A ‘tickle-my-tummy’ nation

When I read this description of my adopted nation, decades ago, I was tickled (so to speak). When I was employed in the Balance of Payments Branch of the Bureau of Statistics, I realised how dependent Australia is on foreign capital inflows; and that there is a price to be paid when the economy is kept afloat by foreigners seeking a substantial profit or some economic advantage.

I arrived in 1948 when the British Subject status of Australians was replaced by Australian citizenship. British by origin and heritage, Australians seemed unconcerned by remaining beholden to Britain; except in relation to defence. When attacked by Japan, Australia had placed itself under the protection of the USA. We have been subservient to the US ever since, rushing into wars behind our hoped-for protector.

Since Australia is not in Asia, and is also not of Asia, with its Western roots, it cannot avoid being part of the West – in every way. We are an integral part of the West.   American corporations also developed Australia in economic (and cultural) terms, allowing us to jump smoothly after World War Two from a consumer nation (riding on the sheep’s back) to an industrial nation – a path not normally available to a developing nation. In the Treasury I learnt that the Government did rely on market forces to take the economy forward.

Our Governments, not known (ever) to possess any long-term plans for development (not even a population policy), are ever so grateful to anyone who wishes to invest in the country. Until the 1970s, when tariff-protected uneconomic, and technically inefficient, industries were opened up to foreign competition, with support from arbitral authorities, the people ate well. Welfare now subsidises or supports those affected by either import competition or the exigencies of an open market. (In 1963, I was the first ‘free- trader’ in the then Tariff Board.)

Like other nations, Australia seeks international trade agreements. Concessions of an economic nature are made, the signatories seeking mutual benefit. There will be some losers in each participating nation.

An amazing feature of the Trans Pacific Partnership to be signed is the surrender of Australia’s sovereignty. Corporations in signatory nations will be able to sue the Australian government in a foreign court “when they believe a change in Australian laws are affecting their profits.” Refer Anna Patty’s article ‘TPP deal may expose legal risks’ in the 5 March 2018 issue of ‘The Sydney Morning Herald.’

Patty quotes academic Stuart Rosewarne as describing this provision as “quite scary because it effectively allows a foreign-owned company to have any Australian law, including enhanced labour laws that are considered to impose additional or onerous obligations on a company’s employment practices, to be set aside.

Tickle my tummy or not? How cheap is sovereignty?

An Asian screens foreign takeovers in Australia

Nearly 50 years ago, a conservative government, concerned at the rate at which foreigners were buying up profitable Australian enterprises, passed legislation to screen foreign takeovers. Ironically, the day the screening process commenced was the first day of a Labor Government. Since Australia has always relied on the inflow of foreign capital to keep afloat, the government had placed the responsibility for the screening process with the Treasury.

With a staff of 3, with 6 years of experience in another agency in dealing with senior executives of private corporations, I opened the takeover screening office. While I reported to a senior executive, I had no reason to consult him. I set up operating procedures, interpreted the legislation (with the concurrence of Attorney-General’s Department), and obtained agreement from my boss to proceed. I had previously told him about my background. My reports to the Treasurer, via the Foreign Investment Review Board (FIRB), would be approved by my boss, obviously.

Even after the FIRB Secretariat had grown to 8 Sections (in 3 Branches), I was the one who wrote the occasional briefings to the Treasurer about changes to the policy. This was an extension of my initial role – of explaining to powerful people how my office would operate. My offsider and I, together (to avoid any risk of being misquoted), would point out that a foreign takeover had only to be ‘not against the national interest.’ We were also required to guide the foreign investor to the gateways available. Later, I briefed lawyers and company executives about our approach, by invitation, in their offices.

For a former ‘blackfellow’ for whom the Australia worker was not yet ready, it was significant that, as with my work in the 1960s with the then Tariff Board, I was accepted readily by all the senior executives I dealt with in the 1970s.

In the 1980s, I again related successfully, but with the leaders of our ethnic communities and State Government executives. Australia had clearly joined the Family of Man.

Our political structures have now to open the door fully to multicultural participants, perhaps with a greater emphasis on secularism.

