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    Victoria: Back in the Basket Again

    By
    Lushington D Brady
    -
    1

    Reproduced with permission from The BFD

    https://thebfd.co.nz/2024/05/09/victoria-back-in-the-basket-again/

    I grew up in Victoria (don’t judge me, it wasn’t always the way it’s become), and lived through the dark days of the early 90s. Back then, it seemed that hardly a week went by without another economic calamity: the Pyramid building society collapse, the Tricontinental bank collapse, the State Bank of Victoria collapse, and the Victorian Economic Development Corporation collapse. 

    Not to mention the collapse of the Victorian branch of the National Safety Council of Australia under a cloud of embezzlement. The state’s credit rating plunged from a gold-standard AAA to an embarrassing AA+.

    Fun times.

    Well, to spin the old Chinese curse, Victorians are living in fun times again. The most indebted state in Australia, and diving deeper into the red for the foreseeable future. Once again, all at the hands of a Labor government.

    It’s clearly not as if there’s no room for cleaning out the bureaucracy in Victoria. 

    The state’s credit rating is now a dire AA, and under threat of plunging further — which makes even paying off debt more expensive.

    Over the four financial years covered by the budget, the annual interest required to service Victoria’s debt will jump from $6.3 billion to $9.3 billion. This is a serious chunk of change and, as a statistical quirk, the fastest-growing expenditure item listed on the government’s cash flow statement.

    Victoria’s net debt – the total amount we owe – is forecast to pass $187.8 billion by July 2028 on the way to an unknown, distant peak. It is unfair to characterise it as a mountain because, at this point, there is no downward slope discernible to Treasury officials.

    “As a proportion of gross state product, Victoria’s net debt is going to be higher than it was at the end of the Cain/Kirner years,” says economist Saul Eslake. “If I was a Victorian taxpayer, I would be worried about that.

    “Certainly outside of Victoria, everyone thinks Victoria is a basket case.”

    Astonishingly, Victorian Treasurer Tim Pallas claims the debt has “stabilised”.

    In the six months since Pallas published his last update of Victoria’s finances, the bottom line has gone backwards by $2 billion.

    In the mid-year budget review tabled in December, the cash deficit for 2023-24 – the total revenue raised by the government less everything it spends – was forecast to be $13.1 billion. On Tuesday, that figure was revised to $15.2 billion.   The Age

    So very stable.

    Over the four financial years covered by the budget, the annual interest required to service Victoria’s debt will jump from $6.3 billion to $9.3 billion.

    Remember when Dan Andrews promised 4000 ICU beds? Yeah, neither does he. In fact, Victoria’s health system — traditionally a Labor strength — is in for a major trimming-down. Although, in a rare departure for any government, let alone Labor, it seems as though it’s bureaucratic fat that’s getting cut.

    A leaked document, seen by this masthead, reveals one of the options is mergers – or “consolidations” – which would mean many existing health services would lose their own chief executive and local boards and have them replaced by an advisory board.

    It’s clearly not as if there’s no room for cleaning out the bureaucracy in Victoria. The state has 76 health services, compared with 17 in more populous NSW, 16 in Queensland, 10 in SA, five in WA, and just three in Tasmania. Even New Zealand only has 20 district health boards.

    But that’s not how it’s going to be spun by vested interests. Labor risks getting on the wrong side of the powerful hospital unions. Already, the complaints are starting.

    It doesn’t look as though the budget is buying Victorian Labor any love at all.

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    Treasurer Tim Pallas said his 10th budget would help families, but the only sweetener was payments of $400 per child from next year for the families of students in Victorian public schools and concession cardholders at non-government schools.  The Age

    In fact, if The Age’s vox pop is anything to go by, not many “key stakeholders”, as the jargon goes, are particularly happy.

    Certainly not young families, commuters, or small business owners.

    In 92, it took the mongrel of Jeff Kennett and Alan Stockdale to fix the Victorian basket case.

    Who’s going to save Australia’s Wokest State from itself, this time?

    The Tax Power

    By
    Adam Craig
    -
    0

    The Commissioner of Taxation has too much power. 

    Libertarians consider tax to be either theft or, at best, should be low and flat to cover bare necessities. It certainly shouldn’t be as complex as it is or run to thousands of pages. 

    Most mainstream tax reform proponents have grandiose visions that would only add complexity and likely raise the overall tax burden. Libertarians rightly oppose those ideas as they come. 

    However, there is an easy win that ought to be important to libertarians: we need to limit the Commissioner of Taxation’s powers. It’s not exciting work, like developing new systems, but it is significant. 

    First, the Commissioner has too much power to amend assessments. 

    Australia has a self-assessment tax system. That means we declare income and allowable deductions, which the Commissioner accepts but can then amend if he considers the taxpayer was wrong. 

    Libertarians can demand fairer amendment periods, a fairer burden of proof, and less funding for the Commissioner. 

    For individuals the Commissioner can amend an assessment within two years. For businesses, it is usually four years. 

    However, the relevant section of the law for income tax – leaving aside equivalent sections for other taxes – is around 3000 words– because it contains “ifs” and “buts” to protect the Commissioner. 

