Global Habitat Destruction

Today global habitat destruction is funded by rich-world governments, rich-world multinationals, and rich-world institutions such as the World Bank, in their own interest. In April the forests of Papua New Guinea fell prey to the transnationals and the World Bank. Who led that charge? The Australian Government. [Dr. Martin Cohen, Queensland University of Technology,  Brisbane - letter in Guardian Weekly, 20.6.02]

Financial Instability Returns

Due to financial deregulation and liberalisation following the dismantling of the Bretton Woods regime, "financial instability has re-emerged as a major policy concern".
The world has gone full circle in a little less than a year - uncertainty was replaced by confidence in the early part of this year, only to be replaced by uncertainty again...  In the US the Federal Reserve now sees conditions skewed to economic weakness. The preconditions for recovery - low interest rates, improving profitability, and low inventory levels - are in place. But for the recovery to gain momentum, confidence needs to be restored, and this will require an absence of new corporate shocks.[CEC Newsletter, 22.8.02, PO Box 376, Coburg, Vic 3058]

Business Conditions Robust but Confidence Falling

The chief economist of the National Bank, Alan Oster, saw no reason to change GDP forecasts of 3_ to 4% over the next year. But big uncertainties remained, he said - global equity markets and drought - in particular. Business confidence had fallen a further five points, the largest falls being in mining, construction, electricity, and agribusiness. [ Alan Oster, July Business Survey ]

Corporate Cultures in for an Overhaul?

Jack Stack, manager of Springfield Remanufacturing  Corporation, has regularly been going to MIT to speak with young executives about the ideals and values of the engine manufacturing   company he helped build...  It emerged as a model of how  management and labour could successfully work together in a culture of trust and ownership...  In the late 1990s he saw a change in the attitude of business leaders - they seemed far more ambitious for themselves than their companies, being more interested in the value of their holdings than the profits of the companies... They told him his ideas for tapping into the enthusiasm, intelligence and creativity of working people were antiquated. He says so many young CEOs were mesmerised by getting a one or two million job, selling out and getting out of town... Corporate cultures are now in for an overhaul; attitudes and beliefs are set largely by top executives. The values they espouse, the incentives they put in place, and their own behaviour provide the cues for the rest of the organisation...  The first task of modern corporations is to acknowledge that a company's viability now depends less on making the numbers at any cost, and more on the integrity and trustworthiness of its practice. [John Byrne of Business Week, in AFR 14.8.02]

Accounting For Company Directors

Three directors of CTC Resources NL, who siphoned more than$2.5 million into private companies in their control, have been banned from being company directors for 8 years, and fined $245,000 each. They were found to have breached corporation law in relation to management and loans. The chairman of ASIC, David Knott, said the judgement was a warning to all company directors. [Allen, AFR 29.8.02]

Call For Better Policing of Auditors

Professor David Boymal, head of Ernst & Young's accounting and standards practice, called for this and the establishment of an auditor oversight board to do it. He said it was scandalous that there was no mandatory requirement for listed companies to have audit committees. [Leon Gettier, SMH 27.8.02]

Independent Auditors and Clear Accounting Standards Needed

At a recent high powered business luncheon of the Securities and Chartered Accountants Institutes, the Prime Minister restated his preference for a "light handed" government response to Australia's corporate failures...  His sentiments are supported by many in business...  Tony Harris, former NSW Auditor-General, considers that the Commonwealth is unlikely to upset such powerful business interests, but it should...  Most economists recognise that regulations induce consumers to drop their guard, and that they are too often written by those being regulated...  Harris said that it would be wrong to prefer disclosure over regulation...  Australia needs independent  auditors and clear accounting and audit standards, he said. "Guides are only useful for the honest", he said. Australia needs black letter law for those who...  can resist everything except temptation. [Tony Harris, former NSW Auditor-General, AFR 13.8.02]

