The perils of Self Regulation


A month or so ago, The Political Sword posed the question ‘What have the unions ever done for us?’ The piece closed with a question:

. . .if there was nothing for the political right and employers to fear from the unions, why are the same groups still trying to neuter the unions’ ability to campaign and protect the perceived interests of their members in 2014 while ‘unions of employers’ are encouraged?

There are multiple answers to this question, some of which probably have some evidence behind them. One is that the union movement generally supports the Australian Labor Party — although some unions don’t, such as Together, which is primarily the Queensland public servants’ union. Naturally the support of the ALP would lead to a financial contribution: the conventional wisdom is that if the funding from unions for the ALP is diminished, the political organisation is less capable of fighting an election.

This line of reasoning has some validity but begs the question: where do the Liberal and National Parties get their funding from? Legislation in most jurisdictions within Australia put a cap on the amount of money that can be given directly to any political party without the need for disclosure. The values vary and for the purposes of this discussion aren’t important.

So you have legislation passed by politicians that regulates the donations they are allowed to accept during the course of their political careers. In effect, we are allowing politicians to self-regulate the value of cash and in-kind support garnered from the community and while some of the donations are probably altruistic, we don’t know that. Self-regulation usually doesn’t end up well. To eliminate the claims of ‘[the other side] would do that’, ‘jobs for the boys’; ‘political favours’ and so on, lets look at some non-political examples of failed self-regulation that have affected us all.

The Global Financial Crisis occurred during the late 2000s. The US Securities and Exchange Commission (SEC) imposed a $550million fine and a requirement to amend its business practices on Goldman Sachs in 2010 to settle —

SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.

For more information please go to the link above. The short version of the press release, however, is that Goldman Sachs (and others) packaged up sub-prime (having less than ideal security backing) domestic mortgages that did have insurance in the case of default, claimed the resultant securities were completely backed by adequate security and sold the ‘investments’ to others. There was a loss of confidence in the stock market towards the end of 2007 causing the employment rates and demand for houses in parts of the USA to fall. That also reduced the value of houses and the underlying mortgage security, while those that lost their jobs couldn’t afford to reduce the value owing on the now depressed security value of the mortgage. So the home owners began to default on their mortgages and the mortgage security holder then attempted to claim the shortfall on the mortgage insurer. The mortgages were insured but the insurers couldn’t fund the demand on their policies and were close to bankruptcy until the US Government intervened.

The problem here was self-regulation. In the 1990’s, the Reagan Presidency had reduced the supervision of financial institutions in the USA. Staff of these institutions were ‘incentivised’ with large commissions if they made more money for the financial institution — leading them to take risks. The Reserve Bank of Australia’s response to the 2014 Financial System Enquiry discusses the GFC and claims:

The global financial crisis revealed a number of shortcomings in policies and practices at financial institutions and at regulatory and supervisory agencies, particularly in north Atlantic countries. These shortcomings included: … insufficient financial institution holdings of high quality capital and inadequate management of liquidity risk; inadequacies in basic microprudential supervision, corporate governance and risk management practices; an under-appreciation of the scale and complexity of operations at large trading banks and other financial institutions — particularly those with activities in multiple jurisdictions — and the difficulty in resolving them when they failed; inadequate oversight of over-the-counter (OTC) derivatives markets; and insufficient visibility of the extent of interconnectedness among financial institutions, including between the regulated and shadow banking sectors, and across borders.

The report then discusses the domestic and international efforts to determine the issues as well as rectify them. Amongst the responses were increased prudential requirements, better regulation and better assessment of financial risk — in short, partial re-regulation of the financial markets.

Australia did suffer some fallout from the failure of self-regulation in the financial industry during the Global Financial Crisis, as the Halifax Bank of Scotland (HBOS) owned Bankwest at the time. The University of New South Wales discusses the failure of prudential requirements and the subsequent fallout across the banking sector, the practices of Bankwest under HBOS, and the subsequent problems the Commonwealth Bank inherited when it purchased Bankwest subsequent to the GFC. Yet business finance brokers such as Mooney, Kiddle and Partners, are still questioning the need for regulation in financial markets, arguing the case that the small and medium business lending sector is being affected by unnecessary regulation.

Early this year, someone in the office of Assistant Health Minister Fiona Nash, ordered a website that promoted healthy eating, through giving packaged food a ‘star rating’ between 1 and 5, to be pulled down soon after it ‘went live’. The subsequent investigation discovered that the minister and her chief of staff were implicated in the action. Additionally, the chief of staff was married to the sole director of a firm representing a number of packaged (or ‘junk’) food manufacturers and he had worked for a multi-national packaged food manufacturer prior to his move to the public service. The Australian Consumers Association compared the ‘stars’ that would be awarded to cheese sticks, peanut butter and cracker biscuits and found that the products of one of the multi-national packaged food companies (that had been attempting to discredit the system) did not compare well. The New South Wales Cancer Council has described a number of the methods that are used to circumvent the existing self-regulation of food advertising. The Conversation carried a report in August 2013 entitled ‘Forget children, self-regulating ads only help the food industry’. In the report, Sandra Jones, a Professor and Director of the Centre for Health Initiatives at University of Wollongong writes:

Following advocacy by parent groups and NGOs (non-governmental organisations) regarding the extensive use of premiums to sell fast food to Australian children, the mandatory Children’s Television Standards were revised in 2009 to clarify that an advertisement:

must not make reference to the premium in a way that is more than merely incidental to the reference to the advertised product or service.

