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Sunday, May 27, 2012

Road to Nakba

Israel's 'Law of Return' is based on the presumption that Jews across the globe, regardless of race, are descended from one of the 12 tribes of Judah who once lived in the Holy Land. This presumption fails to acknowledge that most Jews across the globe are descended from converts to Judaism and have not racially originated from the Holy Land at all. The true descendants from this time are the Palestinians, whose history is rooted in Judaism and subsequent conversions to Christianity and Islam. 

Many governments across the globe support Israel and believe its existence to be a valid return to origins for the Jewish diaspora. In spite of thousands of years of evidence to the contrary, most nations are not willing to challenge this revision of history. Many adherents of Judeo-Christian faiths believe this Israeli version of history because they believe it is God's will and fulfillment of His divine prophecies.

On 14 May, Israel annually celebrates its Day of Independence which it declared in 1948. On 15 May, Palestine commemorates the 1948 Nakba. Nakba meaning 'the catastrophe' - the day that Israel was formally proclaimed, representing the ethnic cleansing and Judaising of Palestine based on the Law of Return.

While it is often believed that Israel was created by UN Resolution 181, it was actually created by the Jewish Agency in contradiction to Resolution 181, which had resolved that the Jewish state should be created along with an Arab state and with the permission of the local Arab population. Of course, the locals weren't in agreement with having half their country given away to foreigners. The Jewish Agency wouldn't take no for an answer and set about systematically destroying Palestinian villages and forcibly removing or executing the inhabitants. To justify this, and to gain the support of the majority of the world's nations, Israel propagated the story that Jews have a right to return to their homeland, the Holy Land, Eretz Israel, the Land of Israel. In order for this story to gain credence, history has been rewritten. Ironically, Adolf Hitler stated, 'if you tell a big enough lie, often enough, it will be believed.'

How many expulsions make an Exile?

The first claim is that the Jewish diaspora was the result of a dispersal of Jews from the Holy Land through exile. According to the Bible, around 597BC Nebuchadnezzar exiled Judeans to Babylon, whilst some fled to Egypt and others remained in Judea. By 538BC, the Judeans were allowed to return, which many did, and others remained in Babylon and Egypt. This exile was temporary and did not result in Jews wandering throughout the world.

It is also claimed that after destroying the Temple in Jerusalem in 70AD, the Roman Empire exiled the Jews from Palestine. This exile supposedly resulted in Jews wandering throughout the world for the next 2,000 or so years. This is quite the exaggeration. In 63BC,  Judea (a small region of Palestine) became a province of Rome. Around 70AD the Judeans revolted, resulting in many deaths and much of the population enslaved.  However, Rome did not exile or deport the entire population of the region, or even a significant portion of the population. From132AD to 135AD, there was another revolt (led by Shimon Bar Kokhba) in Judea. Again the Judeans were defeated, many killed, some enslaved, some fled, some exiled (mainly the leaders of the revolt); most remained.

No history book of the era records a mass exile or a mass exodus of Jews from the Holy Land. (1)  The Romans were adept at many things, in particular recording their heroic deeds for posterity. Yet, strangely, the Romans did not record such a monumental event. Additionally, why would they do such a thing? With roughly 2,000,000 Jews in the Holy Land around that time, it would have been a lot of tax-payers to kick out of the Empire. It makes no sense. The respected Jewish historian, Josephus, also did not record any such exile. Certainly, some of worst agitators suffered expulsion from Judea, however, this was not a mass exile.

The few historical records of the alleged 'exile' were written centuries after this and appear to be fabrications as they do not match any record written at the time of the 'exile'. Eventually Jewish historians realised that an invented 70AD exile, and/or a 135AD exile did not match existing historical records, so they rewrote the exile to coincide with the Muslim conquest of the Holy Land around 638AD. (1)

Exile, regardless of whether it was in 70AD, 135AD or 638AD is claimed to have dispersed the Jews throughout the world, resulting in a Jewish diaspora.

Proselytes - Jewish by conversion, not race

What is rarely discussed, however, is that from around 200BC, the Jews had begun proselytising the Roman Empire and the many traders who travelled to and through the Holy Land, including Persian and Asian traders using the Silk Road. The bible has a number of references to proselytes as converts to Judaism, including this verse in Matthew 23:15 'Woe to  you, scribes and Pharisees, hypocrites! For you travel the land and the sea to win one proselyte, and when he is won, you make him twice as much a son of hell as yourselves'.  

Women were most willing to convert to Judaism, perhaps because the men didn't want to pay the price of admission to this exclusive religion; namely by severing their fore-skins. It is interesting that the Apostle Paul wrote in Romans 2:28-29 'For he is not a Jew, which is one outwardly; neither is that circumcision, which is one outward in the flesh: But he is a Jew, which is one inwardly; and circumcision is of the heart, in the spirit, and not in the letter; whose praise is not of men, but of God.'

It would appear that Paul wasn't keen on promoting physical circumcision either, but opted for the more palatable and less painful, 'spiritual' circumcision. For that matter God wasn't keen on promoting physical circumcision at this point as it represented the old covenant which required blood sacrifice. The new covenant that God made, a covenant in which Jesus paid the blood sacrifice for all,  focussed on man's spiritual condition and relationship with God. The old covenant required man to constantly atone for sin, under the new covenant Jesus was the atonement and we were forgiven by grace.

Conversion to Judaism was not always voluntary.  In his book 'The life of Flavius Josephus', Josephus writes 'the Jews would force them to be circumcised, if they would stay among them'.

As a result of centuries of proselytisation, Jewish converts extended throughout the Mediterranean, from Northern Africa through Egypt, Persia, and the areas now known as Turkey, Greece, Italy, France and Spain. By around 300AD, the proselytes also extended into Eastern Europe, Western and Central Asia.  From these, the mighty Khazar empire was established and expanded throughout Euroasia, from Russia in the north to Kazakhstan, Ukraine, Georgia and north-eastern Turkey. The Khazar aristocracy eventually converted to Judaism and obviously encouraged the ongoing proselytising of Eurasia.

