Hi all. It has probably become obvious to anyone that may have been following this Blog for some time that posts have become few and far between of late. I think I have more-or-less struggled over the years with times of poor health, but no more so than the current time. It is a many faceted problem and I won’t go into all of the details. Essentially, something needs to change (or a number of things really). Being still at work and clearly needing to continue to work in order to feed myself, etc, sadly it has beome time to change the way I do things around my many Blogs, etc. I have always enjoyed being online and keeping blogs and websites ticking over, but it has now become an almost impossible chore.
What will change is that this Blog will remain up as an archive, while also providing a gateway (via a link) to my Facebook Group (Informed Insight), where I hope to continue posting curated articles/links/videos, etc. It is so much quicker and easier to do that there than having to write code, etc, here. Essentially, the only real change will be the location of the information.
If you would like to continue the journey with me, please visit the Facebook Group linked to below – and thank you for visiting me here over the years.
The only other thing to note is that this Facebook Group is a subgroup of my Facebook Page, ‘Insight to my World,’ which you are also free to like and follow should you wish.
After almost a year of heated discussion about the News Media Bargaining Code, there will shortly be a new law of the land – one that’s unlikely to be applied to the platforms it was intended to reign in. But that’s not to say it hasn’t done its job.
With some final tweaks expected to the draft legislation, Facebook on Tuesday announced it would restore news for Australian users and strike up commercial agreements with local publishers. It signed its first deal with Seven West media yesterday.
Meanwhile, Facebook threatened to stop providing Australians access to news — and did (while also blocking domestic violence helplines, children’s cancer charities and the Royal Australian College of Physicians).
In return, the federal government said it would stop all advertising campaigns on the platform. Interestingly, it’s this move which most likely “assisted” the recent negotiated outcome with Facebook.
The amendments
The changes made to the code — other than the opportunity to sell advertising to the Commonwealth again — were small, but important. It’s worth remembering the code’s aim was to balance out the bargaining imbalance between big tech platforms and news media businesses.
Essentially, it provides a mechanism to force a deal when a commercial outcome can’t be reached voluntarily. The code is mandatory, since the Australian Competition and Consumer Commission (ACCC) took the view the platforms would not otherwise get to a commercial offer, let alone a commercial settlement.
As set out by Treasurer Josh Frydenberg, there were four changes made that have met Facebook’s needs:
before a digital platform is made subject to the code by being “designated”, the minister must first take into account whether it has reached commercial agreements with news media businesses
the government must give at least one month’s notice of designation to any platform it intends to make subject to the code
the non-discrimination provisions (crafted as an anti-avoidance mechanism) will not be triggered in respect to remuneration amounts or commercial outcomes that arise in the course of usual business practice
final offer arbitration will be a last resort and should be preceded by good faith mediation, provided this lasts no longer than two months.
The above amendments made by the government are not major, in terms of changing the scope of the News Media Bargaining Code. However, they do include some important clarifications regarding how the code will operate.
Both Google and Facebook were very concerned the approach of “final offer arbitration” would adversely affect them. In this, if a deal couldn’t be struck, both the platform and media business would have to present their offers and defer to an arbitrator to choose one.
Google and Facebook initially argued for “commercial arbitration”, where the arbitrator acts with more discretion. Commercial arbitration tends to favour the party with the most information or bargaining power.
The compromise of requiring good faith mediation before any compulsory arbitration (whether commercial or final offer arbitration) is a classic dispute resolution approach.
Win some, lose some
The News Media Bargaining Code has changed in a way that is a compromise, but hasn’t lost its original intention. The process of negotiating changes to the code has revealed the private values of Facebook, Google and any similar parties that could be impacted by the code.
The exposure draft, the introduction of the Bill, the Senate committee and Facebook’s petulant actions: all have acted to identify a financial outcome for each of Google, Facebook and the Australian news publishers.
The process has been a classic, but painful, exchange of information that would otherwise have been held close to the players’ respective chests.
For Google, it has shown Google Search must remain untouched, even if this means forking out millions in a matter of days. For Facebook, it has demonstrated that rapidly changing social media offerings (such as trying to remove news in Australia) can’t be done without major complications.
It may be too soon to judge whether Facebook’s approach of taking its lobbying to the brink worked in its favour, or to its detriment. The platform’s first interactions with the new UK Digital Markets Unit (a regulatory regime targeted at big tech firms) will likely shed some light.
And finally, the ACCC can claim it was right in its initial recommendation; after a long drought, there will soon be money flowing to public interest journalism.
The intention of the News Media Bargaining Code was to create an environment where commercial deals would be struck between the platforms and news media businesses in Australia.
Now, under several deals, Google and Facebook will pay Australian news media businesses tens of millions of dollars each year for locally created content.
