Now it’s time to hack the country! July 26, 2024

30:56I feel as though it better shares the prosperity. Tim Cook, brilliant CEO. Done wonders for Apple. Fantastic. If I went up to him and said – I took over control of the board and said, hey, we're going to give you an extra$200 million a year, do you think he's going to work harder? Oh, I agree with that. He's not doing anything. I mean, the money - The pretense that somehow people are going to work harder or work better with another million dollars in the back pocket is nonsense. Or the other argument is there's no incentive to try anymore. Yeah, that's right. So all of a sudden, all these wannabes say, nah,$400 million is not enough for me to get out of bed.

31:32If it was$500 million, I'd do it, but not for$400. I'd get stuffed, yeah, exactly. Yeah, so I think it just helps in that regard. And just, again, I think it's more the waste that we're spending. We talk about the waste in administering tax and super and how many billions of that adds up to. How many unions and business groups and government get together and try and nut out these wage agreements and no one's ever happy at the end of it. It's just like, just do that. And I feel as though it cuts back on a lot of waste as well as being something that's a little bit more fair. I like it. Okay, that's cool.

32:07I'm not sure which one to go with that. I'm going to go controversial and come back to something that's controversial. I think we need to think about, I'm going to say the phrase, everyone ready? death taxes oh dear death taxes i reckon this is so this is my biggest we have a lot of challenges as a society right i think i've seen this before on the pod so it shouldn't come as news to anybody else but i actually think in we will look back in half a century short of the empire crumbling to your point ram or some sort of war or some other redistributive effect um i think we will look back in 50 or 60 years at a couple of generations worth of inherited wealth and the enormous disparity.

32:45My only challenge to your point about the minimum wage thing actually is it looks after income but not wealth. So if I'm Tim Cook and I've got a gazillion dollars worth of Apple shares, whether my wage is actually$400 million or$4, I'm going to make a fortune more out of owning the shares than I am out of the income I earn from work doing the job. And so the question of wealth is a really, really important one. I'm not in favour of taxing wealth, actually, for what it's worth. I think taxing stock rather than flow, in other words, a fixed thing which doesn't generate income or may not generate income for the sake of it, I actually don't agree with that at all.

33:19But I do think at some point you have to recognise that growth. And I think in terms of both the opportunity to raise tax revenue, because we have to, to pay the things we want to do, and also to think about the impact of, let's say I die with 5 million bucks, pick a number, right? and then my kids uh don't need that money they work they do their own thing they can't we talk about compounding right so if four grand compounded for for 70 years is 1.6 million dollars imagine four million dollars compounded for 70 years yeah right and think about the impact of that so when i die with some estate and then you know maybe my kids have their own homes by them maybe they don't like you know it doesn't need to be about me anyway um but you get the idea right so so two kids uh one of them one of them whose parent leaves them a seven-figure sum one who doesn't then think about those people's kids and those people's kids the inherited inequality will get worse and worse over time and i really think while you know we're all we're all tripping over ourselves talking about stage three tax cuts and how much money i want right now and my cost of living and all that you know again people are doing it tough so don't get me wrong but we're not kind of talking about the big issues in terms of the society we're leaving behind so i actually think we are going to have to very seriously consider a for tax revenue purposes they're probably fairer ways of collecting money than the whacking person someone who's working for income uh not instead of it won't be you know as well as um and then the inherited inequality that i think is really going to problem now my kids are probably winners from that by the way hopefully unless i really screw this up um you know i've i've got enough money to hopefully retire when i want to and hopefully thereafter i keep compounding it away there are other people who will retire with nothing and go on a pension or a little bit that that combination i just think it's an ugly combination mate so i i think we're gonna have the very serious conversation for revenue and equality reasons about what we do with inheritance taxes yeah i mean uh i'm selfishly i'm dead so i don't care right at this point that's the other thing that's a very good point actually i just you know what i don't get mate there's people who die with 15 million dollars who say my kid should get all that money and not realize the privilege is kind of one of those loaded words these days but when you get to whether your kids get 15 or 14 or 12 or 10 million dollars or 15 million dollars and the kid next door is nothing anyway and you're arguing about how much kids get i don't know it's hard to swallow.