Meanwhile the proselytes living in the Roman Empire and subsequent Byzantine Empire continued their proselytisation into Northern Europe.

The European Jews who migrated to Israel during the 20th century, claiming that it was their land, were not descended from Jews of the Holy Land (Palestine, Judea, Israel) but were descended from European and Central Asian converts to Judaism. They are the descendants of proselytes.  They have as much claim on the Holy Land as a Christian descended from Britons.

The diaspora written about in the bible referred to Jews who had moved or been exiled to Babylon or Egypt, where they remained - they did not become 'wandering Jews'. It was not a world wide dispersal.

Palestinians are the true descendants of Judea

The tragic irony of the persecution that is being wielded against Palestinians (and has been since at least 1948) is that the ancestors of most of those Palestinians would have been Jews in Palestine 2,000 years ago. Over the centuries many of them converted to Christianity during the malevolent reign of the Byzantine Empire which forced conversions on its citizens and persecuted Jews.

Following the Muslim conquest of Palestine around 638AD, many of the citizens converted to Islam. Unlike the Byzantine Empire, the Islamic Empire did not force conversion on the population. Contrary to the claims of some Zionists who believe that this resulted in the exile of Jews, the Muslims did not require anyone to leave the country. Similar to the Roman Empire, exile would have drastically reduced the Caliphate's tax base.

Many of the Jews in Palestine at the time welcomed and assisted the establishment of Islamic rule because it was preferable to the cruel Byzantine rule. Under Islamic law, Muslims were not required to pay tax and non-Muslims were. Not surprisingly, many non-Muslims, in particular Jews and Christians, eventually converted to Islam as a tax avoidance measure. This introduced a problem for the Caliphate government because their tax-payer base rapidly dwindled, so they eventually revised their taxation policy.

The descendants of these Muslim converts live in the Holy Land today and, ironically, face persecution and a form of exile at the hands of Jews, the returning 'diaspora', who are descended from Jewish converts.

Palestine - 'terra nullius'

In the late 19th century, a small group of Zionists cast their covetous, collective eye towards Palestine. Zionists claimed that the Jewish diaspora had a God-given right to inhabit the Holy Land. The problem with this is that they wanted Jews to be given the land and the original inhabitants to secede power to them. In 1948 this came to fruition.

By 1948, following centuries of horrific European pogroms against Jews which culminated in the genocide unleashed by the Nazis, the world was convinced that Jews around the world should be granted their own land.  They were given Palestine. This in itself was perhaps the world's worst example of NIMBY - Not In My Back Yard. At that time, the United States and some European nations were refusing to take in Jewish refugees following the Second World War. It suited them perfectly for the problem of Jewish refugees to be moved somewhere else, anywhere else. So United Nations Resolution 181 was passed with little consultation, and no negotiation, with Palestinians. 

On 14 May 1948 modern Israel was formally established by the Jewish Agency. 15 May 1948 is commemorated by Palestinians as the Nakba - 'Day of Catastrophe'. 

For 50 years prior to the establishment of Israel, Zionists had been saying that they needed to take a nation that was empty.  They decreed the land of Palestine to be a "land without people - for a people without land".  Essentially they were proclaiming Palestine to be 'terra nullius' (latin for 'land without people'). And so the cleansing of history began. The propaganda stated that the Palestinians were an invented people. Yet the Jews making this claim were not descendants of Abraham or any other resident of the Holy Lands. The Palestinians had resided there for thousands of years.  The European Zionists and their ancestors had never resided there.

Government policy - Judaise Palestine

In order to supplant the local population, a law was passed  that enabled any Jew from anywhere in the world to relocate to Israel and inhabit land and property that had been stolen from the local Palestinian population. This was property that had once belonged to Palestinians who had either been violently forced to abandon it, or had been violently threatened in order to cheaply sell the property to the government of Israel. The Israeli government worked ferociously to encourage Jews to move to Israel and to drive out the local Palestinians, offering them cheap houses and land. The reason for this was to "Judaise" the country by increasing the numbers of Jews and decreasing the numbers of Palestinians (2).

1948 wasn't the return of a diaspora, but an invasion of Palestinian land.

'Law of Return'

Today, Israel requires all citizens and political parties to acknowledge the 'Law of Return' which enables Jews from anywhere in the world to become Israeli citizens, whether or not they were born there and whether or not they even chose to remain in the country. Even parties representing Muslims or Palestinians are required to acknowledge this law.

The 'Law of Return' assumes that all Jews have genetic roots in Israel/Judea.  There can be no 'return' if their ancestors where never from there.  The 'Law of Return' is one of the key tools in the Judaisation of Israel/Palestine.

The real Semites

Criticism of Israel often results in accusations of anti-Semitism. The irony of this, is that the Palestinians whose land was forcibly taken from them are Semites who lived in the area for millenia, while the bulk of the Jews who moved to Palestine around 1948, are not Semitic, but from various European and Asian races.

Additionally, most of the criticism is not against Jews or Judaism, but against human rights abuses committed in the name of Israel.  The nation of Israel has established itself as a Jewish state, but like any State it must be held accountable for its actions, regardless of its State religion.

Martin Luther King and 'that' quote

Occasionally someone will repeat the quote purportedly written by Martin Luther King, "When people criticise Zionists, they mean Jews. You are talking anti-Semitism".  This was supposedly written by MLK in "Letter to a Zionist Friend".  It is false. MLK never wrote such a letter. The quote itself?  There appear to be two sources of it. One account is by Seymour Martin Lipset who claims that MLK was at a dinner in Cambridge when a young man made disparaging remarks about Zionists as a people group. MLK replied with "Don't talk like that. When people criticize Zionists, they mean Jews. You're talking anti-Semitism". This account is documented at:

The second account claims that King was speaking at Harvard University when a student asked a hostile question about Zionism.  MLK responded with "When people criticize Zionists they mean Jews, you are talking about anti-Semitism". This account is recorded here:

The quote itself is based on an incorrect assumption, namely that Zionists are Jews. However, not all Zionists are Jews, not all Jews are Zionists. To demonstrate this inaccuracy, one only has to look at the large number of Christian Zionists and of course the large number of Jews who criticise Zionism. Sadly, many Jews who are critical of either Zionism or Israeli policy are labelled 'self-hating' Jews in an effort to motivate them through patriotism and loyalty and the implication that they are traitors to their own people.

