Australian Federal Election 2022

[old man emu]

23 minutes ago, Yenn said:

The aim of a good super fund is to make money from its investments

No doubt that, but why must the investment be made outside Australia? Why are Super funds investing in the manufacturing growth of other countries and leaving our own with a rather bleak future for our descendants.

 

The problem is in the competition between these Funds to be the winner at the end of the financial year. Typical capitalist mentality and myopia. Why did China's economy blossom? Because they looked further than 12 months into the future and were prepared to wait for the riches to come. Fruit trees don't bear a crop in their first year. The Chinese government, basically as stable as our own, knew it would take time to build its base infrastructure and provide its people with training. 

 

The Five-Year Plans are a series of social and economic development initiatives issued by the Chinese Communist Party (CCP) since 1953 in the People's Republic of China. The party plays a leading role in establishing the foundations and principles of Chinese communism, mapping strategies for economic development, setting growth targets, and launching reforms. Planning is a key characteristic of the nominally socialist economies, and one plan established for the entire country normally contains detailed economic development guidelines for all its regions. 

 

Is this way of doing things unique to China? Hardly. It is an example of the Plan-Do-Check-Act cycle that everyone uses daily. Are you going to watch a football match tonight? If so, you will complete the cycle. If you don't watch football, you simply start with a negative plan for watching football and plan something else. This is where our Governments fall down a lot of the time. They don't make plans, other than for pork-barreling prior to elections to buy votes.

[facthunter]

A safe folio is a diversified one. Don't have all your eggs in the one basket. IF you own the house you live in and have 5 others for Investment as an example. All Clive's efforts are out of self interest. He wants the taxpayer to subsidize access to his stranded assets.   Nev

[onetrack]

The biggest single problem with investing super funds is ensuring the risk of losses is minimal. All business investment poses considerable risk and that investment risk must be ameliorated by ensuring that losses are minimised, either by strategies or some form of insurance. Even the biggest banks in the world take regular hits by way of massive losses. They simply either take those losses on the chin, or keep reserves on hand to compensate for losses.

 

Investing in Australian industry and innovation requires risk capital - and super funds are risk averse. So Clive's BS about investing into Australian companies and industry is simply not a sustainable idea.

Clives aim is to get large amounts of cheap money easily, so he can peg more mineral leases, and then sell the minerals to the Chinese on a large royalty basis.

 

A "nice lil' earner" as Arfur would say - and one that has worked like a dream for Clive. But his scheming does nothing for Australian industry or innovation or employment. He'd sell the whole of Australia to the Chinese, if he thought he'd personally make more money out of the deal. He doesn't give a rats rectum for the average Australian, he thinks the paltry level of taxes he pays, is making all the rest of us rich. What a joke.

 

My missus has her super in the Telstra Superannuation fund. The level of funds she has in there, never stops going up, and the annual return is between 7% and 9%. It's a "Platinum" rated super fund. 

I cannot believe the constant level of return from this fund, it's staggering the way it even rides out downturns and recovers rapidly.

This is simply because their investments are carried out by a committee of knowledgeable investment experts - and they invest worldwide, and constantly study the investment trends and projections.

If Telstra Super was restricted to investing a large percentage of its funds within Australia, the returns would be considerably less, and a lot of retirees depending on super funds would end up poorer.

 

Edited April 28, 2022 by onetrack

[kgwilson]

Any investment organisation worth its salt will invest in whatever and wherever to get the best return it can for its investors within the risk envelope set for those investments. If that means investing offshore then that means the return to the Australian investors will be better than investing locally. It just makes financial sense.

 

For example I had an old Super fund that was split in 3 ways for a moderate risk. Low risk was bonds and cash investments, medium risk was in blue chip stocks and high risk was in high performing but volatile companies. Combined the return was 5-7% annually except in a few bad years it was negative. Then once I retired & realised I had enough to keep me in a reasonable lifestyle I had become used to & I owned everything & had no debts, I decided to go the whole hog & put that old fund to work on the basis that I could lose it all. I started with 40k in 2005.