Corporate Irresponsibility

President Bush's credibility in attacking the behaviour of corporate America has again come into question after he headlined several events for a Californian political candidate whose business ethics are under scrutiny... He promised to "hold people accountable who betray the public trust". He said "we are going to rout those out who cook the books"... He is finding it increasingly difficult to speak with authority on the issue of corporate accountability, after reports about his own business background and others in his Administration... . However, he needs to keep addressing the issue of corporate America's ethics, principally because examples of questionable behaviour keep hitting the headlines.[Luke Collins, AFR 26.8.02]
 

The Disaster of American Corporate Life

The Bush Administration is trying to get to grips with this disaster before the erosion of public confidence destroys it in the November elections. Its principal initiative so far has been to stage manage the humiliation of business executives caught cooking the books...
There is no mystery behind the public reluctance to take the Bush team at its word. It is cut from the same slick but ultimately threadbare cloth as the corporate culture it now claims to abhor...  The president's chief adviser, Larry Lindsay, was a financial consultant and advisory board member  for Enron before coming to the White House. Harvey Pitt, head of the SEC (the economy's financial watchdog) was formerly a lobbyist for the accounting industry  - accused of abetting the loose practices of many corporate boardrooms...  Likewise, Larry Thompson, head of the federal task force on corporate fraud, was found to have sold off $5 million in stock in his former credit card company...  a few weeks before news emerged that some of the loans on its balance sheet were questionable...  If the administration is being associated with boardroom America, it has only itself to blame. That is how it sold itself - Bush's decision to tackle the subject brought back to life some long forgotten facts about his own corporate past involving "insider trading", when he presented himself as the CEO-president of America Inc., leading a team of captains of industry. [Julian Borger, Guardian Weekly, 8.8.02]

Business Scandals in USA: Who Directs Whom?

In the wake of business scandals across America new rules are set to reshape US boardrooms...  Under the new rules companies will have to ensure that a majority of directors are independent...  They must have no material relationship with the company, with a five-year "cooling off" period for former employees, auditors, or family members. Those who were asleep or looked the other way while investors' funds vanished in an avalanche of accounting frauds, could soon find themselves in the courtroom, not the boardroom...  The new rules... may blow apart comfortable old boy networks...  Now independent directors are set to become the new "hot stock" in the business world; before companies had to have only three...  The New York Stock Exchange is instigating a program of director education with prominent universities. [ Pamela Williams, AFR 20.8.02]

Caveat Director: Multinationals Seek Exemption From Reforms

Dozens of the world's biggest companies are lobbying for exemptions from tough corporate reforms in the USA, claiming "unwarranted intrusion" into their home country laws. A letter to the US Securities & Exchange Commission on behalf of a hundred multinationals based in Europe and  Asia, says the reforms would have a "harsh and dramatic effect" on foreign companies listed on US stock exchanges. Foreign companies want exemption from two provisions, which prohibit personal loans to executives, and force them to pay back profits if accounts are restated due to misconduct. [Fiona Buffini, AFR 2.9.02]

Who Shall Audit the Auditors?

Arthur Anderson LLP has officially ceased to be an auditor of public companies, after being convicted of obstructing the US Government's investigation into the collapse of Enron Corp...  Once the fifth largest accounting firm, Anderson is left with the tasks of winding down operations and dealing with lawsuits. [ Bloomberg, AFR 2.9.02]

Frankenstein Finance

A leading London investment fund manager said that we do not have a global financial system anymore, but a Frankenstein monster. The policies of financial deregulation have created this, he said. Every time the monster got hungry, it was fed by the central banks. Now it is out of control. [Citizens' Electoral Council of Australia Newsletter  No.5, 25.8.02]

The Chosen Few...

Of the 100 biggest Australian companies listed on the Stock Exchange, 47 offered profitable options packages to their executives...  Corporate law requires companies to disclose the value of share option plans, but it has been difficult to enforce this... The Shadow Treasurer asked why the Government had not adopted stronger laws to police executive remuneration. The Treasurer said they were working on it. [Toni O'Loughlin, SMH 21.8.02]

Scandals Scar Investor Psychology

The bears' picnic looks to be over - global equity markets are at a five-year low...  The absence of new accounting scandals... has given a fillip to sentiment...  But there are still plenty of reasons to worry. Recent data has only intensified the debate over whether the world's biggest economy will enter a fresh recession - a so-called "double dip" scenario... Investor psychology is still scarred by all the scandals. [Jim Parker, AFR 18.8.02]

Lies, Damn Lies, and Company Statements...

