Lawfare

7 February 2024

“Show me the man and I’ll find you the crime” is the famous statement attributed to Lavrentiy Beria, Joseph Stalin’s secret police chief. This is an example of lawfare: the manipulation of legal processes, civil or criminal, to serve political, ideological, or personal interests rather than upholding justice.

Lawfare involves the misuse of the law by various means including selective enforcement, biased prosecutions, and politically motivated judgments for reasons unrelated to justice. It targets individuals or groups based on their political beliefs, policies or affiliations, and uses the law as a weapon to suppress dissent.

Civil Law

Civil law is traditionally employed to resolve disputes between private individuals or entities. However, it has increasingly become a weapon in the hands of powerful interests to silence critics. Strategic lawsuits against public participation (SLAPP) are a prime example of how civil litigation can be misused. These lawsuits are often filed with the primary aim of intimidating, censoring, or bankrupting individuals or organisations critical of those in power.

Australia’s proposed Misinformation and Disinformation Bill will potentially criminalise free speech.

SLAPP suits typically lack merit but serve as a tool to burden defendants with legal expenses and time-consuming litigation. The fear of financial ruin can force individuals or groups to retract their statements, cease their activities, or settle out of court.

Criminal law

Governments and powerful organisations have increasingly turned to criminal law to suppress dissenting voices. Laws that criminalise defamation, sedition, or spreading false information can be exploited to target political opponents, journalists, activists, or any individual expressing dissenting views.

Australia’s proposed Misinformation and Disinformation Bill will potentially criminalise free speech. Ostensibly drafted to address the dissemination of false information, the legislation raises concerns due to its broad scope, leaving individuals uncertain about what constitutes a violation. Such ambiguity can be exploited to selectively enforce the law, enabling those in power to target specific individuals or groups based on political motivations rather than the alleged offense.

The absence of precise definitions allows for the manipulation of the law to serve political interests, allowing authorities to interpret and apply it selectively. This raises concerns about the erosion of democratic principles, as those in authority exploit legal measures to silence opposition and stifle public discourse.

One of the key concerns in the misuse of civil and criminal law is the selective prosecution of individuals or groups based on their political beliefs or affiliations. Authorities may use their power to target specific dissenting voices, leaving others untouched, thereby creating a chilling effect on those who oppose the status quo.

Strategic lawsuits against public participation (SLAPP) are a prime example of how civil litigation can be misused.

An example of this is the prosecution of Donald Trump, who many people believe is being persecuted rather than prosecuted to defeat him as a presidential candidate. Many believe Joe Biden has weaponised the Department of Justice to go after his political opponent, contrasting its treatment of Trump to that of Joe Biden in spite of widespread allegations of Biden’s corruption.

The repeated prosecution of Pakistan’s former prime minister, Imran Khan, is another example. The Pakistan military has used the country’s courts to impose jail sentences that ensure he and his party are unable to participate in forthcoming elections.

When legal actions are driven by political motivations rather than a genuine pursuit of justice, it erodes the credibility of the legal system. The rule of law is founded on the principles of fairness, due process, and the objective application of legal standards, not on the whims of those in power.

Frivolous civil lawsuits targeting individuals or groups and selective prosecution in criminal law depart significantly from a rule of law approach. In a rule of law framework, legal processes are expected to be impartial, fair, and based on established principles rather than arbitrary decisions or personal biases. Frivolous civil lawsuits, often driven by ulterior motives such as harassment or silencing dissent, abuse the legal system by burdening individuals with unnecessary litigation, straying from the principle of justice and fairness.

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Similarly, selective prosecution in criminal law undermines the rule of law by targeting individuals or groups based on political motivations rather than the merits of the case. A rule of law system requires equal application of the law, ensuring that legal actions are not used as tools for persecution or favouritism. When prosecution becomes selective, it compromises the foundational principles of fairness, due process, and equal protection under the law. In essence, both frivolous civil lawsuits and selective criminal prosecution deviate from the rule of law by introducing bias, subjectivity, and personal motivations into legal processes.

Jaimie Stevenson

Jaimie Stevenson JD (Monash) is a legal consultant for Australian-based SMEs, specialising in technology, data, privacy and IP law. She is passionate about the rule of law, as opposed to arbitrary rules, and minimal government encroachment on the inherent rights of the
individual including freedom, autonomy and dignity.

The New UAE Corporate Tax

Damon Hayhow

12 February 2024

The United Arab Emirates (UAE) is famous for, among other things, zero tax. That ended this year. The UAE now has a 9% tax rate for all but a very few exempted industries.

The implementation of a corporate tax is not because the UAE needs the money to build new roads, hospitals, schools or public facilities. The UAE is home to some of the most extraordinarily modern, effective and high-quality public utilities and infrastructure in the world. None of it required tax revenues. Nor was it all paid for with money from oil revenues.

Similarly, the UAE is not implementing a tax regime to fund public services such as policing, rubbish collection, healthcare or education. Again, the UAE embarrasses high-tax countries when it comes to public safety, maintenance of public spaces, healthcare and education. People in the UAE cannot even conceive of being robbed, let alone mugged; or even seeing a homeless drug addict. The unparalleled safety and cleanliness of the UAE has not required tax revenues; nor was it all funded by oil revenues.

The UAE has massive, diverse, revenue generating investments within itself, and throughout the world.

The UAE is also not implementing a tax regime to fund a social welfare program. 89% of the UAE’s 9 million residents are expatriates. They must support their residency through work sponsorship or business profits, or else they have to leave. Technically, there is limited assistance available to the 11% minority of native emirate citizens. In reality, there is an unspoken positive discrimination applied to emirate citizens for various job positions. So taxes are not needed for welfare.

The UAE is also not implementing a corporate tax to cover a ballooning government bureaucracy and out-of-control public indebtedness, like that seen throughout the “developed” Western nations, such as Australia. The UAE has massive, diverse, revenue generating investments within itself, and throughout the world.

The idea that Governments need an instrument as crude as tax to monetise a national economy is as archaic as it is absurd. We live in a world in which some of the largest and most successful companies lose money on their core business in order to drive greater profits from tangential sources. Airlines, for example, knowingly lose money from the business of flying planes, because greater profits come from the financialisation of their frequent flyer programs. Google and Facebook also stand out as companies whose revenues exceed the GDP of entire countries despite their ‘core products’ being ostensibly given away for “free”.

The UAE has attracted literally trillions of dollars of foreign investment, hundreds of thousands of companies, millions of residents, tens-of-millions of visitors each year, and built some of the most incredible cities on earth in scarcely a few decades; primarily, arguably, as a result of eschewing taxation. So why would the UAE change direction after achieving such success following a far more sophisticated business model?

UAE is home to some of the most extraordinarily modern, effective and high-quality public utilities and infrastructure in the world.

The reason the UAE is sacrificing the zero-tax brand it worked so hard to build, is due to political pressure from socialist, globalist, kleptocratic politicians in high-tax, western nations. That is, the same politicians responsible for the terminal decline and humiliation of the West – the exponentially increasing debt, monetary debasement, deindustrialisation, illegal migration, growing homelessness, increasing crime, energy shortages, insane ‘woke’ politics, military weakness, civil unrest etc etc etc – are demanding that other nations, like the UAE, follow their lead.