According to an Australian Financial Review report, Facebook Australia paid a little under A$17 million in tax in 2019. Shutterstock
There’s also a reasonable expectation regional news businesses will receive funds in exchange for regional news — although a clear standard offer is yet to be made by the platforms.
This development will not change the inevitable shift of the news business model to a largely digital environment. But it does balance the value proposition between news creation and news curation.
It has also made clear to Facebook, Google and news media businesses that they exist and operate in a symbiosis. The status of this relationship? Well, it’s complicated.
Ahead of the budget, the government has announced new rules that will allow small businesses at risk of collapse to continue to work out their problems instead of appointing an administrator.
They are needed because of an avalanche of insolvencies awaiting the end of an effective moratorium on bankruptcies (a so-called “regulatory shield”) that expires at the end of December.
Since it was introduced in March the number of companies entering external administration has been unusually low compared to earlier years (at a time of unusually bad conditions) suggesting a buildup of zombie companies waiting to die.
Number of companies entering external administration
Twelve months to each week (red) versus previous twelve months. ASIC
The new rules will allow insolvent small businesses with liabilities of less than A$1 million to keep trading under the eye of a small business restructuring practitioner for 20 days while they develop a restructuring plan to put to creditors rather than surrender control to an external administrator.
If half the creditors by value endorse the plan it will be approved and the business can continue under its present ownership with assistance from the restructuring practitioner. If not, it can be put out of its life quickly under a proposed simplified liquidation process.
Existing laws give directors little leeway
Under the current insolvent trading law, directors are expected to immediately stop the trading when they know or have reasonable grounds to suspect the company is insolvent. Directors who “give it a go” and try to trade their way out of financial difficulty face severe legal consequences: personal liability, a fine of up to $1.11 million per offence or a prison sentence of up to 15 years in extreme cases.
The only way to avoid these penalties is to quickly place the company in the hands of the administrator who temporarily manages the business until the company’s creditors make a decision on the company’s fate.
Its a regime not particularly suited to small businesses.
The proposed new rules can be seen as a tacit admission of the failure to the “safe harbour” law reform of 2017. Applicable to all companies irrespective of size, it protects directors from personal liability for debts incurred by an insolvent company if they took a course of action “reasonably likely to lead to a better outcome” for the company and its creditors than administration or liquidation.
Anecdotal evidence suggests it is largely shunned by small businesses in part because of its uncapped cost. The fees of small business restructuring practitioners will be capped.
The new laws will create breathing space
The new rules are based on Chapter 11 of the United States Bankruptcy Code, with important differences.
The US law applies to all Companies, not just to those with debts of less than $1 million. And it gives the court an oversight role.
The absence of judicial supervision in what’s proposed for Australia is a double-edged sword. Court involvement generally means delays and high costs.
On the other hand, it provides a valuable check against abuses – such as the deliberate liquidation and rebirth of “phoenix companies” in order to avoid paying debts.
In Australia, that’ll be the role of the small business restructuring practitioner.
It’s not yet clear how they’ll work
It won’t be a panacea for small businesses. They will be required to lodge any outstanding tax returns and pay any employee entitlements before a plan can be put to creditors.
In the current circumstances many small businsses will not be able to comply.
There’s much we don’t yet know about what’s proposed. The government’s briefing says time and cost savings will be achieved through “reduced investigative requirements”. It is unclear to what the extent the liquidator’s wide investigative powers into reasons for business failures will be curtailed.
The changes are likely to have profound implications for many stakeholders, including creditors, employees and the general community.
It is important that the government consults properly before the new rules are put to parliament in time for their introduction on January 1.
Australian supermarket giant Woolworths has announced its single biggest investment in logistics infrastructure, spending A$780 million to replace up to 1,300 workers with robots.
It plans to build one semi-automated and one fully automated distribution centre in south-west Sydney. About 650 jobs will be created at the new centres, to open in 2024. Three existing centres (two in Sydney, one in Melbourne) will close as a result.
Woolworths’ chief supply chain officer, Paul Graham, emphasised the safety benefits of automation:
Cutting-edge automation will build tailored pallets for specific aisles in individual stores – helping us improve on-shelf product availability with faster restocking, reducing congestion in stores, and enabling a safer work environment for our teams with less manual handling.
In these COVID-conscious times that’s the obvious spin.
But it’s true this is a response to the changes being wrought on the retail sector by COVID-19.
The principal change is a matter of pace. COVID-19 has turbocharged the shift to online shopping. Even as social-distancing rules ease, this trend will consolidate. Many bricks-and-mortar shops are in trouble, particularly those in shopping centres.
Retail will also be shaped by how COVID-19 has changed our shopping behaviour, with thrift and value being important.