US capitalism has undergone a crisis of faith in the credibility of financial statements, executives, and stock valuations, from which it may just be starting to emerge. There is a long way to go, but forcing executives to aver to the veracity of their companies' financial statements... is at least helping to improve investor sentiment.[AFR, 18.8.02, unsigned commentary]

Corporate Governance

Its aim is to seek to constrain the temptations in boardrooms and among senior executives, to prefer their interests over those of shareholders and owners...  Much has been heard about the greed of executives and the complicit behaviour of accountants, but what about the lawyers whose advice has frequently smoothed the path for dubiousness and dishonesty? In the USA, rules are being established to require company lawyers to report any wrongdoing they discover to the chief executive...  If the response is not helpful, lawyers will be required to go to the board or its audit committee. If they too were in the scam, the lawyers would have to go to another independent group...  In an era hungry for corporate governance and transparency, it is old-fashioned and hopeless for professional associations to be both trade unions and statutory regulators. [Richard Ackland, SMH 30.8.02]

Corporate Crooks and "Lifting Their Games"

Recent parochial corporate disasters have brought the spectre of corporate malfeasance (wrong doing) into the lounge rooms of middle Australia. News of lavish tips and undeserved multi-million-dollar bonuses, directors who did not bother to turn up to board meetings, or check the books of companies that they later paid hundreds of millions for, have dominated the headlines in recent weeks...  Senator Ian Campbell, parliamentary secretary for financial services, said the public mood was for action, and that new laws to protect whistleblowers inside the crooked groups were being drafted. His preferred outcome, however, was for business to "lift its game". He insists he is reluctant to draft laws to ensure good corporate governance; he said the government and business are "at one" in opposing new laws, adding "layers of rigidity, cost and administration to a largely law-abiding, ethical and principle-based marketplace".  [[Bill Pheasant, AFR 15.8.02]

Executives Executed?

Australia's executives could find themselves subject to a host of regulations, including a full disclosure of their share option packages, under a policy blueprint released by the Opposition. Labor's finance spokesman, Stephen Conroy, released a direction statement outlining future policy options to toughen corporate governance, continuing Labor's political attacks on corporate excess. Policy options include:
  - Allowing shareholders to approve executive incentive schemes.
  - Changing the law on company boards to ensure a majority are independent.
  - Requiring more disclosure from analysts.
The chief executive of the Australian Institute of Directors said Labor's paper was largely in line with best practices supported by his organisation. [Katherine Murphy, AFR 30.8.02]

Revealing the Business World?

Under Labor's new corporate governance policy, the labyrinthine web of personal connections that links Australia's business world would have to be revealed...  As well as revealing which old school tie they wear, candidates for directorships would also have to disclose past dealings with other companies, links with other directors and executives, and the other directorships they hold...  Labor is also proposing to restrict the number of directorships that can be held at one time. [Toni O'Loughlin, SMH 30.8.02]

Australia A Leader In Corporate Governance?

The chairman of Santos, Stephen Gerlach, said Australia must continually raise its corporate standards and not follow the US slavishly...  Many of the measure being proposed in the US already existed here. Australia is a leader in this area, he said Australian companies should ensure they have proper checks and balances, and concentrate on issues such as "the character or core values" that govern their relationship with share holders, employees, business partners, and the community. [Chris Milne, AFR 5.9.02]

Transnational Capital At Work

Some of Australia's biggest companies face costly reconstruction on their internal governance practices, including abolishing loans to executives and directors, under tough new US laws. [Kitney & Collins, AFR 2.9.02]

