Stone the crows! Challenging the sacred cow of medical research

Stephen Matchett has put on the armour of Don Quixote and taken a tilt at the sacred cow/windmill of state-funded medical research.

Not, you understand, that this is picking potential winners, as the Medical Research Future Fund Action Group explains, “Medical research is Australia’s best knowledge industry, employing 23,000 research professionals supporting a medicines industry of over 40,000. Annually, Australia now exports $4 billion worth of products developed through medical research, making it Australia’s largest high technology export industry.”[vii]

Good, oh, except researchers are largely on the public sector payroll and the exports are not necessarily the result of Australian science. As Professor Anderson acknowledges, “Only a small amount of this export is the direct product of Australian health and medical research, but I’m equally certain that we wouldn’t have such a vibrant sector if we didn’t have such a vibrant and quality medical research sector.”[viii]

But not to worry, medical researchers are making a motza for us [possibly] [but] With “large uncertainty surrounding the inputs” and a 210 per cent range between lowest (but still outstanding) and highest rate of return cynics could suggest this is not exactly bankable data, but what can you expect from cynics?

As for whether medical research is the best use of public funds – few ever ask the question.

Terrence Kealey addressed the related question, whether public funding of research drives out private funding. His answer was “yes” and moreover, the amount of private money driven out exceeds the public input. Hence more public funding means less research funding in total. Interesting? See the summary of Kealey’s book in this collection of papers on the way to make research pay.

Posted in Rafe | 10 Comments

Wow. Simply wow.

I was travelling yesterday and didn’t get the opportunity to read the Tax Justice Network report into corporate tax. It got front page coverage in The Age and SMH and Judith covered that here.

This morning the AFR piles on too.

Corporate Tax Association executive director Frank Drenth said the report had a number of serious and sloppy errors.

One company had Australian tax applied to its global earnings –less than 10 per cent of which were earned here. It unfairly treated the property industry by applying a 30 per cent rate to its profits, even to those set up as trusts where unitholders are taxed.

“Are they suggesting we tax both the company and the unitholders? That’s pretty sloppy,” he said.

Unitholders do not pay tax if they are not residents, but the report does not restrict its analysis to them.

The report failed to account for the dividend imputation credits that are handed back, he added.

Mr Drenth said there were always “huge errors” in attempts to determine effective company tax rates because the information available was not designed for it.

I have had a chance to eyeball the report and one of the things it does is apply the 30% corporate tax to financial accounts profit figures and describe the difference between that figure and actual tax paid as avoidance. Yet it is well known that financial accounting and tax accounting differs. So the people doing the analysis have actually no idea of what they are looking for and no idea what they are doing. I spotted that mistake straight away – there will be others. It is very poor form for Fairfax to publish such basically incorrect information and analysis on the front page of its big dailies.

Update: Stephen Bartholomeusz of The Australian puts the boot in here:

Startling? Outrageous? Those would be the conclusions, if they weren’t built on a complete absence of the facts. The report is remarkable for the shallowness of its understanding of corporate taxation and, indeed, of the entities it points the finger so accusingly at.

It is a brutal take down.

Posted in Taxation | 32 Comments

The worst American president ever

obama intelligence cartoon

I guess on this one he can’t blame George Bush so he blames someone else:

President Obama largely blamed the United States’ intelligence community in an interview broadcast Sunday for giving an incorrect assessment of the capabilities of the Islamic State in Iraq and Syria (ISIS).

“Our head of the intelligence community, Jim Clapper, has acknowledged that, I think, they underestimated what had been taking place in Syria,” Obama said on CBS’s “”60 Minutes.” . . .

Obama’s remarks served as an acknowledgement that the United States in recent years has been largely unaware of the power behind ISIS, which has been characterized as a terrorist group with some qualities of state-backed military forces. . . .

Obama also admitted that the United States overestimated the willingness of allies such as Iraq to join in the fight against ISIS.

Golf and shooting hoops is not the kind of work that will get you plugged into the needs of the moment. It also doesn’t help that he surrounds himself with people who will not criticise what he does. Here’s an article with video that sets things pretty straight about the kinds of associates he has, OBAMA: “Wherever I See Folks, They Always Say… You’re So Great” .

Obama must only be getting his feedback on the golf course as the rest of the country doesn’t think he’s so great these days. A Reuters/Ipsos poll released last week had Obama at a dismal 35% approval rating.

Even the black community’s support is starting to erode. A Zogby poll from earlier this month had Obama’s support among African-Americans declining form 91% to 78%.

I think there may have been a palace coup of sorts by various Democrats since he is no longer in charge the way he once was. From the man who was going to shut down Guantanamo and pulled the troops out of Iraq things have been changing in some very definite ways in the opposite direction.

