Over a year ago I wrote that many of the schemes people use to try to protect their assets against creditors fail. That was when I wrote about the case of Mr Cummins, the barrister who had not lodged a tax return for about 30 years and who had transferred his half of the family home at Hunters Hill to his wife and his shares in the company that owned his barristers chambers to his family company. You might remember that the High Court said the scheme failed totally. You might also remember my comment that the only people who make money out of these schemes are the people who peddle them –because they get their often very high fees and the government-because it charges stamp duties on the transfers.
It seems some people are still trying the schemes and the schemes are still failing. Earlier this month the High Court held another scheme didn’t work to prevent assets being available for a family court split.
Dr Ian Spry, a retired Victorian barrister, married Helen Spry in 1978. They had four daughters, now in their twenties. In 1968, Dr Spry created the ICF Spry Trust with himself and his siblings, their spouses and their children as beneficiaries. He was the sole trustee. In 1983, he excluded himself as a beneficiary for land tax reasons. In 1998, when his marriage was in difficulty, Dr Spry further varied the trust to exclude himself and his wife as capital beneficiaries. The Sprys separated in October 2001. In January 2002, Dr Spry divided the income and capital of the trust between four trusts he set up for his daughters. Mrs Spry filed for divorce in the Federal Magistrates Court in December 2002. The divorce was finalised in February 2003.
In April 2002, Mrs Spry applied to the Family Court for property settlement . Dr Spry and the
children argued that the assets of the trust were not part of the asset pool to be considered in making property orders In 2005 that court found that the steps taken with respect to the ICF Spry Trust in 1998 and 2002 were designed to keep property away from his wife and the Family Court and set them aside.
Dr Spry and the children appealed Eventually the case came to the High Court which dismissed the appeals.
Three Justices held that without the 1998 variation and the 2002 dispositions, Mrs Spry would have had a right due administration of the trust and to due consideration as a beneficiary –that means she has two related rights. First she can make sure the accounting is correct- protecting the trust money against fraud or negligent investments. Second while she does not have the right to receive money (if she did then the whole tax purpose of the trust would be defeated) she has the right to be considered. . Dr Spry would have had a power to give her the whole of the assets of the trust.
The three justices held that these rights were property of the parties to the marriage. It held that the Family Court could make orders in property settlement proceedings as if changes to property rights brought about by the divorce had not yet occurred.
Another judge came to the same answer by considering special provisions of the Family Law Act.
The three judges in the majority are saying the same thing as the High Court said in Mr Cummins case, that you cannot protect assets by changing how you hold them.
That’s not to say family trusts don’t have a function. They do, but the way to safeguard the assets is to hold them in the right way to begin with. That may not always work but fiddling with the assets once you own them almost never works
The odd thing about all this is that Dr Spry thought the scheme would work, he was a very well known barrister who wrote textbooks on trust law.
I am surprised that some lawyers and accountants continue to promote these schemes. IF they don’t tell their clients the risks then either they don’t know what the risks are –in which case they are incompetent or they do know them- in which case they are rogues.
Be warned.
Further reading the high court judgement http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2008/56.html?query=^spry
Monday, December 15, 2008
Wednesday, December 10, 2008
the law of chocolate, slavery and free trade
ITs not just about law this week.
This week I want to do something quite different and write about a very old law case which now has a new significance.
Sir Edward Carson was an Irish barrister who became an English politician (being the Cabinet Minister responsible for the British Navy during part of World War 1) and finally a "law lord" (a judge who is a member of the House of Lords).
In 1908 he appeared for the London Evening Standard in a libel action brought by George Cadbury, the head of the family that then owned the famous chocolate company. The Standard was controlled by Liberal Unionists members of a political party which supported tariffs and industrial protection (which was then called Imperial Preference). For years before that time England had been a free trade nation with negligible tariffs. Those supporting Imperial Preference pointed to the relative decline of British industry which was trying to compete against Germany and USA which both had very high tariffs. (An interesting aside here is that Abraham Lincoln supported tariffs- in fact both Karl Marx and Charles Dickens wrote that the US Civil War was about the largely manufactoring Northern states trying to impose high tariffs while the southern states opposed this. Both Marx and Dickens said the war had little to do with slavery.) The Tariff reformers also claimed that free trade was basically amoral- that to buy the cheapest product all the time led to exploitation of workers and a lowering of standards.
The Cadbury family were Liberal supporters of free trade and had in 1901 purchased the Daily News (another London paper and something of a competitor for the Standard). The Standard articles alleged that Cadbury Bros Ltd ,which claimed to be model employers having created the village of Bournville outside Birmingham, which was trumpeted as being a wonderful place to work and live knew of the slave labour conditions on São Tomé, the Portuguese island colony from which Cadbury purchased most of their cocoa for the production of their chocolate. At that time on Sao Tome the workers were indentured, rather like the Kanakas in the sugar fields in Queensland in the 1800s but in even worse conditions. They could not leave their employer, they were kept impoverished and-the Standard alleged – half starved and driven to work at gunpoint. The articles alleged that George's son William had gone to Sao Thome in 1901 and seen for himself the slave conditions. The articles went on to say that the Cadbury family had decided to continue purchasing the cocoa grown there because it was cheaper then that grown in the British colony of the Gold Coast, (which is what Ghana was then called) where labour conditions were much better, being regulated by the British Colonial Office. The Standard alleged that the Cadbury family knew that the reason cocoa from Sao Thome was cheaper was because it was grown by slave labour. The articles left the reader to draw the conclusion that free trade directly led to exploitation.
George Cadbury sued the Standard. Carson defended the paper. In the course of the trial all the truly dreadful conditions that workers on Sao Tome suffered came to light. The jury found that George Cadbury had been technically defamed but that in substance the allegations were true and awarded him one farthing in damages. Older readers may remember the farthing was the smallest denomination in pre decimal currency- one quarter of a penny- in today’s money less then a quarter of a cent.
This case was regarded at the time as an important political case as Carson and the Unionists maintained that it showed the fundamental immorality of free trade. Protection and tariffs was not simply-they said- about protecting British industry and workers but about helping what we would today call developing countries maintain and improve their standard of living.
So why have I written about this long ago case? Because law and politics and economics are connected and because the same sort of thing is happening today. Today we have ‘outsourcing’, we have what economists call ‘the race to the bottom’ with countries reducing wages or industrial or environmental standards to compete with other countries. And most of all we have China. A recent ANU study "A "Race To the Bottom Globalisation and China’s labour standards" shows how Chinese policies fixing wages at $1 or less per day is stopping economic growth and better wages in countries like Thailand, Indonesia and the Phillipines All of those countries- like Australia- are signatories to International Labour Organisation (the ILO is an arm of the United Nations) and ensure better wage and industrial practises then does China. Other studies have shown that in America that from 1973 to 1993 (the period in which tariffs started to be reduced ) 1.3 jobs per 100 were lost on balance each year But 10.2 jobs per 100 were destroyed, while 8.8 were created. There was also a net reduction in wages- that is the new jobs paid less then the old ones.
I might be venturing away from law and into politics but is it time to rethink our trade policies?
Further reading
* "Race To the Bottom Globalisation and China’s labour standards" http://rspas.anu.edu.au/~anita/pdf/AChancp461.pdf
* Michael W. Klein, Scott Schuh and Robert K. Triest, "Job Creation, Job Destruction and International Competition" (Upjohn Institute) http://www.upjohninst.org/publications/jcjd.pdf
Chocolate on Trial: Slavery, Politics, and the Ethics of Business, by Lowell J. Satre
This week I want to do something quite different and write about a very old law case which now has a new significance.
Sir Edward Carson was an Irish barrister who became an English politician (being the Cabinet Minister responsible for the British Navy during part of World War 1) and finally a "law lord" (a judge who is a member of the House of Lords).
In 1908 he appeared for the London Evening Standard in a libel action brought by George Cadbury, the head of the family that then owned the famous chocolate company. The Standard was controlled by Liberal Unionists members of a political party which supported tariffs and industrial protection (which was then called Imperial Preference). For years before that time England had been a free trade nation with negligible tariffs. Those supporting Imperial Preference pointed to the relative decline of British industry which was trying to compete against Germany and USA which both had very high tariffs. (An interesting aside here is that Abraham Lincoln supported tariffs- in fact both Karl Marx and Charles Dickens wrote that the US Civil War was about the largely manufactoring Northern states trying to impose high tariffs while the southern states opposed this. Both Marx and Dickens said the war had little to do with slavery.) The Tariff reformers also claimed that free trade was basically amoral- that to buy the cheapest product all the time led to exploitation of workers and a lowering of standards.
