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Big Brother imposes fines up to $1M for blaming carbon tax.

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It's not somebodies job, as you said, you will be passing the cost on.

 

You said your racks cost $2500 per month, each right? You seem to imply having 4 of them, totalling $10k a month.

 

And the point is, electricity is a tiny portion of expenses.

 

Therefore to simply cover increased costs. A 6% increase of 3.5% of expenses is a 0.21% increase in expenses. Given the ratio of revenue to costs in that industry, then revenue needs to be raised by 0.19%. One could do that by raising all prices across the board by 0.19%. Of course, one could also simply raise prices by 6% and blame the carbon tax, thinking 6% here = 6% over there.

 

This industry instead direct to consumers with the mass of the population, by the time that filters down to them indirectly through business to business to business finally to consumer, it is completely diluted.

 

 

 

Leonid

 

You're going to need to provide more details. The percentage of total necessary expenses this $150 a month increase represents for your business. Then we can talk business.

 

You need to clarify some things... 4000kVa is 3200kW.. even at 13c per kWh.. that's a lot.. more than you're paying.

 

I know you said you do not know what component of that is electricity. But what other possible resource costs could there be?

 

 

 

It seems like you're implying that you don't own that business, and are outsourcing servers from them, in which case, neither the $2500 or $150 is the actual direct expense or actual rise of cost running these servers. But the amount they decide to charge you.

 

 

 

However, if you are in the fortunate position of the bulk of your costs in utilities, then either you are paying far far far too much for utilites, or if you're not and this rise poses a threat to your business, or a substantial price increase, your prices are way way below market rate anyway.

Edited by Athiril

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Hell, let me calculate for you the amount of area needed to run Australia on solar power.

 

The only 24-hour solar plant in the world is in Spain - the Gemasolar plant. That is the most high-tech solar plant in the world, and the most efficient, outside of research labs.

 

It consumes an area (total, inc batteries) of 343.2 acres or 1388881m^2. It produces a peak of 19.9MW.

 

Or 14W/m^2.

 

Australia's current requirement stats show 56GW in production. That means to satisfy it with solar, we need 4000000000m^2 worth of solar plant. Or 4,000km^2.

 

However, that was a calculation on peak production. A year of running showed a capacity factor of 63.1%. That means we need to compensate with land by increasing the land requirement to 6339km^2.

 

That's a facility 79km x 79km.

 

 

 

Not doable. Not even close. Not considering Gemasolar cost EU$250m and we'd need 4560 of them to satisfy Australian power requirements.

 

You said your racks cost $2500 per month, each right? You seem to imply having 4 of them, totalling $10k a month.

I clearly said I had 2 of them. The other datacentre has different costings and I have no word of Carbon Tax impact on it.

 

And the point is, electricity is a tiny portion of expenses.

Racks are actually the biggest expense we've got. And they're about to get at least 6% more expensive. At least.

 

Therefore to simply cover increased costs. A 6% increase of 3.5% of expenses is a 0.21% increase in expenses. Given the ratio of revenue to costs in that industry, then revenue needs to be raised by 0.19%. One could do that by raising all prices across the board by 0.19%. Of course, one could also simply raise prices by 6% and blame the carbon tax, thinking 6% here = 6% over there.

Your figures are wrong. Your stats are average across the big players as well as the small players in that field.

 

I don't need to tell you that small businesses have less leverage. For example, Equinix will do deals for a number of racks where they cost less per rack - even by up to 30%. That kind of discount is inaccessible to small businesses.

 

Our costs are higher than the average. Big businesses with clouds, have lower costs than we do per client.

 

This industry instead direct to consumers with the mass of the population, by the time that filters down to them indirectly through business to business to business finally to consumer, it is completely diluted.

Like I said - it may be. Tax works in exactly the same way as the trickle-down economy... those whom tax reaches last, feel its effects the least.

 

However, this tax, has a purpose. To save poley bears from drowning in boiling Arctic seas by penalising big polluters for polluting.

 

You've just admitted that businesses will pass the tax on at no cost to themselves. Where's the penalty?

 

 

Leonid

 

You're going to need to provide more details.

I don't need to provide you with anything. You must be under the assumption that I want to hear you attempt to justify this.

 

This assumption could not be further from the truth. I am telling you simply what will happen, not what is modelled to happen. Government is making businesses less internationally competitive by increasing their costs and affecting their bottom lines unless jobs are shed OR the costs are passed on.

 

The percentage of total necessary expenses this $150 a month increase represents for your business. Then we can talk business.

We don't know yet. Remember, we only have one component thus far. We have an office and another datacenter. And the 6 diesel generators in one DC and 2 in the other are still not accounted for.

 

Also $2500 a month seems a bit much for electricity costs for 4000kVA. I know you said you do not know what component of that is electricity. But what other possible resource costs could there be?

There must be something wrong with your comprehension.

 

I've clearly said I pay $2500/month/rack. I've also clearly said that I don't know what percentage of that is the cost of electricity to supply said 4kVA (not 4000kVA). I'm not privy to that information, nor is any customer of the datacentre.

 

Things are going to cost more, and people are going to have less purchasing power, won't that mean that there will be less things trading hands and thus less carbon produced.

 

What's the problem with this chain?

The problem is the shrinking economy that comes with that if you follow the slippery slope.

 

If you don't, you have a slower rate of economic growth and more exposure to shocks.

 

Athiril: where did you get the 3.5% of total costs figure for electricity for Australian cloud providers?

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Yes. Someone was crying on the radio today that the scheme should be scrapped purely because growth forecasts it relied upon when being made/implemented/whatever have turned out to be wrong.

 

I don't remember other taxes being called to be scrapped in low growth years, tho'.

 

I've never been quite clear - is the fear of reduced competitiveness in the global market aimed at 'us' trying to make foreign sales, or with losing out to local sales by consumers going with imports that skip the extra costs?

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Yes. Someone was crying on the radio today that the scheme should be scrapped purely because growth forecasts it relied upon when being made/implemented/whatever have turned out to be wrong.

