Superannuation’s Legislative Risk

I recently got back from a short holiday in Canberra, our nation’s capital. Amongst other touristy things, we visited Old Parliament House, where there is an Australian Democracy Museum. One of the displays is on the past Prime Ministers, and when you see them all together, you realise that we’ve had a lot of them, in the century and a bit that we’ve run our own parliament.

In fact, from 1901 to 2010, we’ve had 31 changes of government. For those not doing the math as we go along, that’s one every three and a half years.

And for someone who is, say, 35 years old, and facing 25 years before they can get access to the money in their superannuation, there’s an expected 7 or so new governments that will have a chance to meddle with it in the mean time.

The risk of current and future governments impacting the performance of an investment through passing laws is called Legislative Risk. Unfortunately, laws that affect superannuation have been prime candidates in the past for government fiddling. In the future, given the rumours about the Henry Tax Review, it will almost certainly get further tweaking still.

If you’re an employee, participation in superannuation is compulsory, where 9% of the total salary package (or thereabouts) is locked away in the system. Unless employees are willing to go to the expense and effort of setting up a Self Managed Super Fund, their money is generally invested in Australian stocks and bonds. So, if you want to invest in say fine art, residential property, a family company or venture-capital backed start ups, you aren’t going to get any joy with super.

Despite the limited investment options and the long period that you can’t directly benefit from it, an investment in your superannuation gets beneficial tax treatment. This is its key advantage, and the very thing that is vulnerable to legislative risk – a risk that is real, based on past actions and rumoured future actions of our governments.

I think that most Australians would benefit from having some level of investment outside of superannuation (even if it’s just their home), in order to reduce their exposure to this risk.

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Myki mystery

Hong Kong Subway
Image by mikeleeorg via Flickr

I’ve spent a couple of weeks in Hong Kong, and am familiar with the Octopus card. I’ve lived in London, and traveling on the Tube to work every day, clocked up a lot of experience with the Oyster card. So, I was interested to see how Victoria’s own Myki would fare, and I was willing to be an early adopter.

The stories in the press haven’t been pretty. My personal experience was varied, but comes down on the side of bad.

I normally use a Zone 1 weekly ticket, so I decided to simply transition over to a Myki with a weekly ticket on it, rather than risk using the new Myki money system. However, it appears that you can’t escape the latter system, as I found out the hard way.

It started off well. I ordered my new Myki ticket for free (offer extended now to the end of January) and it arrived in the post a few days later, with my name spelled correctly, and the right letter (!) accompanying it.

I went to the train station to put a weekly ticket on it. It was a little unintuitive to load it up, but I’m sure next time it will be quicker.

Arriving at the exit barriers at Parliament station, I encountered my first problem. I wasn’t sure where the Myki had to be put in order to be scanned. As people banked up behind me, and I tried attempt after attempt, eventually I found the right spot. It’s on the side of the barrier (rather than the front or top), on right side of the passenger using it, and at about their knee level. When you scan properly, a message “CSC PASS” appears on the display at the top of the barrier and the gate opens.

Heading home, I knew where to scan, so went through okay. But getting off at my station (in Zone 1) to head home, I was engrossed in my podcasts and I really can’t tell you if I “touched off” at the station or whether the machine didn’t read the card correctly.

The next day, mysteriously, the Myki card didn’t appear to scan correctly when I got on the train, and when I again got to the barriers at Parliament station (confident in my ability to get Myki to scan correctly) they didn’t open. There was no error message, no beep. The Myki card simply wasn’t recognised.

Luckily I was carrying around my receipt for the weekly pass, which I showed the barrier attendants, as there was no other way to indicate to them that the Myki card was valid. They let me through then, and again in the afternoon when I experienced the same problem trying to get home.

Here’s what I learned later: even if you aren’t using the Myki money system, you still need to touch off, as it turns out that Myki will assume that you’ve travelled to the end of the line if you don’t, which means you get charged the difference between a Zone 1 trip and a Zone 2 trip. In my case, this difference was $2.02, so my Myki money balance went from zero to negative $2.02. If you have a negative balance, the card won’t work.

That evening, I rang Myki to complain about my card not working, and spoke to a helpful person called Vinh. After several periods of clarifying what happened, punctuated by long periods on hold, he explained that I’ll be getting a credit for $2.02 to get the card working again. He wasn’t sure if $2.02 was the right amount, because he couldn’t see the negative balance on his system.

