Tax Break

Who said tax is boring?

Far East in deep water

Where’s the motto?

If the motto of the United States is “In God we trust”, the motto of Australia should be “No worries”. We northern hemisphere folk who, unlike our antipodean friends, have summer in the summer and winter in the winter believe that, come Christmas,  an Aussie’s problems boil down to finding room for another shrimp on the barbie while his guests luxuriate in the pool swigging cans of XXXX (a beer for illiterates, pronounced 4X).

Australian defences are ready

I was, therefore, shocked to the depths of my didgeridoo when, in the middle of last winter (real winter, that is) I was informed by a representative of one of the Australian State Governments that  her government invests an inordinate amount in defence. My first impulse was to ask whether they were expecting an airborne strike by New Zealand sheep, the idea being so ridiculous. When I was told that the concern was Chinese imperialism, I was still gobsmacked – China has never struck me as that way inclined. It occurred to me that they were probably just scaremongering  so that when Julia Gillard, the prime minister, travels abroad she has something more serious to talk about than Australia.

Well, as Harold Wilson once said, “A week is a long time in politics” and the last couple of months have shown that those Bruces and Sheilas are not as dangerously brainburned as they insist on making us think they are.

The South China Sea has been witness to a series of petty maritime incidents between various nations that are frankly reminiscent of what was happening in our northern neck of the woods exactly one hundred years ago.  With spats over lumps of rock with such unlikely names as Scarborough Shoal, Spratly and Paracel there have been faceoffs between China and Taiwan, China and Philipines, China and Vietnam, South Korea and Japan (the Chinese navy must have been on vacation that week) and, most recently, China and Japan. It seems that all the minnows have been tickling the dragon under its armpits (I don’t know whether dragons have armpits) to test how far they can go before being incinerated. Meanwhile, the Americans, bound to keep the peace in the region, follow developments closely and frighten the hell out of the rest of us with the threat of going in and really warming up the party. The overriding concern, of course,  is Chinese expansionism, but if World War III does break out in the Australian outback’s back-yard, the conflict’s roots will likely be traceable to a VAT hike. Read on.

Beware!

Earlier this month the Japanese government purchased two small islands in a private transaction (I can picture it now – “Have you met our new neighbours ? Delightful people . Very quiet. They are called Japan.”). This really narked the Chinese who think they own them and would have liked to move in themselves. There have been all sorts of demonstrations in China and one newspaper even suggested skipping diplomatic options and going straight for the nukes. Most surprising of all, Xi Jinping, the next leader of China, having forgotten to meet Hillary Clinton and various other fat cats over the previous two weeks,  came out of hibernation to berate his neighbours. The question everyone is asking is: “Why did the Japanese do it?”. The  question everyone should be asking is Why did Mr Yoshihiko Noda, the highly pragmatic Japanese leader, do it?”.

Rewind a couple of months. Faced with the impossible arithmetic of covering pension costs of an increasingly aging population (the Japanese are skilled at not dying), the effects of an earthquake and nuclear accident, and fearing a Europe-like crisis  Mr Noda announced that consumption tax (VAT to you and me) would be raised from 5% to 8% in April 2014 and 10% in October 2015. The Liberal Democratic (which means conservative) opposition could not object to this austere measure but, following defections from the governing Democratic Party, extracted a promise of early elections from Noda as the price for passing the legislation last month.  Noda, blatantly doing what he genuinely felt was necessary for Japan’s future, effectively committed Hara-Kiri and is expected to lose the election convincingly.

As this story was unfolding, the maverick Governor of Tokyo  – reputed to be something of a loose cannon – started moves for his administration to buy the abovementioned islands in an act of, what many have interpreted as nationalistic provocation. Hence, Noda stepped in to frustrate that gentleman’s plans and, ultimately, to try and defuse the situation with the Chinese by ensuring nobody actually set foot on the islands. Despite acute early reactions, there are indications that tensions are starting to wane.

It would be tempting to wrap up with “And they all (probably) lived happily ever after”. Had Noda not tampered with the consumption tax, they might have done. But he is now looking down the barrel of an election shotgun and is probably about to be blown away. And there’s the rub. One of the leading candidates in this week’s contest for Liberal Democratic Party leader, who would almost certainly become prime minister after the General Election, is Nobuteru Ishihara. His father, Shintaro Ishihara is a famous author who has lately made a name for himself as none other than…..the maverick Governor of Tokyo. Like father, like son? Interesting times. I am thinking of inviting my worried Australian friends to join us in the Middle East – even if we are a bit short on shrimps and XXXX beer, not to mention Christmas.

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