 

I don't remember other taxes being called to be scrapped in low growth years, tho'.

I don't remember too many proven-useless taxes being created in low-growth years as the world teeters on the bring of another recession, either.

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Sorry I made a typo, it is late.

 

For starters, I do not agree with the carbon tax being either a good idea, or helping reduce carbon output among other things. What I am arguing is that it isn't going to cause huge bullshit cost rises.

 

This assumption could not be further from the truth. I am telling you simply what will happen, not what is modelled to happen. Government is making businesses less internationally competitive by increasing their costs and affecting their bottom lines unless jobs are shed OR the costs are passed on.

You've already stated costs will be passed on. The Government is not making businesses less internationally competitive. The costs broadly across the industry are not going to rise by fuck all. Because utilities are sweet fuck all in the total costs for businesses.

 

You're logic is also flawed, you say that Government makes businesses less internationally competitive, unless they cut jobs or cut costs? Both job cutting, and passing on costs makes you less competitive, that is not a solution to remain competitive. Hol-y crap. Accepting a slightly smaller amount of profit per year to the business (this doesn't affect owner wages, as drawings are taken out before profit) keeps the status quo as far as competitiveness is concerned.

 

Regardless, the cost rises for industries concerned are small, and not going to affect competitiveness by passing them on. Secondly competitiveness isn't simply measured on direct cost of a product or service, that idea is ridiculous.

 

Tha entire idea is retarded.

 

I don't need to provide you with anything. You must be under the assumption that I want to hear you attempt to justify this.

Actually you do, or you need to stfu. You are stating X, providing incomplete figures that are MEANINGLESS on their own, as we cannot see what portion of real cost this is, and in turn how much prices would need to rise, you are making a statement of contradiction against what the Government has stated, and what figures show.

 

You need to actually provide at least data to back that up with in your individual case (which wouldn't be representative of the industry). You state all this, therefore the burden of proof is on you. I've given industry figures showing what's what. Your simply word of "what's going to happen because I said so" is worthless bullshit.

 

 

Utilities are 3.5% for your industry. It DOES NOT MATTER that small businesses have higher costs, this is the average across the entire industry, and that is the point, 3.5% is the entire cost for the entire god damn industry. And is what everything, as a whole, is going to experience in cost rises against that 3.5% in electricity, and this is the net effect that will be experienced by the net population. IE: Cost rises that will be felt by the majority of people.

 

This goes for all industries everywhere. If X is 2% of the cost over the entire industry, and X is set to rise by even 50%, and industry total costs were $1bn, with $1.1bn revenue. Then total costs only rise by $10 million, or 1%. To maintain a profit margin of $100 million, we need to increase revenue by $10 million. Therefore prices across the industry would need to rise 0.91% to do that.

 

 

And this rise is a portion 3.5% of costs not the whole lot, it doesn't matter that your costs may be more, because these are not your expenses, these are the datacentre's expenses. You cited $150 a month rise in electricity costs.

 

 

4kva = 3.2kw, I've see the rate for Sydney quoted as about 13c/kwh, I don't know the accuracy of that. That's about $310 a month in electriy per rack. Australia produces just under 1kg per kwh of electricity iirc. At $23 per metric tonne of CO2.. that should be $54.76 rise in electricity costs. Now you cited $150 as an electricity cost rise. I doubt that is the whole story.

 

The actual electricity cost rise should be then 2.14% of your rack rates, not 5.67%.

 

In any case, you do not know what your total costs are? This means you do not know where your money is going. This means you cannot possibly present any kind of point in relation to costs, when you don't bloody know what your costs are as a business owner.

 

 

 

That 5.67% rise portion, or +6% of current rack rates, is going to be lower with all your other expenses added in. Again, you have said you do not know what your business expenses are, therefore you cannot argue how a $150/month rise is going to affect you. This $150/moth rise is simply at the discretion of a third party as well.

 

 

 

 

 

 

 

 

 

 

 

Leonid, what you are doing is something like this:

Government: X, because A, B, C.

Leonid: No, X is bullshit, and completely opposite because B.

 

B is meaningless without A and C to put it in context.

External data showing B is completely out of context.

 

Leonid: I don't know what A is.

Leonid: I refuse to provide context.

Leonid: I don't need to, because I am right.

Leonid: And the Government is wrong.

Leonid: Because I said so.

 

 

 

I've never been quite clear - is the fear of reduced competitiveness in the global market aimed at 'us' trying to make foreign sales, or with losing out to local sales by consumers going with imports that skip the extra costs?

Are you talking about retail? And they're supposed losses to overseas markets, where they cry about wanting lower GST thresholds (which would be bs anyway given price discrepancies), about how hard done by they are?

 

Basically the anti-competitive whingefest by retailers?

 

That industry is in a mature state. There is no high growth, nor should they expect it, nor should they expect the right to consumer's dollars by coercive measures.

 

For general consumer goods, the yearly revenue $121.1 billion, profit $6.7 billion, $3.3 billion in exports.

 

High comeptition is faced from online, yes, but the actual major factors in decided growth or shrinkage in Australian retailling are: Real household disposable income, consumer sentiment index, national unemployment rate, real GDP growth and 10-year bond rate.

 

Though, the interesting thing about it being a mature industry is this;

Revenue volatility: LOW

Capital intensity: Low.

Barriers to entry: Low.

Regulation Level: Light.

Industry Globalisation: Low.

Competition Level: Medium

 

Harvey Norman has 2.5% of consumer goods retailing market. They made $6.64 billion in sales from 2010-2011. Up 1.7% from previous year despite negative growth of industry.

 

There is little doubt that the hottest topic in the sector in 2011 was online spending. A number of leading retailers joined forces through the Fair Imports Alliance to pressure the government to reduce the tax-free threshold on goods bought online from international retailers. The campaign was a disaster as it failed in almost every objective.

 

The Productivity Commission released a report into the productivity of Australia’s retail sectors in December 2011 that stated lowering the tax-free threshold on goods purchased overseas was not feasible and would cost more to implement than it would raise in revenue.