Shopping online is the new norm
In April, 5.2 million Australians shopped online, according to Australia Post’s 2020 eCommerce Industry Report. The Australian Bureau of Statistics estimates those sales were worth A$2.7 billion, 11.1% of all physical retail sales, compared with 7.1% in March 2019.
This sharp hike in demand exposed weaknesses in retailers’ online capabilities. For example, crushing online demand meant both Woolworths and major rival Coles temporarily suspended their online shopping services.
More automated fulfilment centres are part of meeting these online demands. Of course, such investments were already on the radar.
In March 2019, Coles announced an exclusive deal to use the “end-to-end online grocery shopping solution” developed by Ocado, a British online supermarket chain that has no stores, only warehouses. Its technology spans the online shopping experience, automated fulfilment and home delivery.
An Ocado warehouse in Wimbledon, southwest London. Willy Barton/Shutterstock
The Coles plan included two new “highly automated” customer fulfilment centres in Melbourne and Sydney, to be ready in 2023. Coles also announced plans for two new automated distribution centres in Queensland and NSW, costing A$700 million, in October 2018.
Woolworths itself has already opened the Melbourne South Regional Distribution Centre, whose automated features are hyped in the following promotional video.
So these latest moves are part of a trend, albeit one unexpectedly accelerated by COVID-19. And once consumers try new channels, studies show, they are likely to stick with them.
The future is dark
At the other end of the supply chain, the shift to online shopping has created demand for “dark stores” – essentially, stores without customers. These smaller, decentralised facilities, located in suburbs rather than industrial parks, are designed to pick and dispatch online orders quickly.
Woolworths opened its first dark store in Sydney in 2014. Coles opened its first in Melbourne in 2016. Existing stores are also being repurposed as dark stores. In April 2020, Australia’s Kmart temporarily converted three stores to use as fulfilment centres.
Such moves may become permanent, as shoppers demand faster delivery times and physical store assets become less viable as “traditional” retail businesses.
Existing stores are also being adapted to respond to customer demands for faster, more efficient online shopping. In January 2020, Woolworths began building its first “eStore” – an automated facility adjoining its supermarket in Carrum Downs, Melbourne.
Fewer, smaller stores
As online shopping increasingly provides greater revenue streams for retailers, more physical store closures are also on the cards.
In May, Kmart’s owner, Wesfarmers, announced it would shut 75 of its Target stores (and convert the rest to Kmart stores). Also looking to downsize are Australian department store icons Myer and David Jones, which have accelerated their plans to reduce floor space 20% by 2025.
Footwear giant Accent Group – which owns more than a dozen shoe brands and has more than 500 stores in Australia and New Zealand – is planning to close 28 stores and focus more on online sales.
As online revenues grow, expect more “right-sizing” and closures.
Repurposing shopping centres
All these closures will add to the woes of shopping centres.
Though crowds reportedly surged back to centres when “lockdown” restrictions were eased, growing awareness that the pandemic is not over and social distancing protocols continue to create consumer anxiety.
Until people feel safe shopping, dining and gathering in crowded public places, consumer aversion will remain.
In response to these COVID-conscious times, shopping centres will endeavour to enhance those aspects of the shopping experience, such as sensory elements and entertainment, which the online shopping experience can’t provide.
The retail mix will change: fewer fashion and general merchandise shops, and more services such as medical centres, offices and childcare centres.
Opportunities for smaller retailers
One bright spot may be for local and independent shops.
Smaller retailers can often adapt faster than larger ones. Smaller community pharmacies, for example, implemented social distancing and hygiene measures more easily than larger retailers, due mainly to their smaller size and having less traffic.
There are opportunities to leverage shoppers’ desire to support local shopkeepers, producers and growers. Locally made goods and services are also less likely to have long supply chains that will impede overseas deliveries while COVID-19 is uncontained.
But they’ll still need to sort out their online shopping experience.
In the wake of slumping demand for apartment building, it’s little wonder the multi-unit housing industry has been eagerly eyeing a possible new residential product: “build-to-rent”.
In fact, the latest figures show that apartment-building construction starts were down 36% in 2018 from 2016. But how much will this little-known type of housing solve our housing problems?
Build-to-rent won’t be a silver bullet solution for Australia’s housing affordability stress, but it does have potential to tick the box on several important public policy objectives. These include widened housing diversity, enhanced build standards, and a better-managed, more secure form of private rental housing.
But for this to happen, Australia’s tax settings need adjustment.
What is ‘build-to-rent’?
This refers to apartment blocks built specifically to be rented, usually at market rates, and held in single ownership as long-term income-generating assets.
The enduring owner might be, for instance, an insurance company, an Australian super fund, a foreign sovereign wealth fund, a private equity firm, or the building’s developer.