However, patriotism is a dangerous thing which often discourages people from criticising their own for fear of being labelled treacherous. As Guy de Maupassant once said, 'Patriotism is a religion, the egg from which wars are hatched.' Also in relation to the dangers of patriotism, William H Boyer stated, 'blind patriotism has been kept intact by rewriting history to provide people with moral consolation and a psychological basis for denial.'

Criticism of Israel is not criticism of Judaism. Israeli policies have resulted in the deaths of thousands of Palestinians and the issuing of hundreds of UN resolutions condemning Israeli aggression and illegal settlements.

Even with the 'Law of Return', most Jews have chosen not to return. There are many Jews throughout the world who do not agree with, or believe, the Zionist propaganda. However, the propaganda has influenced so many people that many Jews and Christians, and even a number of non-religious people, believe that Palestinians have no claim to their own land.

There have been gross human right violations committed on Palestinians in the name of Zionism. The world needs to understand the truth behind the ethnic cleansing of Palestine, the reconstruction of history and the manipulation of religion that Zionists have used for the illegal creation of Israel in 1948 and to justify the ongoing expansion of illegal settlements in the Palestinian territories and the perpetuation of gross human and civil rights violations (3).

Zionism ignores the fundamental tenets of scripture, will calls for treating each other with love and respect. For instance, Leviticus 19:18, '... you shall love your neighbour as yourself '.


Israel prides itself being the sole democratic nation in the Middle East. It even allows Palestinian parties to be represented ... along as they accept the Law of Return. However, would Israel ever allow the Knesset to be ruled by Palestinians?

Palestinians are treated like second class citizens in Israel, while those who live in Palestine are treated as anathema, a problem to be destroyed.

Israel states that it is a Jewish nation and therefore only Jews can rule the nation. This is not seen as contradictory to democracy, yet it does not allow fair representation of, or opportunity for, all people in the nation.

Israel in its embrace of Zionism, ignores basic Jewish scripture in the way that it treats non-Jews, particularly Arabs, who live there. Leviticus 19:33-34 states 'And if a stranger dwells with you in your land, you shall not mistreat him. The stranger who dwells among you shall be as one born among you, and you shall love him as yourself; for you were strangers in the land of Egypt: I am the Lord your God.'

The violation of this scripture is all the worse for the fact that the Palestinians are not 'strangers in the land' as they lived, owned and worked this land for thousands of years, yet they are treated worse than strangers.

Israel - with right comes responsibility

Although created illegally, Israel's existence has been accepted by the United Nations and it's occupants have a right to exist in peace. This right however, should not come at the expense of the occupants of that land. Palestinians also have a right to exist and to live in peace, secure from attack and secure from their land being stolen. They have a right to the same freedoms that we all are entitled to. They should not be caged behind walls (euphemistically called security barriers) which prevent them accessing health services, education, jobs and their own farms.

Whether a one state or two state solution is adopted, all people there have a right to live peacefully.

Peace is possible for Israel and Palestine, however, it will struggle while history is being reinvented, people's rights are being abused and the Nakbah is denied.


(1) "The Invention of the Jewish People", Schlomo Sand, 2009, (Verso, New Left Books) Chapter 3 "Invention of the Exile", including references to numerous historians, such as:

(a) Chaim Milokowsky, "Notions of Exile, Subjugation and Return in Rabbinic Literature" in "Exile: Old Testament, Jewish and Christian Conceptions", James M. Scott (ed), Leiden: Brill, 1997.
(b) Israel Jacob Yuval, "The myth of the exile from the land: Jewish time and Christian time", Alpayim 29, 2005, 29-35.
(c) "East and West: A History of Canaan and the Land of the Hebrews", A.G. Horon, Tel Aviv: Dvir, 2000, 344.

(2) "The Ethnic Cleansing of Palestine", Ilan Pappe, 2006, Oneworld Publications Limited.

(3) "The Iron Wall: Israel and the Arab World", Avi Shlaim, 2000, Penguin Books.

Further reading
Further comment on the invasion of Palestine, the legitimacy of Palestinians, the human rights violations of Israel and the misinterpretation of biblical scripture, refer to these articles at the Ranting Panda blog:

Israel - Superstition, Prophecy and Human Rights.

Palestine's Right to Exist

RIP Victims of Operation Cast Lead

Updated 15 May 2016

Friday, May 25, 2012

Sympathy for the devil

People smugglers may not belong to the world's most respected profession, they may be trading on tragedy, but they exist to fill a human rights need which governments have both caused and failed to adequately and humanely address.

Kevin Rudd, former Australian Prime Minister said 'people smugglers are the vilest form of human life, they trade on the tragedy of others, and that is why they should rot in jail and, in my own view, rot in hell.'

This seems a little harsh. There is an argument to make that they have actually saved many people from a life of despotism, persecution or languishing in a dead-end refugee camp with no hope for the future. Yet the 'smuggler' is charged with criminal offences, even though it is not illegal to enter a foreign country in order to apply for asylum. So if it isn't illegal to apply for asylum, and the asylum seekers are by and large granted asylum, then why are the 'smugglers' being so demonised?

Rudd accused people smugglers of 'trading on the tragedy of others'. People smugglers certainly do profit from tragedy, but the tragedy shouldn't exist in the first place. People smugglers haven't caused the tragedy that the asylum seekers are fleeing from, they are merely opportunists taking advantage of it.

