, the Red Retail Group, which also controls Borders Australia. Perhaps it will be possible for the administrators to trade through the difficulties and restructure the business so that it might return to prosperity in the future, but that’s little consolation to those angry customers or those fearful employees who will now to some degree be made to pay for the mistakes of others.
That anger has been manifested most prominently by the response from customers who have been told that the gift cards they may have received for Christmas aren’t really a gift at all. Customers have been told that gift vouchers will be honored only if they are matched by an equal or greater amount of cash. In other words, if you have a Borders or Angus and Robertson gift card for $20, you can combine it with $20 cash to buy a $40 book. This grab for cash has been seen by customers as greedy, unfair and unjust. After all, they or someone they know has already paid cash to the face value of the voucher on the expectation that it will be exchanged for merchandise. It’s as if I have paid in advance for a hotel room, only to be told when I check in that I must pay again because the hotel has run out of money. It’s not my fault, and it shouldn’t be my problem. But unfortunately, gift cards are not what they appear to be.
It turns out that they are unsecured financial instruments, as determined by a Federal Government ruling, which means that they are not subject to consumer law. Instead they are governed by securities and investment law, effectively meaning that a gift card is worth less than an I. O. U. Under securities law, people who hold gift vouchers are no longer customers when a company goes broke. Instead, they become unsecured creditors and must line up behind the bankers and the lawyers before they can expect to get even one cent. In that context, the Red Group offer to redeem gift cards when presented along with a matching amount of cash could be viewed as a generous method of ensuring that customers still get value, while the company offloads some of its stock and makes a few more dollars all at the same time. But, of course, that’s not the way customers are seeing it at all. Instead, customers are outraged. And I don’t blame them… if anything, they’ve been dudded by the regulations as well as by the company.
More importantly, the damage to whatever remains of the company’s goodwill could well have a material impact on its chances for survival. By angering customers, the administrators are likely to drive them away, an outcome in which there are no winners.
If the business is to survive, it should go without saying that it will need to keep its customers happy, and hopefully even attract some new ones too. But that really just begins to touch upon the heart of the problem. Why is the company in trouble in the first place? Falling retail sales. Why are sales falling? If more people are turning to on-line sales, why are they doing that? Is it, as the company claims, a result of import restrictions and tax exemptions for on-line purchases? Or is there something else going on? The truth is that Red Group’s goodwill was already taking a beating before this debacle arrived. Comments posted on-line on the Sydney Morning Herald website have reflected customer views that Borders prices are not only more expensive than on-line competitors, but they are more expensive than bricks and mortar competitors such as K-Mart and Big W. One reader even complained that prices are higher than recommended retail.
Of course, if Amazon and E-bay can be successful, surely there’s nothing stopping Borders and Angus and Robertson from running their own on-line operation, and in fact that’s exactly what they do. So, problem solved, or so you would think. But actually, no. Even on the bold new frontier of the cyber world, Red Group retailers have been accused of failing to match the customer service of dedicated on-line operators. Prices are still not competitive, but far more importantly, deliveries are reportedly slow. While there is some substance to the claim that import restrictions disadvantage local operators, and the G. S. T. rules favour the off shore operators, that is only a part of the story. A small part, in fact, but also a clue to some of the components of a much bigger picture.
An alternative view of the downfall of the Red Group has been given by author Di Morrissey, who told John Laws on 2SM that in her view the company ran into trouble because it was badly managed. She acknowledged that there had been a downturn in book sales in traditional stores, but claimed that the decline was broadly in line with the overall retail sector. And it’s true… retail sales figures across the board have been in the doldrums ever since the Global Financial Crisis. Consumers are exhibiting a new pattern of behaviour, less likely to spend recklessly, and when they do spend they are looking for bargains more aggressively than ever. Why should it be any different with books? Consumers have become more frugal across the board, so if any business is going to persuade them to part with their hard earned dollars it will be the one offering the best value and the best service.
The contention is that, with prudent management, a good business can withstand the challenges of an economic downturn. The fact is that while all bookstores have experienced challenging conditions, not all of them are going broke. No doubt the management at Red Group is keen to find excuses and explanations such as the fall in sales and the rise in competition, but they are hardly going to blame themselves are they? So is there something wrong with the way the group has been run? Well, funny you should ask that, because it brings us to the real roots of the problem. And it’s not just Red Group that suffers from the afflictions which have landed them in the hands of the administrators.