A scattering of build-to-rent schemes are already underway or completed, mainly in inner Sydney and Melbourne. And they may prove to be the forerunners of a new Australian residential property sector – but that is far from guaranteed.
In Australia, our private rental market is almost entirely owned by small-scale mum-and-dad investors, so this kind of housing would be a largely new departure from typical Australian real estate.
Potential benefits
The build-to-rent development model, involving a long-term owner commissioning an entire building, creates an incentive for higher, more enduring quality than the standard “build-to-sell” apartment development approach.
Importantly, build-to-rent is a long-run investment that caters for rental demand, which tends to grow steadily.
This means the model is largely immune to the fickle changes in housing demand resulting from typically short time horizons and primarily speculative instincts of individual buyers traditionally dominant in our market.
So at its full potential, this new housing product could introduce a valuable counter-cyclical component into the notoriously volatile residential construction industry, helping to offset damaging booms and busts. In other words, build-to-rent can create stability in the Australian property market.
How build-to-rent can incorporate affordable housing
Optimistically, some have claimed build-to-rent could also provide an “affordable housing” fix for many earners who are doing it tough in our existing private rental market.
But this could be possible only with the aid of major government funding or planning concessions.
Ideally, housing at rents affordable to low or moderate income earners would be included in predominantly market-rate build-to-rent schemes. Indeed, one major construction industry player recently advocated this as a standard expectation.
So how should affordable housing be provided in this case?
To find out, our analysis compares the cost of developing affordable housing by a for-profit company with development under a not-for-profit community housing provider.
Thanks to that non-profit format, and the tax advantages that go along with it, community housing providers can, in fact, construct affordable rental housing at significantly lower cost than their for-profit counterparts. Less subsidy is therefore needed.
Nonetheless, government help in some form will be essential to enable an affordable housing element. The most painless way for this to happen, from the government perspective, is through allocating sections of federal or state-owned redevelopment sites to community housing providers at discounted rates.
Encouragingly, this strategy was recently advocated by newly designated federal housing minister Michael Sukkar.
Such designation of government-owned sites could, for instance, be factored into large-scale urban renewal projects like Sydney’s Central-to-Eveleigh and Rozelle Bays. When complete, it could fulfil the widely voiced demand that 30% of these developments should be affordable housing.
Levelling the playing field
Our modelling shows that under current conditions, even market-rate build-to-rent projects are barely viable – at least in Sydney.
The inflated price of developable land in Australia’s urban housing markets is an important contributing constraint. But our research also identifies a range of government tax settings that disadvantage build-to-rent, compared with both mum-and-dad-investors and traditional build to sell developers.
Removing less favourable land tax and GST treatment could markedly improve build-to-rent feasibility.
From a housing policy perspective, there’s also a case for the federal government to reconsider its recent “withholding tax” decision that treats overseas-based institutional investment in rental property less favourably than investment in commercial property.
Since such global funds would likely lead the establishment of a new Australian build-to-rent asset class, revisiting the withholding tax changes could be a significant step in making build-to-rent a reality in Australia.
In any case, build-to-rent is no simple solution for Australia’s affordable housing shortage.
But even as a market-rate product, it could fulfil several important public policy objectives. How far it might do so in practice is something that governments rightly need to weigh up when considering industry-proposed tax and regulatory reforms.
Hal Pawson, Associate Director – City Futures – Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice, UNSW
According to organisers, two million people marched Sunday in Hong Kong, with many shifting focus away from a controversial extradition bill to the resignation of the Beijing-backed chief executive, Carrie Lam. Jerome Favre/AAP
The latest protests in Hong Kong on Sunday, which organisers said brought some 2 million people to the streets, represented yet another striking show of “people power” in the semi-autonomous Chinese city.
Chief Executive Carrie Lam’s efforts to bring calm to Hong Kong included an uncharacteristic about-face on her position over the weekend, a rare apology and the indefinite suspension of the proposed changes to the city’s extradition laws, which sparked the initial protest against the government last weekend.
But laden with qualifications and a subtle rebuke of the protesters, Lam’s repositioning of the issue has had limited impact, suggesting that she may have seriously underestimated the anger and determination of her constituency. The protesters are now calling for nothing less than her resignation, making her the “lightening rod” for public anger in the face of growing resentment towards Chinese influence in Hong Kong.
As the people of Hong Kong continue to take to the streets, one wonders whether the real struggle has only just begun.
How the fight over the extradition bill mushroomed
For many, Lam’s controversial extradition bill represented the “thin edge of the wedge” of Chinese control. If passed, the proposed law could have seen local and foreign criminal suspects sent to mainland China to stand trial in a judicial system that is opaque and vastly uncompromising.
