The heavy cost of organised crime

Who would fall for a Nigerian bank scam, these days?

Well, an elderly Australian couple did – and sent $500,000 overseas.

That case was just one of many, described in a new report on the operations of organised crime in Australia.

Another involved an Australian travelling overseas, with a suitcase stuffed with cash, that he he was planning to launder.

John Visser, acting chief executive of the financial intelligence unit Austrac estimates that organised crime now costs Australians no less than $15 billion a year.

Mr Visser also said this “is a huge waste and cost to every Australian.

“And for that reason, we want our agencies working hard to dismantle such syndicates.”

Austrac provides financial data and intelligence to state and federal government agencies.

Another case, mentioned in the report, involved drug sales by a bikie gang.

Mr Visser said  a pharmacy linked to that motorcycle drug gang received cash deposits worth $1.1 million in just 15 months.

He was addressing a ceremony in Brisbane, at which the Austrac report was launched.

The Federal Home Affairs Minister, Brendan O’Connor, who also attended the function, said the criminal syndicates involved in organised crime could be stopped.

“What we do know is if we can stop the money flow, we can cripple criminal syndicates,”  he said appealing for  public help.

“What we know it is sometimes the smallest of information that businesses provide can indeed be used effectively by AUSTRAC, by the Australian Federal Police,” Mr O’Connor said.

“This report, particularly going to the case studies, underlines the need for businesses to report certain conduct by consumers, by indeed their own customers,” he added.

Mr O’Connor warned, too, that organised crime in Australia is becoming “increasingly more sophisticated.”

“And so we have to be much more vigilant,” he said.

New credit laws start this week

Desperate measures can be tempting in hard times.

Especially as many Australians are in hard times at present, even though the nation – as a whole – has so far managed to dodge outright recession.

It is particularly hard. in such circumstances, to avoid bad decisions, which make things even worse.

A loan, taken on bad terms, can look like the quick fix you might need, when things get tough.

It isn’t.

Those who have fallen into this trap, though, might get a little unexpected help soon.

That’s because the Federal government has just announced new consumer credit protection laws, that might well offer some redress.

The new laws are meant, in particular, to protect consumers from what the government calls “predatory lenders.”

The Federal Financial Services Minister, Chris Bowen, said the new laws would replace older State and Territory laws, that have been in place since 1992.

They will be based on four principles.

• Responsible lending that ensure consumers are not lured into loans they cannot reply
• Extended hardship provisions, on loans of up to $500,000
• Bans on predatory practices, such as using household items as security for cash loans and
• A single national licensing regime and consistent requirements across the nation.

Mr Bowen described the new laws as “a significant reform.”

He said the new laws  would come into effect on Thursday.

Mr Bowen said  said they represent the culmination of a practical, co-operation partnership between all levels of government, industry, consumer groups, policy makers and regulatory authorities.

Despite all this goodwill, though, the new laws will not become your primary protection against predatory lenders.

Your best defence, as always, will still be your own natural caution.

What Julia’s coup may cost you

Like most things in this world, Julia Gillard’s coup comes with a price tag.

And this one has your name on it.

You might end up worse off in retirement than you should have been.

Or you could end up paying more tax.

There is still some doubt about how big this price tag will be.

The word substantial, though, would not be misplaced.

The government said, back in May, that it would gradually lift the compulsory superannuation contribution rate, from its present level of 9 per cent, to 12 per cent.

It also said, then, that it planned to gradually cut the company tax rate, for small business people, from 30 to 28 per cent.

However, the Treasurer, Wayne Swan, also issued a blunt warning at the time, about this package of measures, which also included a plan to making putting in your annual tax return much simpler.

As most Australians now employee an accountant, at a cost that commonly reaches $800 a year, that small change, too, offered substantial savings.

What, though, was Wayne’s warning?

In his own words, it was this:”…the package is dependent on the successful implementation of the Resource Super Profits Tax.”

As that has now been thrown into doubt, the 12 per cent superannuation levy and the cuts to company tax for small business have too.

The are the inevitable consequences of what Julia Gillard and her backers have done.

Ms Gillard says she expects Australia’s miners to pay more than they have been.

However, the 40 per cent super profits tax, which Kevin Rudd proposed, is effectively dead in the water.

One of the government’s chief negotiators, in present talks with the miners, Martin Ferguson, says more progress has been made than many observers recognise.

That might be true.  It is now clear, though, that the package of benefits, that the super profits tax was meant to fund, will now be cut back sharply.

So what does all that mean to you?

On the government’s own figures, if you are now a 30 year old employee, the loss of that 12 per cent compulsory super contribution would cost you no less than $108,000, on the day you retire, at 65.

