## SPECIAL UPDATE ##
26 July 2004
Whether it is a coincidence or not, but it would seem an Australian abbatoir named Burrangong Meat Processors at Young, NSW, had to lay-off 65 workers in the mutton processing section because of the drought and "difficult market conditions". As managing director Grant Edmonds said:
'The suspension of mutton processing operations is a temporary measure only and has been forced on us by the effects of the prolonged drought on livestock availability and difficult market conditions.
'Our decision should not be read as a signal of any intention to permanently shut down our mutton floor.
'We deeply regret the effects of those employees directly affected, but can confirm that pork and beef processing, as well as other activities at the plant, will continue as usual.' (5)
Luckily the business had diversified sufficiently to maintain profitability in its operations by processing other types of meats. The question that comes to mind is why couldn't the business restructure itself so that all the original staff could be employed in different areas?
Or the truth might be that the drought in Australia is hitting the business hardest and not so much because consumers have decided to move away from cheap ham products.
The drought has an unsavoury habit of reducing the numbers of animals for processing which in turn reduces the output of a business and the amount of profit it can make and ultimately the number of employees the business can employ.
## SPECIAL UPDATE ##
19 March 2005
McDonalds is paving a positive path through the plethora of fast foods sold to the Australian people by being the first fast-food outlet in Australia to provide nutritional information on all its food products. Combined with a new range of healthy alternatives to the standard Big Mac and we can say the company is doing its bit to change Australian diets for the better.
Come to think of it, we may have no choice in the matter. New research published in the New England Journal of Medicine predicts life expectancy for the generation of adults and children living today will, for the first time in 1,000 years, decline as a result of the obesity epidemic.
On hearing this research, Australian managing director for McDonalds Guy Russo is urging governments and the food industry to lift up its game and provide clear labelling of all foods. Russo is particularly interested in seeing nutritional information regarding the levels of fat, sugar and sodium so consumers can make informed decisions about what they are purchasing.
As Russo said: 'I wouldn't mind [governments] legislating [for mandatory labelling]...' (Houston, Ben. McDonald's wants all fast foods labelled: The Canberra Times. 19 March 2005, p.12.)
But will it be enough to get people to change their eating habits? Probably not. Despite the voluntary labelling of food products, McDonalds managing director admitted he was selling more of its traditional products. This may explain why other fast-food outlets have not followed McDonald's lead. With this in mind, Russo is cautious to remind people of the importance of eating a well-balanced diet:
'McDonald's food can be part of a well-balanced diet. It's got to be eaten in moderation and you need to exercise, but I would say that about just about any food that anyone eats.' (Houston, Ben. McDonald's wants all fast foods labelled: The Canberra Times. 19 March 2005, p.12.)
Perhaps what society needs is some shock tactics showing the consequences of eating poor foods and how it is affecting their bodies and society with a realisation that the current generation of children are becoming too fat and may not see beyond their fortieth birthday as the obesity problem causes strokes and heart diseases in plague proportions within society.
If we keep this up, the terrorists in other nations won't have to lift a finger to stop Westerners. We are already doing the work of killing ourselves through the fast foods we eat!
## SPECIAL UPDATE ##
December 2005
A growing number of Australian schools will follow new education policy to be implemented next year where all foods sold in canteens must be healthy. Now if only the schools desperate for money can follow this policy and not be lured into selling unhealthy food to make a buck.
## SPECIAL UPDATE ##
March 2007
McDonald's develops and sells 9 meals considered by the Heart Foundation as healthy (ie. given the red tick of approval). A great move from the fast food giant. Now fast food doesn't have to be unhealthy.
Will the competitors follow?
Ethanol in the petrol industry
Then we have the rather scandalous case of ethanol being added to petrol in large quantities without informing the consumers of the situation.
You see, ethanol — a flammable alcohol — is a relatively cheap product to produce for businesses. Petrol isn't. So naturally businesses will try to mix ethanol with petrol to create a cheaper product for consumers to buy at the same price as pure petrol.
Now it may be okay to have a certain amount of ethanol (no more than 10 per cent and preferably less) in the petrol if it will help to reduce the cost to the consumer and not just the businesses involved. And more importantly, the engines of cars (or lawn mower, brushcutter etc) can run on this ethanol/petrol mixture without damage.
However, the problem begins when businesses choose to add too much ethanol into petrol (up to 28 per cent in some cases) without informing the consumers at the point of sale or even explaining the consequences of using this heavily tainted product over a long period of time to the lifespan of the engines.
Why do businesses do it? It saves them money which, in the end, means bigger profits. It is plain and simple. So long as the consumer is unaware of the situation, businesses can still charge at the same full price if the product is made entirely of pure petrol.
Add to this the fact that a car with more ethanol in the petrol requires the owner to refill the petrol tank more often and we can quickly see how businesses make a profit. This is because ethanol has a slightly lower boiling point than petrol and so gets used up more quickly in the high-temperature engine without giving back enough energy to run the engine properly. Therefore petrol station owners and petrol companies make more of a profit as car owners have to regularly refill the tank with more petrol. Yes, very clever indeed!
Did you also know service stations do happen to have a car repair service as well? Of course, you might be wondering, "How would the service station owners get enough customers through the repair shop?" Simple. By putting in more ethanol into the petrol, certain components in the car engine can corrode more quickly. When customers realise something is wrong with their car, they have to bring it into a local service station where they will be required to pay thousands of dollars to replace the corroded components or in the worse case scenario put in a new engine. The businesses then reap the benefits of the sale.
NOTE: And if for any reason this doesn't work, there is always the secret cartel approach of colluding with other petrol station owners and oil companies to fix prices. Just so long as nobody finds out. Evidence for this approach can be found in what is believed to be the first in a series of landmark decisions by the Federal Court in Australia. On 17 March 2005, the Federal Court has fined a cartel of eight petrol distribution companies and eight individuals representing them for almost A$24 million for fixing fuel prices in the city of Ballarat. It came after Trevor Oliver, owner of an independent two-bowser service station and garage shop revealed details through an ABC radio talkback program about his suppliers efforts to dictate prices by telling him to raise petrol prices to the same amount as everyone else in the area. This sparked an investigation by the Australian Consumer and Competition Commission (ACCC) leading to the landmark prosecution. (The Canberra Times: Whistleblower hails petrol ruling. 19 March 2005, p.14.)
How have businesses explained this situation? Some companies have attempted to show the positive aspects of ethanol such as how environmentally-friendly the substance is compared to petrol and so hopefully get people to accept the additive. But at the end of the day, standard car engines are not manufactured to handle high levels of ethanol properly. Also ethanol is not considered the most environmentally-friendly product for burning.
## SPECIAL UPDATE ##
11 April 2003
Realising the possibility of a consumer backlash over the ethanol-in-petrol scandal which could affect the A$13 billion tax revenue every year from petrol sales, the Australian Federal (Howard) Government has moved to set a 10 per cent cap on ethanol in petrol and will make changes to the Fuel Quality Standards Act 2000 to ensure labelling of ethanol blends is mandatory at all petrol stations. Well done! Although it won't solve the general business attitude towards change and making high profits, it will at least ensure people continue to maintain the economy by going to work in their now better-protected cars without undue influence to have them repaired and refilled regularly.
The first scientific report on ethanol in petrol was commissioned by the Federal Government and has found 10 per cent or less ethanol blends is considered reasonably safe.
