Webdiary - Founded and Inspired by Margo Kingston

QANTAS says it is "likely" it engaged in price-fixing of the type that saw British Airways fined a total of $640 million for anti-competitive behaviour in the US and Britain.

I was right yesterday, when I thought, Qantas might have been involved in price fixing. What penalty will be imposed on Qantas? Will the fuel surcharge be dropped? I don't think so.

British Airways (BA) has been fined a record $640 million for fixing ticket prices on flights between the UK and the USA.

British Airways and Virgin Atlantic colluded to increase the price of the fuel surcharge on trans-Atlantic flights over an 18-month period.

Last year Virgin blew the whistle on the scam and BA has now been fined $290 million by Britain's Office of Fair Trading and $350 million by the US Department of Justice.

It is the first time that the UK and the US have simultaneously brought action against a company.

Virgin has been given immunity and will not face any fines. British Airways has condemned the actions of its employees, and Virgin has also apologised.

Virgin blew the whistle on BA for collusion on the fuel surcharge. I wonder if similar deals have been done is Australia, between Qantas and Virgin. Would the Howard government give Virgin immunity if it admitted to the offence? 

Family First Senator Steve Fielding's maiden speech is on Webdiary here.

SF/162. Wednesday July 25, 2007

GOVERNMENT MUST CUT PETROL TAX TO HELP STRUGGLING FAMILIES

The Government must cut petrol tax to help families struggling to make ends meet with soaring petrol and food prices.

FAMILY FIRST leader Steve Fielding said cutting petrol tax also takes pressure off inflation which reduces the likelihood of another interest rate hike.

Consumer Price Index (CPI) figures for the June quarter 2007, released today, reveal the cost of petrol was up by more than nine per cent.

"The cost of fruit was up by over eight per cent, vegetables rose by more than six per cent and the cost of buying a house was up an extra one per cent," Senator Fielding said.

"Australian families are struggling to make ends meet yet the Government is ignoring their pain. It is economically irresponsible of the Government not to cut petrol tax. It risks another interest rate rise which would send many families over the edge.

"FAMILY FIRST wants a petrol tax cut of 10 cents a litre, which the Prime Minister has said would cost $2.8 billion. Cutting petrol tax takes pressure off inflation because when petrol prices come down, the price of goods and services falls as well, thereby reducing inflation. This also reduces the likelihood of another interest rate hike, which is the last thing families want."

FAMILY FIRST has action plans on petrol, groceries and housing: to cut petrol tax, stamp out predatory pricing and give special tax breaks to first homebuyers.

All the major parties are doing is talking about the problems. The Government and Labor have announced petrol inquiries, and Labor also wants an inquiry into grocery prices. On housing, Labor will host a summit! Only FAMILY FIRST has concrete action plans to help Australian families struggling to make ends meet.

The latest Family First press release on grocery and fuel prices is Petrol, Groceries and Housing: families want action, not inquir

The Labor push on groceries follows campaigns on a range of issues affecting the family budget, including the high cost of fuel and childcare.

The Opposition Leader will today promise that the Australian Competition and Consumer Commission will be given extra powers to monitor prices and publish regular surveys of grocery costs for a typical shopping basket, including staples such as biscuits, bread and milk.

A National Grocery Pricing Inquiry would report to the incoming Labor government within six months, after consultation with individuals, consumer groups, retailers and businesses along the supply chain.

"When families fill up their baskets and trolleys at the local supermarket, they should not have to worry if they are getting a raw deal by inflated grocery prices," Mr Rudd said last night.

Rudd is going to ask the ACCC to monitor grocery prices. This will send a shiver down the backs of Woolies and Coles. 

David, I'm glad things are different in Aus, but here in Tas, Woolworth owns the wholesale warehouses that supplies IGA. They even deliver in woollies trucks at times. Tas is very different, as we don't have the volume to create proper competition. Woolworth / coles own the major liquor wholesalers, nearly all fuel outlets and control lots of other commodities. I'm not anti corporate, but anti cartel and corporate monopolisation. I am certainly anti globalisation and economic rationalism. I'm all for competition and definitely not a socialist, as it's a miserable failure. But I do believe in small business rather than big business. I want a new system that takes the best of the failed past and present, giving this country a positive future. By your own comments, the present system of open slather corporate dictatorship and lack of import controls, is driving us down the drain.