 

Most importantly, the public campaign only served as free publicity for online retailers, which saw a surge in demand. From a global perspective, Australian retailers are unique in their belief that online retail is a threat.

 

Around the world retailers are embracing online sales platforms as an extension of their existing businesses, enabling them to reach more customers.

The real 'loss' of business is from smaller players to the big guys (The ones whinging about losing business, it's okay when they steal business though).

Despite the largely well-defined and established segments across the consumer goods market, the performance of a number of players has been increasingly affected by intense competition from external operators.

 

Department stores are the largest offenders, expanding and infiltrating a number of specialist retail markets including clothing retail, recorded music retail, computer and software retail and book retail. Category killers like Bunnings in hardware retailing have affected the performance of garden supply retailers.

 

The sheer size and buying power of consumer goods giants like Myer, Harvey Norman, Bunnings and Big W have enabled them to offer competitive prices across a range of product lines and regular promotional deals to meet all budget needs.

Retailers in Australia experience a high rate of employee theft and fraud, resulting in an annual cost of $3.0 billion for retailers, with such costs in many circumstances transferred to consumers.

 

Despite efforts to reduce external consumer theft, retailers are now challenged to reduce and eliminate theft internally. Key products popular for employee theft include shaving products, cosmetics, face creams, perfumes, CDs and DVDs, fashion, electronic games, mobile phones and watches.

 

In some circumstances, supply shortages have been attributed to theft of these popular products.

Edited by Athiril

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For starters, I do not agree with the carbon tax being either a good idea, or helping reduce carbon output among other things. What I am arguing is that it isn't going to cause huge bullshit cost rises.

I didn't say they would be huge. I just said they would be there, and I have reason to highly doubt treasury modelling, based as it is on a world-wide pricing of carbon.

 

You've already stated costs will be passed on. The Government is not making businesses less internationally competitive. The costs broadly across the industry are not going to rise by fuck all. Because utilities are sweet fuck all in the total costs for businesses.

Really? Tell that to an aluminium smelter :)

 

Second - our price of $23/t is the highest in the world or close too. And this is the most comprehensive scheme in the world. How exactly is it that we're not making our businesses less internationally competitive?

 

You're logic is also flawed, you say that Government makes businesses less internationally competitive, unless they cut jobs or cut costs? Both job cutting, and passing on costs makes you less competitive, that is not a solution to remain competitive. Hol-y crap. Accepting a slightly smaller amount of profit per year to the business (this doesn't affect owner wages, as drawings are taken out before profit) keeps the status quo as far as competitiveness is concerned.

Please don't go into business until you've done Business 101.

 

Also:

"The Government is not making businesses less internationally competitive."

"Both job cutting, and passing on costs makes you less competitive"

 

Two almost consecutive sentences Athiril. You've already acknowledged businesses will pass on costs. Then you say that is not the Govt. making businesses less competitive, then you say passing on costs makes businesses less competitive.

 

Get your argument straight. You're fighting both sides of the coin and making my case for me.

 

Also, cutting jobs can make a business more competitive. Especially if you're in IT and purchase program x for $y and get rid of employee z who costs $2y because program x automates his/her job. That's basic business Athiril.

 

Regardless, the cost rises for industries concerned are small, and not going to affect competitiveness by passing them on.

Are you going to cite treasury modelling again to prove this?

 

Secondly competitiveness isn't simply measured on direct cost of a product or service, that idea is ridiculous.

You're fighting a spoonman. No-one said otherwise.

 

However increased costs do make a business less competitive.

 

Actually you do, or you need to stfu. You are stating X, providing incomplete figures that are MEANINGLESS on their own, as we cannot see what portion of real cost this is, and in turn how much prices would need to rise, you are making a statement of contradiction against what the Government has stated, and what figures show.

You have the exact proportion of increase of cost on the only aspect of the business that I have information on as yet. When July 1 hits, I'll have more info.

 

You need to actually provide at least data to back that up with in your individual case (which wouldn't be representative of the industry). You state all this, therefore the burden of proof is on you. I've given industry figures showing what's what. Your simply word of "what's going to happen because I said so" is worthless bullshit.

I don't need to provide anything. I've explained to you that the cost of my rack due to electricity hikes under the carbon tax are an extra $150.

 

Industry figures are meaningless. It's like measuring a convenience store on Woolworths' numbers.

 

Utilities are 3.5% for your industry.

Evidence please! Where did you get this number? Pull it out of thin air?

 

It DOES NOT MATTER that small businesses have higher costs, this is the average across the entire industry, and that is the point, 3.5% is the entire cost for the entire god damn industry. And is what everything, as a whole, is going to experience in cost rises against that 3.5% in electricity, and this is the net effect that will be experienced by the net population. IE: Cost rises that will be felt by the majority of people.

This is like arguing with a child.

 

There are not many small private clouds in Australia and plenty of big ones. This means that the figures are skewed to them. By virtue of their size, they are able to extract massive discounts across the board.

 

Cloud computing is not a saturated industry with thousands of players. There's maybe 100 private clouds in Australia and the top 5 would have more clients than the next 95 combined.

 

I am not talking about the industry. I don't care about industry averages. I care about my bottom line.

 

And this rise is a portion 3.5% of costs not the whole lot, it doesn't matter that your costs may be more, because these are not your expenses, these are the datacentre's expenses. You cited $150 a month rise in electricity costs.

Where is this 3.5% from?

 

4kva = 3.2kw, I've see the rate for Sydney quoted as about 13c/kwh, I don't know the accuracy of that. That's about $310 a month in electriy per rack. Australia produces just under 1kg per kwh of electricity iirc. At $23 per metric tonne of CO2.. that should be $54.76 rise in electricity costs. Now you cited $150 as an electricity cost rise. I doubt that is the whole story.

 

The actual electricity cost rise should be then 2.14% of your rack rates, not 5.67%.

Again, it's like arguing with a child, except the child makes assumptions he knows nothing about.

 

Racks don't stand in stand-alone dark rooms. They stand in air-conditioned datacentres. These datacentres also have lights, core switches, terminals, comms.

