Always Travelling

Call me weird, but I've been thinking a lot about public governance lately. Call me even weirder, but I'm writing this at 1.00am and the only reason I am up is because I just took a few headache tablets (this is the worst headache I've had in a loooong time). I'm going to write about tax, and hopefully my international friends will find this interesting. Perhaps you can make some comparisons between the Aussie system and your own?

Tax reform has been pretty significantly achieved over the past two decades in Australia, but there is still a way to go. Australia has a progressive income taxation system, where the money you earn is taxed at different rates, as shown in the tables below. The whole basis is that higher income earners are more able to make a higher proportional contribution to public goods. Australia has other usage based taxes and flat taxes, for instance funding for road construction and maintenance comes from petrol excise which is obviously usage based, but income tax is by far the most significant and impacting, and I happy to live in a country with a tax system based on redistributing wealth to aid low income earners. However, much more can be done. Take a look at the income tax schedules for Australian residents in 1985-86, 1994-95 through to 1999-2000 (tax rates were kept the same through this period), and 2006-2007. You can see here for full history.

1985-86
Taxable income	Tax on this income
$0–$4,594 $4,595–$12,499 $12,500–$19,499 $19,500–$27,999 $28,000–$34,999 $35,000 and over	Nil 25 cents for each $1 over $4,595 $1,976.26 + 30 cents for each $1 over $12,500 $4,076.25 + 46 cents for each $1 over $19,500 $7,986.25 + 48 cents for each $1 over $28,000 $11,346.25 + 60 cents for each $1 over $35,000
1994-95 to 1999-2000
Taxable income	Tax on this income
$1–$5,400 $5,401–$20,700 $20,701–$38,000 $38,001–$50,000 $50,001 and over	Nil 20 cents for each $1 over $5,400 $3,060 + 34 cents for each $1 over $20,700 $8,942 + 43 cents for each $1 over $38,000 $14,102 + 47 cents for each $1 over $50,000
2006-2007
Taxable income	Tax on this income
$1-$6000 $6,001–$25,000 $25,001–$75,000 $75,001–$150,000 $150,001 and over	Nil 15 cents for each $1 over $6,000 $2,850 + 30 cents for each $1 over $25,000 $17,850 + 40 cents for each $1 over $75,000 $47,850 + 45 cents for each $1 over $150,000

Note the difference between marginal and average tax rates. So in 2006-2007 if your taxable income is $25,000 your average tax rate would be around 11% (2,850 from 25,000), if $75,000 your average tax rate would be around 24% (17,850 from 75,000), and at $150,000 your average tax rate is around 32% (47,850 from 150,000).

It's important to note that if your wage is $100,000 it does not necessarily mean that your taxable income is $100,000 - you can significantly decrease your taxable income by claiming deductions for many different things. Two of the most significant are voluntary before-tax superannuation contributions (starting July 1st most people can put up to $50,000 into super and thus reduce their taxable income by that amount), and claiming expenses on investments (called 'negative gearing', and typically people claim the difference between mortage repayments and rental income on investment properties, this amounted to something like $20 billion last year). Superannuation is one of the best things the Australian government has introduced - the aim is to phase out retirement pensions or at least significantly decrease the load on the taxpayer. At the end of June 2007 it is estimated that this pool of savings will total $1.2 trillion and be the second largest pool of investment funds in the world, behind Japan Post bonds. The new legislation I mentioned above that will allow most people to put away up to $50,000 per year into super (at 15% tax on entry) and thus decrease their taxable income by the same amount will have a massive impact on superannuation, and I believe will sharply increase savings levels.

