Tuesday, 4 July 2017

This democracy thing ......

Is it something ‘we’ have and ‘they’ don’t?

The demonization of China in our media – mainstream and not-so – is constant. Our biggest trading partner is often the subject of critical comments because it is not ‘a democracy’’ - not like us. It is worth reflecting on a few comparative news items.

Last October, the China Daily news site reported http://www.chinadaily.com.cn/china/2016-10/22/content_27142506.htm that  a province in China had just elected over 400 new lawmakers, saying,  ‘The new legislators were elected Tuesday and Wednesday in 14 cities in the province. The 12th Liaoning Provincial People's Congress now has 594 deputies.’
Why would a province in China need 600 lawmakers when for our central government we elect a mere total of 226 members? It transpires that Liaoning - https://en.wikipedia.org/wiki/Liaoning - has a population of 43.9 million!  Adjoing North Korea, Liaoning has 14 prefectures, 100 counties and 1511 townships  (2012 figures). 
Thus this northern Chinese population elected, on the above figures, 13.5 lawmakers per million of population, whereas, we make do with about 10 per million: increases in population since 2012 would reduce both figures but the indications are that Liaoning has at least as many elected lawmakers as Australia has federally.
Of course there are many differences. The article in China Daily also advised, ‘The by-elections for lawmakers were carried out in Liaoning after an election fraud scandal in January 2013 that implicated 523 deputies to the Liaoning Provincial People's Congress. They either resigned or had their qualification as deputies terminated.’ Which just goes to show what a crooked bunch they are or what an effective anti-corruption watchdog they now have; take your pick.
Than again, our Parliament has an estimated 900 registered lobbyists  -http://johnmenadue.com/john-menadue-who-can-we-trust/. If we add just half these to our 225 representatives giving us 676 lawmakers in Canberra, then we can boast as having 30 lawmakers per million population! Lobbying is a tax deductible business expense, so they are all on our payroll one way or another; but only10 are democratically elected.

The phrase ‘…..qualification as deputies terminated’ indicates that there is a mandatory  qualification before a Chinese would-be lawmaker can stand for election. In Australia almost anyone can stand for election but one has a much better chance of success if one has been ‘pre-selected’ by an existing political party – proven party loyalty and compliance being prerequisites to get the party’s ‘blessing’.

Thus, both in Liaoning and Australia, voters do get a choice of candidates – but in practice it is just a choice between candidates who have already been singled out, nominated, by some other body.

Doubtless too the successful Chinese candidates must espouse the communist system with specific adherence to the current 5-Year plan that has been developed by some higher authority, the central government in Beijing. In Australian it is assumed that one accepts capitalism – any other ‘ism’ will create difficulties for one’s public image – especially the variety embracing the neoliberal philosophy of globalisation, reduced regulation, privatization programs and balanced budgets.  Thus, both sets of candidates have prescribed ideologies. The Beijing Consensus and the Washington Consensus?

That the Liaoning Provincial People's Congress does not have any say about what the Beijing government does in the South China Sea goes without saying. Similarly, our national Parliament has no say in the deployment of Australian forces in foreign parts-- http://www.abc.net.au/news/factcheck/2014-09-08/julie-bishop-correct-on-australia-history-at-war/5710696– or the deployment of foreign troops in Australian parts such as Darwin! http://www.abc.net.au/news/2011-11-16/gillard2c-obama-announce-darwin-troop-deployment/3675596
So can ‘democracy’ be rated? It is not just a binary matter that a country either has it or it doesn’t and it is not just a matter of ‘free and fair’ elections. Democracy does not stop at the ballot box, it is a system and the way it functions and serves its purpose is the true measure of it.  Is it not time that we realised that ‘democracy’ is a work in progress and that we would do well to concentrate on improving ours and let other countries attend to theirs?
We could begin by accepting:
·      that ‘democracy’ was a dirty word at the beginning of white settlement,
·      our first governments were top down affairs; grass roots were to be trodden on,
·      the ethos of white settlement was of centralist governance of all aspects of society; it was after all a prison
·      our democracy is not the result of a lengthy, natural gestation
 This is in contrast to indigenous, old societies where, in the very beginning, tribal groups, settler communities managed their own resources and affairs and over millennia coalesced – with much skullduggery and bloodshed - into larger more extensive governing bodies; and finally central, national governments. In this sense, Australia got it the ‘wrong way up’ and has never sought to accept that local communities are best managing their own affairs and resources; at present in Australia local government exists only at the convenience of State governments.
This status quo is firmly ensconced in our ‘community DNA’; witness how often local initiatives and programs are conditional upon grants – bestowed by Government - and how revered are those who are skilled at writing the applications. No thought that the grant money may have been extracted from other communities lacking the ‘nous’ and application skills!
If we do aim to improve our democracy, the way it works and what it delivers, we must recognize that democratic governance naturally grows from the small to the big; witness how the States came together to form the Federal body. Sadly our States lack legitimacy in the sense that they did not grow from self-governing communities.
We need local governance to be fully, constitutionally recognised – it is the bedrock of genuine, effective democracy.
Unsourced quote – a Chinese national explains to an Australian,  ‘The difference is that you can change the party governing but not the economic system whereas we cannot change the governing party but we can change the system’.