Politicians of all persuasions should take the plank out of their own eyes before trying to take the speck out of someone else's. Politicians in Australia gain considerable political mileage through raising the 'threat' of a 'refugee invasion', vilifying asylum seekers while exploiting the nation's fears and racism. It is the politicians who trade on the tragedy of others for political point-scoring. Elections have been won and lost on this very issue.

Many years ago a successful businessman stated to me that his business model was based on the adage, 'if you see a need, fill it'.  Today's people smugglers are successful because they have seen a need and are filling it. This is a need that has often been created or nurtured by rich and powerful countries sponsoring despots for geopolitical reasons. For instance, Hussein, Pinochet, Suharto and Pol Pot were sponsored by the United States while Idi Amin, Gaddafi and Mubarak were sponsored by the Soviet Union.

The use of these regimes to further the geopolitical hegemony of powerful nations has resulted in much of the refugee issue we see today. It is these nations which traded on the tragedy of others. As people were massacred by despotic regimes in Central and South America, Africa, the Middle East, South East Asia and so on, American corporations grew rich and the US government spread its influence. As the US and USSR fought wars by proxy in Iraq, Iran, Afghanistan, South East Asia, Africa, the Middle East, innocent civilians were massacred in the name of democracy or socialism.

Now that the Soviet Union is no more, the United States is prancing across the globe forcing 'democracy' on people at gun-point while allowing western corporations to profit  through the economic rape of vulnerable nations. It's not actually democracy that the US is forcing on nations; democracy is the guise under which capitalism is being forced on these nations for the benefit of American corporations.

This is the true trade on the tragedy of others.

As Wendell Berry, a farmer and writer, stated "how would you describe the difference between modern war and modern industry - between say, bombing and strip mining, or between chemical warfare and chemical manufacturing? The difference seems to be only that in war the victimisation of humans is directly intentional and in industry it is 'accepted' as a 'trade-off'. "

Berry also stated, "We seek to preserve peace by fighting a war, or to advance freedom by subsidising dictatorships, or to 'win the hearts and minds of the people' by poisoning their crops and burning their villages and confining them in concentration camps; we seek to uphold the 'truth' of our cause with lies, or to answer conscientious dissent with threats and slurs and intimidations ... I have come to the realisation that I can no longer imagine a war that I would believe to be either useful or necessary. I would be against any war."

Refugees who escape war or life under a despot often end up either living indefinitely in a refugee camp with little hope or being held in soul-destroying indefinite detention as applications are processed. These are people who have not committed a crime but are being treated worse than a convicted criminal.

Who can blame someone for commissioning a 'smuggler' to help them escape such desperation. The majority of these people are found to be genuine refugees and granted asylum. From there, they go on to become worthwhile members of society.

During the second world war, people smugglers were applauded. Back then they were assisting Jews and other persecuted people to escape Nazi Germany, often for a fee. What is the difference between them and those who assisted people to escape persecution from Saddam Hussein or the Taliban?

Most people smugglers are not in business for philanthropic reasons, being solely interested in the money earned. Whilst many of them charge exorbitant sums, they are taking huge risks with the lives of themselves, the crew and the asylum seekers and they are running the risk of being arrested. Sadly, some of these journeys end in tragedy through the deaths of hopeful asylum seekers.

Ironically, many people who criticise people smugglers do so, not because of any altruistic concern for asylum seekers, but because they just don't want the asylum seekers in their country.

To suggest that people smugglers should 'rot in jail' or 'rot in hell' as Kevin Rudd suggested is to completely misrepresent the gravity of the situation and to demonise scapegoats for political gain. No-one forces asylum seekers to use people smugglers. Asylum seekers have a choice between the devil and the deep blue sea!

True criminals are ones who force injustices on others, such as theft, kidnapping, rape, torture, murder ... the sort of crimes that some States and corporations sanction in their pursuit of power and money.

Rather than politicising the tragic circumstances of these victims of injustice, governments across the globe could take steps to assist in the resettlement of refugees in a more humane and timely manner.

If governments are genuinely concerned with stopping people smuggling, they would take steps to prevent the situations that create the problems. This would require nations to stop waging war or supporting despots and stop exploiting the economies, natural resources and people of developing nations. Governments need to cooperate with their regional neighbours to assist in quicker processing of applications and ensuring that asylum seekers are not dehumanised or imprisoned indefinitely, but instead treated with respect and dignity.

Saturday, May 19, 2012

The sentimental consumer in an holistic economy

Few people take responsibility for their failures. In the case of low consumer sentiment, consumers are failing to take responsibility, preferring to blame the government. Consumers are carrying household debt at 150% to their disposable income and are desperately seeking out bargains and paying lip service to 'Australian Made' as they incessantly buy foreign product in their hunger for cheaper products. It is these factors and opposition fear-mongering, not the economy, which have destroyed consumer and business confidence in the market. In fact, consumer sentiment is merely one aspect of an interconnected economy; it is one very important factor impacting an holistic economy.

Australia's economy is one of the strongest in the OECD. Interest rates are low, employment is low, the current account deficit is lower than any time in the last 10 years, but paradoxically consumer and business confidence is low.

A number of factors are driving confidence, not least of which is uncertainty in global markets, particularly in Europe and USA. There is also obvious concern about the impact of the carbon tax which commences on 1 July 2012. Yet with fewer than 500 companies being taxed and considerable tax benefits for tax-payers, the impact on the consumer should be minimal. Of greater risk, is companies using the carbon tax as an excuse to price gouge, taking advantage of the ignorance of the consumer. The government needs to monitor this to ensure that increases are justified.

Even though the Australian economy is strong, the Labor party has failed to adequately explain this to the public. The Rudd and Gillard administrations have been fraught with debacles and perceived debacles which have been exploited by the opposition.