A review of food and beverage advertisements in five Australian cities over a two-month period in 2010 identified 619 breaches of the standards, including 120 breaches of this specific clause, and 332 breaches of the industry’s voluntary regulations.

Even ACMA (the body that attempts to regulate commercial media) has concerns about how the packaged food industry self-regulates advertising on television. Regular watchers of ABCTV’s MediaWatch would be aware of its frequent concern of the lack of real regulatory power that ACMA can wield.

No doubt parents find the pestering from their children wanting the latest ‘incentive’ to purchase a particular packaged food product annoying. They do always have the right to say no. The industry demonstrates time and time again, however, that this sort of marketing does work, despite the claims of responsible self-regulation which is supposed to prevent it. Unfortunately the disregard for self-regulation and continual marketing of what is really food that is not healthy creates a number of problems later in life. On 13 October 2014, ABCTV’s ‘Four Corners’ reported on the results of a community health program managed by the council for the City of Ararat in regional Victoria, called ‘Ararat Active City’. The program came about primarily due to the Channel 10 ‘reality’ show ‘The Biggest Loser’ making the claim that the town was the most obese town in Australia — and making a living by selling advertising surrounded by people suffering while attempting to lose weight. A lot of the stories of the participants from both the The Biggest Loser and Four Corners discussed their poor eating habits — from childhood.

Earlier this year Barry O’Farrell resigned as Premier of New South Wales when it was revealed at an ICAC enquiry that he accepted a gift of a bottle of Penfolds Grange from someone with connections to a firm that was attempting to win a Government contract. While the punishment may be excessive for the ‘crime’, why would the ‘thank you’ note have been available three years later unless there was some expectation that the gift would result in favourable treatment? Not that Barry O’Farrell was the only politician caught up in the ICAC enquiry: Eddie Obeid in New South Wales and a few Queensland politicians were also ‘mentioned in dispatches’ — although O’Farrell seems to have lost the most. Politicians make the rules around donations to political causes then appear to fragrantly breach them.

Rob Oakeshott, former NSW and Federal Member of Parliament, writing in The Saturday Paper is promoting a Royal Commission investigating political donations. He claims:

The real threat is within government itself. It is the increasing corruption of our public decision-making by influence gained through record levels of private donations. The only colour Australia needs to fear is the colour of money in its democracy. Chequebook decision-making is the silent killer of necessary reform.

Oakeshott suggests that the commission would need a period of years to properly investigate the structures used by political parties to funnel donations and writes:

We need a royal commission because the only other option is to trust “the system” to self-regulate. By leaving this long-overdue clean-up of the “corruption by donation” of Australian policy to the worst offenders — political party leadership and their respective head offices — we’ll simply fall for the same pea and thimble tricks that have added to the complexity of the current electoral laws. We’ll end up with a convoluted, short-term bag-of-trickery reform.

The claim is made that the two major political parties spend around $100 million per election and, as Oakeshott has been both in the ‘two party’ system and outside it as an independent, he probably has some evidence to support his claim. Any way you look at it, the donors of significant parts of the $100 million would probably expect some ‘return on the capital expenditure’ as demonstrated by the sudden reappearance of a thank you note some three years after it was written.

Despite the claims, it seems that self-regulation only benefits those who are supposed to be regulating themselves. Rob Oakeshott has an on-line petition to sign — available here should you choose to do so — that requests the Governor-General commence a Royal Commission into political donations and how to introduce some rigour into the system to ensure that politicians serve all those who elect them, rather than unknown vested interests.

If self-regulation is a demonstrated failure in the financial markets and advertising of unhealthy food to our children, why do we believe that politicians have greater altruistic values?

What do you think?



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TPS Team

7/12/2014Welcome 2353 back into the author's chair this week with a look at self-regulation. It doesn't work very often (ever?) in commercial fields, so why do we expect that in the hands of politicians it would be any different? Let us know what you think in comments below.