Wednesday, 28 June 2017

Reflections on the commons and independence

The commons of UK and James Boyce's. Van Diemen's Land

In his very well researched history, Van Diemans Land (Black Inc. 2008), James Boyce relates how the early convicts there felt they had been dumped on the edge of a vast common. Ironically, many had been sentenced to transportation because they had been caught using the commons of England in traditional ways – trapping and snaring game, ways which had been made illegal under the Game laws and Acts of Enclosure. Boyce’s Introduction contains many  references to the convicts’ acceptance  of sharing resources  with Aboriginals and each other – land, water, game – and their adaptability  to go bush, to obtain ‘the essentials of life from the new land’.  ‘Van Diemen’s Land was aught but a vast common’ quotes Boyce, p70, Ref32. Defining his book as ‘an environmental history’ with the main interest of how the environment changed the settlers, the early chapters contain many specific references to Tasmania as a common and its effect on the early settlers, how the free access to the natural resources led to much entrepreneurial activity

So there was rugged independence in the early days of settlement and it was engendered by easy access to common land and its natural resources.
Commons are, to this day, very important parts of British society but the concept of shared use of the land is not a basic feature of modern mainstream Australia. English Commons have featured strongly in my own history having been an active Commoner of Ashdown Forest in Sussex (exercised my ‘Rights of Common’ to wood for fuel, bracken for litter and heather for thatching etc during the 60s and 70s).
The present UK Commons – and they are countless, many not publicly marked – are the remnants of the countryside still not fully privatised, remnants left over from the time before ‘ownership’ and formalised property rights, centuries ago. In the British Isles there were small communities simply living off the land, simply sharing what resources there were to provide rudimentary shelter and sustenance; Iron Age stuff and earlier – as seen on TV’s ‘Time Team’ with Tony Robinson! The present Ashdown Common, 3,000 acres between London and the south coast has a number of villages, dwellings, cricket pitches and tennis courts, a golf course, wild deer, it supports Commoner’s sheep and occasional cattle, has many horse trails and footpaths. It is its present size because the local inhabitants, the commoners of 1400 AD resisted attempts to enclose the late John of Gaunt’s estate; the later earl got his way with about half but that was 600 years ago!

