Friday, August 22

Unfinished Superannuation Business

One of the more colorful of Australia’s politicians was Paul Keating; Treasurer for Australia in the 1980’s who went on to become Prime Minister. Keating was quick witted, one not to mince words, irreverent but unusually dedicated. He publically admitted his lack of economics knowledge when first he became Treasurer and in those early days often looked rather bleary eyed and tired, from all night and early morning sessions poring over the latest treasury forecasts.

Personally I always thought he was a very clear thinker and one of the very few politicians whose communications were fluid and smooth; devoid of the usual irritating ums and arrs or awkward pregnant pauses. He was recently interviewed by Kerry O’Brian of the ABC and if you read the transcript I think you will be surprised by that same style. Click here to read the transcript.

Keating instituted many economic reforms; more so than anyone before or after him as he unshackled our labour and banking practices strangled in regulations and allowed the Australian dollar to float. But his most significant reform was to establish a universal superannuation scheme.

Keating’s grand vision was to encourage every citizen to save for retirement, and in the process create a huge pool of investment capital to enrich the nation. At that time superannuation existed for only about 50 % of the workforce and the remainder relied on somewhat meager government payments of the old age pension. Keating’s idea was the aged pension would become increasingly irrelevant as it was quickly superseded by universal superannuation. His vision was that every citizen would have a post retirement income equivalent to preretirement, paid for from a pension out of each persons superannuation account.

It began with the employer paying in a compulsory 4 %( initially Government funded) for all workers and eventually the minimum guaranteed percentage rose to 9%. Many people personally paid in another 5% or even matched the 9% contribution.

It was Keating’s intention to legislate for the 9 % to be increased to 15% but such intentions was denied after he lost the 1996 federal election and subsequently the elected Liberal Coalition showed no interest in increasing the percentage. Actuarially over a working lifetime, assuming just 15% and investing to give real rates of return you will finish up with sufficient funds to accomplish the goal of self funded retirees.

Superannuation remains unfinished business which hopefully will be rectified by the Rudd Government.

Sunday, August 10

Peak Oil

The rapid increase in the oil price to US $150 a barrel and its decline to around $115 has caused me to ponder the peak oil theory.

Peak oil describes the point in time when oil production declines. Peak oil theory assumes demand will outstrip supply as future deposits become increasingly costly to extract, ensuring price escalation and an end to oil dependant economies with catastrophic results. Nobody can tell reliably when that will happen but a groundswell of current opinion suggests it is either already upon us or it is immanent. It is an undeniable fact that reduced oil use, particularly in agriculture and most types of transport require huge societal shifts to sustainable limited alternatives. Alternative technology is far from encouraging. Man made fuels such as ethanol, derived from plants or diesel from coal only partially cover the gap and are much more expensive. There is no viable alternative other than to drastically curtail our use of oil, with less dependence on transport requiring communities to become more self sufficient.

But is the peak oil theory creditable? Are we at the end of what was a brief period of time known as the oil age?

In the past we have encountered similar sharp price increases in the 1970’s when OPEC curtailed production, in 1981 when Iraq was at war with Iran, and in 1991 during the gulf war. This time proponents of the peak oil theory say it’s a different scenario because our reserves have been in decline and new fields will be increasingly costly.

We cannot change geology.

Oil and gas will become increasingly expensive to extract from dwindling reserves. It seems creditable enough to believe we have reached this point in the cycle where oil prices can only escalate rapidly.

Although the statistics available are notoriously unreliable there is however a consistent trend in aggregated world reserves to show a small net increase, cementing a continuing trend of the oil industry each year to find more oil then it produces. In other words the net effect of new discoveries of economically feasible oil fields and assessment of the life of existing reserves of what’s left in the ground showed an incremental increase over previous years, in line with a positive continuing trend. The proponents of the peak oil theory argue some countries like Saudi Arabia deliberately lie about their level of reserves, overstating the figures to justify pumping more oil. But their motivation for doing this is at odds with their investment plans, as they implement large scale infrastructure spending. Why spend vast sums of money to increase your capacity if your reserves are running out!!

