Dodgy real estate practices:

Phil Naylor, CEO, Mortgage and Finance Association of Australia, writes: Re. “Tips and rumours” (yesterday, item 7). Yesterday, Crikey published:

Be careful what you tell a mortgage broker. I recently bid for a properly at an auction in inner city Melbourne. Prior to the auction, I called a mortgage broker that a friend recommended. I told the mortgage broker about the property and I was advised by them that with the financing I could secure, I could easily bid up to $1.1 million for the property. The property sold for $1.07 million at auction and I dropped out of the bidding at $1.010 million.

A couple of days later, I spoke to the selling agent about the auction and was told that the successful bidder had “inside information” because her mortgage broker had told her that someone interested in the property had pre approval finance of $1.1million. Alarm bells rang … I called the mortgage broker and he admitted that the winning bidder was his client. A very robust conversation followed.

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Needless to say, I will not be using this mortgage broker again in the future.

The unsuccessful property bidder should make a formal complaint to the Mortgage and Finance Association of Australia (MFAA) about the broker they had this encounter with. If the broker is a member of the Association, the actions outlined by the bidder may breach of the MFAA Code of Conduct and the broker will be investigated; if found in breach, the broker will be fined, or suspended or expelled from the Association.

The MFAA Code of Conduct is currently the best form of protection for consumers until federal legislation is implemented later this year.

Unfortunately, the actions of fringe operators like this one tarnish the entire industry and we need people who have these experiences to let us know so we can put a stop to it.

Our economic future:

Geoff Alford writes: Re. “RBA minutes reveal an upbeat board of central bankers” (yesterday, item 4). In the early 20th century atomic physicist (Niels Bohr) once wrote that “prediction is very difficult … especially about the future!” Yet here we are imagining things are normal and the global economic crisis is just another recession. Even Crikey seems to follow this line, reporting Treasury and RBA forecasts, who follow their standard practices for forecasting the future by projecting recent trends, when this is a structural recession, more like the Great Depression. Hey, the mandarin emperors have no clothes! Has no-one noticed?

None of us really know whether this recession will last two years or 10 years. In the meantime, the public are kept in the dark.

Currently, we have oil companies capping wells and cutting back on exploration because the price of oil has fallen –talented oil workers are being laid off and will not be easy to get back again. So supply slows while demand remains. Soon, demand will exceed supply, but there will be a lag because of the previous short-sighted decisions… So what happens when peak oil prices come back with a vengeance? How will our predicted recovery and growth cope, especially if it depends on accessible oil?

China is getting out of US dollars and stockpiling commodities for future needs and trading. The Chinese could teach capitalism a long-term lesson. Also, I have not seen much discussion of the US dollar’s decline or the issue of food supplies in the coming future and how we secure that future. Instead the politicians and their emperors tells us that “all is well in the best of all possible worlds”, or will be until after the next election.

At least it would be a start if some realism entered the debate, just as with climate change. Apart from the acolytes on both the right and left, most of us honestly do not have the answers.

Agog with Gog and Magog:

Donald Dowell writes: Re. “Why Bush invaded Iraq: the war on Gog and Magog” (yesterday, item 1). Is Clive Hamilton serious with that ludicrous story of Bush invading Iraq to bring on Armageddon? Talk about believing what you want to believe. Bush always gave the impression of being born — again to better garner the sizable evangelical vote, and from stories of his college years, the last thing on his mind was the “End of Days” etc. More like where’s the next tok…

I thought climate change sceptics were ridiculous with their conspiracy theories of scientists fudging evidence for all those juicy research funds, but this takes the cake.

Chris Hunter writes: It’s not hard to be agog at the Bush epistle invoking the unleashing of Gog and Magog on the four quarters of the earth. For the majority of sane people on the planet US policy in Iraq was always on the nutty side, hence their reaction.

But what about our own Great Crusader, John Winston Howard? Where does he fit into the overall scheme of good versus evil? Does he still continue to keep his armour ready and oiled for that final battle prior to the New Age beginning?

