This regular feature is back again. The idea is that, over the weekend, you should post your thoughts in a more leisurely fashion than in ordinary comments or the Monday Message Board.
Please post your thoughts on any topic, at whatever length seems appropriate to you. Civilised discussion and no coarse language, please.
John Quiggin 
Long time reader, first time post…thanks for the opportunity John. My question for the weekend: is anyone else concerned, from an efficiency point of view, with the rise of these Pentacostal ‘mega-churches’? In recent months the BRW has published a number of articles discussing the asset and revenue streams of these churches, which for some of these churches totals millions of dollars annually.
My main concern is two fold. Firstly, I consider the granting of tax concessions to charitable organisations to be a fundamental breach of the separation of church and state (although not enshrined in our constitution, I think this is a fairly crucial aspect to our secular political system). People will no doubt argue that many charitable institutions are not religious or associated with any church, and this is valid. However, overwhelming evidence suggests that on both a revenue and asset basis, churches dominate the not-for-profit sector.
Which brings me to my second point – has a cost-benefit study ever been done on the forgone tax dollars versus the purported welfare benefits of these churches? Many of these churches, and Hillsong is perhaps the largest at the moment, are effectively running commercial enterprises with huge tax concessions. Pizza shops, recording studios, lawn mowing rounds, and Sanitarium Food Co are all examples cited. These do not sound like social welfare institutions to me…
So, does this concern people? As I see it, secular Australia is subsidising churches to run commercial ventures, with this money being used to fund personal ministry and expansion, not social welfare. Of course, this does not apply to all churches, but there is currently no accountability, or requirement that churches uses a percentage of revenues on social welfare. What are your views on this John?
Some more good news from the Arab world which suggests things are finally changing for the better following the implementation of democracy in Iran and the removal of the Taliban. A recent survey of Arab opinion found that many Arabs no longer follow their governments’ and the media’s line and accept that Israel and the US are to blame for their problems. The survey asked what Arabs thought about the relative lack of economic progress in the Arab world. In answer to the question, “What is stalling development in the Arab world?,â€? 81 percent chose “Governments are unwilling to implement change and reform” while only 8 percent cited “The ongoing Arab-Israeli conflict,” I wonder if western academics, journalists such as the odious Robert Fisk and a number of contributors to this blog will now get the message.
Stay. On. Message. Stay. On. Message. Stay. On. Message.
“the implementation of democracy in Iran”
As Rove might say, “What the … ?”
A significant fall in the current account deficit announced yesterday. Stoney silence from the Chicken Little brigade. I did think the ALP was really spinning it by reminding all that it is the 42nd defeicit in a row, and the ABC carried out their duty in solemly reporting that fact – that it was the 42nd deficit, not the significant fall that smashed market expectations or the revision downwards of the previous deficit.
Sadly for your argument, Razor, it was the trade deficit that was announced, which forms only part of the much bigger current account deficit.
Oh well. Better luck next time.
Dave, if you are going to criticse someoone with your usual sarcasism, whether it be politics or economics, get your facts right. Now there is a good deal to criticse about the libs economic policies and about previouis policies under Labor governments. However, the anglo-saxon economies are doing very well relative to Europe and Japan. This should, at least, suggest that a bit less heated rhetoric is needed from those who favour a more interventioniist approach.
Re the defifit, well as Ross Gittins has pointed out, Australia has run a current account deficit in virtually every year since white settlement. As a young economy we have had to place a greater reliance on foreigners to invest. Most of the money companies have borrowed has gone to finance productive investment – we are not going down the econoic tube in other words.
Adam, I have been confused and surprised by the growth of these churches, which I have also observed to be growing very strongly . Never thought of the commercial aspect though an agree that it does not seem right that they are being given beneficial tax advantages to conduct business.
What bothers me is that they might start to exert a religious right type influence in Oz, I guess it already started with Family First. Cripes, do we always have to follow the US?
On 2nd thoughts I doubt anything serious will materialise. Aussies just aren’t as feverish as the Yanks.
Dan
Rather harsh Michael. Dave looks to have merely replied to Rzor in kind.
Moreover, while Autralia has generally run current account deficits, these have been in the 2-3 point range, not 6-8 (or closer t, and were also historically comprised of more long-term equity, not accumulating debt as is now the case.
Sorry, that posted before I had finished corrections – naughty blog.
I was going to say “… (or closer to 10 points after taking out cyclical factors, as John recently pointed out) and were…”
Adam and Dan ,I too, have concerns about the rise of the religious right in Australia. We do not have the puritan background of the States,true.