We're in a very good position going forward: Australia has no significant public debt, and the government has delivered 10+ straight budget surpluses, despite quite large income tax cuts. There is so much to say right here, but the most important points are these:

• The engine of our tax system and thus the funding of public goods and services is our high earners. The average wage in Australia is around $50,000-$60,000, and 90% of people pay less than $15,000 tax. High earners however contribute far more, for instance a taxable income of $250,000 results in over $90,000 tax. Tens of thousands of Australians have very high incomes and there is only so much you can do to reduce your tax burden.
• However, high income earners should have a much greater responsibility to contribute to the community and thus this burden is fair enough.
• Tax reform is all well and good, and an important goal to be achieved to keep the economy kicking, but standard of living is also affected by the ready provision of public goods and services. Some things should not be privatised or scaled back because of a desire to reduce taxes. Education and health cover in Australia have moved backwards in recent times. Liberalisation has done wonders for the Aussie economy, but the benefits of this (and the overflowing government coffers) should have been sown into better education services and health cover.

Paul is, as I write this, probably sitting in the departure lounge at Perth Airport. He flies out today after 18 months in Perth. In that time he has been one of my very best friends, and I will miss him. Life moves on, people come and go, but the friendships we create do not end so long as we stay in touch. And he has some adventures ahead of him! Paul will be working in Canada for the next two years on an awesome AIESEC internship, and I am sure he will settle into life there quickly and make the most of having an AIESEC committee look after him!

Paul, I know you'll read this at some point, so I want to say thank you for your friendship and be sure to keep us all regularly updated, no matter how busy your new job is!

Me awarding Paul for the brilliant way he took to responsibility in the committee, at the conclusion of the AIESEC Western Australia State Conference 2006.

Me, Paul and Nick Taylor in King's Park overlooking the city, last night after Paul's farewell dinner. Photo is a bit stuffed but oh well.

Pic's from the farewell dinner here.

• We have 2 microwaves at my house. I learnt last week that one of them is older than me - it was bought a few months before I was born. I use it often and it still works fine. That's pretty good value for money!
• My brother moved out today, and I helped take some furniture over to his house, which he has renovated from a shitty old bomb to something quite different. He is moving out not for independence, but so he doesn't have to pay capital gains tax if he wants to sell it at some point in the future!
• I have been meaning to write about "The Surrendered Wife", a supposed guide for marital intimacy that has sparked some controversy. I actually came across it when I picked up a copy of Woman's Day, one of those stupid trashy women's magazines that people buy for some unknown irrational reason. I laughed so hard I cried when I first read about it, but in thinking more about it I tried to recognise what was good about the 'technique/method' rather than just laugh it off as some silly American thing. I think I'm giving up though, the links to the articles have been open on my browser for quite a while. Here are the links, you can make up your own mind. Wikipedia article. For counterpoint, Loving Female Authority.
• In the last week I:
• read half of a fat epic medieval political/war book, all fictional and total escapism. (tick!)
• tried to catch up on 2 weeks worth of news feeds but have succeeded only in scanning and sorting the interesting from the rest. (half tick)
• worked a very boring casual job and earnt some money (tick that one off the list!)
• socialised, but not too much (tick!)
• attended a documentary screening of 'Control Room' and a subsequent panel on media power and manipulation. (something intellectual, tick!)
• bought textbooks and started looking at them (big tick!)
• did not catch up on sleep, exercise like I meant to, or organise bus driving lessons (to do tomorrow).

Over a period of time I have set out to bring the AIESEC network on LinkedIn together, using my own account as a central hub so that disparate clusters of AIESECers could find each other via the reduction in degrees of separation that linking though my account offered. Once the ball was rolling, the momentum has carried it through to now reach 2000 connections. It's been a pretty passive process that has taken only minimal effort - I drafted up an email describing my goal of bringing together the AIESECers on LinkedIn and how people could find others and use LinkedIn networking to their advantage, and then used the 'find colleagues' function every few weeks to find AIESECers in my newly expanded network or AIESECers that had joined LinkedIn recently, and sent them the email with an invitation to connect. I only actually know perhaps 50 of the connections, but that is not the point. The point was to connect to many others and thus draw together the AIESEC network, reducing the number of degrees of separation and allowing people to find each other. For others, yes, limiting your network to only those you know is a good idea. It is only a small thing, but hopefully it adds value to the AIESEC network, where members and alumni can find and get in touch with others with greater ease than had been the case.

