Australia can show other nations how to make democracy work better

In the USA and UK voters are going ballistic. They have elected or not elected people who could or could not solve their problems. In the UK a lot of young people could not be bothered to vote on Brexit then when the outcome did not please them, they voted the government into minority. That might weaken the nation and jeopardise the very jobs they want so badly. In the USA, politics has degenerated into more of a circus than expected. Did the young people in the UK really not realise how valuable the right to vote was as opposed to life under kings like Henry VIII or Elizabeth I. The people in the USA certainly had plenty of knowledge about their new President-to=be.

Meanwhile back down under we have just launched a facility for you and everyone in Australia to rate whether you believe that your MPs ( and by implication their parties) represent you well or badly. Local MPs must be held responsible for the actions of their parties, otherwise voters would have no effective representation at all. Far too often the local MP would tell a voter “I am all for what you want and working had for it. It is just the other people in my party who are doing what offends you.” What nonsense! That is an excuse that does not ring true or wash with voters. It is the job of a local MP to make the party do what the voters want.

If he or she cannot do that then the voters in that electorate need better representation.

Please go to the “Rate your MP” page and rate them. If you find any flaws in the website let us know as we are just testing it. We are very small and completely unfunded so please understand the limitations of what we can do. With your help we can do much more. Join us. It is free. We welcome everyone.

Later you can decide whether you might like to upgrade to a fee-based participation where you have access to services that require time, effort and money to provide. has no party political favourites or preferences. That is up to the voters.

Our aim is to Advance Australia Fair with voters telling governments what they want and governments doing what the voters want.

We have much to do and it will require compromise and tolerance of each others foibles, because that is what working together requires. We must try to give politicians one clear goal on each issue. If we give them 50 different goals they will simply go into neutral and do nothing.


Tax Evasion is a Game Big Businesses Play

Some reformers were dancing with glee at the newly passed “Google Tax” giving our government “some of the world’s strongest anti-tax dodging legislation”. Really? Or is that just government propaganda?

The penalty is only 10c in $1 and the chance of conviction about 1 in 100 so most global corporations will risk it. Their tax accountants and lawyers will have already worked out how to avoid it or fight it in court for so long that a cheap negotiated settlement will result in a slap on the wrist.

ATO need funds to fight the teams of tax experts that will fight any assessment it issues, yet the government limits its funding.

The law will probably encourage many global corporations to shift production of goods and services offshore, inserting The Philippines, India or China between a tax haven and Australian sales. The taxable income will be earned in the tax haven from production in the low wage Asian countries. Only scraps will be earned in Australia. Aussie banks based in tax havens will just finance the global corporations in the “middle country”, so their cut will not see the ATO either.

Wage earners suffer most with massive costs of housing and feeding families and marginal tax rates of up to 45% plus 10% GST on much of their spending . We would like to hear your views on that and post them.

Communist Chinese Government owned enterprises will be exempt from the laws as will be foreign owned equity and superannuation funds.

Proving that the gaining of a tax benefit was the primary rather than an incidental purpose in how a business has been structured has been a thorn in the side of those wanting fairness in taxation since a Liberal aligned judge killed off the anti-avoidance provisions in the 1936. It will continue to be.

If voters want to reinstate fair tax laws they will be well advised to join free and make a combined, concerted long term effort to persuade politicians that their continued jobs as local representatives will depend in part on fairer tax laws that see those who can afford to pay most doing just that. Major public companies are right at the top of the list and get away with murder at present thanks to compliant politicians.

It is the people who drive jobs by buying what is produced. They are the ones who need tax breaks. They don’t often award themselves Million dollar salaries and bonuses. will make a big difference if a lot of Australians join in.

APRA rules buttress Banks against bubble

Sure, but they don’t buttress borrowers against the bursting of the Sydney and Melbourne property bubble. APRA is primarily funded by the industries it supervises. Remember the old saying – “He who pays the piper calls the tune”. That has been our experience whenever we have referred bank misconduct to APRA. This is self-regulation at its worst.

In her print version of the Sydney Morning Herald’s story on the dangers of interest-only loans, Elizabeth knight concludes with these words, “A curious footnote to APRA’s move (to tighten regulations) is that the big banks all say that interest-only loans experience lower delinquency rates than the average across their loan books.”