Unfortunately, the last time the UAE ignored the bullying of Western politicians they were placed on a so-called international ‘grey list’ by the Financial Action Task Force (FTAF) for not doing “enough” to “fight money laundering”. Compared to the money laundering taking place in the US, the volume going through the UAE is a pittance. But the issue was never about money laundering; it was demonstrating fealty to the Western political cabal. The ‘grey-listing’ was to embarrass the UAE rulers. The practical effect was simply to increase the paperwork burden placed on UAE banks moving money to and from overseas. That burden has made routine banking more difficult and expensive for legitimate SMEs, while having virtually no impact on companies and individuals transacting large sums.

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So the embarrassingly incompetent boobs overseeing the decline of the world’s richest countries have finally forced the UAE to start penalising businesses for being successful. The question now is: what is the likely impact going to be?

In 2018, the UAE was similarly pressured into implementing a goods and services tax (VAT) that included precious metals. The new 5% tax caused a 75% reduction in precious metal trade. Just 6 months later the Government exempted precious metals from the tax, restoring trade to previous levels.

So it will be very interesting to see what comes of the new UAE tax.

Damon Hayhow

Damon is the founder of the National Recomposition Institute and creator and founder of the Recomposer software system. He was also formerly the Australian Ambassador to the International Society of Sports Nutrition, president of the World Powerlifting Congress Australia and an Australian Champion in Bodybuilding and Powerlifting.

E-Scooters: A Two Wheeled Burden?

Meaghan Whyte

23 February 2024

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.

Meaghan Whyte

Meaghan became a staunch anarcho-capitalist after a collection of life experiences that left her disabused of any vestige of goodwill towards the state and its attendant institutions. Notable experiences included university gender studies, and living under social democracy. Now, she writes to advocate for the abolition of the state.

Raising Free Thinkers: The Case for Homeschooling

Warren Wang

25 May 2024

Two months ago I wrote an article in which I questioned my boy’s childcare centre for indoctrinating kids at preschool age about the controversial political matter of Acknowledgment of Country.

Shortly after, our second baby was born. During the hospital stay, unable to work much, I listened to several audiobooks that made me reconsider our children’s future education. I had long considered homeschooling but had comfortably settled on sending them to a private school. After careful discussion, my wife and I decided homeschooling is the right choice for our family.

Homeschooling aligns seamlessly with libertarian values, fostering individual freedom, intellectual growth, strong family bonds, and meaningful social interactions. This article summarises our thoughts on the ideological, intellectual, financial, familial, and social justifications for choosing to homeschool our two children.

Ideological Justification: Homeschooling as an Act of Anti-State

Homeschooling, viewed through a libertarian lens, represents a profound act of anti-state resistance. It rejects the traditional “factory model of education,” designed to produce a uniform, obedient workforce suitable for industrial society, heavily influenced by state mandates and standardised curricula. By choosing to homeschool, parents assert their right to direct their children’s education, free from government control and standardised norms.

Homeschooled children interact with people of various ages and backgrounds, enriching their social experiences and fostering a broader understanding of the world.

This opting out of the state-run education system rejects the regimented, one-size-fits-all approach of public schooling, which often emphasises conformity over individuality and critical thinking. Homeschooling allows for a more personalised and flexible educational experience, fostering independent thought and a deeper connection to learning, which starkly contrasts with the efficiency-driven, industrial roots of the current public education system. This choice embodies a broader libertarian ethos of minimising state intervention in personal and family matters, thereby promoting freedom, autonomy, and self-reliance.

Intellectual Justification: Personalised and Effective Learning

One of the greatest advantages of homeschooling is the ability to provide a personalised education tailored to each child’s strengths, weaknesses, and interests. Traditional schooling often hinders the intellectual growth of children who do not fit the mould. Homeschooling allows for a more flexible and adaptive learning environment, where children can explore subjects in greater depth and at their own pace.

This personalised approach not only enhances academic performance but also fosters the ability to self-learn, which is crucial for lifelong intellectual development. By cultivating self-directed learning skills, children become more engaged and motivated in their educational journey, making the process both more enjoyable and sustainable. They learn how to seek out information, critically evaluate sources, and apply knowledge in real-world contexts, far beyond the confines of traditional academic settings. Ultimately, homeschooling nurtures not just academic excellence in the short run but also the capacity for lifelong learning and intellectual curiosity, providing a foundation for ongoing personal and professional growth.

Financial Justification: Investment in Long-Term Gains

A key concern in choosing homeschooling is the financial burden. My work keeps me heavily occupied, and a high mortgage adds pressure. Homeschooling requires sacrificing work schedules and dedicating more time to children’s education, doubling the financial strain. This concern is common among libertarians, especially in expensive cities like Sydney.

However, we see homeschooling as an investment, yielding significant long-term benefits. The financial cost is offset by the gains in children’s education and personal development. Additionally, homeschoolers can take holidays during school terms when travel is cheaper, which benefits families with extended families overseas. Homeschooling also encourages children to develop life skills, financial literacy and responsibility from a young age, likely bringing financial rewards earlier.

Family Bond: Strengthening Family Connections

Homeschooling fosters a closer family bond by allowing parents and children to spend more quality time together. Parents can gain a better understanding of their children’s needs, interests, and learning styles, leading to a more effective educational experience.

Homeschooling aligns seamlessly with libertarian values, fostering individual freedom, intellectual growth, strong family bonds, and meaningful social interactions.

Additionally, the involvement of grandparents and other extended family members can further enrich the homeschooling experience. Intergenerational communication allows children to learn from the wisdom and experiences of their elders, fostering respect and understanding across generations. This dynamic can also provide emotional support and a broader perspective on life, enhancing the educational journey.

Social Justification: Learning Without Peer Pressure

A significant social advantage of homeschooling is the opportunity for children to grow without the negative influence of peer pressure. Instead of being confined to a classroom with same-age peers, homeschooled children interact with people of various ages and backgrounds, enriching their social experiences and fostering a broader understanding of the world. This exposure helps develop better social skills and a well-rounded social aptitude.

Homeschooling, when done right, provides numerous opportunities for real-life social interactions through community activities, volunteer work, and diverse social engagements, preparing children for the complexities of adult life and helping them build meaningful relationships and valuable life skills beyond the traditional classroom setting.

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Conclusion

Homeschooling offers a compelling option for libertarian families seeking to raise free-thinking, intellectually curious and well-rounded individuals. It aligns with the core values of liberty and personal responsibility, providing a tailored and effective educational experience. Despite the financial challenges, the long-term gains in personal development, family bonds, and social skills make homeschooling a worthwhile investment. By embracing homeschooling, libertarian parents can ensure that their children receive an education that truly reflects their values and prepares them for a life of independence and critical thinking.

Warren Wang

Warren escaped Communist China a decade ago to pursue education in Australia. Now a finance businessman, he passionately defends libertarian freedoms. Vigorously opposing COVID lockdowns and mandates, Warren champions traditional Western liberties, hoping Australia avoids becoming the repressive nation he left behind.

Victoria: Back in the Basket Again

Lushington D Brady

24 May 2024

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?

Lushington D Brady

Punk rock philosopher. Liberalist contrarian. Grumpy old bastard.

I grew up in a generational-Labor-voting family. I kept the faith long after the political left had abandoned it. In the last decade or two, I’ve voted at times for just about all of the major parties and quite a few of the minor ones.

My vote may have changed, but those basic working-class values I grew up with never have.

GST is Better than Income Tax

Duncan Spender

3 July 2024

In my last article I argued that a flat and broad-based income tax is much the same as a broad-based GST, so we have little reason to hate the concept of income tax more than the concept of GST. I argued this by setting out an imaginary scenario with five citizens, one business, and no government.

