Take Advantage of the Small Business Investment Allowance
Filed under: Australian News, Business, Finance and Investment
The current Financial Year 2008-2009 ends at midnight next Tuesday 30th June, so now is a good time to take advantage of any tax benefits that you are entitled to.
As part of the Australian Labor Government’s measures to try and stimulate the economy, the Small Business and General Business tax break legislation went into effect on the 22nd of May 2009.
The allowance in a nutshell is this:
if you run a small business with a turnover of less than $2 million and buy an eligibile depreciating asset costing over $1000, you can make an additional one-off 50% tax deduction. This is in addition to the all the normal tax deductions on assets used to earn an income.
If your business is bigger, you still get an additional deduction, but it’s only 30%.
Full details can be found here on the Australian Taxation Office’s website:
The website smartcompany.com.au has a well-written explanation in their article “New details on the 50% small business tax deduction“.
Some examples of tangible depreciating assets include new computers, peripherals, furniture, vehicles and tools. Computer Software does not count as it is not considered tangible and does not depreciate.
Music Legend Michael Jackson Passes Away
Online media has reported that Michael Jackon suffered a heart attack at his home and could not be revived. He was declared dead earlier this morning at the UCLA Medical Centre.
His artistic contributions to pop music will withstand the passage of time. His trademark ‘moonwalk’ is widely known and imitated by many (including me), and some of his most played songs on video hit shows include ‘Thriller’, ‘Beat It’, ‘Billy Jean’ and ‘Bad’.
He was not a living god, but a human being with imperfections. It is my opinion that media gossip about his private life was a mixture of truth and fiction, his prominence and eccentricity fuelling opportunistic individuals seeking attention and money.
Perhaps his suffering children and family may now live a more normal life, with fewer media intrusions.
Should We Help Egypt Go Nuclear?
Filed under: Australian Foreign Policy, Australian News, Middle-East Affairs
The biggest Australian engineering firm Worley Parsons, an ASX-listed company, has just won a $160 million contract to help build Nuclear Power Plants for the Arab Republic of Egypt.
According to a Bloomberg article, the contract will provide “engineering and advisory services” including “training Egyptian nuclear engineers, advising on which technology to use and best construction locations”.
I have very strong reservations about this deal. Egypt is an Arab-Muslim country. At the moment, the current Egyptian Government is somewhat friendly to the West and uses overwhelming force to prevent its home-grown Islamic fanatics taking control, but this could change overnight.
There are many different designs for electricity-producing nuclear reactors, some of which are designed to avoid producing weapons-grade nuclear fuels as by-products. A the moment, I have no idea what sort of design Worley Parsons plans to recommend to the Egyptians.
My fear is that the reactors could be converted to allow production of weapons grade nuclear fuels, or that Egypt will learn enough to be able to build new reactors specialised for this purpose. The last thing we need is another Islamic regime with nukes.
Ponzi Schemes and Carbon Reduction Schemes
There is a Russian proverb – ‘when you live beside the graveyard, you can’t cry for every funeral’.
Recently in the news, there has been nothing new, just repetitions of the same themes over and over – economic bailouts, corporate fraud and distraction politics. As a result, I have become desensitised and no longer feel any shock.
I will comment on two piece of related news: Bernie Madoff’s $50bn Ponzi Scheme and Kevin Rudd’s Carbon Pollution Reduction Scheme. How are they connected? They are both scams.
Bernie Madoff’s Ponzi Scheme
For many years, New York investment manager Bernie Madoff operated a hedge fund that consistently returned 12% per annum to investors for many years.
Early this month, it all fell apart when investors wanted out. The fund turned out to be a Ponzi Scheme that merely used new investors capital to pay distributions to previous investors.
This has been described as the “world’s biggest corporate fraud by a single individual”, resulting in estimated losses of $50 billion US dollars. I personally doubt that he acted alone.
Incredibly, the alarm bells were raised as far back as 9 years ago when an analyst named Harry Markopolous sent a report to the SEC titled “The World’s Largest Hedge Fund is a Fraid”. It is not clear if the SEC took any action on this.
How did he get away with it? I’m not sure, but he did have many friends in high places – after all, he was a former chairman of NASDAQ.
Regulators generally don’t care about small investors, but now that some rich and prominent people got hurt, perhaps the SEC will start taking corporate transparency seriously.
Kevin Rudd’s Carbon Pollution Reduction Scheme
Australian Prime Minister Kevin Rudd set a token 5% Carbon Dioxide reduction target for the year 2020. Expectations were as originally as high as 15% and some were demanding a reduction of 25%.
Clearly, he wanted to maintain his popularity by doing something to appease the Climate Change believers, but not dare risk anything to further exacerbate our economic problems.