 

I didn't know what companies the fund was investing in initially but later found it was a lot of Tech stock in the US, Europe & Japan and various start ups I'd never heard of. Returns after fees were 20 - 30% until I lost over 50k in a day in the 2008 GFC. I just left it there and the returns came back & in 2020 the annual return was 27% after fees, then it plateaued with the pandemic & talk of a stock market crash in September last year I took 150k out & put it in the bank. Between the decision & receiving the cash the value retreated 4k. That left 42k & today that is now 39k, just under what I started with. 

[Jerry_Atrick]

You beat me to it, OT. Superannuation (or pension) funds are about long term investment to provide returns to provide for a sufficient income in retirement. So, be definition, they have to be risk averse and try and provide consistent positive returns as a portion of their fund holders retire every day. For a while now, most super funds allow annual elections, which means the members decide the types of funds their superannuation manager invest in. Typically, the advice is when young pick the "riskier" funds or "growth" funds and as you age, move them to more stable funds. These elections may be one good reason why a lot of the super funds are in international investments.  I still have the bulk of mine in balanced US equity funds - as the US markets still are the best providers and use balanced funds (i.e. not weighted in any particular industry sector) to diversify risk. I also have some in ESG funds, but there is a lot of greenwashing at the moment, so I don't go too much into it.

 

There are other funds that are set up to take equity risk. Macquarie bank have infrastructure funds, venture capital funds, etc. and most Venture Capital companies are fund managers because they seek investments from the public and set up unit trusts and other collective investment vehicles. These are designed to take risk and allow investors to get exposure top those risks, with resultant rewards (and failures).

 

The other benefit of having trillions of $ in international stocks is it balances the inward investment from foreign investors and corporates who overtake our companies. I can now invest in Arnotts of whoever owns Arnotts when they bought out Nabisco (Tim Tams, for me).. and still reap the rewards of what was inherently Australian. But it gives us a defence of foreign owned assets here.

 

[old man emu]

So you are saying that a country that has an extremely stable political system, a well educated population, raw materials in abundance, reasonable transport infrastructure, and a good credit rating is too risky to invest in? Those foreigners who pour money into buying up agricultural lands, minerals, housing, tourism must be bloody fools with more money than sense.

[facthunter]

A lot of foreign investment here is money laundering and getting it out of more politically risky currencies. You say we have an extremely stable political system?  It's based on lies and lack of transparency and kick backs. Our ratings in things that matter have tumbled in the last 10 years.. Foreign Mining Companies pay no tax as they shift money around in their structures to have the profits show in a  tax Haven . When Australians invest here they would have to pay tax.. Nev

[octave]

With my super I can change my investment mix on-line and as often as I like.    For shares I can choose international or Australian  The Australian shares historically have yielded a higher return but are riskier.    Whether super funds are  invested here or overseas I would think there is still a benefit to the country.   I have some shares in a US based company.    When I sell these shares the initial investment and profit will be brought back to Australia and of course I will have to pay tax. I consider that I am taking money (when I sell) out of the US economy and adding it to the Australian economy

 

I am not sure who said it but I agree that Palmer is looking to his own interests when he advocates this.  

[old man emu]

By "stable political system" I mean a system where, for good or bad, whoever is elected to form government gets to complete its full term. The People aren't storming the doors of parliament house and dragging the unliked out to be killed. An Independent Commission Against Corruption might shine light on those who have done the wrong thing, but it will be individuals who are caught out. It won't lead to a dissolution of parliament, or a switch to some other style for running the country.

[old man emu]

2 minutes ago, octave said:

Palmer is looking to his own interests when he advocates this

That may be so, but, leaving him out of the picture, doesn't the idea have some degree of merit that makes it worth investigating? 

[octave]

53 minutes ago, old man emu said:

That may be so, but, leaving him out of the picture, doesn't the idea have some degree of merit that makes it worth investigating? 

 

Sure but some detail would help. How would this be achieved.  Al I can find on his policy site is this  -

 

Australia has over one trillion dollars of superannuation invested overseas.

Just like when John Curtin in World War 2 brought the troops back to save Australia, the United Australia Party will bring back a trillion dollars of Australian super back to Australia, to save Australia.

 

How would it be enacted?   I actively manage my super, would I be told where I have to invest? 

Edited April 28, 2022 by octave

[Jerry_Atrick]

As usual, whenever a pollie or aspiring pollie makes a claim, especially of Clive's calibre, we should fact check the claim, "most is invested in overseas companies."

