Is the #pension a safety net or an asset in a portfolio?

Malcolm is not as popular as he once thought he would be. Here is a little window into his waning popularity with Australians in receipt of the age pension:

 

pension

 

The difficulty here is that the purpose of the age pension is no longer clearly established and accepted by the (majority) population. Is it a safety net that pays only to those in genuine hardship? Or is part of a retiree’s personal wealth portfolio, a defined benefit lifetime annuity independent of other sources of assets or income?

The pension was established (over 100 years ago) as a safety net. For much of the 20th century, anecdotal evidence suggests the population accepted that fact and ‘going on the pension’ was almost seen as an indicator of low social standing and to be avoided. The pension is means-tested, so phases out entirely when assets and income exceed thresholds. Clearly, it has been operated as a safety net, although there is a genuine debate over the appropriate threshold levels.  Yet the angry pensioners argue that they have earned the right to their pension and no politician should take it away even if they have a million dollars in other investments and they own their own home outright.

As is often the way in political economy, when Governments fail to do the spadework before pulling the policy levers of change, we end up in an unholy mess. The spadework must prepare the ground based on values, principles and attitudes. Only when the population is in broad agreement and understanding with and of these principles should policy be developed or reformed.  Only when Australians  agree on the purpose of the age pension should it be amended.

Single-handed #sailing – handling marinas

Getting a yacht into or out of a marina is often a stressful time for the skipper. Yachts do not manoeuvre easily, the space is usually crowded, there are plenty of things to run into and break, including other yachts, and the wind and tide can play havoc. On top of that, yachts using engines to go astern are subject to propeller walk: the stern will be pushed to one side (port if you have a right-handed propeller) and steerage is almost non-existent. My own yacht suffered damage last year when another boat trying to exit the marina in a breeze lost control and bumped into our stern, breaking off the solar panel from its fittings at the pushpit. The panel went to the bottom.

Continue reading

Get on with it

Handling a boat single-handed is a great way to learn. I spent many years crewing on different boats over the years and what tends to happen in a well campaigned yacht is that each crew-member becomes very good at their specific tasks but does not become familiar with many others. This extends to all aspects of handling from entering and leaving marinas, sail handling, navigation and so on. The single-hander needs to be able to do it all.

I was on my own with a brand new Wichard backstay tension adjuster to install as the existing one had become unserviceable. To replace a backstay adjuster requires the backstay to be released. The backstay is obviously an important part of the standing rigging that holds the mast up. What was making me apprehensive was the wind blowing in the 20-30 knot range, gusting higher, over the port quarter. Even though the yacht was secured in the marina, there was enough windage in the rig, the furled mainsail and the mast to have her heeling slightly in front of the wind. Had the wind been blowing from the north, it would be coming over the bow and all load in the rigging would have been on the forestay and lateral shrouds. But that was not the case and the backstay was clearly under some load. I busied myself with other tasks hoping that the wind would ease, which it didn’t.

Nothing else for it but to get on with it. I’ve heard opinions that the best time to do a difficult task is now. Do not delay or procrastinate. I know of yacht skippers who never delay a departure owing to bad weather – they say that leads to constant anxiety, constant delays and prevents learning and experience that would otherwise stand the boat and crew in good stead. So get on with it: I rigged the mainsheet halyard to a line (of spectra – high breaking strain rope) and attached that to a deck fitting at the stern, in similar attitude as the backstay and tightening it with the halyard winch. I let go the backstay, replaced the adjuster and re-rigged the backstay, then let go the temporary line and halyard.

Simple really.

Summer

It is summer in the southern hemisphere. In fact, tomorrow is the summer solstice. I’m not planning to attend any particular ceremonies, sacrifices or druid knees-ups but I am planning to sail as much as I can during a break from matters of great pith and moment.

This year I have a new objective: prove to myself that I can sail singlehanded. This does not mean that I have to tie one hand behind my back but rather that I leave the dock with no-one else on board. Boat handling when single-handed has its challenges. This should be exhilarating. Or frightening. Or something of a disaster. Or, it may be successful. I haven’t left shore alone on a boat since my salad days in a dinghy. These days, I’m sailing the following (former) ocean racer:

IMG_0243.JPG

Should be interesting.

Windy day in Victoria

The South Australian blackout debacle was not caused by a once-in-a-lifetime storm, as I documented at this blog post.

Today is windy in Victoria. The data below shows how the wind at St Kilda harbour (just 5km from the CBD) has been rising all day. Compare this data against the data in my earlier post from South Australia. Very similar.

This weather is not abnormal.

stkilda-weather

Corporate #tax – why?

Why does Australia have a corporate tax rate? What does it mean to tax a legal construct that is not actually a person?

In large part, it means complexity in tax laws, regulations, numerous bureaucrats, advisors, accountants, court cases and government regulators. So much wasted time and nugatory effort. Think about the advantages in freeing those people from the daily tax grind and allowing them to do something more useful, something that would be valued by other people in society.

A corporation is merely a means of allowing investors, entrepreneurs, managers and customers to cooperate efficiently. It was the concept of the limited liability company structure, devised and refined over 200 years ago that allowed investors to participate in shares, with their liability limited to their investment. Continue reading

SA #power – more trouble is on the way

The report below comes from The Australian newspaper today. It suggests that there is further trouble coming down the line (pun intended) for South Australia. Problems with infrastructure take time to fix. Yet, as I pointed out in this post, very windy weather is a monthly occurrence. The worst Government response would be to continue to blame a once-in-a-lifetime storm (which it wasn’t) and continue with the current policies of power generation and distribution.

 

SA line warnings.jpg

 

More on the SA #power debacle – abnormal weather?

In my post yesterday, I pointed out that there was nothing unusual about the weather hitting South Australia in the last few days. Hence, the inability of the State’s power network to cope with this weather showed inherent fragility that would turn away investment dollars. The State’s future is seriously in doubt – no one should think otherwise.

But some people questioned my claim that the weather was not abnormal. They may have listened to the Premier or many journalists or other climate change religionists calling this a climate change induced once-in-a-lifetime apocalyptic weather bomb (yes, those descriptions have all been used.) Continue reading

South Australia’s #power shut down

South Australia’s electricity grid completely shut down yesterday. The whole state was without electricity for many hours. Even today, power is still out for many households and businesses. The Premier blames an extreme weather event. Well, if you look at the actual weather observations from around the state yesterday from the Bureau of Meteorology, it is blindingly obvious that while it was wet and windy, the weather was not at all extreme.

It is clear that the state’s power source is incredibly fragile.

This will make South Australia a very unattractive prospect for any new investment.