## SPECIAL UPDATE ##
September 2003
Keeping true to their word in showing their profit mentality, the Federal Government's ethanol task force consisting of government officials and the FCAI (the representative for the major vehicle manufacturers and importers including oil companies, service station operators, producers and distributors of ethanol, and motoring organisations) are considering introducing an allegedly brand new hi-tech fuel for the benefit of the Australian community (it has been around for some time, except consumers weren't aware of it!) with up to 10 per cent ethanol content (E10). The secret aim is allegedly to entice those many Australian people with car makes and models older than 1992 to purchase new cars capable of handling the ethanol blend once vehicle menufacturers introduce the latest cars with the warranty to work with the new fuel.
The trick it seems would be to introduce quietly and innocently into the Australian community a list of current vehicles suitable for using E10 developed by the ethanol taskforce but, of course, without the warranty to support the suitable car models and makes from vehicle manufacturers. In that way, owners of older car models would be enticed to purchase a slightly newer car or pay for the repairs. Once the E10 fuel is fully accepted by the motoring public resulting in an equilibrium in the taxes received by the Government and profit earned by the business community, the vehicle manufacturers will introduce brand new "fuel flexible" cars into the marketplace having the warranty to accept the E10 fuel instead of doing it immediately. But before this happens, consumers must spend more money in buying the latest cars before the businesses can introduce the new engine technology.
So after the Australian public learnt how businesspeople tried to rip them off over many years by selling high ethanol fuel blends beyond the 10 per cent range without notifying the public, the Australian Government realised the taxes it was receiving from selling fuel was going to be affected. Hence the decision to cap ethanol to 10 per cent. Then the Government and business representatives in the industry got together to find ways to get the motoring public to accept the blended fuel while at the same time give the business representatives an opportunity to make more money by selling more existing cars able to run the new fuel, and later new cars in the future with the warranty to run the new fuel.
If there is a chance to make a buck from the gullible public, you can be sure the Federal Government and businesspeople will be there to join the party!
This latest information has been gleaned from selected documents allegedly leaked by an unnamed source within the taskforce.
## SPECIAL UPDATE ##
20 September 2003
Mr Bob Gordon, executive director of Australian Biofuels Association in Kingston, ACT, claims the documents were not "secret" and there was no mention on the number of cars that would not operate on the E10 fuel. Furthermore, Gordon claims a growing list of countries including New Zealand, US, Brazil, Japan, China, India and Thailand have embraced ethanol use in standard petrol a week before the Australian Federal Government established the ethanol task force. And Gordon says older cars can and have always run on 10 per cent ethanol. Just so long as the consumer remembers to ask a mechanic to check for water in the fuel tank, fuel hoses and seals before the consumer uses the ethanol fuel.
If that is true, then why aren't vehicle manufacturers providing warranty to car owners using the ethanol-blended petrol since 1992 in NSW? Why isn't the engines built to handle ethanol properly by now? And why was it so difficult for consumers to find out exactly how much ethanol is being put into fuel (in some cases as high as 28 per cent ethanol)?
Actually if cars can be compatible with ethanol, why can't we have pure ethanol running all cars? There is an industry in Australia already suffering greatly from virtually no export dollars known as the sugar industry. Can't we use basic chemistry to create pure ethanol from sugar canes?
Gordon is one of those business people with a vested interest in making money from ethanol-blended fuels. He was known to have emphasised the benefits of ethanol in petrol as a means of reducing greenhouse gas emissions. But as P. J. Carthy of Lyneham, ACT, said:
'As I understand it, the rationale for having ethanol in fuel is to cut down on greenhouse gas emissions. Peter Brewer (CT, September 16, p.5) quotes Bob Gordon, of the Australian Biofuels Association, that motorists will notice a "modest reduction in performance and range per tankful".
'Given that this means vehicles will use more fuel, which in turn means more emission gases per distance travelled, can some independent person from the CSIRO or other scientific organisation advise the actual amount of extra fuel motorists will need to use/buy to travel the same distances they are now and, more importantly, the percentage reduction in greenhouse gases that can be expected from 10 per cent ethanol?' (6)
## SPECIAL UPDATE ##
10 July 2004
Somehow we keep getting the impression many profit-motivated businesses in the energy industry don't want consumers to have free and unlimited energy supplies.
The latest information to support this view has come from a team of US engineers and biologists who have invented for the first time a solar cell made of photosynthetic proteins sandwiched between layers of conductive material. Unfortunately the protein solution will have to be regularly replenished to maximise the electrical power of the cell (which is where most of the profit will be made). But at least on the positive side it should be better for the environment than oil or coal.
The invention requires businesses to grow enough spinach leaves so scientists can extract a plant protein from the light-sensitive membranes of plant cells called chloroplasts to help with the conversion of light into energy. By layering this protein onto a glass surface coated with indium tin oxide and producing a sandwich effective on top of this composing of the protein layer and an organic conducting material and finally topped with a silver electrode, it is possible to generate a measurable amount of electricity.
As one of the inventors — Marco Baldo of the Massachusetts Institute of Technology — described the solar cell, it can potentially produce as much, if not more, electricity than standard silicon-based solar cells. At the moment the plant-based solar cells are inefficient, converting only 12 per cent of absorbed light energy into electricity and generate an electrical current for up to 21 days. Nevertheless Mr Baldo believes it won't be too long before these cells eventually rival and possibly exceed the electrical output of commercial silicon cells with a conversion efficiency rate of around 20 per cent.
Limited lifespans of the silicon solar cells are another issue (well, if you mistreat them and don't protect them from excessive heat and ultraviolet light when exposed constantly to sunlight). Baldo believes the new plant-based solar cells will one day exceed the lifespan of silicon-based solar cells because all you have to do is replenish the protein solution as often as you like.
Hence, in theory, these plant-based solar cells could be manufactured to be cheaper to build than silicon-based solar cells. Well, they will have to. If consumers are going to have to replenish the protein solution on a regular basis at a cost (at least 21 days compared to the lifespan of silicon cells), the rest of the cell will have to be cheaper than traditional "almost permanent" silicon solar cells.
Or better still, why not put on a protective glass sheeting over the existing silicon-based solar cells?
The idea is to get a piece of glass produced from nanotechnology to allow light to pass through but not the heat. The material already exists and it should be used in solar technology. Put on an additional protective surface to stop ultraviolet light from getting through and the silicon solar cells should theoretically last forever.
Combine this with the ability to magnify the intensity of visible light hitting the solar cells by designing the glass sheeting to have a multitude of tiny magnifying glasses on it (ie. circular-shaped bulbs coming off the surface slightly) and it should increase the electrical output of the solar cells to a much higher level.
Or what about converting the highly abundant and free radio waves permeating the entire universe 24/7 and on Earth (from free-to-air radio and television stations) to electricity? Think it is impossible? Well, think again! The patented invention already exists thanks to Sir Raymond Phillips. Still sceptical? Well, check out the patent by clicking here.
Unfortunately, don't tell the businesses in the energy industry about these ideas. They certainly won't like them if a profit can't be made for all eternity!
## SPECIAL UPDATE ##
28 August 2004
Melbourne inventor Angelo Di Pietro is doing some interesting work in developing a more environmentally-friendly motor engine. His invention may one day replace all petrol and diesel-driven cars, buses, boats and other vehicles with a new engine running on compressed air.
Instead of the conventional pistons moving up and down from the pressure of controlled explosions inside the cylinder chambers to help rotate a shaft for moving the wheels, the compressed air would directly rotate the shaft through a cleverly-designed rotary engine.
