Wry & Dry

In a galaxy far, far away... Outrageous: $118,000 for tax advice. PM "shocked and appalled..."

I.   In a galaxy far, far away...

... journalists are now warning of a late Trump swing.  Wry & Dry is trying to imagine what a 'Trump swing' looks like. Perhaps a Neolithic creature swinging on a sturdy vine suspended from the highpoint of made-in-Pittsburg scaffolding, wearing only a MAGA cap and clutching a model of the Great Mexican Wall, and swing onto the stage of a Nuremberg-rally look-alike.

Media-psephologists are now hedging their bets. But similar to Richie Benaud's famous, "keep it up-vibe and keep it interesting" exhortation to his commentating team as Australia's opponent were about to chase an impossible run scoring target, so the media must try and give the impression that Trump might still win. 

Cartoon tsar vlad meddling

As at this morning more than 60% of those who voted in 2016 have already voted.  And comparisons with Trump's win in 2016 miss the point.  Or the points.

Firstly, sleepy Joe Biden is not the hated Hillary Clinton.  She was loved in solidly Democrat states, which accounted for her 2% lead in the nation-wide polls and 3 million more votes nation-wide than Trump.  But every vote greater than 50% in, for example, California is a waste for Democrats.  Nation-wide polls miss the point.

Like assessing an ageing grandfather, it's hard to hate Biden. And Readers should look to the 'swing states': Pennsylvania, Florida and Georgia.

Secondly, a cohort of 4 years of voters who were under aged 18 in 2016 will now be voting.  Their lens will be very different from the 4 years of voters who have died and who probably voted for Trump. 

Wry & Dry will stick his skinny neck out and predicts Biden to win 356 Electoral College votes.  Trump to win 182.

II.  Outrageous: $118,000 for tax advice

Readers may have noticed an explosion of outrageousness directed at ASIC, the corporate Labrador, for paying the relocation accounting bill of some $118,000 for its then incoming Chairman, James Shipton [1].

Good grief.  Of course ASIC should have paid his relocation accounting bill, if that was part of the appointment deal.

But for KPMG to charge $118,000 for providing that advice is nothing short of outrageous.  This was a prime opportunity to plausibly rip-off a government body for vast sums.  Only charging $118,000 shows that KPMG just doesn't get it.  The bill should have been at least half a bar (i.e. $500,000+).  

Cartoon kpmg tax

International tax advice, involving three jurisdictions: Hong Kong (always complex); the Yoo-Ess-Ay (labyrinthine) and Australia (getting trickier), is a fertile ground of low hanging fruit fees.

KPMG have let the profession down.

[1] Disclosure: Wry & Dry once received a death threat from a constituent of Mr Shipton's father, the late Roger Shipton, former federal member for the seat of Higgins.  Wry & Dry had the temerity to publicly suggest that the very blue riband seat should be occupied by a person other than Mr Shipton.  It soon was.  And the death threat was ignored.  

III.  PM channels Captain Louis Renault

Readers would have seen that the CEO of AusPost, Christine Holgate, has been given a yellow card by PM Jimmy Morrison.  As a reward for executing an amazing deal [2] for the company (and its shareholder, i.e. we-the-taxpayer) and its customers, Ms Holgate gave Cartier watches to the total value of $20,000 to four senior executives. 

Cartoon cartier watch

In a shabby channeling of Captain Louis Renault [3], Jimmy Morrison said that he was, "shocked and appalled..." and demanded that Ms Holgate be stood down.  What sort of irrationality is this?  AusPost is a self-funding commercial business.  The watches were all about providing staff with incentives to do deals that enhance the company's ability to serve the needs of its shareholders and, importantly, customers.  Under Ms Holgate's leadership AusPost has done a terrific job in transforming itself to a digitally-enhanced provider and being nimble enough to compete strongly against the likes of DHL and UPS.

PM Morrison took the easy and populist route.  He needed to show spine.  He didn't.  His comments and (illegal) direction for Ms Holgate to stand down were inappropriate and cheap politics.

He should show some Christian humility, apologise and back down. 

