THE POLITICISATION OF SCIENCE

I have written extensively on the impact that political views have on science and how scientific viewpoints then feed into public policy like a feedback loop. All well oiled by copious quantities of taxpayers cash.

The assumption that carbon dioxide is a poison of course is a fallacy. Carbon has been demonised. Television pictures of clouds of gases being emitted from electricity generation cooling towers have impact. Its a pity therefore that the television journalists do not inform their readers that those emissions are largely water vapour.

They also don't tell you that water vapour is a very potent greenhouse gas, far more so than carbon dioxide.

European forests have increased in area by some 5,000 sq. kilometres in recent decades. Some of this is "direct action" in the form of man made plantings, and some is the reversion of former agricultural land into forest. If you travel to western Poland you can see it.

Increases in water vapour and carbon dioxide should (are) sustaining increased vegetation growth, both in density and in geographic spread. There have been recent scientific publications, including satellite photography which illustrates the point. How rich the earth was in former geologic times, the evidence for which is found in an abundant fossil record. These were times when the atmosphere contained far more water vapour and carbon dioxide than it does today. Plants and animals thrived.

How interesting it would be then, if instead of this constant "we are all going to be ruined" harping from the green-politicised scientific community, we could envisage a world where northern Canada, Siberia, Saharan Africa, and Australia became the food bowls of the world. All it takes is water, warmth, and plant food: carbon dioxide.

For my readers who are interested in pursuing these themes, Ian Plimers' excellent book, Heaven and Earth is a good start. So is Taxing Air:Facts and Fallacies about Climate Change, but Messrs Carter & Spooner.

Taxing Air is challenging: it tolls the bell on what the so-called climate change is really about: extending the tax base for green-left governments. What next: a royalty on rainwater falling in your garden? Don't think it can' happen, especially now the government knows who has rainwater tanks.

David Millhouse is an international entrepreneur with over 30 years in venture capital and private equity internationally. Based in Brisbane, Australia he is a specialist in venture financing and capitalisation, as well as the management of high growth companies, many of which proceed to IPO. He has conducted business in the UK, Germany, Switzerland, USA, Canada, Singapore, Hong Kong, Australia and New Zealand. A scientist by original profession, with an MBA and LLM from Bond University in Australia. He is a trustee of Bond University, Australia’s premier private University, and was formerly a trustee of the Queensland Art Gallery/Gallery of Modern Art. There are 30 years of publications and media on his professional activities and he has had a stellar career at CEO level since 1983.

For personalised solutions to the issues raised in the blog, please contact CORPbuilders TM at www.corpbuilders.com.au or call 0413 748 844

ROBIN RUDD IMPOVERISHES THE POOREST

Australian real interest rates are near zero. That's right: close to zero. Monetary policy is similar to that in the US, UK, EU and Japan. Why?

The domestic Australian economy requires serious stimulation. It isn't happening, because the "politicians have made investment too dangerous". So writes Robert Gottliebsen in Business Spectator (www.business spectator.com.au).

Interesting then that the effect on un- and under-employment is yet to be debated. This from Morgan Stanley to their clients: "We think the real downturn is only about to begin". Specifically their comments refer to a savage decline in engineering and construction activity which, given many people fly into large resources developments from their home towns, is likely to spread the effects of such a downturn widely throughout the economy. It is already happening in once prosperous regional cities like Mackay in Queensland. Real estate prices are deflating there.

A zero real interest rate is not enough to provide business confidence to invest and employ these people. Uncertainty about income does not stimulate property prices, no matter how low the interest rate. Buyers beware.

Contrast this with a country which has few natural resources, but massive trade surpluses with every one of its major trading partners/blocks: Germany. Why? Why should Australians envy and strive to emulate the Germans?

Political stability is one reason. Angela Merkel, the present Chancellor has provided stable leadership in very difficult economic circumstances, and almost certainly will retain power in the forthcoming Federal elections (two weeks after Australia). Contrast this stability with the childish, selfish behaviours evident in Canberra these last years.

Investment requires stability, confidence, and certainty. I have found these qualities across the German polity, legal system and corporate governance systems over a long period of time. They have not been evident in Australia for many years and are not evident now. Not at least until the next government has had at least 12 months of settling in.

Doubtless, Australia's self styled fiscal conservative prime minister, his predecessors and their respective ministers think they are assisting the poorer segments of Australian society by taking from the "rich" and distributing to the "poor". In fact, the result of their collective policies is the reverse. Robin Rudd stands out as a wrecker, deliberate or not, which will take a long time to fix.

David Millhouse is an international entrepreneur with over 30 years in venture capital and private equity internationally. Based in Brisbane, Australia he is a specialist in venture financing and capitalisation, as well as the management of high growth companies, many of which proceed to IPO. He has conducted business in the UK, Germany, Switzerland, USA, Canada, Singapore, Hong Kong, Australia and New Zealand. A scientist by original profession, with an MBA and LLM from Bond University in Australia. He is a trustee of Bond University, Australia’s premier private University, and was formerly a trustee of the Queensland Art Gallery/Gallery of Modern Art. There are 30 years of publications and media on his professional activities and he has had a stellar career at CEO level since 1983.