But there is an inherent difference between income tax and GST that makes GST better. I will argue this by adding an additional year to the imaginary scenario, and by honing in on three of the citizens – the three employees.

Year 1

In year 1 each employee earns a salary of $100,000, enough to buy 100,000 products at $1 each.

One employee is short-sighted and borrows $100,000 from another employee, who we will call the long-sighted employee. So in year 1 the short-sighted employee buys 200,000 products while the long-sighted employee buys nothing.

Year 1 with no government

Citizen…	receives…	and pays…
The short-sighted employee	$100,000 of salary, plus $100,000 borrowed from the long-sighted employee	$200,000 for 200,000 products
The long-sighted employee	$100,000 of salary, less $100,000 lent to the short-sighted employee	Nothing for no products
The take-it-as-it-comes employee	$100,000 of salary	$100,000 for 100,000 products

To extract the money it demands, the government imposes an income tax rate of 19.8 per cent.

Year 2

In year 2 each salary is $104,030, but this amount now buys only 101,000 products because the product price has risen from $1 to $1.03.

The salary of the short-sighted employee is transferred to the long-sighted employee to pay off the previous year’s debt. As such, the long-sighted employee buys 202,000 products in year 2, while the short-sighted employee buys nothing.

Year 2 with no government

Citizen…	receives…	and pays…
The short-sighted employee	$104,030 of salary, less $104,030 paid to the long-sighted employee	Nothing for no products
The long-sighted employee	$104,030 of salary, plus $104,030 paid by the short-sighted employee	$208,060 for 202,000 products
The take-it-as-it-comes employee	$104,030 of salary	$104,030 for 101,000 products

Bring Out The Government

Now imagine instead a scenario where there is a government, and let us assume the government’s taxation does not discourage the citizens from producing as much as in the absence of government.

In year 1 the government demands enough money from the three employees to buy 60,000 products. The government could get the money via a 20 per cent income tax on the salaries of the employees.

Year 1 with income tax

Citizen…	receives…	and pays…
The short-sighted employee	$80,000 of after-tax salary, and $80,000 borrowed from the long-sighted employee	$160,000 for 160,000 products
The long-sighted employee	$80,000 of after-tax salary, less $80,000 lent to the short-sighted employee	Nothing for no products
The take-it-as-it-comes employee	$80,000 of after-tax salary	$80,000 for 80,000 products
Government	$60,000 in tax	$60,000 for 60,000 products

In year 2, the government ups its demand, and now seeks enough money from the three employees to buy 60,600 products.

If the government gets the money via income tax, it ends up taking more from savers compared to the amount taken from borrowers, and compared to the amount taken from those who neither save nor borrow.

Consider the long-sighted employee, who lent $80,000 to the short-sighted employee in year 1, and who receives $83,452 from the short-sighted employee in year 2.

Year 2 with income tax

Citizen…	receives…	and pays…
The short-sighted employee	$83,452 of after-tax salary, less $83,452 paid to the long-sighted employee	Nothing for no products
The long-sighted employee	$83,452 of after-tax salary, plus $83,452 paid by the short-sighted employee, less $683 of tax on interest	$166,221 for 161,379 products
The take-it-as-it-comes employee	$83,452 of after-tax salary	$83,452 for 81,021 products
Government	$62,418 in tax	$62,418 for 60,600 products

The pre-tax income of the long-sighted employee in year 2 is $104,030 of salary plus $3,452 of interest, summing to $107,482. So the long-sighted employee has higher pre-tax income than the other employees, simply because of a deal struck between peers.

There is an inherent difference between income tax and GST that makes GST better.

To extract the money it demands, the government imposes an income tax rate of 19.8 per cent. The rate is lower than in year 1 because the government has dreamt up more income to tax than just salary income.

The long-sighted employee pays more tax in year 2 than any other citizen ($21,261 compared to $20,578). The long-sighted employee ends up purchasing less than double what the take-it-as-it comes employee purchases, despite the long-sighted employee having gone without all purchases in year 1.

This intrusion into the deal struck between the long-sighted employee and the short-sighted employee is how income tax punishes saving.

Even if the long-sighted and short-sighted employees respond to the imposition of income tax by negotiating a change in the interest payment involved in their arrangement, this would just mean they share the punishment of deal-making meted out by income tax, a punishment that the take-it-as-it-comes employee avoids.

As income tax penalises deal-making between savers and borrowers, while GST does not, income is inherently inferior to GST.

Duncan Spender

Duncan Spender is CEO of Oysters Tasmania, having previously served as CEO of the Multicultural Council of Tasmania. He advised Senator David Leyonhjelm from 2014 and briefly served as Senator in 2019. Duncan’s early career was in local government and the Australian and New Zealand Treasury Departments.

Part II:Programmable Money

Simon Anderson

21 February 2024

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.

Simon Anderson

Simon Anderson is a technology consultant from Auckland, New Zealand. He believes in the fundamental right of all people to exercise their democratic rights peacefully, particularly with regard to free speech. Simon came into public consciousness as a video-documentarian during the trans rights counter protests in Auckland during March 2023.

The Lure of Government Benevolence

David Leyonhjelm

27 December 2023

Why is it that in many countries, including Australia, governments consistently spend more than they collect in taxes, thus increasing the national debt?

Most governments understand that budgets should be balanced. They have seen what happens in countries that accumulate too much debt and cannot service it. And yet, the debt keeps growing.

The explanation is rather uncomfortable for many of us. It is, broadly speaking, our own fault. We keep electing governments that reflect our thinking.

There was a time when we largely provided for ourselves. Prior to 1909, for example, there was no age pension; everyone was expected to save for their retirement, directly or via a mutual society.

The reality of socialism is universal poverty, but the illusion of unlimited, universal care remains powerful.

Similarly, prior to 1910 there was no disability support pension. Privately funded charities and philanthropic organisations provided assistance for the disabled.

It was the same with health care; Medibank, the precursor to Medicare, did not exist until 1976.

University fees were a private cost until 1974. There were many scholarships on offer but those who failed to obtain one and whose family was unable to pay the fees would often delay or forego tertiary studies.

For women returning to work, childcare was typically provided by families, friends and neighbours, or by community organisations such as churches. Government subsidised childcare only began in 2000.

Most people would probably be disinclined to wind back the clock. And yet, most people also believe that they already pay too much tax and do not wish to pay more. And therein lies the problem.

In the five years in which I was a senator, I wrote hundreds of articles for newspapers and magazines. The subject on which I received the most hostile feedback was the suggestion that eligibility for pensions should take into account all assets, including the family home. It was inequitable, I argued, that the taxes of those who could not even afford to buy a home were funding the pensions of those living in multi-million-dollar houses.

I lost count of the number of people who claimed they were entitled to a pension because they had paid taxes during their working life. Many also argued that age pensions were justified because there were parliamentary pensions (although these were abolished in 2004).

It made me realise that Australians want to have their cake and to eat it too. That is, they want the government to pay for all sorts of services, but do not associate this with taxes. Money from the government is somehow different.

We keep electing governments that reflect our thinking.

The outcome is that governments implement generous schemes such as the NDIS, age and disability pensions, Medicare, childcare subsidies and HECS, generally to public acclaim, without mentioning where the money is to come from. There are far more votes in spending money than collecting it.

This presents a problem for libertarians, who advocate low taxes and small government. How can they persuade Australians that the hugely expensive government-run schemes they consider to be a right are either not necessary or could be replaced by something that is cheaper and more effective, if approached differently.

