There are many real issues with our government and its close association with the financial markets. Some years back the Commonwealth Bank and the State Banks did involve the Government in the banking area and by being there they were a signpost in the direction of the regulations and after the floating of the Australian Dollar and the sale of the State and Commonwealth banks as well as the sale of the state insurance companies took that direction out of the financial area and then treasurer become more intermit with the banks and other financial institutions. This new relationship saw governments begin to be involved as customers and to obtain the best outcomes they began to give favourable treatment to them and took their eyes off of the non-compliance of strong and sound financial practices. As the foreign ownership of the financial institutions strengthened so did the scrutiny of the institutions.
I observed irregularities back in 1985 with Town and Country Insurance and after a successful conviction against the husband of a political candidate concluded in 1986 I called for an inquiry into the financial institutions but could not gain support since so many of the political movers and shakers and a strong financial take in so many of the institutions. Very little that came out of the recent inquiry that I had not been aware of in 1986 when I called for the inquiry; the only difference is the extent of the irregularities – code for illegal acts. The fact that there is a law on the statute books that put a 10 year incarceration and a $10,000 for each and every act of conspiracy to defraud; just simply amazes me that not one person went to jail for their involvement in the planning and the promotion of the fraudulent plans that stole billions from so many of the Australian people. The most despicable fraudulent plan was where the funeral insurance was offered to new born Aboriginal children at such a rate that after 10 years in the fund the contributions had more than covered the cost of a funeral that was offered by the policy, yet to cease paying then all the benefits would be lost after 2 months in arrears.
You speak of the tax relief for investment properties and housing and while there is a very strong argument that the costs associated with the investment ought to tax deductible; there certainly needs to be a very close looking at the allowable expenses. The galloping house prices are in effect an unrealised capital growth, even while ownership continues in the investment property. However if we fixed the economy well then the galloping prices would not happen anymore and the unrealised increased value would be far more modest.
Fixing the whole economy would be a huge redirection and would include the isolation of the control that the international investors have on all manner of the Australian economy and to impose strong and strict rules on all of the Australian financial institutions. It would also mean the removal of foreign ownership of any Australian real estate. While foreign investors may lease Australian real estate that ought not to own any nor to have grater than 49% ownership of any business in Australia. Foreign investors earnings in Australia must attract a premium income tax rate. These few steps will commence the turnaround of the economy and the manner of their implementation will determine the extent of the negative affects of these measures on the Australian economy until a more stable and balanced economy emerges. As with change there would be no guarantees at all but the gap between the low income earners and the wealthy must be reduced to prove that we are just and a just and compassionate society.
The chances of moving in this direction are remote as the greed of most is so strong that the self-interest of many will prevent the spark of financial justice to develop in to a sustainable flame.
Yours in Good Faith
Sent: Tuesday, 3 August 2021 1:26 PM
To: ‘Milton Caine’ <email@example.com>
Subject: RE: how should we measure the health of the economy?
The financial markets are a satanic beast with corporates able to hide behind created entities to protect themselves & their accumulated wealth.
Greed begets greed!
A wealth tax and/or death duty would even up the intergenerational equity very quickly. But I doubt Governments would have the intestinal fortitude to make such legislation.
Until Australia reaches a bigger gap between the Haves & have nots causing a rebellion (or at least a backlash) there will be timid approach to this question.
Even Labour has backed down on deleting tax incentives for investment property.
From: Milton Caine <firstname.lastname@example.org>
Sent: Tuesday, 3 August 2021 6:49 AM
To: letters Newcastle Herald <email@example.com>
Subject: how should we measure the health of the economy?
While studying Economics at Newcastle University I was the odd person out when we were concentrating on the evaluation of economic success of a nation. The GDP was considered to be a strong measure and is relied upon to show the health of the economic health of a nation – I strongly disagree; when monthly increases in house valuations exceed the annual increase in wages this is the mark of an economy needing urgent attention to reign in the housing unaffordability so that the essentials of a successful economy can be re-established. The characteristics of a successful economy must be that every person can have affordable housing, sufficient food, adequate clothing and affordable utilities with some funds left over for savings.
In 1985 an average 3 bedroom house in Newcastle was about $45,000 and the minimum weekly wage was $165.50; while today those same houses are priced at about $650,00 and the minimum weekly is $772.60 in todays market. This means that house prices have seen an increase of 14.444 times the 1985 prices; while wages have experienced a 4.668 times increase. Herein lies the heart of the problem as some focus on the “successful” nature of the housing market which is funded by extremely high and increasing levels of debt and the directions given to all levels of government do not in anyway have a path to solve this problem.
Some will call for huge wage reform so that wages are increased to unaffordable levels and then the new increases in house prices will see housing affordability, in the words from The Great Gatsby, as did the yellow light “recede endlessly into the past.”
There is a solution but it is not to make housing loans easier to get or for government support to first home buyers; but rather a radical step by government to totally sever its direct ties to the privatised financial markets and completely sever their total manipulation of the financial markets. Note well: the recent enquiry showed clear evidence of conspiracy to defraud customers of their funds by almost every financial institution and no one went to jail!!! Why?? The close association of this market to government and their investments into these institutions.
We need a new direction.
Yours in Good Faith