Greed, Fear, and Crooked Corporations

According to Moody's Investors Service the recent record pace of corporate defaults might materially weaken Wall Street and credit ratings, if it suppresses US recovery...  A record 89 companies defaulted on $US64 billion in the first half of 2002...  Moody's said big defaults had "pummelled investor confidence", particularly among retail investors. This might  cause falling revenue for Wall Street banks, and result in prolonging US recovery. [Reuters, in AFR 21.8.02]

Markets Must Factor in a War

This is the sub-title of an article by David Hale, global chief economist, in the Zurich Financial, August 12. He says the Bush administration has invested so much capital in the campaign against Saddam Hussein, it cannot easily back down. As a result, the risk of war in the Persian Gulf is likely to emerge as a major constraint on the performance of US financial markets after the corporate government scandals fade this autumn...  We have entered a new era in which security concerns will justify large increases in both spending and  the role of government. [cited in AFR 22.8.02]
 

Australian Momentum Still Decent, Despite Corporate Scandals & Drought

The outlook for the world economy remains murky, but in the face of the subdued world environment Australian data is still showing decent momentum...  The indecisiveness is not being helped by... corrupt corporate governance, and the prospect of an extended geopolitical conflict: corporate accounting scandals are currently getting the most focus, and in Australia there is the negative impact of the drought. Business investment is weak, but expectations remain strong, and Australian economic data is holding up well, so far.  [Economic Outlook, August 2002, St. George Bank (Ryan, Crawford & Heffernan)]

Lucky OZ

The global chief economist of the Deutsche Bank, Norbert Walter, believes it is too early to say that the world share market has bottomed, considers Australia is doing well, but does not quite know why - "a lucky outcome under difficult circumstances". [Craig James, AFR 20.8.02]

Banks' Tentacles Everywhere

This is the headline for the conservative Australian Financial Review of 27.8.02 in "Chanticleers" column. This regular stimulating column observes that: "The big four Australian banks have successfully converted their traditional domestic market domination into wealth management". More than 50% of total retail funds are under such management, and an even higher share of the new growth markets, trusts, and wrap accounts. The local management game is one of domestic scale in which the big banks are the powers...  The reality is that the big four banks have got their arms firmly around everyone's money from home loans to superannuation. [AFR 27.8.02]

You Can Bank On It

ANZ bank was fined $10,000 over four breaches of the Workplace Relations Act; these arose from a threat by the bank to demote branch manager Joy Buckland after she addressed  staff at a union meeting. She was honorary president of the Finance Sector Union. The maximum penalty if $40,000; the low fine was because the breach arose out of a single course of conduct, and Buckland was not actually demoted. [Anne Lampe, SMH 24-5 Aug.2002]

They Are Banking On You!

The Australian banking industry was in a state of near crisis in the early 1990s, with billions of dollars lost in corporate bad loan provisions, and huge pressure on profits. The banks rebuilt their balance sheets and put their financial houses in order at the expense of their customers. They closed branches, slashed services and charged incredulous consumers more for the privilege. The ANZ's marketing chief, Dirk Howindt, said the banks had driven shareholder value to the point where they had lost customers... "we have to rebuild consumer trust", he said. Significant progress had been made but there was still a long way to go... Many bank advertisements have been criticised as being full of empty irrelevant claims about friendship, trust and understanding. [Robyn Stubbs, AFR 26.8.02]

British Banks Criticised

A powerful committee of British MPs criticised Britain's biggest banks for failing to put their houses in order, and confusing millions of customers with baffling interest-rate charges...  The committee complained that the banks had failed to act on a number of complaints levelled against them over 30 months ago. These included the length of time needed to clear cheques, and about the way some banks used "educational" visits as a way to persuade young people to sign up for a bank account. [James Lewis, Guardian Weekly 8.8.02]

Disappearing Bankers?