 

My 4kVA rack supplies 4kVA inside the rack and an unknown component $x is the electricity cost. Total I pay is $2500.

 

The total I directly consume is 4kVA. The total I indirectly consume is anyone's guess. Air-conditioning, lighting, core equipment all form part of the price and all require power.

 

In any case, you do not know what your total costs are? This means you do not know where your money is going. This means you cannot possibly present any kind of point in relation to costs, when you don't bloody know what your costs are as a business owner.

Maybe I need to repeat this again since it appears to be so difficult for you to understand.

 

At the beginning of every month I get an invoice. That bill has the following items on it:

6 Ethernet cross-connects

2 FC cross-connects

2 x 4kVA racks SYD2

 

I do not know my electricity costs. They are not listed on the invoice nor made available to me by the datacentre. They could be 1% of the $2500 per rack I pay or 40%. I've no idea, nor does anyone in Equinix.

 

This is how things work in business.

 

If you asked any of my clients what their licensing costs of MS software were as a component of their monthly spend with my business, they'd have no idea. They pay $x a month and we pay licensing $y out of that. Their invoice doesn't itemise our profit and costs.

 

That 5.67% rise portion, or +6% of current rack rates, is going to be lower with all your other expenses added in. Again, you have said you do not know what your business expenses are, therefore you cannot argue how a $150/month rise is going to affect you. This $150/moth rise is simply at the discretion of a third party as well.

I repeat for you again: the more you use figures about an industry you don't know about, the more foolish it's going to look.

 

We will make a judgement call on what the effect to our bottom line will be when we know the full details. It may not be $150/month. It may end up being $1000 across both data centres.

 

The point is that this does affect our bottom line. And given that MS have recently increased SPLA licensing costs on certain products, and the addition of the carbon tax - we will be passing costs on to clients.

 

And then to their clients and then to individual consumers.

 

Living is going to get more expensive. Maybe not by much. Or maybe by a lot.

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Athiril, I didn't see this earlier, so I'll reply now

 

Leonid, what you are doing is something like this:

Government: X, because A, B, C.

Leonid: No, X is bullshit, and completely opposite because B.

 

B is meaningless without A and C to put it in context.

External data showing B is completely out of context.

 

Leonid: I don't know what A is.

Leonid: I refuse to provide context.

Leonid: I don't need to, because I am right.

Leonid: And the Government is wrong.

Leonid: Because I said so.

Let me explain to you why you don't understand the simple things that I'm saying.

 

First of all, you've got made up figures for my industry. Unless a company owns their own datacentre, their electricity costs are abstracted to them - they've no idea what the total direct and indirect use of datacentre electricity is, as a proportion of their total datacentre costs. My industry is not "IT". My industry is "cloud computing" - as far as I know there are no published electricity cost metrics as a percentage of total costs for Australian cloud providers.

 

In car terms - if you buy a car, you don't know what percentage of the cost is the engine. You don't get that information. You just get the car's specs and a price.

 

Thus, your entire effort to quantify how much my electricity should cost me out of $2500 that I pay per rack, is a futile effort. The rack is not the only electricity in the datacentre that I use, nor does the datacentre work on a normal single-feed grid. So when I tell you that I don't know what my electricity cost is, it's not because I don't want to tell you - it's because I don't know. Nor does anyone who hosts in a datacenter. The $150 is how much I'll pay extra per rack, based on an estimate given by the power utilities to the datacentre - an estimate I'm not privy to, nor will I ever be - so I can't tell you whether it is fair or not, or how much electricity I actually use all up, according to the datacentre.

 

The reason why the government is lying to you is because they can't track costs. Hell, the recent legislation in QLD and NSW that makes it a requirement for utilities to print your carbon tax component of your bill, from July 1 - was adjusted because the carbon tax component is a running daily average split across consumers by the power utility. Thus only an approximate can be made. The other reason they're lying is that their paper is constructed on the basis of united international effort where competitiveness isn't lost because everyone hikes up a carbon tax. This is decidedly not the case.

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And then there's the unregulated carbon derivative market to take into account as well, I wonder how that will jack things up? Same as oil I guess?

 

Link

 

Infographic: Visualising The Size Of Australia’s Carbon Derivatives Time Bomb24

 

Apr

On July 1, 2012, the government’s Clean Energy Future scheme will officially begin.

 

You know it as the carbon “tax”. It has been called a “tax” over and over and over again, by politicians, economists, bankers, and other vested interests, for a simple reason.

 

There are many who want you to think that the scheme to “put a price on carbon” is safe; that the government’s implementation of a “carbon price” is careful, methodical, and prudent. A “fixed price” on carbon dioxide for 3 years. And only after 3 years, a transition from a fixed price to a “floating price” emissions trading scheme.

 

But there is something very important that they are not telling you.

 

There is a Ticking Time Bomb Hidden In The Carbon Tax.

 

It is called “derivatives”.

 

Carefully buried in 1,000+ pages of legislation, just 2 tiny, opaque clauses (109A and 110) have been included that allow the banks to immediately begin creating and trading unlimited quantities of unmonitored, unregulated carbon “securities” (another term for “derivatives”).

 

What are “derivatives”?

 

SHORT STORY: Pick something of value, make bets on the future value of “something”, add contract & you have a derivative. Banks make massive profits on derivatives, and when the bubble bursts chances are the tax payer will end up with the bill. This [graphic below] visualizes the total coverage for derivatives (notional). Similar to insurance company’s total coverage for all cars.

 

LONG STORY: A derivative is a legal bet (contract) that derives its value from another asset, such as the future or current value of oil, government bonds or anything else. [Example] A derivative buys you the option (but not obligation) to buy oil in 6 months for today’s price/any agreed price, hoping that oil will cost more in future. (I’ll bet you it’ll cost more in 6 months). Derivative can also be used as insurance, betting that a loan will or won’t default before a given date. So its a big betting system, like a Casino, but instead of betting on cards and roulette, you bet on future values and performance of practically anything that holds value. The system is not regulated what-so-ever, and you can buy a derivative on an existing derivative.