The cost of smoking:

Martin Gordon writes: Re. “Budget causes Rudd honeymoon to end… according to Fairfax” (yesterday, item 3). I had not expected to hear it again in my lifetime, where an argument for increasing tobacco excise was seriously opposed. It is an absolute no brainer from a health perspective. Simply cuts to the private health insurance rebate will increase public hospital queues, and a reduction in smoking from the excise increase will reduce the queues.

Treasury’s figures fail completely to take account of the cost of smoking generated health demands. Worse is that Rudd and Swan merely parrot this narrow perspective. As a cost saving measure perhaps we could simply dispense with Swan and co and have wombat man (aka Ken Henry the Treasury Secretary) deliver the budget instead.

Kevin Rudd’s weird hand movements:

Margot Foster writes: I have been intrigued by Kevin Rudd’s weird hand movements. When speaking in any environment he keeps his palms semi face up and his fingers rafted together with his thumb at right angles to the glued fingers, especially the right hand.

I would be interested if you could find a body language expert to comment on what he is saying by this behaviour: I am pointing at you but not really? I am halfway to giving you a benediction but not really? I am in beseech mode? I have never seen anyone else do what he does and it really is quite peculiar.

A super clarification:

Kevin Hogarth writes: Re. “Tips and rumours” (Monday, item 6). Crikey published:

The new limits on concessional super contributions don’t just affect salary sacrifice contributions but company contributions as well. The media spin has been around limits on salary sacrifice for super BUT company contributions are included in the limit as well. So let me get this right — we pay more to pensioners BUT at the expense of those who can and want to save for their own retirement?

For someone under 50 who really wants to put as much away for their retirement limits of $25,000 a year are plain stupid. Why would someone who wants to contribute over $25K a year do so if they will be slugged 15% super tax PLUS an extra 31.5% tax — effectively the highest tax rate? You may as well get it paid as cash at your marginal rate and invest it elsewhere. What sort of dumb logic is this?

Whereas I agree with the author on his/her objection to the $25,000 limit on salary sacrifice superannuation, the writer is factually incorrect in one criticism; they do not understand that not all superannuation contributions have a 15% contributions tax. Only concessional contributions such as with salary sacrifice or Super Guarantee Contributions have 15% contributions tax applicable. However for non-concessional contributions, previously called undeducted contributions (such as post-PAYG or “after tax” contributions), such contributions remain not subject to a contributions tax.

For instance, if someone was to make a non-concessional superannuation contribution from their salary it would first be taxed at marginal tax rate then contributed into the super without contribution tax. It seems the current $150,000 pa limit will continue to apply to these contributions. Once funds are in superannuation regardless of their method of contribution, the maximum earnings tax is 15% so a low taxing structure applies.

Certainly someone exceeding the $25,000 limit would be slugged twice on the amount over $25,000, however by not exceeding the $25,000 limit and making any excess contributions from “after PAYG tax” there can still be a reasonable outcome.

Hopefully this clarifies.

Go Souths:

Ed Szabo writes: Re. “The Johns pack-s-x saga: the media can’t lose” (18 May, item 10). So Bernard Keane thinks Souths were “ultimate league miscreants” and litigated their way to reinstatement in the NRL. What does he suggest they should have done when they were unfairly kicked out by virtue of News Ltd’s dubious “criteria” set up? Should Souths have rolled over and played dead? Should they have merged with the now struggling Cronulla Sharks (seriously, this was an option being pushed by all sorts of people at the time)?

As a Souths supporter, I am thankful they took the legal road and successfully challenged the validity of the cull.

The Oz:

Gabriel McGrath writes: Re. Peter Wilson (yesterday, comments). I’d hate to be seen as sticking up for The Australian… but in the case of Peter Wilson… Crikey should indeed, pull their head in. You can’t just accuse someone of being a plagiarist, and if turns out to be untrue, say “yeah, but….” If The Oz did it to Crikey, you’d have a fit.