[2] A deal worth $66 million to the taxpayer-owned company.  It was for a new service called Bank@Post, which allows customers to access banking at the post office. The deal was with three of the four big banks (ANZ didn’t sign up).
[3] Louis Renault was the delightfully corrupt Chief of Police in Casablanca.  Readers should watch: Click Here. 

IV.  It's different this time...

For FY-15, Apple, that somewhat large maker of mobile phones and other things, had earnings (EBITDA) of $77.9 billion.

For FY-20, its EBITDA was $78.8 billion.  That is a 1.15% increase in profit over 5 years. 

However, over the 5+ years since 30 June 2015, its share price has risen by over 300%.  Go figure.

Or read today's Investment Matters (click the icon at the foot of Wry & Dry) for the full story.

V.  There will not be a Trump election theft

Wry & Dry has been besieged by Readers' emails asking will Tax-What-Tax-Trump steal the election and stage a coup?

Cartoon steal an election

Readers can be reassured that he doesn't have the competence to steal an election.  Ponder the pantheon of global bullies: for example, democratically elected [4] Tsar Vlad and Sultan Recep Tayyip Erdogan spent years carefully laying the groundwork for autocracy.

Autocracy-via-Democracy 101: 1.  Gain broad public support; 2.  Get mates to control the mainstream media; and 3.  Appoint toadies to key positions in the military. Then wooshka, success. 

Tax-What-Tax-Trump fails on each critical success factor.  He does not have broad public support; 80% of mainstream media is not controlled by his allies and he is despised by his own Secretary of Defense.

Wry & Dry's spy at the Wharton School at PennU has discovered that he got a C minus in Autocracy-via-Democracy 101.  Which is better than the Es he got in Business Analytics; Financial Accounting and Ethics.  Still hats off for his A... in Hairstyling 101.

[4]  Even Hitler was democratically elected. Well, sort of.

VI.  Sultan of spin

Turkey's Sultan Recep Tayyip Erdogan is grumpy with France's M Macron.  It's not about French backing for Libya's rebel leader in battles against Turkish-backed local militia; French military support for Greece and Cyprus in response to Turkey's claim to energy reserves in the Eastern Mediterranean; or even Macron's condemnation for Turkey's "bellicose" support for Azerbaijan in its war with Armenia. 

It's about Macron's condemnation of Islamist extremism after a Chechen terrorist decapitated a French teacher who showed pupils a cartoon depicting the Prophet Mohammed.

The Sultan said that Macron needed a "mental health check up."  Nasty stuff, indeed.  And then he called for a boycott of French products.  But not all heeded the call.  Wry & Dry notes that over 50% of Turkish Airlines fleet is produced in Toulouse, the home of Airbus.  And senses that sales of French champagne and wine will not be affected.

Last night's murder of three churchgoers in Nice by an Islamist terrorist has been met with silence by the Sultan.  But not by former Malaysian PM Mahathir: Muslims had the right to "kill millions of French people for the massacres of the past". 

Sigh. 

VII.  Red rooster to feather duster

The phrase 'rooster to feather duster' comes to mind.  Readers will recall that less than 12 months ago Jezza Corbyn was the Leader of Her Majesty's Opposition in the UK parliament.  He was a chance to be the PM.

Almost.  Well, lucky to get a touch, actually.  He led the UK Labour Party to a disastrous defeat at the hands of Borisconi.  And now he has been suspended from the party, because of his tolerance for anti-Semitism.

The UK's Equality and Human Rights Commission had found Labour guilty of unlawful acts of harassment and discrimination as a result of "inexcusable" failures to tackle anti-Semitism under Jezza's leadership [5].  The new Labour Leader, Sir Keir Starmer, showed commendable leadership and suspended Jezza from the party.

Cartoon Jezza

Jezza had two alternatives:

a.  Choose humility: accept the suspension and work through the issues with the independent EHRC and the party; or

b.  Choose martyrdom: fight the suspension, mobilise his supporters and far-left unions with all guns blazing.

Entirely predictably, he has chosen the latter. 