The Cadbury family were Liberal supporters of free trade and had in 1901 purchased the Daily News (another London paper and something of a competitor for the Standard). The Standard articles alleged that Cadbury Bros Ltd ,which claimed to be model employers having created the village of Bournville outside Birmingham, which was trumpeted as being a wonderful place to work and live knew of the slave labour conditions on São Tomé, the Portuguese island colony from which Cadbury purchased most of their cocoa for the production of their chocolate. At that time on Sao Tome the workers were indentured, rather like the Kanakas in the sugar fields in Queensland in the 1800s but in even worse conditions. They could not leave their employer, they were kept impoverished and-the Standard alleged – half starved and driven to work at gunpoint. The articles alleged that George's son William had gone to Sao Thome in 1901 and seen for himself the slave conditions. The articles went on to say that the Cadbury family had decided to continue purchasing the cocoa grown there because it was cheaper then that grown in the British colony of the Gold Coast, (which is what Ghana was then called) where labour conditions were much better, being regulated by the British Colonial Office. The Standard alleged that the Cadbury family knew that the reason cocoa from Sao Thome was cheaper was because it was grown by slave labour. The articles left the reader to draw the conclusion that free trade directly led to exploitation.
George Cadbury sued the Standard. Carson defended the paper. In the course of the trial all the truly dreadful conditions that workers on Sao Tome suffered came to light. The jury found that George Cadbury had been technically defamed but that in substance the allegations were true and awarded him one farthing in damages. Older readers may remember the farthing was the smallest denomination in pre decimal currency- one quarter of a penny- in today’s money less then a quarter of a cent.
This case was regarded at the time as an important political case as Carson and the Unionists maintained that it showed the fundamental immorality of free trade. Protection and tariffs was not simply-they said- about protecting British industry and workers but about helping what we would today call developing countries maintain and improve their standard of living.
So why have I written about this long ago case? Because law and politics and economics are connected and because the same sort of thing is happening today. Today we have ‘outsourcing’, we have what economists call ‘the race to the bottom’ with countries reducing wages or industrial or environmental standards to compete with other countries. And most of all we have China. A recent ANU study "A "Race To the Bottom Globalisation and China’s labour standards" shows how Chinese policies fixing wages at $1 or less per day is stopping economic growth and better wages in countries like Thailand, Indonesia and the Phillipines All of those countries- like Australia- are signatories to International Labour Organisation (the ILO is an arm of the United Nations) and ensure better wage and industrial practises then does China. Other studies have shown that in America that from 1973 to 1993 (the period in which tariffs started to be reduced ) 1.3 jobs per 100 were lost on balance each year But 10.2 jobs per 100 were destroyed, while 8.8 were created. There was also a net reduction in wages- that is the new jobs paid less then the old ones.
I might be venturing away from law and into politics but is it time to rethink our trade policies?
Further reading
* "Race To the Bottom Globalisation and China’s labour standards" http://rspas.anu.edu.au/~anita/pdf/AChancp461.pdf
* Michael W. Klein, Scott Schuh and Robert K. Triest, "Job Creation, Job Destruction and International Competition" (Upjohn Institute) http://www.upjohninst.org/publications/jcjd.pdf
Chocolate on Trial: Slavery, Politics, and the Ethics of Business, by Lowell J. Satre
Registration is Protection
REGISTRATION = PROTECTION
I have written about the Torrens system before. This great Australian invention –Sir Robert Torrens was the first Surveyor General of South Australia- has spread over much of the world.
The concept is simple. The government keeps a register, the register mirrors the title, it shows who owns the land, whether there are leases, if someone has an easement over the land or whether there is an easement in favour of that land and so on.
If an interest isnt on the register in some way then apart from some minor exceptions it doesn’t exist.
One example of this is to see the difference between how the ‘new’ and the ‘old’ form of mortgages work (or don’t work) under the Torrens system. Briefly the old form in which the mortgage sets out all the terms, interest, principal, charges and everything else is fully protected by Torrens title. So that where a fraudster pretends to be the owner and mortgages the land the mortgagee wins against the owner who can make a claim against the "Fidelity Fund,"
But in the new sort of mortgages where the interest and principal and most other things are set out in a side agreement which is not registered the owner wins. And probably the mortgagee doesn’t have a claim against the Fidelity Fund. This is because the side agreement is not registered. The Torrens system is as Sir Garfield Barwick wrote many years ago (and as I like to repeat) ‘not a system of registration of title but a system of title by registration." What is not in the register is not protected in fact it can often be ignored.
Another example of the problems the new sort of mortgages causes has been shown in a recent High Court case.
To simplify the facts a mortgagee lent $410,000 to Queensland Premier Mines and Mr and Mrs Beckinsale and another $560,000 to Queensland Premier Mines alone under two separate agreements. Queensland Premier Mines owned land and gave a mortgage. Mr and Mrs Beckinsale were not involved in the mortgage. The mortgage was registered.
The mortgagee then sold the mortgage to Mr French and –by a separate agreement "assigned" the right to sue under the agreements. The transfer of the mortgage was registered. Later on Mr French again sold the mortgage –to a company associated with Mr and Mrs Breckinsale -and again that transfer was registered. But the right to sue was not assigned.
The High Court (agreeing with the Victorian courts from which the appeal came ) said that the only thing transferred was the rights under the mortgage and not the rights in the agreements. This meant that Mr French could sue to recover the debt and the Beckinsale company -the new owner of the mortgage -could not do so. (not that the company wanted to, it wanted to stop Mr French from doing so)
As Justice Michael Kirby wrote
s 62 (being the relevant section) of the Act reflects the important public policy that lies at the heart of the Torrens system of title by registration. There is to be a register open to the public which will record, with the detail required by such sections as ss 73 and 74 of the Act, the nature of a specified interest which, in this case, is the mortgage. An inspection of the register should reveal all about the title. What parties thought or did "on the side" should not be relevant.
One curious thing about this case is that though the land was in Queensland, the court case started in Victoria.
The basis of this- cutting out the manoeuvring’s by the Beckinsales is that –as we wrote above- the Torrens system protects the registered interests in land and nothing else.
The answer is to make sure you register your interests.
I have written about the Torrens system before. This great Australian invention –Sir Robert Torrens was the first Surveyor General of South Australia- has spread over much of the world.
The concept is simple. The government keeps a register, the register mirrors the title, it shows who owns the land, whether there are leases, if someone has an easement over the land or whether there is an easement in favour of that land and so on.
If an interest isnt on the register in some way then apart from some minor exceptions it doesn’t exist.
One example of this is to see the difference between how the ‘new’ and the ‘old’ form of mortgages work (or don’t work) under the Torrens system. Briefly the old form in which the mortgage sets out all the terms, interest, principal, charges and everything else is fully protected by Torrens title. So that where a fraudster pretends to be the owner and mortgages the land the mortgagee wins against the owner who can make a claim against the "Fidelity Fund,"
But in the new sort of mortgages where the interest and principal and most other things are set out in a side agreement which is not registered the owner wins. And probably the mortgagee doesn’t have a claim against the Fidelity Fund. This is because the side agreement is not registered. The Torrens system is as Sir Garfield Barwick wrote many years ago (and as I like to repeat) ‘not a system of registration of title but a system of title by registration." What is not in the register is not protected in fact it can often be ignored.
Another example of the problems the new sort of mortgages causes has been shown in a recent High Court case.
To simplify the facts a mortgagee lent $410,000 to Queensland Premier Mines and Mr and Mrs Beckinsale and another $560,000 to Queensland Premier Mines alone under two separate agreements. Queensland Premier Mines owned land and gave a mortgage. Mr and Mrs Beckinsale were not involved in the mortgage. The mortgage was registered.
The mortgagee then sold the mortgage to Mr French and –by a separate agreement "assigned" the right to sue under the agreements. The transfer of the mortgage was registered. Later on Mr French again sold the mortgage –to a company associated with Mr and Mrs Breckinsale -and again that transfer was registered. But the right to sue was not assigned.
The High Court (agreeing with the Victorian courts from which the appeal came ) said that the only thing transferred was the rights under the mortgage and not the rights in the agreements. This meant that Mr French could sue to recover the debt and the Beckinsale company -the new owner of the mortgage -could not do so. (not that the company wanted to, it wanted to stop Mr French from doing so)
As Justice Michael Kirby wrote
s 62 (being the relevant section) of the Act reflects the important public policy that lies at the heart of the Torrens system of title by registration. There is to be a register open to the public which will record, with the detail required by such sections as ss 73 and 74 of the Act, the nature of a specified interest which, in this case, is the mortgage. An inspection of the register should reveal all about the title. What parties thought or did "on the side" should not be relevant.