Sudden and unexplained senior executive departures have become commonplace in the Australian financial services industry despite greater market demands for more transparency and coherent succession planning. Marc de Cure's decisions to step down as chief financial officer at troubled funds manager and insurer AMP is just the latest example of a disturbing trend. Over the past two years, most of the major banks have seen senior executives depart suddenly without adequate explanations as to why. [Tony Boyd, AFR 6.9.02]

The Banking Cartel

When the banking cartel agrees to landmark intrusions into its pricing policies, there is cause for suspicion and the reasons in this case are clear; while losing a highly profitable earner in credit card fees, overall bank profits will hardly be touched and the losers will be some credit card holders and another card cartel, Visa. The whole reform... is preferable to the present closed shop in which banks take monopoly rents in the form of 30% returns on equity on their credit card business against 20% for a bank as a whole. [John Durie, AFR 21.6.02]

Judge Not, That Ye Be Not Judged?

The ACTU attacked the nation's leading judges for seeking a 30% pay rise. Its president, Sharan Burrow, said their pay claim - lodged with the Commonwealth Remuneration Tribunal - demonstrated the wages gap opening up between ordinary workers and professional elites.  Burrow said that if any workers asked for a 30% increase, employers would scream at the outrageous nature of the claim. Federal Court judges are seeking to have their salaries increased from $221,500 a year, to $287,950 - an extra $1,270 a week. The judges are arguing they have to work long hours and perform complicated tasks. [Morgan Mellish, AFR 5.9.02]

Sex, Hot Money, & Construction

Allegations that former union officials took bribes, were involved in money laundering, and organised free sex for sub-contractors are being aired at the Cole royal commission into the construction industry. [Neil Mercer, SMH 19.8.02]

The New Economy Killing Collectivism?

Unions need to face the fact that the new economy is killing collectivism...  only 19% of private-sector workers are covered by collective agreements, compared with 83% in the public sector...  There are now more people self employed than trade unionists. One in five work part-time, from home. Contract labour is growing more popular with both employees and business owners...  A strategy needs to be built on representation of the individual employee, in which every legal forum is employed to uphold working rights...  The legitimacy of unionism needs to be renewed. [Gary Punch, former minister in the Hawke & Keating  Governments, in SMH 4.9.02]

Australia's Poor Record On Unemployment

In the eight years since 1994, the unemployment rate has fallen by only 2%. Our rate now exceeds that in a dozen other OECD countries. When the next recession does come, we will pay a high price for this failure. [Professor John Quiggin, ANU, in AFR 15.8.02]

Capitalism At Work

The long property boom means that the wealthy have been able to earn more in gains on their property than their annual taxable income. According to Westpac's chief economist, Nigel Stapledon, while wages increased an average 6%, house prices soared 17%...  The rich are often earning more from capital gains than income. For example, the Woollahra/Point Piper area, where the average taxable income was $109,000, house prices grew 19%. [Mathew Chandler, AFR 26.8.02]

Medibank Private Loss - Not Very Healthy

Australia's biggest health fund is set to report a loss of over $100 million due to a disastrous foray into international stock markets, and tough operating conditions. The result threatens to undermine its planned privatisation (!). It is understood to have lost tens of millions as it unwound its equities in a falling market, and higher claims than expected...  It has cut management by over one-third since July. These follow a loss of $60 million on its international share investment. [Stewart Oldfield, AFR 2.9.02]

Waterworks

The board of Water Wheel Holdings continued to reassure shareholders about the company's financial status, despite a warning from the financial controller that it was insolvent. The group's former financial controller, Stephen Nankervis, resigned after confirming his view that the company could not pay its debts on time. Neil Young, QC, told the Victorian Supreme Court that Nankervis resigned after ten weeks in the job...  He outlined the declining fortunes of the company in a civil penalties case brought against the three directors by ASIC. [Bill Pheasant, AFR 20.8.02]