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7/12/20142353 How relevant and contemporary is your piece today! Only this morning did David Murray's Financial System Inquiry (FSI) see the light of day. According to [i]ABC News: “A key finding of the report is that Australia's major banks sit only middle of the road by international standards in the amount of capital they hold to cover potential loan losses. “In reaching this finding, the FSI has expressly rejected research commissioned by the Australian Bankers' Association that put Australia's banks in the top quarter of institutions globally. “Federal Treasurer Joe Hockey told a press conference in Sydney today that "it is vitally important that our banks be well capitalised". "The Murray Inquiry is recommending there be a further look at increasing those levels of capital and that's something that needs to be dealt with appropriately by the regulator," he said. “Mr Murray said the inquiry reflected on the lessons of the global financial crisis, saying even a much more modest banking crisis would cost 900,000 jobs.”[/i] In other words, Murray, himself an ex-banker with the CBA, believes regulation is necessary to keep the banks in a capitalized state that would enable them to withstand a crisis similar to the GFC. On cue, Steven Münchenberg, Chief Executive Officer of the Australian Bankers’ Association came out in response insisting that the banks were adequately capitalized. He and his bankers prefer self-regulation. It’s ironic that Hockey, the man who wants to strip away ‘red tape’ aka regulation, now embraces regulation, no doubt sacred witless that he may have to face a GFC-type crisis. As you point out, when self-regulation applies, there are always those who will rort the system. Some are old-fashioned shonks or outright crims; others are the elite white-collar crooks that are more sophisticated. They use smart lawyers to devise nefarious techniques to cover up their criminal behaviour. The NSW ICAC offers many examples. If the world was full of decent, honest people with concern for the common good, government regulation would be unnecessary – self-regulation would suffice. Despite all the hype about letting the markets regulate themselves, we all know the truth – that does not work.

Ken

7/12/20142353 and Ad The main problem with self-regulation is that profits always come first. In industries like mining and construction, self-regulation leads to workers' deaths. Those industries see occupational health and safety as a 'cost'. Left to themselves, if they could see that the death of a worker was cheaper than providing safety, then you know which way they would go. The problem when it comes to politicians is that they are the legislators. Even to establish an independent body to set and oversee political donations would require legislation. Oakeshott's idea for a Royal Commission is a good idea for the simple reason it removes politicians from the equation, although they would still need to legislate the recommendations. I think a body linked to the Australian Electoral Commission would be appropriate to set guidelines, just as the Remuneration Tribunal sets parliamentary salaries. As I understand it, we can't have the same body setting the guidelines and legally enforcing them (the reason we used to have an Arbitration Commission [u]and[/u] an Arbitration Court). So either the guidelines would need to be enforcable through the courts (perhaps something related to the Court of Disputed Returns) or through another body given legal powers. But, yes, there is a need for a different approach to election funding that takes account of rising costs, of different media, a more educated population, etc, and takes politicians out of the decision making. Almost got your title in the 'captcha' -2235

2353`

8/12/2014Ad, thanks for your kind words. It seems that David Murray - now freed from the constraints of being a key player in 'the system' has had a epiphany on the regulation of the financial sector since. Ken, I agree with your comment that those that set the guidelines shouldn't regulate them. Pity others don't. I'd never thought about getting my username on Recaptha - now I'm going to be disappointed every time I don't :-)

Ken

8/12/2014When even Hartcher is writing that Abbott is the government's main problem then it appears the push may be on for a change of leadership. http://www.smh.com.au/federal-politics/political-opinion/tony-abbott-is-the-problem-with-the-federal-government-poll-20141207-12247a.html

jaycee

8/12/2014If self-regulation was such a success as many big corp's claim or want it to be, we wouldn't have such a public obesity problem and we wouldn't have many eating corp's pushing the very products that cause that obesity! Fail, Fail, Fail!!

Ken

8/12/2014jaycee It goes back to the pieces I've written about freedom and the free market and the way the neo-liberals want government out of the way. When pressed, business will promise to self-regulate but as you say that doesn't work. Basically what laissez-faire or self regulation does is push costs back on to government when something goes wrong. As I suggested in my earlier comment, in mining and construction the death of a worker may be cheaper for a company than providing adequate safety but that death comes at a financial cost to government (let alone the loss of a human life and the grief of family). It is only since the GFC, when governments had to bail-out self-regulated banks, that they are realising that for 40 years of Thatcherism they have been conned by big business. Governments always complain about 'cost shifting' but that is what business has been doing. The fact that even Hockey appears to be supporting the tighter regulation of the banking industry reinforces that governments (of all persuasions) are waking up to the con and realising that regulation actually saves them money. The change may be slow with governments of Abbott's ilk but the financial cost of self-regulation is becoming apparent even to them. As someone said (Nixon or Kissinger ??) when you have them by the balls the hearts and minds will follow.