35:53Yeah, it is. I mean, the only, I don't disagree in principle. It'd be a pretty decent debate to be had on where the lines are drawn on all of that kind of stuff. I think that would be the hard part, you know, where, what do we consider an amount which is appropriate or under which is fine over which is too excessive. They're very subjective things. So, but I don't, don't disagree with the intent at all. And I think you'd probably just draw the line and do it at a point where it doesn't impact 90 % of people or something like that. Probably. And, you know, you probably get a pretty good outcome.

36:27I like that, though. I like that. Thank you, Matt. What are you thinking?

36:35Macro Prudential. Oh, go. So, we have this, we've, I mean, you and I have spent so many hours and hours and hours chucking this idea around. Half of hours. But we talk about interest rates once a month because the media makes us. And, you know, it's always this - Every six weeks now, though, thankfully. That's true, actually. Yes, we get a little bit of time off. A little bit of extra time. So it's always this, and we always just talk about how horribly blunt it is. You know, the bank there is trying to control inflation, and they're trying to do it by increasing or decreasing the cost of money.

37:11And it's kind of important for certain discretionary spend. But the big elephant in the room is it's just like it's everyone's sort of mortgages. It's like we really need to stop people spending too much on these discretionary things. It just turns out that if we do this, we're just going to like potentially destroy the economy because this other section here is actually not spending too much. They're just barely trying to keep their heads above water. So I feel as though macro prudential just allows a bit more discretion in that. And so what do I – it's a word that gets thrown around. Macro prudential just means added lending requirements.

37:41So when a bank lends money to someone, you might sort of say, look, you can only – there is a minimum – oh, sorry, yeah, a minimum capital adequacy ratio from the bank. You know, I think it's about 12.5 % in Australia. So they must have a certain level of assets to make a loan. Yeah. And if you haven't got those assets, you can't make more loans. Yeah, you can't. Again, I say this only because it surprises a lot of people and it surprised me when I learn about it. So I'll say it again. But when a bank creates a loan, they create money. Yeah. Right? And so when you've got low capital adequacy ratios, they've got a great ability to create money.

38:20So if you only have to carry, if you only have to keep 1 % of your loan booking deposits, for every dollar in deposits, you can create$100 worth of debt. Yeah. At 12%, you can create$8 for every dollar you have. And so the higher that is, and it's also exponential. So it's not like 1 to 12 isn't like, you know, it's not 11 % less. It's literally one, effectively one twelfth, going from one to twelfth. Now, as you go from twelfth to 13, it only reduces by a smaller amount. But yeah, keep going. And it's so important because the trouble is at some point, and this is what used to happen in the olden days, people would say, that's cool, I want my money.

38:54And they, well, it's not there. The money is not there. Not everyone can get their money. We still have bank runs, by the way. Look at Silicon Valley Bank last year. Was that only last year? I think it was, beginning of last year, right? I would have said the year before if you'd asked me, but yeah. You know, and it was the fastest bank run in history because everyone just pulled out their app and said, transfer the money. That's right. The money wasn't there. The money wasn't there. They had all these liabilities that they just couldn't kind of fulfill. So anyway, my point is that generally speaking, when you have these big banking collapses, it's almost always a function of banks lending without any prudence, lending way more than they can support.

39:36and there's a very strong incentive to do that in a free and open market where everyone can kind of do it and when it is implicitly backed by the government which is what always happens we bail them out i would basically sort of say well i'm actually of the view that it's important for credit creation is very important someone's over there got a brilliant business idea they don't have the cash but if they could borrow it they could make that happen they could create jobs they could create products and services that people want and again everyone is richer so a world in which if you don't have money, you can't get money.