Herein then lies the confusion, assuming there is a fudging of figures than the theory remains creditable, if not we have limited time to adjust. And if the latter be correct than the price of oil will actually fall back to somewhere at around $100 per barrel, or even below within a year, assuming countries don’t simply turn off the pump and also barring another War or a cataclysmic event.

What of the future? No one knows!

Maybe there is a window of opportunity over the next 30 years to finally make some headway in reducing our reliance on oil, time for consumers to adjust. Already the recent spike has given a boost towards a more sustainable pollutant free lifestyle.

Thursday, July 31

Trying to explain the inexplicable

Cart has expressed surprise in his recent post as to the closeness in the current campaign in the USA thinking its puzzling why Obama wouldn’t be a runaway leader given the state of the USA economy. I agree with his sentiments. Here is my take on maybe why it is so evenly matched; in the form of snippets from a purely imaginary campaign speech I have written for McCain as if I was to try and imagine I was campaigning for him. It’s not my personal sentiment in any way and you also may not also agree with its substance or tone, but let’s know what you think or your reason why you think it’s a close match. The speech was compiled having regard for the various quotes and responses recently made by McCain and a certain other inferences I have made.

An imaginary campaign speech

If elected I intend to work closely and cooperatively with the best possible talent available. I will consult with such people as Al Gore on climate change initiatives and work closely with Nancy Pelosi, a woman whom I have come to greatly admire. If elected I look forward to working alongside her.
You won’t ever hear me glorifying war. I am only too familiar with its untold suffering and terrible consequences. Survivors all mourn their fallen comrades. If I was to become the Commander in chief my past experience presents a sober reminder to be thoughtful yet resilient in determining the defense strategy in consultation with our able commanders of the armed forces. Our guard have performed at a level not seen since world War 2 but I can tell you there only one thing worse than suffering from being overstretched and highly stressed in the military and that's if you’re a defeated military.
I can also promise to never putt up income taxes. Already however, I have angered some of my supporters by announcing a policy which will top up revenue from payroll taxes. Those industries that need help can always come and knock on my door but if I’m going to continue to support industry it’s only fair they contribute their fair share. That may upset some but I want to confirm to you I am not captive to any particular ideology.
I don’t rely on wordy grandiose speeches either but rather I can assure you there is no ambiguity about my policies. Let me be clear that I will not be putting up income axes, I will fix the oil price within a decade, and you can relax in the knowledge that we will respond to all of the climatic challenges. The budget deficit will be balanced in the next decade having regard to my economic growth orientated policies.

I admire people for what they do and not for what party they represent. Al Gores will be someone I will have a close working relationship with should you give me the privilege of the presidencey .My policies will mean the USA will be totally self sufficient in energy requirements within this decade! Al tells me this entirely feasible. My policies are down to earth and easily understandable; accelerated investment in many alternative energy sources and increased exploration for the tradition energy sources. I once put my life on the line for my country and I’m willing to be of service again; with the benefit of a lifetime of experience at your command.

Sunday, July 27

Checkered Shirts and Urban Skirts

My youngest daughter Rachael is performing at a gig which she has entitled “Checkered Shirts and Urban Skirts -a night celebrating the crossroads of country, blues, roots and folk music.” which is her concept and also a very good excuse to wear her fancy shmancy checkered shirts from Texas.

If you want to hear any of her music click here and then click on to any of her songs or to hear another of the bands 'The Stillsons' at www.myspace.com/thestillsons

Wednesday, July 16

What’s going on in the USA?

There seems to be much confusion over what’s going on in relation to the so called credit crunch and the continued fall out of major financial institutions.

The position was much more serious than was initially thought with the amount of debt involved and over reliance on credit reaching mind boggling proportions. The last time you had a similar scenario was in the seventies, which coincincided with the last oil spike which sent economies like the USA into a tailspin.

But then the USA was a net creditor to the rest of the world, not the largest Debtor as currently exists, so this time it’s much worse. No country has ever borrowed its way into prosperity and simultaneously allowed its currency to depreciate as is occurring with the USA dollar.

So I can’t see how the dollar will ever recover should the USA continue to keep borrowing ever larger amounts which in turn means overseas creditors are attempting to avoid the currency and invest in commodities.