It's holidays and I don't start work on next semester's orientation programme till next week, so yesterday I rang a printing company I have done some casual work for in the past and told them I was available. "Well if you're available right now...", and so I worked 4-10pm yesterday and I am doing the 2-10pm shift today. And I have the paper cuts to show for it on my fingers already. It's hell boring work, I am keeping hoppers filled with brochures and helping fix the machine when it stuffs up every ten or so minutes, but I can listen to audiobooks on my ipod whilst doing so and listen to speeches and whatnot. And although I'm not materialistic, it is nice to see the bank balance go up. I would have only spent the days at home reading news and books in any case :)

A pay increase for politicians is never going to be a popular thing, but let's take a look at the numbers involved. From The Australian:

PRIME Minister John Howard has defended a 6.7 per cent pay rise for politicians, saying they work harder than many people on similar salaries.

The base salary for backbenchers will jump from $118,000 to $127,000 next month under the latest ruling by the Remuneration Tribunal, an independent body which sets politicians' wages. Mr Howard will receive a $21,000 rise to $330,000 a year while Opposition Leader Kevin Rudd will get an extra $15,000.

Plus, they get a whole lot of free travel and an electoral allowance that ranges between $30,000 to $40,000 depending on the size of their electorate. So the leader of our nation receives for his efforts $330,000 per year plus a bit more, a great superannuation scheme and other perks... still, it doesn't seem that much compared to the responsibility of leading the nation. We have thousands of managers and businesspeople earning far more than that per year. I'd argue that yes, you need to be passionate about politics and have a benevolent, alturistic streak to you to be a good politician, but I'd also argue that you shouldn't have to earn less to enter politics than what you would earn in business. Effectively, if we want the best talent in the country leading our government, we ask them to sacrifice higher pay levels to do so. The type of talent we seek can name their price in business and have the world's best employers knocking down their doors.

I have no issue with paying the Prime Minister $5 million dollars and each federal politician $1 million. In fact, that might be the best investment Australia can make - draw in the best talent from all sectors and I'm sure the management of the country would improve as a result. If they do a crap job, then we elect someone else in 3 years time. And there would be sure to be plenty of other talented people fighting for their positions. I have read somewhere that the Singaporean Prime Minister has a base salary in the $2-$3 million range... but then again, Singapore isn't exactly a perfect model of a thriving democracy from what I've read.

It's funny to read the justifications and whatnot from the pollies after a pay rise, they know that whatever they say won't be well received. Take this guy:

Opposition federal/state relations spokesman and former minister Bob McMullan defended the decision on the grounds it had been made by an independent tribunal. "I'm not going to get into a debate about the merits," Mr McMullan told reporters. "An independent tribunal sets the decision. As I say, sometimes it's too much, sometimes it's too little, and I just get on with my job and they send me a cheque at the end of the month. (emphasis mine).

Sure buddy, get on with the job and they send you a cheque. Sure.

I got that restless feeling in my feet whilst looking at photos of my girlfriend's stunning island home, where she has wonderful thick greenery, mountains, and crystal clear water over coral reefs, all within a stone's throw. The views from the balcony of her workplace are simply sensational!

I need that travelling feeling.... Soon, soon it will happen. I have to graduate first. So after looking at those pics I spent the next hour on Google Earth, as I sometimes do, thinking about stuff - politics, history, economics, international relations...

Anyway. Australia is beautiful in it's own way. The red Aussie Outback... just take a look at the Laverton golf course for instance, in the left hand half of the pic below. Not a blade of grass to be seen! I don't see any bunkers either... unless you call the dirt fairways bunkers too! That line of trees running from upper right to lower left is actually Skull Creek, and out of shot (further east) that creek saw at least two confrontations between the police and Indigenous folk in the not-so-great history of race relations in this place. The second pic is just south of the first, but is enlarged a bit more. Unfortunately the town has two different aerial photos melded together, and the one over the western part of town is at a lower resolution, so I have cropped it before the change.

All in the one convenient place. Hopefully I'll be adding many more over the course of next semester too!