Casablanca

9/12/2014[b]Who is the jester in Tony Abbott's court?[/b] Nicholas Stuart. December 9, 2014 So there you have it. Structure, stability and staff. A [PM] possessing all the benefits of incumbency who can't even make a showing in the continuing stream of opinion polls has a real problem. Quite frankly, they don't deserve the loyalty of their followers. http://www.canberratimes.com.au/federal-politics/political-opinion/who-is-the-jester-in-tony-abbotts-court-20141208-122dvf.html [b]Tony Abbott must shift with the tide on climate change[/b] Peter Hartcher. December 9, 2014 - 8:34AM The political misjudgment of climate policy has been central to the downfall of the last three prime ministers. Despite the best advice of his ministers, Abbott is flirting with the danger of being the fourth. http://www.canberratimes.com.au/federal-politics/political-opinion/tony-abbott-must-shift-with-the-tide-on-climate-change-20141208-122ie7.html [b]Australia ranked worst-performing developed nation on climate performance[/b] Peter Hannam. December 9, 2014 - 2:30AM Australia is the worst-performing developed nation when it comes to climate-change action, with the Abbott government's scrapping of the carbon price cementing its lowly ranking, a survey by European non-government organisations shows. Australia ranked 57 out of 58 nations reviewed by the survey, which has been done each year since 2005 by Climate Action Network Europe and Germanwatch. Only Saudi Arabia fared worse. http://www.canberratimes.com.au/environment/climate-change/australia-ranked-worstperforming-developed-nation-on-climate-performance-20141208-122nk4.html [b] How the world's economic growth is actually un-economic[/b] Robert Costanza, 9 December, 2014 The focus of the recently concluded G20 summit was economic growth. The final communiqué begins: “Raising global growth to deliver better living standards and quality jobs for people across the world is… http://theconversation.cmail1.com/t/r-l-cdtldc-trhltityg-b/ [b] Another year bites the parliamentary dirt[/b] FRANK BRENNAN 8 December, 2014 What a dreadful year it has been for parliamentary democracy. Speaker Bronwyn Bishop has taken pride in the number of members she has ejected. Senator David Leyonhjelm has introduced his same sex marriage bill in an orderly fashion, but the decision will rest with the Abbott Government, which won't want to to hand the bouquet for breaking the logjam to Leyonhjelm. To get arrangements for the bearing and nurturing of children right, we need our parliament to be a more considered and dignified place than a battlefield. http://www.eurekastreet.com.au/article.aspx?aeid=42378#.VIYnvsk4WSo [b]Death of a disability dynamo[/b] FATIMA MEASHAM Death loses its abstraction when a person like Stella Young dies. It becomes material. It makes itself manifest in the silence, which it somehow solidifies: the unwritten word, the unspoken retort, the unmade joke. 'Disability doesn't make you exceptional,' she told a TED audience in Sydney last April. 'But questioning what you think you know about it does.' Stella flipped what we thought we knew about many things. http://www.eurekastreet.com.au/article.aspx?aeid=42379#.VIYnd8k4WSo [b]John Howard attacks Cate Blanchett's 'outrageous' Whitlam memorial speech[/b] AAP. 8 December 2014 Former Liberal prime minister takes aim at actor saying the idea that free education arrived with Gough Whitlam ‘is complete nonsense and it ought to be called out more frequently’ http://www.theguardian.com/film/2014/dec/08/john-howard-attacks-cate-blanchetts-outrageous-whitlam-memorial-speech?CMP=ema_632 [b]By bargaining with children, Morrison's refugee strategy has a kidnapper's logic[/b] Julian Burnside. 8 December, 2014 Now that Scott Morrison’s extraordinary refugee amendments have passed, it’s clear that his humanitarian concern for drowned refugees is really a lie http://www.theguardian.com/commentisfree/2014/dec/08/the-argument-is-over-morrisons-amendments-show-he-has-no-genuine-concern-for-asylum-seekers?CMP=ema_632 [b]'One Of The Most Brilliant Political And Comedic Minds I'd Met': Tributes Flow For Stella Young[/b] Max Chalmers. 8 Dec 2014 The widely admired advocate today got the send off she deserved https://newmatilda.com/2014/12/08/one-most-brilliant-political-and-comedic-minds-id-met-tributes-flow-stella-young [b]Dealing Ourselves Out Of The Economic Debate[/b] Ian McAuley. 8 Dec 2014 If we really do trust the Coalition more to manage the economy, maybe we need to rethink what good economic management looks like, writes Ian McAuley. https://newmatilda.com/2014/12/08/dealing-ourselves-out-economic-debate

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9/12/2014Casablanca Thanks for another set of exciting links, which I'll read this evening after returning to Melbourne following a day and a half of mowing here. The mowed grass looks neat and is now browning off - hopefully it has finished growing for the summer!

Ken

9/12/2014thanks Casablanca Interesting that Hartcher is continuing to attack Abbott, now on climate change. But, of course, he does so only from a political, tactical point of view. And I like that Costanza is writing about what I wrote about back in April (I think) about GNH and alternate ways (including the GPI) of measuring 'economic' activity.