One curious thing about this case is that though the land was in Queensland, the court case started in Victoria.
The basis of this- cutting out the manoeuvring’s by the Beckinsales is that –as we wrote above- the Torrens system protects the registered interests in land and nothing else.
The answer is to make sure you register your interests.
Tuesday, November 18, 2008
Developer Contributions
The media has been full of ‘development contributions’ recently. Some people (mainly it seems to me developers and other people in the property industry) blame them for the high price of land. So I thought I might tell you about the contributions
First what are they? Councils provide services like roads, parks, libraries, community halls, sporting facilities. All of these cost money. All of them are used by the people within the council area. Mostly the council does not charge a fee for using them (indeed in some cases such as libraries the state government prohibits councils from doing so –though not for using add on services like the canteens at sports grounds and the photocopiers in the libraries). The council has two ways of paying for the services it provides (Apart from the fee for service). IT can increase our rates (assuming the state government will let councils do so- for it generally ‘pegs’ rate increases to no more then the rise in inflation). Or where an area is growing and people are moving into it and so increasing the demand it can in some way charge the people who are moving in a once off fee. And that second way is the ‘development contributions."
They are not new. Although councils had been levying charges on a piecemeal basis with varying degrees of success (Developers used to take action against councils ) the power of councils to charge was first legislated by Neville Wran’s government when it brought in the present Environmental planning laws in 1980(the Act was passed in 1979 but came into force in September 1980-giving everyone a chance to become familiar with it. I think it would be excellent if governments gave us all a similar chance to get used to new schemes before they were introduced- the Federal government did so with GST).The Act also allowed developers to provide their own services or to dedicate land for parks and so on instead of paying some of the contributions (You can see how this has worked by looking at Somerset Park or the Landcom developments at Metford where many of the parks and cycleways were developed by the subdivider.)
In 1992 Nick Grieners coalition government made some major changes –particularly to make councils have a publicly available ‘plan’ setting out the rates that council will charge for particular developments and there have been other changes allowing developers and councils to enter into planning agreements (this is mainly for large scale developments and allow the council and the developer to set some ground rules). And now the state government and bodies like Hunter Water can charge contributions as well.
Developers could –and did – appeal to the Land and Environment Court against the contributions.
Mostly the scheme seemed to work without much criticism for many years- though sometimes it could be a little unfair. I remember when I was in Cooma the local radio station was building extensions and was levied for car parking. But the nearest public car park was almost a mile away near the court house and the council officers drove from the court house to the radio station building when the court case was on. They were able to park in the street without any problems.
So why the fuss now? I really don’t know, the charges are not all that much- Maitland City Councils general charge per block (there are different and slightly higher ones for specific new areas like Gillieston Heights) is $11397 which is perhaps 6% of the total price of a block of land in a new subdivision ( blocks in the Lake View development at Bolwarra Heights were selling for $195,000 at the beginning of the year) and Hunter Water’s fee is $2617.
The developers push to do away with these means that we –the existing residents will have to pay more in our rates and charges for services which will be used not by us but by new residents.. And if the Tilligery dam ruckus is any guide we will be paying a lot more.
For years now the state government has been trying to make councils charge on a user pays basis (so for example rates are supposed to be broken into amounts for garbage collection and so on). But the developers in complaining about these development charges are trying to shift costs to the general public.
Further Reading and references
MCC contribution rates http://www.maitland.nsw.gov.au/PlanningDevel/S94Plans/S94ContributionRates
Hunter Water rates (note there are two -headworks and an individual locality charge) http://www.hunterwater.com.au/2367.aspx
The state government site (and note the government wants more changes as listed on the site)
http://www.planning.nsw.gov.au/planning_reforms/developmentcontributions.asp
First what are they? Councils provide services like roads, parks, libraries, community halls, sporting facilities. All of these cost money. All of them are used by the people within the council area. Mostly the council does not charge a fee for using them (indeed in some cases such as libraries the state government prohibits councils from doing so –though not for using add on services like the canteens at sports grounds and the photocopiers in the libraries). The council has two ways of paying for the services it provides (Apart from the fee for service). IT can increase our rates (assuming the state government will let councils do so- for it generally ‘pegs’ rate increases to no more then the rise in inflation). Or where an area is growing and people are moving into it and so increasing the demand it can in some way charge the people who are moving in a once off fee. And that second way is the ‘development contributions."
They are not new. Although councils had been levying charges on a piecemeal basis with varying degrees of success (Developers used to take action against councils ) the power of councils to charge was first legislated by Neville Wran’s government when it brought in the present Environmental planning laws in 1980(the Act was passed in 1979 but came into force in September 1980-giving everyone a chance to become familiar with it. I think it would be excellent if governments gave us all a similar chance to get used to new schemes before they were introduced- the Federal government did so with GST).The Act also allowed developers to provide their own services or to dedicate land for parks and so on instead of paying some of the contributions (You can see how this has worked by looking at Somerset Park or the Landcom developments at Metford where many of the parks and cycleways were developed by the subdivider.)
In 1992 Nick Grieners coalition government made some major changes –particularly to make councils have a publicly available ‘plan’ setting out the rates that council will charge for particular developments and there have been other changes allowing developers and councils to enter into planning agreements (this is mainly for large scale developments and allow the council and the developer to set some ground rules). And now the state government and bodies like Hunter Water can charge contributions as well.
Developers could –and did – appeal to the Land and Environment Court against the contributions.
Mostly the scheme seemed to work without much criticism for many years- though sometimes it could be a little unfair. I remember when I was in Cooma the local radio station was building extensions and was levied for car parking. But the nearest public car park was almost a mile away near the court house and the council officers drove from the court house to the radio station building when the court case was on. They were able to park in the street without any problems.
So why the fuss now? I really don’t know, the charges are not all that much- Maitland City Councils general charge per block (there are different and slightly higher ones for specific new areas like Gillieston Heights) is $11397 which is perhaps 6% of the total price of a block of land in a new subdivision ( blocks in the Lake View development at Bolwarra Heights were selling for $195,000 at the beginning of the year) and Hunter Water’s fee is $2617.
The developers push to do away with these means that we –the existing residents will have to pay more in our rates and charges for services which will be used not by us but by new residents.. And if the Tilligery dam ruckus is any guide we will be paying a lot more.
For years now the state government has been trying to make councils charge on a user pays basis (so for example rates are supposed to be broken into amounts for garbage collection and so on). But the developers in complaining about these development charges are trying to shift costs to the general public.
Further Reading and references
MCC contribution rates http://www.maitland.nsw.gov.au/PlanningDevel/S94Plans/S94ContributionRates
Hunter Water rates (note there are two -headworks and an individual locality charge) http://www.hunterwater.com.au/2367.aspx
The state government site (and note the government wants more changes as listed on the site)
http://www.planning.nsw.gov.au/planning_reforms/developmentcontributions.asp
Tuesday, November 4, 2008
Regulation and the sub prime mortgage crisis. Or how America got itself in a mess.
I’m going to take a wider view this week and not write about Australian property laws. By the time you read this the dust will be settling on the American Presidential election- which I’m told cost about a billion dollars (which is the same as Americans spend on potato crisps each year). But the problems of the world economy remain.
Some of the commentators such as Piers Ackerman in the Newcastle Herald last month have been trying to blame the American subprime mortgage crisis-which they say started it all- on laws which made USA banks lend to minorities and poor people. Ackerman was vague, he didn’t name the laws but other commentators have: they say the Community Reinvestment Act is to blame. Now that is in fact the only law that made banks lend to minorities and poor people so I guess that’s the one Ackerman is talking about. Ackerman and those like him go on to argue that its regulation that got us into this mess and the only way out is to remove regulation and have what they call a free market.
That this is utter garbage can be seen by comparing America and Australia. America has a far less regulated system then we do, and our banks are (because they are regulated by government agencies) far safer, indeed our four big banks are among the 20 safest and most secure in the world (there are only 20 banks in the world that have an AA credit rating –which each of our big 4 does). And that’s one reason why there is so few problems here. All lenders here are regulated for capital adequacy for the type and size of loans and for many other things- talk to your bank or building society if you want more details.
But what I want to focus on is the Community Reinvestment Act. This was started because American lenders wouldn’t lend to poor people. This wasn’t nearly so much a problem in Australia (partly because the government helped finance lenders through community terminating building societies- one my older readers may remember was the Telarah Community Advancement Association). So in 1977 the US Congress enacted this law. Now its this law that after 30 years of trouble free progress is now blamed for causing the problem. The people like Ackerman who say that this law interfered with the market also say that this interference is responsible for the problems.