40:07It's going to be a poorer world. But I do think that there's a sliding scale there of where at the moment we're a little bit too loose and fancy free with how much we let the banks get away with as well. What would you change? Would you increase the capital adequacy ratio? Yeah, I would increase the capital adequacy ratio. I would limit the LVRs that people could have against that. And that's sort of been sort of done at the discretion of banks at the moment, but there's no legislation. We saw what happened with places like Rams and stuff when they got over their skis and all of this kind of stuff.

40:43Just setting some rules in place that would still allow for a profitable, vibrant industry, but would mean that the industry itself was far less robust and be potentially in need of bailouts, which is just me and you and all our listeners paying their taxpayers money to bail out some idiot banker who made reckless decisions, which is what always happens, right? I think that's a far better outcome for society. The banks would cry blue murder because their profitability would be hit. Yeah. But they would still be viable and they would still be someone who's prepared to do it. There'd be enough profit to make it worthwhile.

41:23It's a very – I've said it before and I'll say it again. Banking is such a privileged position. It's unlike any other business in our economy because they get to create money, right? So because of that, I'm sorry, the rules are different for you. I'm sorry. If that's so egregious to you, go and open up a footwear retailer or, you know, fast food restaurant. Do what you like. Go to those other industries. But if you run a bank and the entire solvency and stability of the local financial system rests on your shoulders, I'm sorry, pal. There are just really tight rules around that. That's just how it's going to be.

41:57Correct. Yeah. Mate, the only challenge I've got is the LVR one. Oh, yeah. I'm just not – I understand the impact on the – potential impact on the asset prices. I just reckon it's hard enough to save a deposit as it is. Make it hard for people to require them to save a bigger deposit seems at a societal level. So we should absolutely increase the regulation of the bank. So I'm agreeing with you there. I'm not sure whether I could come to the same view as you on the LVRs. I actually don't think it'll be as necessary as people kind of like to think because the houses can generally be sold for short of a permanent crash in which house prices are permanently worth 50 % less.

42:35If you've got a whatever deposit, I feel like it's just a relic rather than a necessary component. So I don't disagree with why you're doing it. I just kind of feel like it actually hits first home buyers harder, makes their lives tougher at a time when prices are already probably pretty tough and saving a rent takes a decade plus. if you increase the saving deposit, sorry. If you increase the OVR you basically just lengthen the time it takes to be able to get enough deposit to buy a house. Yeah, I hear that. But you've got to, I mean, we've gone from only the banks looking at the dad's income because women's income doesn't count.

43:09It's how it used to be, right? That was crazy. Got rid of that and then we got to, well, now you can do 10 % deposits and actually now you can do this. Sorry, that's true too. Yeah. Percentive income I'm happy with, by the way. Sorry, the deposit, deposit, requirement. I saw the other day 5 % deposit and you can borrow the deposit from, we talked about it on the pod actually a while ago. There's a new business, it's like the afterpay of deposits. You borrow the deposit to help you borrow the rest in the line. So it's all debt. I want to tell you, when I bought my first unit, when I was at 20 something, I borrowed 105 % of the purchase price.

43:50Right. back when that was possible but I guess that was my point I had the income for it there was nothing gained by making me 105 % is always stupid by the way but there was nothing gained by making me save longer for a deposit no one won anything more than that there was no in my view anyway I find the deposit thing a relic rather than a genuinely useful part of what's going on I'd rather it should blend in other ways than making it harder for first-home buyers and easier for second-third-home buyers because they've got the LVR because they've already owned equity in their place. You kind of, you know, I'm massively against first-home buyers grants, as you know, but I just don't think pushing more first-home buyers out of the market makes things any better.

44:35Yeah. Well, I mean, it probably helps affordability and ultimately in the long run maybe helps them as well. It's certainly like this idea, there'll be no one to further leverage themselves up to the eye, therefore prices will stop rising. He was like, yeah, that's probably what will happen. But isn't it – I've always thought the income argument is interesting. I went through this recently with getting my own loan. They said, oh, your income is really uncertain because you own your own business. But if that guy over there, he's got a full-time job, so it's dependable. It's like, well, people lose their jobs.