For air to be compressed electricity must be generated from somewhere. Currently the engine uses a number of batteries to compress the air, but the inventor envisages the engine will be more efficient and would allow solar cells to do the work of compressing the air. If this is possible, it would make the car one-hundred percent environmentally-friendly.
Among the other advantages of the new engine include a significiant engine weight reduction. Instead of around 90kg for a standard petrol-driven car engine, the new engine could be as light as 13kg.
While tests with the engine has achieved 50km/h on a small four-wheel maintenance cart, two of these engines could provide adequate speed and power for a conventional small car.
Finally, if durability tests prove the engine will last for many years, we may have a serious solution to the car pollution problem. Until these problems are solved, we will be relying on standard motor vehicles for at least another 15 years (possibly 20 to 55 years knowing how slowly people change over to the new system given the high price of cars).
## SPECIAL UPDATE ##
11 December 2004
The Federal (Howard) Government has released a technical report on ethanol. Despite the Government's attempt to cap ethanol to 10 per cent since 1 July 2003, the public's confidence was eroded thin over this scandal. Now the Government has issued another report providing more technical information to convince the public ethanol is a good product.
While some concerns were put to rest in the report, it would appear the only solution to the problem would be to buy the new flexible fuel vehicles available overseas capable of handling pure petrol or a combination of petrol and ethanol up to a maximum of 85 per cent ethanol if required. The report presents this solution in a highly positive way by saying:
'Sales of flexible fuel vehicles are increasing overseas, which point to considerable potential for increased uptake of ethanol fuel blends in Australia.
'These vehicles can run on petrol or a combination of ethanol and a range of blends up to 85 per cent ethanol.' (The Canberra Times: Ethanol fuel report to ease fear, says Govt. 11 December 2004, p.9.)
The report also uses the confidence-boosting term "enhancer" to describe the ethanol additive in petrol.
The report unfortunately does not reveal the full price for one of these new vehicles but we can expect them to cost the same as a luxury car (ie. A$55,000 plus).
In the meantime, the standard petrol-variety of vehicles trying to cope with 10 per cent ethanol blends are expected to remain on the road for at least another 30 years or until enough second-hand vehicles of the newer technologies get sold off to have any affect.
## SPECIAL UPDATE ##
June 2005
With petrol station owners and oil companies finding it harder to make a profit through an injection of cheap ethanol of any reasonable amount (so long as the consumers don't know about it), it would appear some pumps are being let go to the point where the accuracy of measurement becomes faulty. This may seem to the advantage of the consumer until the authorities testing the pumps discover the faulty pumps are providing less petrol for the measurements shown to customers.
According to a recent test conducted by authorities in Australia of 1,200 pumps in 85 petrol stations and televised on Channel 7 Today Tonight on 6 June 2005, no less than 215 pumps were found faulty. And every one of the pumps were coincidentally providing less petrol than expected! Consumers wanting to know how to find out whether a pump is faulty will be virtually impossible unless you are prepared to carry around a large and highly accurate measuring bucket to collect the petrol (and letting it cool down) before pouring the petrol into the car.
As for the big supermarket chains — Woolworths and Coles — giving customers a 4 cent discount for petrol after spending A$30 or more in the supermarkets, the petrol prices charged by participating petrol stations will suddenly raise the petrol price to cover the discount. Consumers will discover the discounted prices are no different from the more independent petrol stations.
Less petrol to consumers? Is this a new environmentally-friendly policy from the business professionals?
We doubt it!
## SPECIAL UPDATE ##
25 June 2005
Petrol prices are expected to rise to A$1.20 in Australia in the coming weeks. With this rise comes the admission from Australian Prime Minister Mr John Howard of how important it is to rake in money from consumers through its tax excise on petrol. As petrol prices increase, Mr Howard claims he is powerless to act by reducing the excise tax of 38 cents a litre to say 30 or 35 cents a litre. Mr Howard prefers to blame the price hike on world oil prices and not on the tax his government imposes:
'The price of petrol is painfully high, I'm aware of that. That is the fault of world oil price fluctuations, it's not because of unreasonably high taxes.' (Jean, David. Petrol won't hit $1.20 says expert: The Canberra Times. 26 June 2005, p.3.)
Mr Howard thinks the level of tax on petrol is reasonable. What does reasonable mean in his mind? Perhaps he meant the tax spent on the war in Iraq and on television advertisements explaining how great the government is doing is considered reasonable from his perspective?
How about doing something really reasonable by reducing the tax on petrol instead of giving a miserly A$6 in tax cuts to low and middle income families?
## SPECIAL UPDATE ##
October 2005
Petrol prices reach as high as A$1.44. Prices will drop during the Christmas period to as low as A$1.06. However the price of petrol will have more regular and suddenly spikes from 2006 with average prices going quickly upwards because of another factor — namely the Earth is no longer yielding more oil deposits and the available deposits have reached or is about to reach "peak oil" as industry experts say. Soon oil supplies will go down yet demand for oil increases at a rate of approximately 2 per cent per year.
## SPECIAL UPDATE ##
15 April 2006
It is becoming clear one simple fact. The lack of an alternative energy source for driving cars is permitting oil companies to monopolise petrol prices. Oil companies will claim petrol prices rise and fall with the world oil prices as dictated by OPEC and other oil-producing countries. But we see clear evidence during the Easter holiday how this is not the case. Oil companies know when there is a holiday or weekend, so prices just happen to increase by $0.10 or more on a Friday, or Thursday in the case of Easter. Not surprisingly, the cheapest time to purchase petrol is usually mid-week, or around Tuesday.
Until other energy sources are found, the monopoly shown by the oil companies in dictating petrol prices will continue into the foreseeable future.
## SPECIAL UPDATE ##
21 April 2006
Political leaders don't want to offset the high petrol prices by reducing excise tax on petrol claiming every one cent reduction in the cost of petrol per litre would equate to a significant loss of revenue. In Australia, Prime Minister John Howard stated on radio today how significant the loss would be:
'The problem about giving a tax cut in relation to petrol is that...taking a cent a litre off excise would cost somewhere in the order of $300 million.
'With present high levels [at the bowser], people would say anything less than 10c was chicken feed, so you are looking at an enormous amount of revenue.' (Crawshaw, David; Tasker, Belinda and Bunce, Jane. Cuts to petrol excise vetoed: The Canberra Times. 22 April 2006, p.9.)
Over what time frame are we talking about? If Mr Howard means 12 months of consistently high petrol prices, then maybe $300 million is lost for every cent per litre is reduced. But aren't the petrol prices going to drop anytime soon? Or is Mr Howard hinting the petrol price rise has well and truly begun as the last oil reserves are being milked for all they are worth and will soon be depleted in the next 7 to 8 years?
Meanwhile, the timing couldn't be worse for Mr Howard when Finance Minister Peter Costello publicly announced the land of Oz is completely debt free after earning unprecedented revenues from tax this financial year. So great is the revenue that people are predicting a massive budget surplus in May 2006 exceeding $13.4 billion. There have been calls for tax cuts, but it won't be in petrol excise.
Assuming petrol prices will drop at some point in time, worrying about losing A$3 billion in excise tax from petrol for a $0.10 reduction compared to over $13.4 billion and growing rapidly (and with compound interest Australia could soon earn as much as the US Government), it doesn't look like a major loss for the Australian government. But if it still wants to justify raking in the revenue, how about ensuring social services, education and the health system are propped up with some of the money?
And while Australia is doing particularly well for itself, how about building goodwill with other nations by helping people to survive, grow their own food, and provide security, education and technology? Who knows? It could even save the government hundreds of millions of dollars in housing so many refugees in detention centres.