So what was has been achieved by this? Apart from the fact that Global Warming Alarmism is bullsh**, China’s own CO2 emission growth will of course outstrip our savings within several months. Even if we ignored China, the flawed computer models (that others believe in) indicate that a much much larger cut would be needed to reverse a warming tread.
Do Australian University Students Struggle?
In the recent Sydney Morning Herald article article Too Many Uni Students Cry Poor, economics editor Ross Gittins says “One group I’ve never had much sympathy for is self-pitying university students”.
I respect the old man, but he is really out of touch with the realities facing young people today. Are today’s Australian university students struggling more than students in previous decades? I say yes.
Degrees Are Worth Less Today
Contrary to what Ross Gittins says, having a degree these days does not even guarantee a job, let alone a high salary.
Tertiary qualifications are now the baseline
Decades ago, the Australian workforce had a vastly different composition – Many students left high school before before year 12 and without receiving their Higher School Certificate (HSC). There was a lot of unskilled work and many more people learnt a trade. There were also far fewer women in the workforce. Only a small elite chose to attend university to get a degree, and these people were snapped up by employers.
Today, things are very different. According to the Australian Bureau of Statistics report on statistical trends in education for the state of NSW in 2007, 85% of students complete their HSC, and almost 40% of those between 20 and 25 years of age are enroled in post-secondary education. Degrees, Diplomas and TAFE Certificates are now assumed knowledge for a majority of careers.
Teaching Standards Have Fallen
The Government has cut university funding since the late 1980s, whereas during the same period, private sector salaries increased greatly. This has led to talented Australia academics deciding to quit academia.
In their desperation for money, Australian universities have increased their reliance on full fee-paying Interational students, mainly from Asia and the Middle East, who pay lots more than locals for the privilege of an Australian degree.
University course content, assignments and exams have been dumbed down over the years to help ensure that people finish and ‘get out the door’ with minimum delay.
An Oversupply of University Graduates
Due to the large number of people that have degrees and the lowering of teaching standards, graduates face far more scrutiny when seeking employment.
Today’s employers want candidates to have practical experience in a commercial setting, objective proof of competence and demonstrated achievement in their field.
One of the greatest ironies is that due to the shift towards university education, there are now shortages of tradespeople in Australia. Bricklayers and plumbers now earn more money than many degree-qualified professionals.
Living and Educational Expenses Have Increased
Gittins is correct in stating that HECS [university course fees] can be deferred, and are only repayable once a student has an income greater than a predefined threshold (about $41,000 per annum). However, there are many expenses that cannot be deferred.
Textbooks and Course Notes Are More Expensive and Frequently Updated
We live in an age of rapid obsolescence and changes in the legal and political landscape.
New editions of textbooks are released almost every year and these can cost up to $200 per book. Some courses require multiple textbooks. For a full-time university student who studies four courses per semester, this can amount to $2000 per year.
Learning Tools and Equipment
Today’s students need modern learning tools. Although Universities say that they are optional, in practice no student wants to be disadvantaged compared to their peers. Such tools include laptop computers, mobile phones and broadband Internet access.
Amortised over the period of a degree, these tools can cost anywhere between $500 to $2000 per year.
Accomodation in Capital Cities is Expensive
Some students can continue living with their parents. Others can’t – this may be because their university is not close to their home, or they have a partner, or simply want their independence. These people require accomodation.
Most of the large reputable Australian Universities are located in capital cities. Over the last 10 years, the asset price bubble pushed capital city property prices to atmospheric heights.
Relentless immigration coupled with a slowdown in new property development have resulted in rental costs exploding. In the eastern suburbs of Sydney, a 1-bedroom apartment now rents for $500/week.
Previous generations certainly did not have to deal with this.
The Man Who Lost His God
A 22 year old American man, Jesse Kilgore, committed suicide in October by walking into the woods near his New York home and shooting himself. According to the original article, his father Keith Kilgore attributed his death to his son having read the book book ‘The God Delusion’, by the British atheist evolutionary biologist, Professor Richard Dawkins.
Jesse’s death is a tragedy and my heart goes out to his family and friends. Sadly, in their anger, they place blame on three parties – the book author Richard Dawkins, the Professor who recommended the book to Jesse and the secular public school system.
Instead, they are ignoring the underlying issues that may have led this to happen – after all, a normal healthy person does not commit suicide after reading a book!
I believe that the real factors are:
- Jesse’s fear of being ostracised or isolated by his family and friends. Would Jesse have been able to discuss the book with his father, a ‘retired military chaplain’, without being shouted at or abused?
- His sheltered upbringing may have prevented him from being exposed to multiple different belief systems that would have built up his mental ability to deal with uncertainty and doubt.
- It is also possible that he was suffering from an undiagnosed mental illness like depression or anxiety that he masked by sheltering in his religious observance.