    For example, if the Commissioner makes a tax avoidance determination, he can have four years instead of two years to change an assessment. If the Commissioner believes there has been fraud or evasion, he has an unlimited amendment period. If the Commissioner believes a particular section of the tax law relating to trusts applies, he again has an unlimited amendment period.  

    These powers predate most of this century’s technological advances, which enable the Commissioner to work more efficiently and collect more data. Also, many amendments to the tax law in recent years have made it easier for the Commissioner to apply the law, including changes to avoidance laws favouring the Commissioner.

    It must be a libertarian position to reduce amendment periods. 

    Second, the Commissioner does not need to prove anything in litigation. The starkest example of this rule operating unjustly is when the Commissioner has amended a taxpayer’s assessment because he believes fraud or evasion has occurred. 

    The Commissioner need only believe there has been fraud or evasion. 

    He can form this opinion about any year – 2003, for example. And if he goes back to 2003, he will likely repeat that for many subsequent years, and he will apply penalties and interest. 

    Most mainstream tax reform proponents have grandiose visions that would only add complexity

    Suppose the matter is in the Australian Administrative Appeals Tribunal or the Federal Court of Australia. The Commissioner will not need to prove the truth of his opinion. Also, it doesn’t matter if the taxpayer proves the Commissioner’s opinion was wrong. The taxpayer’s task, two decades later, is to show that its accounting was correct. Not surprisingly, most people do not have records that go back that far. 

    It must be a libertarian position to oppose the power to simply deem fraud, and to demand a time limit on the exercise of the fraud or evasion power. The Commissioner should have an obligation to prove fraud or evasion has occurred before the taxpayer must prove its accounts. 

    Third, the Commissioner is emboldened to use his amendment powers through funding. The Commissioner receives substantial funding to run the Australian Taxation Office. 

    Libertarians would rightly want that funding limited. 

    However, there is also a perpetual cycle of giving the Commissioner additional funding to use his amendment powers, particularly under the auspices of tax avoidance.   

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    Libertarians would want that funding limited because it encourages the Commissioner to use his firmest amendment powers. It also raises questions about the management of public finances – should the Commissioner be “rewarded” with additional funding for things he should already be doing? 

    Libertarians can demand fairer amendment periods, a fairer burden of proof, and less funding for the Commissioner. 

    It would be hard to think that most taxpayers would not be libertarians regarding these issues.

    The Federal Government Should Deliver a Decade of Surpluses

    By
    Duncan Spender
    -
    1

    A government’s balance sheet indicates whether it is engaging in intergenerational redistribution. If the government has negative net assets it is leaving future generations with more obligations than benefits. A government with positive net assets is leaving future generations with more benefits than obligations.

    Governments have no advantages over individuals in making decisions about what to leave to future generations, so should leave those decisions to individuals. This means that governments should have zero net assets; their balance sheets should be balanced.

    Governments in Australia do not have balanced balance sheets. The Commonwealth has a significantly negative net asset position and each of the states and territories has a significantly positive net asset position.

    When it comes to setting fiscal policy, governments should ignore short-term Keynesian distractions, and focus on long-term intergenerational neutrality.

    This is shown in Chart 1. It depicts public sector net asset positions relative to the size of the related economies. Commonwealth net assets are shown relative to Australia’s Gross Domestic Product (GDP), while each state or territory’s net assets are shown relative to the relevant state or territory’s Gross State Product (GSP). Each jurisdiction’s public sector includes government-owned businesses such as government-owned banks.

    The Commonwealth’s negative net asset position means that it is choosing to leave future generations with obligations in excess of benefits. In essence, the Commonwealth Government has locked in benefits for future generations, like security from the military assets it has accumulated to date, but has racked up far greater obligations, like obligations to pay back Commonwealth debts and fund the superannuation of retired Commonwealth public servants. 

    This decision of the Commonwealth Government to beggar the future is unlikely to represent the preference of Australians.

    The Commonwealth Government’s intergenerational redistribution should stop, so as to leave intergenerational decisions to individuals. In other words, the Commonwealth Government should convert its negative net asset position to a zero net asset position.  This should be done through a decade of surplus budgets (or surplus ‘operating results’ to be more precise) of around 2 per cent of GDP. 

    This could be readily achieved, for example by reducing Commonwealth Government transfers to the state and territory governments. These transfers are particularly odd given that each state and territory government is wealthier than the Commonwealth Government.

    Each state and territory government’s positive net asset position means that it is choosing to leave future generations with benefits in excess of obligations. It is teeing up more benefits for future generations, like their enjoyment of public land holdings and use of infrastructure like roads, than it is racking up future obligations, like State Government debts and funding the superannuation of retired State public servants.

    While leaving future generations with benefits in excess of obligations sounds nice, this is something that individuals are perfectly capable of doing without government.  

    Governments have no advantages over individuals in making decisions about what to leave to future generations

    And the current generation may well be of the view that the degree of generosity to future generations shown by each of the state and territory governments is excessive. If there is a difference of opinion between a government and the individuals it represents, then it is the government that is wrong. 