The money that they are generating is of concern. Particularly as they are moving into direct competion with mainstream business and maintain special non-tax advantages.
Hate to start up a pizza shop with my secular inclinations and be overun by the guy next door, who was doing it for jesus or allah, with volunteers and not paying tax. Just hope the taxation department is working on the blurring of the lines between church and state.
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Michael as a long-time supporter of democracy and economci reform in the middle east, what message exactly is it that I’m supposed to get?
Bob Carr, and he is not the frist politician called for a “debate”, or at least consideration of the introduction of nuclear power to replace coal fuelled power stations. That seems to be about the choice, since alternative energy sources cannot fully replace coal stations, as Carr pointed out, and not to mention the environmental downside of wind power. A possible solution here might be to replace the centralized power system with a more decentralized system, making use of alternative energy and reducing carbon emissions.
I realize that nuclear energy is one of those hot button issues. Bob Brown and Helen Caldicott have already rejected the proposal outright, pointing the set of environmental, healthy and safety dangers. But nuclear power is an old enough technology that enables us to look at case studies, other than Chernobyl. Sweden, following a referendum 25 years ago, has just decommissioned its last nuclear plant. Now it is said that 80% of Swedes support the re-introduction of nuclear energy, not surprising since in 2003 with eleven stations produced 45% of their energy, and now it is believed because alternative energy, specifically wind, cannot replace the nuclear deficit, Sweden will have to import coal produced electricity adding to the problem of acid rain.
Meanwhile, Finland is going ahead with building more nuclear power stations. Who is right?
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Michael how abotu those of us who are critical of the current government, were critical of the Labour government and favor a less interventionist policy? Can we be heated in our rhetoric?
Regarding the taxation of Church assets and income – Australia has a far less generous approach to taxing religious institutions than, say the US.
In theory at least, commercial enterprises run by Churches are taxed in this country.
Of course there’s nothing to prevent those commercial activities hiring adherents of the church in question and then putting pressure on them to donate a big chunk of their wages back to the parent organisation.
wmmbb,
Nuclear power is considerably more expensive than coal-fired or gas-fired power in Australia. While the energy generation part of the nuclear power cycle may not generate CO2 emissions, the mining part of the cycle requires the moving of millions of tons of ore – using CO2 emitting fossil-fuel-burning equipment.
It makes a lot more economci sense for Australia to continue to use coal as a fuel source, possibly combined with co-firing of biomass and to reduce our net emissions in other ways such as reafforestation, carbon sequestration and the use of ethanol and biodeisel.
A carbon tradign scheme, whether linked to Kyoto or not, would provide a mechanism by which the market could determine the most effective way of achieving a given level of reductions in emissions.
I don’t rule out nuclear power as one possible contributor to that but I think government shouldn’t be acting as advocates for nuclear power or any other form of energy generation.
I’ll also mention that the new combined-cycle coal plants produce only about 1/4th as much CO2 per unit of output as older plants. While they’re more expensive to build than conventional coal-fired plants, they still appear to be cheaper than nuclear power-plants.
David,
what Michael is of course referring to is the growing democracy movement in Iran. Sometimes we need to read into a line or two to understand what is meant. I would think a “normal” person who knew a little about Iran at the current time would put that together and undertand what Michael was saying. Of course, why do that when a good sneer, disdainful, nasty little comment will do, hey.
There are some Iranians who believe we are not too far away from that push to get the Mullahs out of the picture. This of course is debatable, would be good if true. That’s all Michael was saying.
David, please correct my propositions for errors as I ‘am too lazy to use spell check.
Thanks
Someone has to say that the Waratahs are very stupid for buying Wendal Sailor.
“I wonder if western academics, journalists such as the odious Robert Fisk and a number of contributors to this blog will now get the message.”, from Michael is a line which is pretty well described by
“a good sneer, disdainful, nasty little comment will do, hey…”
I must be “abnormal” because I think that this statement: “Some more good news from the Arab world which suggests things are finally changing for the better following the implementation of democracy in Iran and the removal of the Taliban.” does refer unequivocally to something that has occurred already, since the current events are following it.
Thank you, S Brid.
Anyone else think that the nuclear option is simply being introduced as a strawman?
Carr wants to go ahead with a new coal-fired plant at Lithgow. The nuclear option will be carefully reviewed and rejected, in favour of the coal plant.