So, just what is the Red Retail Group, and why has it run off the rails? The Red Retail Group is comprised of Angus & Robertson, along with Borders Australia, Whitcoulls New Zealand, Calendar Club, and Supanews Newsagencies. In turn, the group is owned by a so-called investment company by the name of Pacific Equity Partners. PEP is a private equity firm, which means that neither it, nor any of the companies it operates, is a publicly listed company. So far, the only explanations to have been forthcoming from management have identified a decline in profitability, blamed on a combination of increased competition from on-line sales and the increasing popularity of electronic books. On the face of it, that’s an explanation which seems to make sense. On-line retailing has experienced significant growth across the board, but it has been especially successful for books, which don’t need to be tried on for size, and which can be easily warehoused and shipped without spoilage. So-called E-books too have proven to be popular, and will only become more so as devices such as the i-pad proliferate the market. But what the management has been less vocal about is the nature of their investment and the magnitude of their debt.
Red Retail Group has reported a net loss of $43.6 million on turnover of about $580 million. Debt is said to be in excess of $130 million. On the face of it, that seems like a very large number, but does the debt explain the group’s difficulties? Well, even if an outrageous interest rate of 10% was applied it would only account for $13 million of the net loss, so it would be unreasonable to suggest that the level of debt alone is the cause of this particular disease. However, it is a symptom. While it is generally accepted that debt financing is a legitimate method of funding business activities, it is predicated on the purpose of the borrowing. The principle is that debt funding can be used to finance capital works which will be productive, it can finance stock which will be sold at a profit, and it can be used to finance the acquisition of an appreciating asset. But has anybody stopped to consider the purpose of this particular debt?
Pacific Equity Partners is not a bookselling or publishing firm. Its managers are not “book people”. They are “money people”. Pacific Equity Partners is a private equity investment company run by merchant bankers and lawyers. While you might think that a private equity firm might be in the business of simply managing the money of its wealthy clients by finding worthwhile investments for them, PEP does not exist to acquire and operate robust businesses. It exists to acquire under valued or underperforming businesses, restructure or reshape them, and then sell them to someone else, usually through a public offering and floatation on the share market. The vultures strip the carcass bare, and then fling the remains to the Wall Street wolves. Or in this case Bridge Street in Sydney, but that just doesn’t have the same ring to it.
In order to achieve this, a private equity operator will usually seek to cut costs by restructuring a company, reducing staff, and gouging suppliers. They will then seek to maximize returns either by driving up volume with aggressive marketing and sometimes discounting, or alternatively by increasing margins by pushing prices up. Note that none of these strategies are in fact sustainable over the long term, and therefore none of these strategies are conducive to building a robust business which will thrive in the good times and survive in the down times. But that is not important to the private equity operator, because his goal is to artificially inflate the perceived value of the asset so that it can be sold to unsuspecting punters at the highest possible price, lining the pockets of the private equity operators and their wealthy clients. They have absolutely no stake whatsoever in the long term viability of any such business, and they care even less about the customers who keep that business alive.
The point is that one of the factors, and perhaps the most significant one, contributing to the demise of the Red Retail Group is this agenda to plunder the company of its value in order to enrich the bankers, the wankers, and the lawyers, at the expense of job security and income security for employees and without any regard for actually serving the customers. That’s because in their view, the people buying books at Borders are not their customers. Their real customers are themselves and their financial backers. Of course the glaring weakness in this whole business model is that it relies on UNNECESSARY debt to finance it. The whole trouble is that these modern day buccaneers have not simply reached into their own back pockets to purchase what is an otherwise perfectly good company. They have borrowed the money to buy the company, and it is the company which must shoulder the burden of that debt, even though the company did not require the funds for operational purposes. In short, the company is made to suffer for the benefit of the privateers.
In fact, these corporate hyenas should not be permitted to call themselves “private equity” firms in the first place, because the bulk of the money they use is not equity at all. It’s debt. But of course, calling yourself a “private debt company” just doesn’t have the right kind of sound to it, does it? The amazing thing is that this has all happened before. Does anybody remember the eighties? Gordon Gekko… anybody? Back in those days the smart thing to do was to put together what was known as a “Leveraged Buy Out” or LBO. It was, to all intents and purposes the exact same thing. Anybody who did not have enough money to buy a company simply borrowed somebody else’s money to do it. Then, as now, everything was fine while assets kept appreciating and the market kept rising. Then, as now, everything turned to a particularly lumpy kind of custard when the market took a tumble. You would think that people would learn, but apparently it is enough to get rid of the word “leveraged”, which is after all a dead giveaway about what you’re up to, and simply call the same thing a “private equity investment” instead.