This same problem is now facing Argentina’s new president, Javier Milei. Although Argentinians elected him with his libertarian agenda, he did not receive a majority of votes and his party does not have a majority in parliament. Argentinians, like Australians, have been told for decades that the government will provide. Like most Australians, most are yet to accept that their expectations are unrealistic.

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Unless voters can be persuaded that there is no such thing as free government money, and that personal responsibility yields better results at lower cost, there is little chance governments will implement policies based on that. Even in Argentina, which has defaulted on its national debt no less than eight times, the appetite for economic reality is low. Milei will require the wisdom of Solomon to implement his policies.

We must hope that he succeeds. The reality of socialism is universal poverty, but the illusion of unlimited, universal care remains powerful.

David Leyonhjelm

David Leyonhjelm was an Australian Senator from 2014 to 2019 representing New South Wales for the Liberal Democratic Party. Notable for his libertarian consistency, David’s work in Senate Estimates attracted acclaim worldwide for its forensic examination of government
waste. Professionally, he is a veterinarian and agribusiness consultant.

The Reckoning is Coming

Damon Hayhow

18 December 2024

The saying goes that when America sneezes, the rest of the world catches a cold. If there is truth to the analogy, then the world is in a whole lot of trouble. Because America appears to be on the brink of cardiac arrest.

The physical health of America is appalling. Many of her proudest cities look like dystopian third world slums. Crime is out of control and infrastructure is crumbling. In many parts of the country the water is not safe to drink, the streets are not safe to walk, the bridges are not even safe to drive across. When natural disasters strike, like the recent hurricane Helene and the fires in Hawaii, the emergency response looks more like the slow and decrepit response of the world’s poorest countries, not that of the richest.

America’s job prospects are similarly bad. Like Australia and much of Western Europe, America has largely deindustrialised and is living off debt. America’s highest revenue generating companies are vampiric resellers of Chinese-made consumer goods. Walmart is number one, followed by Amazon and then Apple. What does America actually make? Boeing planes, that fall out of the sky. F35 fighter jets, that cannot leave the ground. Bombs, drugs and treasury bonds.

So, the problem that triggered the worst financial crisis since the Great Depression is now worse.

America’s finances, though, are where it is most diseased. The US government debt is currently $36.2 trillion – 123% of GDP. Each year the Government outspends its earnings by more than Australia’s entire GDP.

Total US debt is an eye-watering $103 trillion, almost equal to the GDP of the entire world. But on top of that the US has unfunded liabilities – committed expenses for which there is no budget allocation – of $221 trillion. That’s more than 200% of global GDP and amounts to $654,000 per US citizen.

But America does not just have a debt problem; it has an everything problem. Even Donald Trump, with all his experience leveraging bankruptcy to revive companies, is not going to fix this one. It is irresolvable.

To underscore the point further, in the past two years America added another $1.9 trillion worth of new sub-prime mortgages. In 2007, $1.9 trillion was the entire value of the sub-prime mortgage market that triggered the 2008 Global Financial Crisis.

Also since 2007, America’s student loan debt has ballooned to $1.7 trillion. The auto loan market has also more than doubled, to $1.7 trillion. And Americans have racked up $1.4 trillion in unsecured credit card debt (up 50% since 2007). The total US mortgage market has doubled to $20 trillion and the portion of sub-prime mortgages also increased.

So, the problem that triggered the worst financial crisis since the Great Depression is now worse. And it is joined by at least three more debt market problems, that are even less stable.

Emergency response looks more like the slow and decrepit response of the world’s poorest countries, not that of the richest.

Behind the scenes, since 2008 until recently, America, the EU, Japan, UK, and other major economies have been printing currency (“quantitative easing”), running zero (or negative) interest rates, reducing (or removing) bank reserve requirements, monetising debt, pushing pension funds into junk instruments, buying corporate stocks to juice the stock markets, and papering over problems. The fiscal and monetary armories are exhausted.

These strategies to keep the global economy limping forward are based on Keynesian economic theories. Ironically, Keynes failed to foresee the 1929 crash and great depression. He somehow lost substantial money in the roaring 20s stock market. And he massively mis forecast the Weimar hyperinflation. His ideas sold books, but did not work well.

A reckoning is a mathematical certainty. It will be much worse than the GFC, because the entire situation is worse. And as bad as the picture is in the US, the EU is even worse, as is Japan. Australia, too, will not cruise through this crisis on a wave of Chinese mineral purchases. There is going to be severe pain.

This sort of once-in-a-lifetime crisis will be profoundly confronting for libertarians and will require deep introspection. The meaning and value of freedom will change. The importance of personal goals over family, friends and community will be challenged.

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But the terminal decline of an empire or society does not mean the terminal decline of opportunity, freedom and hope everywhere. The world does not collapse. It reorients and reconfigures. Capital does not disappear; it moves.

There are always people hungry for opportunity, freedom and growth. These people are drawn to each other; usually in places which offer an abundance of opportunity due to not being a place previously considered. For example: Hong Kong in the 1970s, Singapore in the 1980s or Dubai in the 2000s.

The West is unarguably in decline. The East is ascending. It might be time to look at a map and do some research, just in case the maths are telling the truth about America.

Damon Hayhow

The Tax Power

Adam Craig

3 May 2024

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.

Adam Craig

Adam Craig is a barrister. He had libertarian instincts as a teenager but joined the ALP as a student doing blue-collar work. After graduating he worked as a public servant, mainly at the ATO (including secondments at Treasury and Prime Minister and Cabinet). In observing the workings of government and the tax system, Adam became increasingly convinced that government had no answers and was wasteful. He left the public service for a life of independence at the Bar and has reembraced libertarianism.

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

Kenelm Tonkin

26 February 2024

GOVERNMENT OVERREACH

Habeas corpus will not be restored in Australia.

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

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

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

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

For the first time, 33% or more of the Australian population will be obese.

SOCIAL TRENDS

The sale of sex dolls will increase in Australia.

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

Mount Barker SA will have a larger population than Busselton WA, Orange NSW, Bowral NSW, Dubbo NSW, Nowra NSW or Bathurst NSW.

At least 25% of Australians will attend church monthly.

Less than 50% of Australians will use TV as their source of news.

Pet ownership in Australia will grow to more than 70% of all households.

SCIENCE & TECHNOLOGY

Space X’s Starship will successfully reach orbit.

ECONOMICS

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

Cash transactions will decrease below 17% of total transactions.

Australian coal exports will increase from last year.

ELECTIONS

The ALP-Greens Coalition will be returned to government in the ACT General Election.

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

The Liberal-National Party will win the Queensland State Election.

Barring court-affirmed election fraud, a diagnosis of ill-health, imprisonment or assassination, Donald Trump will win the US Presidency.

GEOPOLITICS

In 2024, China will neither invade Taiwan by land nor impose a naval blockade.

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

There will be no resolution of the conflict in Ukraine.

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

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

Kenelm Tonkin

An entrepreneur who has employed 1,470+ people, Kenelm was admitted to the BRW Fast 100 three times with businesses in Australia, NZ, Singapore and New York, where he lived for 12 years. Kenelm’s investment firm performs mid-market leveraged roll-ups. He was a regular columnist for the Australian Financial Review. Kenelm is the Founder of Liberty Itch.