For personalised solutions to the issues raised in the blog, please contact CORPbuilders TM at www.corpbuilders.com.au or call 0413 748 844

HENRY THORNTON & ALAN KOHLER ON THE DESTRUCTION OF THE AUSTRALIAN ECONOMY

On the 5th June this year I reported:

 

Henry Thornton is the non-de-plume of a highly reputable Australian economist. This week he writes: "Australia is no longer the miracle economy, and seems to be heading almost heedless into very difficult times". He goes on: "The current government has steered Australia into a situation of great economic disequilibrium whose main manifestation is a loss of competitiveness of Australian business". "Spending tax payers money has provided no preparation for the sacrifices that will be necessary to reform Australia's international competitiveness". "The budget has fallen apart and has been shown to be in far worse shape than the Treasury and the Government ....believed until recently".

 

Last week, the government unveiled a massive deficit with no realistic prospect of improvement. And their mea culpa is probably not even accurate.

 

If anyone doubts Thorntons' view, or mine in these blogs, look no further than Henry Thornton and Alan Kohlers' articles in the Australian of the 6th August (today).

 

Thornton writes: " Leaders in denial as we head for a recession we don't have to have". "The nations leaders are walking unknowingly into a new economic crisis, ironically just as other developed nations are showing signs of recovery" (Please read my Ping Pong Pang Series: all coming true). "The only excuse for the steady tramp into recession is the insularity and self congratulatory hubris of successive ministers and officials..." Listening to lightweight politicians and their syncophant commentators on the TV current affairs shows makes me cringe. Australians are Lions being led by Donkeys. So much misplaced trust.

 

Alan Kohler, another well respected economist writes today on the same page: "The men and women in federal cabinet over the next three years are the ones who will finally have to confront this challenge, more than 11 years after it was identified. It can be put off no longer".

 

In short, the China boom ended two years ago and Australia and the world is adjusting to new economic realities while China reforms and transitions its economy and the United States undergoes a rebirth based on cheap energy, cheap labour (by Australian standards), technical innovation and the availability of venture capital.

 

Well may the Australian Reserve Bank reduce the cost of money. That will not save the Australian economy from recession. A nasty period of price deflation in assets, products, and services costs is the inevitable result. But it will cleanse the profligacy which so defiles the opportunities for the Australian people today. Most people know others who have lost their jobs or are on reduced hours.

 

If you haven't already got assets denominated in US$, Euros, or Sterling, then its probably not too late, although it would have been better to act a year ago.

 

David Millhouse is an international entrepreneur with over 30 years in venture capital and private equity internationally. Based in Brisbane, Australia he is a specialist in venture financing and capitalisation, as well as the management of high growth companies, many of which proceed to IPO. He has conducted business in the UK, Germany, Switzerland, USA, Canada, Singapore, Hong Kong, Australia and New Zealand. A scientist by original profession, with an MBA and LLM from Bond University in Australia. He is a trustee of Bond University, Australia’s premier private University, and was formerly a trustee of the Queensland Art Gallery/Gallery of Modern Art. There are 30 years of publications and media on his professional activities and he has had a stellar career at CEO level since 1983.

For personalised solutions to the issues raised in the blog, please contact CORPbuilders TM at www.corpbuilders.com.au or call 0413 748 844

WHERE TO FOR AUSTRALIA?

Australia is at a cross roads. As I have previously written, the country can go down the road of old school socialism or it can have its own Margaret Thatcher moment. Only Australians can decide at the forthcoming Federal election on the 7th September.

Under the Rudd, Gillard, Rudd governments, Australia was taken down the socialist road, at huge cost to its economy, industries, and the welfare of its people. Despite the fact that Rudd marketed himself as a "fiscal conservative".

What he has actually done is to create a mountain of Federal Debt. Net Federal debt is now some AUD 250 billion and growing at a rate only exceeded by Spain and Slovenia. To plug the gap, he now proposes to tax bank deposits (Cyrus ?), despite the fact that these are already insured. For my non-Australian readers, State and Territory government debt is about the same volume as Federal debt, which should not be seen in isolation.

As a highly respected economist and former Reserve Bank board member, Warwick McKibbin, reports (Australian Financial Review 2nd August), there is a growing problem with deficit spending to fund social programs. Australia is not growing its debt to fund productive infrastructure. Concurrently, Rudd policies are reducing economic activity and employment significantly.

Monetary policy is following other countries, not yet at the money printing stage, but interest rate reductions will not work in an environment globally of credit contraction, including in China. It is this credit contraction and the reduction in the speed of money circulation that multiplies the sins of taxing and spending governments.

People are becoming debt shy: the shift to part time work and underemployment, and the ageing of the population serves to emphasise that trend.