Posted in International, National Security | 32 Comments

Counting the cost of alternative energy sources

A nice piece by Don Aitkin looking at the full cost of renewable energy.

There’s not as much hype as there once was about electric cars, but I recall my surprise on learning that you would have to run one of them for 90,000 kilometres before all the CO2 created by the energy used in making it had been offset by the CO2 savings generated in using it.

And if a dam is used for hydro-electricity, how long does it take for the CO2 created by building it and running it to have been offset by the CO2 saved by generating electricity that way instead of through burning coal? A very long time, but it happens. A lot depends, of course, on the details of the dam we are talking about.

Now someone has done this for all forms of generating electricity, and I find both the methodology and the results quite fascinating…It is all based on a formulation called Energy Returned on Energy Invested, which is shortened to EROEI. I’ve seen it before, but not enquired further. More on that in a moment. Morgan says that, with respect to alternative energy forms, the much-discussed storage problem (how can you best store solar energy for use at night, or wind energy when it’s not needed by the grid?) is not the real problem: there is not enough surplus energy left over after construction of the generators and the storage system to power our present civilization.

What he means is that there is simply not a large enough return on investment in the alternative energy source to allow it do it anything much.

And a cute picture of Lord Monckton!

Posted in Rafe | 30 Comments

Did he really write that?

Phillip Coorey has an unfortunate turn of phrase in the AFR today: (emphasis added)

In the company of cowards: Bush, Howard and injustice at Guantanamo, released this week, is a compelling and sobering account of a western democratic government losing its head and sacrificing principles in the cause of national security.

No doubt Infidel Tiger can and will entertain us for hours with headless puns.

Posted in Libertarians don't live by argument alone | 33 Comments

Q&A Forum: September 29, 2014

Posted in Open Forum | 418 Comments

The Age falls for crap yet again

Any newspaper that regards the writings of Michael West worthy of publication, let alone front page coverage, must surely not be long for this world.  Of course, he is not the only completely unreliable and slanted ‘journalist’ which this rag employs.  One of the reasons for reading these fruitloops is the sure knowledge that the complete opposite of what they say is true.

When a dodgy sounding outfit called the Tax Justice Network produces a report that has been sponsored by the dodgy union, United Voice (this union was always doing deals with the Gillard government – recall the aged care and childcare wage funds designed to promote union membership), you think that most journalists would be very very suspicious.  But not the luvvies at The Age – they fall this sort of stuff every time.

They seem to have no understanding of even the basic features of the tax codes that apply to Australian listed companies, including:

  • Overseas operations complicate tax matters significantly.  James Hardie, which is cited in the article and is now domiciled in the Netherlands, pays unfranked dividends to Australian residents,who are then fully taxed (no franking credits).  There is no evasion going on here.
  • Real estate investment trusts are also taxed differently from other companies with more of the tax being paid by the security holders.
  • Companies which make large investments in tangible and intangible assets will pay less tax in the short-run; we need these investments for future prosperity.  Again, this is not a form of tax evasion.

It is interesting that the ABC has picked up this dodgy report but not other media outlets.  Check out the drivel from Andrew Leigh MP, formerly known as Professor Andrew Leigh, at the end of the article.

Almost a third of Australia’s largest companies are paying less than 10¢ in the dollar in corporate tax, according to a report that exposes a gaping hole in government revenues over the past decade.

As Australia prepares to host world leaders at the G20 summit in Brisbane in November, where a global assault on tax avoidance will be a key topic of discussion, the report found 84 per cent of Australia’s top 200 stockmarket-listed companies pay less than the 30 per cent company tax rate.

Some companies, including household names like James Hardie, do not contribute a dollar to Australian coffers, it found.

Tax minimisation by large companies far outweighs that of small and medium-sized businesses and has a disproportionately large effect on eroding the tax base.

“Tackling corporate tax avoidance is an urgent priority; Australia does not have a spending problem, it has a revenue problem and it must be fixed,” write the authors of the report, Who Pays For Our Common Wealth?

The 90-page look at the the tax contributions of the S&P/ASX 200 between 2004 and 2013 – the first research of its kind attempted – claims up to $80 billion was foregone by the taxman over that period; a sum of money that could all but wipe out the government’s past two budget deficits.

It details the widespread and growing use of subsidiaries in tax havens and so-called “thin capitalisation”, where local entities are saddled with huge debts to reduce tax liabilities in Australia.

Almost 60 per cent of the ASX 200 declare subsidiaries in tax havens. For example, global broadcaster 21st Century Fox has 117 and logistics group Toll Holdings 72 in low-tax jurisdictions, including Bermuda, the British Virgin Islands and Singapore.

Nearly a third of companies have an average “effective tax rate” of 10 per cent or less.

James Hardie pays an effective rate of 0 per cent tax, Sydney Airport 2 per cent and Echo Entertainment – owner of Sydney’s Star Casino – 5 per cent, the report found.