 

A quick search brought up this: https://www.superannuation.asn.au/ArticleDocuments/402/2203_Super_stats.pdf.aspx?Embed=Y

 

For asset allocations outside MySuper funds (whatever they are), 20% of share investments are Australian, and 31% overseas.. it doesn't break down where.. so this would seem reasonable. There are investments in fixed interest (would imagine this to be AA+ - AAA+ rated government bonds mainly, with some lower rated stuff for higher yield), listed and unlisted property trusts, infrastructure investments, and some unlisted. God knows what Other is.. probably swaps and other derivative products for risk management purposes (one hopes).

 

For asset allocations of other super funds... 23% Aussie listed, and 29% international (again, not broken down). Again, this would seem reasonable. And, well, you can read the rest.. but they hold 9% in cash... which is probably required for liquidity management in terms of transferring individual members to annuities as they retire, for example. Interestingly, they have investments in Hedge Funds (only 1%), so are pursuing high yield.

 

The numbers don't show and inherent bias towards other countries to the deference to Australia given a lower risk strategy against a global investment strategy at all.. So, it would appear Clive is just full of BS and the MSM are too lazy to call him out.

 

Notice, there is a small amount of unlisted equity in both categories. I would say this is either equity finance or venture capital, which is high risk, high return (although when taking into account the losses, the return flattens a bit). It doesn't say which countries the investments are made, but I would wager the most is in Australia. It represents 5 and 6% of the respective classifications, which as high risk investments, would seem an appropriate level to allocate to high risk assets.

 

So, on the basis of the data., it would appear Clive's claims are... in the context in which he made them, inaccurate at best.

 

The other thing to think about is that superannuation is a very highly regulated segment within the financial services industry. I don't know Aussie law that much, but there have to be internal checks and balances, of which rafts of people are employed to ensure they are met. In addition, what people forget, is the actual funds are usually constructed as trusts or similar.. which means the trustees have fiduciary responsibilities by general laws of trusts they have to adhere to, in addition to prudential and conduct laws. Simply saying they have to do x or y is not feasible while ensuring the responsibilities are met.

Edited April 28, 2022 by Jerry_Atrick

[onetrack]

Trying to increase investment in Australian manufacturing by forcing superannuation companies to invest their funds here, is not the way to get our manufacturing base fired up again.

 

The simple problem is that we have a low level of population sited mostly around the edge of a huge continent, that equals the Continental U.S. in area. That low number of people means a very limited market for products - and long distances to freight the products to the end user. We rely on trucking - which is no longer cheap.

 

We don't have a large, cheap labour force available to us - unlike China. We don't have cheap power (although we should, if we invested more in renewable power sources) - unlike China, which has the Three Gorges Dam (for cheap hydro power), and a host of easily-won (if low-grade) coal mines to feed a sizeable number of coal-fired power stations. While we close our coal power stations, the Chinese are building more of them.

 

We have to abide by a raft of emissions laws and safety restrictions in business activity - to which restrictions, the Chinese only pay lip service.

We don't have a host of large rivers which greatly lower transportation costs - unlike China. We don't have a large investment in shipping and ports, unlike China - which they can utilise to subsidise their manufacturing base. 

 

I agree that more manufacturing should be done in Australia - and we particularly need to ensure that our vital supplies are manufactured here. We must always ensure our food production and local supply chains are largely able to withstand shocks (apart from huge natural disasters).

We must have long-term plans in place to ensure cheap energy supplies, and good quality and adequate water supplies are always available in quantity - so we can initiate downstream processing of minerals and other basic products, that we produce.

 

Our politicians and leaders are good at short-term promises and bankrolling "mates" established businesses - but nary a one of them has a clear-cut, definitive-goal, long-term plan for future Australia.

The interesting thing to me is, that virtually every polly, when they leave Parliament, goes to work in the corporate sector - and every large company and corporation that they go to work for, has a long-term plan in place, for their company or corporate continuance and growth.

 

Edited April 28, 2022 by onetrack

[Jerry_Atrick]

Therein likes the rub.. Superannuation funds (or more accurately, fund managers) are passive investors. They can't set policy and they don't manage businesses as an active investor would.

 

I agree with Octave, relying on them to simply invest in Australia is not the way forward. You will be investing in an artificially inflated industry living off investor funds as opposed to free cash flow and profits, and it will all be a house of cards.. And the little person who has invested for their after-work livelihood will be the loser.