Despite the positive news from Vinh, my card continued to be ignored by the barriers for the rest of the week, and the balance stayed at -$2.02. Hopefully next week it will be working, but by this point, I don’t expect it to.

Lessons learned:

  • Always keep the receipt handy for the weekly pass, since this is the only way to prove that I’ve actually got the right to travel on the train.
  • Always remember to touch on and off, even if I’m not using the Myki money system, and even if there isn’t a barrier at the station that forces me to scan the card to get out.
  • Keep using the old system for as long as possible, since the weekly passes cost exactly the same and I don’t need to keep a separate receipt nor remember to touch on and off.
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A Modest Proposal

Tony Abbott
Image via Wikipedia

Dear Tony Abbott,

Your new climate change policy for the Liberal Party is certainly interesting: a 5% reduction in national emission levels from those of the year 2000 by the year 2020, but without implementing an energy trading scheme or carbon tax. Although it doesn’t sound like you’ve quite settled how you’ll achieve this yet, you are looking at options such more regulations and new government subsidies. You are clearly open to options which the Labor Party is traditionally closed to.

However, as someone who might be willing to take on radical yet reasonable policy positions, I would like you to consider a simple measure that will cost the government nothing, yet easily achieve your target. Pass a law that makes it illegal to eat meat.

The United Nations’ Food and Agriculture Organisation 2006 report “Livestock’s Long Shadow” found that 18% of global greenhouse gas emissions come from the livestock sector, which is more than the emissions from all the cars in the world. We have been looking for emission savings in all the wrong places.

Having Australia become the first country to go vegetarian would demonstrate global leadership and really show those United Nations guys that we can do without their pesky energy trading scheme. If China can introduce a one child policy, then surely we can introduce a one food policy. Almost a third of Indian people are vegetarian, which is like if seventeen entire Australias were vegetarian. The global thinking is consistent: I have been assured by a very knowing fellow in London (author of the Stern Review on the Economics of Climate Change) that people ought to go vegetarian for the climate’s sake.

According to the Australian Government’s Department of Climate Change, “Tracking to Kyoto and 2020” report, our emission levels in the year 2000 were 553 million tonnes of CO2-equivalent gasses. A 5% reduction is a reduction of 27.7 million tonnes. Vegetarianism will easily achieve this.

As the Garnaut Climate Change Review notes, “Australia’s per capita emissions arising from agriculture are more than six times the world average, more than four times the OECD average” and the Agriculture, Forestry & Fishing industry is the largest industrial contributor to emissions, accounting for 29.3% of industrial emissions. Garnaut attributes 123.7 million tonnes of emissions to beef cattle alone.

Meat & Livestock Australia estimates that “50.7kg of red meat was available for consumption by each person in Australia in 2006-07” while a Japanese study estimates that each kilo of beef “generates the equivalent of 36.4 kilograms of carbon dioxide”. At a population of 20 million, that is an equivalent of about 37 million tonnes of greenhouse gas from meat eating.

Even more dramatically, an analysis by the Vegetarian Network Victoria forecasts Australia becoming completely carbon neutral within 3-5 decades of adopting vegetarianism if land currently used by cattle was reforested. Ask the Labor Party if their tax is able to achieve that.

There is also the opportunity to snooker your colleague Mr Turnbull, who seems to be positioning himself as a sort of Australian Al Gore. By adopting vegetarianism, you can occupy the highest of moral ground, while also being against taxation and climate change. High ground is the safest position to be in these troubled times.

Your role-model and mentor John Howard took strong measures in 1996 to ban all the dangerous guns (thank goodness we got to keep the safe guns). This type of bold leadership is what we need in the climate crisis of 2009.

Yours faithfully,


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History Repeats

When I heard that the name for the new variant of Vegemite was “iSnack 2.0”, it took me a little while to understand that it wasn’t a joke. The new variant is basically 30% Vegemite and 70% cream cheese, but apparently it deserved a revolutionary new name.

Although I am horrified at the thought of a breakfast spread that includes not only punctuation but numbers in its name, there seems to be historical precedent for this sort of crazy naming. Here’s what Wikipedia says..