I attended a Bollywood movie premiere on Friday night, and boy was it fun! The movie was Jhoom Barabar Jhoom, and it was lighthearted and fun, not the greatest movie ever, but more to the point the atmosphere in the cinema made it a very enjoyable experience. I went with Anusha, and as we lined up we noticed that everyone was Indian, naturally. This seemed to be the type of thing that is fully Desi, like I heard no English being spoken in the theatre beforehand and lots of women dressed up in Indian stuff, it was great to be there! I joked with Anusha that I should have stood up and shouted "Hey everyone, I'm white! Look at me, look at me!". The audience got right into it at different times, with laughter roaring at some of the jokes, which often played on Pakistani-Indian stereotypes. One thing I do have to say is that I think "Big B", Amitabh Bachchan, is getting a bit too old for the dance scenes. He's 64! Stick to the acting buddy!

I finished my last exam for semester 1 2007 on Friday, so I have 5 weeks break till semester 2 starts. After sitting here playing a stupid computer game for the last 2 hours, I have decided to create some goals so I don't waste this time!

• Read at least one of the many good books I have strewn all around my room.
• Start the process of reviewing the material from my completed units, something I have been intending to do for quite a while. I want to end up with a few pages of key things per unit to take forward so I can revisit them every year or so (and not totally forget what I have learnt, plus get a greater understanding about what it is I actually have learnt).
• Earn / save some money.
• Earn that money preparing next semester's orientation programme for the next lot of US kids.
• Exercise, daily. Get a bike and start riding to uni.
• Organise driving lessons for the medium rigid license and then pass the practical (so I can drive the bus).
• Get some good sleep.
• Prepare for next semester. Buy the textbooks, get a headstart in reading them.
• Be social, but not too social as I have to save money too.
• Keep exploring topics I know little about.

They're not exactly SMART, but oh well this isn't a bloody LC plan!

Some of Freud's stuff still makes me laugh out loud. The thought that he was taken seriously in his time... well, suffice to say that my abnormal psych lecturer included some psychodynamic material amongst other theories to offer alternative psychological perspectives for some disorders... but basically derided anything Freudian in our lectures. One example made me laugh just then as I was reviewing a lecture on arousal stage sexual dysfunctions, in which Freud offered 'castration anxiety' and the 'Oedipus complex' as causing Male Erectile Disorder. Castration anxiety is the fear that an erection will result in castration, because women have penis envy (which happens to be the cause of Female Arousal Disorder). Oedipus complex is about conflict with a father figure over gaining mother's attention, which brings about feelings of inferiority and impotence.

At least they're easy to remember as they're so ridiculous. It also makes it easily understandable why some still view psychology as quirky pseudoscience.

Well perhaps saying that is not such a good thing anymore!

For three months from late November 2004 to early February 2005 I worked as an intern in the Shared Services Project Office, specifically within a small group of HR managers charged with the change management of the public sector move to shared corporate services (ie, streamlined HR, payroll, certain financial procedures across agencies and departments - basically all the backroom stuff that they can put together, downsize and proceduralise). I helped in the campaign to educate the thousands of effected public sector employees about the impending changes - a difficult task if ever there was one!

This is a stereotype but take 5,000 public sector HR and payroll employees and half of them will be 40 year old mums who have been doing the same job in the same office with the same colleagues for at least the last 10 years, who value job security above all else, and will resist change with everything they've got! Try telling them that they have to apply for newly created positions in a 'SSC' (shared service centre) and work in a big building away from where they currently work, and then try telling them that the move will be staggered and we don't know exactly when they will be moved across and what job they could be doing... Plus, the issue that secondments across departments is very common, and people on secondments often work at a pay grade above their official status, but that with the move to the SSC they will have to move across to a position comparable to their official grade... So many little things that make people upset and angry. Anyway...

I learnt a hell of a lot about corporate services and about working life in general, and saw first hand how such a large project could easily get sidetracked. I felt back then that things were going awry, and look at the news:

• I annihilated my exam yesterday. One more to go.
  
• I have not really read any news lately as have been studying - feeling deprived!
  