Casablanca

9/12/2014[b]Massaging the truth[/b] [b]Joe Hockey Has Full Support Of Tony Abbott’s PR Strategy [/b] The Shovel. December 8, 2014 The Prime Minister’s Public Relations strategy says Joe Hockey is doing a tremendous job and is set to become one of Australia’s great Treasurers. In a glowing appraisal of Mr Hockey’s performance in the role, the PR strategy said, “Unequivocal support, long-haul, hard work, tough choices, difficult decisions, irresponsible cross benchers, under control, doing what’s needed for a prosperous Australia, Labor’s budget mess”. http://www.theshovel.com.au/2014/12/08/joe-hockey-has-full-support-of-tony-abbotts-pr-strategy/ [b] The Coalition's own messages are neither coherent nor convincing [/b] Lenore Taylor, Friday 5 December 2014 The government’s daily briefings are useful in understanding how this year went so badly wrong so quickly. The messages help because they are, quite transparently, neither coherent nor convincing, but rather the spin of a government that seems to have snookered itself. http://www.theguardian.com/australia-news/2014/dec/05/the-coalitions-own-messages-are-neither-coherent-nor-convincing?CMP=soc_568 [b]Message of the day [/b] Kaye Lee. December 6, 2014 The Abbott government’s plan is THE ONLY PLAN to improve economic growth and repair the budget – regardless of what question is asked, this is to be the reply. They are to repeat over and over again, what a good year it has been. http://theaimn.com/message-day/

jaycee

10/12/2014Talk about self regulation….I despise the idea of the “protestant work ethic” for the utter bullshit it is!...it has nothing to do with any notion of ‘production”…for example; when I was a young blade in apprenticeship in a joinery shop, I would quite often clock on a couple of minutes late…the leading-hand took me to task on this (why is it so easy to find crawlers and suck’oles in the working classes?) and pressed his little proddo homily on me that ; “If you can be a minute late, you can be a minute early”…being a young smart-arse, I countered with ; "what difference does it make if I get into my overalls before I ride to work than if I take time to change into them when I get here..I’m not at the bench any sooner”…he just repeated his little sacrosanct maxim and told me not to be cheeky. I know he was a proddo because of the little tracts he’d hand out every now and then…only proddos recruit from the street…the micks use a kind of pulpit “central casting”for their “hard-sell”! Of course, it was not lost on me then that the ‘work ethic' is not an exercise to increase production, but rather that age-old mechanism of applied discipline for nothing but discipline’s sake…..a futile gesture in the face of the human condition. It’s why the “god principle” has failed to take a complete hold after two thousand years of bullshit…now their burden of trying to sell a dud product is 'killing them'...(sick joke!)..the human condition demands a tad more than breast-beating, sack-cloth and ashes and catholic knees to get through this "valley of tears” we call life. Personally, I thought that little window in the late sixties / early seventies of social revolution was one of the few ‘moments of liberation' that sad humanity has achieved! This current coterie of castanets, snapping their fingers at us “servants”, looking for us to jump at every snap is an example of that ‘work ethic' discipline. But of course, setting example by deed is so much more difficult than forced labour….We got a “Fat-Boy” telling us to do some heavy lifting, we got a “Gucci Gurl” trying to show she’s “one of us”..we got a…a…slimy prick telling us to be good citizens and we have , amongst a myriad of other dickheads, a “svelte, suave, silver-tail” telling us how much communication HE THINKS we need…..all servants under the most oily, con-man and most excellent example of the loss of opportunity to implement “free-choice abortion” in the early part of last century!...let us yet hope that selective resuscitation is employed in the near future to mankind’s benefit in regards that same certain specimen mentioned above! If self-regulation was such an “in-situ” success, they wouldn’t have built a pub on every street-corner in the mining town of Broken Hill…they wouldn’t have to build and operate private confessionals in every catholic church and they wouldn’t need “pin” passwords on everyone’s account card!.... Trust me!

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10/12/2014Casablanca I have just now finished reading your recent links. What a lot of critical comments they contain, and what lovely tributes about Stella Young. Ian McAuley's piece was insightful and instructional. Lenore Taylor was her usual forthright self. How can the Abbott Government survive the onslaught of pointed criticism, even from usual supportive journalists?

jaycee

10/12/2014The sudden surge in Liberal votes in the Fisher by-election is a worry...I hope there is a check on the hand-writing of those postal votes...I smell a "Liberal plan B" where the "involuntary votes" of the chronically ill and dementiaed in various homes and hostels are brought into the play to shore up the barricades!

jaycee

10/12/2014A sort of..: "Oh!..by the way..are these little papers here important?...well, bless my soul!..you don't say?"