But there’s much more at stake for the people, identity and prospects of Hong Kong. For those concerned about China’s rising influence in the city, the legislation represented a dangerous break in the firewall that has preserved civil liberties for the people of Hong Kong within the “one country, two systems” framework.
While its proponents claim the bill has a narrow application, many fear it would enable China’s leadership to target political opponents, entrepreneurs and activists as part of its wider strategy for exercising control over the region. The implications for Hong Kong’s reputation as a vibrant global financial, business and transit hub would be significant.
Of course, the latest demonstrations cannot be viewed in isolation – they are the latest chapter in Hong Kong’s longstanding tradition of public dissent. And there have been some notable successes in the past, including the indefinite suspension of plans to implement a national security law in 2003 and the reversal of a proposed comprehensive national curriculum in 2012.
Yet, as the 2014 Umbrella Movement protests revealed, the mood in Hong Kong appears to be taking on a more sombre tone. Much of this reflects the changing mood within China.
Protesters in Hong Kong wore black on Sunday night, a striking change from the white apparel worn last week. Roman Pilipey/EPA
Under President Xi Jinping, civil protests — even those organised in the special autonomous region of Hong Kong — are increasingly fraught. Xi himself set the tone with a particularly hard-line speech during his 2017 visit to the city for Lam’s swearing-in.
Flagging new levels of intolerance for activities that might be interpreted as encouraging Hong Kong independence from China, Xi noted:
Any attempt to endanger China’s sovereignty and security, challenge the power of the central government … or use Hong Kong to carry out infiltration and sabotage activities against the mainland is an act that crosses the red line and is absolutely impermissible.
Despite the efforts of China’s state-run Global Times newspaper to lay blame for the “uncontrolled street politics” on “Western forces” and “malice from afar”, however, Chinese political authorities have remained relatively quiet on the Hong Kong protests this week.
This is unsurprising. Coming just a week after the 30th anniversary of the Tiananmen Square protests, China was never likely to take an openly provocative stance against the protesters.
But it is clear Beijing is keeping a close eye on the situation, pushing back on criticisms from abroad and now possibly wavering in its support for Lam. Ever sensitive to external critiques that relate to questions of sovereignty, the Chinese government may decide to take a harder line should the protests continue to gather momentum.
Lack of foreign pressure
Thus far, the response to the protests has been relatively muted. The European Union has called for the rights of the Hong Kong people to be respected, noting its concern for the “potentially far-reaching consequences” of the extradition bill. UK Prime Minister Theresa May, meanwhile, has called on authorities to ensure the extradition arrangements “are in line with the rights and freedoms” set forth in the joint declaration when the British handed Hong Kong back to China in 1997.
US President Donald Trump has remained ambivalent so far, saying only last week, “I’m sure they’ll be able to work it all out.” But according to his secretary of state, Mike Pompeo, Trump is now expected to raise the issue when he meets Xi at the G20 Summit at the end of the month. This is only significant insofar as it reminds us of Trump’s transactional interest in the region.
As for Australia, Foreign Minister Marise Payne issued a fairly neutral statement in support of the Hong Kong people’s right to protest. It left many, including those in Sydney, Melbourne and elsewhere who protested in support of Hong Kong last week, somewhat underwhelmed.
Beyond the protests, how the current tensions unfold will have serious implications for Australia’s engagement in the region and our ongoing relationship with China. The 2017 Foreign Policy White Paper reinforces the core values underpinning our international engagement, including support for political, economic and religious freedoms, liberal democracy and the rule of law.
How and when we articulate our commitment to these values, and reinforce their place in our region, will be the key test of our diplomacy going forward.
As protesters turn their ire on Carrie Lam, the Chinese government may retreat from its support for her. Roman Pilipey/EPA
Where do the protests go from here?
Lam’s decision to suspend consideration of the extradition bill offers a necessary moment for pause. But it hasn’t taken the heat out of the protests.
At this stage, Lam hasn’t backed away from her intent to revive the bill at a later stage. It’s also likely the Chinese government will continue to press towards that outcome, though perhaps in a different form and even under different leadership. Much hangs in the balance.
Hong Kong’s protesters appear galvanised by their cause. But whether they can sustain the necessary momentum for the long game — where crossing red lines may come at a cost — is another matter altogether.
Another federal budget, and yet more tinkering to superannuation tax breaks. But the latest changes will only help older wealthier Australians. The losers are younger workers and taxpayers.
What’s the plan?
From July 1 2020, Australians aged 65 and 66 will be able to make voluntary pre- and post-tax superannuation contributions without having to pass the Work Test, under which they are required to work a minimum of 40 hours over a 30-day period.
About 55,000 Australians aged 65 and 66 will benefit from these changes at a cost of A$75 million over the next four years.
