ASIC’s plan to put warning labels on financial products

ASIC

It has recently been reported that financial regulator the Australian Securities and Investments Commission (ASIC) wishes to apply warning labels, not unlike those seen on cigarette packets, to various financial products.

Investor warnings could be slapped on a host of complex and risky financial products in the same way as the graphic warnings on cigarette packets, under new safeguards being considered by the corporate regulator. … ASIC could use the power to impose conditions on risky investment products such as restricting access for self-managed super funds, requiring retail investors to obtain financial advice before they could invest or slapping warnings on product disclosure statements and prospectuses for example telling investors, “Your capital is at risk”.

This kind of proposal, when bureaucrats elect to involve themselves in consumer calculations about the balance between risk and return, is plainly inconsistent with a liberal society in which we are meant to lean toward dignifying people with the capacity to make their own financial choices.

In this case, ASIC would privilege themselves with standing in for consumers when making decisions balancing the costs and benefits (as filtered by risk-return considerations) when purchasing certain financial products. This substitution of political for individual decision making is, if nothing else, particularly elitist in its character.

Another concern would be that consumers might well elect to take government recommendations about risk assessments at face value, depriving themselves of learning opportunities about what financial product configurations best suit their needs.

As Chris Berg noted in his book, The Growth of Australia’s Regulatory Statethe trouble with mega-regulators such as ASIC is that they see very few limits to their regulatory domain and this leads to undue costs imposed upon the productive economy.

When ‘everything is on the table’ in policy terms is the time many illiberal ideas come out into the open. Let’s hope Treasurer Scott Morrison has the energy and foresight to prevent ASIC indulging any further with this particularly illiberal idea.

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Matt Ridley on climate wars damage to science

Viscount_RidleyMatt Ridley’s June essay for Quadrant on the damage that the climate debate is doing to science has been re-published by the Global Warming Policy Foundation with a new introduction, and is well worth a read.

Ridley, who describes himself as a “lukewarmer” (someone who believes that that the climate may be changing but that the effects are nothing to worry about), details how many of the climate change claims made by scientists over the years have not held up to independent scrutiny and how the reasonable middle ground in the debate has been cleared away.

He finishes with the sentence “Yet they are not prepared to debate the science behind their concern. That seems wrong to me.”

Read the whole essay here.

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Top 3 articles from this week you must read

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Arthur C. Brooks

1. Matt Ridley’s terrific essay on the damage global warming alarmists are doing to science is a must read

2. In the New York Times on Saturday, Arthur C. Brooks slammed academia for promoting diversity, without actually practicing it

3. From the “population bomb” to catastrophic climate change, it seems progressives always champion doomsday ideologies. See Bret Stephens excellent article In The Australian yesterday here ($)

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Desalination plant bill will take decades to pay off

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Governments no doubt love how they can make taxpayers foot the bill for their own mistakes

Back in 2007, under the influence of people like Tim Flannery who implied that the dams may never fill again, the then Victorian Labor government commissioned the southern hemisphere’s largest desalination plant at Wonthaggi in the state’s south-east.

In reality, Victoria was in the middle of one of Australia’s regular droughts, which broke in 2010 as it always does. Since it opened in 2012, the desalination plant has been unused.

While this was one of many desalination plants built around the country (see the results here and here), this one was particularly notorious for its $6 billion construction cost, obscenely generous working conditions and alleged involvement of undesirable elements. If the construction costs weren’t bad enough, the repayment terms negotiated by the government amounted to $18 billion over the 27 years to 2039 – and that is without ordering any water. Yes, if you actually want any water it costs extra.

Today’s Herald Sun reports that Melbourne Water has proposed that repayments now be spread over 60 years rather than 27 years, to allow household water bills to be reduced by a total of $100 over the next five years. This proposal sounds suspiciously like toll road operator Transurban’s plan to build some roads and tunnels in Melbourne’s west in exchange for extending tolls on its flagship CityLink project from 2035 to 2050.

Forcing our grandchildren and great grandchildren to pay, so that water bills can be cut in the lead-up to the 2018 state election is a shocking idea. This proposal should be rejected, and taxpayers in other states alert to any similar proposals in the future.

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BMW ad banned for encouraging dangerous driving

Following complaints from just three viewers, this BMW television ad was banned in the United Kingdom, for supposedly encouraging “irresponsible and potentially dangerous driving.” Take a look:

This looks less like a dangerous ad, and more like an advertising standards bureau that doesn’t have enough work to do.

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Climate change credibility under question

Day-After-Tomorrow

The New York Times has published a report claiming that the Chinese government has been sprung understating its national coal consumption, and noting that this could “complicate the already difficult efforts to limit global warming.”