DoodlePoodle

11/12/2014Just wanted to share the following: Dr David Pascoe BVSc PhD OVH AUSTRALIA YOU ARE AMAZING! TWO POINT ONE MILLION HITS !!!! HISTORY HAS BEEN MADE...AND STILL THE NUMBERS RISE... Politicians of Australia, the people are speaking - and you need to listen. The team of people who are supporting David - who is flat out working and operating on horses right now - took a call from one of Australia's most respected and best loved former political leaders this morning who said: THAT VETS LETTER HAS BECOME A DEFINING MOMENT IN OUR NATIONS HISTORY.." read it yourself.... AN OPEN LETTER TO THE AUSTRALIAN PEOPLE: Dear Men and Women of Australia, There are two photographs on this page, and while they might look like father and daughter, they are separated by two nations, one ocean and some seventy years. Yet incredibly, they are both part of the same tragedy, the kind that leaves deep and irreparable scars on a nation and its people for a lifetime. The young woman who was born in 1907. The elderly man who was born twenty seven years later in 1934. The photograph of the woman was taken in the Great Depression of 1936 when the man was a two year old boy. Her name was Florence Owens Thompson and she was a 32 year old mother of seven who was photographed sitting homeless in a tent. The image was published across the newspapers of America and it managed to enrage the nation, because people could not believe that Americans could be treated in such a way. It forced President Roosevelt to act, to step up and become a leader for his times: he launched soup kitchens, work gangs, programs for the homeless, dams and roads and railways were built – and he gave his people hope. John Steinbeck later wrote a book called The Grapes of Wrath which became an American literary Icon. It was about a drought that made the farmers penniless – and how the banks had forced them off their land so they could sell it on to the big powerful corporations. What happened to the farmers of Oklahoma ultimately carved a deep and shameful scar across the American identity that was felt throughout the Twentieth Century. The second photograph on this page is of Charlie Phillott, now 80, an elderly farmer from the ruggedly beautiful Carisbrooke Station at Winton. He has owned his station since 1960, nurtured it and loved it like a part of his own flesh. He is a grand old gentleman, one of the much loved and honoured fathers of his community. Not so long ago, the ANZ bank came and drove him off his beloved station because the drought had devalued his land and they told him he was considered an unviable risk. Yet Charlie Phillott has never once missed a single mortgage payment. Today this dignified Grand Old Man of the West is living like some hunted down refugee in Winton, shocked and humiliated and penniless. And most of all, Charlie Phillott is ashamed, because as a member of the Great Generation - those fine and decent and ethical men and women who built this country – he believes that what happened to him was somehow his own fault. And the ANZ Bank certainly wanted to make sure they made him feel like that. Last Friday my wife Heather and I flew up with Alan Jones to attend the Farmers Last Stand drought and debt meeting in Winton. And after what I saw being done to our own people, I have never been more ashamed to be Australian in my life. What is happening out there is little more than corporate terrorism: our own Australian people are being bullied, threatened and abused by both banks and mining companies until they are forced off their own land. So we must ask: is this simply to move the people off their land and free up it up for mining by foreign mining companies or make suddenly newly empty farms available for purchase by Chinese buyers? As outrageous as it might seem, all the evidence flooding in seems to suggest that this is exactly what is going on. What is the role of Government in all of this? Why have both the State and Federal Government stood back and allowed such a dreadful travesty to happen to our own people? Where was Campbell Newman on this issue? Where was Prime Minister Abbott? The answer is nowhere to be seen. For the last few months, the Prime Minister has warned us against the threats of terrorism to our nation. We have been alerted to ISIS and its clear and present danger to the Australian people. Abbott has despatched Australian military forces into the Middle East in an effort to destroy this threat to our own safety and security. This mobilization of our military forces has come at a massive and unbudgeted expense to the average Australian taxpayer which the Prime Minister estimates to be around half a billion dollars each year. We are told that terrorism is dangerous not only because of the threat to human life but also because it displaces populations and creates the massive human cost of refugees. Yet not one single newspaper or politician in this land has exposed the fact that the worst form of terrorism that is happening right now is going on inside the very heartland of our own nation as banks and foreign mining companies are deliberately and cruelly forcing our own Australian farmers off the land. What we saw in the main hall of the Winton Shire Council on Friday simply defied all description: a room filled with hundreds of broken and battered refuges from our own country. It was a scene more tragic and traumatic than a dozen desperate funerals all laced onto the one stage. Right now, all over the inland of both Queensland and NSW, there is nothing but social and financial carnage on a scale that has never before been witnessed in this nation. It was 41 degrees when we touched down at the Winton airport, and when you fly in low over this landscape it is simply Apocalyptic: there has not been a drop of rain in Winton for two years and there is not a sheep, a cow, a kangaroo, an emu or a bird in sight. Even the trees in the very belly of the creeks are dying. There is little doubt that this is a natural disaster of incredible magnitude – and yet nobody – neither state nor the federal government - is willing to declare it as such. The suicide rate has now reached such epic proportions right across the inland: not just the farmer who takes the walk “ up the paddock” and does away with himself but also their children and their wives. Once again, it has barely been covered by the media, a dreadful masquerade that has assisted by the reticence and shame of honourable farming families caught in these tragic situations. My wife is one of the toughest women I know. Her family went into North West of Queensland as pioneers one hundred years ago: this is her blood country and these are her people . Yet when she stood up to speak to this crowd on Friday she suddenly broke down: she told me later that when she looked into the eyes of her own people, what she saw was enough to break her heart And yet not one of us knew it was this bad, this much of a national tragedy. The truth is that these days, the Australian media basically doesn’t give a damn. They have been muzzled and shut down by governments and foreign mining companies to the extent that they are no longer willing to write the real story. So the responsibility is now left to people like us, to social media – and you, the Australian people. And so the banks have been free to play their games and completely terrorise these people at their leisure. The drought has devalued the land and the banks have seen their opportunity to strike. It was exactly the excuse that they needed to clean up and make a fortune, because once the rains come – as they always do – this land will be worth four to ten