That is a substantial amount, on any calculation.`

Is Julia too narrow to be PM?

Tony Abbott probably put it best.  “A midnight knock on the door, followed by a political execution, is no way for a Prime Minister to be treated.”  he said.

While that is certainly true, his own qualifications for making that observation  in Parliament might be questioned.  Did the fact that he, himself,  knocked on Malcolm Turnbull’s door at mid-day, rather than midnight, for example, really make it all that much better?

Australia’s new Prime Minister, Julia Gillard, explained her new position at the despatch box, in Federal parliament, saying that the Labor government (under Kevin Rudd), had, indeed, slipped “off track.”

“We will get back on track,” she declared.

“That is why I acted.”

A noble, if vague, thought.

Ms Gillard  then expanded her explanation, by reminding MPs a little later, that they were all in parliament “in the national interest” and especially “in the interests of working families,” not in “their own interests.”

Her first action, though, was to offer an olive branch to rebellious miners, who oppose Kevin Rudd’s resource industry super profits tax, by cancelling the government’s ad campaign, and challenging them to drop  theirs.

They did.

Ms Gillard also invited the miners in, for further talks, asking only that they come with “open minds” and reminding them that they will, ultimately have to pay more tax.

Australia’s new Prime Minister has, certainly, demonstrated the height of her ambitions.

Do her abilities – and understanding – though – match the demands that will present?

A look at her role as Education Minister is instructive.

She introduced the My School Website, which makes the results of  the National Assessment program, Literacy and Numeracy, or  NAPLAN tests, for Australian school children, public.  That made the public ranking of schools possible.

That, in turn, will allow children from poor suburbs to be branded as “failures,” at an early age, because attended a lowly ranked school.
These tests are meant to keep Australia’s school children  on the straight and narrow, in their educations, by ensuring that they meet set standards, at set times.

In fact, cramming for these narrow tests, can  stop children aged eight, eleven, thirteen and fifteen facing the the necessary challenges of broader thought.

These are prime learning years, when children should be excited by what they learn in – and out – of school.

Associate Professor  Margaret Wu, of Melbourne University, is a sceptic.

“I personally think what the government proposes is going beyond the accuracy and the validity of the NAPLAN results,” she  said.

“It basically means linking NAPLAN results based on student performance with teacher performance.

” That link is conjecture.”

The results, for children of working families, are particularly likely to be negative.

On that test, alone, this entire  testing system, itself, is dangerous.

Julia Gillard  told parliament that she, herself, came from modest circumstances, in “an incredibly hard working family.”

She still managed, though, managed to rise to the exalted rank of Prime Minister.

Her obduracy, on the NAPLAN tests, though, will certainly make it harder for both young Australian girls – and boys – from the wrong side of the tracks – to follow her great example.

This makes her obduracy, on the issue, all the more difficult to understand.

She makes the miners an offer

Julia Gillard’s first action, as Australia’s new Prime Minister, was to seek peace with the nation’s miners.

Mining  rose when the Labor Caucus endorsed her for the post today, after Kevin Rudd stood aside.

Ms Gillard declared  shortly afterwards that she would call off a government advertising campaign, that was meant to neutralise the miners’ television ads, opposing Mr Rudd’s plan for a super profits tax on Australia’s resources industry.

She told reporters that  reaching an agreement on the Resource Super Profits Tax would be one of her first priorities.

However Ms Gillard said her  Government would not  abandon the tax.

“Australians are entitled to a fairer share of our inheritance, the mineral wealth that lies in our grounds, they are entitled to that fairer share,” she added.

“But to reach a consensus, we need to do more than consult, we need to negotiate, and we must end this uncertainty which is not good for this nation,.”

Ms Gillard said she expects the mining industry to give some ground to reach a compromise on the tax.

“Today, I am throwing open the Government’s door to the mining industry and I ask that, in return, the mining industry throws open its mind,” she added.

She described stopping the government’s ads as a sign of good faith.

“Today, I will ensure that the mining advertisements paid for by the Government are cancelled and, in return for this, I ask the mining industry to cease their advertising campaign as a sign of good faith and mutual respect.”

Ms Gillard says the negotiations with the mining industry would continue to be led by the Treasurer Wayne Swan and Resources Minister Martin Ferguson.

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Gillard:Australia’s new PM

Julia Gillard is set to become Australia’s 27th Prime Minister – and the first woman to hold the post.

This follows Kevin Rudd’s decision not to stand against her, despite his promise last night to do so.

This meant that Julia Gillard was elected unopposed as the new leader of the Labor Party, with Wayne Swan as her deputy, also unopposed.