Low consumer confidence is reflected most noticeably in depressed retail and services sectors, with many businesses struggling to meet budgets. Perhaps the biggest threat to these sectors has been the level of household debt. In 1996, household debt was around 70% of household disposable income, by 2007 it was around 150%, which is the highest in the world. Since 2007, it has remained relatively static with a slight decrease in interest paid on the debt due to the RBA reducing interest rates during this time.

Household debt increased dramatically because of a significant increase in housing prices resulting in higher mortgage levels. Home ownership wasn't just sold as a necessity or as a way of avoiding rent, but as a means to wealth.  Home buyers were sold the illusion that they could become exceedingly wealthy through real estate. They embraced this dream with a fervour reminiscent of Gordon Gecko in the 1988 movie 'Wall Street'. As stories abounded of untold wealth through real estate (and to a lesser extent through the share market), consumers were practically chanting the Gecko mantra 'greed is good' as they bought the bigger house, the investment property, or invested heavily in the share market.  Mortgages, equity and margin loans rather than being anathema to astute investors, were revered as 'good debt' leading to financial freedom.  Nothing could be further from the truth.  They were sold a dream based on unfettered capitalism.  They were sold a lie that would make a few rich at the expense of many.

Contributing to this has been increases in credit card debt as consumers are manipulated by businesses to "keep up with the Jones's". A strategy that has at its core 'perceived obsolence' as a result of new models of everything being released regularly.  The retail sector has been their own worst enemy in this regard, promoting 'interest free' terms to entice consumers to update products regularly, but which contributes to higher household debt, ultimately reducing net disposable income. This in itself becomes a vicious cycle, as net disposable income reduces, so does the purchase of some products, while fuelling increasing credit card debt in order to buy 'essentials'.  Large debt, means large debt repayments, affecting the willingness of consumers to spend, reducing retail sales and further depressing the retail sector. It also impacts on the real estate and services sectors as people are less willing to spend.

A quick comparison of household debt (at 150% of disposable income), to government debt shows that in 2010/11, federal government receipts were $282 billion, while government payments were $336 million, which is approximately 120% of income. In the 2012/13 budget, government receipts are forecast to be $378 billion and government payments $372 billion, providing a small surplus and outlays of 98% against earnings, providing an underlying cash surplus of $3.5 billion.
(Reference accessed on 19 May 2012:

Consumers complain about local manufacturers such as Pacific Brands taking their manufacturing overseas, yet these decisions are made so that the manufacturer remains competitive and solvent.  Australians are not buying the Australian manufactured product because generally t is more expensive than imported items.  While we see some loyalty to Australian products it is not enough to maintain the Australian manufacturing industry.

Consumers do not want to pay full price for anything and will often try to bargain retailers down, often playing one against the other.  Whilst this is fantastic for the consumer's hip pocket, it is doing nothing to improve the retail industry. Retailers are often forced into offering huge discounts to attract consumers.

Online shopping through foreign websites has also affected the local market. Many overseas sites sell products cheaper than they are sold in Australia and will offer free postage.  How can a consumer resist such a saving? How can the local market compete while remaining profitable?

The high Australian dollar is having an impact and is encouraging Australian's to shop overseas while discouraging foreign investment in Australia.

Domestic online shopping is also affecting the local retail market. Large retailers enable consumers to purchase groceries and goods online, which reduces the number of people going to shopping centres. This directly affects the smaller retail stores as few people go to a large shopping centre just to visit a small retailer.  Usually the small retailer only benefits because of shoppers who are there to visit a larger retailer.

The following charts shows the decline in retail sales, which mirrors the trend in consumer confidence.

Following the GFC in 2007/8, there was a recovery in both retail sales and consumer sentiment following Kevin Rudd's economic stimulus packages which protected Australia from the worst of the GFC.  In 2010 there is another sharp decline, most likely as a result of the 2010 election which resulted in a hung parliament.  There were no winners from this election as both major parties were forced to compromise with the independents in order to form government.  Out of this, Labor was returned to power, but in doing so had to renege on an election promise of not introducing a carbon tax.  This compromise was exploited by the Liberal party who claimed Labor had lied during the election campaign.  Lie or not? Had Gillard won government in her own right, would she have introduced a carbon tax? It is unlikely, so it is inaccurate to say she lied.  She did, however, compromise. Nonetheless, the accusations of lying and the fear-mongering by both the Liberal party and the business and mining sectors have dramatically affected consumer confidence as people fear the impact on household budgets when the carbon tax commences on 1 July 2012.

We cannot solely blame the government for low consumer confidence.  The consumer is carrying massive household debt at 150% of disposable income. Many of us complain about government debt, yet it is affordable.  Of course debt is different to deficit. The opposition demonised the term deficit even though government deficit is not necessarily a bad thing. To sit on a surplus during a recession would be grossly irresponsible, tantamount to Nero fiddling while Rome burned. The government needed to spend in order to keep the economy moving and to protect jobs - hence the 'stimulus package'.  Nonetheless, if forecasts are correct, the economy will return to surplus during the next financial year.  The government has been managing the economy responsibly.  The consumer has not managed their own debt as well. Consumers criticise the government's financial management, yet it is the consumer who has the unaffordable debt, not the government.

Numerous factors affect a nation's economy, including government policy, market behaviour and conditions, consumer and business sentiment, decisions by the Reserve Bank and foreign influences.  No one factor can be held solely responsible, however, each factor has a responsibility. At risk of sounding like an holistic economist, to quote the Douglas Adams character, Dirk Gently, 'it's the interconnectedness of it all'; no factor operates in isolation.

Australia has a strong and growing economy as a result of government policy and RBA decisions. Consumers and businesses need to stop blaming the government and take responsibility for their role in the economy.  They may have some influence over government policy through voting and lobbying, but they have the most ability to improve their own confidence in the market, which helps to stimulate the economy, including employment and business growth. Consumers and business need to take responsibility for their behaviours, stop listening to fear-mongering and negativity and instead cultivate that confidence. Instead of the constant whinging and criticism, consumers and businesses should appreciate just how secure and stable Australia's economy is. It is this that will build the confidence.

