Banks respond to Crikey's article

Bendigo and Adelaide Bank:

Will Rayner, Head of Investor Relations, Bendigo and Adelaide Bank Limited, writes: Re. “Bendigo and Adelaide should come clean on MIS” (yesterday, item 26). In response to your article we make the following points…

Bendigo and Adelaide Bank has lent to more than 8000 individual credit-worthy borrowers who have subsequently invested in Great Southern MIS schemes. We continue to work with our customers to deliver the best outcome for all parties. We are closely monitoring the performance of each loan, and are in the process of contacting each customer to discuss their loan and their options going forwards. As per normal practice, provisions and write-offs are calculated on a loan-by-loan basis. We will continue to manage this portfolio in a similar manner.
While we remain vigilant about the performance of these loans, we are ultimately comfortable with our position, and have not revised our market guidance as a result of these developments.
The statement released to the ASX by Bendigo and Adelaide Bank on May 26, 2009 includes the customers and exposures outlined in the separate announcement by Adelaide Managed Funds.
APRA’s decision not to support the proposed purchase of the Asset Backed Yield trust was in no way related to these issues.
Contrary to recent media reports, neither Bendigo and Adelaide Bank, nor any of its related parties have recently bought any portfolio of loans from Great Southern at a discount (such as the $0.38 cents figure that has been quoted).

We would appreciate if these facts could be reported.

The politics of the ETS:

Margaret Dingle writes: Re. “Whatever happens to the ETS, it represents colossal failure” (yesterday, item 2). I am extremely frustrated by the politics around the emissions trading scheme. I really want Australia to reduce carbon emissions and was pleased when the Government raised the potential reductions to 25% by 2020. I would be happy if this were locked in as a minimum with possibility of increasing it if international agreement were achieved with other countries reducing emissions substantially more.

We do need to protect trade exposed industries that are less carbon intensive than their overseas competitors. However, I am opposed to free carbon permits for coal fired power stations. Coal fired power stations are not trade exposed, their competitors being other Australian energy generators, not foreign imports. Industries need to be supported for reducing their carbon emissions per unit of product, by efficiencies or by using less carbon intensive fuel or electricity.

I am disappointed in the Greens, who ought to be negotiating with the Government to improve the scheme. They risk making themselves irrelevant, as would happen if the Government made a deal with the Coalition, in which case the scheme would be less beneficial to the environment than if there had been negotiations between the Greens and the Government. I suspect the Greens of trying to force a double dissolution.

Rich pollies:

David Havyatt writes: Re. Yesterday’s Editorial. In your editorial you pose the hypothetical:

If only we had a parliament dotted with rich listers. Men and women who have achieved something in their lives more concrete than the stacking of party branches and the backstabbing of their colleagues. People who entered politics out of a sense of public spirit and duty, never mind the shabby pay and punishing hours. What a rich parliament it would be.

It does make me wonder whether we recall the days before parliamentarians were paid, like the start of the nineteenth century. Do you remember that “pay for parliamentarians” was one of the Chartists six demands, so that ordinary people could be represented?

It may be a “rich” parliament but it probably wouldn’t be democratically representative. Do you want a property qualification on voters too now?

Chris Dodds writes: So Crikey thinks the rich list is a qualification for Parliament. The conclusion is that Bond, Scase, Elliot, Pratt, Adler and others would raise the standard. I doubt that but then I have a quaint view that parliament is the peoples house and that the rich have too much influence anyway.

The reality is that they probably wouldn’t want the public scrutiny that public office affords given the track record of very many senior corporate players that Crikey exposes only too well in your business section.

Thomas Flynn, Executive Director, Australians For Constitutional Monarchy, writes: Your editorial on Wednesday is a paean to Malcolm Turnbull. You conclude by saying: “If only we had a parliament dotted with rich listers. Men and women who have achieved something in their lives more concrete than the stacking of party branches and the backstabbing of their colleagues.” If you think that such sea-green innocence — guiltless of such dirty politicking — applies to Malcolm Turnbull, then I have only two words to say to you: Peter King.