It’s another boost for tax planning
Treasurer Josh Frydenberg says the changes will help Australians save for their retirement.
But most 65- and 66-year-olds still working to top up their superannuation are already eligible to make voluntary super contributions, because they satisfy the Work Test. Working 40 hours over a 30-day period – or little more than one day each week – is hardly onerous.
For every dollar contributed to super that genuinely helps Australians save more for their retirement as a result of these changes, there will be many more dollars funnelled into super to make extra use of superannuation tax concessions.
The biggest winners will be wealthier retired 65- and 66-year-olds with other sources of income, such as from shares or property, which they will now be able to recycle through superannuation.
They will be able to put up to $25,000 into super from their pre-tax income and then – because super withdrawals are tax-free – take the money back out immediately. Their contributions to super are taxed at only 15%, whereas ordinary dividends or bank interest is taxed at their marginal tax rate. The tax savings can be as high as $5,000 a year.
Such strategies aren’t costless: other taxpayers must pay more, or accept fewer services, to make up the difference.
It will mean larger inheritances
The government is also allowing 65- and 66-year-olds to make three years’ worth of post-tax super contributions, or up to $300,000, in a single year.
These changes will mainly boost inheritances.
Most people who make after-tax contributions already have large super balances and typically contribute from existing pools of savings to minimise their tax.
Grattan Institute’s 2016 report, A Better Super System, found that only about 1% of taxpayers have total super account balances of more than $1 million, yet this tiny cohort makes almost one-third of all post-tax contributions.
These changes will turbo-charge so-called “recontribution strategies” that minimise the tax paid on superannuation fund balances passed on as inheritances. When inherited, super fund balances originally funded by pre-tax contributions can be taxed at 17% (including the Medicare levy), depending on the age of the deceased and the beneficiary.
To avoid this tax on their estate, individuals can withdraw superannuation funds tax-free and contribute them back as a post-tax contribution, up to the annual post-tax contributions cap of $100,000 each year.
It fails the government’s own test
In 2016, the government tried – but failed – to define the purpose of superannuation as providing “income in retirement to supplement or substitute the Age Pension”.
The proposed objective rightly implied that super should not aim to provide limitless support for savings that increase retirement incomes.
The benefits of super changes should always be balanced against the costs of achieving them. The government’s latest changes fail that test.
Within a week of the Christchurch terror attacks, Prime Minister Jacinda Ardern has announced a ban on semi-automatic weapons. AAP/David Alexander, CC BY-SA
Up until Prime Minister Jacinda Ardern’s announcement of a ban on military-style weapons yesterday, New Zealand had a system of licensing firearms holders and used a process of application, vetting, reference checks and attendance at firearms safety lectures.
Knowledge of the Firearms Code was required and tested. A firearms license holder was able to then legally acquire any number of firearms. New Zealand has not set up an arms register since the Arms Act was enacted in 1983.
There is no tally of how many firearms are in New Zealand, and no log of how many firearms any individual may have. There is an estimated 1.3 million firearms legally owned in New Zealand, and nothing beyond speculation about how many illegal weapons have found their way in.
New Zealand Prime Minister Jacinda Ardern announces a ban on military style semi-automatic weapons and assault firearms.
With a certain class of license, military style semi-automatic weapons (in unlimited numbers) could be acquired legally. Some 14,000 of these weapons are thought to be legally owned in New Zealand.
Loop holes in current legislation abound. These make it possible to modify weapons and obtain large magazines, and even to buy armour-piercing bullets. Why, in a peaceful, democratic and open society, does anyone need a military-style automatic weapon and armour piercing ammunition?
Prime Minister Ardern has shown the decisive leadership we should see from a leader who genuinely cares about the people she leads. She has finally grasped the nettle, exploiting the current situation to drive through the changes New Zealand should have made 23 years ago following the Port Arthur massacre. She has outwitted those who might oppose her move, because there is no argument that anybody could muster now that would in any way resonate with the vast majority of New Zealanders.
Ardern has announced the ban on a number of weapons, signalled changes to the firearms licensing regime and the need to keep tabs on the national recreational arsenal. But there is a tough road ahead.
Politicians have an unquestioning faith that legislation is sufficient, but it is largely impotent without adequate resourcing for the enforcement of new rules. With only an estimate to work on, New Zealand Police (the administrators of firearms regulations) will have to identify and locate the owners of these weapons and implement the buy-back and amnesty that will be required.
Many owners will give them up. Their humanity will outdo their desire to have them, but the shocking reality of panic buying of semi-automatics since the Christchurch tragedy signals that clearly there are those who will seek to subvert the government’s intent. Police will have to investigate those who fail to cooperate, safely seize the weapons and prosecute the offenders.
