EDITORIALS

DAVID HICKS: KANGAROO COURTS AND CONCENTRATION CAMPS

Why does not the Australian government insist that David Hicks, one of its citizens, who has been imprisoned in Guantanamo Bay for five years without charge, be tried in the same way as Americans suspected of having committed crimes - by traditional courts in front of a jury and on the United States mainland?

Furthermore, Australia should point out that a country which keeps unconvicted persons in solitary confinement brands itself as uncivilised.

THE VICTORIAN CHARTER OF HUMAN RIGHTS

A Charter of Human Rights and Responsibilities has been in force in the State of Victoria, Australia, since 2007-01-01. A worthwhile start, but does this legislation go far enough?

Subjects which are not covered but which ought to be include the following:

• A right to a trial by jury for breaches of State law
  (compare section 80 of the Australian Constitution).
  
  
• Compulsory asset acquisitions to be on just terms
  (compare section 51(xxxi) of the Australian Constitution).
  
  
• Compensation to be provided to persons acquitted of crime
  (in respect of the legal expenses incurred, of any income lost and of any loss of liberty)
  
  
• A right not to pay multiple taxes on the same transaction
  (as, for example, in the case of the fire brigade levy, goods and services tax and stamp duty on general insurance premiums).
  
  
• A right to die with dignity.
  

CHINESE WALLS CANNOT WORK

Consider a financial institution that is acting as an adviser to a company that is planning to make a takeover offer for a target company. In that capacity it clearly has access to highly sensitive market information.

If that institution wishes to also act as a broker then it is expected to take steps to ensure that those of its staff as are working in the broking area are not able to become aware of such critical information until after it has been made public. This process is called "setting up a Chinese wall".

However, if the broking staff concerned are given a specific instruction from up high not to deal in shares of the target company for the time being, then that rather lets the cat out of the bag.

If, on the other hand, the staff are not given such an instruction and continue trading in the shares concerned either as principal or as agent, then the institution will be widely (and possibly unfairly) regarded by investors, regulators and the media as not having managed its Chinese walls properly.

The only practical solution to all this is for the Parliament to pass legislation prohibiting any institution from being both a corporate advisor and a broker at the same time. Those institutions that are already both would need to choose which of these two hats they wish to wear in the future.

THE RBA AND INTEREST RATES

To have short term interest rates set by the Reserve Bank of Australia at irregular intervals may have been useful in earlier times, but in this era of having a competitive environment as an economic goal it no longer makes sense.

Australians would be much better off if these rates were set by market forces - as already happens in the case of long term interest rates.

Another precedent is worth mentioning. Once upon a time it was thought necessary to have the exchange rate for the Australian dollar fixed by the authorities. This requirement was abolished in 1983, when the floating of the currency commenced. The roof did not fall in.

In any case, the assumption that monetary policy can fix the Australian economy on a "one size fits all" basis is a nonsense: the resource States are booming; the cities in the other States are pottering along; the rural sector is struggling in the drought; and so on.