times the price. In fact, when farmers have asked for the payout figures, the banks have been either deeply reluctant or not capable of providing the mortgage trail because they have on-sold the mortgage - just like sub-prime agriculture. This problem isn’t simply happening in Winton, but rather right across the entire inland across Queensland and NSW. The banks have been bringing in the police to evict Australian famers and their families from their farms, many of them multigenerational. One farmer matter of factly told us it took “oh, about 7 police” to evict him from his first farm and “maybe about twelve” to evict him from his second farm which had been in his family for many generations. You think they are kidding you. Then you see the expression in their eyes. And there was something far worse in the room on Friday: the fear of speaking out against the banks: when we asked people to tell us who had done this to them, they would immediately start to shake and cry and look away: They have been silenced to protect the good corporate image of their tormentors called the banks. What in God’s name have the bastard banks been allowed to do to our people? This is a travesty against the rights and the human dignity of every Australian So it’s only fair that we start to name a few of major banks involved: The ANZ is a major culprit (they made $7 billion profit last year). Then there is Rabo - which is an international agricultural bank - the NAB, Bank West and Westpac (who paid CEO Gail Kelly a yearly salary of some $12 million). They are all equally guilty. For any that we have missed, rest assured they will be publicly exposed as well But here’s the thing: when these people are forced off their farms, they have nowhere to go. There are no refugee services waiting, such is the case for those who attempt to enter the sovereign borders of this nation. The farmers simply drive to the nearest town – that’s if the banks haven’t stripped their cars off them as well - and they try and find somewhere to sleep. Some are sleeping on the backs of trucks in swags. There is basically no home or accommodation made available to take them. They camp out, shocked and broken and penniless – and they are living on weet bix and noodles. If there is someone that can lend a family enough money to buy food, they will: otherwise they are left completely alone. And consider this: not one of them has asked for help. Not one. They just do the best they can, ashamed and broken and brainwashed by the banks to believe that everything that has happened is completely their own fault There is not one single word of this from a politicians lips, with the exception of the incredibly courageous father and son team of Bob and Robbie Katter, who organised the Farmers Last Stand meeting. The Katter family have been in the North since the 1890’s, and nobody who sat in that hall last Friday could question their love and commitment to their own people. There is barely a mention of any of this as well in the newspapers, with the exception of as brief splash of publicity that followed our visit. The Minister for Agriculture Barnaby Joyce attended the meeting in a bitter blue-funk kind of mood that saw him mostly hunched over and staring at the floor. He had given $100 million of financial assistance in a lousy deal where the Government will borrow at 2.75% and loan it back at 3.21%. The last thing these people need is another loan: they need a Redevelopment Bank to refinance their own loans: issuing a loan to pay off a loan is nothing more than financial suicide. The reality is that Joyce cannot get support from what he calls “the shits in Cabinet” to create a desperately needed Redevelopment Bank so that these farmers can get cheap loans to tide them through to the end of the drought. Our sources suggest that those “shits in Cabinet” include Malcolm Turnbull – Minister for Communications and the uber-cool trendy city-centric Liberal in the black leather jacket:, Andrew Robb – Minster for Trade and Investment and the man behind the free trade deal, the man who suddenly acquired three trendy Sydney restaurants almost overnight, the man who seems to suddenly desperate to sell off our farms to China – and one Greg Hunt, Environment Minister and the man who is instantly approving almost every single mining project that is put in front of him. At the conclusion of the meeting, we stood and met some of the people in the crowd. My wife talked to women who would hug her for dear life, and when they walked away people would suddenly murmur “oh, she was forced off last week” or “they are being forced off tomorrow” . Not one of them mentioned it to us. They had too much pride. The Australian people need to be both informed and desperately outraged about what is being done to our own people. This is about every right that was once held dear to us: human rights, property rights, civil rights. And most all, our right to freedom of speech. All of that has been taken away from these people – and the rest of us need to understand that we are probably next. In the last four weeks the Newman Government has removed all farmers rights to protest to a mine and given mining companies the rights to take all the water they want from the Great Artesian Basin – and at no cost to them at all. And all of this has happened under the watch of both Premier Newman and Prime Minister Abbott. Until Friday, we used to think of Winton as the home of Waltzing Matilda: it was written at a local station and first performed in the North Gregory Hotel. I think it was Don McLean who wrote, “something touched me deep inside…the day the music died”… in his song American Pie, and for us, last Friday was the day music died. We will never be able to sing Waltzing Matilda again until we see some justice for these people, and all the farmers of the inland. This is no longer the Australia we once knew: no longer our country, no longer our people, no longer the decent caring leaders we once remembered. Right now, the banks, the mining mates, the corrupt politicians and all the ‘mongrels in suits’ have won – and the Australian people don’t have a clue what has been done to them. Like the American Depression and the iconic photograph of Florence Owens Thompson, there is a terrible, gaping wound that has been carved across the heartland of this nation. We need to fully grasp that, and to understand that our people – dignified, decent and honourable old men like Charlie Phillott - have been deliberately terrorized, brutalised – and sold out. In one sense, Charlie Phillott has become the symbol overnight of every decent Australian: the simple right to live out our lives on the land we love - and the land we are still free to call our own. At least until some dangerously persuaded corrupted trendy liberal theorist decided to strip all that away. The truth is, no Australian was ever consulted about whether or not they wanted to see their land mined into oblivion or see our precious water poisoned and given away for free, whether they wanted to be driven off their land by the greed of banking executives who saw the chance to make a profit by wiping out the weakest and most vulnerable amongst us. No Australian was ever consulted about whether or not we wanted to see our beloved homeland sold on the cheap to greedy faceless foreigners just because some slimy two-faced minister managed to convince a weakened prime minster to meekly carry out his bidding. Nobody has asked us. We the People. Not once. So if we are ever going to do something, then we’d better realise that its now only two minutes to midnight – so we’d better move fast. Regards David