 

Most large banks try to prevent smaller investors from gaining access to the derivative market on the basis of there being too much risk. Deriv. market has blown a galactic bubble, just like the real estate bubble or stock market bubble (that’s going on right now). Since there is literally no economist in the world that knows exactly how the derivative money flows or how the system works, while derivatives are traded in microseconds by computers, we really don’t know what will trigger the crash, or when it will happen, but considering the global financial crisis this system is in for tough times, that will be catastrophic for the world financial system…

 

Australia’s banks already trade in derivatives. Most of their derivatives bets are on movements in Interest Rates and Foreign Exchange Rates. And they have a total exposure to just these forms of derivatives, that is truly mind-boggling.

 

The numbers are so big, that no one can comprehend them.

 

You have to see it for yourself.

 

First, via the superb demonocracy.info website, here is an infographic to help you visualise what $1 Trillion looks like (click image to enlarge):

 

 

Click to enlarge | Graphic source: demonocracy.info

Got that?

 

$1 Trillion is a lot of money*.

 

The value of all Australians’ superannuation savings combined, is about $1.3 Trillion. As is the claimed annual “GDP” of the Australian economy.

 

Now, here is an infographic showing the Australian banks’ recent record high total “Off-Balance Sheet” derivatives exposure. Remember, this is before the official start of a “price on carbon” allows the banks to start creating and trading carbon derivatives too (click image to enlarge):

 

 

Click to enlarge | Graphic source: demonocracy.info | Data source: RBA statistics

I want to emphasise the point made earlier.

 

Almost everyone incorrectly believes that no trading will happen until 2015. But the truth is, the banks can begin creating and trading in carbon derivatives from Day 1. Even though the scheme is supposed to be a “fixed price” scheme for the 3 years up to 2015.

 

Those 2 little clauses I mentioned earlier (109A and 110), are the reason why trading will begin from Day 1. Trading in carbon derivatives, that is.

 

They are opaque, easy-to-overlook clauses stating that the Clean Energy Future legislation does not prevent the creation of and trade in carbon “securities”.

 

The designers of the legislation (no, not the politicians), know full well that the banking industry can and does create and trade derivatives on everything.

 

Including the date of your death. That’s right. We have previously documented how banks are trading in Death Derivatives.

 

All that is needed, is for there to be a “price” put on some thing, effectively making that thing a “commodity”.

 

Once there is an underlying price, then banks can create a derivative.

 

Provided there is no law specifically preventing them from doing so.

 

It is that simple.

 

And that is why the Clean Energy Future scheme has those two little clauses buried inside. As Explanatory Memorandum 3.36 confirms, they are “included for the avoidance of doubt” that the government does NOT wish to prevent the banks creating carbon derivatives.

 

That is also why, just 3 days after the government released its draft legislation for “putting a price on carbon”, it was reported that:

 

Australian banks are eyeing opportunities to cash in on the proposed carbon tax by developing new financial products and services that capitalise on a market seen to be worth billions of dollars annually, according to a report by the Australian Financial Review.

 

Australian financial firms that have experience in European carbon markets, such as Macquarie Group Ltd, Westpac Banking Corp Ltd and ANZ Banking Group Ltd are particularly keen to establish their presence in the Australian market….

 

ANZ’s head of energy trading said the value of the derivatives carbon market would dwarf the $10 billion initially raised by the government, according to the AFR.

 

You have now seen just how mind-bogglingly enormous is our banks’ exposure to (mostly) Interest Rate and Foreign Exchange Rate derivatives.

 

$17.93 Trillion is equivalent to nine (9) skyscrapers made of pallets of $100 bills, each towering more than twice the height of the Sydney Harbour Bridge.

 

The $10 billion that the government will raise from forcing companies to buy carbon permits – the basic mechanism for “putting a price on carbon” – is almost nothing compared to the value of derivatives that banks will create and trade.

 

Unmonitored.

 

Unregulated.

 

Off-Balance Sheet.

 

The government’s claimed $10 billion in expected revenue from the Clean Energy Future scheme, is equivalent to just one (1) of the 10 x 10 squares of pallets forming the base of one (1) of those derivatives skyscrapers pictured above.

 

That’s one (1) storey in two hundred (200).

 

I hope that you now have a better idea – a clear picture in your mind’s eye – of what the ANZ Bank’s head of energy trading meant, when he gleefully said that the value of the carbon derivatives market would dwarf the $10 billion initially raised by the government.

 

A government that has followed the lemming-like lead of Ireland, by explicitly and implicitly putting taxpayers on the hook for the deeds (and misdeeds) of the banks, by placing the nation as guarantor for the solvency of the Australian banking system.

 

Meaning, just like the rest of the West, our banks are Too Big To Fail.

 

And from July 1, thanks to the Clean Energy Future scheme and those two little clauses, the government has handed the banks a licence to print.

 

It is really a licence to kill.

 

Tick.

 

Tick.

 

Tick.

:)

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Leonid - you have stated that Government makes business less competitive UNLESS they pass on their costs or cut other costs - it is passing on costs that makes things less competitive (if the cost is actually substantial), and cuttting costs etc often makes the business less productive and in turn less competitive (negative growth), you need to get YOUR argument straight in case you simply missed the entire point there. Absorbing costs would maintain competitiveness status quo. I'm not saying they should absorb costs, I'm say you are full of fucking shit.

 

I get my figures from industry reports for Australia, for the cloud computing industry, as a portion of revenue it is 3.5% in expenses to utilities, 7.2% rent, 8% depreciatin, 28% wages, 16.2% purchases, and 25.6% other. 11.5% profit as a portion of revenue. For 2011-2012.

 

All industries in the sector have 1.4% in utilities cost - lower than household expenses portion.

 

 

 

 

Your argument is invalid, because you do not provide data or reasoning. Only a statement. "$150" on top of $2500 is incomplete. It doesn't tell us anything at all. Becase we do not know what your current expenses and revenue are. And you are unwilling to provide those figures. If you don't know these figures what they are currently, then any point you think you have to make is only more invalid as you can't even manage your own business, and unware of your costs, and fail as a business owner. If you haven't started business yet, you still do not know the figures, and is completely pointless and meaningless.