45:11You can get fired tomorrow, right? The business you work for could go bankrupt. You could get into an – There's a thousand different reasons as to why the income, your tax return from last year is completely irrelevant to what it is next year. You can work for the same company for 30 years. What's the difference, right? I always saw that for people with their own businesses, they actually have tens or hundreds or thousands of customers. So you've got thousands of sources of income versus the employee who's got one. It's like, what's risky? It's like, well, you know, I'm at the Motley Fool. I'm either 100 or zero, right?

45:40The Motley Fool goes broke tomorrow. I'm gone. If Strongman loses one customer or 10 customers or 100 customers tomorrow, it kind of sucked for you. But that's, you know, one person either flicking the switch is my job or not. You know, one person flicking your switch, you don't notice. 10 of them doing, you don't notice. 100 of them, maybe you'd start to notice. But it's a very different thing, right? Yeah. So I guess, look, just to end the point, it's not, again, with everything we're saying, the devil is in the detail, right? And you can argue the toss on the fine points. But whether you want to reduce the amount of collateral that's needed for a loan in cash terms, or whether the income that that is sort of secured against.

46:17It just, I feel as though the settings have, I think history bears this out. When you look at it, how that has evolved over the decades, it's easier and easier and easier and easier. Now, is it still appropriate or not? I don't know, but like logically at some point you cross a line and it becomes harder and harder and it gets to the situation. I feel we're kind of at now. We've got this diabolical inflation problem. The only way to fix it is to raise interest rates, but we can't raise interest rates because of all the debt that everyone's built up. So you've painted yourself into a corner because we've got this one lever, whereas a macro prudential environment, the system where we had a little bit more subtlety in things that we didn't have to make it everything about housing, and we can have a little bit more fine motor control on some of the settings that we employ.

47:07I think it makes sense. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

47:18Can I throw an extra oar in the water on macroprimation, on macroprimation policy? I've said this a million times. I would use the interest rate buffer that they use counter-cyclically, which means that when you want to put more money in the economy, you can do so without pushing up asset prices unduly. When you suck more money out of the economy, you don't crash asset prices unduly. because on one hand, prices should be allowed to move freely. And this is often seen by some, maybe even by you, I'm not sure, as unduly propping up prices or stopping prices crashing because they deserve to or whatever.

47:48It's actually not about that at all. It's actually my biggest issue the other way, on the other side, when they go up, when rates come down. So why do central banks, and again, we know you're on central banks, and I'm sorry to keep bringing it up, but why do they increase rates? They increase rates to suck money out of the economy, not to push asset prices down, right? The asset prices coming down are a consequence. of borrowing being harder, which is fine as it goes. Similarly, when they drop rates, why do they do it? They drop rates because they want to say, actually, my mortgage is now cheaper.

48:15I can afford to take the next 100 bucks a month and spend it instead. And in theory, that puts demand back into the economy and helping offset whatever economic slump we're in. Now, that to me makes some sense. It doesn't make a lot of sense to Ram, but between the two of us, we're somewhere close to that. But the impact of that, as we well and truly know, we saw massively during the last five years, is when you drop interest rates to put money in the economy, you also push up prices. Now, what does that do? Two things, firstly. Two things, frankly. Firstly, it pushes up house prices because people can now afford to borrow more.

48:47But also, you know what it does? It actually doesn't increase demand in the economy because all we've done is put in the house prices. So not only is it bad for asset prices themselves, it actually works against the aim of the central bank, which is to try and stimulate the economy. So RAM would destroy central banks. That's cool. if we're going to have them i would say to them you know what here's the deal guys pick a pick a neutral interest rate call it four percent uh when rates go down to put money in the economy the buffer goes up at the same rate so and when the rates go down don't get that right right we're going to get a buffer goes up when the rates go up buffer comes down so when interest gets to 10 there's no need to have a 5 buffer on top of that because rates aren't going to 15 if they do it's going to stay there very long similarly when rates go from as they did what six to two letting people borrow at two was absolutely stupid it was rank stupidity not letting them pay two percent that's fine but letting them borrow as if the rate would be two percent in perpetuity what's just it's it's negligence bordering on yeah i would say criminal but it's not miles away from that right because some people who are very decent hard-working people who don't know anything about finance, go to the bank manager and say, mate, how much can I borrow?