  • Just like the new variant was named following a national naming competition, the original was named following a similar competition back in 1922.
  • Just like the new name is extremely derivate of popular products on the market, the original name was derived from the popular spread Marmite that was shipped to Australia from 1919.

Although, Vegemite wasn’t always called Vegemite. From 1928 to 1935 it was sold as Parwill, in order to work with a marketing slogan of “Marmite but Parwill” (get it?). Obviously, the product name was changed back when the marketing didn’t work. So, if history continues to repeat, perhaps iSnack 2.0 will be given a less ridiculous name once the marketing people wise up. We can only hope.

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Melbourne Chocolate

Melburnians seem to take their chocolate heritage for granted. I still find it amazing, and while I still do, I want to jot it down here.

Both Melbourne citizens and Australians in general are fans of chocolate. According to IBISWorld, chocolate and confectionery in Australia is a $2.5b per year industry. If we look at Nielsen’s list of the top confectionery sold in convenience stores during the year to February 2009 by share of value, the top chocolate bars (candy bars, for US readers) were:

  1. Mars 2Pak 80g
  2. Snickers 2Pak 80g
  3. Cherry Ripe 85g
  4. Mars Bar 65g
  5. Twirl Bar Kingsize 63g
  6. Snickers 60g
  7. Kit Kat 45g
  8. Boost 80g
  9. Turkish Delight Twin 76g
  10. Cherry Ripe 55g

I’m listing these to highlight an interesting fact. However, we need to examine where each of these chocolate bars were invented:

Yep, the Cherry Ripe holds two of the top ten places for chocolate bar sales, and it was invented in Melbourne. (All the rest come from three places: US, UK and Ireland.)

Noted Melburnian Sir Macpherson Robertson (1859 – 1945) founded the MacRobertson’s chocolate company which, according to Wikipedia, was responsible for the Cherry Ripe, Freddo Frog, Bertie Beetle and Snack. The chocolate company was sold to Cadbury-Schweppes, and the Ringwood-based factory continues to this day. Sadly, they don’t offer any public tours.

The MacRobertson name no longer appears on the Cherry Ripe wrapper, but it does live on in Melbourne through a highschool, a bridge, and the building of the National Herbarium of Victoria.

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Cash back

I recently bought a new laser printer from Officeworks. It’s from Brother, and I picked it up for $99. Actually, it was $139 with a $40 “cash back” (and I’m still waiting for the cash back, to be completely honest).

Cash backs are a weaselly way of providing a discount. We all know that they are offered with the understanding that not all customers will be bothered to, or will remember about, getting their cash back. If they were genuine about the discount, they’d simply reduce the retail price.

In order to claim this one, I had to:

  1. Keep the receipt from Officeworks
  2. Make a photocopy of it
  3. Do a web search for “brother cash back” (no details were provided in store, on the receipt, or with the product on how to claim the cash back)
  4. Visit the right website
  5. Locate the serial number for the product (detailed instructions are provided on the website)
  6. Complete a claim form online, including specifying receipt number, serial number, and bank account details
  7. Get back a unique code, that had to be written on the back of the photocopied receipt, along with my name and address
  8. Post the photocopied receipt to the address specified (also requires a stamp)
  9. Wait

Not exactly trivial. At several points I wondered if it was worth bothering, but I obviously persevered. A straight-out discount would have been preferable.

Although, now I’m reconsidering. The practice of cash backs is a bit like a tax on the slack. The motivated get the discount, while the slack do not. If everyone was motivated enough to jump through the hoops the manufacturer has created, the amount they could provide in the cash back would be less. So, in a real sense, the difficulty of the cash back process results in a higher cash back amount for those willing to endure it.

I may end up quite happy once the payment has been received. However, The Age published an article today alerting readers to problems with HP’s cash back schemes. So, I wait, and hope that Brother’s process is less difficult than HP’s.

How I stopped loving Twitter and embraced Facebook

Maybe this post is for geeks, but perhaps not. Twitter is a social networking site that allows you to send and receive short messages to your friends. Facebook, I’m sure you’ve heard of. Twitter is much trendier, much more elite, than Facebook, but I’ve pretty much given it up these days. According to Tom Reynolds, I probably shouldn’t admit this, or I will be shunned by the cool kids. However, I feel that I should explain.