Howard's Gas Deal With China

The prime minister helped to secure a deal for an Australian-led consortium to sell 3 million tonnes of liquefied natural gas annually to China for the next 25 years. The consortium included BHP, Billiton, Woodside, Shell, BP, Chevron, Mitsui and Mitsubishi...  The leader of the country was acting as chief negotiator at the dinner when the deal was negotiated; there were no commercial representatives present. A critical moment in the process was in April 2001, when Howard blocked Shell's takeover of Woodside Petroleum, because he felt its control of such a vital Australian resource would create a conflict of interest in foreign markets. He told the Communist Party cadres in Beijing that Australia had a proven and unarguable record as a reliable and ethical provider of strategic resources. He said we could demonstrate a capacity to deliver on time, on price, and offer flexibility of arrangements if necessary. Howard is said to have cultivated a good working relationship with Premier Zhu and other Chinese leaders. [Tony Walker, AFR 10.8.02]

New Senator On The Ball

Senator Kerry Nettle gave her maiden speech on the evils of global capital and the misplaced wisdom of economic fundamentalism...  In the firing line were the land clearers, the ecological vandals, the international bureaucracies, and the unaccountable chief executives of transnationals. She said these institutions were stealing power from the community and from individual activists. "Vitally important decisions are stolen from the hands of representatives, democratically elected parliaments, and placed into the hands of non-elected, unaccountable bureaucracies and CEs of  transnational corporations. The rise of corporate globalisation is currently the greatest threat to our democratic system". [Senator Kerry Nettle, in AFR 22.8.02]

First Speech of Senator Kerry Nettle; Some Highlights

The Greens look forward to continuing to work with indigenous Australians to address both past and current discrimination. Only when indigenous and non-indigenous Australians work together can the true potential of our multicultural society be realised. The Greens bring a vision to politics in Australia and around the world that is based on four core principles: social and economic justice; ecological sustainability; peace and nonviolence; and grassroots democracy. Communities in Australia and overseas are increasingly turning towards The Greens because we offer an optimistic and caring vision of the future. People are sick of a lack of choice at election time. They are sick of the emphasis on self-interest and of the predictable surrender to the power of profit. Increasingly there is a need to restate the fact that we live in a society that values and reclaims the importance of community action as an expression of the society's humanity, compassion and connection with the environment.[Kerry Nettle, Australian Greens Senator for NSW-First Speech]

Commercialising Public Education

The Government's latest education discussion paper covers issues such as regulatory environment, public accountability, red tape, efficient use of resources, and the effectiveness of university governing bodies. It recommends incentives to encourage older academic staff to retire, greater use of contract appointments, and improvements in workplace practices. It also includes a proposal to employ academic staff on a nine-month basis, instead of yearly, as at present. The secretary of the National Tertiary Education Union said the proposals failed to take account of the real limitations on staff performance, such as increasing workloads, increasing student to staff ratios, attacks on intellectual freedom, mounting  job insecurity, casualisation, and lack of trust in senior management. [Allesandra Fabre, AFR 15.8.02]

High Costs, Higher Education and "Sensitive" Documents

The Federal Government refused to table documents in the Senate, that the Opposition claims, show Australian universities are heading for a financial crisis. Labor claims one in four universities is in deficit...  Senator Campbell, the manager of government business in the Senate, said the documents were too sensitive to release. [AFR,  27.8.02]

Academic Requiem?

Once universities were icons of integrity, citadels of civilisation , bastions of benevolence. But universities have fallen on hard times and so too, have their reputations. Put to their first comprehensive test of how they adapted to the "real world" of financial self-sufficiency, NSW's ten public universities scored poorly in report cards marked by the State's Independent Commission Against Corruption (ICAC). The failings were due as much to poor attitude as to inadequate management, but both were responsible for tilling a ground fertile for corruption. ICAC found universities consistently lagged behind other public sector organisations in anticipating, detecting, preventing, and prosecuting corruption...  As a result they are vulnerable to an array of potential corruption, from cheating and plagiarism, to the falsification of results and academic credentials, financial fraud and bribery. The consequence, of course is a diminution of public trust in these once august institutions. [Leading article in SMH 15.8.02]

Higher Education and Higher Costs

Labor stepped up its attack on the Government's review of higher education, accusing the Prime Minister of walking away from promises not to deregulate university fees. Mr. Howard said the review would consider all options for reforming higher education... . But Ms Macklin, Deputy Leader of the Opposition, said he had "thrashed" a series of promises he made in 1999. She said the current proposals would create an elite higher education where money, not merit, opens university doors. Real interest rates on student loans and fee deregulation would mean massive increases in costs for university degrees. [Mark Davis, AFR 21.8.02]

Flexibility Needed On Campus?