An interesting article in this week’s Fortune (Justin Fox) ‘Betting Against the House’ comments on a theme often raised on Prof Q’s Blog. That in irrational asset markets it can be unwise to bet on a price fall. House prices in London — up 200% in a decade – are due for a correction and warrants can be purchased which yield profits once the inevitable fall in house prices occurs. But almost no-one is purchasing them despite unanimous agreement that prices are (eventually) due for a tumble.
The article also discusses the second edition of Robert Shiller’s Irrational Exuberance which includes a new chapter on the US housing bubble. US house prices in 1980 were in inflation-adjusted terms about their level in 1895 but have in the subsequent 20 years risen by about 50%. Moreover there has never been anything in history like the increase in house prices over the past decade.
Again the craziness cannot continue but people are still buying. The monthly cost of buying a house is much higher than the imputed rental received so it makes no sense to buy. Again the crazies who believe that prices will continue to rise forever dominate those who make this sober calculation. Shiller plans to sell warrants in the US which allow people to profit from a decline in house prices but one wonders whether they will meet the same fate as the US securities.
It is a significant failure that would seem to be relevant in Australia as well. Massive price corrections in housing markets with a highly-indebted population could spark a terrible recession here. Isn’t this a policy issue that deserves examination? Maybe issue warrants or persuade people to do the ‘imputed rental’ versus expected mortgage cost calculation. This would apply both to new and current house owners. It would help to stabilise prices at long-term levels and smoothe the effects of a dangerous price collapse.
Testing comments????
I have commenced a campaign to rid the world of bad maiden parliamentary speeches forever! starting with Kate Ellis whose oscar-like acceptance speech scored her a 2/5.
Harry Clarke —
Recall Keynes’ comment that financial markets are like beauty contests, with one difference: Successful investors are not trying to predict the contestant who will win the contest, they are trying to predict the contestant whom the other investors predict to win. That is why it can be rational to purchase in an over-priced housing market, even when one personally believes the market is over-priced. It may even be the everyone in the market believes it is over-priced, and yet still acts this way, since they don’t know the beliefs of the other participants.
IG, I find it odd that you build in the presumption that processing ore inherently involves using fossil fuel, particularly since you then go on to mention the biofuel alternatives. The fallacy is in its worst form when people knock ethanol for the purpose, when it simply does not make sense as a single change on its own. As part of a package of measures which include other resources, it does make sense. For instance, the power machinery used in cane growing could easily be powered by bagasse burning gas gas producers, a form of fuel that would be unsuitable for many other motorised vehicles but which would work perfectly well in context.
By the way, we already know how to make fusion reactors; it’s just that we don’t yet know how to recover the excessive energy losses from bremsstrahlung that stop the reactors making break even. That secondary problem isn’t even nuclear physics, the hard part has already been done and now we only need another few decades of development using that or some other branch of fusion applications.
PML:
By the way, we already know how to make fusion reactors; it’s just that we don’t yet know how to recover the excessive energy losses from bremsstrahlung that stop the reactors making break even.
I’m sorry, but that just looks like nonsense to me. What does Bremsstrahlung have to do with it? What about all of the other energy losses? The fundamental problem is that we haven’t yet reached breakeven point, for a whole host of reasons.
That secondary problem isn’t even nuclear physics, the hard part has already been done and now we only need another few decades of development using that or some other branch of fusion applications.
What you call a “secondary” problem is actually the fundamental problem. No one has worked it out, ever. Maybe someone will work it out in another few decades. It’s hardly a developmental problem. It’s something that requires a breakthrough.
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Good point, although it seems somewhat indirect to use non-fossil fuels in order to produce another non-fossil fuel.
For the next several decades we’re likely to be using a mix of fossil (petrol/desiel) and non-fossil (ethanol/biodeisel) liquid fuel sources. Apart from anything else it’ll probably take decades to produce sufficient biofuel production capacity. If we use biofuels to produce uranium that’s biofuel we aren’t using to displace petrol or deisel in transport applications.
I don’t think we can afford to wait several decades for a replacement for current energy production systems, regardless of whether we describe the difficulties with fusion as technical or fundamental.
I hope this makes sense, I’m tired and its late.
Adam, the Pentecostal Churches do very little social welfare work akin to the sort of stuff done by the Catholic Church and the mainline Protestant churches. So if that’s the justification for their tax exemption, then we’re not getting value. However, I don’t think that is the official justification. Anyone know?
David, perhaps MB meant to refer to “implementation of democracy in Iraq” – which is also still largely in the future, although the elections earlier this year (thanks to pressure from Sistani’s mob which forced the invading/occupying forces to abandon their original undemocratic game plan for post-Saddam Iraq) were a reasonable start.