The Guardian 11 October, 2006
Culture and Life
by Rob Gowland
Where money flows like water
Looking for a large financial institution to manage your diverse investment portfolio? Of course you are (according to the TV ads, we all are). It would seem prudent, however, to steer clear of Westpac. Apparently they can’t even keep track of their own income, not accurately, anyway.
Westpac is one of the bigger banks in this country; it made a profit last year of close to $3 billion. But you have to wonder about the efficiency of a bank that made a "systematic error in the way it calculated interest income from credit cards", which is what Phil Coffey, Westpac’s Chief Financial Officer, says happened.
This "error" caused the bank to overstate its credit card interest income to the tune of some $34 million. While this is a paltry figure for a bank like Westpac, which will easily make up the shortfall out of their profits for the second half of the year, it is still a sizeable chunk of the money that capitalist "investors" in Westpac view as their private property.
The matter was compounded by an analyst from global financier JP Morgan who pointed out at a teleconference called by Westpac that this was not the first instance of a major "accounting error" at the bank, referring — embarrassingly — to "an emerging history" of such errors.
In true corporate fashion, Coffey responded that "bank processes were being tightened [whatever that means], staff responsibilities reviewed and management heads would roll".
But even as some luckless Westpac executive gets scapegoated and tossed out on his ear, there are two things we can be sure of: the dumped executive will probably learn nothing about capitalism from the experience and Westpac will definitely not give any of their excessive profits back to their ordinary customers.
I see that John Howard is still adamantly declining to sign the Kyoto Protocols on behalf of Australia. Global warming, it seems, has nothing to do with greenhouse gas emissions.
And greenhouse gas emissions, of course, have absolutely nothing to do with the making and marketing of cars and trucks. Just how much, I wonder, do the oil companies, car manufacturers and the road lobby generally, allocate — in various guises — to persuading local and national governments to build more and bigger expressways?
Not to mention the amount those same corporations must expend each year — through assorted institutes and foundations — to persuade the public of the superiority of private, personal transport over public transport.
The oil and car industries are not the only sources of private profit whose quest for a "return on their investment" costs the community dearly. Cotton production is another.
Cotton growing uses prodigious amounts of water and degrades the soil on which it is grown. Only the use of vast amounts of fertilizer and the use of equally vast amounts of insecticide make it possible.
The effects on farm workers and their families of aerial-spraying of insecticide are well documented (although often officially unacknowledged). So too is the depletion of our scarce water resources to facilitate the growing of this destructive "cash crop".
However, the agribusiness lobby is deaf to everything but their own profit making. (Naturally, they’re capitalists, after all.)
And the small, individual farmers who (of necessity) have hitched their wagons to rice and cotton production, are obliged to go along with the prevailing misuse of water in their particular branch of agriculture.
We have written about this before, but it seems necessary to harp on it, in the light of last week’s news that the Namoi and Barwon rivers — important rivers in northern NSW — have actually stopped flowing, with the upstream extraction of large amounts of water for cotton growing in time of drought being singled out as the primary cause.
Australia is the driest continent on Earth. The cultivation and development of forms of agriculture that are dependent on intensive use of water would seem to be obviously inappropriate.
Agri-business, however, is merely another form of capitalist profit-making. If the return on the investment is short-lived — because they had to bugger the environment in order to extract the profit — then so be it.
If rice and cotton production become untenable in Australia because the water table has been damaged or the fragile, ancient soil ruined, Capitalists will simply divert their capital to some other "investment opportunity" some where else and resume accumulating profits from there instead.
The Australian people are the ones who will be left to clean up the mess — if possible.