    State and territory government intergenerational redistribution should be put to a stop by each government reducing its positive net asset position to net zero. This should be done through a decade of deficit budgets (or deficit ‘operating results’ to be more precise) of around 4 per cent of GDP on average.

    Such deficits could be achieved by abolishing inefficient taxes like stamp duties, or by giving away assets. (Such give-aways count as losses that detract from the operating result.)

    The biggest deficits should come from the wealthiest state governments, in Queensland and Victoria.

    The wealth of the Victorian state government may come as a surprise. The Victorian state government has a stronger net asset position and a weaker net financial asset position than many of its counterparts (see Chart 2). It has done a lot of borrowing, which has weakened its net financial asset position, but it has done this to invest in non-financial assets.  Overall this generates a positive, or at least neutral, impact on net assets.

    Unfortunately for the Victorian state government, credit rating agencies tend to ignore a government’s net assets and instead focus on its net financial assets. Even more stupidly, lenders take these credit ratings into account when lending to governments. If a state or territory government wanted to defend its credit rating so as to ensure continued access to low-cost borrowing, it could still run significant deficits in line with my recommendation. It would just need to achieve these deficits by giving away non-financial assets, like land, so as to leave its net financial asset position unchanged.

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    When it comes to setting fiscal policy, governments should ignore short-term Keynesian distractions, and focus on long-term intergenerational neutrality.

    Free Markets Work Better for Energy

    By
    Nicholas Samios
    -
    0

    Energy is again front and centre in the news with the debate over the merits of nuclear energy becoming mainstream. But then last week the Prime Minister announced a new scheme to subsidise the manufacture of solar panels in Australia. One wonders whether this is to support industry or just to close down a debating point against solar – that only 1% of the hardware used in Australia is manufactured locally. 

    The push by governments worldwide to subsidise solar energy, under the banner of sustainable development and carbon neutrality, seems forlorn.  

    The truth is that free markets are more effective at capital allocation and problem solving than governments (assuming you accept there is a problem that needs solving). Free markets operate on profit incentives, driving businesses and individuals to invest resources where they are most efficiently used and valued, leading to innovation and optimal distribution of goods and services.

    The DeGrussa solar and battery project in Western Australia epitomises the sheer lack of commercial savvy possessed by government.

    Australia’s existing solar energy subsidies are an obvious illustration of the misaligned priorities and inefficiencies that can arise from government intervention. The Albanese government’s commitment to injecting $1 billion into domestic solar panel manufacturing, including in coal-rich areas like the Hunter Valley, is a classic example of the triumph of hope over experience.  

    Australia’s history is littered with government involvement in business sectors that wasted tax payer money through inefficiencies.   The proof of free market superiority was demonstrated when entities like the Commonwealth Bank of Australia was privatised (under Paul Keating), as was Telstra (under John Howard), and Qantas Airways (under Bob Hawke). Each became far more efficient and successful post-privatisation. 

    A particularly significant example is the case of Commonwealth Serum Laboratories, privatised under Paul Keating. Originally government-owned, CSL was started in 1916 to “serve the health needs of a country isolated by war”.  Fair enough perhaps.  

    The push by governments worldwide to subsidise solar energy, under the banner of sustainable development and carbon neutrality, seems forlorn. 

    CSL was privatised in 1994 and has since been transformed into a global biotechnology powerhouse. Post-privatisation, CSL significantly increased its operational efficiency, innovation capacity, and market reach, becoming a leading provider of vaccines and plasma products worldwide. CSL’s journey from a national vaccine manufacturer to a global biotech leader underscores the difference between how governments lose and free markets win.

    Albanese ought to learn lessons from Keating and Hawke on the superiority of private capital at solving public problems (banking, telecoms and aviation). Is energy so different?  And what does the Albanese government think it is going to achieve anyway with this $1bn investment?  How will Australian ventures compete with global giants, especially Chinese manufacturers which benefit from (ironically) cheaper electricity, lower labour costs, and economies of scale?

    The DeGrussa solar and battery project in Western Australia epitomises the sheer lack of commercial savvy possessed by government.   Funded in part (and thus enabled) by federal taxpayers, it is now being dismantled after just seven years, highlighting the precarious financial underpinnings of these subsidised solar ventures. This project, once a beacon for renewable energy in remote mining operations, became a financial quagmire, with the cost per tonne of avoided greenhouse gas exceeding market rates for carbon credits.  

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    The DeGrussa project serves as a cautionary tale.  There is a broader trend of hasty government interventions in the solar energy sector, driven by politics motives rather than economics. 

    While the drive towards renewable energy may be commendable (let’s buy into that for the sake of argument), the path to achieving it must be paved with prudent financial decisions and strategic planning – best executed by the free market. 

    None of your Business

    By
    Max Payne
    -
    1

    Housing affordability is a perennial issue that seems to be spilling over into the political domain in a way that is more divisive and acute than ever. And as usual, the political class is more interested in sounding like they are engaging with the issue than actually addressing it.

    Oddly enough it is the left side of politics that has shown the most interest in the critical supply side of the equation. The Liberals on the other hand appear poised to double down on demand-side solutions by rehashing their ‘super for homes’ policy – as if there wasn’t already enough money flowing into property! Meanwhile everyone else on the right merely points to immigration.  