 

It is doubly invalid because you cannot compare anything you get from July 1, because you have stated you do not know what your figures are.

 

How the fuck can you possibly present an argument of "this is going to affect me by X" when you don't actually have anything for a baseline comparison?

 

 

 

The specific report I have referred to is Industry Report L7831. Don't talk to me about business 101 if you don't even know what your own fucking figures are let along an industry report.

http://www.ibisworld.com.au/industry/default.aspx?indid=555

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Guest xyzzy frobozz

As an aside....

 

I just thought I'd post this little gem, from none other than the good Lord Monckton.

 

Posted Image

 

Lest anyone have any lingering doubt about this bloke's credibility. American Freedom Alliance sound like a responsible and balanced, like, totally "non-political" (their words) organisation as well.

 

http://www.americanfreedomalliance.org/

 

Can anyone say "GODWINS"!

Edited by xyzzy frobozz

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Leonid:

 

1. In putting a price on carbon, we accelerate the development of these technologies that you are waiting for. This has the long term benefit of reducing over all carbon emissions.

 

2. You seem to concentrate on the technology required to produce carbon-cheap power. But what about technology to be more energy efficient? Consider using more efficient power supplies, using slower CPUs if your applications are disk bound, etc. None of these seem out of our grasp.

 

3. You might pass the cost on, but market competitions says there will also be those who won't, and there will be those who will find ways to be more energy efficient as to maintain their margin and their cost-to-customers. As long as businesses are not colluding, a price on carbon will force companies to optimise for energy efficiency, and if they do, the rise in prices may not be as extreme as you make it out to be.

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Leonid:

 

1. In putting a price on carbon, we accelerate the development of these technologies that you are waiting for. This has the long term benefit of reducing over all carbon emissions.

Proof?

 

2. You seem to concentrate on the technology required to produce carbon-cheap power. But what about technology to be more energy efficient? Consider using more efficient power supplies, using slower CPUs if your applications are disk bound, etc. None of these seem out of our grasp.

We already use servers very efficiently.

 

3. You might pass the cost on, but market competitions says there will also be those who won't, and there will be those who will find ways to be more energy efficient as to maintain their margin and their cost-to-customers. As long as businesses are not colluding, a price on carbon will force companies to optimise for energy efficiency, and if they do, the rise in prices may not be as extreme as you make it out to be.

Everyone will. Even though there aren't many players, there aren't huge margins in private cloud hosting.

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Leonid - you have stated that Government makes business less competitive UNLESS they pass on their costs or cut other costs - it is passing on costs that makes things less competitive (if the cost is actually substantial), and cuttting costs etc often makes the business less productive and in turn less competitive (negative growth), you need to get YOUR argument straight in case you simply missed the entire point there. Absorbing costs would maintain competitiveness status quo. I'm not saying they should absorb costs, I'm say you are full of fucking shit.

And I'm telling you the same except I do it from the position of owning a business. As the only one of us two that does, it's my word we'll be listening to.

 

For a start, we can mention that I never said anything like "Government makes business less competitive UNLESS they pass on their costs or cut other costs". I said that government is making business less internationally competitive by increasing tax when other nations are not.

 

Furthermore, absorbing costs would NOT maintain competitive status quo. It immediately makes overseas clouds more attractive. It also means that the bigger clouds (Telstra, etc) can have lower hikes as they are in a negotiating position.

 

I get my figures from industry reports for Australia, for the cloud computing industry, as a portion of revenue it is 3.5% in expenses to utilities, 7.2% rent, 8% depreciatin, 28% wages, 16.2% purchases, and 25.6% other. 11.5% profit as a portion of revenue. For 2011-2012.

 

All industries in the sector have 1.4% in utilities cost - lower than household expenses portion.

And where are these reports?

 

Show me them. Link them.

 

Your argument is invalid, because you do not provide data or reasoning. Only a statement. "$150" on top of $2500 is incomplete. It doesn't tell us anything at all. Becase we do not know what your current expenses and revenue are. And you are unwilling to provide those figures. If you don't know these figures what they are currently, then any point you think you have to make is only more invalid as you can't even manage your own business, and unware of your costs, and fail as a business owner. If you haven't started business yet, you still do not know the figures, and is completely pointless and meaningless.

Maybe I need to repeat it again, fourth time lucky?

 

This $150/month/rack increase is not the only increase I'm facing. Giving you my other costs won't give you an accurate picture until I know ALL my increases come July 1.

 

So no, I don't know my costs yet because I haven't been given them by my suppliers, yet. And I can guarantee you that you won't get to know my costs because of the carbon tax before I know about my costs due to the carbon tax.

 

It is doubly invalid because you cannot compare anything you get from July 1, because you have stated you do not know what your figures are.

I can tell you one figure. The cost of a rack has increased by at least 6% due to the carbon tax.

 

Arguments?

 

How the fuck can you possibly present an argument of "this is going to affect me by X" when you don't actually have anything for a baseline comparison?

Someone needs to read the first post I made in the thread regarding my cost increase. That someone is you.

 

The specific report I have referred to is Industry Report L7831. Don't talk to me about business 101 if you don't even know what your own fucking figures are let along an industry report.

http://www.ibisworld.com.au/industry/default.aspx?indid=555

Which you haven't read because you haven't paid $845 for this report.

 

So I repeat again: where did you get those figures from?

 

Furthermore, absorbing costs would NOT maintain competitive status quo. It immediately makes overseas clouds more attractive.

I need to explain this one because you're not in cloud hosting and wouldn't have a clue why this would be the case.

 

Australia already has what is called an "Australia tax". For example Microsoft SPLA licenses cost 30% more here across the board than they do in Singapore. Office ProPlus is $24/user/month or something similar. In the States it's $5.40 or something similar. Internet is more expensive in Australia, as is most hardware (servers, storage arrays, etc).

 

The only thing Australian clouds have over US or Singapore clouds is that we're local and comply with Australian data requirements. We also have helpdesks in the same time zone.