Thus the commons of those northern isles supported many communities which in due time – with many battles, invasions, resistance and general skulduggery - coalesced into the sort of central government we know today. But the close association with the land persists in the English psyche today so that Bill Bryson can write of it as ‘the cherished land’ (UK Magazine, Resurgence No245). It is crisscrossed by footpaths, bye ways, tow-paths, bridle paths – many dating from Roman times and earlier – rights of way in use today and is adorned with marshes, moors, fells, forests, woodland and ponds having public access rights which are fiercely defended against all comers – sadly not always successfully. It is this literally ‘grass roots’ history that gives strength and meaning to Local Government in the United Kingdom today. 
In contrast, the Van Diemen’s Land/early Australian experience of commons was harshly suppressed by Lieutenant Governor George Arthur in order to supply a servile workforce for the growing number of free settlers. In chapters 12, ‘Controlling the Convicts’ and 13, ‘Imposing Dependence’ James Boyce shows how Arthur, with British support and experience, used every device – secure barracks to prevent ‘fraternising’, informers, a police force comprising two-thirds serving convicts,  meagre carrots and very heavy sticks – to secure the desired servility.  Before 1820 many ex-convicts and some still under sentence had been allowed plots of land to build crude shelters on, or small land grants for subsistence living for themselves and families; some had licences to resources to support rudimentary commercial enterprises. But Boyce quotes, page 126, a John Henderson complaining that a low-born migrant, ‘soon imbibes such ideas of liberty, equality and independence’ that renders him totally useless ‘for the situation of a subordinate’.  This was no way to run a prison nor to support the ambitions and provide the free labour for the increasing numbers of free-settlers and must be ended. Lt.Gov Arthur was the man to do this - though there was much resistance and opposition and total success was never quite achieved. 

Friday, 26 May 2017

Game of Mates - book review

Game of Mates – how favours bleed a nation
By Dr Cameron K Murray & Professor Paul Fritters
reviewed by Colin Cook

We all like to help a mate – it is just human nature to lend a hand, give a lift or a bit of advice; this book is about cultivating and helping mates with grey gifts – a very different game.

The authors submit the Game is costing us billions every year. They estimate on housing development we lose $11 billion per year, transport infrastructure, two thirds of our costs are lost, but in superannuation, it is only a quarter! Banking costs us $15 billion per year and on and on.

‘Grey gifts’ are the authors’ classification of those favours and presents you can render to a mate, cost you nothing, are valuable to him – will solicit a return of some kind, some time – but which cost the community heaps and heaps, often way into the future. Many examples are given in the chapters dealing specifically with Superannuation, Transport, Banking, Mining and others such as Taxes, Pharmacies & Health, Supermarkets, University Education and Agriculture in the chapter, ‘Other Games, Other Mates’.

But it is the depth of the analysis that is impressive. We are shown the myths that enable us to be ‘sold’ on the virtue of the games, the fundamental human traits that contribute to the recruiting, soliciting and the gaming of/by mates, the conditions that make the Game feasible and, most importantly, what we can do to reduce this enervating, impoverishing drain on our society.

One myth for example that Public Private Partnerships build infrastructure without pushing the State to into debt; the contract may guarantee a fixed return to the investor – which is just like the State issuing a bond to raise the capital for both impose a future liability on the State. Then the State may even lend the investor the money at a favourable rate; this loan would be shown as a State asset -  no debt at all, see! Only liabilities which are not disclosed.

To research the traits fostering the Games, the authors designed a computer-based experiment to observe behaviour, including amongst complete strangers, close up in a laboratory. The result of their rigorous work showed that at least 84% of us would play the Game of Mates, given the opportunity!

‘Grey mateship’ – recruiting and soliciting – often develops through professional contacts and co-operation. Over the years, this is hugely strengthened by the revolving door of appointments; regulators join trade associations, retired politicians become lobbyist, lobbyists are given safe seats and become politicians. An appendix lists many persons coming-and-going through revolving doors.  It is happening before our eyes. 

How is it we stand this robbery? One explanation is that our expanding population conceals the extent of it; we all benefit a bit from the growing population/GDP but not as much as we could because the Mates take a grossly non-proportional share.

The book is written as a tale about James, the Mate, and Bruce, the average Australian. James will fight hard and dirty to retain his positions and influence – and he owns the mainstream media. The authors exhort Bruce to ‘Rise up’; to reclaim the value of the grey gifts for the public, disrupt James’ coordination – jam the revolving door, have citizen juries to make top public appointments – and bust James’ myths. Independent media and journalists are very important for myth busting. And to create publically owned competitors for James and his mates – construction, banking etc

The book has just one short-coming – that there is no reference to the electricity industry. Maybe this would need a whole book to itself!

This really is a must read– not just for grey haired activists but for all students whatever your subject, all mortgage holders, all members of superannuation funds, our local councillors and council staff. Buy one and circulate it widely. Better still, buy two and give one to a ‘small m’ mate. As Professor Steve Keen writes, ‘……essential for all Australians, except the Mates’.