    There is no question that the heart of this issue is the fact that there is not enough housing being built to keep supply in step with demand – I previously hypothesised that more atomised living arrangements could be at least partly to blame, Bob Day suggested land supply was responsible.

    Politicians never talk about the amount of misallocated capital which has resulted from government intervention.

    There are other problems too – government intervention during Covid brought forward demand and deferred builder collapses, aggravated by inflation of material and labour costs. The affordability of borrowing to buy a house has also tightened – with mortgage repayments rising significantly due to interest rate hikes. 

    There has also been a long history of demand-side grants, subsidies, policies and exemptions that have aimed to increase affordability while also maintaining high prices. That’s before we even talk about how much state and local governments rely on higher house prices, particularly via stamp duty and council rates.  

    But there is something more fundamental at the heart of the property market – the extent to which government intervention directs investment away from more productive investment involving genuine innovation. Australia is anti-business, and Labor’s changes to stage 3 tax cuts indicate the punitive attitude government takes towards higher income earners. 

    Politicians never talk about the amount of misallocated capital which has resulted from government intervention. People respond to incentives – and there is very little incentive to invest in innovation and business, but plenty to invest in property – notwithstanding the current constraints.

    The affordability of borrowing to buy a house has also tightened – with mortgage repayments rising significantly due to interest rate hikes. 

    Would you start a small business and deal with endless red or green tape, the highest nominal minimum wage in the world, the above median corporate tax rate, and spiralling energy costs? 

    Given the government’s policy settings you’d be more likely to buy an investment property, write off the interest payments against your taxable income, and claim a capital gains discount if you decide to flip it or sell up later. Perhaps you’d even build a property portfolio by leveraging equity along the way. 

    You’d benefit from the legislative protection of inflated prices that has resulted from real estate becoming such a large pool of private wealth and key source of state and local government revenue. You’d bank on local council opposition to new development, and large public infrastructure projects tying up resources to halt new housing supply coming to market amidst ever growing demand. 

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    Australian property has become such a safe bet that it is now even a well-known vehicle for international money-laundering! 

    Talk of new housing supply, development, upzoning or adjusting the rules around capital gains tax and negative gearing won’t change the fundamentals. Australia is anti-business and anti-innovation. Housing is the only way to get ahead in the lucky country.

    The Everyday Libertarian

    By
    Nicholas Samios
    -
    0

    In today’s politically charged atmosphere, evangelical libertarians often stray into polarising debates around topics like firearms or drug legalisation. Is there a subtler, more effective approach?  

    I suggest the “everyday libertarian mindset”. It involves reframing common complaints and concerns through the lens of smaller government and individual liberty.

    I often hear myself responding to complaints about government by saying “that’s why we need guns”.  When I say this, libertarians “get it”.  But this phrase causes our “normie” friends to switch off.

    Smaller government policies can foster the development of diverse and innovative energy sources, including nuclear power

    How about a more congenial conversational pivot:  “That’s why we need smaller government.”

    Picture this: A friend laments Australia’s low productivity. Instead of delving into a heated debate about employment policies, you respond calmly, “That’s why we need smaller government.” This simple phrase opens the door to a discussion about the role of government in the economy and the importance of prioritising individual liberties over interventionist agendas.

    Here are some instances where the everyday libertarian mindset shines:

    1. Healthcare costs: Rather than blaming the system for rising healthcare costs, discuss how government regulations inflate prices and limit choice in the healthcare market. Advocating for smaller government and increased competition can give individuals greater control over their healthcare decisions and costs. Would there be a shortage of doctors, hospitals, and other services if the government got out of the way? 

    2. Education quality: When concerns arise about education quality, highlight how government monopolies limit choice and innovation in education. By advocating for school choice and decentralising control over education, parents and students can access a wider range of educational opportunities tailored to their needs.

    3. Bureaucratic red tape: Encountering bureaucratic red tape or inefficiency? Emphasise the need for smaller government and streamlined regulations. By reducing the size and scope of government, individuals and businesses can navigate processes more efficiently.

    4. Personal freedoms: Discuss personal freedoms and civil liberties, emphasising the importance of limiting government power to protect individual rights. Smaller government leads to less intrusion into citizens’ lives and greater respect for individual autonomy.

    Rather than blaming the system for rising healthcare costs, discuss how government regulations inflate prices and limit choice in the healthcare market

    5. Publicly funded broadcasters: When discussing the publicly funded government broadcasters, such as the ABC and SBS in Australia, consider the implications of government involvement in media. Point out that taxpayer-funded media outlets compete with the private sector, which do not cost taxpayers anything. By advocating for smaller government and media independence, individuals can support a diverse and free press that serves the interests of the public rather than political agendas. Encourage exploring alternative funding models, such as private sponsorship or subscriber-based models, to ensure journalistic integrity and freedom of expression.

    6. Nuclear energy: Discuss the lifting of the ban on nuclear energy in Australia. Smaller government policies can foster the development of diverse and innovative energy sources, including nuclear power. Advocate for a free-market approach to energy production, where individuals and businesses have the freedom to pursue cleaner and more efficient energy solutions without burdensome government regulations hindering progress.

