Friday, March 16

Letters to the editor

These letters were published in the Australian Financial Review which is Australia’s leading national business paper with a weekday circulation of around 237, 000 and 153, 000 for the weekend edition.

All the letters with a link to the original article can be read " on line " by clicking on the heading to this post. Some were chosen to have cartoons attached created by their resident cartoonist.

A sample of some is reproduced below :

Security risk overdone

Local Huawei chairmen John Lord is justified in rejecting the assertion that a security risk justifies exclusion of the local arm of the telco giant, the second-largest supplier of telecom infrastructure in the world, in the building of the $36 billion national broadband network (“Huawei: “We’re no risk”, March 27).

Huawei has more than 100,000 employees with nearly half employed in research and development in Germany, India, Russia, Sweden and the United States. Their network extends to over 100 countries including most of the world’s 50 largest telecoms.

ASIO, of course, doesn’t have to justify its position to the public nor has our Prime Minister in her muted response “it’s prudent”. But with a project of this size one might reasonably ask why security safeguards and undertakings for all contractors aren’t already sufficiently robust to afford security protection.

Perhaps we should also ban US companies on the basis that more US military involvement here poses a national security risk bearing in mind the ease with which their own top secrets were posted for all to see on the Wikileaks website.

It doesn’t seem as if we have travelled too far forward from the time when the headlines screamed “Reds under the bed”.

Harvey’s groans still make a case

In “Please stop whingeing, Gerry Harvey’’ (Letters. January 12) I note Kieran Kelly avoids mentioning the one salient point that Gerry Harvey and Dick Smith attempt to make.

Simply put, overseas purchases by Australian consumers from internet sites owned and operated outside Australia avoid paying GST on purchases under $1000.

The growth in on line sales from these sites enjoying this cost advantage has nothing to do with innovation or changing modes of business or anything else but is due to this tax cost advantage.

Australians will and do purchase electronic goods, or any for that matter, when they are cheaper offshore. This year the government will collect hundreds of millions of dollars less in GST as a result of consumers sourcing goods from overseas which are not subject to GST. This means less tax is available for schools roads and heath. Retailers can, of course, set up their own on line shopping, but will be uncompetitive as they are subject to GST and import levies.

Baillieu’s Work Cover grab

James McKenzie’, chairmen of the Transport Accident Commission and Victorian Work Cover Authority, reaches the inescapable conclusion that a state government’s decision to impose a dividend on the workers compensation and work safe authorities is akin to simply another tax on employers. (“Baillieu raid threatens Work Safe’s full funding", Opinion. February 28).

The Baillieu government has taken just this course in its move to take $471 million in additional diviends from the WorkCover Authority.
I can remember the previous mess for workers compensation in the state several decades earlier prior to the present reform when employers faced crippling premium rates as high as 8% of wages as a consequence of large payouts under common law underwritten by a number of private insurers. Fortunately today after much needed reform we now benefit from the lowest rates in Australia.

But as McKenzie correctly points out, these are now at risk if the government decides on a policy of dividend imposition which can only be recovered in increased premiums from employers.
Hiding behind this ideological bent to pay a dividend should be seen for what it is – an additional premium hike on employers for no reason other than to boost the Treasury coffers and give the appearance of good economic management.

Asia resilient on Indian demand

Stephen Wyatt’s gloomy assessment on commodities (“China props up shaky demand” (January 30) notes that while China remains the elelephant in the room, it is not the only game in town.

Wyatt fails to mention some of the supply restraints emerging or that other resilient markets such as India and those in our Asian region which can and are leading the way in a revival in construction projects whose increased demand for steel will lead to an increase, for instance, in iron ore consumption.

In fact India’s consumption of iron ore is rising at a time as it reverses its position from self sufficiency to one that is a major importer since the government took action against illegal miners.

Further supply constraints are arising from Brazil whose mines were recently affected by the very heavy rains.

Depressed levels in the Euro zone and the USA are unlikely to get much worse so that overall even if there was curtailment in China’s appetite, the slack may be offset by demand elsewhere combined with emerging supply restraints.

Resources Future Assured

Stephen Wyatt’s “Boom glory days drawing to a close” (Commodities observed February 23) continues his theme commodity prices beginning in 2013 will suffer severe falls and put pressure on the share prices of BHP Billiton, Rio Tinto and Fortescue Metals.

Forecasting one year ahead is difficult enough, but predicting a 50% reduction in iron ore price over the next three years, as Wyatt does , even when quoting commodity analysts, is implausible.

