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Thoughts on Australian company tax reform

Introduction. One of the important constraints on tax reform in Australia is widespread ignorance about notions of tax incidence. A mistaken theory of tax incidence – the “flypaper theory” – suggests that taxes impact on those groups that they are directly levied on. So, payroll taxes and superannuation levies fall on the companies they are […]

DVD rental stores & history.

DVD rental stores have been buffeted by competition and technological change in a way that is fascinating to students of business history. A fun thing to consider too because simple perceptions here drive justifiable economic knowledge and insight.

I once had 4 of DVD rental stores within 2 km of my home. Now there are […]

Real estate agents providing financial advice

A snippet that interests me. The Ray White Group (one of Australia’s largest real estate brokers) is to move into the financial planning industry. They earn commissions on real estate transactions and I assume they will earn commissions on the advice they give. They seek ASIC approval and expect to get it. My devious, perverted, […]

Sugary lies

In the current issue of NewScientist it is reported that in 2013 the US Sugar Association applied pressure on the US Congress to drop US funding of the WHO because its new food guidelines included strict suggested limits on the role of sugar in the diet. More information is in this Guardian report. Sugar is […]

David Jones directors make astute share purchases

David Jones needs to be explicit on what two of its directors knew about a merger offer from Myer that was made to the board of DJs the day before these two directors bought shares in DJs and before DJ’s had decided to reject the merger offer. DJs also announced an improved profitability outlook a […]

Privatising Australia Post

The cry has gone up from the BCA to privatize Australia Post. Its a weak argument from a posturing bunch of low-intellect phonies who are promoting self-interest, neo-con ideology and third-rate economics.

Australia Post is a natural monopoly. Its mail sorting and handling operations as well as its delivery and transport operations are characterised by […]


An entirely hypothetical situation I am thinking about raises the following parable.

A firm employs someone who earns $100,000 per year and he/she produces each year in revenues $400,000 – the value of their marginal product. There are no other significant variable costs. In the face of cost pressures the firm sacks him/her to save […]

Albanese goes

So Tom Albanese has been sacked (sorry, err, he “resigned”) as the CEO of Rio Tinto. He was only paid $7m in 2011 for his efforts at Rio Tinto so I guess there were warning clouds there. But after all, what did he really get wrong? Turning down BHP-Billiton’s 2008 3 share offer might have […]

BHP Billiton & climate change

It interests me that BHP Billiton (the world’s largest coal exporter) is adjusting its port construction plans to account for the effects of climate change on ocean behaviour. They are also looking carefully at further investments in coal given they anticipate a movement away from coal. As a firm they are committed to addressing the […]

Financial heroes at Goldman Sachs

Sociopaths who act only to enrich themselves at the expense of their clients? Surely not. Who could believe a disgruntled former employee?

This is particularly so given Goldman Sach’s enviable track record. A reputation they are continuing to enrich, if you can excuse a dreadful pun.

This is the Borowitz report that provides a […]

BlueScope Steel’s share price collapses in week before significant share issue

BlueScope Steel seems to have some questions to answer. It recently announced a 4 for 5 issue of shares at 40 cents. As the ex rights shares have traded over the last few days for less than 40 cents the value of these rights is zero at present. As Bryan Frith points out in The […]

Bank robbery

Over the past 5 years US bankers have been paid $2.2 trillion. That’s roughly twice Australia’s GDP. It is an astounding amount that was not invested in productive assets but spent on fairly useless business executives who drove their firms – and the world economy – to the point of collapse.

This makes the rewards […]

BHP-Billiton to invest in agriculture?

Potash or potassium carbonate has several industrial uses but is, in the main, used in agriculture. According to the Wikipedia entry: “Potash is important for agriculture because it improves water retention, yield, nutrient value, taste, colour, texture and disease resistance of food crops. It has wide application to fruit and vegetables, rice, wheat and other […]

BP share price

It is interesting to look at BP’s share price. Its above where it was last July though it has fallen markedly (by one-third) since the oil spill began in April in the Gulf of Mexico. Yesterday $11b was wiped off the value of the company as further efforts to stop the leak […]

Executive remuneration

Here are the Terms of Reference for the Productivity Commission inquiry into executive remuneration in Australia.  It is a sensible inquiry because remuneration practices are part responsible for the excessive risk-taking and greed that has led to the current financial mess. 

My kneejerk reaction – the type of reaction that this inquiry hopes to […]

Costello is right on Rio

Despite some silly protestations over at Catallaxy I think Peter Costello is quite right to oppose the deal by Chinalco to purchase key Rio Tinto assets.  BHP-Billiton, for a time, valued Rio Tinto shares at somewhere north of 3.4 times the value of BHP-Billiton script.  They are now trading at about 1.6 times a BHP-Billiton […]

Business-people who reduce capitalism’s appeal

Maureen Dowd shows justifiable contempt for the greedy ‘masters of the universe’ who have destroyed the lives of millions – 80,000 extra unemployed globally in one day this week – and yet still cretins like former CEO of Merrill Lynch Mr. Thain – a man who in my view should be in jail – cries […]

Ethics & Merrill Lynch executive remuneration

The real bonuses and the phoney profits have been a feature of Merrill Lynch’s US operations.

But ex CEO John Thain’s actions seem to me to show the moral bankruptcy of Wall Street.  Merrill Lynch paid out $15 billion to executives in 2008 which just matched the controversial 4th quarter losses that Bank of America (its purchaser) have […]

BHP-Billiton – Rio Tinto deal is off

On July 14 2007 I tipped a possible takeover bid for Rio by BHP-Billiton. On November 8 that year it happened. I got it wrong however in suggesting it likely that eventually some sort of deal would be done. In dramatic news yesterday the 3.4 BHP-Billiton shares for 1 Rio Tinto shares bid was abandoned. […]

Macquarie Bank another domino to topple?

I dont have time to comment on this review but as I have suggested in the past the future of Macquarie Bank and its ‘millionaire factory’ is being increasingly questioned. In my earlier post I noted that Enron analyst Jim Chanos described Macquarie as a Ponzi scheme.

Certainly the spinoff firms from Macquarie are not […]