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    I find the phrase “that’s why we need smaller government” easy to apply to almost any situation.  Any mistake a government makes – “that’s why we need smaller government – less for these people to stuff up”.

    By incorporating these instances, we illustrate how the everyday libertarian mindset can be applied to a wide range of issues, promoting smaller government and individual liberty in everyday conversations. It’s about sparking thoughtful discussions and planting seeds of libertarian principles in the minds of others, one conversation at a time.

    The Missing Ingredient – Assimilation

    By
    David Leyonhjelm
    -
    0

    When Al Grassby was Immigration Minister in the Whitlam government in the early 1970s, he announced that multiculturalism was to be Australia’s future policy. Assimilation was over. 

    There was a time when Australia actively promoted assimilation. It was the late nineteenth and early twentieth centuries  and applied to Aborigines, varied by state and location, involved the removal of vulnerable children from families, included an obligation to learn English, discouraged speaking local languages, and prohibited certain customary practices – particularly those involving violence. 

    But Grassby was not referring here to Aborigines or to policies from the distant past. Nor was it a reference to the White Australia policy, which the Whitlam government had officially ended. His comment was about new immigrants and implied that they had been subject to a policy of assimilation. 

    In the generally accepted meaning of the word, this was complete nonsense. What Australia had was a policy of promoting integration. And, as history shows, it had been remarkably successful. 

    The point is, values matter. Australia does not need multiculturalism.

    Mostly European and British, Australia’s post-war immigrants were referred to as “New Australians”. Although encouraged to learn English, they were never asked to disown their origins. There were free English classes for adults, and parents were required to send their children to school, like everyone else, where lessons were conducted in English. The kids often became interpreters for their parents. 

    Most immigrants became Australian citizens relatively quickly, the only negative being they had to renounce the citizenship of their original country; Australia did not permit dual citizenship until 2000. 

    If the immigrants themselves had mixed feelings, the second or third generations saw themselves as Australians first and their country of origin second. Immigrants married other immigrants, their children married other immigrant children, and many went on to be highly successful. 

    The Whitlam government also began to admit significant numbers of people from Asia, initially Vietnam and Cambodia. And while there were pockets of resistance to this, with Whitlam himself wary of accepting anti-communist Vietnamese refugees, these also integrated well. Later waves from places such as Sri Lanka, Mauritius, Hong Kong, Malaysia and India were equally successful. 

    But then something changed. Certain immigrants began to form enclaves and avoid contact with other Australians They also made minimal effort to learn English. The men often went back to their country of origin to find a wife, even if they were born in Australia, refusing to contemplate finding one locally. 

    Most importantly, they became contemptuous of Australian culture and values while demanding respect for their own. This was not about football, music or food, but core aspects of liberal democracy: equality before the law, presumption of innocence, respect, democracy, free speech, economic opportunity, and tolerance. This was accompanied by a major upsurge in violent crime and welfare fraud. 

    While it obviously reflects a failure to integrate, this is nonetheless multiculturalism. The culture of these people is maintained in parallel with Australia’s traditional culture. 

    If the immigrants themselves had mixed feelings, the second or third generations saw themselves as Australians first and their country of origin second.

    After several decades of this, Australia’s laidback ‘live and let live’ culture is now under serious challenge. 

    In a number of countries in Europe, the same issue has arisen. Several are now abandoning multiculturalism in favour of active integration. Perhaps it could even be called assimilation. 

    The Netherlands, for example, now requires most immigrants (including asylum seekers) to undertake a “civic integration” examination within three years of arrival. The examination tests knowledge of the Dutch language and society, and a pass is required to obtain permanent residence and citizenship. Certain classes of prospective immigrants must also pass a test even before they first enter the country. The pass mark is being steadily raised. 

    It is obvious that Al Grassby’s policy is no longer appropriate, if it ever was. Liberal democratic values are jeopardised when authoritarian, doctrinaire or anti-liberal cultures are given equal standing. The presumption of innocence took a major hit in the Higgins case, for example; equality before the law came under threat with the Voice referendum; freedom of speech faces yet more limits with the Government’s Misinformation and Disinformation bill; and economic opportunity is being squeezed by excessive taxation and red tape. Meanwhile, tolerance is challenged by cancel culture and antisemitism.

    None of these is directly attributable to a failure of immigrants to integrate, but they indicate a lack of national commitment. If traditional values are not defended, alternative values will inevitably gain a foothold. 

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    There are multiple ways to rectify this problem. Australia already has an integration test for citizenship, for example, but it could be made more like that of the Dutch. There are many sources of potential immigrants, so we could select those most likely to integrate (most of those refusing to integrate come from the Middle East). And we could also make it abundantly clear to prospective immigrants that they are expected to adapt to Australian culture, not vice versa.  

    The point is, values matter. Australia does not need multiculturalism.

    25 Provocative Predictions For 2024 From The World’s #1 Political Observer

    By
    Kenelm Tonkin
    -
    0

    GOVERNMENT OVERREACH

    1. Habeas corpus will not be restored in Australia.
    1. The Australian Federal Budget will be in deficit and expenditure will increase on the previous year.