Corporate taxation in Oz: Is morality relevant?

“New research has revealed 76 of Australia’s biggest multinationals pay an average effective tax rate of just 16.2% – half the corporate tax rate.

It has also discovered the commonwealth government lost $5.4bn in potential tax revenue in 2013 and 2014 from those same companies, as they shifted billions of dollars in profits offshore.

Corporate tax experts from the University of Technology, Sydney, have worked with the activist group GetUp! to examine the financial records of the top 100 multinational corporations with operations in Australia.

They say large pharmaceutical corporations are paying the lowest effective tax rate at just 5.7%, compared with 7.5% for hi-tech corporations and 20% for energy corporations.

Australia’s official corporate tax rate is 30%.

A new report, Closing the Caribbean Connection: Solving Aggressive Tax Avoidance by Top Foreign Multinationals Operating in Australia, shows their findings.

It says the largest corporations with operations in Australia favour two tax minimisation techniques over any others.

The first technique, called “debt loading,” is favoured by energy companies. It finds foreign multinationals lending capital to their Australian operations at unusually high interest rates, with any profit made in Australia used to repay the foreign subsidiary. For the purposes of company tax records in Australia, the profits are then recorded as a loss in the form of an interest payment on the loan.

The second technique is called “profit alienation” and is preferred by pharmaceutical and hi-tech firms. It finds corporations holding intellectual property rights in low or zero tax jurisdictions. Any profits made in Australia are then used to pay the parent company for the use of its intellectual property.” … …

“The report’s authors say the Turnbull government needs to follow Hong Kong’s example in tackling debt loading abuse, by eliminating interest deductions and other financial payments on loans from foreign subsidiaries located in low or no tax jurisdictions.

It also says the government should introduce a diverted profits tax, set at 30% to reflect the current statutory tax rate for companies, as in the United Kingdom.

“Everyday Australians are paying tax at a higher rate than billionaire corporations like Chevron, Apple and Google,” Getup! campaigner Daney Faddoul said. “These foreign multinationals are inflating their losses and shifting their profits to rob Australia of crucial investment in our local hospitals and schools.”

(The above paragraphs are extracts from  Guardian Australia’s tax report of 20 April 2016.)

Representative government, anyone? One lot believes that, in the exciting times we live in, reducing company tax will result in instantaneous wealth creation (for whose benefit?). The other lot tells us what it might do one day. Will they work together for the benefit of the populace? What we have are legal loopholes benefiting from moral loopholes.     

 

 

 

A nation ruled by God’s Will?

Australia remained a British territory until 1948, when the Australian Citizenship Act converted the Aussie from British subject to Australian citizen. Yet, the Queen of Britain remains Australia’s head-of-state, represented in Australia by the Governor-General and State Governors.

When Prime Minister Chifley placed his nation under US suzerainty, the ownership and control of Australia’s principal enterprises and rural properties by British and other foreign interests was increased substantially by US investors.

Thus, Australia became industrialised rather suddenly without going through the normal incremental changes. That the output by the US enterprises was limited primarily to the Australian market did not delay the higher standard of living which resulted. From my time in the Balance of Payments Branch of the Bureau of Statistics, I came to realise that it is a continuing foreign capital inflow which enables the nation to survive, and for us citizens to eat as well as we do.

Donald Horne was correct when he published ‘The lucky country’ in the early 1960s. But, why not credit God’s Will as the cause of our full bellies?

Is it not God’s Will that has now brought the formerly-feared ‘yellow hordes of the North’ to Australia, with deep pockets filled with cash, to buy up all manner of our nation’s assets? As well, how is it that we are able to grow a very thirsty crop like cotton, when the river which feeds this production is seemingly drying up at its mouth?

But is it God’s Will that we should compete with poor countries everywhere which rely on their cash crops for survival? While their former colonial masters are reportedly ‘screwing’ them as buyers of these rural products, do we need to compete with these poverty-stricken growers in producing tropical fruits? Are we capable of producing industrial goods for export, as Sweden does?