The evidence is against them. The Bank for International Settlements economist’s Luci Ellis concluded that "there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust," Ellis goes on to say that the failed subprime loans have been mainly what he calls ‘exurban’ –which includes what we would call rural residential and that loans under the Act were made to poor urban dwellers. Again f the Federal Reserve Bank of San Francisco says that independent mortgage companies (which I think are lenders like Aussi home loans) made "high-priced loans" at more than twice the rate of the banks and thrifts;(which are like building societies and credit unions) most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.
Aussi and lenders like it are regulated here and are not in any responsible for Australian problems nor do they make higher priced loans. Even so the problems that RAMS suffered seem to show that foreign wholesale lenders thought that our non bank lenders had the same sort of problems.
The answer is not the free market that Ackerman goes on about. Its not the answer -if only because its not a free market- my university lecturers told me that free markets were ones in which every person was effectively equal, that no buyer or seller could by itself influence the market and that’s certainly not true here – I am not my bank’s equal, and the banks are big enough to influence the market.
Rather the answer is better regulation, that’s why we can be thankful for the bipartisan approach of our successive federal governments.
Some links: some of the leading deregulationist commentators * http://www.lewrockwell.com/dilorenzo/dilorenzo125.html (don’t believe what you read by this man without checking reviews of his biography of Abraham Lincoln-which he advertises on his site (he believes the slaveowning Southern states were right to succede and keep on owning slaves. " "Consider this inflammatory assertion: "Eliminating every last black person from American soil, Lincoln proclaimed, would be 'a glorious consummation.'" Compare the nuances and qualifications in what Lincoln actually said: "If as the friends of colonization hope, the present and coming generations of our countrymen shall by any means, succeed in freeing our land from the dangerous presence of slavery; and, at the same time, in restoring a captive people to their long-lost father-land, with bright prospects for the future; and this too, so gradually, that neither races nor individuals shall have suffered by the change, it will indeed be a glorious consummation." One need not be a Lincoln admirer to recognize that DiLorenzo is making an unfair characterization." http://www.claremont.org/publications/pubid.226/pub_detail.asp)
An article from the Wall St Journal http://online.wsj.com/article/SB122298982558700341.html
J A Millon on CNN http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html
(but note these people don’t provide any detailed analysis)
Luci Ellis (warning a long and technical paper ) http://www.bis.org/publ/work259.pdf?noframes=1
The US Federal Reserve analysis http://www.frbsf.org/news/speeches/2008/0331.html
Traiger & Hinckley LLP. (2008). The Community Reinvestment Act: A Welcome Anomaly in the Foreclosure Crisis (also long and technical) http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf
Some of the commentators such as Piers Ackerman in the Newcastle Herald last month have been trying to blame the American subprime mortgage crisis-which they say started it all- on laws which made USA banks lend to minorities and poor people. Ackerman was vague, he didn’t name the laws but other commentators have: they say the Community Reinvestment Act is to blame. Now that is in fact the only law that made banks lend to minorities and poor people so I guess that’s the one Ackerman is talking about. Ackerman and those like him go on to argue that its regulation that got us into this mess and the only way out is to remove regulation and have what they call a free market.
That this is utter garbage can be seen by comparing America and Australia. America has a far less regulated system then we do, and our banks are (because they are regulated by government agencies) far safer, indeed our four big banks are among the 20 safest and most secure in the world (there are only 20 banks in the world that have an AA credit rating –which each of our big 4 does). And that’s one reason why there is so few problems here. All lenders here are regulated for capital adequacy for the type and size of loans and for many other things- talk to your bank or building society if you want more details.
But what I want to focus on is the Community Reinvestment Act. This was started because American lenders wouldn’t lend to poor people. This wasn’t nearly so much a problem in Australia (partly because the government helped finance lenders through community terminating building societies- one my older readers may remember was the Telarah Community Advancement Association). So in 1977 the US Congress enacted this law. Now its this law that after 30 years of trouble free progress is now blamed for causing the problem. The people like Ackerman who say that this law interfered with the market also say that this interference is responsible for the problems.
The evidence is against them. The Bank for International Settlements economist’s Luci Ellis concluded that "there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust," Ellis goes on to say that the failed subprime loans have been mainly what he calls ‘exurban’ –which includes what we would call rural residential and that loans under the Act were made to poor urban dwellers. Again f the Federal Reserve Bank of San Francisco says that independent mortgage companies (which I think are lenders like Aussi home loans) made "high-priced loans" at more than twice the rate of the banks and thrifts;(which are like building societies and credit unions) most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.
Aussi and lenders like it are regulated here and are not in any responsible for Australian problems nor do they make higher priced loans. Even so the problems that RAMS suffered seem to show that foreign wholesale lenders thought that our non bank lenders had the same sort of problems.
The answer is not the free market that Ackerman goes on about. Its not the answer -if only because its not a free market- my university lecturers told me that free markets were ones in which every person was effectively equal, that no buyer or seller could by itself influence the market and that’s certainly not true here – I am not my bank’s equal, and the banks are big enough to influence the market.
Rather the answer is better regulation, that’s why we can be thankful for the bipartisan approach of our successive federal governments.
Some links: some of the leading deregulationist commentators * http://www.lewrockwell.com/dilorenzo/dilorenzo125.html (don’t believe what you read by this man without checking reviews of his biography of Abraham Lincoln-which he advertises on his site (he believes the slaveowning Southern states were right to succede and keep on owning slaves. " "Consider this inflammatory assertion: "Eliminating every last black person from American soil, Lincoln proclaimed, would be 'a glorious consummation.'" Compare the nuances and qualifications in what Lincoln actually said: "If as the friends of colonization hope, the present and coming generations of our countrymen shall by any means, succeed in freeing our land from the dangerous presence of slavery; and, at the same time, in restoring a captive people to their long-lost father-land, with bright prospects for the future; and this too, so gradually, that neither races nor individuals shall have suffered by the change, it will indeed be a glorious consummation." One need not be a Lincoln admirer to recognize that DiLorenzo is making an unfair characterization." http://www.claremont.org/publications/pubid.226/pub_detail.asp)
An article from the Wall St Journal http://online.wsj.com/article/SB122298982558700341.html
J A Millon on CNN http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html
(but note these people don’t provide any detailed analysis)
Luci Ellis (warning a long and technical paper ) http://www.bis.org/publ/work259.pdf?noframes=1
The US Federal Reserve analysis http://www.frbsf.org/news/speeches/2008/0331.html
Traiger & Hinckley LLP. (2008). The Community Reinvestment Act: A Welcome Anomaly in the Foreclosure Crisis (also long and technical) http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf
Monday, June 16, 2008
A visit to Gloucester
Last Thursday I caught the train to Gloucester. It was 35 minutes late leaving Maitland and almost an hour late by the time it got to Gloucester which is something more then 100 km north of here. Still the train trip was comfortable enough. As I travelled I thought how the train service has declined, that the fastest train from Sydney to Newcastle is now slower then the steam hauled "Flyer" of my childhood- and the Flyer had a dining car! Even the XPT's are slower then they used to be (15 minutes slower between Sydney and Maitland) which means that some connections are no longer kept even when the trains are on time.
And this in a state which has spent so much money on roads. Its about time that this was reversed. I am writing to our local MP's Perhaps I will post the response. My friend in Sydney Gordon Cheng has posted about public Transport http://ingmarhingwah.blogspot.com/search/label/public%20transport and there are groups pressing for change but nothing seems to happen much.
Its about time it did.
<>
And this in a state which has spent so much money on roads. Its about time that this was reversed. I am writing to our local MP's Perhaps I will post the response. My friend in Sydney Gordon Cheng has posted about public Transport http://ingmarhingwah.blogspot.com/search/label/public%20transport and there are groups pressing for change but nothing seems to happen much.
Its about time it did.
<>
Wednesday, June 4, 2008
Deposit bonds a warning to vendors
Deposit bonds are one way that purchasers use to bridge the gap when they don’t have the money to pay a deposit to the agent when they are buying land The bonds are a promise by an insurance company to pay the deposit that the purchaser would otherwise have to if the purchaser defaults under a contract. The purchaser buys the bond- most banks and building societies will sell them. In most cases the bond is never called upon because the purchaser settles and pays the whole of the money on settlement instead of the more usual balance of the price less deposit.