There will be no return to the "normative", pre-Great Recession times. This is the new normal, and there is no China boom on the horizon to alter that. Indeed, the maturing of the Chinese, Indonesian, Malaysian, Thai and Indian economies will mean that their highly educated populations will manufacture quality products, and provide high quality services to Australian consumers. This is at the same time that Australian government policies have significantly increased the costs of production and delivery in Australia.

The choice is clear: more of the same which will result in the rapid export of the country's best talent and industries, or have its own Margaret Thatcher moment.

For those of my readers following Australian politics, this is a sample of what the spin doctors don't tell you:

https://www.youtube.com/watch?feature=player_embedded&v=u-5RgFe9OX4

http://www.spectator.co.uk/australia/8955281/a-complete-and-utter-fraud-2/

 

 

My prognoses for the Australian economy are all coming true. It is not pretty. This new (old) prime minister is the same person who has squandered 96% of the government revenue generated by Australia's once in a century resources export boom according to recent independent reports.

 

It is the same person who doesn't have much of a clue about the true state of Federal Government finances and purports to seek re-election based on ever increasing expenditures which have no revenue base.

 

It is also the same person who is presiding over huge spending on government advertising trying to persuade people he has all under control. What rubbish. He might, just, be able to keep the genies in the bottle until election day (he will keep deferring the election I suspect), but there is a generation of landmines being laid which will cost Australia and its neighbours very dearly.

 

Australians will rue the day if he succeeds. Think United Kingdom under the Callaghan Labour government of the 1970's. It took Margaret Thatcher to fix the mess.

David Millhouse is an international entrepreneur with over 30 years in venture capital and private equity internationally. Based in Brisbane, Australia he is a specialist in venture financing and capitalisation, as well as the management of high growth companies, many of which proceed to IPO. He has conducted business in the UK, Germany, Switzerland, USA, Canada, Singapore, Hong Kong, Australia and New Zealand. A scientist by original profession, with an MBA and LLM from Bond University in Australia. He is a trustee of Bond University, Australia’s premier private University, and was formerly a trustee of the Queensland Art Gallery/Gallery of Modern Art. There are 30 years of publications and media on his professional activities and he has had a stellar career at CEO level since 1983.

For personalised solutions to the issues raised in the blog, please contact CORPbuilders TM at www.corpbuilders.com.au or call 0413 748 844

 

 

 

"CORNINESS, INSINCERITY AND TOKENISM"

Not my words. This was written and published by a prominent Labour ex-Minister, Gary Johns, in the Australian of the 16th July. To quote:

"Whatever he has promised, Kevin can't. He can't deliver. Kevin can't because he is full of cant -corniness, insincerity, and tokenism".

"He can't balance the books, although he spent the money. He can't deliver prosperity because he can't so no to the unions. He can't scrap the carbon tax by renaming it a carbon price."

And this was only the start of the article, the themes of which are being picked up by much of the mainstream Australian quality press.

Australia had the opportunity (and did in 2007) for zero net public debt, reducing taxation, and at the same time investment into quality infrastructure. That opportunity has been well and truly squandered by the Rudd-Swan-Gillard-Rudd socialist government.

Australians now face a declining standard of living, rapidly rising un- and underemployment, a slowing economy, and public debt likely to rise to European levels.

Rudd, between wrapping his arms around whoever will tolerate him, ignores these realities and promises anything designed to win a vote. Ask Gary Johns. Yesterday, yet another business tax hit in an economy reeling from uncertainty and disgust.

He makes much of "saving" Australia from the Great Recession in 2008 onwards. In fact, recent objective analysis including that from Dr Doug McTaggart, formerly Professor of Economics at Bond University and CEO of the Queensland Investment Corporation, makes it crystal clear that in 2008/9, it was net exports that saved the economy. He writes: "The collapse in discretionary consumption, aided by a collapsing exchange rate, leading to a collapse in imports was a key reason why Australia did not have a recession". It had nothing to do with government spending, despite Rudds' protestations.

If this guy is returned at the next Australian federal election, Australians are likely to rue the day. Lower living standards will be the inevitable result.

David Millhouse is an international entrepreneur with over 30 years in venture capital and private equity internationally. Based in Brisbane, Australia he is a specialist in venture financing and capitalisation, as well as the management of high growth companies, many of which proceed to IPO. He has conducted business in the UK, Germany, Switzerland, USA, Canada, Singapore, Hong Kong, Australia and New Zealand. A scientist by original profession, with an MBA and LLM from Bond University in Australia. He is a trustee of Bond University, Australia’s premier private University, and was formerly a trustee of the Queensland Art Gallery/Gallery of Modern Art. There are 30 years of publications and media on his professional activities and he has had a stellar career at CEO level since 1983.

For personalised solutions to the issues raised in the blog, please contact CORPbuilders TM at www.corpbuilders.com.au or call 0413 748 844