      Correct: “A deficit of $28.3 billion is forecast in 2024–25.”
      Source: Statement 1: Budget Overview. Page 2.
      https://budget.gov.au/content/bp1/download/bp1_bs-1.pdf

      Correct: Forecast expenditures for 2023-24 and 2024-25 are $691,070,000,000 and $734,518,000,000 respectively.
      Source: Statement 6: Expenses and Net Capital Investment. Page 233.
      https://budget.gov.au/content/bp1/index.htm


    ENVIRONMENT

    1. There will be at least 7 tropical cyclones or severe tropical cyclones in Australia.

      Correct:
      Category 3 Severe Tropical Cyclone Anggrek. 10-25 Jan 2024.
      Category 3 Severe Tropical Cyclone Kirrily. 12 Jan – 5 Feb 2024.
      Category 1 Tropical Cyclone Lincoln. 14-25 Feb 2024.
      Category 4 Severe Tropical Cyclone Neville. 4-24 Mar 2024.
      Category 4 Severe Tropical Cyclone Megan. 13-21 Mar 2024.
      Category 5 Severe Tropical Cyclone Olga. 4-11 Apr 2024.
      Category 2 Tropical Cyclone Paul. 9-12 Apr 2024.
      Source:
      https://en.wikipedia.org/wiki/2023%E2%80%9324_Australian_region_cyclone_season

    STOCK MARKET

    1. Woolworths’ revenue will be lower in the March 2024 quarter than in the March 2023 quarter.

      Incorrect: Federal Opposition Leader, Peter Dutton, called for a Woolworths boycott because it would not stock Australia Day paraphernalia. I incorrectly thought this extraordinary interference with the market might suppress sales below the same quarter the previous year. However, revenue for the 2024 March quarter was $16,800,000,000, higher than for the 2023 March quarter which was $16,338,000,000.
      Source: Page 2.
      https://announcements.asx.com.au/asxpdf/20240502/pdf/0634t0t80r8xxq.pdf

    HEALTH

    1. There will be 10 or less global cases of wild polio.

      Pending: As at 25 May 2024, there have been two cases of wild polio globally, both in Pakistan. Watch this space for more updates.
      Source:
      https://www.who.int/news/item/08-04-2024-statement-following-the-thirty-eighth-meeting-of-the-ihr-emergency-committee-for-polio#:~:text=Sudan%20and%20Sudan.-,Wild%20poliovirus,samples%20to%20date%20in%202024
    1. For the first time, 33% or more of the Australian population will be obese.

    SOCIAL TRENDS

    1. The sale of sex dolls will increase in Australia.
    1. In at least one month during 2024, social media platform X will attract more than 450 million monthly users.

      Correct: On 24 May 2024, Elon Musk announced X achieved over 600 million monthly active users.
      Source:
      https://www.socialmediatoday.com/news/elon-musk-x-now-600-million-monthly-active-users/717078/ and https://backlinko.com/twitter-users#twitter-monthly-users
    1. Mount Barker SA will have a larger population than Busselton WA, Orange NSW, Bowral NSW, Dubbo NSW, Nowra NSW or Bathurst NSW.
    1. At least 25% of Australians will attend church monthly.
    1. Less than 50% of Australians will use TV as their source of news.
    1. Pet ownership in Australia will grow to more than 70% of all households.

    SCIENCE & TECHNOLOGY

    1. Space X’s Starship will successfully reach orbit. 

    ECONOMICS

    1. The number of new incorporations will decrease in Australia from the previous year.

      Pending: In 2022-23, there were 406,365 business entries in Australia. We are waiting for the 2023-24 number
      Source:
      https://www.abs.gov.au/statistics/economy/business-indicators/counts-australian-businesses-including-entries-and- exits/latest-release
    1. Cash transactions will decrease below 17% of total transactions.
    1. Australian coal exports will increase from last year.


    ELECTIONS

    1. The ALP-Greens Coalition will be returned to government in the ACT General Election.
    1. The Country Liberal Party will win the Northern Territory General Election.

      Correct: The CLP won the election on 24 Aug 2024.
      Source:
      https://www.sbs.com.au/news/article/country-liberal-party-promises-new-chapter-after-northern-territory-election-win/cwyuz1x0a
    1. The Liberal-National Party will win the Queensland State Election.
    1. Barring court-affirmed election fraud, a diagnosis of ill-health, imprisonment or assassination, Donald Trump will win the US Presidency.


    GEOPOLITICS

    1. In 2024, China will neither invade Taiwan by land nor impose a naval blockade.
    1. The United Nations General Assembly will pass at least three resolutions concerning Israel and Australia will vote with the United States.

      Pending: UN Security Council Resolution 2735 adopted 10 June 2024.
      Source: https://documents.un.org/doc/undoc/gen/n24/165/11/pdf/n2416511.pdf
    1. There will be no resolution of the conflict in Ukraine.
    1. At least two international borders will change.