This, just as Borisconi was on the ropes over his government's management of Brexit and coronavirus.  But red roosters never die.

[5]  The EHRC found Labour had broken the law in relation to harassment, political interference and inadequate training for staff handling anti-Semitism complaints. The lapses "appeared to be a result of a lack of willingness to tackle anti-Semitism rather than an inability to do so", it said.
It found 23 instances of Mr Corbyn's office exerting influence over decisions on whether members should be suspended or investigated, including one complaint made directly against Mr Corbyn. In its findings, the watchdog said there had been "serious failings in the Labour Party leadership". Its lead investigator, Alasdair Henderson, described Mr Corbyn as "ultimately accountable for what happened at the time".

VIII Hearts of Oak

Nothing swells the hearts of Brits as dering do action by the SAS (Special Air Service) or SBS (Special Boat Service). 

So when the BBC reported on Monday morning that SBS commandos had taken control of a hijacked oil tanker, the Nave Andromeda, Brits would have nodded quietly and knowingly to one another on the Tube or in the bus queue.

Err, degree of difficulty 0.1.  The vessel was 1.5 kilometres off the UK coast, 5 kilometres from the Royal Navy's massive base at Portsmouth.  There were seven hijackers, who were actually Nigerian stowaways seeking asylum in the UK.  They were armed with 'sharpened objects or even knives.'  The operation took nine minutes.  No shots were fired.

Cartoon SAS

Still, doubtless good enough for gentlemen of the gentlemen's clubs in St James to "meet at the The Club for lunch" and bore one another with expanded stories of their own adventures.   

IX.  Bookies' corner

Put your glasses down:

Biden: $1.52  (last week: $1.53)

Trump: $2.60  ($2.60)

Source: Sportsbet.

Snippets from all over 

1.  Inflation up

Australia recorded the biggest quarterly rise in inflation since 2006, increasing 1.6 per cent in the September quarter.  

Wry & Dry comments:  It follows a record fall of 1.9% in the June quarter - the first deflation since 1998.

2.  Cathay consequences

Cathay Pacific's cull of 6,000 employees has already had consequences: apartment rents in Discovery Bay have fallen by up to 20%.

Wry & Dry comments:  This will get worse. 

3.  US defaulted bond auction payouts hit 3.5 cents in the dollar

The median value for bankrupting companies’ cheapest debt in credit derivatives auctions this year is just 3.5 cents on the dollar, a record low and far below the 23.4 cent median for 2005 through 2019. 

Wry & Dry comments:  In the search for higher income investors have bargained away legal protections, accepted ever-widening loopholes, and turned a blind eye to questionable earnings projections.  But now that the coronavirus downturn has truncated revenue, many companies cannot service their debt.    

4.  China struggles to meet target

China ramped up purchases of American goods in September as its economy strengthened, though it still remains far from the full-year target set out under its Phase One trade deal with the U.S. 

Wry & Dry comments:  The monthly value of U.S. goods that China bought reached $9.9 billion in September.  That still leaves China’s purchases at only 38.5% of a total target of more than $170 billion for the year.

Chart US China trade

 Cartoon china trade

5. Somebody turned off the lights

Californian power company PG&E is pre-emptively cutting power again in northern California, affecting 386,000 homes and businesses in 38 counties, or nearly 1 million people. 

Wry & Dry comments:  It's the fourth times this year the state’s largest utility had to shut off electricity due to high winds and extreme wildfire danger, which could spark blazes if live wires topple into dry brush. 

And, to soothe your troubled mind ...

Miscellany 

Last words ...

"If China wants to defeat the US, Trump is the best weapon.  Only through him can we see the collapse of Rome.  Trump's destructive power to the US is more than that of 100 nuclear bombs.”

 -  Mr. Wang, a Chinese property broker, writing on WeChat.

'Mr. Wang' is probably a pseudonym for Xi Jingping.

A lightly salted absurdity ...

"I am the captain of NTHI Kallisto, a Greek navy minesweeper.  Change your bearing."

"I am a container ship fifty times your size.  Your call."

Click on the link to see the outcome: Click Here. 

 

Cheers

Anthony