China 2024 and Beyond: A Troubled Future

Warren Wang

17 January 2024

My recent discussions on Liberty Itch have painted a picture of China’s landscape as a prison-like surveillance-intensive system, and as a no-privacy technology-driven cashless society. In this article, I want to further explore the future of China as we look towards 2024 and beyond. I will examine the implications of China’s expanding surveillance state, the tightening grip of authoritarian power, the simmering economic challenges, and the looming demographic crisis.

A Safe Prison

In China, particularly within its major cities where surveillance cameras are omnipresent, the situation resembles a vast yet secure prison. Proponents may argue that it ensures unparalleled safety, but high security is also a characteristic of prisons, largely due to extensive surveillance, with only a few exceptions like Jeffrey Epstein.

Beyond what I discussed in my previous article, emerging technologies are being used by the government to further erode any remaining privacy. A recent example I heard from a friend is a discreet device, easily overlooked, capable of extracting comprehensive information from your phone within a short range. Although not widely deployed yet, the potential of such technology is horrifying. While the most secure phone option in China is an overseas iPhone, these have been banned by all government bodies and affiliated organisations – a decision aimed at facilitating surveillance under the guise of patriotism.

The youth unemployment rate in China reached new highs each month in 2023

A Loyal Empire

Xi Jinping’s regime is imposing a concentration of power unprecedented since Mao’s era. This communist empire demands not just loyalty, but absolute allegiance from its members. Figures like the recently deceased former Premier Li Keqiang, known for their more liberal stances on society and the economy, have been conspicuously absent from the new cabinet for a year.

With the aid of AI and new technology, examining loyalty to the supreme leader has become easier. In various government bodies and affiliated institutions, such as banks and universities, advanced AI-embedded cameras are being employed to analyse people’s facial reactions. These sophisticated systems scrutinise subtle changes in lips, noses, chins, eyes, and eyebrows to infer individuals’ emotions – admiration, confusion, indifference, or even dissent. The leap from mere “facial recognition” to “mind reading” is deeply troubling.

A Growth Mirage

China’s economy is facing severe challenges. Despite optimistic forecasts for a robust recovery following China’s post-COVID reopening at the end of 2022, the reality in 2023 has been starkly different.

Stock Market: In contrast to the significant gains in global share markets in 2023, with the US up by 24.2%, the Eurozone by 15.7%, and Australia by 7.8%, China’s stock market has seen a decline, down by 11.4%.

Property Market: The real estate sector, once a cornerstone of China’s economic growth, has seen a decline of 20-30% across most major cities. In cities like Shanghai, luxury properties have seen even steeper declines of 30-40%. This downturn is more pronounced in smaller cities experiencing a net population outflow. Additionally, a report in August 2023 indicated that the vacancy rate in 28 major cities was at 12%. (For comparison, Australia’s vacancy rate was recorded at 1.02% in October 2023.)

Local Government Debts: Local governments need to repay a record US$651 billion in bonds in 2024. The deep property slump is reducing their ability to generate income from land sales, which is a crucial revenue source. The slowdown in the broader economy has also affected their tax revenue. Growing concerns about potential defaults could trigger a widespread economic crisis.

Spending: Although people are still showing off with travelling photos on popular Chinese social media platforms, overall spending has reduced significantly, leading to the phenomenon termed “selfie travel.” A friend, whose business has suffered a significant downturn, satirically remarked, “I used to shop at Hermes, but now I shop at Uniqlo.”

With the aid of AI and new technology, examining loyalty to the supreme leader has become easier.

Youth Unemployment: The youth unemployment rate in China reached new highs each month in 2023, leading to the government’s decision to cease publishing the data. The last official youth unemployment rate was over 20%. This trend is attributed to a slowing economy and a mismatch between graduates’ skills and job market demands, as well as their expectations and “lying flat” attitudes, which pose serious implications for social and political unrest.

Baby Boom Bust

China’s future is increasingly influenced by a significant demographic issue: its declining birth rate. In early 2023, China experienced its first decline in birth rates in 60 years, a trend that only intensified as the year progressed. Despite policy shifts from the One-Child to the Two-Child and later the Three-Child policies, young families remain reluctant to have more children. This trend, along with minimal population growth, threatens to strain social security systems, potentially leading to a critical tipping point.

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Conclusion

While numerous factors, such as potential war with Taiwan and evolving political and economic relations with Western countries, play a role in shaping China’s future, the areas discussed here are particularly significant. The increasing reliance on surveillance, a heightened emphasis on ideological conformity, and a declining population, point towards significant difficulties ahead. Though Xi Jinping, persistently criticised for lacking the capability to advance China’s progress, remains the unchallenged supreme leader, China is in urgent need of a new Deng Xiaoping—a true reformist—to take the country back onto the right track.

Warren Wang

The ABS Just Found 188,000 Public Servants Hiding Behind The Lounge Cushions.

Dimitri Burshtein

12 December 2023

The Numbers Grow Ever More Staggering Every Year.

Around early November of every year, the ABS publishes statistics on the number of public sector employees in Australia. The numbers grow ever more staggering every year.

The ABS says there were 2,430,400 public sector employees in Australia as at 30 June 2023. That is across Commonwealth, State, Territory, and Local Government. By way of context, this is:

more than the entire population of Perth;
a centimetre away from the entire population of Brisbane;
five times the entire population of the ACT; and
four times the entire population of Tasmania.

How bad would the shortages be if the public sector did not hoover up all the skills and resources which are in short supply.

The salary costs for all these employees for the 12 months to 30 June 2023 was a humble $215 billion. Again by way of context, Australia could pay for the multi-year AUKUS nuclear submarine program with one and one third years of Australian public sector employee salaries.

In November 2022, the ABS said there were 2,160,000 public sector employees at June 2022. Twelve months later, in November 2023, the ABS said there were 2,348,400 at the very same date. That is, the ABS somehow found an extra 188,000 extra public sector employees hiding behind the lounge cushions. Just a small 9% variation.

The ABS says there were 2,430,400 public sector employees in Australia as at 30 June 2023

This is not a suggestion that there should be no public sector employees. But 2.4 million? Is it any wonder that Australia is experiencing economic pain and inflation with ever more resources being transferred from production to the public sector. Plus all the reported skills shortages … in engineering, ICT, legal, accounting, and trades … how bad would the shortages be if the public sector did not hoover up all the skills and resources which are in short supply.

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These numbers are staggering but are sadly par for the course in Australia, where our political leaders seem to believe that any problem can be solved by taking money and property by means of legal force from taxpayers to give to people who pay no price when their schemes and solutions don’t work.

Dimitri Burshtein

Dimitri Burshtein is a Principal at Eminency Advisory and a former government policy analyst. He is a contributor to The Australian newspaper, Spectator Australia magazine and various libertarian blogs. Dimitri has also appeared on SkyNews and 2GB radio.

Free Markets Work Better for Energy

Nicholas Samios

4 April 2024

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.

Nicholas Samios

Nicholas Samios is a fund manager and small business investor with a wealth of experience spanning three decades in commercial finance and SME capital raising. In his spare time, he puts on his “Austrian School” economist hat and utilises his insights from the commercial
world to analyse the economic landscape for SMEs and entrepreneurs.

The Everyday Libertarian

Nicholas Samios

13 March 2024

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.

Nicholas Samios

The Misguided Quest for “Fair Share”

Nicholas Samios

10 February 2024

“Grab your torch and pitch-fork” was the rallying cry of the left in the recent debate over stage three tax cuts. And so the mob was led to follow a trail of sprinkled money to the door of high income earners to rob them of tax relief.