I watched the presentations to congress on TV early this morning (our time) with Ben Bernanke and I thought he sounded and looked uncomfortable at times.

I think the only way forward is to ensure the USA dollar reverses the cumulative depreciation and begins to appreciate. The only way to do that is stop borrowing, which means you undertake the herculean task of returning the budget into surplus and ensure the trade cycle (the net trade position with the rest of the world) also begins to turn positive.

No small order.

It will take a very long time, but it needs to be the policy aim, debated and hopefully understood as good policy, as common sense which will give much needed hope for a future generation. The current mix is not sustainable. The debate about how Freddie and Fannie and 96 over extended regional banks should be supported is important but it’s coincidental to the main game.

Longer term what is needed are clear goals which are easily undestood by everyone.

Translating that policy into a stronger dollar will involve continued high levels of distress as a consequence of reduced spending combined with inevitable higher interest rates.

The USA still has some great assets, not least of which is its people but I think they need to hear the painful truth of what’s needed to turn the ship around and head in the right direction. Progress I think can only begin with a stronger dollar and much less reliance on credit and spending. That will also help substantially reduce the oil price.

Friday, July 11

The Victorian Photo Album

My wife belongs to a writing group which publish their collective stories.
Below is her recent story from the groups recent Authology.

The Victorian Photo Album

The Victorian Photo Album sat among a row of other albums of various shapes and sizes. These precious possessions held a passing parade of family images; a visual reminder of faded special events. It was a loving Christmas gift from her parents some years ago. She puts the duster aside, takes it down from the shelf running her fingers over the burgundy grosgrain fabric binding. Her eyes wander over the posy of antique flowers printed on the marbled, emerald green and burgundy cover; a reproduction of a long gone era. The forward on the first page reminds an observer of the stiff, formal, sepia presentation of photos of our ancestors, unlike the technological advances of the present day. Each cardboard page has either a small oval or round-cornered, oblong, single cut out section with small slits to enable a special photo to be slipped into place. Each one is surrounded by a spray of flowers: briar roses, pansies, daffodils, hibiscus or passion flowers. These floral arrangements highlight each special print.

As she turns the pages she wades back through a sea of memories. There is her eldest daughter posing for a school photo. She wishes she had written the date on the back. Now she can only guess. Perhaps it was first grade; it was certainly wintertime, as the heavy, box-pleated, woollen uniform implies. She remembers wondering at the time what her first born would be when she grew up. There she is again on the opposite page; all grown up celebrating her twenty-first birthday. Then she was nearing the end of a University Degree in Commerce. How confident she looks as she thanks her friends for attending this special event even though some had ‘sent her up’ earlier, mimicking many of her bad habits. How well they knew her. This photo is surrounded by daffodils; Spring flowers for a blossoming womanhood.

Another turn reveals her second daughter’s prep photo in a similar pose, pen in hand ready for school work. There was that familiar, shy tilt of the head which has disappeared in her twenty-first photo opposite, where she was ready to join her family and friends at a local restaurant. The hibiscus spray of muted autumn tones complements her floral skirt of similar hues. The brown, suede, beret sitting at just the right angle demonstrates her tasteful fashion sense which was always evident even during her student teaching rounds.

Over the page a young debutant smiles up at her, or so it seems. ‘All that shopping around from salon to salons paid dividends’, she muses. Her baby is all grown up and looks beautiful in the pearl satin, medieval look, gown. The wrist length lace gloves were not a popular addition. How things change from age to age! She caught her by surprise when she expressed her wish to make her debut. She should have known that her natural ability to appreciate and move to music would be motivation enough. The social aspect of the whole process did not go unnoticed either.

The small oval space opposite lies empty. ‘Life must have intervened, distracting me from the completion of the album or perhaps her young school photo is in another album. I must hunt it out and complete the original idea,’ she decides. Over the page is her daughter again with her proud father. They are surrounded by antique roses, a fitting finish for a debutante. ‘Oh! That tie he is wearing is still hanging in our cupboard and has not been worn for years. I really need to do some spring cleaning and have him update his wardrobe,’ she promises herself.