jaycee

12/12/2014" No Australian was ever consulted about whether or not we wanted to see our beloved homeland sold on the cheap to greedy faceless foreigners..." That sentence betrays a kind of xenophobia and racism that kicked off many of the area's problems in the first place...I remember it wasn't that long ago those very farmers were doing the same sort of things to Aborigines and then greenies etc. Although to be fair, many wrongs do not make a right and the problem faced by the drought is real and devastating. Along the Murray irrigation areas, there is a similar problem with the "generational small holdings" and the newer Managed Investment Schemes. I wrote to the State (SA.)minister about the problem, but it seems the so-called"free-market' is now the only "regulator"..and as we have discussed here and now..it is of scant comfort to many. This is the missive (w/appropriate editing) I sent to the minister. Discussion Paper on solutions for sustainability of a community. Ok...here comes the BBQ. stopper !...let's cut to the chase and admit the realities of farming in the Mid-Murray Council area..: a) That it is primarily an agricultural constituent... b) That the agriculture producers are mostly of generational owned small holdings.. c) the imposts of market requirements, restrictions and pricing are more favoured to large holdings, large cororate agri-business and Managed Investment Scheme producers...... The result being the developement of a "perfect storm" of squeezed "family farms", concentration of production to "outside interests" that export their produce, dumped excess commodities resulting in rock-bottom prices for produce and concentration of water allocation licences with corporate agri-business. The result could be a complete loss to the local community of independence in growth and supply of produce from family farming enterprises. Many might say..: "So what!..let the market decide."...But it isn't "the market" deciding...it's "Fund - Managed" speculators with super capital, super credit and cross-border / cross-seasonal gaurantees of profit margins protected against crop-failure by multi-location producers that, being so large and having the capacity to produce so much, they can control the price of produce by dumping or withdrawing commodities from a market that will eventually be reliant on their capacity....The smaller producer having neither the capacity, flexability, nor the credit to "ride-out" long-term problems...add to the mix an uncertain climate, and we have that perfect storm mentioned above. What can we do?... Those mega-producers deliver their products either interstate or ship to ports for export way outside this council area...so they are not affected by local fluctuations...it is the smaller, family owned farms that are at risk and we can do something there. It is a new idea, building NOT on a cooperative of producers, though they would be good...it is a "market-oriented" proposal that would require a contract between individual parties..no different than the usual "contract to supply" of many businesses...it would require the Mid-Murray Council to become an "investor in the constituency" to supply locations and under-cover premises where a regular, consistent, semi-permanent stalls (much like the Central Market) of local farmers could sell a huge variety of produce to local shoppers....produce such as vegetables, meats and fruit and even cereal grains in either bulk or packaged. I told you it was a BBQ. stopper....but I believe we have the capability to do this...but we have to think big...very big! We have quality growers of everything in the lines of vegis' , meats, fruits and cereals...do we have the population of consumers to purchase?...if these "centralised" markets stayed open for say.. three consecutive days each, I would think they would be a goer...considering also the weekend tourist flows through the area..if council could obtain State or Federal monies to construct multi-purpose under-cover arenas with appropiate coldstore facilities...then it could be a goer...There would have to be at least four locations all operating simultaneously over three days, perhaps..one in Morgan, one in Blanchetown, one in Sedan and the other in Mannum....the multi-purpose arenas could be hired out on other days for other pursuits. Sure, this is a simplistic over-view of possibilities that would involve cooperation and contractual certainies between council, growers and a willing-to-participate public....but what other choice is there? Just lay back and watch as all these hard-working, quality producing generational farms and families get squeezed out of the industry?... or do we affiliate and come together as a society and instead of ending up with a community that is depreciating and all our young people want to move away from, we become a community that is creating and not only do we get our young people to stay, but we attract more keen people to come to the area because they want to be a part of a growing community. What do you think?
How many umbrellas are there if I start with two and take 2 away?