Higher education needs more flexibility in order to meet 21st century requirements. Financial reform is crucial in making this possible - the old system became inflexible because it was so heavily dependent on federal funding. But the Vice-Chancellor's Committee has rejected all four of the Government's financial reform options. More federal funding is not an option, but the universities refuse to accept this. [Paul Monk, AFR 19.8.02]

Consuming But Not Competing?

The chairman of the Australian Competition and Consumer Commission said landing charges at Australia's larger airports had gone up between 40% and 130%, since the price caps were lifted in July. He also said that airport operators were increasing other charges, such as taxi fees, car-parking rates, and check-in counter rentals. The Victorian Treaurer, John Brumby, said the Federal Government had failed to respond to key recommendations in the final Ralph report on tax issues affecting infrastructure, three years ago. The Howard Government was yet to develop much needed tax laws for privately provided infrastructure, he said. [Mark Skulley, AFR 15.8.02]

Speculation Wins Again

An international tax on international financial transactions was first proposed by US professor James Tobin 30 years ago, as a way of removing excessive volatility from foreign exchange markets. Such a tax could raise over a trillion US dollars annually, but the OECD says the costs of implementing it would outweigh the benefits. Tobin's tax would penalise short term trading which can cause massive daily fluctuations in the financial markets. Tobin, a Nobel prize-winning economist, found his strongest supporters in anti-globalisation activists who say the money could be used to aid developing countries. At a rate of 0.5% on current trading levels, the tax could raise $US1.5 trillion. The OECD report argues that the tax would make the markets less liquid and penalise high-frequency activity undertaken by traders (!). [Alexander Fabro, AFR [21..6.02]

Corporate Law: Cosy and Compromised?

Once upon a time lawyers were professionals with special responsibilities. While they may have been "guns for hire" they also, importantly, had a duty to maintain the integrity of the legal system. Should there be a conflict between their obligation to their client and their broader duty to uphold the law, the law was supposed to win. Then came economic rationalism and the influence of economists on the practice of law. In the 1980s, the market for legal services came to be seen as little different from any other and the client became king. For at least a decade, law firms and other providers of professional services were under pressure to get closer to their clients - to see the world through the client's eyes. Everyone was happy. This aggression on behalf of clients got results: clients benefited and the lawyers made lots of money. Then two things happened that are about to spoil the happy ending. In the United States, Enron collapsed, and in Australia, one of the country's most prestigious legal firms, Clayton Utz, was humiliated and its practices exposed in a sensational case, involving document shredding by one of its clients.[Chris Merritt, AFR 24.8.02]

Public Versus Private Salaries: No Contest

The Governor of the Reserve Bank is one of the best paid executives in the public sector - $500,000 p.a. The chief executive officer of the National Australia Bank gets $2.9 million. The chairman of the Australian Competition and Consumer Commission gets $280,000; the chief executive of Woolworths gets $1.8 million...  Which prompts the question - is this country run by second-rate executives? Are the best people in the private sector, attracted by bigger salaries and better conditions? The consulting manager of Mercer Human Resources, Rob Beddington, says the Government continues to pay extremely conservatively, and you have to ask whether this will be enough to attract the next generation. Most senior public federal executives receive at least 40% less than those in the private sector. Other examples are: Chief of Defence Forces $320,000; CEO of National Bank $2.9 million. Australian Tax Commissioner $300,000; CEO of Woolworths, $1.8 million. [Michael Cave and Annabel Hepworth, AFR 10.8.02]

A Rose By Any Other Name?