Ironically, Australia is reportedly also being ‘screwed’ by powerful foreign interests through their taxation arrangements; we are lethargic in capturing what is our due. Then there is the feat (enabled by concessions in our taxation regime?) which results in the taxable incomes of major enterprises operating in Australia to be a small fraction of their total incomes. As well, as the big-end-of-town political party seeks to have the company tax rate reduced, reportedly some companies pay no tax, others pay little tax, and none of the big ones pay the maximum rate of 30%.

The underlying logic is that, in these ‘exiting times,’ all of our major corporations will rush out to ’create wealth’ by increasing employment as soon as their tax rate is reduced. In the thicket of economic theories, most of which are good at forecasting only the past, this thistle will not take root.

Where do we go from here? That depends on whether our federal parliamentary reps can be shocked into accepting the adage ‘It’s the economy, stupid’ as a war cry, rather than rely on God’s Will; and on foreigners buying up the nation.

 

 

Hating one’s oppressors

I hated the brutal thugs of the People’s Anti-Japanese Army for their reign of terror in Japanese-occupied Malaya. They controlled, through fear, the country-side where my family lived. This occurred near the end of World War Two. A gang of Chinese, self-labelled communists, seemingly preparing for the takeover of Malaya when the Japanese departed, held to ransom every individual and every family. How extensive their area of control was not known.

Not knowing who their spies were resulted in the death of all conversation in public spaces. I blame these thugs for shortening my father’s life. I have been firmly anti-communist ever since; I am unsure of my attitude to socialists. I am comfortable being a communitarian small-l liberal.

Also hated by me and others was the Japanese military, although they left us alone if we behaved. And I was too young to appreciate that the Japanese were clearing out of Asia all the European colonial nations, those of the innately superior ‘white race.’ My hatred of the Japanese grew out of their brutality, our worsened level of freedom and comfort, and (particularly) my hunger.

However, in the mid-1970s, I decided, as a federal official, that I had to discard my prejudice. That was after I had commented to the Australian representative of a major Japanese conglomerate that they had, by shifting money from one pocket to another, acquired ownership of valuable pastoral property. It had been an unscrupulous means of cheating an Anglo-Australian, the majority shareholder; but he had not been alert.

There were comparable cases elsewhere in the country. I had previously noted that other Japanese enterprises had acquired ownership of this or other major property, even when the partnership had been 51:49 % in favour of the Australian partner. In these cases, there could have been necessary collusion, to bypass official policy on foreign acquisition of Australian real estate.

Then, after a major Japanese investment proposal had been finalised, to mutual satisfaction, a Japanese diplomat had reportedly defined me as ‘hard but fair.’ That’s me!

As for my hatred of British colonialism, it was based on our loss of freedom, my father’s principal teaching. Finally, we achieved that, because all empires do fail. I remain anti-colonial, thereby despising today’s neo-colonialism, while having no antipathy to the British or the Japanese or the Chinese peoples. We are all essentially alike.

Hatred is a corrosive emotion. It needs to be dispersed through a maturity of spirit.

Musings at Death’s Door: an ancient bicultural Asian-Australian ponders about Australian society

‘Musings at death’s door: an ancient bicultural Asian-Australian ponders about Australian society’

Near what I considered to be the end of my life (as erroneously forecast by an otherwise accurate clairvoyant), I decided to take a rear-vision-mirror look at the nation into which I had been sent by the spirit world (I did once think of it as exile). Having survived the White Australia era unscathed; having had my career path blocked four times unfairly; having a creditable record of accomplishments during my contributions to civil society; having experienced a full life in a Western milieu while retaining the spiritual values of Asia which had formed me, I was in a position to place on record my considered conclusions about Australia and its society.

During a 30+ year career as a public official, I had spent 14 years dealing with the private sector, and 9 years with leaders of our immigrant communities, with some contact with ministers of government, and a slight tussle with a shire council about citizen rights. I had also received a Meritorious Service Award from my trade union. I feel that I understand my country of adoption to be able to write objectively, while being proud of its achievements.