In numerous reports from ACTCOSS and other social agencies, it is clear all of them are crying out for extra funding and more staff. This has to be clear indications there are people out there being hurt by government funding cuts over the past 10 years.
Talk of tax cuts by observers looking at this year's budget surplus usually benefits those who are already better off. It is better to direct some of the money to social agencies who can target families and individuals who aren't surviving well under the new industrial relations environment and welfare-to-work regimes as well as those who are simply so poor and lost of all confidence that no work regime will help until they have a roof over their heads, have food on the table and can relate once more with people in the community.
And just as importantly, start investing in new environmentally-friendly energy sources and technologies to help wean the population off petrol and natural gas and at the same time find ways to create natural and self-replenishing carbon sinks to reduce the greenhouse gases in the atmosphere. This involves planting trees and shrubs, and later allowing the wildlife to recolonise the environment without our interference where they can naturally transfer and deposit the next generation of seeds.
Yet Mr Costello argued the extra money will come in handy for helping to look after the aging population (ie. people like Mr Costello and Mr Howard who will be among this group very soon and all needing extensive care). Yes, but at some point you need to spend the money to ensure the aged are cared for with a good health care system, education for an active mind, and social services for those aged people who may not be financially well-off. You might as well start siphoning some of the money towards these areas now before it gets too expensive and not enough time to fix up the system later.
If not, then it is probably an excuse for covering up the real aim for raising the revenue which is to spend it on how the government wants during the election year of 2007 in order to buy votes and get people to reelect the Howard team once more.
## SPECIAL UPDATE ##
March 2008
Petrol prices in Australia rise to $1.54. One oil company was prepared to go on record stating that people should be prepared to pay $3.00 per litre in the next 10 years.
Public donations
Even in the situation where members of the public provide financial donations to a bank or company for any publicised humanitarian aid, it can take months or years before the money is released to help people.
Why? Banks and anyone else who administers the money as part of the humanitarian aid want to profit on the financial donations from the general public through the interest earning investment schemes such as a 12-months investment account and/or dabbling on the world stock market.
It is only when media reports come out asking why it is taking so long for the money to go to the needy do banks and private firms suddenly release the funds.
## SPECIAL UPDATE ##
21 October 2003
The Australian Federal (Howard) Government is also prepared to employ a similar tactic when it comes to the $10 per plane ticket levy introduced in 2001 originally designed to pay the employees of the collapsed Ansett airline their lost entitlements (ie. superannuation and wages). After providing a loan to the liquidators of around $334 million and having most of it repaid after the assets of Ansett were sold (around $190 million), the Government has still managed to successfully make $235 million from the levy and hence made a substantial profit of $128 million. Yet somehow the Government refuses to distribute this levy (and why not part of the profit) for any shortfalls to the employees. In the meantime, a number of employees have committed suicide and others are struggling to pay their mortgages while the Government line their pockets and superannuation with the interest earned from the levy.
Government ministers such as Mr Tony Abbott, the Transport Minister Mr John Anderson and Prime Minister Mr John Howard are keeping quiet when spoken to by the media about the issue. Actually, Mr Abbott is trying to wash his hands of the issue by saying the money is no longer part of his department now that he has moved over to a new portfolio.
## SPECIAL UPDATE ##
11 November 2003
Transport Minister Mr John Anderson has defended the Government's actions to the media claiming the money earned from the $10 levy is being withheld on a legal technicality. As soon as a decision is made in the Federal Court in Melbourne can the money be released. In the meantime, Ansett workers continue to suffer and the Government continues to make more money by investing some or all of it in the right areas of the economy.
So what is the legal technicality mentioned by Mr Anderson? Why is it taking 18 months to decide on this one lousy technicality? Surely it isn't the issue of money which is holding up the process?
## SPECIAL UPDATE ##
21 November 2003
It has taking three days of intense negotiations to resolve the dispute between the Ansett's administrators Korda-Mentha and the Ansett Ground Staff Superannuation Plan wanting to claim $180 million from the sale of Ansett assets. Although final approval is sought from the Federal court on Tuesday 25 November 2003, the deal would involve altering the deed of company arrangements as required to legally liquidate the Ansett company.
The resolution was made possible only after Justice Alan Goldberg ordered mediation between the parties after noticing the cost of litigation was eroding the funds and former airline's staff agreed to the changes to the deed in the hope of expediting the release of some more of their entitlements.
The Federal Government, as Ansett's biggest creditor, will be a party to the proposed agreement.
## SPECIAL UPDATE ##
25 November 2003
The Federal court has agreed to release $150 million to the former Ansett staff. This would now cover A$0.71 for every dollar owed to the staff compared to the average A$0.50 in every dollar. Another A$200 million is still owed in remaining staff entitlements.
Multiskilling
Want to know of another way to maximise profit within a business? No problem. There is an increasing number of job titles advertised in local and national newspapers as being described as looking menial or relatively standard jobs having a fairly standard salary. But if you look more closely at the duties of the positions, they are in fact jobs requiring extensive management skills as well as the skills needed to perform the actual jobs.
Take, for instance, an innocent-looking advertised job in a newspaper called an "IT Support Officer Grade 3" for roughly A$35,000 per year. Ask for the duty statement and you will discover a whole range of additional tasks such as the stressful and time-consuming management tasks of coordinating and supervising staff, creating new policies and so on while at the same time having an unusually high expectation of the support officer to go out there and promote/sell products for the business. And this is on top of the actual help desk support for individual clients and customers which is what you would think the job should actually entail given the job title and salary for this position.
This is affectionately known in the world of management as multiskilling.
You see, some employers will try to hide this high management expectation of a job by disguising it as an ordinary looking position with a low salary. Once the employee is in the position, they will be subtlely thrown into unexpected management duties to help run the entire business.
The alternative is, of course, advertising the correctly-titled management position at a higher salary on a regular basis. But it will have to be advertised regularly because there is a high turnaround of people in such jobs due to the way employers tend to place performance-based agreements into the job in an attempt to force the new managers to maximise profit. This latter situation is why you will find a large number of management and executive positions in the first half of the employment sections of newspapers. People only stick around for a while to make a reasonable amount of money, then they resign to go to better pastures (lower pay for less stress, or to run their own business instead).
In other words, it is all about reducing costs and maximising sales through certain cunning techniques so as to maximise profit for the business.
Skewing the facts or evidence
Another problem is how some tabloid journalists and reporters wanting to make a profit for their newspaper, television or magazine business will skew what they are seeing or hearing in order to create a sensational story so that people will buy and read their articles.
An example of this include the recent Martin Bashir's Michael Jackson interview where important responses from the famous star were left out by the British reporter in favour of presenting an unbalanced and more sensational view that made the pop star look worse than he is.
It may be true that Michael Jackson has had a difficult childhood while performing for the public and helping his parents become rich and also did some silly things later in his life, but at the end of the day a responsible reporter should be objective and present all the responses and the facts.
The fact that Bashir fell short of meeting this objective through responsible and ethical journalism meant it was nothing more than an attempt to make himself and the business he was working for more financially richer at the expense of making someone else look bad.
The gene real estate
And how can we leave out the extraordinary situation of certain highly profit-motivated business professionals who are cashing in on the DNA real estate of every living thing?
