The Sydney Morning Herald Calls Out the RBA

A couple of days ago the SMH posted an article in which it stated that "The Reserve Bank has been involved in the payment of multimillion-dollar commissions to shady middle-men in its drive to win banknote printing deals with foreign governments."

(side note: The URL I was using now points to a SMH website, though my initial observation (and the RBA's response) refer to an article in the Age)

It then goes on to imply that the RBA has been involved in some sort of bribery or corruption scandal.

It soon becomes apparent to the reader that it is not the RBA iteself which is being accused, but a firm, Securency - the RBA being a 50% shareholder in Securency.

Later in the article, the SMH presents four pieces of evidence upon which it seems to have rested its entire argument.

Evidence Part One:

* Made payments to a London firm, Contec Global, which was accused in an official Ugandan inquiry of having a corrupt relationship with a Ugandan minister found to be "fronting and lobbying" for the company.

What's this? Securency paid a separate firm for services rendered and that firm was accused (not found to have mind you) of having a corrupt relationship (which is what exactly? bribery? family ties? the director went to the same school? the Ugandan government didn't like him and Contec wasn't mean to him?). So, the RBA is guilty because it is associated with an organisation that was (no comment on whether it still is) associated with an organisation that may have been involved in a corrupt relationship of an undefined nature and magnitude.

Evidence Part Two:

* Been linked with a controversial South African casino tycoon, Vivian Reddy, who was embroiled in the recently aborted corruption trial involving his friend, the President, Jacob Zuma. Reddy denies the allegations.

Wow! The RBA is associated with an organisation that has links to a significant financial player in one of the many countries it operates in and that financial player possibly has links to a third (fourth? fifth?) party who was recently tried for corruption, but the trial was aborted...

* Made payments to companies linked to a South African businessman, Don McArthur, who last year was convicted for fraud. McArthur denied any link to Securency.

Securency made payments to a company that is linked to a businessman who committed fraud. One has to wonder if the SMH has ever paid a business in Australia for a service rendered, and at some point after that said business was found to have committed fraud somewhere along the way.

* Paid million of dollars in commissions to a Vietnamese company, CFTD, whose subsidiary, Banktech was managed by the Vietnamese central bank governor's son at the time the bank decided to switch to polymer notes in 2002. A 2007 Vietnam corruption inquiry found the governor's role in the deal was irregular.

Finally, something with some vague substance to it - at least in this one there was a definitive finding of frau... corrrup... oh, irregularity. On the part of the RBA through Securency linked to a company which owned another company which was managed by the son of a guy who was found to have acted irregularly.


I don't want to suggest that Securency shouldn't be in great amounts of trouble and an appropriate investigation launched if there is some actual substance to the claims made by the SMH. (I note that the RBA has let us know that the Board of Securency has referred the matter to the Australian Federal Police, so I guess we'll find out eventually). However, it is grossly negligent of the SMH to make such accusations if this is the strongest evidence they have (and one has to wonder, if they have stronger evidence, why didn't they present that too?)

Is it really enough in today's society, that if you know someone who knows someone who knows someone who may have done something that might not have been completely upstanding, then you yourself have acted immorally, improperly, and committed a crime?

Sadly, I guess that is the case. It seems to be increasingly prolific in our increasingly interconnected world. Two relatively recent examples being:
* the increasing levels of separation that ACMA is happy to hit you up for
* Mr Rann's disgustingly anti-freedom and, in my opinion, immoral anti-bikie laws (of course, it should be noted that whilst they are sold as targeting the bikies, there is little reason that they couldn't be used against other groups in the future)

It's getting towards the point where I need to be able to buy a small pacific island and live out the rest of my life there, free of the growing authoritarianism, hatred, and censorship of our governments.

Budget First Thoughts

I've spent the last fifteen or twenty minutes taking a very brief look over some of the budget papers released tonight. I intend to post a more considered and detailed response to the budget late on Thursday evening.

But I thought I'd throw my first two or three thoughts out here for your perusal.


Overall Impression: Good on the surface, but full of holes on even a slightly closer inspection.

Specific Notes:

Changes to Youth Allowance - probably quite good. I've little problem with removing the impetus to take a gap year. Dropping the age to 22 is a strong idea as well, though it'd be nice to see it done a little quicker than is proposed (of course, I also see the need to spread the costs at least a little this budget). Increasing the amount you can earn before losing YA is a god send. This is one section I will definately be having a closer look at - one of my main concerns remains the effect YA has in delaying entry to the workforce, which is by-and-large detrimental to your ability to get a good job once you've graduated. But, overall I think the YA changes are quite positive.

Uncapping University Places -!!! I have died and gone to heaven if I've read this part correctly and if the details follow the general direction in the way that I hope they do. I will definately be returning to this section for some detailed commentary.

Infrastructure Projects - good to see some cash flowing this way, though I withhold judgement until I've had a closer look at which projects the cash is flowing towards.

Paid Parental Leave - Yay! Finally we're not completely backwards in this regard. Again, I reserve judgement until I've seen the details. I'm ecstatic (and surprised) that it's parental leave and not maternity leave. I hope there are no provisions requiring employers to increase the parental leave they already offer. Real wages need to drop (and will one way or another), and relieving some of the parental leave burden from those employers that do offer it is a nice way to do this (plus, forcing them to do so would punish those employers that had already stepped up and offered parental leave whilst those employers who haven't the moral decency to step up will now reap the benefits... And that's enough hypothetical conjecture).

First Home Owners Boost - the FHOG is still bad economics. I wish they'd axed it.

Age of Retirement - I am absolutely amazed that they were prepared to move the age at which you become eligible for the aged pension, admittedly it's only a small increase from 65 to 67 (and I've yet to look to see for changes in superannuation access age and the like). Still, I'm amazed they were willing to do this. Without real investigation my greatest qualm is probably that they should've taken the opportunity to up it a little more. Given the ageing population, it's likely it will need to be increased again and I wouldn't count on future governments having the political will to do so (I didn't expect this one to have the will, I guess that's an advantage of being able to point to the GFC and blame it).

Nurse Practitioners to get access to MBS and PBS - Fuck Yes! About goddamned time. Now, they need to expand the role and increase the number of nurse practitioners. (I can only imagine the current howling of hatred and "you'll kill everyone" that must be flying through the AMA at the moment). I will definately be taking a closer look at these changes.

Defence Spending - The word 'dubious' doesn't begin to cover my reaction to this area of the budget.


All in all, I'm quite optimistic that this is a good budget, especially if the projections for a return to surplus are accurate and feasible. The proportion GDP of the deficit is less than I had anticipated. Many of the changes are superficially brilliant, I am most eager to take a closer look at these changes and see if their details hold up to their promise.