 

Agree with most of what OT has said re getting Aussie manufacturing up and running. And, dare I say, the government could lead with policy - for example, a) tax breaks and incentives for innoviative start ups. I forget the name of the scheme here, but basically, if you invest in an innovative start up, you take your first £1m capital gain tax free - or something like that. Although investors should never make decisions purely on potential tax breaks, it factors into the risk assessment when making a decision to invest or not.

 

Then, the governments can have a published policy to buy Australian owned/manufactured, Foreign owned/Australian manufactured (and serviced for plant), Australian Owned/Foreign Manufactured, Foreign Owned/Foreign Manufactured in that order of preference, subject to the higher order being reasonably competitive, even if the more expensive.. with the added bonus that if you are a start-up or young company without 3 years of accounts, you will be still considered on a risk based approach.

 

This would give a huge incentive for Australians to take the risk of starting up manufacturing

 

Then, there can be general support, grants, tax breaks, etc, but they have to be geared to high value-add and innovative product manufacturing and they cannot be transferred to foreign ownership within a very long period of time. And of course, there cannot be any pollie or ex public servant join these companies for, say 20 years after they leave, to keep it all fair.. And an independent procurement appeal board if any of the higher priority suppliers were not awarded procurement in deference to lower priority suppliers while they met the conditions to be awarded the contract... etc..

 

In fact, can you imagine giving business a 110% tax claim for buying the top priority supplier in the pecking order above, and 90% for the bottom. That would also help drive local businesses to buy from the "right" suppliers, and not amount to an unfair customs tax (although I am sure it would be challenged in WTO).

 

And of course, Aussies (like poms), could be more fastidious in selecting products along the same lines.

Edited April 28, 2022 by Jerry_Atrick

[Jerry_Atrick]

I found this an interesting take on the LNP

 

[old man emu]

We have penalty-containing legislation which prevents misleading and deceptive conduct by businesses and those penalties are regularly applied. In contrast, there are no laws to stop politicians or third parties from openly lying in election campaign advertising. This is wrong. Why? Because political parties advertise in order to have the electorate employ a party to provide a service to it - managing the operation of the Nation. 

 

If a person, or company, was set up to provide a service - say a financial management company as an example - its advertisements aimed at attracting customers must comply with "truth in advertising" legislation. The reasonable, honest amongst us agree that such compliance is a good thing. But political parties are not subject to this basic tenet of honesty. In 2021 Zali Steggall (she's the one who turfed out Tony Abbot) introduced a Private member's Bill, the Commonwealth Electoral Amendment (Stop the Lies) Bill. During Question Time she asked the Prime Minister why lying in political advertisements was permissible. His response to that question can be watched by following this link: https://www.zalisteggall.com.au/commonwealth_electoral_amendment_stop_the_lying_bill

 

What you will see there is ScoMo replying to a specific question by reading from a document clearly prepared in order for him to answer a Dorothy Dixer about the Government's handling of the COVID crisis. You can't say that he lied in that reply, but what a disservice to the Nation he did by not answering the question. Unfortunately, Steggal asked two questions at one, which made it easy for ScoMo to slip the noose. The first part of the question could have been answer simply with Yes or No, and the obvious get out of gaol answer was "No". Steggal could then have asked the supplementary question, "What is the Government going to do about it?"

 

More and more we see examples of the Conservative riding roughshod over the people who elected them to do a job. They consider themselves as the political descendants of the bunyip aristocracy, a term coined by one Daniel Deniehy in 1853 in response to attempts by William Wentworth to establish a system of aristocratic titles in the colony of New South Wales. He accused the conservatives, led by the veteran Sydney politician William Wentworth and what Deniehy called "some dozen of his friends," of wanting to "confiscate for their own uses the finest portions of the public lands, to stereotype themselves into a standing government, so that they may retain, watch over, and protect the booty they wrest."

[octave]

I think that a part of the responsibility for problems with politicians rests with us electors.   We are quite childlike. We demand often quite specific promises.    In the real world these promises are often unrealistic.   We also tend to think poorly of a politician who enacts a policy and then discovers that for some reason it does not work as intended and changes that policy.     The media will use terms like "the minister has done a backflip"    This means that at worst a government will doggedly stick to something that is not working and at best they slowly phase out a policy hoping we wont notice.  