In the debate over Australia’s tax system, the concept of “fair share” has been wielded like a moral cudgel. Advocates argue high-income earners should pay more under the guise of affordability. Yet when we examine the impact of progressive taxation, especially through the lens of real-life financial pressures, the narrative of fairness starts to show cracks.

Taxpayers deserve a system that not only is fair but also reflects a government that is accountable for its financial decisions.

Consider someone earning $200,000 annually. Contrary to the image of affluence often portrayed, they face substantial financial obligations: mortgages, rising living costs, and family expenses. Despite these challenges, they’re taxed at a rate significantly higher than those earning $70,000.

Under the new “Stage 3” regime, the person on $200,000 pays $55,000, which is $45,000 more than the person on $70,000 who pays $10,000. That is, more than five times as much in absolute dollars. Fairness isn’t just about percentages; it’s about the impact on individuals’ lives. The dialogue around tax rates frequently ignores these actual dollars paid, masking the true disparity. (See graph).

Furthermore, this focus on rates overlooks a critical issue: bracket creep. As wages increase over time, individuals are pushed into higher tax brackets without a corresponding real increase in their purchasing power. This is an insidious form of taxation that exacerbates the burden on middle and higher-income earners, eroding the principle of fairness the system claims to uphold.

Moreover, the strategy of progressive taxation, while politically popular, overlooks the broader economic implications. High tax rates for top earners disincentivize the innovation and investment that drive economic growth. It is a short-sighted approach that prioritizes immediate political gain over long-term prosperity.

As wages increase over time, individuals are pushed into higher tax brackets without a corresponding real increase in their purchasing power.

But the conversation about fairness must also challenge the government’s role in fiscal management. Instead of relying on tax increases, especially through bracket creep, as a default solution for budget shortfalls, there’s a pressing need for government to exercise fiscal restraint. This involves cutting wasteful spending, prioritizing essential services, and treating taxpayers’ money with the respect it deserves. Taxpayers deserve a system that not only is fair but also reflects a government that is accountable for its financial decisions.

A fair tax system would mitigate the effects of bracket creep, ensuring that individuals are not penalised for nominal increases in income that don’t reflect real gains in wealth. Alternatives such as a flat tax could offer more equitable solutions, ensuring everyone pays their share in a manner that encourages economic growth and innovation.

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In advocating for a truly “fair share” we must demand comprehensive tax reform that addresses not only the rate of taxation but also the underlying issues of bracket creep and fiscal responsibility. The aim should be a system that encourages prosperity, treats every taxpayer with fairness, and holds the government accountable for the stewardship of public funds. The quest for fairness in taxation is not just about adjusting rates; it’s about crafting policies that encourage a vibrant economy, respect individual contributions, and ensure the government treats taxpayer money with the care it warrants.

Nicholas Samios

The Missing Ingredient – Assimilation

David Leyonhjelm

28 February 2024

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.

David Leyonhjelm

Good Reasons for Suspicion

Simon Anderson

19 January 2024

Worldwide outrage engendered by the SWIFT Affair seems rather quaint today. Operating since 1973, the Society for Worldwide Interbank Financial Telecommunication is the messaging system that accounts for almost all international financial transactions. Evidence emerged in 2006 that the United States government had been covertly monitoring SWIFT transactions since the late 1990s and in collaboration with SWIFT since 2001.

SWIFT’s collaboration to supply transaction data breached the laws of Belgium (where it is based) and Europe. That European citizens could be subject to such monitoring by a foreign power caused great consternation among both the populace and European governments.

Justifying the enormous collection of the private information of citizens of allied and friendly countries, the US government claimed it was a necessary aspect of terrorism prevention. To avoid the appearance of disunity between NATO allies in the ‘War on Terror’, and to placate an indignant population, the European Union negotiated an agreement to enable US access whilst making provision for minimal privacy for European Union citizens. An agreement which was altogether academic: as Edward Snowden’s 2010 disclosure of classified NSA material demonstrated, the United States resumed clandestine surveillance of SWIFT before the ink on the agreement was dry.

The Social Credit System is popular in China, where efficiencies and fraud prevention are broadly appreciated.

This incident became fertile ground for conspiracy theories among a growing segment of the populace in Western countries, particularly those already suspicious of government overreach in ‘The War on Terror.’

(The populations of non-Western countries, accustomed to the American modus operandi in world affairs, required no such convincing.)

From survivalists in the Appalachian Mountains to billionaires purchasing luxury fallout bunkers in New Zealand, people began to think about ‘what if’, extrapolating contemporary social, political, geo-political and environmental trends to rational yet disconcertingly dystopian conclusions, pessimism exacerbated by the 2008 Global Financial Crisis and resentment at the enormous taxpayer-funded bailouts of the institutions that caused it.

Currency suddenly held people’s attention. Was it evolving from a means of exchange to a mechanism for surveillance? Could it be used to impose social controls on entire societies? What if it was absent altogether? What are the privacy ramifications of obsoleting paper currency?

SWIFT’s collaboration to supply transaction data breached the laws of Belgium (where it is based) and Europe.

No-one needed to look too far for answers to most of these questions. In 2014 the Social Credit System was introduced by the People’s Republic of China to several regions. The excesses of the state and the capabilities inherent in the system became readily apparent to horrified Western observers shortly thereafter. Currently comprised of disparate systems, the objective is for the Social Credit System to coalesce into a consolidated system encompassing the entire country. Underpinning the system is financial transactions (currently the Yuan, in future the Digital Renminbi.)

The Social Credit System is popular in China, where efficiencies and fraud prevention are broadly appreciated. Many of the criticisms of the system as a form of Orwellian control are overstated but not invalid. Suspicious foreign observers rightly point out that while it might not be utilised for that now, it could be in the future. Conversely, observers taking a nation-state perspective began to consider the possibilities for their own societies.

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So ended the decade: a growing appreciation by governments for the control inherent in surveillance of financial systems, and a burgeoning section of the populace suspicious of state overreach into private transactions.

Technology is the enabler for all of it, good and ill. As the technology landscape evolves the battle remains the same, between the rising libertarian instincts of the populace and the authoritarian tendencies of the state. Yesterday’s battle was the SWIFT affair. Tomorrow’s battlefield is cryptocurrencies and Central Bank Digital Currencies.

Subjects I’ll address in part II.

Simon Anderson

(Don’t) Be Your Own Boss

Max Payne

15 January 2024

By ‘closing the loopholes’, Labor ultimately seeks to undermine self-employment, casual employment and competition, Libertarians must take note.

November 17 2023 The scene is the 2023 HR Nicholls Society conference in North Sydney; the speaker is Ken Phillips; the topic: Federal Labor’s ‘Closing the Loopholes’ bill.

Phillips is unassuming, plainly dressed, but he means business. In a conference otherwise dominated by partisan interests and the society’s own history, he cuts through with a powerful and practical message. Having dissected and analysed all 274 pages of the ‘Loophole’ bill and written his own submission (on behalf of Self-Employed Australia [SEA]), he has been in regular contact with the crossbench, who Labor currently relies on to pass legislation.

Phillips was optimistic then, satisfied that the crossbench were heeding his call for caution and discernment over the prevailing narrative. But it was not to last; Senators David Pocock and Jackie Lambie combined to split, then pass, the first tranche of the bill, including concerning new provisions that escalate the power of union delegates. But the worst is yet to come.