Many of the lowest paying companies are real estate investment trusts, which pass some of the tax burden onto investors, the report said.

Before its release on Wednesday, the Corporate Tax Association, which represents much of the ASX 200 on tax issues, dismissed the report, saying “usually there are logical explanations for low effective company tax rates”. Continue reading

Posted in Uncategorized | 60 Comments

Am I missing something?

The headline screamed that the man had been killed by the Taliban because he was Australian.  Really?

He had fled Afghanistan, before coming to Australia by boat in 2000, was granted refugee status (because it would be too dangerous to return), then took a visit back to Afghanistan to visit family members … and his death at the hands of the Taliban is OUR FAULT.

Am I missing something?  WTF was he doing returning to Afghanistan?  Tell me what you think.

Here is the piece from The Age (which really seems to have entered the equivalent of the newspaper asylum with its most ridiculous piece today on supposed tax avoidance by Australian companies. Doesn’t anyone there know anything about the tax codes that govern Australian listed companies?):

A Sydney man visiting family in Afghanistan was pulled off a bus and murdered by Taliban militants just because he was Australian, local authorities say.

The ABC is reporting that Sayed Habib Musawi, 56, who came to Australia from Afghanistan by boat in 2000, was killed while travelling on a bus to Kabul after visiting relatives in Ghazni province.

He was the only person pulled off the bus by Taliban militants on September 20. His beaten body was found on the side of the road, the report said.

Ghazni’s deputy governor, Mohammad Ali Ahmadi, told the ABC’s AM program that Mr Musawi, who held an Australian passport, was killed because he was an Australian citizen.

“Of course the reason is that he was an Afghan-Australian,” he said.

“He didn’t do anything besides that – he didn’t do anything wrong, he wasn’t a criminal, he wasn’t involved in government activities.

“The reason of his murder was very clear – that he was a dual citizen, he came from a country that Taliban think is an infidel country.

“When the Taliban arrested him, he said to them, ‘I came from Australia to see my family.’ And then the Taliban… issued an order for his murder.”

Mr Ahmadi said Mr Musawi’s hands were tied behind his back and there were signs of beating.

“The bullet wounds were clearly visible on his dead body. The murderers beat and tortured him. People in the area contacted us, so we ordered the district security chief to investigate.

“After an investigation it became clear that the dead body belongs to Sayed Habib, an Afghan Australian who came to visit his family.”

One of Mr Musawi’s four children, his 23-year-old son Nemat, said the shocked family was trying to find out what happened.

“The whole family is devastated. We can’t believe it. I just spoke to my dad a week-and-a-half ago and he was with family members and he said he was going to call me back.

“I was waiting for his call and then the next thing I hear he’s been shot dead by Taliban three times.”

“It seems like it was all set up, because they just stopped the bus on the way to Ghazni and then they just went straight to my dad … called him and pulled him out of the bus,” he said.

“What my family is going through, I don’t want any other family to go through. We want justice for us, for my mum, for my family.”

The Musawi family have asked for assistance from the Australian Government.

In a statement to the ABC, the Department of Foreign Affairs and Trade said the Australian embassy in Kabul was trying to confirm reports of the death.

“The area where these events reportedly occurred is contested by the Taliban and it will be difficult to obtain definitive and official confirmation of the man’s death from the Afghanistan Government,” the statement said.

“Consular officials are providing assistance to the man’s family.

Posted in Uncategorized | 54 Comments

More evidence the planet is cooling


Sure the planet is warming. Look at all the evidence: NOAA: 1695 Low Max Records Broken or Tied From Sept 11 to Sept 20. One record broken by 25F. I wrote my article on Global Cooling because the evidence that the planet is cooling and not heating is becoming more abundant. This is from the link:

1695 Low Max Records Broken or Tied From Sept 11 to Sept 20 according to the NOAA.

A “Low Max” means that the maximum temperatures for the day was the lowest it has ever been. This indicates daytime cooling.

Above is a screenshot showing location and the biggest difference between old record and new record.

The list is just the ones I could capture in a screenshot.

Posted in Global warming and climate change policy | 25 Comments

Trade is good: Dare I say “The science is settled?”

I’m in Sydney speaking at the Australian Political Studies Association 2014 conference. For some or other reason an earlier version of myself thought it would be a good idea to wake up at 4am and fly to Sydney on the first flight rather than spend Sunday night in Sydney and sleep in. My current self is cursing that past self.

Anyway I’m speaking in a session on “Analysing Trade and Industry Policy in Australia”. I’m the token economist saying that industry policy is bad and Australia should not be defending local industry and the like.

My slides are here. Long time Cat readers will recognise the arguments from a 2011 presentation I gave.

Posted in Economics and economy | 23 Comments