49:58And the bank manager hits his calculator four times and says$1.8 million. And they go, really? He goes, yeah, that's fine. Based on the current interest rate and APRA's rules, you can borrow that bunch of money. Now, when rates go up to 6.5 % as they have, and they should be able to sell their house or go broke, is it their fault? I mean, at some level, there's personal responsibility. But if you've got a brickie and a nurse or whatever it is, they're not supposed to have to know the vagaries of interest rate movements, right? Like, can we ask them to, can we educate them to, I suppose? Could we actually say, look, rates are down 2%, that's the good news.

50:30So your mortgage is going to be cheap for a bit, but because it's going to go up, we're not going to load you up with that sort of loan. We're not going to lend you$1 million rather than$1.8 million because we know rates are going to go back up. And even if you don't realize it yet, it'll happen. So we're going to make sure that we don't offer you a loan predicated on a stupidly low rate or restrict you from getting a loan at a stupidly high rate if it'll stay there forever. So using the buffer, basically the amount you have to add to the current rate to assess loan viability, use that counter-sickly.

51:01It's designed to counterbalance movements in rates. You add more money to the economy, or you take it out, you add stimulus, or you contract the economy, you remove stimulus, but you don't screw with asset prices on the way through. Yep, makes a great deal of sense. What else you got? Is it on me again? I did the extra macro approve it, So I was like, I can have another one if you want. I've got one more. Yeah, go for it. Go for it. All right. This is one I've banged on about before, and I'm only going to do it again because this is the format and this is the place. We are massively, massively overdue for a sovereign wealth fund.

51:34Speaking of intergenerational inequality, the idea that we have gold, iron, copper, tin, lead, lithium, uranium, rare earths in the ground right now, oil, gas in the ground right now. It's been left to us by our forebears and their forebears and their forebears. and since Australia wasn't ever inhabited by people, been on the ground for millions and millions and millions and millions of years. We finally go, thanks guys, we're going to dig all that up and spend it on trinkets. We're going to give ourselves tax cuts. We're going to go and spend it on Mars bars and champagne. And sorry kids, that's gone now.

52:12Is just an absolute disgrace. And again, like, you know, have your own view. My view simply is we should leave the world better than we found it or at least as good. If you dig up something we got and then spend the proceeds on a party and then say, sorry, kids, we couldn't be bothered leaving anything for you or leaving part of that for you, I think that is just horribly, horribly, horribly immoral, frankly. So what would I do? I would take all of the proceeds from all of the extraction of minerals and say, we have an eternal asset, resource under the ground. And we are going to take it out of the ground and we're going to use it because using it's useful and growth is good and activity is good and sounds of living are good.

52:51But what we're going to do is when we use that, we're going to take the proceeds and we're going to leave those proceeds in a fund. We're going to turn a natural physical resource into an eternal financial resource for us, for our kids and for their kids and for their kids. They do it in Norway, it works spectacularly well. They do it in some countries in the Middle East, it works pretty well. There is absolutely no reason we couldn't or shouldn't do it other than political will and frankly selfishness. So yeah, I would increase resource rents and royalties, by the way. We're selling them way, way, way too cheaply.

53:20The thought experiment I always use is if you said to Macquarie Bank, hey, guys, here's Australia's natural resources. How much do you want to sell them for? The chance they wouldn't put the prices up is so stupidly small you couldn't calculate it. They're going to go, you charge what for this? Think about every time we privatise something, right? What happens to the fees and charges? They go up. Now, do we love it as consumers? No. Does it make perfect sense as a business? Of course it does. Why would you not do that? So I would put the rents and royalties, just two names for the same thing. It depends on what the mineral is.