Wyatt fails to acknowledge that in India and China softer future steel making demand for construction (and hence iron ore demand) may be more than offset by robust growth in the consumption-related sectors such as machinery and transportation.

This is a natural progression for these developing economies fuelled by demand from a burgeoning middle class and echoes China’s latest five year plan.

China is aiming at reducing its reliance on exports and investment to be more reliant on local consumption to sustain its economy.

If there is going to be any slowing in demand in commodities than a more likely scenario is a gradual decline but anyone predicting further massive falls is foolhardy. The dynamism of developing economies and their ability to sustain demand for resources over the next several decades should not be underestimated.

Hewson’s bank bashing unfair

John Hewson’s “Greedy banks cry foul” (Opinion, February 3) is another example of bank bashing lacking substance. I am intrigued by his idea that banks operate in a privileged position as a virtual oligopoly and are greedy.

Bank returns for the four majors vary from around 13 % to 17 % on shareholders’ funds with the top notch going to the Commonwealth and each has a very distinctive customer base.

Many listed Australian icons easily exceed this return such as Telstra at 26%, Woolworths 28% and BHP 38%. Given the cost of Capital is 12% the banks average returns of 15% can hardly be viewed as excessive. In fact the Australian banking industry is extremely competitive as evidenced by the string of foreign banks that closed their local operations unable to realise commercial returns.

Thankfully we have a strong banking industry which did not succumb to the overtures by foreign banks to become engaged in the sub-prime securities and derivatives market which caused those banking giants in the USA and Europe to need huge publically funded bailouts to remain solvent.

The only reason banks have to seek wholesale funding overseas at higher interest rates is because their local depositor base here is insufficient. Hewson and the flurry of bank bashes only serve to undermine what is needed: a continuing strong healthy profitable competitive banking sector which is critical at a time when overseas credit markets remain constrained.

Thursday, March 1

A Faraway Place

‘A Faraway Place’ is a poem by my wife and I quickly penned this poetic afterthought

Only a memory; not history- just thoughts
Latticed green landscape of her endless estate
The old genes return to inspire a memory
Needlework of her boundless homeland
What mastery does this poem reveal?
Echoes of a past princess in nature’s royal estate?
For although we as mere mortals must be
Can we not imagine a finer dust that lays dormant ?
To emerge in words and song

A Faraway Place
For years I’d longed to visit
Where Winston Graham wrote
In Poldark of Cornwall:
Bodmin, St Ives and Penzance.

A tale of smugglers, tin miners, gentry,
Intrigue, romance and greed
Where raging seas sculpt craggy cliffs
And Cornish Heath abounds.

There at last; much to explore
Where other feet have trod.
I’ll do my best to recount
Of happy times spent then.

First, L....r Farm; a dairy.
Bed and breakfast offered too.
It settled in a verdant vale
Quite difficult to locate.

Through blossoming, hedged lanes we drove
At last found the estate.
That picture postcard property
Was all that we had hoped.
The hostess was a little strange
When I asked her for an iron
She brought it, but not a board.
When asked about a place to dine,
“Don’t ask me”, was her shrugged reply.

The locals about were friendly.
One stopped to show the way
To the famous bronze age ‘Hurlers’,
High up upon the moor.

There, golden, gorse girt granite stones
Placed so long before
When ancients worshiped many Gods;
A picture perfect; Bodmin Moor.

Lazy days; see mare and foal
Share grazing ground with
Ewe and lamb and tourists who
Delight in nature’s spectacle on Bodmin Moor.

Beware the marshes and the bogs,
Beware large cats that roam;
A Puma? That was hard to cop!
Sightings listed at the Minions Village Shop.
Glimpsed a skeleton on the landscape
With a Tamer Valley view.
A monument or gravestone?
To wealth or exploitation?
To Tin!!

St Ives was such a busy place
The day that we were there.
Just couldn’t find a parking spot
By harbour or by sea.

It was a public holiday and the beach was crowded.
Traffic crawled through narrow streets
Past cottages so small and quaint
Once fishermen’s accommodation.

To visit the Tate Gallery;
One reason we had come.
But time grew short while tempers frayed.
Thought we’d come back another day.

Penzance though picturesque
Did little to impress me
But the nearby Minack Theatre;
An astonishing place to be.

The stage below, the sea beyond
The cliffside terraced to seat a crowd.
I’d have loved to sit beneath the stars
That night while the actors performed.

Alas the seats were all sold out
And the rain had begun to fall.
Though disappointed I was content
To rest and enjoy the view.

Moved on from Penzance to further climes
So much more to see
But Cornwall; it will always be
A beautiful memory.