She pauses again at the final photo remembering her parent’s 40th Wedding Anniversary. They are standing outside Mishe’s of Balmoral after a delicious seafood meal with all their family. What better place to celebrate this special event; they met at a surf club dance and spent a great deal of time at the beach. The turquoise ocean background fades to a silvery blue as the tide laps over the creamy shore. June’s late afternoon sunlight spreads across her father’s face leaving her mother partly in shadow. They are casually dressed; her father in a pumpkin coloured jumper and light brown trousers and her mother in a sage wool dress, pink-mauve cardigan and matching scarf. They have always had an eye for fashion and that day was no exception. She remembers placing their photo in the wreath of passion flowers. Yes, an appropriate choice.

Suddenly she realizes that her parents are the same age then as she is now. Back then she could not imagine what she would be like at sixty-one. Then, she was a thirty-eight year old, full time, stay at home mother, ferrying her three daughters to various activities, at the same time rehearsing with her husband for their Parish Reviews. She can’t help but compare their lives: similar in some ways but very different in others. Her parents were married in 1945 in a small room at the side of the altar of a Catholic church. Mixed marriages were only just tolerated then and could not be celebrated in the church proper. When she married though, things had changed a little. They took their vows in front of the altar but her husband could not take communion even though he was able to in his own Anglican church. He received a blessing instead which seemed to her a contradiction. The church has mellowed somewhat since then, allowing girls to serve at the altar and men and women to give out communion but stands fast against other issues such as married priests, women priests and non-Catholics not able to receive communion.

Her parents moved into their new home five years after their marriage in what was then the outskirts of Sydney. They raised three children, two girls and a boy. Her mother was a stay at home mother which was the norm for that time. Her father worked sometimes three jobs in their early married life and they were heavily involved in their children’s sporting activities. Her mother gained her driving license in her forties and re-entered the work force when her youngest son was in high school. On the other hand, she passed her driving test early into her first pregnancy much later than her younger sister. Two car accidents while traveling as a passenger had destroyed her confidence but necessity forced her to face her fears. Her first home after she married, fifteen minutes further south from her parents was only serviced by a bus to the shops or railway station making it impossible to lift her heavy pram up the steps without a great deal of effort. The bus driver would not help either. That was not part of his service. She remembers her mother traveling by bus with three children and the weekly shopping struggling on and off the bus. She was made of sterner stuff.

The last space in the album is empty; a perfect place for her 40th wedding anniversary photo next year. Tears moisten her eyelids as she closes the album, turns it over and gently runs her fingers over the smooth surface. Why the tears she wonders? Perhaps it‘s grieving for things past. ‘This is foolish for we cannot go back’, she scolds, No! They are happy tears. Now she has four beautiful grandchildren to create a sequel to these precious memories. Wiping away the tears, she replaces the album in its place on the shelf, dusts it off one more time and begins to think about preparing the evening meal as she continues with her chores.

Friday, July 4

Trust is in the Eyes of a Killer Whale

Tom returned each year to Eden (located on the south coast of Australia) as part of a Killer whale pod who hunted wales with the resident Homo sapiens.

The arrangement was that the pod herded migratory whales into the bay, blocking off escape routes and chased them around until they were exhaustered. They then swam in close to shore and the whaling station, thrashing the water with their tales to signal to the whalers it was now the time to man their whale boats and harpoon and harvest the whales. The pod in turn was rewarded with the tongues (of no use to the whalers)which can weigh up to 4 tonnes and the lips as their share of the spoils.

No one was aware how this unique and brutal partnership began at this exact location but it is likely the aboriginals formed a bond before the whalers adapted to this routine.

Both parties witnessed and shared in the tragedies of the sea, and one such event occurred when a fearless young man had decided to take all of his family out to sea one fine day, boasting he was an expert seaman; unheeding wise advice to stay within the confines of the bay.

A sudden unexpected squall capsized his small boat and all of the family tragically drowned in the heavy seas. All of the bodies were recovered by the distressed community except for the father.

Tom knew where his body had lodged,firmly wedged underneath a rock with an entanglement of sea weed, but despite his best efforts of continually circling the area for several days his message was not understood. Joining up with the pod they decided to all swim around in circles for days until it was rather too obvious even to the most casual of observers what they were indicating. His body was recovered and it was decided on a burial service at sea, with the Killers.