53:50What about all the jobs? That'd be fine. Totally would be fine. That would be fine. By the way, if there's a mine closed, great. Let's give those people more than they're earning. I don't care. The amount of money we would make relative to the jobs that lost are just so stupidly large. If you said to me, Scott, look, here's the thing. we're going to change the financial advice business and you're fired and you can't even get a job anymore in the financial service industry because we're just going to get rid of it because we don't need it uh but the reason we're getting rid of it is because we're earning tens and tens and tens of billions of dollars doing other things uh so what we're going to do is going to take one of those billion and give you your current wage for the rest of your life i'm not going to complain the government shouldn't complain because they're so far ahead the australian people should be like well philip's a lucky bastard but just i'll take it because we're making a lot of money anyway that is that is pure cutting off nose to spite your face to save a couple hundred jobs in mining and again i really i do feel for those people i'm not being flippant but at a national level to to miss the opportunity to to firstly collect and then generate through compounding billions and billions and tens and hundreds and eventually trillions of dollars in asset value because we're trying to protect what a thousand jobs two thousand jobs five call it twenty thousand jobs call it forty thousand jobs you are still miles ahead by doing it rather than not and on a national interest basis that's what governments are there for not to say i will i will i will kill sell our kids down the river save a couple of mining jobs it is an absolute nonsense there is no excuse for not having a sovereign wealth fund we should have one today we should have one 30 years ago there is no excuse not have one tomorrow oh it's crazy i mean it's so i think if you were to straw poll people in the street like what percentage of Australians work in materials mining but like oh like 20 % like it seems like it's always talked about as this massive employer it's a tiny employer I think it's like two percent oh yeah yeah two and a half times more people work in tourism like you know and retail is five times or whatever it is like just stupidly big like in terms of the pie chart it's very small and again it's not it's not trying to pick on any one particular person or group here.

56:05I'm just saying that it gets treated as if like, oh, if we rock the boat in the slightest way, everyone's out of work and we're all, all your super is going to go and your investment properties are going to tumble. It's just like, no, it's not. In fact, we would all be richer. We'd actually be paying less taxes because the sovereign fund is going to be doing far more of the heavy lifting there. And it'll still be going in a thousand years time, right? Like, it's just like, that is, we really should have led with this, you know, tax reform, super reform sovereign wealth fund boom you're done you're like again you're welcome like the amount of value created the amount of waste stopped is just it blows the mind and the only reason it isn't is because there's just very powerful lobby groups just to be a little conspiratorial am i being wrong on that like how else do you rationalize it yeah i don't think you can can you no you can't and i think that's the why wouldn't the government do it it's just like well you know this basically there's a quid pro quo here it's like we know don't touch it or we're not going to give you as much money next year that's whether it's stated implicitly i'm sure they're not dumb enough to do it like that but that's it right i think you know i i always i think i'm i'm always i'm always maybe i'm too generous or maybe i'm not cynical enough i don't know which um or maybe both i suspect that the power is partly the nation for those guys and And having, you know the reason why?

57:32The reason why is the mining super profits tax. When the government was forced to back down because the mining industry had an enormous advertising campaign, which is far more about the polling than the donations. Yep. And I think that's something you've got to, right? You've got the money going straight through and you've got the impact on the electoral politics of what happens if it's different. Just genius. I mean, how can you convince people? It was just like, you're going to be better off after this to vote against it. Is, is. I mean, you've got to tip your hat to some extent and say, wow.

57:57That's right. Exactly. Exactly. That is actually, I just thought of another one on that before we close up. Here's an easy one to fix such a significant number of ills. I'm going to ban corporate political donations straight away. Ban all donations. Yeah. Let's go. I'll go to the whole. No, no, no. I'm with you. Yep. Sold. We're going to do that. I'll let you elaborate on how things get funded, but we'll get rid of political donations all together. Yeah. And we ban lobbyists from having hall passes to Parliament House. You don't get an all-access pass. Like, what the hell? And by the way, if you're not across it, that's exactly what happens.