These monopolies have open slather on imports and are destroying our horticultural and other industries, driving us further into foreign and person unsustainable debt. I think history shows us that once entities get to a certain size of control and manipulation, they implode bringing everything down with them.

History shows past society collapses happen quickly, rather than over a time span favoured by the participants. I think we are facing those hurdles now.

Yes, David, I'll bet Wal-Mart would set the cat among the pigeons here. This kind of thing will almost certainly open things up a bit:

... Human Rights Watch found that while many American companies use weak US laws to stop workers from organizing, the retail giant stands out for the sheer magnitude and aggressiveness of its anti-union apparatus. Many of its anti-union tactics are lawful in the United States, though they combine to undermine workers’ rights. Others run afoul of soft US laws. ...

Human Rights Watch’s investigation revealed that, in most cases, Wal-Mart begins to indoctrinate workers and managers to oppose unions from the moment they are hired. Managers receive explicit instructions on keeping out unions, many of which are found in the company’s “Manager’s Toolbox,” a self-described guide to managers on “how to remain union free in the event union organizers choose your facility as their next target.”

It's like Uncle Joe's wet-dream. Wal-Mart's culture is so in tune with that of the Howard Government, you've really got to wonder why the Government didn't lure them over here years ago. Then again, Coles/Woolies are a big part of the Government's core constituency, so Wal-Mart may have to wait for the 6th Howard Ministry.

Alga, I have done some research for you and have found out that indeed  IGA in Tasmania does not operate as it does on the mainland.  Are you sure they really get their products from Woolworth and Coles in Tasmania?  Sounds pretty weird to me.

On the mainland, IGA stores are independently owned and get their products from IGA Distribution which is part of the Metcash group.  Metcash is huge and turns over more than $7 billion a year. It is buying directly from manufacturers and is naturally a direct competitor to Coles and Woolworths.

If we are to have a viable grocery market in this country we need something like IGA / Metcash to continue to succeed. They and other competitors need to grow in scale so that we have a proper functioning of the market.

There are very few comparable countries that have such a concentrated retail market as Australia.  Switzerland has the same problem and it shows in the prices.  In Switzerland there is a grocery duopoly like Australia where retailers Coop and Migros.  Swiss grocery prices are 40% more than Germany. There is no excuse for this and it is all about Coop and Migros gouging Swiss consumers while Germans enjoy a competitive market.

Countries like Switzerland and Australia clearly have poorly developed laws in relation to internal cartels.  The solution in part would be to give more power to the ACCC.

Besides IGA, another force for change in the Australian market is the German owned Aldi stores. Aldi is a limited assortment concept but they do have 140 stores in Australia now and their prices are significantly lower than duopoly players, Woolworths and Coles.  Their products are their own brands and are mainly made here in Australia.

I recently read a book called the Wal-Mart Effect.  The tagline for this book is "how the world's most powerful company works and how it is transforming the American economy".  The Economist made the Wal-Mart Effect book of the year in 2006.

The retail grocery market in the US is fiercely competitive and Wal-Mart has delivered permanent, radically lower prices.  I don't really want to go into a debate on Wal-Mart as that is not the purpose of this thread.  I know the common criticisms of the world's largest retailer but one of them is never that their prices are too high.  The concern with Wal-Mart is how they treat their employees, suppliers etc in their relentless drive for lower prices.

Each country has its own situation.  What we have in Australia is like a sort of 19th century robber baron model of grocery retail.  Few other OECD countries have this.

Our market model means we are being screwed by Woolies and Coles.  I am not a campaigner for IGA or Aldi per se but I think people should boycott the duopoly and shop at the limited alternatives.

All that aside, from your comments it sounds as though you would be an anti-corporate, anti-global socialist.  If we had a socialist model o f grocery shopping it would be like East Germany in 1984.  Spare me that.

All we need is a market that operates within an effective framework.  That framework must ensure fierce competition and low prices.