Vendors can check online to make sure the bond is real (there were stories of forged bonds in Sydney not so long ago) and many vendors regard the bonds as almost as good as having the money in the agents trust account. In fact some say its better because all you have to do to get the bond paid is to apply to the insurance company. You don’t have to prove that the purchaser has breached the contract in such a way that entitles the vendor to get the deposit. To get the money out of the agent often means you have to sue the purchaser and get a judgement first.
But, a recent court case has shown how the insurance company can get out of paying the bond. Reliance Developments sold land at Tuggerah to Mrs McKenzie for $1,600,000. Mrs McKenzie ‘paid’ the deposit by giving a bond issued by Lumley Insurance for $160,000. But Mrs McKenzie defaulted and Reliance terminated the contract.
On 12th September 2006 Reliance’s solicitor wrote to Lumleys saying they enclosed the original bond, a notice terminating the contract and a statement that Mrs McKenzie had not paid the deposit. The solicitors sent the letter by both fax and post. If in fact they had sent all those things then Lumley would have had to pay under the bond. But the solicitors sent the wrong notice (Mrs McKenzie’s company had rented the building and the solicitors sent a notice terminating the lease by mistake). Lumley did nothing until it got the original of the letter –the day before the bond expired on 22nd September. Lumley then wrote by ordinary post to the solicitors saying the wrong document had been sent. The solicitors got that letter on 25th September. They responded immediately, sending the right notice that day. Lumley denied liability- saying the bond had expired.
The Court said Lumley was right to do so because it was only liable if the strict conditions of the bond had been fulfilled. Commentators say that bond issuers like Lumleys do not have to give reasons for denial of claims even if the claim is made within time and the problem can be solved within time. All it has to do is sit and not pay under the bond.
Be warned.
Legal column in local papers for fortnight beginning 2nd June
Vendors can check online to make sure the bond is real (there were stories of forged bonds in Sydney not so long ago) and many vendors regard the bonds as almost as good as having the money in the agents trust account. In fact some say its better because all you have to do to get the bond paid is to apply to the insurance company. You don’t have to prove that the purchaser has breached the contract in such a way that entitles the vendor to get the deposit. To get the money out of the agent often means you have to sue the purchaser and get a judgement first.
But, a recent court case has shown how the insurance company can get out of paying the bond. Reliance Developments sold land at Tuggerah to Mrs McKenzie for $1,600,000. Mrs McKenzie ‘paid’ the deposit by giving a bond issued by Lumley Insurance for $160,000. But Mrs McKenzie defaulted and Reliance terminated the contract.
On 12th September 2006 Reliance’s solicitor wrote to Lumleys saying they enclosed the original bond, a notice terminating the contract and a statement that Mrs McKenzie had not paid the deposit. The solicitors sent the letter by both fax and post. If in fact they had sent all those things then Lumley would have had to pay under the bond. But the solicitors sent the wrong notice (Mrs McKenzie’s company had rented the building and the solicitors sent a notice terminating the lease by mistake). Lumley did nothing until it got the original of the letter –the day before the bond expired on 22nd September. Lumley then wrote by ordinary post to the solicitors saying the wrong document had been sent. The solicitors got that letter on 25th September. They responded immediately, sending the right notice that day. Lumley denied liability- saying the bond had expired.
The Court said Lumley was right to do so because it was only liable if the strict conditions of the bond had been fulfilled. Commentators say that bond issuers like Lumleys do not have to give reasons for denial of claims even if the claim is made within time and the problem can be solved within time. All it has to do is sit and not pay under the bond.
Be warned.
Legal column in local papers for fortnight beginning 2nd June
Tuesday, June 3, 2008
President Carter and the downfall of the Soviet Union
There's an idea that hangs round like a bad smell, that President Carter was a weak president who kowtowed to the Soviets and let the Communists get away with anything, that to be blunt he was a patsy.
I think that was put about by the same Republicans who maligned John Kerry's record as a decorated commander in Vietnam while G W Bush went AWOL (I have often wondered why he wasn't charged, I wonder even more what his father - another decorated serviceman- he flew Grumman Avengers Lightnings in the Pacific in World War 2- thought of his son's avoidence of service).After all President Carter is the only professional serviceman (in the wider sense- he was in the Navy) to become President since Ike (and he served in Korea, his commander Admiral Richover later saying that if Carter had stayed in the forces he would have become Chief of the Naval Staff ).
Anyhow another Republican- Robert M Gates (currently US Secretary of Defence and formerly Director of the CIA- the only career CIA officer to become Director) has set the record staight in his "From the Shadows" (published by Simon and Schuster). Gates shows that Carter not only continued all the weapons research that previous presidents had started (such as tactical neuclear weapons) but far more importantly commenced 'covert ' programmes to support human right activists in the Soviet Union. These programmes caused the Communist regime so much trouble that they (according to Gates) regarded Carter as the most dangerous President in undermining the evil empire.
And reading Gates its not hard to see why. Carter's support for dissidents for Helsinki watch and those other now gone bugbears of the Communists showed the communist system for what it was - a tyranny built on lies.
The fact that Carter refused to support right wing repressive regimes and indeed called for their reform only made him more dangerous to the Communists. They couldnt attack him as two faced.
And Carters actions were firmly based in his faith in Jesus Christ.
Gates book is now 12 years old and perhaps for some it is old news but the myth of the Carter weakness wont go away. Gates's unbiased account deserves to be better known.
I think that was put about by the same Republicans who maligned John Kerry's record as a decorated commander in Vietnam while G W Bush went AWOL (I have often wondered why he wasn't charged, I wonder even more what his father - another decorated serviceman- he flew Grumman Avengers Lightnings in the Pacific in World War 2- thought of his son's avoidence of service).After all President Carter is the only professional serviceman (in the wider sense- he was in the Navy) to become President since Ike (and he served in Korea, his commander Admiral Richover later saying that if Carter had stayed in the forces he would have become Chief of the Naval Staff ).
Anyhow another Republican- Robert M Gates (currently US Secretary of Defence and formerly Director of the CIA- the only career CIA officer to become Director) has set the record staight in his "From the Shadows" (published by Simon and Schuster). Gates shows that Carter not only continued all the weapons research that previous presidents had started (such as tactical neuclear weapons) but far more importantly commenced 'covert ' programmes to support human right activists in the Soviet Union. These programmes caused the Communist regime so much trouble that they (according to Gates) regarded Carter as the most dangerous President in undermining the evil empire.
And reading Gates its not hard to see why. Carter's support for dissidents for Helsinki watch and those other now gone bugbears of the Communists showed the communist system for what it was - a tyranny built on lies.
The fact that Carter refused to support right wing repressive regimes and indeed called for their reform only made him more dangerous to the Communists. They couldnt attack him as two faced.
And Carters actions were firmly based in his faith in Jesus Christ.
Gates book is now 12 years old and perhaps for some it is old news but the myth of the Carter weakness wont go away. Gates's unbiased account deserves to be better known.
Monday, May 12, 2008
The state government's proposed planning laws
I’ve never tried to comment on a current issue before, I don’t want to compete with the news section of the paper. But I am going to stick my neck out about the state government’s plan to remove some planning powers from council.
To begin with let’s be quite clear, this is not a party political issue. The regime the state Labor government wants to change was introduced by Neville Wran’s Labor government in 1979. (for that matter the first town planning scheme in the state was introduced by the Labor Government in 1948).
What turned out to be the most important change that Wran made was to involve the public in planning. This happened firstly because plans and major developments had to be exhibited for comment- and all neighbours had to notified of almost any development. The second change was to allow anyone to object to a development either when council was considering it, or if they were disatisifed with the council’s decision, -and if it’s a major development- by appeal to the Land and Environment Court (Which Wran’s government also set up at the same time). This has allowed special interest groups to campaign against a particular development and many have been stopped or modified.
Now this public scrutiny can embarrass the government- look at what’s happened with Wollongong City Council recently. But it can be more then embarrassing, the scrutiny can reveal corruption- again look at Wollongong Council. Sometimes the scutiny shows that everyone acted properly –such as in the Orange Grove case in western Sydney. And its just as important for people to know that the government acted properly, that the complaints were independently checked out as it is to find (and then fix) the corruption.
But quite apart from exposing bad decisions the whole process –with public input generally means that the majority gets what it wants, and that’s democratic And if the majority doesn’t get what it wants then there is a good reason. That doesn’t mean that Councils always make the right decision, they don’t and that is why we have a review process- ultimately ending up in the Land and Environment Court.
Councils have only limited powers and must abide by the rules and importantly must be seen to abide by the rules and if they don’t then the court generally makes sure they do.