A Coalition member said the Federal government’s proposed new super profits tax for the mining industry had “claimed its first victim.”

Ms Gillard is believed to have gone into the meeting with more than 70 votes already pledged.

As that became clear, Mr Rudd’s supporters persuaded him not to stand against her.

Mr Rudd has not yet said what he will do now.

He was due to fly to Canada this afternoon, for a meeting of the G20.

Ms Gillard will now make an appointment with the Governor General, Quentin Bryce, to advise her to make her appointment as Prime Minister official.

Her supporters believed that Ms Gillard has a much better chance of winning the Federal election, that is likely to be held later this year, than Mr Rudd would have had.

It is not yet clear what Ms Gillard will do about the proposed resource industry super profits tax, although most observers believe she will scrap it.

A member of the Left, Ms Gillard received strong backing from the Right for her challenge, after a series of poor opinion polls for Labor, under Mr Rudd.

She does, however, face a perhaps grim precedent.  The only other Australian Prime Minister, at least in the last 80 years, to lose an election, in his first term, was Labor’s James Scullin.  Mr Scullin who held office between October 1929 and January 1932, suffered that loss, after a split in his party.

Ms Gillard’s biggest challenge now is to unite the deeply divided Labor party behind her.  She will have only a few months, at best, to do that.

The Coalition, under Tony Abbott, can hardly believe its luck.

Super profits tax:compromise likely

Kevin Rudd will make some significant concessions on his proposed resource super profits tax.

He has little choice.

A fresh election is due before the end of the year.

And the big miners’ campaign against the proposed  tax is undermining his government’s support, particularly in the  resource rich States of Western Australia and Queensland.

New research, by the Roy Morgan organisation, confirms that.

It shows high levels of concern about the proposed new tax in both States.

The issue continues to dominate debate in Federal parliament, too.

The Opposition Leader, Tony Abbott, believed he had new ammunition, when he launched an attack on the government, over the planned tax, yesterday.

He asked if a speech by the Treasury Secretary, Ken Henry, earlier this week signalled that the government is planning to extend its super profits tax to areas outside mining.

The Prime Minister responded with a flat denial.

“The bottom line is that the government’s position in relation to the resources super profit tax is that it applies to non-renewable resources in Australia,” Mr Rudd said.

“That is the entire basis of the regime.

“It is a taxation arrangement designed to deal with the non-renewable resources of this country.

” Once they are extracted and removed, they are not returned to Australia; they have gone forever.

“That is why they have been separately taxed for a long time through the royalties system.

“We propose tax reform based on a profits based tax, not a production based tax.

“That is the core of our reform and is therefore unique to the resources sector.”

This was an unusually clear response.

So what concessions could the government make, to save its own skin?

A Canadian academic says the government got its super tax model right.

But Professor Jack Mintz says the rate is wrong.

He told the ABC that  a rate of 30 per cent would be better than the 40 per cent, that the government is proposing.

There have already been signs that this might be acceptable to the miners.

Superannuation overhaul delayed

The Rudd government now admits that its heavily promoted overhaul of Australia’s superannuation system won’t be complete before the next Federal election expected later this year.

Chris Bowen, the minister who has responsibility for superannuation, revealed that in in a television interview.

He said the third report of the Super System Review will reach him on June 30.

That will deal with the structure of this huge industry, which now has $1.2 trillion under its control.

In a preliminary report, published in April, the head of the review, Mr Cooper, recommended that self managed superannuation funds not be allowed to invest in collectible items, like yachts, wine or exotic cars.

Mr Bowen said he would be responding to that final report, after he received it.

“Once that’s done, they’ll be, in total, by far the biggest reforms in superannuation that we’ve seen in 20 years,” he added.

However he also said:”It’s unlikely that we’re going to see legislation before the election.”

“This “underlines the importance of the re-election of the government,” Mr Bowen said.

No date has yet been set for the next Federal election.

The last Saturday on which it could be held, under existing law,  is February 5.

However, governments have traditionally been reluctant to hold elections during holiday periods, so it is still likely to be held this year.

The government is also  facing another obstacle to an early overhaul of Australia’s superannuation system.

It has announced that it intends to raise the present compulsory superannuation levy from 9 to 12 per cent of salary, saying this would add $108,000 to the eventual superannuation payout of a worker now aged 30.

However this declaration depends on acceptance of the resource industry super profits tax, which is still being negotiated with Australian miners.

The Opposition Leader, Tony Abbott, flatly opposes that tax.

The Coalition also opposes the government’s proposed move to a 12 per cent superannuation guarantee levy.