I'd actually like to see Wal-Mart come in here.  Something huge like that needs to happen to correct this market.  Perhaps Wal-Mart coming in and sending the weakened Coles bankrupt would be right up my street.

My solutions are probably not like yours, Alga but then I'm not a socialist.

Socialist or capitalist, I really resent being screwed around.  Coles and Woolies are doing that to us and no one is trying to stop them.

In Tasmania, all independent food stores including IGA, get their supplies through Woolworth and Coles, who own the wholesale outlets IGA and others are contracted to. I believe its much the same in Aus, but happy to be corrected.

So in reality, it's just another con job of smoke and mirrors. There will be no change from whoever gets into government as all parties line up for their bribes from virtually the same corporations. Whilst we allow unrestrained monopolisation by the corporate giants, the only outcome is right wing corporate dictatorship. Family first, just another ploy by the religiously controlled right wing Lib/Lab coalition, to make it look like there is choice. That's why they are all willing to give such huge amounts to wealthy religious schools, to the detriment of the public system.

There is no viable choice in our politics, they are all the same. With a lateral change of political power and direction, no hope is foreseeable.

I have long resented the duopoly.  Go to IGA.  If you go to one of their bigger stores you will find everything you need. Coles and Woolies are stealing from us.  Don't go to them.  Go to IGA. The only way these companies will be taught is to go elsewhere. IGA has everything, they are civilised and they are less of a rip off.

Consumers should boycott Coles and Woolies until they stop acting like predators.  What they are doing should be illegal.  In many comparable jurisdictions overseas it is illegal. It would be in the United States and Canada.

True Margo, New Zealand only has one house. Their system of government for most of their history was far more complex than ours.  They only had one house of parliament and only two levels of government.  They never had the states as we do nor any concept of a federation.  As you'd know, they could have become part of the Australian federation back when such topics were in vogue.

Their original model of government was quite simple which is understandable given that their country is the size of the UK or Japan rather than our own which is a continent.

You'd know about Queensland, Margo. We only had one house of parliament there also.

New Zealand had few checks and balances which meant their government could go to extremes like the "big idea" era of Piggy Muldoon or the extreme economic rationalism of Rogernomics.

I find New Zealand endlessly fascinating.  It is the same yet obviously so entirely different.

In the end they made a decision in recent years that their system of government did NOT have enough checks and balances so they brought in a German style system of mixed member proportional.

It has its merits in that the government is arguably more representative of the people but it goes against the Anglo Saxon notion of an adversarial system.

As you'd know I lived in Switzerland.  Their system was designed to force consensus.  This is quite alien to us as we are used to an adversarial system where one party is clearly in charge and the other is in opposition.

Reform of our constitution in the direction of Switzerland, Germany or New Zealand is highly unlikely.

The biggest thing we have is the Senate.  We have the most powerful uppper house in the world, outside the United States. If people want to restrict the power of the lawmakers, we have a very powerful model based on the US model (and in part the Swiss model)..... the Senate is the circuit breaker.

Australians have long known this and used their votes accordingly.

The situation we have right now is most unusual.  We don't need to change our system to ensure checks and balances. We have a fine federal system in my view.

If you think Howard and Co should be restrained then you should consider your vote in the Senate.  This is the Australian way.

I love our system.  We weigh up the powers between state and federal and then we weigh up how the federal power itself should be comprised.

It is a lovely system.

If you want to vote Liberal but have them restrained then vote otherwise in the Senate.  Same for the other way.  We have always done it that way.

I LOVE IT.

I wrote in this piece: "I know it's a hopeless cause, but I reckon The Greens and FF would do well to consider giving preferences to each other before the old parties in some States or Territories at the Senate election."

Yep, hopeless cause. My guess is that Canberra Greens were seeking a preference swap in the ACT Senate election. That would be in FF's interests, I'd say, because Fielding gets power if the balance of power is with the new parties. Getting The Greens' Kerrie Tucker up in the Senate would immediately deliver power to Fielding, because a swap of a Liberal Senator for a Green would mean the Government would lose the Senate numbers. Never happen though, I guess. Today's press release from Senator Fielding:

BOB BROWN’S HYPOCRISY ON PREFERENCES

Bob Brown’s hypocrisy on preferences is breathtaking.