But just as the trust strengthened, tragic events were about to tear it apart forever.

Tom and the whales sometimes were prone to become overly enthusiastic chasing the whales around the bay and losing concentration at times becoming temporally beached in the shallower water. On one such occasion a stranger,observing the stranded killer whale rushed into the water with his gun and shot it dead.

Before the local community of whalers realized what had happened the stranger had fled as the traumatized whales hastily left the bay, never to resume their migratory return. Tom and some of the other whales however did return as they had recognized the man as a stranger unconnected to the community of whalers.

The final betrayal of trust concerned Tom.

There had been change in the captaincy of the boat and the captain decided not to cut out the tongue and lips for Tom on that fateful day before hauling the smaller( larger ones were usuually left for several days)carcass ashore. One of the old time crew said to the captain “Tom is not going to like that, he’s likely to turn nasty and I don’t blame him! “.

But no amount of persuasion would change the skippers mind. So as he gave the order to the crewman who reluctantly headed for home.

But Tom had the rope in his mouth and was intent on pulling the boat back out to where the whale had previously lay dead in the water. There was an almighty jerk, as if a hand had reached out in fury and shook the boat in rage.

A tug of war ensued, the skipper was not going to be dictated to by a mere killer whale, so he ordered full throttle ahead until it all ended when they witnessed an amazing sight. The rope had apparently caught around one of Tom’s teeth which finally gave way as they witnessed its dislodgment and saw it sink to the sea bed.

Tom swam away in humiliated defeat.

Tragically the tooth cavity became infected with an obsess, and, unable to hunt, Tom died of starvation. His was washed up on the forshaw and it was decided to preserve his body and his skeleton which today can be seen at the maritime museum.

The missing tooth is evident and even the jaw has markings that are the same size as that of the roap and harpoon lines that entwined his mighty mouth so long ago when he become imprisoned within the bowels of the cruel sea.

That is what I think may have happened but there are many slightly different versions of this fascinating partnership.

Sunday, June 22

Opera in the schools

A group of 4 schools in Sydney are collaborating to produce an opera; completely dependant upon the students themselves. To produce the libretto, musical score, sets, staging and choreography under the guidance of their school musical teacher. Apparently many of the students had never even seen an opera before, and decided to see La Boehme to give them idea of what it is all about. I think this is a wonderful opportunity for students to discover many new dimensions in creativity they would not otherwise experience.

It also reminded me of two instances many years ago proving how easily things can go wrong even in the most professional opera companies. One instance concerned the use of Great Danes who were fitted with shaggy mains around their necks to make them look like lions. They looked magnificent. It was decided to save time there would be no need for them to join in on the dress rehearsal since all that was required was for them to be led out onto the stage at the required time. Alas on opening night when the dogs were on stage and heard the high music they all simultaneously began howling at the top of their voices; there was no alternative other than to lead the dogs off and close the curtain much to the amusement of the audience l

The second instance concerned a rather nervous soprano making her debut who was unduly concerned about a high note in her aria. This particular production called for stage extra’s who acted as spear carrying warriors under threat they would be sacked by the Producer unless they followed implicitly the directions of the prompt (The prompt sits below the stage and cannot be seen by the audience) who had been given the job of directing them into their required positions on stage.
When the soprano began her Aria the men had already entered the stage and as she continued she fluffed her top “C”. It wasn’t anything so terrible, but the Prompt grimaced and held his hands over his ears in sympathy, to which all of the spear carrying warriors acted simultaneously to the merriment of the audience. The soprano thought they were all laughing at her and tore off the stage in tears, the curtain came down with an ominous thud and after a short interval the opera recommenced. The show must go on!

Thursday, June 12

Office Scene

The modern office has been transformed because of what’s been invented in the past 40 plus years.

Personal computers, personal phones,the Internet,voice and e mail and even fax facilities which are now taken for granted simply didn’t exist then. Usually there was only a number of shared telephones and communication and storage of information was only a tiny fraction of what it is today.