But what the government proposals do is strip away some of this scrutiny. The government has already done this by taking away council powers to control ‘major’ projects. Instead the Minister decides first what such a major project is and then second he decides if that goes ahead. So locally the Minister approved the Huntlee development despite (According to Four Corners) advice from his department that the development should not proceed. And (again according to Four Corners) the developers had given almost half a million to the ALP over the seven years before the minister approved the development.
Now one of the changes the government proposes (And it’s the best one they have) is to remove much of the Ministers powers. Instead many of these developments will be controlled by a new Planning Assessment Commission. But here too the Commission only has the power to control the developments if the Minister says so and there are no appeals from the Commission which can run its proceedings more or less as it likes.
Councils are going to be restricted by regional panels- made up of 3 state government appointees and 2 council nominees. For example the council cannot reject a state government development without the approval of the panel (and state government officials make up the majority of the panel).
All in all this is a bad policy. The government’s excuse –that the council process takes too long – has been exposed for what it is by the report that the Minister takes longer on average then do councils when deciding on a similar development.
Further reading
Four Corners transcript http://www.abc.net.au/4corners/content/2008/s2216656.htm
The state government’s site where it sets out its side of the story http://www.planning.nsw.gov.au/planning_reforms/index.asp
The Local Government Associations site http://www.lgsa.org.au/www/html/2492-30-april-2008.asp?intSiteID=1 and http://www.keepitlocal.org.au/
And –for those interested- I am posting the older articles in this column on my blog. http://peterkirsop.blogspot.com/
To begin with let’s be quite clear, this is not a party political issue. The regime the state Labor government wants to change was introduced by Neville Wran’s Labor government in 1979. (for that matter the first town planning scheme in the state was introduced by the Labor Government in 1948).
What turned out to be the most important change that Wran made was to involve the public in planning. This happened firstly because plans and major developments had to be exhibited for comment- and all neighbours had to notified of almost any development. The second change was to allow anyone to object to a development either when council was considering it, or if they were disatisifed with the council’s decision, -and if it’s a major development- by appeal to the Land and Environment Court (Which Wran’s government also set up at the same time). This has allowed special interest groups to campaign against a particular development and many have been stopped or modified.
Now this public scrutiny can embarrass the government- look at what’s happened with Wollongong City Council recently. But it can be more then embarrassing, the scrutiny can reveal corruption- again look at Wollongong Council. Sometimes the scutiny shows that everyone acted properly –such as in the Orange Grove case in western Sydney. And its just as important for people to know that the government acted properly, that the complaints were independently checked out as it is to find (and then fix) the corruption.
But quite apart from exposing bad decisions the whole process –with public input generally means that the majority gets what it wants, and that’s democratic And if the majority doesn’t get what it wants then there is a good reason. That doesn’t mean that Councils always make the right decision, they don’t and that is why we have a review process- ultimately ending up in the Land and Environment Court.
Councils have only limited powers and must abide by the rules and importantly must be seen to abide by the rules and if they don’t then the court generally makes sure they do.
But what the government proposals do is strip away some of this scrutiny. The government has already done this by taking away council powers to control ‘major’ projects. Instead the Minister decides first what such a major project is and then second he decides if that goes ahead. So locally the Minister approved the Huntlee development despite (According to Four Corners) advice from his department that the development should not proceed. And (again according to Four Corners) the developers had given almost half a million to the ALP over the seven years before the minister approved the development.
Now one of the changes the government proposes (And it’s the best one they have) is to remove much of the Ministers powers. Instead many of these developments will be controlled by a new Planning Assessment Commission. But here too the Commission only has the power to control the developments if the Minister says so and there are no appeals from the Commission which can run its proceedings more or less as it likes.
Councils are going to be restricted by regional panels- made up of 3 state government appointees and 2 council nominees. For example the council cannot reject a state government development without the approval of the panel (and state government officials make up the majority of the panel).
All in all this is a bad policy. The government’s excuse –that the council process takes too long – has been exposed for what it is by the report that the Minister takes longer on average then do councils when deciding on a similar development.
Further reading
Four Corners transcript http://www.abc.net.au/4corners/content/2008/s2216656.htm
The state government’s site where it sets out its side of the story http://www.planning.nsw.gov.au/planning_reforms/index.asp
The Local Government Associations site http://www.lgsa.org.au/www/html/2492-30-april-2008.asp?intSiteID=1 and http://www.keepitlocal.org.au/
And –for those interested- I am posting the older articles in this column on my blog. http://peterkirsop.blogspot.com/
Saturday, May 3, 2008
Singers of Renown
for forty two years John Cargher brought Australians into the world of opera. His books and his programmes have been an education. He was never an expert, he never wanted to be, he was what he said he was a member of the audience sharing his joy with us. But even if he wasnt a musicologist (what a word!) he knew so much more then we did and wearing his knowledge lightly he taught us.
I started listening regularly in Cooma when we only had one ABC channel- regional radio and was always pleased that we the regional listeners got an extra song. And then his programme came on Radio National and I listened then. I still can not sing, I still can not tell different voices apart but I know that I liked the glorious sounds that he presented.
And now after a life of 89 years and a world of experience from birth in East End of London childhood in Germany and then return to England to be a tool maker and to RAF ground crews and to Australia Mr Cargher has died.
I will miss his programmes.
HE showed us so much. God rest his soul
I started listening regularly in Cooma when we only had one ABC channel- regional radio and was always pleased that we the regional listeners got an extra song. And then his programme came on Radio National and I listened then. I still can not sing, I still can not tell different voices apart but I know that I liked the glorious sounds that he presented.
And now after a life of 89 years and a world of experience from birth in East End of London childhood in Germany and then return to England to be a tool maker and to RAF ground crews and to Australia Mr Cargher has died.
I will miss his programmes.
HE showed us so much. God rest his soul
Thursday, April 24, 2008
Kipling and Anzac Day
I have just got home from the dawn Anzac Day service at East Maitland. As always they leave me with mixed ideas. Perhaps Kipling said it rather well.
Recessional (A Victorian Ode) 1897
Rudyard Kipling
GOD of our fathers, known of old,
Lord of our far-flung battle line,
Beneath whose awful hand we hold
Dominion over palm and pine—
Lord God of Hosts, be with us yet,
Lest we forget—lest we forget!
The tumult and the shouting dies;
The Captains and the Kings depart;
Still stands Thine ancient sacrifice,
An humble and a contrite heart.
Lord God of Hosts, be with us yet,
Lest we forget—lest we forget!
Far-called our navies melt away;
On dune and headland sinks the fire;
Lo, all our pomp of yesterday
Is one with
Judge of the Nations, spare us yet,
Lest we forget—lest we forget!
If, drunk with sight of power, we loose
Wild tongues that have not Thee in awe,
Such boastings as the Gentiles use,
Or lesser breeds without the Law—
Lord God of Hosts, be with us yet,
Lest we forget—lest we forget!
For heathen heart that puts her trust
In reeking tube and iron shard—
All valiant dust that builds on dust,
And guarding calls not Thee to guard.
For frantic boast and foolish word,
Thy Mercy on Thy People, Lord!
This poem set to music has been sung either in whole or more commonly in part at most Anzac Day Services for many years. It is usually seen as the poem of a militant triumphal british Empire and as the poem of the soldiers of that Empire. It isn’t.
Its context is partly given by the date: it was composed for Queen
First note the constant and repeated reference to God or Lord. This is a religious poem. (And so perhaps appropriate for a semi religious day like Anzac Day when at each Dawn Service there are prayers, hymns and an address from a clergyman. But what sort of religion and what sort of God does Kipling invoke?
Seems to be like Land of Hope and Glory (and you need to see the last night at the Proms see British people at their most imperialistic singing this even if Britain has lost an empire and has yet to find a role) where the writer after thanking God
"for making thee (
prays that God will
"make thee mightier yet"
But each successive verse says the reverse
Verse Three
Our navies melt away
…
all our pomp of yesterday is one with Ninevah and
When Kipling wrote this the British navy was not merely the largest in the world it was larger than the next two biggest navies in the world and it was the policy to keep it that way. Yet this huge navy melts away.
All the imperial pomp of the late Victorian Empire will be ended like these cities.
If, drunk with sight of power, we loose
Wild tongues that have not Thee in awe,
Such boastings as the Gentiles use,
Or lesser breeds without the Law—
But the British were all Gentiles (Kipling didn’t believe that strange myth that the British were the 10 lost tribes) And the point is clearer with the next reference :Lesser breeds without the Law" (we do not have the Law ie the Jewish Law the only law to be capitalised.