There is nothing curious about that. Interest-only loans experience lower delinquency rates because they do not require the borrowers to repay anything off the loan. Loan servicing is much easier when the borrowers don’t have to repay the actual loan. They just pay interest. But they have to repay the loan one day!

However, interest-only loans do go bad and then it is often fatal. That is because there are two reasons such loans go bad. The first is that the borrowers cannot even pay interest. This can suit the bank very well because it will then periodically loan the borrower more money with which to pay the interest. It is what we call a Ponzi loan and it is deadly from the start. In this way a bank traps a borrower into an unaffordable loan at low interest rates. Then when the interest cannot be paid the bank lends the extra money by way of a high interest overdraft account. It enables the bank to lend about 50% of the security value at first then ramp the debt up to about 80% before calling the loan in and selling the poor unsuspecting borrower up.

The second reason such loans go bad is that the property value falls for any one of a dozen reasons. It may be an economic recession, bursting of a housing bubble as exists in Sydney and Melbourne now or it could be that demand shifts to a different area because an industry closes down like mining did in mid-western Queensland or a power station closes like Hazlewood in Victoria. Newcastle and Wollongong have both suffered from such closures before. Banks foreclose when the debt gets too close to the security value. Then the borrower can lose that security. Banks often choose to call in the interest-only loans when property values fall and that means the borrowers could lose their own homes as well or go bankrupt.

What really irritates me about these loans is that the banks know how risky for themselves they are and how dangerous they are for borrowers. People often ask me why the banks would make such loans. The answer is simply that the banks want to maximise their profits and do not care who they hurt in the process. They rely on protection from “tame” politicians to whose political parties they have donated millions in the past, to whom they grant helpful loans and who they can convince that they are providing “jobs and growth” when almost everyone knows that they are reducing jobs and sending what remain off-shore as fast as they can. Off-shoring has two great advantages.
Firstly it is more profitable to have work done by people with equal skills and qualifications in The Philippines, or India than to give the work to Australians. Secondly off-shoring enables banks to convince the naive Australian authorities that therefore a greater proportion of profit has been made in their favourite tax haven than would be the case if the work was done in Australia.

So what can the average investor or home owner do to protect themselves against the housing bubble bursting, as almost all bubbles do eventually?

They could convert to Principal and Interest loans over a long period like 20 or 30 years if they have the income stream to make that possible.

They could save like mad to build up some cash assets with which to restructure the loan to reduce the risk when the principal becomes due.

They could sell assets to reduce the debt.

They could make very careful notes of exactly what the bank did and does from the first offer of the loan and keep that to provide to a groups like my GBAC Advisory, where I would take the matter into Federal Parliament for politicians to see what the bank has been doing. The way we do it is highly successful at putting the parliamentary spotlight on the bank. In the past this has led to a high level of political activity challenging the banks.
If people let us know as soon as the bank makes its move, we find that it is usually possible to negotiate a fair outcome for the borrower and the bank. It usually requires some concessions on all sides. Then in most cases we would help the borrower to transition to a new lender on a more suitable loan that includes Principal and interest payments.

The last big collapse was Homefund in NSW when many borrowers lost their homes. I tried to help then but people did not want help. They were confident that their local MP would solve the problem for them. I do not think that was the case in the end. Trust given to bankers or politicians can easily be misplaced. FairGO has worked for voters for 30 years and in my professional capacity as a former Chartered Accountant I have helped borrowers for even longer.
Borrowers have every right to be treated fairly. Interest-only loans are time-bombs waiting to explode because the residual debt remains high. Those who have them can always give us a call to chat about options. What I have written here is just general comment. Every borrower has a different situation to cope with. Once we know what that situation is, we can usually tailor a loan solution to match it.
APRA rules buttress Banks against bubble
Nobody should bank on APRA, ASIC or the government solving the interest-only debt problem for them because it will most likely never happen. That is not how our democracy works. However, by borrowers joining there is every chance we can make it work that way in the future.

Sydney and Melbourne Housing boom is caused primarily by interest only loans. They are loans-for-people-who-can’t-afford-to-repay-loans. These are loan gamblers who bank on the value of property they purchase & mortgage rising and their debt falling in real money terms because of inflation. If the property boom busts and home prices fall, banks will seek extra security. If that cannot be provided they will probably sell up the homes and the borrowers may be left with a residual debt unsecured and thus bearing extortionate interest rates.