Most firearms license holders in New Zealand do not own military style semi-automatic weapons. Many are rural, recreational hunters or use their weapons on ranges. They look after their weapons responsibly, secure them safely, own them legally and use them at no risk to the general public.
Most who own semi-automatic weapons are no different. We should not demonise a section of society simply because of the horrific, obscene and brutally inhuman actions of one lonely individual who no more represents gun owners than he does any other group of New Zealanders.
Illegal weapon imports
But this is not the issue. The issue is that the privilege of owning a certain class of weapons is not worth the terrible cost of 50 people being gunned down in prayer. New Zealand is already seeing the steady illegal importation of firearms, often tied to the increasing movement of illicit narcotics. Banning semi-automatics will increase the demand for the importation of these weapons illegally, adding extra pressure on law enforcement agencies.
For a ban on military style semi-automatics to have meaning, New Zealand’s long coast line, its airports and sea ports, through which illegal commodities are moving, will need resources that allow fit-for-purpose enforcement powers, people and tactics.
The changes New Zealand will now make will not guarantee it will be free of terrorism in the future. Other countries have much stricter firearms regulations, having taken far stronger measures years ago, but they have still suffered terrorist attacks. Firearms reform is one small step for a country that will need to address a plethora of gaps in its security approach.
New Zealand’s terrorism legislation is inadequate. It was found wanting when police attempted to apply it in 2007 during the “Urewera raids”, but charges could not be laid then. New Zealand’s then Solicitor General David Collins described the Terrorism Suppression Act then as incoherent and unworkable. How New Zealand manages social media needs review, and the traditional minimalist approach to national security will no longer suffice.
New Zealand has faced security crises before during the Russian scare in the 1880s and the second world war in the 1940s. It has often been caught out doing “too little, too late” to be saved only by its distance from any potential threat. The internet has extinguished that distance. It has brought the ills of the rest of the world to us. It is already too late. We must ensure that what we do now, is not too little.
As she foreshadowed in the aftermath of the Christchurch massacre last Friday, New Zealand Prime Minister Jacinda Ardern has just announced a ban in that country on specific military-style firearms. It will soon become an offence to own or possess semi-automatic firearms and shotguns with detachable magazines capable of firing more than five cartridges.
Later this month, the government will consider further changes to the law that will tighten licensing requirements and impose limits on certain types of ammunition. There will be a gun buy-back scheme in place in due course that will provide compensation to those who possess soon-to-be-illegal guns. Preliminary advice suggests that might cost the country between NZ$100 million and NZ$200 million.
Thoughts immediately go to the aftermath of the 1996 Port Arthur tragedy in Australia. Then-Prime Minister John Howard had been elected only six weeks before the Tasmanian horror unfolded. He immediately set in train the gun control measures that no previous government, conservative or progressive, would ever have thought possible.
The government placed a ban on the sale, transfer, possession, manufacture, and importation of all automatic and most semi-automatic rifles and shotguns (and their parts, including magazines). More than 640,000 such weapons were thereupon surrendered and later destroyed at a cost to the taxpayer of around A$250 million.
In Australia today, there continues to be bipartisan political consensus and broad community support for what was titled the National Firearms Agreement (NFA). In 2017, it was reaffirmed by the Council of Australian Governments (COAG).
There has been some criticism that certain aspects of the original agreement have been watered down in some jurisdictions in recent years, but the requirements outlined by the agreement generally remain intact.
Did the Australian gun ban and buy-back scheme make inroads into the rate of firearm-related deaths? Did it prevent mass shootings? Jacinda Ardern appears to be convinced that answers to both questions are in the affirmative. Let’s look at the evidence from the past 23 years in this country to test her assumptions.
It is unequivocal that gun death rates in Australia have been falling consistently since 1996. Some commentators object to the connection between this trend and the NFA, saying the downturn was simply a continuation of a long-term decline in gun violence generally.
But recent research found that, compared with the trend before 1997, there was a more rapid decline in firearm deaths after the implementation of the NFA.
However, this conclusion was quickly challenged by another researcher, who argued these findings were simply a consequence of the rarity of these events, and that the data were thus skewed.
The researchers on the first paper then set out to test the null hypothesis: that is, that the rate of mass shootings would remain unchanged after the introduction of the NFA. They concluded that while a definitive causal connection between this legislation and the 22-year absence of mass firearm homicides was not possible, there was nevertheless evidence that before 1996, approximately three mass shootings took place every four years. Had they continued at that rate, 16 incidents would have been expected by February 2018, but that pattern did not play out.
The evidence from the National Homicide Monitoring Program, collated by the Australian Institute of Criminology, concurs with the evidence provided by these authors. Its data indicate that the share of murders committed with firearms dropped significantly around the time of the buyback scheme. Indeed, the number of homicide incidents involving a firearm decreased by 57% between 1989-90 and 2013-14.