Yet Kipling is saying that we are boasting, we are drunk with power if in fact we forget God and we rely on our own strength. George Orwell believed Kipling to be referring to some German philosophers (Nietsche perhaps) who were without the law in the sense of being lawless and advocating that strong men (supermen in Nietsches words) were not bound by law. Both Orwell and Kipling grew up in an
The message is given in the last 2 lines of each verse. It is not a boasting of Imperial power of weapons of what G W Bush calls Awe and Shock" and of might but a call to repent that boast and to put your trust in God.
Still stands Thine ancient sacrifice,
An humble and a contrite heart.
That gives life
Is this appropriate for Anzac Day?
Far more so then the stuff that people say about
Wednesday, April 23, 2008
Review: Deerhunting with Jesus
This book’s blurb describes it as hilarious and funny. It isn’t. It is very serious and at times very sad. Your.sydneyanglicans.net had this in its secular section for reviewers. It’s not exactly secular either.
It is a story – not exactly a description or a history – of the American rural poor.
Joe Bageant writes particularly about his own hometown of Winchester, Virginia, which by American standards is a small town of 23,500. However, his message is general. And it’s a message of gloom and sadness. It’s a story about a society where 20 per cent don’t finish high school, where almost none go on to university, and where most employees do not earn enough to pay for health insurance or buy a house.
Bageant lets people he grew up with tell their own stories So we read of Dottie, who at 59 is half blind (she walks with a cane), overweight, has high blood pressure and has a husband who earns $8 an hour for cleaning cars. After paying rent and other fixed costs they have $35 a week to pay for groceries and medicine. They survive by not filling some of Dottie’s scripts. So she just gets sicker.
Bageant and his son’s story tells the decline of American manufacturing. When he left the US Navy in 1969 he worked at Rubbermaid, then Winchester’s biggest employer. He got $1.65 an hour, free (or almost free) health cover for himself and his family and he made a decent income. Now his son works there and earns about $15 an hour and can barely afford health insurance ($250 per month per person with a deductible of $1200 and it only covers 80 per cent of the bills in any case).
Bageant writes of meeting Joe Cave who has had two discs in his back give up for which he received workers compensation and needs a hip replacement which the compensation insurer says is not work related. Of course, the injury is, and so Cave is bringing an action to prove it but in the meantime he lives on a $480 a month disability pension and pays $320 on his share of the rent for the house in which he and others live.
He tells many other stories about working people, about housing, about health care, about education. And he surprises us. Like most Australians I am smug about our gun control laws and look at America as being the shooters capital. But not so according to Bageant. Many people still hunt for food in America – it’s sometimes the only way some small town folk put meat on the table.
Guns for many Americans are everyday tools. And he shows us how anti-gun hysteria affects people by telling the story of Joshua Phelps, of Pine Bush, New York (population 1539), a high school student and a member of the school’s civil war club, who after appearing in a school re-enactment of the Battle of Chancellorville threw his blank firing replica musket and Union uniform into his car. Joshua was arrested, dragged from class and suspended from school. Gun ownership, Bageant says, is the biggest political divide between American liberals and the small-town people he writes about.
But the biggest divide of all is Christianity, or at least the version most Americans in small towns know. And here more then anywhere else Bageant stops being secular and starts sounding like Amos.
Bageant comes from a Christian family. His father’s last words to him were “Will you be saved? Will you be on Canaan’s shore?”. His brother is a minister in an independent Baptist church. But Bageant himself is not Christian. And it’s not hard to see why.
The church he writes about is the Creation Science church, the church that supports Bush because he is “pro-life “ (ignoring the fact – reported a year or so ago in Southern Cross – that while Clinton was President US abortion rates fell and under Bush they have risen to become the highest in the world) and more than that, the church – or at least a large part of it – wants to return to the Old Testament penal code – complete with stonings. This is an heretical church, a church preaching Law not Grace, a church rather like that in Galacia to which Paul wrote “what makes a man righteous is not obedience to the Law but faith in Jesus Christ”.
Deer hunting with Jesus challenges us directly. It contains a preface addressed to the Australian reader that asks us to avoid the low wage service economy that now afflicts the USA and to foster education. But it should also encourage us to preach the true gospel and in so doing stand with the poor and needy and deliver the oppressed.
America, Bageant writes, despite its outward Christianity has failed to do this. It is a call from a man who I think has lost his faith because the gospel was not properly preached to him. Every minister who is in a parish west of Homebush, south of Port Hacking or north of the Hawkesbury should read this book.
(published in March 2008 edition of Southern Cross)
It is a story – not exactly a description or a history – of the American rural poor.
Joe Bageant writes particularly about his own hometown of Winchester, Virginia, which by American standards is a small town of 23,500. However, his message is general. And it’s a message of gloom and sadness. It’s a story about a society where 20 per cent don’t finish high school, where almost none go on to university, and where most employees do not earn enough to pay for health insurance or buy a house.
Bageant lets people he grew up with tell their own stories So we read of Dottie, who at 59 is half blind (she walks with a cane), overweight, has high blood pressure and has a husband who earns $8 an hour for cleaning cars. After paying rent and other fixed costs they have $35 a week to pay for groceries and medicine. They survive by not filling some of Dottie’s scripts. So she just gets sicker.
Bageant and his son’s story tells the decline of American manufacturing. When he left the US Navy in 1969 he worked at Rubbermaid, then Winchester’s biggest employer. He got $1.65 an hour, free (or almost free) health cover for himself and his family and he made a decent income. Now his son works there and earns about $15 an hour and can barely afford health insurance ($250 per month per person with a deductible of $1200 and it only covers 80 per cent of the bills in any case).
Bageant writes of meeting Joe Cave who has had two discs in his back give up for which he received workers compensation and needs a hip replacement which the compensation insurer says is not work related. Of course, the injury is, and so Cave is bringing an action to prove it but in the meantime he lives on a $480 a month disability pension and pays $320 on his share of the rent for the house in which he and others live.
He tells many other stories about working people, about housing, about health care, about education. And he surprises us. Like most Australians I am smug about our gun control laws and look at America as being the shooters capital. But not so according to Bageant. Many people still hunt for food in America – it’s sometimes the only way some small town folk put meat on the table.
Guns for many Americans are everyday tools. And he shows us how anti-gun hysteria affects people by telling the story of Joshua Phelps, of Pine Bush, New York (population 1539), a high school student and a member of the school’s civil war club, who after appearing in a school re-enactment of the Battle of Chancellorville threw his blank firing replica musket and Union uniform into his car. Joshua was arrested, dragged from class and suspended from school. Gun ownership, Bageant says, is the biggest political divide between American liberals and the small-town people he writes about.
But the biggest divide of all is Christianity, or at least the version most Americans in small towns know. And here more then anywhere else Bageant stops being secular and starts sounding like Amos.
Bageant comes from a Christian family. His father’s last words to him were “Will you be saved? Will you be on Canaan’s shore?”. His brother is a minister in an independent Baptist church. But Bageant himself is not Christian. And it’s not hard to see why.
The church he writes about is the Creation Science church, the church that supports Bush because he is “pro-life “ (ignoring the fact – reported a year or so ago in Southern Cross – that while Clinton was President US abortion rates fell and under Bush they have risen to become the highest in the world) and more than that, the church – or at least a large part of it – wants to return to the Old Testament penal code – complete with stonings. This is an heretical church, a church preaching Law not Grace, a church rather like that in Galacia to which Paul wrote “what makes a man righteous is not obedience to the Law but faith in Jesus Christ”.
Deer hunting with Jesus challenges us directly. It contains a preface addressed to the Australian reader that asks us to avoid the low wage service economy that now afflicts the USA and to foster education. But it should also encourage us to preach the true gospel and in so doing stand with the poor and needy and deliver the oppressed.
America, Bageant writes, despite its outward Christianity has failed to do this. It is a call from a man who I think has lost his faith because the gospel was not properly preached to him. Every minister who is in a parish west of Homebush, south of Port Hacking or north of the Hawkesbury should read this book.
(published in March 2008 edition of Southern Cross)
Intention in the law
One of the things many people find most difficult to understand when they hear their lawyer talk is what the lawyer means by intention. To most of us intention is a mental thing, "I intend to go swimming at lunchtime" is a statement about me and what I plan to do.
But the law talks about this funny thing called objective intention and that can turn out to be the opposite of what the person intended in his or her own mind or what the person says he or she intended. To see why the law talks about objective intention let’s take the swimming example a bit further. I might say to you ", "I intend to go swimming at lunchtime" but I might be lying- perhaps its an excuse to avoid doing something I don’t want to do. If in fact I have not brought my swimming gear to work and if I go to the library then you might say "Kirsop never intended to go swimming."