Sunday, May 6, 2012

Banks - an exercise in greed

On Tuesday, 1 May 2012, the Reserve Bank of Australia (RBA) decided to hand down an interest rate cut of 5 basis points (0.5%).

Yet again the 'big four' banks (ANZ, NAB, Westpac and Commonwealth) have displayed their collective greed by not applying this rate cut in full.

The ANZ must have seen the writing on the wall, as they put up their rates by 6 basis points (0.6%) in mid-April, two weeks before the RBA board was to meet. On 2 May 2012, the day after the RBA decision, ANZ announced a record profit.  ANZ defered its decision until 11 May 2012, when it finally announced that it would also not pass on the full rate cut, but only reduce rates by 0.37%. To add insult to injury, ANZ stated that the rate cut would not take effect until 18 May 2012. Analysts calculate that banks earn $12 million per day for every day they don't pass on the rate cut. For the 17 days that the ANZ does not pass on the rate cut, they will pocket around $204 million!

Westpac also announced a record profit yet, only passed on a 0.37% rate cut.  The Commonwealth Bank passed on 0.4% and NAB passed on 0.32%.

Based on the analysis mentioned earlier, as ANZ and Westpac have only passed on 74% of the rate cut that the RBA provides to them, they will continue to pocket a further 26% of that estimated $12 million per day, which equates to around $3 million per day.  For NAB, their 64% of the RBA rate cut will continue to earn them 36% of the $12 million, or $4.3 million per day, while Commonwealth's 80% of the RBA rate cut will earn them $2.4 million per day.

The banks argue that RBA cuts only affect a portion of their business and that current funding costs are high as they compete for deposits through offering higher interest rates on savings, including fixed term deposits.  This argument has a few flaws, in particular because the RBA factors the impact of interest rates on both borrowings and deposits.   If the cost of deposits was having such a detrimental effect on the banks then why are their profits increasing significantly?

Surprisingly, the RBA economists are generally competent and not prone to flights of fancy. They understand that an interest rate cut does not benefit investments such as savings and superannuation, and considers this before any decision on moving interest rates.

The RBA cuts interest rates to stimulate the economy, conversely they raise interest rates if the economy needs slowing down.  Banks usually pass increases on in full and immediately.  Yet, they are very tardy in passing on decreases.  How is an RBA rate cut going to stimulate the economy if the cut isn't passed onto the consumer?  The reason the economy needs stimulating is because of poor consumer and business confidence, resulting in a suppressed retail sector, slow real estate market, struggling manufacturing sector, lack of business investment and reluctance to employ staff, coupled with rising costs in key areas such as electricity, fuel and public transport ... amongst other things.

Banks, like every business, are expected to make profits.  However profits should come from fair trade practices, not from exploiting benefits aimed at others and society in general. The banks are gouging, as reflected in their record profits, and it is having a detrimental affect on the economy.

The government should consider laws requiring  banks to pass on RBA rate decisions in full and within 24 hours of the RBA announcement.

Please sign the following petition urging the CEOs of the 'big four' banks to pass on the interest rate cut in full:

The petition is available through 'Sum of Us', a world-wide movement campaigning for a better global economy.

Saturday, May 5, 2012

Labor reality versus Liberal hyperbole

We are constantly told that the federal Australian Labor Party is 'on the nose' with the electorate. Certainly comments in the media, letters to the editor and even just general conversation with people would indicate that. Ask them why and of course they will trot out the usual criticisms, such as the BER, pink batts, boat arrivals, the deficit, carbon tax, mineral resource rent tax.

Yet is Labor as bad as they say? Labor has actually achieved a good deal for Australia. Labor's biggest problem is their self-marketing and their public infighting, coupled with the Liberal Party's exaggerated claims of doom and gloom.