• Earlier in the year I started attending 'Curtin Corner', in which a variety of topics are presented week after week by experts in the university and local community. I had intended attending for months before I actually did so. Well another weekly thing I want to attend, and have been meaning to for a while now, is the Buddhist meditation sessions on Wednesday after lunch. I should check it out next week.

Smart move from the St George Bank HR department.

This is all part of the larger picture in which Australia is suffering from widespread labour shortages (in some places pretty severely), and employers are trying to out do each other to attract and retain employees. The 90s saw a spate of downsizing (sometimes euphemistically referred to as 'right-sizing' or 'organisational re-engineering') in which organisations ripped out middle-management layers, and in doing so made redundant predominantly older workers with years of experience. There was a general realisation that the experience older workers had accumulated was significantly undervalued and as a result downsizing did not typically work as well as theorised. So, with the aging population it is also telling to now see organisations like St George bank going out of their way to keep grandparents, who will mostly be 50+ years of age, and who will have accumulated decades of experience.

However, if optional leave periods for "this and that" keep proliferating, at some point why not just make a blanket policy that covers all possible types of leave employees could want?

Isn't that just the best looking group of AIESECers you've ever seen?

(Just found the pic on my computer - where do all these lost photos come from?)

And hopefully we'll be back together soon.

(Just wanted the whole world to know.)

I found 'The Rise, Fall, and Rise Again of Privateers' by Alexander Tabarrok (13 page PDF) to be a fascinating article on the historical economic pragmatics of privateering: private vessels legally authorised to attack and seize cargo from another country's ships. The article also touches on the legal and technological context which gave rise to privateering and draws parallels to the privatising of government services, such as private forces utilised by the US government in Iraq and elsewhere in recent history.

Brandchannel leads with an article titled 'Where Are the "Muslim' Brands?', and draws distinction between brands targeting practicing Muslims and brands simply originating from countries with large Muslim populations. It concludes that building global brands from those that target practising Muslims is not probable, but that naturally it could be possible for brands emanating from Muslim countries that provide regular products to become global players, given the typical brand growing strategies.

A blog I have recently discovered and enjoy is 'An Economist in Paradise', written by a guy who is an Economics lecturer at the University of Mauritius. One recent post that caught my attention was 'The Slave Trade in Mauritius', in which he analyses the island's historic slave market through economic principles. Did you know that 'Indian' slaves were sold at an average 54% discount as compared to the average slave price? The article provides some wonderful economic insights into a horrible human practice.

I received an email invitation to an open public day at a local Mosque - one of only eight in Perth, although there are of course a number of other gathering places, for instance the Mushallah at Curtin University. Of course anybody could probably just pop in at any time, but this event was specially organised by a group of young Perth Muslims concerned with the widespread misconceptions the Australian community seems to have about Islam. For that, for opening up, giving up their time, for their hospitality and patience, they should be congratulated (and I did so at the Mosque and afterwards with an email). I found everyone to be welcoming and approachable, and open to any topic. They even raised the topic of violence and Islam, and of Jihad, proactively seeking to address any questions we might have before we asked them (and in doing so permitting that conversation to happen).

My standout memory of the day was seeing the little kids join in prayer. I was told that Saturdays are kids days, when they are brought in for some religious education (like Sunday school for Christians). What made me smile to see was, whilst the kids followed the adults in standing and then prostrating themselves, they would muck around, bump each other, play games, all whilst trying to maintain the act of actually paying attention to what they were supposed to be doing. The adults just let them have fun. Innocence from the kids and patience from the adults.

I was also happy to partake in the wonderful selection of food from the wide cultural scope of Perth's Muslim community. I met and exchanged numbers with a couple of the guys, and met people from Turkey, Lebanon, Bosnia, Ethiopia, Singapore, Malaysia, and Indonesia.

In the future I would love to see more open days such as this, perhaps advertised in the local newspapers so that they draw a wider crowd from the general public. Doing so takes effort, but I was really impressed and I'm sure many ordinary Aussies would be too. It's about creating positive local connections, awareness and understanding.