The fact that house prices have risen by 131% compared to wages which have risen 38% over the past 20 years shows that the present policy of higher density housing for Sydney and Melbourne has worsened the housing problem rather than solving it. Is the true solution for people to leave Sydney, enjoy the rural lifestyle of inland cities and use NBN to run businesses servicing the world at a tenth the cost of Sydney premises?

Minimum wage, Millionaires and Billionaire tax relief. Is the Federal Government on the right or wrong track to be cautious about raising the minimum wage above $18 an hour? Should we have a maximum pay that can be claimed as a tax deduction by businesses eg $1800 and hour. That is what a business leader gets for working 60 hours a week to earn $1 million a year. What about public companies? If they get tax relief, claim back the GST they pay and shareholders don’t pay tax on dividends because that would be double taxing the shareholders, should the shareholders be liable for deficits if those companies go broke? That would pay staff and suppliers who miss out now. Either companies and shareholders are one unit not to be double taxed but to share liabilities, or they are separate entities to each be taxed on their income

Australian homes for Australian people in our capital cities

Australian homes for Australian people in our capital cities
The story in SMH Business today by Carolyn Cummins says that of the people in the world worth over $30 million, 70% are expected to buy properties in Sydney and Melbourne as safe havens for their money. That makes housing more expensive for Australians. Others come here to rent in capital cities and that too makes it hard for Australians to find rental accommodation there.
Already we are seeing economic conquest of Australia by foreigners buying up our residential and farm properties.
It is, in the view of many, simply unreasonable to allow foreigners to push Sydneysiders and Melburnians out of their cities by forcing up prices with their obscene wealth.
Our present politicians and bureaucrats are not only incapable of protecting Australians from this early demise of their dream homes, but they are actively encouraging these foreigners to come and outbid the very Australian taxpayers who pay their salaries and vote them into office.
The solution is for all Australians to come together in to protect their homes and livelihoods. It is great to welcome people from other parts of the world, but not if they force us out of house and home.
Voters need to decide what they want in respect of foreign ownership. If as they have so far indicated, they do not want to be forced out of their capital cities by foreign buyers they should join forces and campaign for all foreigners coming to live in Australia to be directed to regional and rural cities to live and work and be banned from capital city property ownership directly or indirectly for their first 10 years in Australia.
Ten years allows those who are genuine immigrants wanting to be part of our Australian culture, not simply seeking a safe haven for their wealth, to save for home ownership and move wherever they wish. Those people we welcome with open arms provided they respect and adopt our culture and pay their way, which most do.
There is a feeling that politicians bump up immigration numbers to keep people employed building homes for them. Problem is they bring in more than we can supply with homes and they pick of the best homes. The other mainstream feeling on this is that immigration is kept high so that big business wages paid to staff can be kept low.
Whatever you views, join the network free and participate in discussions. The people we speak to don’t want to block immigrants but they do want to preserve the national rights of our own people, young and old, to live in their own cities, built with their own taxes and hard work.

Liberals should listen to the past leader and support the present one

Mr. Turnbull seems like a good PM, badly let down by other local Liberal MPs with little idea how to govern for the benefit of the Australian people or of finance or economics.

New ABS data shows the fallacy of the Liberal policy of cutting the tax rate for the highest earning taxpayers in the country – the big corporates who fund major political parties.

Corporate profits have soared while wages of ordinary staff fell and some not-so-big earners have robbed of valuable penalty pay.

If Mr. Turnbull was silly enough to take notice of Bill Shorten & other Labor MPs saying that cutting corporate tax rates would increase workers ‘ wages he is a lot sillier than I think. Businesses run for profit, not compassion. Billionaires keep the tax savings for themselves. That’s how they become billionaires.

What Liberals forget in lowering tax rates for the 5% highest earners is that corporations don’t vote and 95% of voters are not high income earners. What ordinary Australians lack in income they more than make up in owning the majority of votes in the majority of electorates.

All they have to do to get a fair go is to re-elect MPs who make the highest earners pay the highest tax rates and replace those who tax modest income earners higher than companies earning billions. It is ordinary Australians who create jobs by spending. Big Business cuts jobs, automates them and sends work overseas in order to boost profits and dodge Australian taxes.

Rather than lampoon Tony Abbott’s comments, Liberal MPs might well examine them for handy hints. Government policy comes from the minds and mouths of our local MPs, not the PM or ministers. These are the people voters hire and fire as representatives.

Elect good local MPs and good government will follow automatically.