Colin Cook, may 2017

Introductory video

See also Chomsky on the Game of Mates in USA, reported at 

Tuesday, 9 May 2017

Benefits of Land Value Taxation

Land Value Tax
Henry George was a strong advocate of this early last century as being the only tax a society should or need levy. His book Progress and Poverty was a land mark publication.  Today……

Land Value Tax can raise revenue and reduce problems of fairness, housing affordability and under-utilisation of land.
But there are a few subtleties often overlooked about LVT – Land Value Tax.

1.    The ‘best-designed’ property tax is the simplest – a flat-rate levy on the unimproved value of the land with no – or very few – exceptions.

2.    The moral justification for such a tax is that if you wish to have a piece of Australia for your exclusive use and benefit, then you compensate us for foregoing that amenity, after all, it is ‘our’ land.

3.    A Land Value Tax (LVT) converts the costs of useful infrastructure from expenditure to investment. Such infrastructure always enhances land values and a LVT would ensure that this would be reflected in enhanced Government revenue – indefinitely – instead of a capital gain for the property owner.

4.    Conversely, any property owner suffering a loss in value would be automatically compensated by a reduced LVT obligation.

5.    It is fit and proper that the greater the value of the land, the more you will pay ‘us’ because it is our efforts and facilities – that is, the society’s – that give and maintain the value to your asset. The value of a parcel of land depends on the community services that it enjoys by way of defence, policing, transport services, educated manpower, health and recreational facilities.

6.    Because the ‘big end of town’ generally owns a lot of property a flat rate tax would see them pay their proper share towards these community services.

7.    By increasing the cost of keeping blocks undeveloped and houses empty, a LVT would reduce speculation in property ownership and stabilise house and land prices; in the longer term, housing would become more affordable – the opposite of present prospects.

8.    Federal Government leadership could see pressure being applied to the States to adopt a nationally uniform, flat-rate LVT; if States can be pressured into selling income-producing assets, the States could surely be ‘encouraged’ to make full use of their land taxing rights.

9.    That all the valuation and collection systems for a simple, flat-rate LVT are in existence – and that the tax liability cannot be shifted off-shore or be denied are more compelling reasons for LVT to be a priority consideration.

10.                  A unique feature of LVT is that it is in a sense voluntary! If the LVT you are asked to pay does not equate to the value and amenity that you enjoy from the property, then you can get someone else to pay it – by moving elsewhere. Not easy but entirely legitimate!

An ideal scheme would be to start with a very small, nationally uniform, LVT with a planned regular increase so that the land and housing markets have a certain and definite path to transition. In due time, GST could be eliminated and Stamp Duty too.

Unfortunately, ‘the big end of town’ does not want to pay their proper share and use their media to demonise LVT – with headlines about taxing the family home. The fairness of LVT is never featured; for example, at one time, the late Kerry Packer personally owned 14 million acres of Australia; if you owned 14 thousand acres you would still be a big land-owner but for every dollar you paid, KP would have contributed 1000. There was a long case with the ATO and some measly 9 or 10 thousand dollars was finally agreed, if my memory is correct.  

Another easy argument the LVT antagonists promote is the plight of the aging widow who – through no fault of her own – has become asset rich as a result of developments around her humble home but is income poor. How could she cope with a LVT? One solution would be for a Reserve Bank Land Trust to buy her freehold at valuation and for her to live out her days as a totally secure leaseholder – financially well-endowed and surrounded by her newly adoring grandchildren!

·      LVT receives increasing publicity - ACOSS, Grattan Institute, Henry Tax Review are all supporters - but, as yet  nothing like enough to get LVT really ‘on the table’. 
·      ‘Value Capture’ has gathered some recent adherents and publicity is based on some similar considerations to LVT – but it presents many opportunities for mates deals, complicated contracts and loop holes which would disadvantage the taxpayer.
·      LVT regimes have always been designed by the States to favour some sectors, penalise others and be competitive as between States; as stated above a simple, flat rate, nationally uniform tax would be totally fair. If we can have a reduction of Company Tax scheduled over ten years, we could have an increasing LVT scheduled over ten years