Subject to an inquiry this year, the remainder of the bill seeks to undermine commercial contracts, create strict pre-conditions that define ‘casual’ employees, and effectively prevent workers from being their own boss.

The loophole bill relies on the rhetoric of exploitation: pitting workers against employers and removing agency from consenting participants in the ‘gig economy’.

90% of people working for digital gig platforms are also employed elsewhere.

The reality is quite different – I should know, having been a contract worker and a casual for much of my working life. These reforms in fact represent a direct attack on my livelihood.

Keep it casual

As Phillips demonstrates in his analysis of wages by employee type, casual workers are financially better off on an hours-worked basis to the tune of about 6% (more if you consider the higher super contributions). What’s more, being a casual employee allows for the worker to ramp up or down their hours, take on a different employer and maintain flexibility much more readily – something I made use of as a student particularly.

Businesses also require flexibility to operate effectively in the marketplace, as demand and staffing requirements fluctuate. The loopholes bill creates stringent regulations on how an employee can be considered casual. This will simply disincentivise businesses from hiring staff as employers will have fewer options to reduce their wage liability when business is slower.

Fixed contracts

Contract and self-employed workers are also in the sights of Labor and the unions. The proposed legislation coins a new term – ‘employee like’ – to describe self-employed workers. This means self-employed workers will be subject to the industrial relations system, undermining the nature of commercial contracts between consenting parties.

As a contract worker myself, I do not miss the IR system. My generous employers allow me paid leave entitlements anyway, and I can readily work for an employer based anywhere in the world, making my own choices with regards to super contributions.

Pitting workers against employers and removing agency from consenting participants in the ‘gig economy’.

Getting a gig

A major objective of the loophole bill is supposedly to protect workers from exploitation in the ‘gig economy.’ The reality is quite different: well over 90% of people working for digital gig platforms are also employed elsewhere – they are ‘hustlers’, earning top-up income outside of regular employment.

There are concerns for market competition too. By eliminating self-employed workers from the marketplace, large operators in industries such as transport and construction will face less competition. How this market concentration will benefit workers and consumers, or is consistent with Labor’s message to voters, I cannot reconcile.

An unlikely union

It is a good deal for those large operators though, and it’s an especially good deal for the unions, perhaps revealing the true motivations behind this bill. Trade union membership has dwindled for decades, and the availability of flexible or casual work has further undermined their influence.

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By forcing all workers into employment contracts subject to IR law, the unions can once again wield significant influence. Large employers can collude with these unions and suppress competition, diluting the influence of smaller or independent players in their respective industries.

The big loser is of course the workers, who lose flexibility in their employment arrangements, are forced to work in industries dominated by a few large players, and are financially less well off if they are casual.

It is truly a sad state of affairs that the party of workers would propose such a bill, but it is characteristic of Australian politics, long divorced from the interests of common workers.
Further reading: https://selfemployedaustralia.com.au/be-your-own-boss/

Max Payne

Max Payne is the Australian Program Associate with Students For Liberty, a global non-profit that spreads the values of libertarianism on campus. He is also a twice former candidate with the Libertarian Party and maintains a keen interest in Austrian economics, classical music and organic gardening.

Wind Power Industry is a Scam

Meaghan Whyte

21 November 2023

Is the business concept viable?

To comprehend the vast folly of the wind power industry, we can ask one logical question: Is the business concept viable?

Assessing business viability necessitates a comprehensive review of financial projections, operational feasibility, profitability and return on investment (ROI).

Financial analysis demands meticulous examination of startup costs and operational expenses, versus revenue.

Operational feasibility assesses practical aspects, evaluating the availability of resources and skilled personnel.

And profitability and ROI requires the business to generate revenue in a manner that justifies investment.

Successful businesses meticulously align these factors to achieve sustained success in the free market.

Keep this information in mind as we look at business cases from the wind power industry over the past year.

Financial Trouble

Markbygden Ett:
The owners of the Markbygden Ett sub-project, part of Europe’s largest onshore wind complex, are undergoing financial restructuring in the Umeå district court, northern Sweden. Facing bankruptcy, the company’s financial struggles stem from an unprofitable 19-year Power Purchase Agreement (PPA) signed with Hydro in 2017. The fixed-volume PPA obliges the company to buy power on the spot market during insufficient wind production, incurring costs due to intermittency. Spot prices rise when wind power is low, contributing to substantial losses.

This exit cost the Danish company $2.2-2.6 billion in penalties.

Siemens Energy AG:
Siemens Energy AG is facing a substantial downturn, its share price having dropped nearly 70% since June. This is mainly attributed to issues within its wind turbine subsidiary, Siemens Gamesa. The company projects a €4.5bn loss for the year due to quality problems and offshore ramp-up challenges. Additionally, technical faults in onshore turbine models are expected to cost around €1.6bn to rectify. Siemens Gamesa’s CEO highlighted concerns including rotor blade wrinkles and bearing particles, posing risks to critical components. Siemens Energy aimed to address these issues, but struggled to secure guarantees for its order book. This contributed to a €2bn loss in Q3. Germany’s government approved a €15 billion financial package, including €7.5 billion in loan guarantees, to support Siemens Energy in delivering Germany’s renewable projects. However, the company’s challenges persist.

Cancelled Projects

Ørsted:
The world’s biggest wind power developer received approval to develop wind power off the New Jersey coast in June this year. It terminated both developments five months later due to soaring costs. This exit cost the Danish company $2.2-2.6 billion in penalties.

Avangrid:
Avangrid, a member of the Iberdrola Group, is terminating power purchase agreements (PPAs) for the Park City Wind offshore project in Connecticut, citing industry challenges like inflation and supply chain disruptions. This follows their similar move with the Commonwealth Wind project in Massachusetts, resulting in a $48 million penalty. Avangrid plans to rebid both projects. These decisions align with a broader trend of wind project cancellations and challenges nationwide, including requests to government for rate increases above those previously agreed.

Siemens Energy AG is facing a substantial downturn, its share price having dropped nearly 70% since June.

Fortescue:
Fortescue Metals Group has abandoned its Uaroo Renewable Energy Hub project in Western Australia, once a key part of its green energy strategy. The multi-billion-dollar initiative aimed to build 340 wind turbines and a solar farm, generating up to 5.4 gigawatts. The project’s termination, marked by last month’s approval application withdrawal, signifies a shift in Fortescue’s commitment to achieve carbon neutrality by 2030.

Vattenfall:
Swedish energy giant Vattenfall has halted plans for the Norfolk Boreas wind development, a crucial part of the UK’s green energy goals. The project, intended to power 1.5 million homes, faced a 40% cost increase due to global gas price surges and supply chain challenges. After winning a government contract with a record-low bid, Vattenfall deemed the project unprofitable amid changing market conditions. The decision incurred a £415 million penalty. This is still seen as prudent, considering lack of future profitability. Vattenfall urged the UK government to adapt the financial framework, and the government capitulated, agreeing to increase payments for offshore electricity generation. This intervention raised hopes for the Norfolk Boreas project’s resumption.

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Verdict

These examples highlight the vulnerability of wind power development projects. This is particularly evident in offshore projects.

Wind power does not meet the criteria for a viable business concept.

Meaghan Whyte

Go Where You Are Treated Best

Damon Hayhow

10 January 2024

‘Go where you are treated best’ is the tagline of entrepreneur, Andrew Henderson, founder of the business Nomad Capitalist. Andrew and his team help entrepreneurs, retirees and others move their lives out of countries like Australia to countries where they will be treated best. It is a business that has being growing exponentially in recent years.