58:35There's more lobbyists walking the halls of power in Canberra than actual represented electives. And by the way, there is no record, public record, of who gave which lobbyist the pass. How is this not the easiest thing in the world to get past the line, right? Well, you know why. Because the two major parties both want it. Yeah, exactly. They are bipartisan. I'm actually not as cynical as others, including you, I don't think. David Pocock has been an absolute breath of fresh air. I'm a massive fan. Great Wallaby first and foremost, but also a great parliamentarian. Now a senator for ACT. He's just campaigning for a register, not a ban.

59:14I'm like, dude, that doesn't give you far enough. I'd love to see the debate on the other side who goes, I know what you're saying. I know you say privately. Yeah, yeah. But when a journalist, if there's one out there that's prepared to do their job actually say articulate to me why we shouldn't do this let me just grab just give me two seconds to grab some popcorn that's right and i really want to hear your answer here because i i don't know what you're going to say with a straight face of course the answer is they don't say anything right they just ignore it move on yeah and this is this is this is why honestly and this let me get political for a second at the end of this podcast it's why independence in parliament is so important right because the things that the independence what here's here's here's a good way to determine things.

59:55If the independents want it and both major parties vote against it, it's probably a very, very, very good idea. Yep. And we're seeing that. Now, one thing I would say, so I talk about political donations. I mentioned that on Twitter. I do it regularly. Simon Holmes Accord, who's a polarizing figure, but funder of Climate 200, sorry, convener of Climate 200, doesn't fund the whole thing. He is a fundraiser, says if we do ban political donations, all we do is entrench the current bipartisan duopoly. And I've got a little bit of time for that, I have to say. So there is the principle and there is the implication.

1:00:22and maybe I'm a little bit too zealous about it because if we remove the opportunity for others, i.e. independence, to be funded, bootstrapped effectively into parliament and we say no one can have money but we all know who Labor and Liberal Party are and we all know how big they are, we all know they're already there and we all know they're the two options for government, does the Page and Phillips party that comes out of this podcast, you know, do we ever get elected? Can you get elected without spending X million dollars as a new potential alternative candidate? it i don't know i really don't know the answer i suspect simon's partly right and so i am a little bit mindful of you know unintended consequences i still think we should ban him anyway i think principle comes first implication comes second but i have to be a little bit pragmatic and say it doesn't matter who the majors are in this case that would be liberal labor it could be you know anybody and i don't have any particular issue with them independently as parties other than the duopoly is a problem in itself.

1:01:18That kind of idea. It's just, that's such an easy win getting, I mean, even, I always think, again, we can get into the detail and debate the finer points here, but anything that just reduces that and moves it in the right direction is just such a positive force. The phrase of, whenever you're trying to figure out why things happen, the phrase follow the money is so on the money, right? Because it almost, not always, but just almost always explains what's going on. Why would they do that? Follow the money. That's why they're doing that, right? Someone somewhere is getting a little bit better off.

1:01:54Someone else is getting the promise to be better off in the future. That's pretty much what's happening, right? Seems like it. Seems like it. And that's the challenge. Have we solved the world's problems? I don't think we probably have. We've done - Dude, have we stopped right there? We've done minimum wages, we've done the inheritance tax, we've done macroprudential, we've done sovereign wealth fund, we've done political donations. I would strengthen whistleblower laws I'd introduce portable banking numbers there's a whole bunch of stuff that I think we could do but if we just took the top three whistleblower laws are really important yeah massively more broadly my only concern with portable numbers mate and this is not I know you have an inherent dislike for the banks and that's fair enough my only concern about that is this is really unpopular too right So I start with principle first and it doesn't always win.

1:02:42Sometimes I have to override it. I'm not sure where the line is between someone's business model and our desire, willingness, decision, ability, whatever, to override some of the things.