Labor needs to start promoting themselves and explaining their achievements.  If the Liberal hyperbole is to be believed, Australia is on the brink of economic collapse, wallowing in debt and illegal immigrants. Yet the truth is far removed from the fear-mongering as can be seen in the following brief summary of Labor achievements:
  • Responsible deficit management.  In the 2012 budget, Treasurer Wayne Swan delivered a budget that will return Australia to surplus by $1.5 billion and build on that surplus of the next four consecutive years.  This surplus follows the deficit that Labor accrued as they rolled out policies that protected Australia during the GFC.  Having said that, is a surplus really necessary? Surpluses are over-rated, yet the opposition has convinced the Australian public that deficits are bad. Under Howard, Australia had a massive surplus which essentially saw minimal funding on infrastructure and key services.  The Australian deficit is manageable and needs to be balanced against the benefit that has been obtained from maintaining and improving infrastructure, services and the economy. Nonetheless, the strength of the Australian economy is such that it is now the time to take the country back into surplus and that is what Wayne Swan's responsible 2012 budget is forecast to do.
  • Economic strength. In May 2012 Australia's economic growth was close to average, while unemployment and inflation were still quite low. On 26 July 2012, Australia's inflation was at its lowest level in 13 years. 
    Additionally, Australia's cost of living was the lowest it has been in 20 years. Australia is one of eight countries which still has a AAA credit rating.
    The biggest threat to both growth and employment is consumer confidence.  A lot of this has been fuelled by negativity and fear-mongering by the federal opposition.
    Given the strength of the Australian economy, consumer confidence should be higher than it is and it is a rise in this confidence which will increase growth and employment, particularly in non-mining sectors such as retail, hospitality, tourism and manufacturing. Additionally, if consumer confidence wasn't being sabotaged by the opposition, we would also see growth in the residential real estate market.  Consumer confidence is being eroded by forces other than the true picture of the economy.
    The high Australian dollar is impacting on the economy (positively or negatively, depending on whether your importing or exporting), yet this is the trade-off for a strong economy in comparison to the collapses in other western currencies, particularly the US dollar.
  • NDIS/NAIS. Labor introduced the National Disability Insurance Scheme and National Accident Insurance Scheme to benefit people born with disabilities and those who are disabled through accidents.
  • Sustainability
    • Carbon tax. Labor introduced a carbon tax to encourage businesses to reduce their unsustainable reliance on fossil fuels and to develop and move to renewable energy sources. The coalition has fuelled fears that this tax will massively increase the cost of almost everything, yet as it is aimed at the top 500 companies (out of 3 million companies in Australia), the biggest threat is some businesses will take advantage of this alarmism and increase prices independently of the tax, that essentially they will price gouge even though the tax may have little impact on them.
    • Renewable energy programs. Labor has implemented other initiatives to assist in moving towards renewable energy sources, such as solar panels for households and schools. Labor invested $5.1 million in renewable energy, including solar, wind, geothermal and biofuels research. Regardless of whether or not you believe in man-made climate change, the fact is that our reliance on fossil fuels is unsustainable and pollutes the planet. 
    • Home Energy Saver Scheme. Labor introduced the Home Energy Saver Scheme to deliver energy efficiency services to around 100,000 low income families.
    • Mining resources rent tax. Labor introduced a mining resource rent tax to ensure that all Australians benefit from the mining of minerals and not just the mining companies. Minerals belong to the Crown, so why shouldn't the mining companies pay for them?
  • National Broadband Network. Labor introduced the National Broadband Network, an ambitious project which will future-proof Australia's communication network rather than reliance on 20th century technology.
  • Health. 
    • Labor increased health spending by 50%
    • increased training places for GPs and nurses
    • upgraded emergency rooms 
    • targeted teen dental health 
    • implemented health checks for 4 year olds.  
    • They also invested over $2.3 billion on cancer research and treatment centres, including the construction of two cancer research facilities in Sydney and Melbourne and established a network of cancer centres across regional Australia.  
    • Labor has increased funding of community mental health facilities. 
  • Aged care
    • 2012/13 budget includes $3.7 billion to reform aged care. 
    • Home care packages have increased by 60%, taking them to 100,000. Home care packages are a group of services that assist the elderly to continue living in their own homes and communities)
    • Aged pension increases. Labor has introduced the single biggest increase to aged pensions in 100 years, with more than $100 per fortnight for singles and $76 per fortnight for couples.
    • increased aged care places by 10,000.
  • Education and Training
    • National Workforce Development Fund which funds industry to support training and work-force development in areas of current and future need, particularly in relation to apprentices and mature age workers.
    • Training places. Labor has created 235,000 new training places to develop workplace skills and increase productivity, enabling more people to not just obtain a job, but have a career.
    • Trade Training in Schools Program. Labor delivered a key 2007 election promise through the Trade Training in Schools Program, which builds trade training centres in schools.  This program encourages students to stay in school longer as well as prepares them for trade-related careers.
    • Single National School Curriculum. Labor established the Single National School Curriculum in order to standardise english, maths, science and history curriculum throughout the country.
    • Laptops in schools. Labor delivered new laptops to all students throughout Australia in years 9 to 12.
    • Education Tax Refund has assisted families with educational costs such as laptops, software and text books.
    • School-kids bonus to assist parents to meet the cost of their children's education
  • Businesses
    • loss carry back - which allows businesses to carry back tax losses so that they receive refunds in subsequent years. This supports once profitable businesses to profit through a tax benefit of up to $300,000.
  • Tax cuts. 
    • The last three budgets delivered tax cuts to working families and low income earners. 
      • someone earning $30,000 p.a. pays $750 less tax than in 2007/8 (26% decrease in tax)
      • someone earning $50,000 p.a. pays $1,750 less tax than in 2007/8 (18% decrease)
      • someone earning $80,000 p.a. pays $1,550 less tax than in 2007/8 (8% decrease)
    • Supplementary allowance introduced for those on low incomes, including students, the unemployed and parents with young children. 
  • Tax free threshold. The tax free threshold has been tripled from $6,000 to $18,000 which presents significant tax benefits for people earning up to $80,000.
  • Infrastructure. 
    • Labor significantly increased spending on infrastructure such as roads, ports and rail networks.  For instance, 'Roads to Recovery' funded the upgrade of local, state, territory and federal roads, duplicating the Pacific Highway and funding of the Torrens and Goodwill rail projects.
  • Global Financial Crisis. 
    • Labor successfully navigated Australia through the Global Financial Crisis, arguably the biggest economic collapse since the Great Depression.  Australia was one of the few western nations which survived relatively unscathed and it was because of the nation-building stimulus packages which included the pink batts scheme, jobs stimulus programs, programs for health and education, small business tax breaks, and cash bonuses for every taxpayer.
    • An RBA report indicated that Labor's efforts during the GFC had saved up to 500,000 Australian jobs. Additionally, Labor guaranteed bank deposits which ensure that our banks maintained their strength and stability, while our savings remained protected.
    • ALP programs protected Australians from the most serious effects of the GFC, earning Wayne Swan the accolade of 'World's Greatest Treasure' by the respectable 'Euromoney' magazine.
    • Critics often raise the BER and pink batts as evidence of ineptitude, yet the BER was the responsibility of state education departments and a report found that the majority of projects benefited the school communities and were delivered within a realistic budget. The pink batts scheme had tragic consequences when unlicensed contractors took advantage of the grants, proving the need for greater government intervention of business activities through more rigid licensing and compliance audits.
  • Industrial Relations reform. 
    • Fair Work Australia. Labor over-turned the Liberals WorkChoices legislation and phasing out the Australian Workplace Agreements which had cost jobs, security and benefits in many sectors, most noticeably retail and hospitality.  Labor undertook the daunting task of standardising the industrial awards in Australia through the implementation of Fair Work Australia and reinstating unfair dismissal laws.
  • Federal-state relations. Labor committed to a more equitable distribution of federal-state funding which was in contrast to Howard's often devisive approach to federal-state relationships.
  • Same-sex relationships. Labor passed laws to recognise same-sex relationships in key areas including employment, superannuation, taxation and health.
  • The Apology. Kevin Rudd apologised to indigenous Australian's for the abuse that they suffered at the hands of previous Australian governments.
  • Kyoto. Kevin Rudd signed the Kyoto Protocol, committing Australia to reducing its emissions.
Australia may be the lucky country, but this 'luck' doesn't happen by chance. It happens through the concerted effort of government to maintain a strong and sustainable economy - this is what Labor has achieved.