For example, the Patent Offices of dozens of countries are somehow letting business professionals ludicrously patent large segments of the DNA owned by virtually every living thing so they can make extraordinary profits. The result of this outrageous patenting process is that these business professionals think they can own DNA and hence have the legal entitlement to ask for excessive licensing fees from any research centre, hospital or individual trying to understand DNA as well as providing low-cost life-saving gene testing for the consumers.
If this trend should continue, we would not be surprised to see one day every human being born into this world requiring their parents to pay business professionals a licensing fee for the privilege of their baby using its own genes to survive!
Business professionals have to use common sense. You see, DNA is owned by everyone. All benefits in gene research should be shared with everyone. Only the actual technology of testing the human genes for potential health problems, if it meets the requirements for uniqueness, being novel, and is something that has not been thought of before by anyone else at any time in human history, is what gets patented, not the DNA itself.
More than 95 per cent of DNA is not unique to all living things. And anyway, how can it be patented if it is owned by every living thing?
Should the business professionals continue with this attitude of making money from DNA, maybe the law should be expanded to permit the rest of the human race to ask for 95 per cent of the profits made by the business professionals to be distributed to everyone (ie. now that's a brilliant way of solving poverty) and all the animals in the world (ie. create an animal trust fund and environmentalists can use the money to rebuild the environment to help look after the animals and plants of the world).
You see, if DNA is owned by everyone, there should be laws entitling everyone to ask for a royalty from the profits made by the business professionals over the gene real estate.
While the remaining 5 per cent of the profits should be distributed partly to the business professionals (for patenting it) and the rest to those people who own naturally those parts of the DNA considered unique compared to other humans and the rest of the animal kingdom.
The commercial software industry
Did you also know major software manufacturers such as Adobe Systems, Inc. and Apple Computer, Inc. are prepared to sell commercial software packages (eg. MacOSX and Adobe Acrobat 3.x-6.x) that are not quite completely clean of all bugs as part of a new marketing strategy to force consumers to upgrade to the latest software? Even when consumers complain about certain bugs, an update may be provided to fix some and then leave it at that. Then consumers who need the product are often forced to upgrade it to avoid the remaining bugs. But unfortunately, a new set of bugs will often plague the same previously-introduced features of the latest software version which for some reason has never existed in any previous version?
It is true that as soon as a major software package such as Adobe Acrobat comes out, the software manufacturer will usually provide a free update within about 1 to 6 months. For example, Adobe Systems, Inc. have provided patches for Adobe Acrobat 3.0 to 3.01, Acrobat 4.0 to 4.0.5, Acrobat 5.0 to 5.0.5. Certainly if enough consumers complain about a bug or any annoying feature which is blatantly obvious (and perhaps for a long enough period of time for the slightly more obscure bugs), rarely will major software manufacturers sit back and do nothing.
However, if possible the software manufacturers with the most popular and market dominant flagship products will want to leave something behind to annoy the hell out of the consumers so that hopefully people will see the benefit of upgrading to the latest software version at a cost (otherwise they won't risk it if there is a viable and equally powerful competitor to steal the market). Then when you buy the latest version, that annoying feature may seem to have disappeared but you are often faced with another different set of irritations or quirkiness in the latest package which has never existed in the previous versions.
Take, for instance, Adobe Acrobat 4.0. This version had a really annoying problem of not being able to Touch Up text with a small font size after a page had been captured. This is a problem that never existed in previous Acrobat versions. Adobe Systems, Inc. received numerous complaints about this problem until it was forced to quickly and quietly deliver to their web site an Adobe Acrobat 4.0.5 Update 1 patch. While the problem has improved considerably, it has not been fixed properly. When consumers are forced to upgrade to Adobe Acrobat 5.0.5, the problem appears to be fixed giving the consumer greater confidence in this area. But the consumers will also notice another quirkiness in the latest software whereby during Touch Up editing, the text can suddenly expand beyond the confines of the text box and hence force part of the text to disappear. You now have to use the Text Attributes function to set the text width back down to 100% just to make everything look normal again and to see the entire text once more.
This quirky feature does not exist in Adobe Acrobat 4.0 or Adobe Acrobat 4.0.5 (or even Adobe Acrobat 3.0).
So why the differences? There is only one good reason for this and that's to force people to upgrade the software regularly to help the company maximise its profits. Otherwise any other explanation would make the company look either incompetent or foolish.
## SPECIAL UPDATE ##
September 2003
Adobe Systems, Inc. has quickly released Adobe Acrobat 6.0 presumably to entice users of Acrobat 5.0.5 or earlier versions to see the benefits of upgrading to the latest version. Unfortunately some Acrobat 6.0 users are still noticing other problems with this latest package. And guess what? You have to upgrade your OS to MacOSX to run the bloody thing!
World trade policies of richer (economically developed) nations
Another classic example of greed gone mad among certain business professionals are the ones in the agricultural sector being heavily subsidised by their nation's Governments.
As the system of world trade currently stands, businesses of developed nations such as the US and Europe are ridiculously involved in growing and selling the same sorts of agricultural products as many of the poorer nations. Because poorer nations have much lower labour costs, you would think these nations would have the opportunity to get themselves out of poverty and debt by selling some of their food on the world market. Unfortunately this is not the case for 120 of the 146 member nations of the Word Trade Organisation. Why? Because the Governments of developed nations realise some of their own businesses will have their profits seriously affected by the products from poorer nations because of the lower labour costs.
So what's the solution? Instead of trying something different, the only way the Governments can do to protect their own businesses is to heavily subsidise the costs of local businesses producing the same sorts of products so as to price the poorer nations out of world markets.
The aim of subsidises is purely to protect local businesses in developed nations who aren't creative enough to find and produce alternative products than their poorer cousins in developing nations; to help the local businesses in developed nations have more exclusive control of the world trade of food with other developed nations through a guaranteed bilateral trade deal; to maximise profit by delivering high-volume food products to other developed nations; and to ensure the economy and standard of living for a number of people in a developed nation are healthy so that the Governments can win elections.
In essence, subsidies are the way for Governments of developed nations like the US and Europe to essentially dominate world trade in food production for the sake of higher profits and maintain political power.
It is true that sometimes the quality of the foods produced by developed nations can be better than the developing nations. But if the developing nations are to pay their debts to world banks and help improve the standard of living for all poor people governed by benevolent leaders, the developed nations should be given a helping hand with the delivery of essential technology and knowledge to poorer nations so they can produce high quality foods to the world at low costs.
Unfortunately as we have it at the moment, poorer nations continue to suffer under the current world trade policies imposed primarily by the US and Europe (a continent forced to create such policies to compete with the US).
## SPECIAL UPDATE ##
20 October 2003
It looks like the US are getting a taste of their own medicine. Apparently the US wants China to float its currency on the market so its value can be varied by market forces and hence make the flood of cheap Chinese products into the US eventually look expensive. In that way, the US industries will have a chance to compete against the Chinese manufacturers. Oh well! It is nice to see a bit of balance in this world. For if the US is prepared to flood third world nations with cheap imports of its own through its own brand of a free trade agreement and at the same time not listen to those countries' concerns about their local industries being decimated, we might as well let China do the same with the US.
It is good to see China not giving into demands by the US to float the Chinese currency.