When I first heard Andrew speak those six words during the earliest days of the Covid sham, it hit me like a power-slap from Mike Tyson. What the hell was I still doing in Australia? For years I thought I had been fighting to build small businesses. But I had not; I could do business just fine. I had a bunch of great products and services in an interesting niche. I liked my customers, and my customers liked me. The fight was against the suffocating cancer of Australian government bureaucracy, and I was exhausted by it. The reality was Australia no longer treated me well, let alone best.

The history of the human race is a story of people escaping horrible governments.

“We crush many a dream around [here]” was proudly proclaimed to me by an officer of Melbourne’s Stonnington Council when I applied for a permit to open a simple, small business. He also bragged how new laws rendered thousands of commercial properties “completely unlettable”. Sadly, the only thing shocking about his statements was his candor. His malicious and malignant attitude towards honest citizens, small business operators and the future success of the country was what I had come to expect from Australian bureaucrats.

Being an unwilling participant in an abusive relationship with local government was only part of the problem. The bigger problem was the direction of the country as a whole.

The absolutely disgusting and immoral human rights abuses orchestrated by the Victorian Government, media and law enforcement during the Covid sham was not an aberration. Nor was the Victorian public’s willing complicity. It was unequivocal proof of the direction society had been headed.

So what is a patriotic Australian supposed to do? Vote? For whom? Protest? And get shot with rubber bullets or sprayed with mace for not supporting the Government-approved message? Exercise your free-speech online? And get arrested in your home, in front of your kids, even if you are pregnant? Or have your government-permission to practice your profession cancelled? Or have your bank accounts frozen?

Australia does not have a bill of rights. You have no legislated right to free speech or right to protest. The Government could not care less about having signed the international treaty for human rights. Their Covid shenanigans proved that unequivocally.

When democracy has been hijacked, like it has been in much of the so-called “free world”, your most powerful option is to vote with your feet and go where you are treated best. If enough people leave, the people and government left behind will be forced to change, to stem further losses and attract good people back. If they do not change, the country will fail as their beliefs and policies were destined to anyway.

The fight was against the suffocating cancer of Australian government bureaucracy, and I was exhausted by it.

Unfortunately, for most people leaving is not an option. The nature of most people’s vocations, businesses, finances and/or families makes leaving all but impossible. There will always be people who have no option but to stay and fight against bad governments. But that does not mean staying and fighting is noble; in most cases throughout history, staying to fight your own government has been a terrible option.

For the few people who can move their lives and business elsewhere in the world, they owe it to themselves and their country to go where they are treated best. It is not weak or cowardly, as many jealous people will say. Nothing is harder than leaving family and a lifetime of friends, to face the uncertainty of restarting life in a new country. But it can be the most patriotic thing you can do; not to mention cathartic, enlightening and positively life changing.

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A country is not its government. Being so disgusted and disillusioned with a government that you move says nothing about your feelings toward the country or its people. The history of the human race is a story of people escaping horrible governments.

Australians are lucky to be welcomed all over the world. Wherever you go, you will always be Australian (or whatever nationality you are). If you go where you really are treated best, you will almost certainly be more financially, emotionally and spiritually successful than you could have been under the current government in Australia.

Nomad Capitalist has a website. I recommend taking a look at it.

Damon Hayhow

Curse of The Planner

Bob Day

1 January 2024

In her excellent book The Siberian Curse, British-American author Fiona Hill describes how the settlement of Siberia in the twentieth century and the mass movement of people and industry into this vast region by central planners lie at the root of many of Russia’s contemporary problems.

Central planning – whether geo-political, social, urban or economic – has caused many a disaster.

Examples abound around the world, but allow me to cite a local one.

Worst of all, it puts home ownership out of the reach of those on low and middle incomes.

A number of years ago, I bought a block of land on a very busy main road in one of Australia’s capital cities. I submitted plans to the local council to build 12 semi-detached home units on the land and, as the zoning allowed for such a development, I didn’t expect any problems. That was of course until I came up against the Council Town Planner who said he’d recommend the development be approved “subject to the provision of noise attenuation devices” across the front of the property (noise attenuation is a fancy name for sound-proofing). I tried to point out that there were thousands of kilometres of main roads with many thousands of dwellings fronting these main roads and it all seemed to work quite well without ‘sound attenuation’. I also told him that the project was actually geared towards older people, many of whom prefer the noise of traffic and pedestrians chatting as they said it made them feel safer than in some quiet back street or cul-de-sac. But he was having none of it. He wanted his noise attenuation devices.

Naturally, I tried the commercial argument that people who didn’t like noise wouldn’t buy into the project and that the market would sort it out. But for reasons known only to town planners but obscure to common sense, he rejected all my pleas, and I had an acoustic engineer design a front fence to assist with noise attenuation. But no sooner had I finished the job than the Royal Society for the Deaf bought all the units – every single one of them. I showed the planner the contract and he couldn’t even see the funny side of it.

Ludwig von Mises, one of the most notable economists and social philosophers of the 20^th century, observed:

‘The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. Planners aim at one thing only: the exclusive absolute pre-eminence of their own plans.’

National, State and Local government planners now infiltrate our lives at every turn.

Take the Reserve Bank of Australia (RBA), for example, the nation’s main economic planner.

The RBA has over 1,500 staff and as well as its headquarters in Sydney, has offices in London, New York and Beijing.

The RBA basically has one main task – to control inflation. As we know, inflation is caused by too much money chasing too few goods and services. When governments contribute to this by running deficits, the RBA is there to put up interest rates and make the government feel the pain of their spending. In recent years, however, the RBA did not do this. In fact, in spite of record deficit-spending, former RBA Governor Philip Lowe said in 2021 the bank would be keeping interest rates low until at least 2024!

Central planning – whether geo-political, social, urban or economic – has caused many a disaster.

Since then it has raised interest rates 14 times in an attempt to bring inflation under control, in effect shifting the inflation burden to consumers – particularly low-income consumers – through price rises.

One can also trace the current housing affordability crisis back to the RBA when it similarly refused to admit it made a mistake with its submission to the 2003 Productivity Commission Inquiry into First Home Ownership. The Bank’s focus on demand stimulators (capital gains tax, negative gearing, low interest rates, etc. – all Federal matters) and not supply factors had a huge influence in shaping the Productivity Commission’s findings.

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As we now know, the RBA overlooked the real source of the affordability problem – the unwillingness by State governments to release more land for new housing and urban planners’ obsession with urban densification, an idea that has failed all over the world. Whether it’s traffic congestion, air pollution, the destruction of bio-diversity or the unsustainable pressure on electricity, water, sewage, or stormwater infrastructure, urban densification has been a disaster. Worst of all, it puts home ownership out of the reach of those on low and middle incomes.

As von Mises observed, the step between planner and dictator is not as big as some might think. When their plans are rejected, planners become indignant, and instead of adjusting their plans to suit the people who have rejected their ideas, they seek ways to enforce their will on the people. The inner authoritarian is revealed.

Bob Day

Bob’s contribution to the Australian community has been reflected in a wide range of appointments including National President of the Housing Industry Association, Co-Founder and Inaugural President of Independent Contractors of Australia, Director of The Centre for Independent Studies, and Senator for South Australia.

Civil Law

Criminal law

Severe Injuries, Lack of Helmets

Economic Burden

Solution

The Numbers Grow Ever More Staggering Every Year.

Is the business concept viable?

Financial Trouble

Cancelled Projects

Verdict

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