I joined up to Twitter reasonably early on for an Australian, starting in March 2007. I wasn’t a huge user – perhaps posting about once a week. But I was there for the first meet-up of the Melbourne Twitter Underground Brigade in June 2007. These days Twitter is pretty big, with some people estimating about 5 million users, even the PM has been seen to use Twitter, and there are some pretty good features that it supports:

  • You can create an alias for people to message you on. You can give out this alias, rather than a “real” identifier for messaging (such as your email address), to protect your privacy a bit.
  • You can set up the alias to deliver messages to you in the form that you want, without the sender having to know anything about it. You can receive messages as emails, IMs or SMS, for example. And reply back in that form as well.
  • You can send messages to all your friends in one go. This is something that is not easily done with SMS, for example, without paying a fair bit of money, e.g. four times as much for four friends, etc.
  • You can publish messages so that anyone can come along later and read all the messages you sent out (and potentially join up as your friend).
  • It was extremely low cost (you only paid to send SMSs, in Australia at least, while all the messages you received were free).

Aside from the publishing aspect, which is rather interesting, these were all things that it’s been known for a long time that people like. No wonder Twitter was successful. I found it an easy way to keep abreast of my friends’ moods and activities. Australians were the sixth largest user of Twitter via SMS.

However, then in August last year, Twitter stopped delivering SMS to anyone outside of North America and India. They had to do this, because it cost them a lot of money to send all those SMS messages, and they weren’t getting any commissions from the mobile operators outside of those regions. Since SMS was the main way I used Twitter, it pretty much cut me off.

Serendipitously, Facebook was undergoing a redesign around the same time. The new design was clearly influenced by the success of Twitter and the status update field and feeds of friends status updates now appeared prominently.

My friends around the world have been gradually appearing on Facebook. Even those who don’t do geeky things. Even my parents. But where Twitter was like an open field where all were welcome to gather and communicate, Facebook is like a gated community or a private club – you are only welcome if you’ve been invited. Philosophically this is something I really hate. Sure, I like my privacy, but I don’t want to feel like I’m locked away. I don’t walk down the street hidden under a shroud, and I don’t think I need to be treated that way online. I occasionally blog. I post my photos to Flickr.

That said, I was forced onto Facebook in order to communicate with my friends who were using it to communicate with me. If I wanted to see their photos, they were on Facebook. If I wanted to see their mood or hear about their activities, it was on Facebook.

What changed is I got an iPod Touch, and installed the Facebook application. It was almost like using Twitter again, except even more people that I like were on it.

One day, Twitter might sort out a way to make enough money to pay for those SMS messages, bring back the features I want, and somehow attract all my Facebook-loving friends onto it. But until then, I’m stuck with Facebook, and despite my initial reluctance to join in, I find myself using it more often than I ever used Twitter.

Positive news for property

This year there have been a few claims that house values will fall significantly, including this one from Christopher Hire (20% fall) or this report on Steve Keen (40% fall). Such a drop in property seems credible on face value as we’ve had significant drops in values on the share market – why would property be immune? Well, as was recently explained in The Australian, it’s really apples and oranges. And, in fact, it turns out that residential property prices have actually increased each of the last two months.

Okay, the increases are very slight, but even a slight increase is a somewhat different reality to a significant fall. I think rumours of the death of the housing market have been exaggerated…

Clash of cultures

I returned to Australia to resume working at Telstra the month before the current CEO joined the company. Sol Trujillo took up his position in July 2005, and brought in a number of trusted people he’d worked with at previous companies. The result was a dramatic increase in the number of Americans in top positions in Telstra. This is hardly news, or particularly interesting.

However, what I have found quite interesting is the intersection between the American business culture and the Australian. In particular, what is often taken by Australians as brash, arrogant, or undiplomatic behaviour can be seen alternatively as plain talking, “speaking their mind”, or direct behaviour. I suspect that this is to be admired in American business circles while seeming unsophisticated or suspect in an Australian context. This is most clear in the Australian business press.