      Correct:
      1 Jan 2024. Republic of Artsakh reintegrated into Azerbaijan.
      1 Apr 2024. Puntland announces independence from Somalia.
      Source: https://en.wikipedia.org/wiki/List_of_national_border_changes_(1914%E2%80%93present)
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    DEATHS

    1. At least two of the following people will die: Ray Lawler, Sophia Loren, Julian Assange, Patricia Routledge, Tom Hughes, Jimmy Carter, Mike Carlton.

      Pending: Ray Lawler died on 24 July 2024.
      Source: https://en.wikipedia.org/wiki/Ray_Lawler

    SUMMARY
    Correct: 5
    Pending: 19
    Incorrect: 1

    E-Scooters: A Two Wheeled Burden?

    By
    Meaghan Whyte
    -
    2

    Since approximately 2016 there has been a rapid increase in personal and for-hire electric scooters (e-scooters) in cities around the world. Over 600 cities now have e-scooter for-hire services and, globally, the electric scooter market is valued at more than AUD $49 billion and growing at 10% per year. In Australia, there was an 800% increase in e-scooters from 2016 to 2021.

    However, there are serious concerns regarding e-scooter related injuries.  

    The Victorian Emergency Minimum Dataset has released figures regarding e-scooter riders seeking emergency care in hospitals: 502 in the 2022 financial year, then 958 in the 2023 financial year; nearly a twofold increase year on year. Victoria introduced its e-scooter trial with 2500 rental scooters in Melbourne, Port Phillip, and Yarra council areas in February 2022, and legalised  private e-scooters on public roads in March 2022.

    Despite the minimum riding age being 16 there have been 193 presentations by children below this age over the past 3 years. Royal Australasian College of Surgeons Victorian chair Dr Patrick Lo has stated that 3 children presented in one week with a brain haemorrhage, brain swelling and a broken neck. 42 unfortunate pedestrians have also been treated for e-scooter-related accidents.

    Mortality due to e-scooter traffic accidents was 9.2%.

    Queensland has released similar figures. In that state, e-scooter injuries admitted to hospitals were as follows: 279 in 2019, 877 in 2022, and 801 by September of 2023.

    In Western Australia there was a 386% percent increase in hospital admissions in the year July 2021 to June 2022. There was a 200% increase in injuries between 2017 and 2022.

    A study by the University of California San Francisco found that in the US, e-scooter-related injuries and hospital admissions increased by 222% from 2014 to 2018, climbing above 39,000. Hospital admissions expanded by 365%.

    Severe Injuries, Lack of Helmets

    The study “Comparison of Injuries Associated With Electric Scooters, Motorbikes, and Bicycles in France, 2019-2022”, published in the Journal of the American Medical Association (JAMA), looked at 5,233 e-scooter injury patients. Mortality due to e-scooter traffic accidents was 9.2%. The risk of severe traumatic brain injury, 26%.

    In a study done by University of California San Francisco, electric scooter injuries included fractures 27%, contusions/abrasions 23% and lacerations 14%. Most concerning, almost one third reported head trauma. 

    The study “Characteristics of Electric Scooter and Bicycle Injuries After Introduction of Electric Scooter Rentals in Oslo, Norway”, published in the JAMA, found that e-scooter injuries often occur at night, to young adults, who aren’t wearing helmets, and have a high blood alcohol reading. Dr Sarah Whitelaw, an emergency doctor in Victoria, echoes this sentiment. She said in addition, riders were often travelling at high speeds.

    In Australia, there was an 800% increase in e-scooters from 2016 to 2021.

    Economic Burden

    In the US, UCLA research reveals that the healthcare cost of e-scooter injuries increased from $6.6 million in 2016 to $35.5 million in 2020.

    Doctors in New Zealand reviewed data of surgeries on injured scooter riders from October 2018 to February 2019. Adding up costs including anaesthetic, theatres, staff, implants, time in hospital and lost income, each injury averaged $19,282 NZD. Over $400,000 was spent in less than five months. 

    The study “The impact of electric scooters in Melbourne: data from a major trauma service” published on Wiley, looked at e-scooter injuries admitted to Royal Melbourne Hospital from January 2022 to January 2023. 247 riders and 9 pedestrians presented for treatment. 33% of riders were wearing helmets at the time of incident. 50% reported head injuries. Hospital cost totalled $1.9 million, and median cost was $1321.66 per patient. 

    According to the hospital’s website, “The Royal Melbourne Hospital is part of Australia’s public health care system and offers hospital care to any Australian resident under Medicare arrangements.” This also applies to the 696 other public hospitals across Australia many of which would be treating e-scooter injuries, paid for by the taxpayer. 

    Solution

    The question for libertarians is not whether to restrict or ban e-scooters, which is what authoritarians prefer, but how to move the financial risk and economic burden of injuries from taxpayers to e-scooter riders.

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    One potential solution is to establish an insurance requirement for both rental and private e-scooter owners. Purchased by riders, this would function like first-party and third-party car insurance. In the event of an accident, the insurance would cover resultant medical costs. 

    Consistent with the concept of personal responsibility, this approach would shift financial liability to individual riders and decrease reliance on public healthcare funds. It might even become a model for managing other health risks.