For months he has been demanding Labour swap preferences with the Greens and warning Labor not to do a preference deal with FAMILY FIRST.

Bob Brown has warned Labor that, if it swaps preferences with FAMILY FIRST, the Greens will not preference them.

In fact, he has warned of “open revolt” among Labor members if the party gives preferences to FAMILY FIRST.

Why then do the Greens themselves want to enter into a secret preference deal with FAMILY FIRST?

“A staffer from Bob Brown’s office has phoned my Canberra office twice in the last few weeks saying the Greens want to initiate talks about a preference deal with FAMILY FIRST,” Senator Fielding said.

“The hypocrisy is breathtaking.  While the Greens have publicly been trying to bully Labour not to deal with FAMILY FIRST, behind the scenes they are secretly trying to negotiate a preference deal for themselves with FAMILY FIRST.”

FAMILY FIRST has not returned the Greens' calls because FAMILY FIRST has no plans to do any deals with them.

The Greens are out of touch with Australian families and small businesses and are pushing a dangerous social agenda and crazy economic ideas.  They want to give free heroin to addicts, open shooting galleries across the country and abolish criminal sanctions for drug users.  They also want to shut down the forestry and coal industries which will destroy thousands of workers, families and local communities across Australia.   

Margo: I see in an item in today's Herald that shoppers are more and more deserting the big supermarkets for small retailers for their fresh veggies, and butchers and bakeries are similarly benefitting. So it is not just me that is sick of the mouldy oranges in the middle of the pack. We have left Woolies permanently now in terms of buying veggies when in ACT.

I had a woman come up to me when I was last buying avocados from Woolies who whispered, they are only a third the price in the shop across the road. And she was right. And they were fresh.

So it is not all going the big marts' way it seems.

Cheers.

Margo: Yes, I saw a TV segment on that, showing independent grocers IGA were cheaper than Coles and Woolies.  And they're nicer to shop in too, I find.

Here's an example of the common ground I talked about re Family First, a press release today:

FAMILY FIRST today succeeded in amending Work Choices and doubling the protection period for workers' redundancy pay to two years. The whole Senate supported FAMILY FIRST's action.

But FAMILY FIRST is disappointed the Government did not support our other amendment to ensure workers do not lose their redundancy benefits when signing a new contract with the same employer. All the other parties supported FAMILY FIRST.

Redundancy pay is a vital safety net to families if workers lose their jobs and provides much-needed security and peace of mind.

Currently, workers could lose their entitlements if the employer removes redundancy from the new contract, because redundancy benefits are no longer guaranteed. FAMILY FIRST fears many workers might sign a new contract not realising they are signing away their entitlements, which would leave them with nothing if they were retrenched. That is a huge concern.

FAMILY FIRST's successful amendment to protect redundancy pay for two years will be a bigger deterrent to employers trying to escape their obligations. FAMILY FIRST wanted a five-year protection period but the Government would not agree.

FAMILY FIRST's action follows the Tristar fiasco where workers allege they are being kept on the payroll with nothing to do as Tristar tries to slash its redundancy bill from $4.5 to $1 million.

Jenny Hume

So today I have had enough. No more Woollies fresh for me. And I never use those petrol vouchers. The servo we use when down south may be a bit dearer but they will do all sorts of things for you when you have a need. I think we need to try and support these small businesses where we can and in any case, the stuff you buy there is often much better.

Margo: Go Jenny! 

Amazingly simple. There is no need to change laws or anything else. The power is with you (reader), it has always been with you. If you do not wish to exercise it, no need to blame others. We as individuals get the society we ourselves choose.

Personally I believe taxation is theft. Neither it, nor governments, should exist in this society. They are not needed, and never have been needed. If we are to pay tax (I accept that changing this may be too big a step at the moment), why is it, we cannot choose what direction (our) money goes in? Why is it that a person cannot make a direction that a percentage of his/her tax dollars go into health, schools, refugee's or whatever one wishes?

I believe once one knows the answer to this question, one realises why the so called system of democratic government can never work. I also believe that it is at this time, one realises this system is ultimately doomed to failure.