In 1989-90, firearms were used in 24% of homicides. In 2013-14, the figure was 13%.
Incidentally, in the United States, 60% of homicides are committed by firearms. To the extent that correlations are useful, there should be no surprises here. The US gun ownership rate (guns per 100 people) is more than five times the Australian rate.
Reducing access to firearms lowers the risk of gun deaths
The evidence that countries with higher levels of gun ownership have higher gun homicide, gun suicide, and gun injury rates is convincing. Anyone advocating gun ownership as a means of lowering levels of violence and crime is arguing against the weight of research.
Jacinda Ardern’s initiative cannot do her country any harm. Twenty-three years after Port Arthur and the NFA, firearm involvement in homicide incidents in Australia, including the involvement of handguns, remains at an historic low.
While it would draw too long a bow to assert conclusively that the downturn in firearm deaths in Australia can be attributed to the gun law reforms alone, the implementation of the NFA can be closely associated with the reductions in mass shootings and firearm deaths.
The choices made by the Ardern government to eliminate certain firearms from New Zealand to improve community safety are consistent with the long-term evidence from Australia.
Many people move in the summer months, but not everyone realises that moving starts a process of identity transformation that never really stops.
I first noticed something about place changing a person when I moved to Canada. While Canada and Australia share many similarities, there were still significant differences. The clothes worn were one, and occasionally a phrase would seem unfamiliar. I was teased for saying “queue” instead of “line up”, and “no worries” instead of “no problem”.
When I moved back to Australia, to tropical Cairns, I found myself in a world that moved on “tropical time”. It could hardly have been more different from the fast-paced world of North America. I had to adapt.
Identities are created and evolve in places. Places can be physical, geographical areas and can also be places inhabited virtually, including online games, forums and blogs, or in discourse, such as books and magazines. These places continually shape our identities, changing as we live our lives day by day.
When we move to a new house, especially if it’s a big move such as from city to country or from one country to another, the process of moving inevitably changes us. For a start, we are now a newcomer and the “locals” will speak of us that way. That shapes how we are perceived and perhaps even whether and how we are accepted socially. The norms and morés of the new community may influence us in other ways, even prescribing how we are “supposed” to act in the new area.
‘City girls’ and ‘country girls’
In my recent research into how media affect lifestyle migrants in rural Queensland, I looked at how place changes people. Many of the women I spoke to described themselves as a “city girl” or a “country girl”. These women framed their identity in relation to their location.
The women who called themselves a “city girl” often chose activities that took them to places where they felt they could relate more – such as the shops, galleries and other amenities of the city. Their identification with the city resulted in weaker bonds locally and sometimes meant that they chose to return to the city. Certainly, they were less satisfied with country life.
On the other hand, women who identified as a “country girl” engaged in activities accessible in their rural locations, including crafts, cooking, gardening and outdoor activities. Their free time reinforced their emplaced nature and strengthened their ties to their place and the people in it. They adapted to being in the country and were happy with where they lived.
Knowing what to do in certain places is a form of capital, as Pierre Bourdieu outlines. Capital describes the knowledge needed to play the game in a particular place.
There are different types of capital, including cultural, economic and educational. Knowing how to act when working at a major company, for example, is different from knowing how to get on when unemployed. These are different fields, which require different capitals. One requires corporate smarts, the other stipulates smarts in various other areas.
Even if our fields don’t change as dramatically as described above, we still use differing capitals when at work, at home, with friends and as a parent.
The way we learn how to act, or adapt, is achieved through the expansion of what’s called habitus.
Ordering coffee is part of many people’s daily ritual, but don’t expect a cafe on every corner outside the city. Jacob Lund/Shutterstock
Habitus is the stuff we do without thinking – the beliefs, norms and ways of doing things that are a part of us. If we were in a witness protection program, these are the things that would trip us up and lead the bad guys to us. It’s simple stuff, like ordering coffee a certain way, or bigger things like thinking about the world through a particular framework or liking blue or living in the city.
To expand our habitus, we need to see new ways of doing things and imagine these for ourselves. This could happen by watching TV shows, reading books, travelling to other parts of the world or seeing someone else do something differently. It’s hard to change habitus, because we need to be open to new ideas that permeate our reality and we need to like them enough to decide to adopt them and let them become a part of us.
When we move, we are changing the field we occupy. To adapt to this, we watch how other people play the game and, to fit in, we most likely adopt these ideas within our habitus and change a bit. At the same time, we might influence the people around us, changing them a little bit too. It works dynamically.
So, yes, moving countries or to the country from the city is an identity-altering project, and the more the fields are different, the more we have to adapt.
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