Israel’s “useful idiots”:

Alan Kennedy writes: Re. “Israel’s ‘useful idiots’ in the Australian media” (yesterday, item 21). Julia Gillard’s decision to accept a junket to Israel is perplexing. Isn’t accepting private money to travel what got Joel Fitzgibbon into trouble? A private visit with access tightly controlled. Gillard should not be on such a charade. She should go on a taxpayer funded visit and see the Palestinians as well. The media stooges Sheridan and Bolt are understandable and the copy will be predictable indeed it could be written now and filed later.

With the media butt monkeys along it is safe to assume no-one will be asking questions such as when are going to dismantle all the illegal settlements and pull back to the 1967 borders? Do you support the proposed law banning protests against Israel’s Independence Day? Do you support the right of return for Palestinians? Do you think the argument against Iran’s nuclear program would be more credible if you first owned up to having nuclear weapons and then announced you were beginning a phased close down of your nuclear program with the goal of ridding yourself of nuclear weapons?

There are of course many questions one would like to ask Hamas but as there will be no access, this will be impossible.

Les Heimann writes: Greg Barns somehow postulates that the likes of Andrew Bolt & Co. are “lovers of Israel” because they can no longer be “haters of communism”… or something like that. This article really should be read by all as it demonstrates such a good example of amateurish literary effort and ill disguised motive.

Barns, it would seem, is part of the motiveless and uneducated latte clique who have been led by the nose to actually believe, or say they believe, that Israel is the perpetrator of all that is evil in the world — oh, sorry, apart from the US that is. He even has the temerity to invent a phrase (or is it borrowed) “conjectural government” — wow!

The reality of course is that without the USA we would all be speaking Japanese and Europe would be uttering German. Barns and his ilk can not abide such a thought of course nor can they accept that Israel actually has the guts to say and do as required to exist.

Clearly Barns should research a little more about both the USA and Israel and ask whether in reality it is actually he and his fellow travellers who are the “useful idiots”.

The vote gap:

Jim Hart writes: Re. “Comitatus: The Australian centre left majority” (yesterday, item 9). Interesting that Possum Comitatus sees the “vote gap” (before and after preferences) as a problem for the coalition. An alternative interpretation is that it is a liability for Labor.

The fact that the coalition gets fewer preferences from minor parties suggests that conservative voters are more sure about what they want: their vote goes straight to the coalition and the other numbers are just an electoral formality. The so-called broad centre-left on the other hand are a less committed and more disparate mob. While they may all agree they don’t like the coalition, a fair proportion aren’t that keen on Labor either.

So they show this by giving their first vote to minor candidates while putting Labor further down the list but still ahead of the coalition. That kind of vote gap is fine for Labor provided the minor parties remain minor, but it’s a bit of a worry if the numbers get serious. Just ask Lindsay Tanner – it wouldn’t take much for some traditionally deep-red seats like Melbourne to turn as green as Fremantle.

Cheers to good health:

Peter Wotton writes: Re. “Diary of a Surgeon: welcome to St Anywhere” (Tuesday, item 15). Some years ago, my son was viciously attacked late on a Friday night and subsequently received prompt and professional treatment at RPA Hospital in Sydney.

In recognition of the wonderful (and free) attention that he received, I wrote to the hospital thanking them. To my surprise I received a letter back from the head of the Emergency Department thanking me for my letter and commenting that, generally the only letters they received were letters of complaint or abuse.

Why does such a small minority of bad outcomes overwhelm the vast majority of good and satisfactory situations? Why have we forgotten to say thanks for a job well done but are quick to complain when the service is not five star?

Bank fees:

Anne-Marie Kioussis writes: Re. “AFR defends the indefensible on bank fees” (Tuesday, item 23). Thank you for presenting a solid, common sense case against the hubris touted in the AFR in your article.. It is surprising to learn of the VCAT ruling that exception fees were unenforceable and not permissible under common law principles; I am shocked, and dismayed, that this has not been pounced upon by consumer groups and made into a huge issue.

Consumers would be far less passive and compliant about paying them if they knew this. They’d also be much more indignant about the way they are enforced. How do you think this can be effectively promulgated to encourage consumer consideration and action?

The Monthly:

Michael Nolan writes: Georgia Webster’s outrage (yesterday, comments) that Ben Naparstek’s appointment to The Monthly has been discussed with reference to his young age is more than a little overheated. It’s also muddled. Even as she asks why his age should be considered a story, she admits it’s “certainly remarkable”. Yes, it is. But whoever took the editor’s role was destined to be discussed with interest, and, given the nature of Sally Warhaft’s departure, it’s hardly surprising that some would suggest any new appointee would be a puppet to the hands-on owner and Board.