 

However in some industries this is not enough - where the data does not need to be kept in Australia, or not all of it. For that we must be innovative and bleeding edge - more so than the international clouds. For that we need money to invest into R&D. That money comes from profits re-invested back into the business.

 

If the government cuts my profit, through increased taxation and I absorb it, I have less to invest in my business, making me less competitive. If I pass it on to my clients and maintain my profit, I can remain technologically competitive but become less competitive on price.

 

In other words, increasing taxes on businesses as a reform can be a good idea. However the carbon tax is not a reform. It is a tax that complicates things so much even treasury has problems modelling it. Nor does it do what it's supposed to do - penalise big polluters such as coal plants, because they do not compete with anyone since their only competition (nuclear) is banned in Australia.

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---

 

Maybe I should write it down one more time. Maybe you'll get it the fifth or sixth time.

 

I don't know what the carbon tax is going to impost on my business come July 1. I only have 1 confirmed price increase and have been told to expect others.

 

Therefore my cost now is known variable X. Lets give it a value of $10000/month. The percentage amount my costs will go up by (thanks Labor) are unknown variable Y. My new costs come July 1 are Z.

 

Solve this equation:

 

Y x 10000 = Z

 

If you can solve this equation, giving me numerical values for Y & Z, I will tell you my costs come July 1. If you can't solve this equation - we're in the same boat.

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You can repeat your bullshit all you want. You're making an awful lot of assumptions. The figures I reference are from the report I linked. Looking at any industry across the board will reveal likewise; electricity increases are going to mean fuck all to actual expense rises, and in turn to actual cost rises.

 

http://www.abc.net.au/news/2012-03-30/carb...-prices/3923062

"Taking both the tariff changes and the carbon tax into account, the average household is expected to see a rise of $122 per year, or 7.6 per cent. "

 

If that same figure applies to business, in your industry, that is still a 0.266% rise in expenses, or $2.2 million, revenue would need to increase by a further $2.2 million to cover, from $1.1 billion to $1.102 billion. 0.182% rise in prices across the board would achieve that.

 

 

And I'm telling you the same except I do it from the position of owning a business. As the only one of us two that does, it's my word we'll be listening to.

No we won't be listening to you, because you're full of shit. "I'm a business owner, you're not, therefore I am right, and the Government is wrong, and the rest of the industry is wrong wrong wrong." is not an argument, not only are you making assumptions, and assuming authority. But it is also ad-hominem. The amount of logical fallacies here is horrendous, you're also assuming, that somehow, your sole business is a good benchmark of performance of all business across Australia, and in turn how it will affect the CPI (the central point), when you cannot even show us how your business will be affected at all.

 

For a start, we can mention that I never said anything like "Government makes business less competitive UNLESS they pass on their costs or cut other costs". I said that government is making business less internationally competitive by increasing tax when other nations are not.

Fuck off.

"Government is making businesses less internationally competitive by increasing their costs and affecting their bottom lines unless jobs are shed OR the costs are passed on."

 

^---

This statement is saying that businesses will be less competitive UNLESS costs are past on, or cost cutting employed (cutting jobs). It is saying this by saying increased costs in businesses will cause them to be less competitive, unless costs are passed on or reduced. So you have directly said that.

 

I can tell you one figure. The cost of a rack has increased by at least 6% due to the carbon tax.

 

Arguments?

Worse then useless because that is misleading.

 

A. You do not know that is solely due to the carbon tax, because it is not your cost that is rising, it is theirs. They can tell you whatever the fuck they wan't. You can roughly find out how much 4kva costs to run in Sydney, and if it appears electricity cost is going up by approximately 50%, something is wrong (like they're lying to you, or not telling you the entire story/reasons of the rise).

 

B. 6% rise in rack unit rental is NOT equal to a 6% rise in expenses! A 6% rise in expenses is NOT equal to a 6% rise in prices!

 

C. It is completely useless because you have not told us your current total expenses, and total current revenue pre-carbon tax. So we cannot see the % of rise in your costs from the rack unit rental, and henceforth cannot see the % rise in your prices that would be needed to simply cover that. I asked that before, and you said you do not know. You don't know your own fucking costs and revenue? This means you don't have a cashflow record, and you do not know where you cash is coming from and where it is going. That reason alone invalidates any usage of your figures. Because they are unknown and incomplete.

 

D. Your figures are not verifiable, you can just claim any old bullshit, like retailers do when bashing online competition. Mine are, because they are not my figures, they are everyone's figures, and are published.

 

E. Your sole business on it's own is not a valid sample or yard stick to benchmark CPI for the whole nation, get real.

 

Someone needs to read the first post I made in the thread regarding my cost increase. That someone is you.

$X cost for A component of expenses + $Y rise in cost of A component tells us fucking nothing at all, because it doesn't tell us the total business expenses, total revenue, and hence can not tell us anything about the % rise in business expenses, and thus cannot tell us what % rise in revenue you would need to make to cover those rises and those rises alone.

 

Because that is EXACTLY what this is about - the % rise in revenue required to meet new costs while maintaining a consistent profit figure or %. You are unwilling or unable to tell us the % rise in revenue required to meet a rise of $150 a month.

 

Which you haven't read because you haven't paid $845 for this report.

 

So I repeat again: where did you get those figures from?

I got them from here:

http://www.ibisworld.com.au/industry/default.aspx?indid=555

 

I've read it, you have not. Learn to understand that difference.

 

If you want to call such basic statements of fact into question (eg; questioning whether I'm lying or not). Then I will call your figures into question. Mine can be proven by anyone who can read that report. All we have to go on from you is incomplete figures that cannot be verified.

 

It is a bit of a laugh for you to require proof of my figures, yet you refuse to provide complete figures from your side, let alone actually PROVE them. Yet you want to argue your contradictory point to these figures and what the Government has said, simply by virtue, of you being a business owner or "I have a business, therefore I am right, I do not need to provide complete data or proof. Here are some arbitrary out of context figures though, look at that 6% rise hurr durr" <-- that is your argument in a nutshell.

