#Shark attacks, bee stings and #fake news

Has anyone else noticed that there have been a number of media reports about shark sightings closing beaches in Victoria this summer? More than usual? The NSW coast, the Eyre peninsula and waters off Cape Leeuwin are more typically the favoured locations for sharks and subsequent attacks on swimmers and surfers. Victorian waters feature far less frequently – until now. This activity generates a buzz in the media offices as journalists have something to write about at a time when usually not much else is happening. Continue reading

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The intolerant left

In 1949, the monumental economic treatise ‘Human Action’ was published, written by Ludwig von Mises. The book remains of immense significance. It is undoubtedly a tough read. Murray Rothbard produced his own magnum opus ‘Man, Economy and State’ a few years later that similarly was an economic treatise built from the ground up. Rothbard and von Mises had similar understandings. Rothbard’s work was a little more accessible for the reader. But von Mises was the grand master. If you question the relevance of a book written over 60 years ago, consider this quotation*:

“The rigid dogmatism peculiar to religious groups and to Marxism results only in irreconciliable conflict. It condemns beforehand all dissenters as evildoers, it calls into question their good faith, it asks them to surrender unconditionally. No social cooperation is possible where such an attitude prevails.”

That quotation is as true, relevant and topical today as it ever was. Today’s Marxists, greens and the totalitarian left are just as vicious as their predecessors.

* Human Action, Ludwig von Mises, Scholar’s edition 1998, p185

The rise of the capital gains tax

It seems likely, judging by the continued Government hints, that the effective rate of tax applied to capital gains on assets held by superannuation funds is going to be increased. Probably this will be announced on Budget night in May and take effect from 7:30pm that night.

As usual, the language is distorted by the politicians to try to twist the truth. I wrote about that in an earlier post. This time around, they say that superannuation funds enjoy a capital gains tax discount. They say the discount results in a remarkably low rate of tax. Hence they are perfectly justified in reducing the discount and making the funds pay a fairer rate of tax. It’s all rubbish, of course. Lies and deception. Continue reading

Shooting kites

UPDATE (Feb 15): The kite referred to below has been shot down. The Government has announced it is not planning to freeze the SG at its current rate.

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The Government has done little to quell the press speculation this week that the Superannuation Guarantee rate of contribution, currently 9.5% of earnings but scheduled to increase to 12% over time, will be frozen at 9.5%. The lack of a smack-down suggests the Government truly is considering this option and allowing the media speculation to check for community reaction. It is called kite flying.

Goodness, the self-interested are quick off the mark – slings and arrows at the ready to shoot down that kite. Superannuation industry associations and rent-seekers have become too used to a guaranteed revenue stream coming in under the compulsion of law. It has become a sense of entitlement and they squeal when confronted with even the slightest perception of a threat to that money. They all lined up last week to squeal about how bad an idea that would be. It really is tiresome.

The cancellation of further increases in the compulsory rate of superannuation contribution is a good idea. I hope it is implemented. Then, I hope the Government realises the logic that if future increases in the SG should be dumped, the current rate is also too high. It should be reduced to zero. That’s right – the whole SG regime should be dumped. Continue reading

Bob and Paul argue (again)

The long-established customs of the Christmas period have religious and spiritual origins, of course. But how do more recent additions to the customs of an Australian Christmas, such as the yacht races to Tasmania, the Boxing Day test match, lunch with one set of relatives and dinner with another, and traffic jams to get out of the cities become established? And moving on towards New Year, how has it happened that no Government, big or small, Federal or State, no local municipality believes that there can be too many fireworks displays? Amorous cicadas must hate 31 December in the late evening.

New Year’s day also is the day when Government cabinet papers from years gone by lose their confidential status and are released to the public. It is typically a 25 or 30 year cycle. For Australian Federal Government cabinet papers, we now have access to the year 1990.  This cycle has given rise to the annual Bob and Paul recommencement of hostilities. I must say, this version of a Punch and Judy show is one of my favourite more recently added customs. Bob Hawke and Paul Keating, two giants of Australian politics, still banging on at each other about who was right, who said what, who was the better PM, who reneged on a deal, who brought home the bacon and carried the Government etc. Each yearly release of cabinet papers starts off a new round of argy bargy. It is the season for it. Silly old buggers.

The Ungrateful Dead

Grateful Dead, the US rock band, is this year celebrating 50 years of, well, live performances, I guess. I bet the founding members didn’t think when they formed the band in 1965 and gave it such a great name (that pun was actually intended) that they wouldn’t be around half a century later. I guess it just goes to show, you just can’t tell how long you will last in this world.

Which makes me think of the pursed-lipped tut-tutting that is happening in Australia right now about The Ungrateful Dead. These are people who have the temerity to die before using up all their superannuation savings, hence bequeath the residual to the next generation. Here’s a piece of journalism on the topic in today’s Financial Review:

“This year an estimated $8.5 billion will be bequeathed by the estates of Australians who die before using up their retirement savings, according to superannuation advisory firm Rice Warner.”

The social services Minister has stated that he thinks that people who have been granted tax concessions to build up their super should actually spend it, rather than saving it and drawing the age pension. There is some logic missing in there, given our means-testing system that increases the amount of age pension when you have less assets separately, but we’ll let it go.

The Ungrateful Dead. So many media commentators today are lining up and tut-tutting their mean, thrifty behaviour – unfairly using tax concessions to pass on wealth to the undeserving next generation. It’s not more than a few years ago that the Ungrateful Dead were being criticized for blowing their super savings on a round-the-world holiday then coming home to live on the pension. Double-dipping, it was called. And then they didn’t die soon enough!

If you want to avoid this disapproval in the eyes of the journalists writing this stuff, then you should do the sensible thing and plan to use up all your savings on the day you die. This only requires a simple calculation of how much you should spend each year once you determine what your future investment return will be and how long you will live for. Simple, really.