 

To me an election is similar to a job interview.   A good interviewer generally does not ask the candidate for a list of promises.  They are more likely look for a general ethos and also check past performance. 

 

The only real promise I want from a politician is they will rationally analyze and weigh up the data, seek advice from  a range of experts in the relevant field and consult with the people. I also want them to be candid and open.   I want to be told the relative risks and benefits of a particular policy. 

 

By way of an example, I had some surgery about 3 weeks ago.   Before the surgery I had to sign the usual consent form.   I was asked if I understood the procedure and then given a list of the things that could go wrong and what the remedies would be.   I asked what the complication rates were and given the odds of a negative outcome.    I did not ask for a promise of success because that would be pointless.   

 

Perhaps another example might be flying.   During take off we get used to planning a strategy (policy?). If the engine fails at this point I will land on the remaining runway, if it fails at this point I will land straight ahead, at this point I will considered turning 90 degrees etc.

 

This is what I want from my politicians.   I want them to be evidence driven and I want them to admit it when things do not go to plan or they get something wrong. There should be no shame in making a mistake as long as they admit it and do their best to remedy it.     

[facthunter]

You might get that with independents who are free to do what they feel is best. . Plenty of disillusioned Liberals are unhappy with the current performance of their party which is anything but Liberal. In the USA Liberal is communist, in a country fast becoming the" survival of the richest and the rest deserve what they get".  Divided society full of hate and distrust.   Nev

[old man emu]

24 minutes ago, octave said:

We also tend to think poorly of a politician who enacts a policy and then discovers that for some reason it does not work as intended and changes that policy

I have no problem with that approach, as long as the politician has the guts to say, "Well we put it into action. We saw how it performed. It didn't go as we hoped it would. We will see what went wrong and fix that." That implies a level of humility in the politician, but what we get are politicians trying to maintain an appearance of omnipotence. And humility and omnipotence don't lay together.

[nomadpete]

1 hour ago, octave said:

We are quite childlike. We demand often quite specific promises. 

Isn't that a bit like expecting politicians to.....

 

1 hour ago, octave said:

....... rationally analyze and weigh up the data, seek advice from  a range of experts in the relevant field and consult with the people. I also want them to be candid and open.   I want to be told the relative risks and benefits of a particular policy.

As far as I can see, although I totally agree with your desire  politicians rarely actually do this. Therefore it is quite unrealistic to expect them to start acting this well any time in the forseeable future. I don't think it to be childlike to demand integrity.

Edited April 29, 2022 by nomadpete

[facthunter]

Currently you are getting actions responding to donations and the availability of the Spoils of Office. It's called Corruption and when  that's going on anywhere you have to expose it before any remedial action is possible. Our Mainsteam Media have a lot to answer for also. They are part of it.  Nev

[octave]

41 minutes ago, nomadpete said:

I don't think it to be childlike to demand integrity

Neither do I but that wasn't my point.   I referring to the way want  politicians to make promises to us that are unrealistic.   

[nomadpete]

And my point is that we don't want politicians to pee in our pockets with false promises, many of which are not pie in the sky unrealistic and would be achievable if only they had the integrity to carry them out.

 

By the way, Octave, neither you nor I are asking any politician or political party to make unrealistic, or unachievable promises. You examples above were honest, simple things that should be achievable by our political system.

Edited April 29, 2022 by nomadpete

[octave]

3 minutes ago, nomadpete said:

And my point is that we don't want politicians to pee in our pockets with false promises, many of which are not pie in the sky unrealistic and would be achievable if only they had the integrity to carry them out.

 

That is what I am intending to say. 

 

2 hours ago, octave said:

The only real promise I want from a politician is they will rationally analyze and weigh up the data, seek advice from  a range of experts in the relevant field and consult with the people. I also want them to be candid and open.   I want to be told the relative risks and benefits of a particular policy. 

"candid and open"   If something is not working as intended I want be be told why and what is being done about it.  I also want politicians to serve the people not the party or themselves.    Perhaps I am not articulating my point well enough.   

[facthunter]

Looks like a BUY election so far and turning from Federal to FERAL. Sco Mo sure has a WAY with People. My way. Nev