1:02:59Here's a – this will be no friends at all. Plain paper packaging, right? Great result and probably worth doing for cigarette packaging this is. I'm not sure if government should just get to take away your brand and IP. i like i don't know you know there's a line there somewhere i'm not a libertarian at all as as you well know but i'm not sure so with banks i'm like well we could we could dismantle anyone's competitive advantage at a stroke of a pen right willies and coals can only be called willies and coals they have to be called your local supermarket uh they can only discount groceries because that hurts the little guy um you know we could pick an industry and and slowly say in the interest of the general public we will take away all those things that you you know you can only make two percent margin growth in supermarkets otherwise you have to donate the rest um i i don't know i just i'm not getting your point i'm not saying you're wrong i just i don't know the answer i i don't know how far we should reach into businesses and say you know for better or worse your customers unwillingness to change banks because they can't there's nothing stopping them now we can make it easier for them to change but there's no there's no i mean banks would make it easy if you went to bank said look i want to transfer all my money from this account at commonwealth the other account was anz press the button now three hours later it's there oh banking on portability helps me do that makes a bit more competition but it's not like i can't do it it's just i so i get your point i just i don't know i don't know where that where that line should be like it's not about the banks it could be the supermarkets could be as a plain paper packaging just to make people really hate me for a minute um or whatever else i don't i just don't know where that where that line is Yeah, again, the devil's in the detail.

1:04:30My quick response is that banks are just too systemically important and they're too privileged. You're literally not just in control of most money creation, besides that, the amount of money that you're pumping into the system. but you also tell increasingly can tell me where I can spend it and how much I go into your local bank branch if you can and ask for$10 ,000 in cash. Yeah. You can't do it. I think it's 2000 that you can't do. And even then you've got, yeah. And now you've got to tell them what, what it's for. Yeah. Like for whatever I want to spend, it's my bloody money. I just, it gets, it gets very Orwellian very quickly.

1:05:15And I know it's, it's sort of, it's not a problem till it is and like potentially jumping at demons that don't exist. But there is a slippery slope there. And I just think increasingly in a world, like Armaguard's gone out of business, right? Because no one's dealing with cash anymore. So those that have to, the mandated to at least accommodate for that are now spending, I was in the papers today, like they're giving money to prop it up to keep this thing going. You're getting to a stage where everything's sort of electronic and everything is being gated and controlled and managed by private for-profit organizations.

1:05:49I just feel like, okay, cool, but that's not a retailer. That's not the Footlocker's brand. You know, that's not Coke's IP. There's a different characteristic and flavor to something. Money is half of every transaction in the economy. Like it's the universal language. It's so critically, fundamentally important that I think if that's your business, you just have tighter rules. You just have tighter rules. That's just how it is. Yeah. Do something else if you don't like it. You've got to be worthwhile. Still want a strong, profitable banking system. Don't get me wrong. Don't get me wrong at all.

1:06:24But just with great power comes great responsibility. Yes, that's a very, very good way to finish. Be responsible. We hope this has been fun. This is just kind of a chance for us to rant, basically. Why not devote a whole episode to it and see how we go from there? If you have any thoughts, let us know. We haven't shared this for a while, but we're back now. So info at fool.com.au is our email address. At least if you've got any comments or questions for the pod, you can get Andrew on the socials at sage underscore Simeon or at straw man invest. That's only on Twitter. I'm on Twitter at TMF Scott P, which is also my Insta handle and Facebook at forward slash Scott Phillips money.

1:07:02Let us know, what did we get right? What did we get wrong? What else would you do? What did we miss? Love to hear, love to hear a bit more. Hopefully it's been an interesting conversation too. As I said, I, I love that our listeners are obviously here for the investing, but they stay for the other stuff, including some of the policy conversations. Some of the great questions and comments we get are about this sort of stuff. So we thought we'd do it as one episode, plus it gets it out of the way, right? So we can concentrate on other things moving forward. So we'll see how we go. Mate, will you come back on Sunday?

1:07:28I reckon I could probably twist your arm. I think you could and I will, yes. Excellent. In that case, we will see you on Sunday. Until then, enjoy your weekend and Fool on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. general advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.