The whole process has been demonstrated over and over again to be something akin to pyramid marketing or the aeroplane game, where it is possible for a handful of shysters to make truckloads of cash relatively quickly, but the dupes who are left holding the bag risk finding nothing left in it for them. But don’t just take my word for it, look at the track record. Texas Pacific Group did it to Myer. They cut staff numbers, destroyed customer service, flogged off the shares at almost $4 each, and today you’d be lucky to sell them for $3.30. And as for Pacific Equity Partners, well they also have runs on the board. One of their most infamous misadventures was the aborted LBO, sorry private equity takeover of Qantas in 2007. Of course, they were just small players in a much larger syndicate run by Macquarie Bank and Texas Pacific Group, but they had a seat at the table ready to push their snouts into the trough.
The attempted takeover of Qantas is a fascinating tale of greed on a grand scale, which, if successful, would have destroyed the company Australians have held dear for so many decades. Even today, I believe, some of the current challenges confronting the airline stem from that debacle. It was only saved because the deal collapsed after institutional shareholders became reluctant to sell out. Shortly after, the Global Financial Crisis ravaged the world and put an end to any possibility that the deal could ever be revived. At the time however, the pirates, sorry the private equity consortium, were offering $5.45 a share. Today Qantas shares closed at $2.54. Just imagine what would have happened to a consortium which had borrowed billions of dollars to pay for a company which subsequently lost more than half its value… It makes you feel sick in the stomach when you think about it. The heritage, the tradition, the pride, all gone on a whim. But far worse than any of that, the jobs of thousands could have been lost.
Sadly, even though Qantas was spared a horrible death, its employees still confront a new world of demands for productivity increases in the face of shrinking wages. In 2006, during the lead up to the private equity bid, Geoff Dixon, then the C. E. O. of Qantas, said “All legacy airlines suffer from the burden of inflated 20th-century cost structures, especially labour costs”. There is no other way to interpret this remark than to believe that it says people are paid too much. That view remains prevalent in the corporate world, with employees considered to be nothing more than an inconvenient expense, rather than a productive asset. Companies are no longer considered to be corporate bodies which serve the interests of their constituent members; rather they serve only their owners… a particularly feudal view of the world.
While it is a sad sight to see a once great Australian icon such as Angus and Robertson at risk of disappearing, or at least falling into disrepute, it is symptomatic of a much deeper flaw in modern business philosophy. It is a philosophy which says that the customer does not come first, that a fair day’s work does not deserve a fair day’s pay, and which falsely assumes that people who are good at managing money are automatically good at managing everything else. It is a corporate philosophy which ultimately must fail, for it cannot be sustained while increasing numbers of stakeholders, employees and consumers, are disenfranchised. It is not possible to run a consumer economy unless you have consumers… or perhaps that’s the whole idea. Perhaps we are entering the era of 21st Century feudalism, where we are all beholden to corporations one way or another, unless we are among the lucky few who actually own them.
So, if you’ve been wondering why Angus and Robertson, Borders, and the others are going down the gurgler, it’s not just because of on-line competition. It’s not just because of the G. S. T. And it’s not just because people are spending less. If that were true, they would all be going broke. No, it’s because the people who are running the business don’t really understand the business. It’s because the people who are running the business are not doing so for the right reasons, with the right motivation, or the right approach to delivering customer service. They have borrowed $130 million and assumed that somebody else will pay. Even the name of the company is surely some sort of joke: why on earth would they call it the Red Retail Group when we all know that red ink means bad news? They don’t care about saving the business, they only care about saving their own bacon.
They’re not in the business of selling books, they’re in the business of cooking them.
Sunday, January 16, 2011
The Leon Delaney Show
2003 to 2010: A few of the best bits...
Part Eight.
From politicians to pop stars, preachers to plain everyday people, you never know just who might pop up on the Leon Delaney Show. It might even be you...
Part Eight.
From politicians to pop stars, preachers to plain everyday people, you never know just who might pop up on the Leon Delaney Show. It might even be you...
The Leon Delaney Show
2003 to 2010: A few of the best bits...
Part Seven.
From politicians to pop stars, preachers to plain everyday people, you never know just who might pop up on the Leon Delaney Show. It might even be you...
Part Seven.
From politicians to pop stars, preachers to plain everyday people, you never know just who might pop up on the Leon Delaney Show. It might even be you...
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