## SPECIAL UPDATE ##
21 November 2003
Australian farmers (and the local film industry) are complaining almost as badly as third-world nations over the extent of the latest free trade agreement proposal between the US and Australia. A closer look at the deal suggests the US has a secret agenda. The Americans want to have greater control of the Australian market, culture and social development in return for letting Australia have slightly better access to the US market. The latest move by the US Government (under Mr Bush) is to encourage the Australian Federal (Howard) Government to reduce the quota of Australian-produced television series, programs and movies. With the Australian Government seeing only money in their eyes and all the economic benefits that come with it, it is likely they will agree to anything from the US. But what will replace the Australian programs? It is unlikely the Australian commercial television stations will consider televising world movies from Europe, India, the Pacific Islands, the Middle East etc just like SBS. If you're a TV executive wanting to get the highest ratings and hence the most money from advertising, you would almost certainly choose the American content. So expect Australians to be watching more American war movies, organised crime, terrorism, sex, violence and drugs etc.
Nothing like supporting your local US Government aim's in fighting the war on terrorism in its own way!
## SPECIAL UPDATE ##
24 January 2004
The continuing saga with the free trade agreement proposal between the US and Australia is soon coming to an end with the US agreeing to let Australia have some access to the US market in return for access to Australian markets. However, because Australia is sticking to its tough quarantine laws, the biggest loser in this latest deal is going to be the Australian sugar industry. A major blow for an industry which is suffering greatly because of low world prices for sugar. We might as well call this the clayton free trade agreement!
Alright. So what else can Australia do? Any other restrictions? Or can Australia be smart enough to indirectly introduce sugar into the US markets in a different way? For example, why not produce real Australian foods from native plants learned from the Australian aborigines? Native bush tucker as the Australians call it. Now that could be something the US might clammer for given their appetite to consume everything in sight. And if that is possible, make sure certain US companies such as Arnotts don't decide to suddenly buy into this native Australian food industry or there would be no one else to blame but the Australian people for losing this opportunity to help a number of Australian industries.
Or better still, why not let the sugar industry turn sugar into an ethanol-producing industry? With basic chemistry, sugar canes can be used to create pure ethanol with ease, purity, low-cost and high quantity. All we need is the will from all car manufacturers to start producing and selling cars capable of running on pure ethanol. And if that can happen, we can save the lives of thousands of people dying from car fumes in the cities as well as give the sugar farmers a chance to survive with their intimate knowledge of growing sugar.
Or is the Australian Federal (Howard) Government thinking too much about winning the next election instead of doing the right thing?
## SPECIAL UPDATE ##
8 February 2004
The free trade deal between Australia and US has been finalised. While Australia will have reasonable access to the US market in areas of manufacturing, mining and some agricultural products, the US will benefit more from the deal in the long term with greater indirect access to Australian markets. For example, the US will sell more American-produced television series, programs and movies on subscription television (ie. cable and satellite through Foxtel) before Australians eventually accept them as the norm for free-to-air television. While it may be worth up to A$4 billion a year in exports for Australia, the US will make a lot more.
## SPECIAL UPDATE ##
30 July 2004
The US has already agreed to sign their end of the free trade agreement (FTA) nearly two months ago.
Now it is Australia's turn to decide whether or not to sign this bilateral FTA and already it is creating quite a furore among the more left-wing types (the more arty-farty and environmentally-concerned individuals) and some right-wing people with a strong patriotic concern to protect Australia's unique identity. These are the people that seem to be splitting the Australian Labor Party in two. Labor's leader Mark Latham is trying to be sensible in giving more time and waiting for additional information to arrive from people like Senator Peter Cook. The only problem is that Senator Cook has his own health to consider and he refuses to write a firm recommendation of whether to go ahead with the FTA or not.
What can Mr Latham do? Well, let's look at what the FTA means to Australia and the US.
Firstly we have to realise the FTA will create new jobs for people in both nations. It is true some jobs will be lost such as in the Australian film and sugar industry. But the general consensus is that more jobs will be created (such as employing more lawyers to protect American intellectual property in Australia). This job argument is usually seen as the short-term view to supporting the FTA, but it must surely be at the forefront of Mr Latham thinking in this election year.
This is not the only thing the FTA represents. There is also a longer-term view. The view being that the FTA can affect the health of the environment and its people in both nations as well as the culture and identity and inventiveness of the people living under the FTA. Ideally, this health, cultural and creativity aspects should be at least maintained and, if not, possibly increased for both nations.
This longer-term view is actually more important for a smaller nation such as Australia which can easily be swamped by imports from a big nation such as the US.
Does the FTA represent real progress forward for both nations where all citizens benefit from it? There is a general consensus it will not for very good reasons.
Firstly, the majority of American companies that will benefit from the FTA are generally large and highly influential entities with massive market power driven by high profits. There is nothing in the FTA to suggest these companies will have the health and well-being of the Australian community and the environment in mind when, at the end of the day, generating high profits is the overriding aim.
For example, the US had wanted within the FTA the ability for American companies to hold patents on anything they can make money on, or have the potential to make money, and force Australian individuals and companies to comply with US patent laws which, in the end, would mean the end of Australian inventiveness.
The American companies can go one step further. When a patent is nearing the end of its life, there will be an attempt to extend the patent through any legal means called "evergreening" to stop competitors from providing generic alternatives.
Can Australia continue to be described as the clever country given how many American products and services protected by patents will be replacing the Australian versions under the FTA (simply because it will cost too much for Australian businesses to fight American companies in the law courts to sell similar products)?
Not likely.
As Michael James of Hackett, Canberra, pointed out:
'The patent provisions of the Free Trade Agreement will cut Australian inventiveness off at the knees.
'Large American firms use portfolios of readily granted, spurious patents to legally harass their competitors.
'For example, Microsoft have patented double-clicking! Never mind that they copied it from Apple who got it from Xerox.
'Who will stand against their army of lawyers and fight for common sense? Whether an Australian company is trying to enter the American market or just to survive in the Australian one, it will be a David in a field of Goliaths.
'Under the FTA, Goliath will hold the patent on slingshots.' (7)
Let us take another example. If we look more closely at the FTA, we find there is nothing to stop some American companies from selling cheap and nasty stuff in the high-priced foods and drugs sold to Australian people. As a case to consider, there is debate now raging as to whether vegetable oils causes blindness. Now Australian scientists are saying the problem actually lies in the oils produced in the US.
How would the FTA control this kind of problem? Otherwise the impact on the available health budget of future Australian governments and the public over the long term will be serious.
Similarly, on the environmental front, some American companies benefiting from the FTA could be of the polluting type which could come to Australia to dump certain waste products.
The last thing on the minds of a number of US executives is to sell low-cost high-quality products to the Australian community or to allow Australian companies to compete on an equal footing.
Then there is the inescapable fact that FTA will see the cultures of the nations clash.
Now if both nations are of equal size and influence, this may not be a problem so long as the people of both nations are prepared to learn and support one another's unique cultures. However, in the case of the US and Australia, the US is incredibly massive, interfering, highly controlling through its intellectual property laws, and incredibly influential in how it delivers its American culture and point-of-view to the Australian people through television and radio.
What makes it worse is the fact that the FTA does not provide adequate safeguards or forms of evidence of the US preparing to support and promote Australian culture and identity among average Americans by, say, helping to pay Australian people to maintain and possibly promote their culture in the US as soon as the bigger nation starts flooding Australia with its own products and culture.
We can see why the US Government is so particularly keen to have access to the Australian television and film industry. This is the most powerful medium to educate Australians about the reality the US Government and its businesses want to promote.
Unfortunately there is no equivalent in the US television and film industry. Australia just can't afford to produce Australian-made films in the quantity (although quality is now comparable with the US) required to balance the US content. And there is nothing to suggest the Americans are prepared to support the Australian television and film industry to ensure there is balance in the two cultures.