Article updated 8 May 2012 following the federal budget announcement:

The Kingdom of God

Matthew 6:31-33 states: "therefore do not worry, saying, 'What shall we eat?' or 'What shall we drink?' or 'What shall we wear?'  For after all these things the Gentiles seek. For your heavenly Father knows that you need all these things. But seek first the kingdom of God and all these things will be added to you".

Too often we allow our worries and cares to dictate our thinking and behaviours.  Certainly it can be stressful if we are finding it hard to feed and clothe our families and ourselves, yet God tells us to not to make this our priority, but to seek His Kingdom first.

Romans 14:17 explains what His Kingdom is and is a great explanation of the above verse: 'for the kingdom of God is not eating and drinking, but righteousness and peace and joy in the Holy Spirit'.

Matthew 6:34 goes on to tell us: 'Therefore do not worry about tomorrow, for tomorrow will worry about its own things.  Sufficient for the day is its own trouble'.

God knows that we face troubles, that we have cares and concerns.  He knows that these things can overshadow our faith in him.  Yet that is why we need to put his Kingdom first.  By establishing our priorities correctly we won't have to stress about other issues.

Some years ago, a number of the modern churches embraced "prosperity teaching", the idea that God will bless us with wealth and riches beyond our wildest dreams.  Yet the bible does not say this at all.  In Matthew 19, Jesus tells a rich, young ruler who obeyed the commandments, that in order to be perfect he had to sell everything. These verses do not just relate specifically to the young ruler, but to all of us.  Following this parable, in Matthew 19:24, Jesus says "and again I say to you, it is easier for a camel to pass through the eye of a needle, than it is for a rich man to enter the Kingdom of God".  Camels were used to carry material belongings .  The eye of the needle was a small security entrance through the wall of the city.  In order for camels to pass through this "eye", the goods they were carrying had to be removed, hence the analogy that it is easier to remove goods from a camel, then from a rich man.

By embracing prosperity teaching we incorrectly prioritise our needs, wants and desires ahead of God.  Instead of pursuing the kingdom of God, prosperity proponents believe that God is there to bless us with riches and wealth. It puts "us" first, not God. Matthew 6:31 doesn't speak of wealth, it speaks of necessity.  It tells us to not worry about those things that we need in our lives, but instead to seek first the kingdom of God and our needs will be taken care of.

Similarly, Psalm 37:4 states 'delight yourself also in the Lord, and He will give you the desires of your heart'.  God will certainly bless us as we delight in the Lord, but this doesn't mean that He will making us filthy rich. If that was the case then there are millions of poor people who delight in God and should be rolling in riches.

Matthew 6:31 tells us that food, drink and clothes are sought by Gentiles, in other words, non-Christians. These worldly concerns are their priority.  Christians should not be giving first priority to worldly concerns, even if it is a basic necessity.  Sadly, some of us use scriptures such as Psalm 37:4 and Matthew 6:31 as motivation to gain all those worldly desires that we have, even beyond receiving our basic necessities.

Although the scriptures above promise reward, God is not trying to buy our devotion or friendship.  In James 2:23, we are told that " ... 'Abraham believed God, and it was accounted toward Him for righteousness'. And he was called a friend of God.God had promised Abraham that he would make him the father of many nations.  Yet Abraham wasn't considered righteous because of what God was giving him, but because he believed what God had promised.  It was his belief in God, not the fulfillment of promise, that made Abraham righteous and made him God's friend.

We should delight in God and seek His Kingdom, not because of any reward we believe we will receive in this world or the next, but because we want to, because we love God.

Another verse which is often cited out of context is Matthew 26:11 'For you have the poor with you always, but Me you do not always have'.  This verse is not a call to ignore the poor, it is simply stating that the disciples needed to put Jesus first, bless Him and anoint Him, for He was going to be crucified not long after, whereas the poor were always going to be there and we are required to care for them always. With literally thousands of verses commanding us to care for the poor we cannot possibly translate this verse as a justification to ignore the impoverished and put our own wealth first. Deuteronomy 15:11 tells us, 'for the poor will never cease from the land; therefore I command you, saying 'You shall open your hand wide to your brother, to your poor and your needy, in your land.'. Additionally, Proverbs 14:31 states 'Whoever oppresses the poor shows contempt for their Maker, but whoever is kind to the needy, honours God'.

In Acts 20:35 the Apostle Paul tells us "I have shown you in every way, by laboring like this, you must support the weak. And remember the words of the Lord Jesus, that He said, 'It is more blessed to give than to receive'. "

The Kingdom of God is not the church building or even individual church communities, yet too often we focus on church growth (which is often achieved through shuffling the decks of existing believers) and church wealth.  We now see the rise of the mega-church; churches which have thousands of members and have taken over other churches in a mergers and acquisitions program that would be the envy of Wall Street.  The bible says 'go into the world', it doesn't say 'sit in church'. Mark 16:15 - '... go into all the world and preach the gospel ...' The great commission is about 'going out', not 'coming in'. 

God tells us that we are forgiven, we need only believe. That is all that we have to do - believe God, believe His Word ... and it will be accounted as righteousness - as it was with Abraham.  Believing God for his forgiveness, salvation and provision, and knowing that we therefore are righteous should give us peace and joy in God! That is the Kingdom of God that we should seek and that is the gospel that should be preached to the world.