Some recent titles of AFL Rules articles:
- “The AFL’s Equalisation Changes Explained” AFL
- “Time to Level the Playing Field” AFL Players
- “Clubs Seek to Level the Playing Field” AFL
- “The Evolution of the AFL: Strategies, Growth, and Key Initiatives” Sports Panda
Record crowds, attendances, income, and support have come because the AFL has made the AFL a highly competitive, skilful, great-to-watch competition. It was no accident, and it happened because the people who set the competition rules worked to make the teams play according to the same financial regulations and made it difficult for teams to buy a premiership. Money is still essential, but team unity and playing for each other is the secret to success and selecting players through the draft is a key component as it reduces the importance of finance.
Labor’s vision of Building Australia will not work unless companies and communities can work under fair rules with an unbiased umpire of finance. Everyone must be able to participate. Teams (companies and communities) must be able to compete with each other with fair finance rules, such as equal access for all by making electronic money work the same as cash. Everyone pays the same for cash and buys the same no matter who the buyer is.
The Biased Rules and Unfairness of the Banking System
The Government has given the Reserve Bank responsibility for keeping enough money in the economy so inflation is low and there is minimum unemployment. The financial rules have not worked. Inflation should be close to zero, and everyone who can contribute to the community should have the opportunity to do so.
Targeted inflation is a cop-out. Inflation destroys lives, and it should be controlled. It happens because capital gains outstrip capital losses. We can solve the problem by spreading capital gains fairly across the community with the objective of zero inflation. Zero inflation makes money tomorrow worth the same as money today and stops the concentration on investment in short-term capital gains.
A person or company can only contribute to “Building Australia's Future” if they can access investment funds. Banking practices prevent most Australians from accessing even zero-interest loans to invest in solar panels. Investing is different from giving people grants, but investment opportunities are unnecessarily complicated because of financial restrictions, and few people ever get the chance to invest themselves.
Profits from investment mean a business has a capital gain as profits go directly to the balance sheet. If a company sells goods and services, it can also sell shares from existing shareholders to customers, and this will share future capital with the customer. It is straightforward to arrange businesses this way and it turns customers into investors.
The small businesses and local investments that built much of Australia are disappearing because banking policies favour the rich over the poor, and the rich do not share capital gains, which makes them wealthier. However, small businesses and local investments can share capital gains, making them highly competitive compared to non-sharing companies as it cuts out much of the need for traditional finance. This, in turn, makes a country highly productive, competitive and fair and builds a stronger economy.
The only group that can change the situation are our federal politicians because they control the federal budget, and they can ask the Reserve Bank to behave in the interest of most Australians and not in the interests of the banks and the wealthiest.
A Start to Building Australia
The Reserve Bank complains that raising interest rates is the only tool to control inflation. They have another one that they use, and that is the governor's public pronouncements. The Reserve Bank knows that the banks take early profits by charging home borrowers capital gains by debiting loan accounts with interest and fees. They know this extends the loans, and borrowers without compensation pay interest twice. Interest is charged twice because banks are permitted to “capitalise interest”, while interest is deemed income and not part of the loan. Banks capitalise with most clients but not with some wealthy ones.
The Reserve Bank should require banks to treat all customers equally and level the playing field. If they did this, it would do more to Build Australia than any other action they or the government could take, as it would show that the Reserve Bank was willing to start to level the playing field and give more people access to new money.
Parliament members could ask why banks can create new money and charge unearned capital gains plus the same amount as interest and fees. They could ask the Reserve Bank if they thought it right that the bank's unearned capital gains of $56 billion last year justified the impoverishment of new home buyers and removed the dream of investing in their own home for so many.
In 2025, it is estimated that 80% of the new wealth generated in Australia will go to the top 1%. This is unfair. The top 1% should receive 1% of the new wealth. In 1960, when I started work, the poorest 10% of the population received 10% of the new wealth, so we know it is possible.
The people in Australia will not participate in Building Australia when the benefits go to the already wealthy. The financial system is built and operates to enrich those who already have wealth. Our governments and public servants are our only hope of changing direction, starting with stopping the capital gain on home loans.
Bank Regulations and Financial Fairness
Unfortunately, I expect the banks will not embrace a level financial playing field. Their profits and bonuses are signs to them that the system is working. Changes to the rules and regulations by the government will be needed to enforce equal access to new money created with loans. View this pre-budget submission to the Treasury for practical ideas on what the government can do to level the investment field so Australians can compete on building better and cheaper goods and services that we all need.