It is in the Australian identity and cultural aspects where the Australian people could suffer the most under the FTA with the US.
Similarly there is a problem with pharmaceutical drugs. Apparently the US wants to do away with the Pharmaceutical Benefits Scheme (PBS) where the Australian Government negotiates on lower drug prices and subsidises the cost of useful drugs to the Australian people. The aim would be to maximise profit for the US drug companies by getting average Australians to pay full price for the drugs (including the cost of heavy and expensive advertising by the American companies).
In other words, the rich gets richer and possibly healthier if they look after themselves (not likely if they keep consuming caviar and champagne and sit in front of a A$25,000 plasma screen everyday), but the poor gets sicker and quickly die.
Unfortunately the FTA is not water tight in a legal sense (ie. lots of ambiguities) to the point where US companies will provide low cost and high quality "useful" drugs and will abide by strict health and safety regulations in Australia. Even the Australian review system for new US drugs entering Australia is extremely weak and subject to serious legal loopholes for US drug companies to exploit.
To put it bluntly, if we focussed entirely on the short-term, which Mr Latham must seriously consider in this election year, the argument is really about whether Mr Latham is prepared to lose some Australian jobs in favour of creating new ones under the FTA and hope to hell there is enough voters benefiting from the new jobs at the right time to look upon Mr Latham as the preferred Prime Minister.
Although it is quite possible voters may choose Mr Howard as the preferred Prime Minister because Mr Latham is not showing anything different from Mr Howard.
The hardest part about this FTA is how Mr Latham is kind of caught in an almost checkmate position where if he agrees with the FTA, he may lose voters at the next election. But he may also gain voters whose jobs are protected or will be created soon. Unfortunately the new jobs will probably not be created soon enough to help Labor get into government because of how close the election day is.
And people will find it harder to see any differences in the two major parties, so why change?
If, however, Mr Latham choses not to accept the deal and think long-term, he will lose quite a few voters in the business community who are expecting to gain a great deal from the FTA, not to mention the average citizens who are looking for jobs. This is to the advantage of the Federal Government. Either way, Mr Latham is in a conundrum.
And as the clever dick Mr Howard has understood, he has the upper hand in not declaring a date for the election while Labor is caught in a bind with this FTA. Mr Howard just has to sit back and watch how everything unfolds for Labor before he makes his decision.
What will Mr Latham do?
Will Mr Latham think differently to Mr Howard and take the long-term view for Australia and start protecting Australian businesses and the people's health and environment? Or will he think in terms of the short-term view of creating jobs to increase his chances of winning the next election?
Either way, Mr Howard will take advantage of the decision.
Or why can't Mr Latham make the decision after the US elections are held and a new Administration is in office? Who knows? Australia may regret committing itself to the FTA in its current form if there is a chance a new US Government might be a little more open to further negotiations with the FTA and give Australia a better deal.
Or better still, can Australia survive without an FTA with the US? Not that the FTA really matters all that much to the US given its shear market power and dominance on the world stage and its persistence in following the globalisation theory of economics on other nations. Even if Australia chose to have multilateral trade deals with other nations, the US might be a little upset but life would still go on.
Well, look on the positive side: the US is getting a lot of help from Australia in Iraq. The US should be happy if Australia chose not to go ahead with the FTA.
And anyway, if the US really wants to have increased trade with Australia, why can't Australia and the US work together to export the things they are good at and which each nation cannot produce?
The point of having trade between two nations is so that the thing being exported is of value to the nation receiving it because it cannot produce the item being traded or is willing to let the other nation supply the item so long as the people in the nation receiving it are not out of a job (if anything, the trade should actually create jobs). As for the basic staple of food and water, every nation can produce this to some extent and as such the people of each nation should create it for themselves to supply to people in their own nation. The only exception to this rule is if say a nation produces a unique type of food which the other nation would like to receive and vice versa. Also a nation which is poor and cannot export a great deal of things should be allowed to export a certain quantity of exports to help the nation find alternative and unique export products in the future which are better at protecting the health of the environment, the people, and the cultures and identities of both nations.
The aim is to create economic development based on preserving the local industries helping local people to survive, but giving people access to different products from other nations through a controlled trade scheme.
In essence, when the thing being exported is unique and different, there is no need to make a fuss over an FTA based on this approach. In fact, the term FTA would really mean what it stands for: a free trade agreement with no restrictions of any kind. For example, the US could manufacture hi-tech solutions in the field of energy recycling and environmentally-friendly wind-powered generators and solar panels and, in return, Australia can provide the creative research behind the technology?
Or why not sell unique Australian foods in all sorts of ways to wet the appetite of the US?
Or are we all so profit-driven to the point where nations have to force upon other nations the things other nations already produce for themselves as part of an FTA at such a low price as to decimate local industries?
## SPECIAL UPDATE ##
Wednesday 11 July 2004
The Australian opposition leader Mark Latham has agreed in principle to the FTA so long as the PBS remains sacrosanct through amended legislation. Similar safeguards have also been added in other areas to prevent unfettered exploitation of the Australian market such as imposing fines on US drug companies for extending patents. The US Government will be looking into the amendments. But will it be enough to stop, say, the rampaging US pharmaceutical companies from taking control of the Australian health care system? Or will the US totally back down on the FTA because of Australia's inability to let go of the PBS?
Australian Prime Minister John Howard was quick to say to his Australian people how the Labor amendments could sink the FTA if the US disagrees with the changes. Funny that considering the amendments are nothing more than to keep the US companies honest, stop them from being greedy, and prevent the US from totally controlling the Australian health care system. For Mr Howard to come out and say what he did at this rather crucial time and without showing specifically how the amendments must be wrong or are not reasonable, it must make some Australian people wonder whether the original deal was a good one in the first place.
As Charles Wharley of Willoughby, NSW, said:
'If the Prime Minister [John Howard] is right and our American friends are likely to back out of the Free Trade Agreement because we tacked on a bit to keep the greedy paws of the US drug companies off our PBS, it makes the whole deal look a bit shonky.
'Makes you wonder why the PM signed it in the first place.' (8)
Supermarket profits
Even when farmers of a developed nation are able to produce similar foods like the poorer nations and sell them locally, the farmers are still forced by dominant supermarket giants in their own nations to sell at near cost prices so that the food can be resold to consumers at massively inflated prices.
The standard markup for businesses selling food products to the consumers should be around 33 per cent. The reality for fresh food sold in giant supermarkets is a little different. The markup of a number of food products (mainly the fresh vegetables, fruit and meat areas) in the supermarkets of Woolworths and Coles can be as high as 500 per cent. It makes no sense for a farmer, for instance, to sell 1 kilogram of beef steaks at around A$3.00 and later the supermarkets try to sell the meat to consumers at A$15 or more.
The supermarkets should not be allowed to sell the 1 kilogram beef for more than $6.00, perhaps $8 or $9 if the supermarkets try to value-add to the product (eg. cut the meat into strips etc).
Or better still, why not let the consumers pay the actual environmental and farmer costs of producing and delivering the food. Give farmers the proper 33 per cent markup profit they deserve for producing the food products and, depending on the season or condition of the environment, an extra charge called the environmental cost to repair the environment after growing the food. The final cost of the food can either be lower than current costs or higher. But at least the consumers are fully aware of the true costs to produce different foods on this planet.
Should the cost for foods be too high, consumers can always go for alternative foods or foods that are easier to grow and in season. Or consumers can learn to grow the food they want in their own backyard until there is enough of the stuff available.
