I mean where do you draw the line? As a shareholder I’d be far more concerned if a company decided to open a branch in Zimbabwe than about it supporting a bit of BCA advertising, while another shareholder might be aghast at the thought of their company investing in technology that produces greenhouse gases. If shareholders are concerned about such things it’s up to them to inform themselves. It would make management’s job impossible if they had to seek shareholders’ approval of any measure that had an arguable ethical dimension.

You think the unions are more morally virtuous to be runnng ads than the employer groups. Am I getting this right?

How many degrees of separation is there between both ACTU to the members and the employer groups to the shareholders?

The ultimate source of trade union funding for the ads is the members (workers) and the purposes for which the money will be spent (promotion of Rudd) are clearly known and understood by members and almost certain to have their full approval. Those who dont approve can argue with their leaders, try to change their leaders or simply resign.

The employers’ association get their money from individual companies but the ultimate providers are the shareholders of these companies and they have no say and know nothing about it. Many may object strongly (if they see their interests differently from the managers) but they don’t know if their directors are funding it and have not been told the truth about the purpose of the business ads – promotion of Howard .

It is more an ethical issue of democratic legitimacy than a legal issue.

Everything unions and employer associations do is political in the sense of advancing the members’ interests as against the interests of others. It’s the nature of a pluralistic society. I don’t see why advertising to promote members’ interests should fall into some special category requiring explicit member approval.

There’s a reason that “union thuggery” campaigns only excite the Lib’s small-business base rather than swinging voters. The median voter is much more likely to have first-hand experience of “boss thuggery” at some time in their life than “union thuggery”.

And that’s without considering the implications of their behaviour for their organisation when Labor is elected. They may find it a bit harder to arrange lunch with the Minister next year …

Incomes are rising like we have never seen and Fred thinks it not enough for his preference group, so he wants to raid the stock market. Jeesh there’s no satisfying some people.

“Trying to find the truth about something is not purely a leftist position.”

Where did I mention a leftist position in all this? This is not the inner voice of unreason speaking to you is it?

However it’s worth remembering that union officials are elected by the people they represent. Activity that wasn’t supported by the membership would be penalised at elections, but that hasn’t been happening. As well, the explicit role of unions is to provide more bargaining power to individual Australians in employment. In that context, lobbying against Workchoices is perfectly justified.

I think pondie84 is correct in suggesting the business lobby has scored an own goal. The message many viewers get from the business ads is that there’s something sneaky going on. This is exacerbated by the attempt to imitate the ACTU’s use of honest working people in the ads, which comes across as patronising and duplicitous.

Personally, I think this whole saga has much deeper implications as to the poor quality of Australian business management and Australian business schools.

As things stand at present, it seems to me that what unions are doing is much more transparent than what business is doing.

As I understand, trade unions raise a special compulsory levy to pay for the ads and members who disapprove can resign – and some have (please correct me if I am wrong). Unions make it clear they support Labor and openly campaign against the Coalition. The levy they raise is for a clear purpose to defeat the Coalition.

By contrast, the business groups are trying to pretend their advertising is non-political (which is a lie) and not telling anyone where the money is coming from (which companies are funding the campaign). If a particular company in which I had shares was known to be funding the deceptive advertising, I could sell my shares in that company (if it were that important to me). But I do not have this information and I am not being told the truth anyway about the true purpose of the ads.

It is, however, true that some union members who have chosen not to contribute to the ad campaigns may not support the purpose of the ad campaign. Still, no analogy can be drawn to the way the business unions have come up with the money for their ad campaigns. If they, instead, wrote to their members and asked each member to donate to a separate fund to be used for political advertisements it would be a much better process.

I’m not overly cut up about the advertising. I’m sure many people look at the ads and wonder what’s in it for Big Business to want so desperately for the Coalition to be returned. They’re not doing this for our benefit surely, but for their own. You could also question what they want in return should the Coalition be returned.

The best option, politically, for the Government and business, all along was to simply say nothing, not advertise, and to try and shut down all avenues of debate on the issue. I personally think they’ve made the wrong move on this one.

It’s a reasonable argument that businesses should engage in political advertising with a vote of owners – not too sure about other stakeholders. But presumably you’d extend the principle to require unions to poll their members before spending their money on similar ads?

Please note the ratio is 18 dollars of loss suffered on the stock price for every $1 lost in profit.

Fred these are Telstras results for 06. I thought we could use it because its a large Australian firm with oodles of employees.

Note that the stock fell around 11% because the market was expecting they would make about $200 million more and they came in under expectations.

They are paying a 28 cents dividend which represents about 5.7% on current price of the stock. The reason it is yielding so high is because investors think they are in a very competitive environment and the other players will continue to eat away at their market share.

As I said, a $200 million short fall had about an 11% downward effect on the stock price. That means that every time you lose $1 of profit investor disappointment could cause the stock to fall 18 times. This ratio is about right these days as the market punishes stocks that dont meet expectations.

Do you really think investors would want to lose 18 times the value of the stock price for every dollar leeched from the profit line?

Please note that the dividend this year and last was paid on borrowed funds due to the very high capital commitments the firm is going through.

Where would you take the money from, Fred? Would you take it from the dividend, or would you take it from profits? Keep in mind that the dividend is below cash rates and is about 150 basis points higher than other comparably large firms due to the inherent risks. Note, the cash rate is now 6.5%.

Take a look at the borrowing. Pretty big nut to crack with interest payments and in case something goes wrong.

Exactly. And that small proportion of narrowly interested constituents will be controlling the government of 100% of the population. I don’t buy any of the facile assurances to the contrary of Gillard (the real power after the election), Rudd (the “front”) nor the leftist Argy.

How do you raeach ths conclusion, Fred?

Chris Murphy is simply a shonk and has been seen as such in the past two elections.

how can you have assumptions in your model that the ALP has rejected many a time.