A day in the life

This is part two in a series of posts looking at some of the problems facing politics and the media in Australia. The first post is here.

Fundamentally, I see the relationship between politicians, the media and the public has become a complete mess. Anabelle Crabb, in a speech to the Sydney Institute in October gave an excellent dissection of the relationship between the media and politicians that highlights many of the issues I go through below.

In Australia (and much of the western world), the political system is broken. There appears to be a large disconnect between what a rational, intelligent and socially responsible individual would do and the policies coming out of our current political system.

Here’s a comment I just posted on the Greens Facebook page as I don’t agree with their populist approach to bashing the banks.

Some key points to consider about the so called “unreasonable profits” being made by the large banks.

1. If banks are making exorbitant profits go to a credit union. Can’t get a better rate at a credit union? Then the problem is getting access to cheaper money, not bank profits.
2. 8.5m Australians have superannuation, pretty much all of those will have shares in Australian banks, so any profits are being distributed to Australians to some degree.
3. More Australians have high interest deposit accounts than mortgages, so higher interest rates help more Australians and also help promote a better savings culture - something Australia is severely lacking.
4. Banks return on equity (standardised measure of profit) is around 12% — certainly not exorbitant and around the minimum of what an investor would expect as a reasonable return for their investment.
5. Some people say “Australia should have a bank run by the govt.” — we did, it is now Commonwealth Bank. It was privatised and now we have a very competitive banking sector based on the 4 pillars bank policy and various credit unions / building societies.
6. Some people say “Bank profits have risen by exorbitant amounts!”. Actually, they have risen because the banks took such a big hit with the GFC so are being compared to abnormally low profits. The most recent profits are more in line with historical norms.
7. Unlike the United States, the Australian government didn’t have to bail out 100 banks that failed, rather we have a strong banking and regulatory system that stood up to the GFC test. One critical component of that is ensuring that the banks make a profit and do so in a sustainable manner.

Unfortunately most Australians (and it seems politicians too) aren’t very financially literate and don’t understand the relationship between interest rates, the RBA, the govt. and banks.

We need someone to move this country forward. Sadly, neither Julia or Tony have the policies to do this or a capable of doing so. This is not entirely their fault, both leaders are products of the Australian political system, which I believe is fundamentally flawed and will require serious changes before we see genuine policies that move this country forward.

There are two serious failing with our democratic system which is holding this country back:

1. Our next government will be decided on a limited few “swinging” seats
2. Lobby groups have too much influence on policy and keeping the status quo

The key seats of Bennelong, Eden-Monaro, McEwen etc. will decide this election, regardless of which party gets the majority of votes across the country. As a result, the votes of some Australians count for a lot more than the votes of others.

This has a direct impact on policy as shown with the “Illegal Boat People” debate. Take the seat of Bowman as an example which is held by the LNP by 0.01%, where the residents believe that “Illegal Boat People” is a real issue. (BTW: It’s not an issue, because 96% of asylum seekers arrive by plane, not boat and only 10-15% of boat asylum seekers are found to be non-genuine)

Lobby groups are the other key issue impacting progression in this country and come in many forms. From religious lobby groups to large industry bodies that have large financial interests to influence government policy.

These groups exist to protect their constituents and interests, which is clearly at odds with government which exists to act in the best interests of every citizen, not those of a select few. These groups are almost always opposed to change as it will have an impact on their influence or the financial interests of their members.

So, assume we had a proper system of government that was influenced only by facts and logic, rather than a few swinging seats, lobby groups and 10 second news bites, what would I like to see on the agenda?

• Genuine tax reform. The Henry Review made 138 recommendations, the government only took up 10
• A new approach to the war on drugs. Despite billions spent on policing drugs, there is no noticeable decline in drug usage or in drug related violence
• Equal rights for same sex relationships
• A halt to government support for polluting industries with the savings placed into incentives for new renewable technologies
• Investigation of innovation in the political system to leverage new technology for enhancing the democratic process
• Equal investment in the education of the next generation, regardless of class
• A sensible debate on a sustainable Australia - for both the environment and economy
• A sensible debate on population and immigration
• A massive overhaul of government processes designed to optimise for efficiency rather than expenditure