To compare questions about Naparstek’s youthful abilities to sexism or racism is faintly ridiculous. At what age are the barriers set in place that Georgia believes Naparstek has broken through? Younger than twenty-five? Exactly twenty-three? Would a 27-year-old have broken barriers? It’s hardly controversial to say that few 23-year-olds would be thought capable of successfully editing one of the nation’s highest-profile journals of politics and culture. Which is to Naparstek’s credit.

And now, an unusual degree of attention will be paid to (at least) his first edition — hopefully it doesn’t offend Georgia’s sensitivities when his initial sales figures are particularly high.

Green jobs:

Roy Ramage, Economic Development Officer, City of Victor Harbor, writes: Re. “Climate change and employment in Australia, what history says” (yesterday, item 11). We now have three new permanent jobs and the possibility of 18 (installers) more — since initiating our www.solarprogram.com.au Solar and wind power at the domestic level are now and necessary.

Wake up! I point you to Dr Andrew Blakers Paper (ANU 2002) and his Solarisation Retrofitting Plan. We have adopted it and our numbers, while smaller correspond with his projections.

We will now aim for energy independence and the number of jobs it will yield as we eventually move to have our own energy company again.

Climate change cage match (now with its own blog):

Bruce Graham writes: Re. Ken Lambert (yesterday, comments). So you try to write an informative piece about a complex industry, and some folks just like to make noise. I will guess that Mr Lambert does not sell stuff, or he would know that 25% profit is a lot lower than some supply constrained industries. I wrote that there is about $3000 profit out of a $12,000 dollar (list, retail) system before government subsidies.

For 1 KW, the costs are:

PV can be purchased for $6000 (wholesale, six month delivery, name brand). Solarbuzz quotes the cheapest retail advertised price as USD 3.26/watt pre tax.
The grid interconnect electronics cost ~ $1200 (x works, wholesale).
Two three days skilled labour installation (say $300/day).
A prefab steel frame.

The rest of the list price is:

Shipping costs.
Retail mark-up.
Overdraft costs.
Exchange rate risk (PV has to be ordered six months in advance, either the retailer or the wholesaler has to guess advance sales.)
Quoting costs (guess five home visits and quotes for every job contracted).
Sign off by a registered electrician (this is a sore point: few electricians understand PV, but the installers cannot sign off)
List markup (for negotiation down to give a “good deal”).

How much of that is profit, depends on business acumen. Most of those business costs disappear if the installer is working on contract during new home construction, as does most of the installation labour. For PV, much of the profits have historically been in the hands of the PV manufacturers. For years there has been rapid global growth in PV manufacture, and long lags before delivery. These are (just like any other industry) signs of supply/demand imbalance.

In recent months, demand has fallen off, international prices are falling, and the Australian dollar has risen sharply, but list retail prices in Australia have not moved. Unlike Mr Lambert, I think those 25% margins are a good thing. It is what a growing industry needs to attract people and capital.

Tamas Calderwood writes: Adam Rope’s (yesterday, comments) one actual argument (rather than his many appeals to “scientific” authority) is that 1998 had a “specific El Nino event” that distorts the temperature data, so I can’t claim there has been no warming since 1998.

OK Adam, I have two points: First, by claiming “El Nino did it” in 1998, you are effectively conceding that natural factors are more important than human CO2. So on this we agree.

Second, I have used UAH satellite data and taken an “average” temperature for the decades May 1979 — April 1989, 89’-99’ and 99’-09’, i.e.; the three most recent ten year periods. 1979-89 shows an average monthly temperature anomaly of -0.05C below the 30 year mean, 89-99 is +0.06C and 99-09 is +0.2C.

Yes, that’s right — this “warmest decade ever” is 0.25C warmer than the 1980’s and not even 0.15C warmer than the El Nino “distorted” 90’s, all despite a 13% increase in CO2 since 1980. Think it’s possible that’s just natural variability? Alas no – for this we must completely restructure our way of life, “invest” in green-energy boondoggles (see Ken Lambert’s recent comments) and introduce a monster new tax system.

I know, I know — but the smart guys have computer models that say we’re doomed! Uh huh, whatever.