For example, concerning the recent submissions to the national broadband tender, Telstra put in a 12 page letter. Earlier in the process, as quoted in The Age, Telstra had stated that they would not bid if there wasn’t a guarantee that structural separation was not on the table, and this was not a bid. Optus agreed, stating “This is not a bid; it’s not even a partial bid”, as quoted in the Australian IT, but later in that article claiming “Telstra has once again proven that they are all bluff”. Clearly this was the opposite of bluff, but once again we see the continued assumption that Telstra’s culture of keeping the commitments of senior management is actually an elaborate game.

I have seen many examples of where Telstra would officially, publically make a commitment and then do everything possible to follow through on that. Even when, in my humble opinion, occasionally information subsequently turns up suggesting that it might not be the best thing to be doing. But so ingrained is this culture of doing what has been promised, that not doing it is not an option.

And yet, still the media treat every commitment made by Telstra as mere positioning. If it were Australians running the show, we would understand it as such, and statements to the press would be part of a negotiating game, to be bargained up or down from. It took me a couple of years to notice that this has not been the case, but the media still doesn’t seem to have twigged that it isn’t the old Telstra, and there’s a different culture at work.

Perhaps the Australian media itself could benefit from more foreigners in the mix, or even in control? And if there’s a more contentious statement than Telstra speaks the truth, it’s that we might benefit from foreign control of Australian media. Hmmm. I’ve said enough.

iPod At Home

I’ve had an ordinary iPod for years, and it’s brilliant for helping me mentally escape the morning public transport crush. Plus it’s great for turning otherwise “wasted” minutes in the day into enjoyable and productive moments when I listen to my batch of podcasts. But, a few weeks ago I bought a new iPod – not to replace the old one, but to leave around the home.

It’s not as crazy as it seems. I bought an iPod Touch, and although it is capable of playing music and TV shows, I don’t intend to use it for multimedia content (I’ve already got an iPod that can do that). It’s primarily an Internet device, and the applications installed on it are almost life-changing.

Whenever I am about to go for a walk, or head to work, or put out washing, I grab it and check the Melbourne rain radar. It takes less than 10 seconds from picking up the device, because it turns on instantly. I would never have bothered to use the laptop for this, but with the iPod Touch it is too easy.

If Kate is watching the TV, I might use it to browse the TV guide of shows that are on other channels, and read summaries of what they are. I often check ahead to see what shows are on that night. Again – I could have done this on the laptop, but it would take minutes to turn it on, boot it up, start up Firefox, go to the relevant website, etc.

I’ve found myself regularly using the Facebook application, which pretty incredible as I rarely used it before. In fact, it has replaced Twitter as my microblogging platform of choice. The app has a couple of bugs and lacks some parts of the full Facebook site, but it is brilliant for catching up on what people have been doing, checking out photos and basically staying in touch.

Also, the web browser on the iPod Touch is as full-featured as a normal desktop web browser (with the exception of having no Flash plugin), and Google Mail has a slick web interface for the iPhone / iPod Touch that performs almost like a native application. The on-screen touch keyboard for the iPod is pretty easy to get used to, and is easier than any phone keyboard I’ve used, particularly when you hold the iPod on its side.

Aside from Google Mail, just using the web browser to search for a website when it comes up in conversation, or when it appears on the TV, or a question just comes to mind.. it is almost trivial to get the information you’re after.

We have also started using the iPod Touch as our de facto digital photo album. All the recent pics are stored in there, and it’s easy to flick through them to show them off to people who visit. It’s better quality than the digital camera screen, and faster to browse. And again, it would take too long to fire up the laptop.

None of these applications is enough to justify the iPod Touch on its own (although, Google Mail and the Facebook app come close), it is really the pure convenience of getting instant access to a wealth of information. It has also provided a sense of connectness to my online friends that I didn’t have before.

There are a few annoying aspects though. Firstly, the web browser (Safari) is prone to crash on several major sites (including The Age) as this is what it does when it runs out of memory. Also, it is pretty slow to synch with the PC since it tries to backup everything. And it doesn’t have the best support for some of the older WiFi security models – it kept on forgetting about my non-SSID broadcasting WEP protected network, requiring me to keep entering the secret key every couple of days.

However, it is an amazing device. Although I’d previously touched on some of the aspects I thought made it revolutionary, I hadn’t appreciated the benefit from the processing power on the device. This provides incredible responsiveness, and together with ability to turn it on instantly, reinforces the sense of convenience. Even Kate thinks it’s pretty cool.