    Part II:Programmable Money

    By
    Simon Anderson
    -
    0

    Two years ago the Deputy Governor of the Bank of England, Sir John Cunliffe, spoke the most sinister sentence I’d heard in a long while. The menace was unmistakable: 

    “giving your children pocket money but programming the money so that it couldn’t be used for sweets.” 

    This statement was offered in the context of Central Bank Digital Currencies. Let me explain what these are and why Sir John’s statement is terrifying. 

    Everyone knows about cryptocurrencies such as Bitcoin. In January 2024 their total market capitalisation reached $US 1.77 trillion. For central banks that is an inordinate amount of money sitting outside traditional financial systems and regulatory frameworks. 

    The crypto market has evolved. Until fairly recently it was difficult to spend, so it tended to be treated more as an investment asset than as a mechanism of exchange. The time taken to process transactions was the most inhibiting factor. Unlike the near-instantaneous transactions of current electronic payment systems, cryptocurrency processing can take minutes.

    Imagine the government decides the economy requires stimulation by encouraging spending – your pay-cheque will lose 20% of its value if you don’t spend it within a month.

    That made it suitable for a making a purchase from an online retailer, but not so good for buying a coffee in the local café.

    Technology has evolved to address this limitation. Cryptocurrency exchanges (much like a brokerage) now offer a variety of financial tools and services in partnership with credit card companies. One such service is a debit card directly linked to a crypto account.  

    This resolves the usability issue. A card such as a WireX can be used wherever Visa is accepted with transactions debited from the user’s crypto account at the speed of a standard EFTPOS transaction. Spending cryptocurrency to buy an espresso has become mundane.

    And in consequence, financial technology (fintech) becomes tomorrow’s battlefield. 

    Conducting private transactions with a democratised digital currency is nirvana for libertarians but a nightmare for the state. Tax departments find it difficult to levy goods and services taxes on transactions that are opaque, while central banks can struggle to set monetary policy when sections of the populace are using a different currency. In New Zealand the Reserve Bank’s ‘Future of Money’ discussion paper identifies this as the primary risk to New Zealand’s monetary sovereignty. For a small economy, the prospect of goods and services being priced in a cryptocurrency instead of $NZD is a very real challenge to the Reserve Bank’s overarching objective of stewarding a stable anchor of value.

    What to do? For the state the answer is to co-opt and regulate, which is where Central Bank Digital Currencies (CBDCs) come in. 

    Like most central banks, the Bank of England realises digital currencies are inevitable. Their plan is to mandate a state-controlled alternative, linked to the traditional local currency. 

    As Sir John points out, CBDCs can be programmed like any other cryptocurrency. From the point of view of the state this is fantastic: improved efficiencies in the financial system generating economic benefit whilst enhancing the control that states traditionally exert over fiat currency. 

    From the point of view of the people it is not so good. Programmability has the potential to enable totalitarian micro-control over every aspect of our financial lives. When every transaction is recorded and the state can manipulate the currency with immediate effect, the people are reduced to mere economic units whose financial behaviours can be strictly monitored, manipulated and mandated.

     Cryptocurrency exchanges (much like a brokerage) now offer a variety of financial tools and services in partnership with credit card companies.

    Imagine the government decides the economy requires stimulation by encouraging spending – your pay-cheque will lose 20% of its value if you don’t spend it within a month. Imagine being automatically sent to the bottom of the queue for diabetes treatment because the health system has determined you spent too much on Coca-Cola over the last 12 months. The possibilities afforded by control of currency at this granularity are endless. 

    In New Zealand the Reserve Bank’s discussion papers are at pains to obfuscate the essence of this aspect. In response to concerns raised by the public, industry and no less than the Privacy Commissioner himself, the Reserve Bank stressed that privacy would be a consideration. It has not been elevated to the status of principle. Of perhaps greater concern is the Reserve Bank’s differentiation between the definitions of privacy and anonymity:

    “’Privacy’ means that it is possible that data was collected but has not been shared, while ‘anonymity’ means data was not collected.”

    Between the competing regulatory demands of the Privacy Act and the Anti-Money Laundering and Countering Financing of Terrorism Act, the Reserve Bank’s view of precisely where on the spectrum New Zealand should reside certainly isn’t leaning towards privacy or the anonymity Kiwis currently enjoy with physical cash currency.

    Alongside the introduction of CBDCs will be initiatives to hobble the competition. Governments will endeavour to regulate existing cryptocurrencies out of existence and are likely to impose stiff penalties on those who trade in them, an aspect the Reserve Bank addresses with the vague and rather euphemistic intention to ‘Regulate new forms of money and payments that impact stewardship goals.’ 

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    This is already happening in China: the introduction of the Digital Renminbi CBDC in 2021 was accompanied by an outright ban on other cryptocurrencies, the Standing Committee knowing full well that control of the digital currency was essential to the long-term success of the overlying Social Credit System.

    Western governments are likely to put a friendlier face on CBDCs, arguing trust, convenience and efficiency. Despite those arguments and the fluffy, paternalistic authoritarianism espoused by technocrats such as Sir John, no-one but your mum should have the right to tell you how many sweets you can buy with your own money. 

    Because she has your best interests at heart. Sir John espouses the best interests of the state.

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