The government's bid to transform the Australian economy from a "branch office" to a "regional finance centre", began with the unveiling of options for revamping its international tax system. More Australian  companies are threatening to go offshore, and the government has outlined several proposals to cut corporate taxes for both local and foreign companies. [Toni O'Loughlin, SMH 23.8.02]

Unholy Smoke - Fag Ends?

Australian tobacco industry documents from the last 50 years show a recurring pattern of media manipulation, bank-rolling of pro-smoking scientists, marketing aimed at young people, and radical disparity between public and private statements, according to Professor Simon Chapman and his research team from the School of Public Health at the University of Sydney. He said the tactics used by the industry changed as the smoking debate evolved...  Papers from the Tobacco Institute confirmed that the key weapon for validating "informed consent" was disproving the fact of addiction - because you can't defend smoking as a free choice if people are addicted. The other main way to validate informed consent was to maintain a level of ignorance about health risks. Also, documents revealed that the industry has a history of paying experts to play down the risk of smoking, and that Australia had the world's best organised, best financed and most politically savvy anti-smoking lobby. Professor Chapman has been given $1.6 million by the US National Institute of Health to analyse the documents from Australia and Asia. He said a documented history of malpractice in the tobacco industry was of great relevance to present day court cases. [Lydia Bell, "Dirty Tricks of the tobacco trade revealed", in University of Sydney News, 5 July 2002]

For Whom The Bell Tolls...

The past 12 months may yet come to be seen as an annus miserabilis as far as freedom is concerned. The reason is that, from motives good and bad, governments everywhere have been restricting rights or enforcing existing laws more harshly, and thus reducing the freedoms that people used to enjoy. This is not to say that they have always been wrong to do so: most people in a democracy are quite willing to suffer the inconvenience and invasion of privacy that come with a search of their bag or briefcase when they board an aircraft or enter a public building. Indeed, they might well be worried if they were as free and unimpeded in such places today as they had been a year ago. But their freedom, coupled with the precedents they create, may add up to a considerable loss of liberty. [The Economist 31.8.02]

Why Is The USA Unpopular?

The US State Department has invited 20 scholars to a conference to hear their views on why the US seems so unpopular around the world...  The conference is a culmination of a project that looked at anti-Americanism in the world at large. Critics say the main causes for anti-Americanism are US policies, especially in its support for Israel; arms control; and the environment. [Reuters, New York Times, in SMH 30..8.02]

Out Of Africa - History Catches Up With Empire

Expansionist Europe had a massive detrimental impact on Africa. The frontrunners were Portuguese pirates, followed by other European explorers and traders. These led to the development of the Atlantic triangle: Slave labour from Africa to the new industries of the Americas - The wealth of America (cotton, tobacco, sugar, gold, silver, copper) to Europe - European technologies and manufactures (especially guns) to Africa.  The Europeans would sell firearms only as part exchange for captives; so the need for captives led to the need for still more captives and still more firearms, a vicious circle which was hard to break. [Basil Davidson, Africa in History]
The history of the West's expansion from the 15th century is littered with victors and victims. The continent of Africa is certainly one of the latter. The European scramble for African colonies led to the development of a settle culture - picking the eyes out of the best.  Now the settlers are facing the winds of change, and must decide whether it is better to keep half a loaf the whole of your life or a whole loaf half your life.
Davidson emphasised that "there is a society of race rather than class... nearly all whites tending to unite, no matter what sectional conflicts might otherwise divide them, against nearly all non-white. In Zimbabwe, South Africa and elsewhere the question is being posed - who should get the profits from minerals, agricultural resources and tourism? The land seizures by Africans in Zimbabwe confirm the logic of might is right, as the settler colonies come to an end. [Abe David, D.R.Asia Project Partners, 29.8.02]

Cry For Me, Argentina!

Until recently Argentina, a country of 37 million, was the most prosperous in Latin America. The unemployment rate has now climbed to 21.5%, the highest level in Argentine history... At all levels of society, desperation is palpable; the country has suffered the world's largest debt default, and a massive currency devaluation. [New York Times & Washington Post, reported in SMH 8.802]