An endorsement pre-publication

Raja Ratnam has lived a full life and made significant contributions to Australian life over six decades.  His experience as an Asian in Australia from the time of White Australia to that of multiculturalism is unique.  This book is a final distillation of the wisdom he has gained over that time. He provides insight into a wide range of areas from society and culture to religion.  And even better, his insights reflect his unique experience.  There is wisdom here and, like all of his work, this book is rich, intelligent and provocative. A major contribution to Australian culture.’ –Prof. Greg Melleuish, History & Politics, Wollongong University

A review

Recommended by the US Review of Books, as follows:

“Before I leave this shell, my body, I need to recognise what it is that I have learnt from my turbulent but interesting life.”

“This book is a commentary about how Australia has changed since the author first moved there in 1948. This work stands on its own merit, however his previous nonfiction work, The Dance of Destiny, describes the prejudices he, as an Asian from British Malaya, experienced. Those experiences are discussed in this latest book, as they relate to his observations of how society has reacted to different races, nationalities, languages, and religions.

Ratnam witnessed a change from White Australia to a multi-cultural, multi-lingual nation. During his years of public service, he achieved several high-ranking positions in areas of refugee settlement and migration, education, and humanitarian work. He was also denied positions because of his ethnicity. Even though he was well-known in his field, including serving as an advisor at a government level, he still faced racism from time to time. In the early 1970s, the country developed an official entry policy that was non-discriminating. Skin color was no longer an official issue. In fact, as more immigrants arrived from ethnically diverse backgrounds, more social workers were needed who could speak those languages and understand the cultures.

This well-written book flows easily from one point to another. It is excellent for anyone studying sociology, public service, immigration policies, and related categories. It is also a recommended read for those who are not necessarily students, but who are interested in how a nation went from being “very British” to one of diversity acceptance. To use the author’s words, “Today’s Australia is not the nation I entered in 1948.”

RECOMMENDED by the USR”

Presentation at Beijing Book Fair 2016

The book was presented at this fair by Dr. Irina Webster of the Australian Self-Publishing Group.

 

Some interesting ‘spin-offs’ from colonialism

Australians were British subjects until 1948, when Australian citizenship was introduced. Quaintly, following its invasion/killing/settlement phase, Australia set out to be a nation of only white people, where no man would disdain any kind of work. A strange ambition, considering its location; set in ‘coloured’ seas, and surrounded by worrisome foreign faiths. This objective is not true today, not while welfare and cheap Asian labour is available.

A commendable national ethos of a ‘fair-go’ then evolved. Seemingly fading now. Trade unions became strong, but have now reached ‘bully-boy’ status, as my newspapers tell me. Yet, as I was told by an elderly Australian, it was the communist immigrant-English trade union leaders who had achieved much of the benefits enjoyed by industrial workers when I arrived in the country in 1948.

During WW2, having been Britain’s back yard till then, Australia (with its British-subject residents) placed itself under the control of the USA – for protection from the Japanese. The post-war hegemonic American Empire which evolved enabled the new Australian satrapy to become an industrialised nation without going through the normal process of industrialisation, step by step.

Major US corporations established a range of industries in Australia. While some competed with one another, they also limited their markets to Australia (avoiding competition with themselves overseas). Becoming progressively inefficient relative to their overseas competitors, both technically and economically, the new industries needed ongoing high tariff protection. Such protection reinforces high-cost production.

In 1963, as an employee of the Australian Tariff Board, I was pejoratively labelled a ‘free trader,’ because I recommended the progressive reduction of all tariffs. Why? Because we were increasingly uncompetitive internationally. For example, Japan’s per unit labour costs of certain major products were lower than in Australia; yet, labour costs were higher than in Australia!

Then, to show how poorly we had been governed (possibly through a subconscious subject-mentality), an ALP (Australian Labor Party) Government began to lower the tariff wall. The ALP normally represents workers. As a political orphan (a communitarian small-l liberal – ‘neither fish nor fowl’), I was entranced. The values of a former colonial subject were implemented by a political party representing workers who had benefited substantially from employment in tariff-protected industries.

Australia seemed to be on the way to becoming a truly independent nation.