It gets much more difficult when the lawyer is trying to look at what a number of people intended. The most common example is in a contract. Lets take the example of the sale of a commercial building. The vendor might say "I intended the margin scheme to apply" because in doing so it saves him GST and so he gets more money in his hand. The purchaser might not like that because if he is in business he can claim the GST back and so he ends up with more money in his hand. So its not very useful to listen to what the parties say they intended. Rather what the lawyers do is to look at what the parties did. Did the contract say the margin scheme was going to apply? Normally if it did say that the margin scheme will apply then that’s the end of it. But sometimes there are arguments. Say (to take a real example) the owner of a building leased a shop and in the lease gave the tenant an option to purchase the building. Say further the lease said that the terms would be those of the standard contract (which is drafted by the Law Society with input from the State government and the Real Estate Institute). That contract says that "normally" the margin scheme doesn’t apply. But when the tenant exercised his option the contract as prepared by the owner’s solicitors states the scheme does apply. The tenant and the lessor are arguing about what was intended. The owner says I always intended the margin scheme should apply and in his own mind he might be right but the lawyer needs to see what is the "objective" intention which is the intention that an outsider would say the people intended.
A very nice example of this is in a recent court case involving a house at Lithgow. More then 90 years ago miners had built houses on land known as the "Pottery Estate" owned by the mining company for which they worked. They paid a very low rental to the mining company,. They then sold their houses and the purchasers bought the house and continued to pay a low rental to the mining company. In 1969 Mr May purchased a 2 bedroom brick house within the Pottery Estate from a Mrs McIntyre. He paid her $1,000 and paid the mining company $85.80 rent in advance for 1969. Over the years the ground rent had increased to $18 a week (Mr May usually paid it monthly in advance but he –and the other people in the Pottery Estate – understood that it was a weekly rent). Mr May carried out various repairs and improvements. Around 1985 Mr May he arranged construction of a new roof at a cost of $5,500. In 1987 he arranged for electrical rewiring at a cost of $2,500.. In May 1995 Mr May arranged for the construction of a new septic system at a cost of $3,200 All these are things home owners not tenants do.
All this changed when a new owner –Ceedive Pty Ltd – purchased the land in 2000. It suddenly increased the rent dramatically, to about the same rent that was being charged for houses in other parts of Lithgow. Mr May and the other people living in the Pottery estate complained and refused to pay the rent. Ceedive tried to evict them.
Mr May and the other residents then claimed they were "Protected Tenants." That term probably needs an explanation to my younger readers. In World War 2 rents were pegged so that landlords could not take advantage of the war time shortage of houses and charge huge rents. After the war houses were in short supply (this was the start of the baby boom and of the big immigration programmes) and in 1948 the state government passed laws continuing the war time regulation of rents. Tenants in such houses were "Protected Tenants". This was meant to be a temporary scheme but it has continued in some places and some circumstances to today.
But Mr May could only be a protected tenant (and so have his rent pegged) if his house was a part of the land –a fixture. And Mr May had in the past acted as if he owned the house. And he certainly thought he did, after all he had bought it.
But the Court of Appeal said that what was important was what the original builder intended. If he intended the house to a fixture then it would remain so (once something is a fixture it always remains a fixture). Here the original owner is dead so the court could only look at what he intended from the circumstances at the time. And the court concluded that anyone looking at what was built (A 2 bedroom brick house on full foundations) would have said the owner intended the house to be a part of the land, and not something that could be taken away. As the court said
A house which is constructed in such a way so as to be removable, whether as a unit, or in sections, may well remain a chattel, even though it is connected temporarily to mains services such as water and electricity. But a house which is constructed in such a way that it cannot be removed at all, save by destruction, cannot have been intended to remain as a chattel."
And so Mr May and the other tenants were protected tenants and so they were only liable to pay a rent fixed at 1948 levels (subject to some adjustments).
And the way the court got to this result was by looking at the ‘objective’ intention of the person who built the house in 1910.
(syndicated law column in local papers for fortnight beginning 21/4/08)
But the law talks about this funny thing called objective intention and that can turn out to be the opposite of what the person intended in his or her own mind or what the person says he or she intended. To see why the law talks about objective intention let’s take the swimming example a bit further. I might say to you ", "I intend to go swimming at lunchtime" but I might be lying- perhaps its an excuse to avoid doing something I don’t want to do. If in fact I have not brought my swimming gear to work and if I go to the library then you might say "Kirsop never intended to go swimming."
It gets much more difficult when the lawyer is trying to look at what a number of people intended. The most common example is in a contract. Lets take the example of the sale of a commercial building. The vendor might say "I intended the margin scheme to apply" because in doing so it saves him GST and so he gets more money in his hand. The purchaser might not like that because if he is in business he can claim the GST back and so he ends up with more money in his hand. So its not very useful to listen to what the parties say they intended. Rather what the lawyers do is to look at what the parties did. Did the contract say the margin scheme was going to apply? Normally if it did say that the margin scheme will apply then that’s the end of it. But sometimes there are arguments. Say (to take a real example) the owner of a building leased a shop and in the lease gave the tenant an option to purchase the building. Say further the lease said that the terms would be those of the standard contract (which is drafted by the Law Society with input from the State government and the Real Estate Institute). That contract says that "normally" the margin scheme doesn’t apply. But when the tenant exercised his option the contract as prepared by the owner’s solicitors states the scheme does apply. The tenant and the lessor are arguing about what was intended. The owner says I always intended the margin scheme should apply and in his own mind he might be right but the lawyer needs to see what is the "objective" intention which is the intention that an outsider would say the people intended.
A very nice example of this is in a recent court case involving a house at Lithgow. More then 90 years ago miners had built houses on land known as the "Pottery Estate" owned by the mining company for which they worked. They paid a very low rental to the mining company,. They then sold their houses and the purchasers bought the house and continued to pay a low rental to the mining company. In 1969 Mr May purchased a 2 bedroom brick house within the Pottery Estate from a Mrs McIntyre. He paid her $1,000 and paid the mining company $85.80 rent in advance for 1969. Over the years the ground rent had increased to $18 a week (Mr May usually paid it monthly in advance but he –and the other people in the Pottery Estate – understood that it was a weekly rent). Mr May carried out various repairs and improvements. Around 1985 Mr May he arranged construction of a new roof at a cost of $5,500. In 1987 he arranged for electrical rewiring at a cost of $2,500.. In May 1995 Mr May arranged for the construction of a new septic system at a cost of $3,200 All these are things home owners not tenants do.
All this changed when a new owner –Ceedive Pty Ltd – purchased the land in 2000. It suddenly increased the rent dramatically, to about the same rent that was being charged for houses in other parts of Lithgow. Mr May and the other people living in the Pottery estate complained and refused to pay the rent. Ceedive tried to evict them.
Mr May and the other residents then claimed they were "Protected Tenants." That term probably needs an explanation to my younger readers. In World War 2 rents were pegged so that landlords could not take advantage of the war time shortage of houses and charge huge rents. After the war houses were in short supply (this was the start of the baby boom and of the big immigration programmes) and in 1948 the state government passed laws continuing the war time regulation of rents. Tenants in such houses were "Protected Tenants". This was meant to be a temporary scheme but it has continued in some places and some circumstances to today.
But Mr May could only be a protected tenant (and so have his rent pegged) if his house was a part of the land –a fixture. And Mr May had in the past acted as if he owned the house. And he certainly thought he did, after all he had bought it.
But the Court of Appeal said that what was important was what the original builder intended. If he intended the house to a fixture then it would remain so (once something is a fixture it always remains a fixture). Here the original owner is dead so the court could only look at what he intended from the circumstances at the time. And the court concluded that anyone looking at what was built (A 2 bedroom brick house on full foundations) would have said the owner intended the house to be a part of the land, and not something that could be taken away. As the court said
A house which is constructed in such a way so as to be removable, whether as a unit, or in sections, may well remain a chattel, even though it is connected temporarily to mains services such as water and electricity. But a house which is constructed in such a way that it cannot be removed at all, save by destruction, cannot have been intended to remain as a chattel."
And so Mr May and the other tenants were protected tenants and so they were only liable to pay a rent fixed at 1948 levels (subject to some adjustments).
And the way the court got to this result was by looking at the ‘objective’ intention of the person who built the house in 1910.
(syndicated law column in local papers for fortnight beginning 21/4/08)
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