## SPECIAL UPDATE ##
3 March 2004
A report commissioned last year by Australian Agriculture Minister Warren Truss has found the reason for the high prices for fresh food in the big supermarkets is because of high management costs. The actual profit made by the big supermarkets are actually slimmer than previously realised. Apparently supermarkets are operating at a world-low 4 per cent profit margin with the cost to operate or run a supermarket averaging around 22 per cent of total turnover in Australia. Yet if we do the sums, 1 kilogram beef steak should still not cost $15 or more unless salaries were not included in the costs. However, the average supermarket staff on the floor (on cash registers and placing products on shelves) don't get rich. This leaves us with the managers working at supermarkets. Putting aside variations in international prices for imported foods and farm production levels, managers at big supermarket chains could be potentially adding anywhere up to 40 per cent or more of the total turnover to pay for management costs (ie. another way of saying the manager's need a salary to live on). If this is true, then it isn't the humble staff working on the floor or even farmers making the food who are benefiting from the profit. Rather it is the managers themselves (and the shareholders) forcing the prices of the fresh food to high levels to help line their own pockets. It is either that, or there is too much value-adding going on which is raising the costs and somehow this has not been included in the total business operating costs and general expenses.
At any rate, if farmers are complaining of selling near-cost for their produce to big supermarket chains the Report is not expected to improve the situation. Farmers are advised to value-add to their produce to help raise their profits and increase the likelihood of selling the produce to consumers through greater convenience, better appearance etc.
Yes, the report has clarified a few things with the public.
## SPECIAL UPDATE ##
20 May 2004
As supermarkets make a massive markup on selling meat in bulk to consumers, the humble independent butchers at the fruit and vegetable markets claim they have to raise the prices for smaller quantities of fresh meat mainly because consumers don't pay for the wasted parts of the carcass. The actual break down of the costs is as follows:
The price for one animal (eg. a sheep) from the farmer is $90 (or roughly $3.00 per kilo). The cost to kill the animal and quickly prepare the carcass at the abatoir is $8.00 per animal. Add $4.00 per animal to transport it to the shops and the total cost to sell to consumers should not exceed $4.00 per kilo.
Where the price increases dramatically according to the more independent butchers is when they have to recover costs for the unwanted parts of the carcass which allegedly represents about 50% of the carcass due to the high fat content of the animal and some bones (some animals moving around on the farm must be fatter than some well-paid Liberal politicians sitting in Australian parliament).
So how are the costs recovered? Apparently the butchers have to sell the popular meat cuts such as lamb cutlets at a much higher price plus the 33 per cent markup. All in all, lamb cutlets could be priced as high as $30 per kilo to the consumer.
But selling the allegedly popular lamb cutlets at $30 per kilo seems to contradict a survey of average consumers recently that people are not buying the cutlets (in some cases for many years) because of the high prices. So how do the butchers still make a profit on selling the high-priced lamb cutlets if enough people are not prepared to buy it?
Wouldn't it be more sensible to spread the costs across all meat products? If so, what would be the true price per kilo for all types of meats?
## SPECIAL UPDATE ##
13 April 2005
The two top Australian supermarkets (Coles and Woolworths) know how to maximise profit. At first it was to pay the least amount of money possible to farmers and later resell the products at a price the supermarkets can get away. Now the supermarkets will simplify the product range, choose manufacturers to provide the lowest price ingredients (if it means choosing imported goods, then so be it), introduce the supermarkets own food brands based on a three tier system (low, medium and higher quality), and sell the products at the same or higher price (depending on the quality).
Smaller Australian food manufacturers (eg. Australian-made local honey, organic milk and other products) will be pushed to the wall thanks to this latest move. From the major supermarkets point-of-view, the solution to the smaller food manufacturers is simple: pay A$800,000 to $A2 million per year to the supermarkets to have the shelf space, provide the supermarkets with the ingredients they need to make the food products at a low enough price, or go elsewhere.
Or why not get together with other smaller manufacturers to sell the products in an independent new Australian-based supermarket chain, or join the farmers' markets in a new independent system of selling locally-produced high quality foods at an excellent price?
## SPECIAL UPDATE ##
January 2006
As supermarkets choose big food companies to supply what are known as "contract marketed foods" at low prices to the supermarkets and later sold at high prices to consumers, they are helping to dictate the prices for everyone else growing food. The message coming through loud and clear from the supermarkets is this, "Either supply food as cheap as the big companies can or get out of the business".
Apart from creating job losses, this kind of attitude from supermarkets will also create another major problem. And it concerns the survival of humanity as a whole. What many people are not realising is that by driving out the small food manufacturers and farmers out of the food production process, we are effectively determining the fate of all human beings based on who can pay the highest price for food to the supermarkets and big food companies should anything go wrong with the economy.
Do we have a backup plan for humanity when it comes to our own food supply?
Ignoring for a moment there could be a disaster looming for the human race, already a number of small farmers are deciding to sell up their land and subdivide it for housing to mostly city people wanting a "tree change" or merely as an extension of suburbia for those who can afford the high property prices. And it is primarily because of this "monopoly access pipeline" created by the big supermarkets between selected food producers and the consumers which is decimating the small farmers. As Joe Boustani, a Sydney tomato grower and president of Greenhouse Vegetables NSW, said:
'Woolies and Coles control everything. We have friends leaving the industry because there's no money in it. The bottom line is that growers have no control over the price of their product — it's David versus Goliath.' (O'Sullivan, Matt. Cracks in the glasshouse: The Sydney Morning Herald. 7-8 January 2006, p.25 (pp.25 & 28.).)
If this trend continues, more and more people will become so reliant on big companies to supply food to the big supermarket chains with no backup system in place that should something happen to the economy, huge numbers of people will suffer from hunger and a major recession will begin. There is already talk of world oil supplies going down causing massive problems for Western economies in the next 5 to 10 years. Longer term threats of global warming affecting coastal cities and creating huge environmental refugee problems will put massive pressures on Western economies. This in turn will increase the price of food, forcing more people to become poor and rich people to become more ruthless in making a profit.
The Middle class will continue to shrink becoming either the future managers and business people getting rich or will fall into the poor basket. While the poor must work for a pittance for companies doing exactly as they are told or join the Army to fight wars with other nations facing similar economic and social pressures of their own (eg. terrorism). Otherwise crime on the streets will increase dramatically leading to a future French Revolution unless a big enough war destroys humanity as a whole.
Surely in this plausible and scary scenario the last thing we want are for small farmers to be disappearing for the sake of profit for the big businesses, the supermarkets and their shareholders (ie. mainly city people sharing the same profit mentality because they can't see another way of living on this planet).
Every farmer must be valued in their production of food and efforts must be made to preserve and stockpile enough food in case the worse scenario happens where big food companies may suddenly collapse.
All the money in the world will not save humanity. But all the food in the world and more we can produce by looking after the environment and our farmers will. Our priority must change or many people will suffer.
The only hope for small farmers is to produce unique or different foods which cannot be produced through industrial methods. Perhaps a new secret combination of foods can produce the future KFC of the world? Or maybe use effective marketing to emphasise the organic and wholesome nature of the foods from small farmers compared to foods produced by big businesses. Something different has to be found in order to stop small farmers leaving in droves from farmlets to join the city folks.
This specialising in certain unique or different foods packaged in a different way could be the key to attracting consumers and supporting local small farmers in business for longer. So long as big businesses stick to the main staple of producing simple foods to avoid impinging on the livelihoods of small farmers can this system work. Otherwise legislation would be necessary to control big businesses from