There are a few points in the article which I will also answer:
“One of his friends, and his uncle (they did not know each other) both told me that Jesse called them hours before he took his life and that he had lost all hope because he was convinced that God did not exist, and this book was the cause,” Keith Kilgore told WND.
Religion was clearly a pillar of Jesse’s identity. I can understand why his spirits were broken by a book that convinced him that his religious beliefs were illogical and that his past observance had been a waste of time.
Does this mean that the correct course of action was to kill himself? Of course not! Jesse clearly drew the wrong conclusions from the book. Here are some conclusions that a person of healthy mind could have made:
- “I was misguided, but it was not my fault – I was brought up that way.”
- “I am glad I found this out at a young age”
- “I can live out the rest of my life free of unnecessary restraints”
- “I can be still be a kind, virtuous person – even more so, as I am now doing what I personally think is right, and not just because I fear the wrath of god”
- “I will talk this over with my local priest or a counsellor and see what they think”
- “I can still maintain my relationships with my family and friends by going to church and celebrate religous holidays with them”
He was pretty much an atheist, with no belief in the existence of God (in any form) or an afterlife or even in the concept of right or wrong,” the relative wrote. “I remember him telling me that he thought that murder wasn’t wrong per se, but he would never do it because of the social consequences – that was all there was – just social consequences
Absence of religion does not imply that there is no morality. For example, the Golden rule ‘Do unto others as you would have others do unto you’ has a solid logical basis and does not need a god to back it up.
If one reads the Bible (and many other religious texts), there are in fact plenty of examples of religiously sanctioned murder that are considered highly unacceptable and immoral in secular western societies, e.g. the stoning to death of homosexuals, idolaters and others.
“I’m all for academic freedom,” Keith Kilgore said. “What I do have a problem with is if there’s going to be academic freedom, there has to be academic balance.
“They were undermining every moral and spiritual value for my [son],” he said. “They ought to be held accountable.”
He suggested the moral is for Christians simply to abandon public schools wholly.
I’m glad that he supports academic balance – unfortunately in this case the balance came in the form of Richard Dawkin’s book – a large undigestible chunk, too big for Jesse to swallow after being brought up immersed in religious dogma. If he wanted proper balance, it should have happened from a young age.
It is the job of a responsible education system to present truthful information and teach the ability to discern fact from fiction. Moral and ‘spiritual’ values need not be based on falsehood.
During my childhood, I was educated in an Australian public school. On Friday’s, we would have a 1-hr period set aside for religous education, where representatives of various faiths would come in and teach those who followed their respective religions. Why can’t religious schools have a weekly 1hr period where an atheist can put forward their case?
“Here’s another thing,” he continued. “If my son was a professing homosexual, and a professor challenged him to read [a book called] ‘Preventing Homosexuality’… If my son was gay and [the book] made him feel bad, hopeless, and he killed himself, and that came out in the press, there would be an outcry.
“He would have been a victim of a hate crime and the professor would have been forced to undergo sensitivity training, and there may have even been a wrongful death lawsuit.
I find this most amusing. American Christian churches frown upon homosexuality, don’t they? And there are books on preventing homosexuality that are readily available, aren’t there?
In order for a book to be implicated in a hate crime, the book would have to incite readers to illegally discriminate against or mistreat people. Does Dawkin’s book advocate such a view? I haven’t read it, but I don’t think it did.
Women Falsely Claiming Paternity Benefits
Filed under: Australian Law Reform, Australian News, Uncategorized
The Child Support Assessment Act was recently amended to allow men who have been falsely paying child support payments to apply to recover their money. This has generated much controversy:
Paternity Tests Prove Hundreds of Men Duped
SMS after DNA test: You’re not the father
Australian men’s group seeks tests before child support
There is no doubt that the decision of a man and a women to have intercourse requires considerable understanding of the potential consequences.
The obligation of a father to financially support his child is clearly established in law. The retired tennis champion, Boris Becker, learnt this valuable lesson after being forced to pay millions of dollars for a child conceived during a brief liaison with a waitress in a restaurant broom closet in 1999.
Similarly, the responsibility of the woman to be truthful about her relationships is equally serious. A women knows exactly whom she has slept with and would certainly know if there is any doubt about paternity.
To extract money out of an innocent person by making false claims of paternity is a very serious matter which also has serious consequences on the other party, both psychological and financial
- It is a gross betrayal of trust
- It is traumatic for the man and the child. The man may have formed a close emotional bond to a child, only to find out that he is not the father
- A man may be deprived of his livelihood for almost two decades until the child reaches adulthood and becomes independent
Apparently, some feminist groups are up in arms stating that the only person that will suffer will be the child. To this, I say that the same argument could apply to a woman who obtains support money by robbing a bank or stealing from her workplace. Does this make her any less culpable for the crime? Of course not.