Ernest: Other than the gruesome attacks on the Israeli athletes, I cannot remember any so-called terrorist attacks even during the Adolf Hitler Olympics in 1936.

At the Atlanta Olympics (just four years before Sydney) there was a bombing which killed two and injured more than 100. See background on the bombing here at Wikipedia. The threat of terrorism at the Olympics was (and remains) real.

Margo: Hi Dylan. Thanks for dropping in again!

Margo: It is not just the small businessman in the shopping centre that is being squeezed. Witness the below production prices paid to dairy farmers for their milk, and no doubt to other primary producers as well. Certainly the price of meat in Woollies is a disgrace given the price paid to farmers for cattle.

And as for being the fresh food people – well, we have just shifted to a small business fruiterer to get decent product. I am sick of the bag of oranges with mouldy ones in the middle from Woollies, and the avocados that are black in the middle when you cut them. And the strawberries that have mouldy ones on the bottom. Of course you only find this when you get home.

So today I have had enough. No more Woollies fresh for me. And I never use those petrol vouchers. The servo we use when down south may be a bit dearer but they will do all sorts of things for you when you have a need. I think we need to try and support these small businesses where we can and in any case, the stuff you buy there is often much better.

Margo: Go Jenny! 

For Howard's wish to abolish the Senate's veto power, see JW Howard, late bloomer Senate revolutionary. That was in 2003. He doesn't worry about that any more, naturally.

Confuse the public and they will remove their confusion by maintaining the status quo. Confuse the public and they won't know what side is up – apathy reigns supreme.

 
History shows that when such a situation develops – like 18th century America – law and order are lost – but only temporarily. 

When a nation has a government appointed and anointed by the powers that be – that is unaccountable and unrestrained by the laws they themselves create – mayhem must result.

I believe that the build up of Howard's so-called Reservists and the right for the Army to shoot to kill is preparing – not for the action of so-called terrorists – but for demonstrations by genuine and concerned Australians.

 
We have to realise that the corporations' plans for Howard's corporation-controlled future of this land is one of a wasteland, devoid of natural resources and a massive nuclear waste dump – compliments of the Howard New Order. Bush’s “man of steel” – fair dinkum.

 
The current Howardist laws against freedom and criticism are minute compared with the plans for his future Australian White Coolie work force.

 
Can any of our mature and reasonable people remember the times when our country was respected throughout the entire world? Do any of our mature and reasonable people understand the consequences of more New Order changes to the laws of this once proud democracy?

 
Allow me to suggest that the corporations only need one more term of control to remove any possible unpunished objection to what they intend to do.

 
The increase in the numbers and power of the Federal Police – the legal right to shoot for the Military in an emergency situation – are not intended to prevent American style terrorists from demonstrating against the removal of basic human rights.

 
They are clearly as obvious as the Reserve military being encouraged by bait to serve the US military corporate in their occupation for profit in far-off lands.

 
A vote for Howard's New Order is a vote for conscription and the removal of Australia as an independent entity.

 
Let's hope that people like Mike Kelly for Eden-Monaro can make a difference. 

NE OUBLIE.

 Petrol problems about peak oil, The real reason petrol prices are high is because crude oil is $74 a barrel compared to $35 a barrel in 2004. The price of crude is high because world demand is beginning to outstrip supply. World discovery of oil peaked in 1964 and has been declining ever since. The most likely production scenario is for an annual decline in world production of 2 to 3 per cent, so that world oil production will fall to about 1990 levels by 2020. In Australia, oil production peaked in 2001.

Hi Margo, Coles and Woolworths may dominate the domestic petrol market but the real reason the prices are high is Peak Oil. I think the price of petrol is set to at least double of the next 5 years no matter who controls the market. It may even go higher if a carbon tax is applied. I think your right the smaller political parties have some great ideas that are ignored by the major parties. I would love to see the day where the smaller parties joined forces and really gave the two majors a hurry up.

The future of Coles is in doubt and with customer satisfaction like this woolworths may follow soon,

According to figures out today we are paying less for our groceries. All depends on whether or not you're on the average wage I guess.

Hope you all have a good day. John