Communication was largely by a hand typed letter which was reliant on the typing pool or if you were a boss via your personal secretary who took shorthand. Hand written notes were commonplace, even in official communication with external parties and most systems relied on manual input efforts or at best were mechanized inputs using accounting machines to record transactions onto hard copy individual ledger records.

Other aspects of office life that have almost disappeared include the beloved Tea Ladies, the ritual of formal morning and afternoon tea breaks, official sing on and sign off books, lunchtime interoffice sporting competitions,lunchtime card playing and the Friday afternoon office lunches.

When I was first began my working life I was also studying of an evening, for seven long years. Having left my home in the country for the city and residing in a not so flash boarding house, I often arrived late for work in a crumpled mess during my earlier disorganised years.

Ode to an old office scene

Drab and grey buildings greet your dreary day
Cold and unfriendly, they reflect our modern way
Murmurs of distant voices, dim echoes from my past
Sign the dreaded time book before your time is passed

There’s a murmur of a fact that cannot be denied
Lindsay’s train is late again, the boss is not surprised
Stagers in, faces grim, casual fashion one might guess
Forgot to iron his trousers and shirts a crumpled mess

He settles into work, to check the ledger cards
The system is manual; a checkers life's not hard
Tea break is upon him, tea lady says gidday
Not afraid to tell you, office secrets every day

Lunchtime is a signal for people great or small
Assemble at the front desk to represent us all
Teams are chosen wisely, football teams a must
Victors or Vanquished, return to slaps or cheers or hugs

Card players are a serious lot, there is no idle chatter
Game is called 500 and the rules are all that matter
For woe behold the new recruit to join the old brigade
To trump his partner's trump, can it ever be the same
Hangs his head in sorrow, prays to learn to play the game

The afternoon drags slowly on; the output's just a trickle
Soon all the work is done as we hear the knock off whistle
We stand in line in time to sign, our work is truly ended
Goodbye my friend, nostalgia time, that time I fear is ended

Sunday, June 1

The Psalms -As the deer longs

I have belonged to one of our local Catholic parish church choirs for over 20 years and I never tire of singing liturgical music, especially the Psalms. As a group we are able to choose individual hymns and psalms which fit in with the church year calendar focus and hence it’s a continual moving feast. We might choose a Psalm to be sung as a hymn or as a responsorial Psalm which is how they were first intended; the verse/chorus is repeatedly sung by the congregation after the choir sings the verses.

The Psalms have several authors; with many attributable to King David. Most people are familiar with the 23rd Psalm “The Good Shepherd (The Lord is my Shepherd) which is prefaced simply as a Psalm of David. Whether it was actually written by King David is problematic as scholars recognize many of the events described within these Psalms attributed to him happened many centuries later.

What I find interesting about the collections of 150 Psalms is the extent of the full range of emotions and drama that are cleverly interwoven to describe celebrated past events and hopeful aspirations of a community; of a rich theology. They reflect the poetic nature of the Hebrew Bible which in turn is indicative of the popularity of poetry in Israel and its surrounding regions at the time.

According to the Jerusalem Bible’s introduction to the Psalms the best way to generally characterize them is in terms of their literary types; of which they are three , Hymns , Entreaty (for use in public and temple court) and thanksgiving.

Here is one of my favorite psalms, which would fit under the heading of an "Entreaty" shown here in abbreviated form.

Psalm 42~is headed: For the Choirmaster ~ of the sons of Korah (which is a reference to the sons of Korah who were musicians at that time of the original composition)

As the deer longs for running streams,
so I long, so I long, so I long for you
.

A-thirst my soul for you the God who is my life!
When shall I see, when shall I see,
see the face of God?
Echoes meet as deep is calling unto deep,
over my head, all your mighty waters,
sweeping over me.
Continually the foe delights in taunting me:
“Where is God, where is your God?”
Where, O where, are you?

As the deer longs for running streams,
so I long, so I long, so I long for you.


Defend me, God, send forth your light and your truth,
they will lead me to your holy mountain,
to your dwelling place.
Then I shall go unto the altar of my God.
Praising you, O my joy and gladness,
I shall praise your name.

Adaption taken from Hymns listed in ‘As One Voice’ © 1988 Bob Hurd Published by OCP Publication` 'AS THE DEER LONGS'