So not only do I fully support this reform – I feel it should be made even stronger in the following ways:
- In the case of false paternity, child support money must be repaid WITH INTEREST to compensate for the man’s lost opportunities
- Mandatory DNA testing of both parents and children must be performed in all custodial disputes
- Where there has been a proven element of deception or fraud on the part of the woman who has falsely claimed child support, she should be subject to all applicable criminal law concerning fraud and theft
- In the above case, the man should also be entitled to seek civil damages as considered appropriate for the case
What are your thoughts?
Kevin Rudd’s $6.2 Billion Auto Industry Package
Australian Prime Minister Kevin Rudd announced a $6.2 billion dollar package to support the Australian Car Industry. This was after foreign owned car manufacturers announced plans to shut down local production in the wake of the global financial crisis.
$500 million of this money will be set aside for a ‘Green’ car innovation fund, to produce environmentally friendly vehicles.
The intentions of this plan are certainly noble. Australia has a proud history of automotive production. The industry employs many people who hold a lot of valuable know-how.
These are the problems I see with the plan:
1. It’s a large amount of money and it may only temporarily defer the problem. Foreign manufacturers will milk the government funds, artificially boosting their profits, then shut down the factories when the money has been exhausted.
2. Australian automotive tariffs are set to fall from 10% to 5% making it harder for our local industry to remain viable in the presence of low cost German, Japanese and Korean imports. Would we be merely sustaining an uncompetitive local industry out of pride?
Here are some possible alternatives:
1. Assist Australian entrepreneurs in buying out the local arms of these manufacturing firms, to ensure that the industry is under Australian ownership and that profits remain in this country.
Perhaps a new Australian company can focus on producing low cost, energy efficient vehicles that would offer something unique and provide a competitive edge on the market.
2. Use the money to pay for redundancies for these workers and retraining to allow them to get job in other industries where their skills can be adapted, e.g. Agricultural technology, military vehicles
What are your thoughts? Your comments are most encouraged.
NSW State Government – Worse than a Desperate Crack Addict?
Filed under: NSW News, NSW Politics, Sydney News, Uncategorized
In a predictable move, the NSW state government, led by Nathan Rees, has cancelled several major rail infrastructure projects – namely, the North West Metro and the Richmond Line duplication, which has been ‘deferred‘.
These had been promised for many years and are needed to cope with the growing population in these areas. Housing has become highly unaffordable in inner-city Sydney, so people were encouraged to move to the outer areas in the expectation that the these Government transport projects, when completed, would be able to take them to their places of employment in the inner city.
The government of course states that these projects, which they previously claimed to be ‘fully funded’, have to be abandoned due to the budget ‘black hole’ created by the financial mismanagement of the past NSW Labor governments led by Morris Iemma and Bob Carr, and the global financial crisis which has led to reduced tax revenue.
Despite having cancelled these projects, the NSW government is desperate for cold hard cash and is prepared to sell all the public assets they can at any price. The latest assets up for sale are the electricity retailers, NSW Lotteries and Waste Services NSW. These are all profitable and income-generating.
One major reason cited by the state government for refusing to borrow money for infrastructure is that they want to maintain their ‘AAA’ credit rating. Correct me if I’m wrong, but isn’t the whole purpose of having credit ratings in the first place to allow reliable borrowers to obtain loans on good terms?
Now is the perfect time for the government to spend borrowed money. NSW is in recession and the economy needs to be stimulated – capital works projects have been historically effective in these situations.
Reviving the cancelled infrastructure projects will remove bottlenecks and lead to increased taxation revenue and economic growth. As we are are now in a higher inflation environment, the net present value of future loan payments will keep falling, reducing the future costs of servicing these loans.
Furthermore, keeping those public assets will ensure that their income is retained, and this income will of course reduce the burden of loan repayments.
Barack Obama wins US 2008 Presidential Election
Filed under: International News, International Politics
I’m sure it came as no surprise to many that the Democratic candidate Barack Obama, defeated his Republican opponent, John McCain in the US general elections last week.
As an outsider I will make the following comments:
It appears that McCain’s faux pas was having Sarah Palin as his running mate. In my opinion, the Republican’s decision to have a female vice president was a gimmick needed to counter the Democrat’s choice of a black president, i.e. promoting the emancipation of black people vs promoting the emancipation of women. Unfortunately, the Republicans did not appear to choose a suitably qualified person and Palin quickly became an object of ridicule in the media.
Considering the current financial crisis and ongoing international conflicts, the incumbent party would have needed to make a superhuman effort to retain power – that made things easier for the Democrats.
I do hope that Barack Obama will prove to be a good leader and not just the outcome of an ‘affirmative action’ mindset.
My concerns at the moment are that the new Government will go soft on fighting religious fundamentalism and preventing the nuclear arming of fanatical regimes like Iran. Russia and China may continue to gain power and influence, unhindered by US intervention.