This is putting it mildly. The whole of the UN’s approach to climate change depends on countries being “honest” about carbon dioxide emissions and targets. That China’s figures are already being questioned should be particularly embarrassing for environmentalists, given how they have consistently praised China for its Paris targets (even though China is actually increasing emissions by 150 per cent, which alarmists spin as reducing “emissions intensity“).

Interestingly, despite a largely compliant media, scientific and political community, campaigners have been unable to keep a lid on a number of inconvenient truths over the last month.

In mid-October, the prominent Sierra Club found itself unable to explain the 18 year pause in global temperature increases and the Indian village of Dharnai’s failed flirtation with a localized energy grid revealed the emptiness of green propaganda.

Only three days after I highlighted the potential for future power blackouts due to its increasing reliance on windfarms and a single interconnector with Victoria, South Australia suffered a blackout due to an unexplained interconnector failure. Incredibly, the ABC found another culprit for the problem (check the story’s first line…).

In France, a popular weatherman has been sacked for questioning climate change, and in the UK, as warned in FreedomWatch in July, the National Grid has for the first time used new emergency measures to pay businesses to reduce electricity consumption. Britain’s wind farms were generating only 0.5 per cent of the nation’s power or barely 3 per cent of their installed capacity.

With the science increasingly contested and renewables-rich power networks already under strain, environmentalists will be desperately hoping the New York Times story does not get legs.

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High Court finds procedural fairness denied

Interesting case decided in the High Court this week:

Judges unanimously found the man, referred to only as WZARH, who arrived at Christmas Island in 2010, presented his case for refugee protection to an independent reviewer.

But his case was taken over by a second reviewer who rejected the claim after considering the transcript and audio recording of the first interview and without conducting a second interview.

The judges ruled that procedural fairness required that the man be informed the review process had changed, allowing him to be heard on how it should proceed.

See the summary, and the Court’s full judgment here.

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“So no one else had to read what I had to”

Check out this bizarre video posted on the Australian Human Rights Commission’s Youtube channel:

In case you missed, here’s a screenshot of the best (worst) part, where the offended narrator touts the power of the AHRC to demand website remove content “so no-one else had to read” what they had to:

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Taxpayers have no business funding an organisation touting its ability to restrict our liberties”just like that”. It should be abolished.

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New gambling tax thought bubble would hurt more than help

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A common complaint about gambling taxation levied by the states and territories is that by virtue of receiving over $5 billion per annum from these taxes, governments become addicted to gambling itself.

But with the federal government itself crippled by a persistent overspending problem, it was only a matter of time before someone in Canberra would float thought bubbles to take their slice of the gambling revenue pie.

And so it is with news Nationals senator Bridget McKenzie is suggesting a new federal gambling tax:

The guts of the proposal would see a uniform tax applied to the gaming industry, with revenue to be distributed across the states that currently regulate the industry. Some revenue would be reserved for regional development projects and for harm minimisation programs.

Based on the reporting, and a reading of her submission to the Tax Review in June this year, the proposal for additional taxes on gamblers seems predicated on a desire to quell online gaming – particularly the sports betting market – presently accessed by Australians.

Regardless of whether the betting games are being played in a hotel or a casino, or on somebody’s smartphone, the fact is that taxes on gambling tend to be regressive in their incidence.

When Prime Minister Malcolm Turnbull mentions that “fairness” ought to be a criterion when judging the efficacy of policy change, it becomes entirely appropriate to ask if a proposed new federal gambling tax is at all reasonable.

Senator McKenzie might decry the lack of a “national approach” to the gambling issues that concern her, but intimating that federal intervention in this area will come without cost remains very much an open question.

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Melbourne school bemoans the need for students to learn facts and be competitive

IB

In a Victorian first, Preshil school is set to phase out the Victorian Certificate of Education (VCE) and replace it with the International Baccalaureate. Principal Marilyn Smith explained that the decision to scrap the VCE was due to “it’s narrow focus on competition” and a need for learning that didn’t revolve around “just learning conventional facts”.

The decision follows in the steps of a growing progressive Left trend to erase competition from all walks of life and create a magical utopia where everyone is a success story simply because they exist. This ideology also manifests itself in some junior sports where scores are no longer kept, or in the most utterly insane cases, where teams that lose by more than 5 goals are declared the winner!

It’s nice to think that, after millennia of striving for a better life, free of war, poverty, hard labour and disease, we can simply down our tools and finally bask in the warm and fuzzy glow of life. A life where we can all just stop competing, be nice to one another, and where nobody ever has to feel sad or disappointed ever again. Oh, and we can stop worrying about learning those pesky “conventional facts”.

Back in the real world, however, we see that it is in fact a desire for a better life that motivates us to compete and constantly better our past efforts. Nowhere is this more evident than in the continual growth of free and competitive markets around the world, lifting people out of poverty on an unprecedented scale. Rather than holding us back from from a better life, competition is delivering us to it.

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