 

You do not back anything up, or provide complete data. You do not provide proof, yet question mine and require proof from mine. Your tactic is to simply try and 'disprove' my side. You have no proof, no data, and NOTHING reliable for your side.

 

Posted Image

 

Giving you my other costs won't give you an accurate picture until I know ALL my increases come July 1.

You have stated here you do not have an 'accurate picture'. Therefore you cannot argue shit.

 

Using your business as an example, you cannot argue ANY point given that statement.

 

 

For that we need money to invest into R&D. That money comes from profits re-invested back into the business.

Money re-invested back into the business is called expenses. It is appears on the cashflow under expenses. You might have an R&D line. You might be a research heavy industry and have 100 lines for R&D. But it will be on the cashflow and it will be in expenses.

 

Revenue - Expenses = Profit.

 

Profit has already has this taken out of it.

 

A growth industry may increase their expenses the following year that by a proportion of the previous years profit.

 

2012-2017 has a forecast of 5.7% growth for your industry.

Edited by Athiril

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I don't know.

If not, you have no argument to be making.

 

Business Leonid Clueless on Carbon Tax.

http://www.climatespectator.com.au/comment...less-carbon-tax

 

 

"In looking at the lifecycle analysis data around the carbon emissions involved in food production I can’t for the life of me work out how a pie could be going up by 8 per cent, unless cow’s methane emissions were covered by the carbon price – which they’re not. Yet I suspect this deli example is not an isolated case. A range of small businesses think that they will be heavily punished by the carbon tax and feel a sense of injustice that they won’t be receiving any free permits to compensate them."

 

"The reality is that for the vast majority of businesses, particularly SMEs, the carbon tax will represent almost a rounding error in their operating costs. That is because energy – which is where the carbon tax will have the greatest impact – represents less than 3 per cent of input costs for most of these businesses and the carbon tax will represent an increase in energy costs of about 10 to 20 per cent. So the end result is 0.3 to 0.6 per cent."

 

3.5% in your industry's case, because your industry uses a fair bit more energy than others. I've bolded the important bit. That is where the greatest increase will be.

 

Let's assume 20% rise in energy costs. That is +0.7% in expenses in your industry as a whole. Or 6.83 million. That represents a 0.62% rise in revenue needed to pass on 100% of that cost (and no more). 5% of your industry's market segmentation is to households.

Edited by Athiril

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I guess I should do some digging around to see how much more expensive a kitchen is going to be to run, with gas and electricity and stuff :\

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You can repeat your bullshit all you want. You're making an awful lot of assumptions. The figures I reference are from the report I linked. Looking at any industry across the board will reveal likewise; electricity increases are going to mean fuck all to actual expense rises, and in turn to actual cost rises.

Look at your report. Look at the companies it references. They're multi-nationals. Their costs are different to Australian cloud providers.

 

They also do different things.

 

http://www.abc.net.au/news/2012-03-30/carb...-prices/3923062

"Taking both the tariff changes and the carbon tax into account, the average household is expected to see a rise of $122 per year, or 7.6 per cent. "

 

If that same figure applies to business, in your industry, that is still a 0.266% rise in expenses, or $2.2 million, revenue would need to increase by a further $2.2 million to cover, from $1.1 billion to $1.102 billion. 0.182% rise in prices across the board would achieve that.

That same figure does not apply to business. Jesus Christ - it's like talking to a 12-year-old.

 

My business has 30 or 40 servers running in two racks, plus storage arrays, plus firewalls, plus tape libraries. Just 6 of these servers are Dell R610s with dual 702W power supplies.

 

And all this runs 24/7.

 

No we won't be listening to you, because you're full of shit. "I'm a business owner, you're not, therefore I am right, and the Government is wrong, and the rest of the industry is wrong wrong wrong." is not an argument, not only are you making assumptions, and assuming authority. But it is also ad-hominem. The amount of logical fallacies here is horrendous, you're also assuming, that somehow, your sole business is a good benchmark of performance of all business across Australia, and in turn how it will affect the CPI (the central point), when you cannot even show us how your business will be affected at all.

No I think we will be listening to me instead of you. The rest of the industry is not wrong - they're going to be hit with higher prices as a function of the carbon tax. They've already been informed of it.

 

The government is wrong. This much is true because businesses have already been informed of price rises on individual goods and services of 3%+.

 

Secondly - apparently I can't show my business won't be affected. Apparently that extra $150 a month won't affect me. That's not a function of the carbon tax.

 

LALALALAALA... *fingers in ears* Oh look fairy unicorns!

 

 

For a start, we can mention that I never said anything like "Government makes business less competitive UNLESS they pass on their costs or cut other costs". I said that government is making business less internationally competitive by increasing tax when other nations are not.

 

Fuck off.

"Government is making businesses less internationally competitive by increasing their costs and affecting their bottom lines unless jobs are shed OR the costs are passed on."

Thanks for abusing me while stating the exact same thing I said I had said and then clarified (which you did not quote because it destroys your point)

 

Worse then useless because that is misleading.

 

A. You do not know that is solely due to the carbon tax, because it is not your cost that is rising, it is theirs. They can tell you whatever the fuck they wan't. You can roughly find out how much 4kva costs to run in Sydney, and if it appears electricity cost is going up by approximately 50%, something is wrong (like they're lying to you, or not telling you the entire story/reasons of the rise).

Apparently you're still in a state of utter confusion.

 

I pay $2500 for a rack that delivers 4kVA to my servers and gear. I also use air conditioning supplied by the datacenter, their edge equipment, their lighting, their fans.

 

All of that is electricity. Which is not included in the 4kVA in the rack, yet it is electricity which I must still pay for.

 

B. 6% rise in rack unit rental is NOT equal to a 6% rise in expenses! A 6% rise in expenses is NOT equal to a 6% rise in prices!

You know, it's been a long road but we'll get there.

 

After all I've not been telling you this for the last 20 posts. You've built that spoonman up yourself!

 

Jesus Christ!

 

C. It is completely useless because you have not told us your current total expenses, and total current revenue pre-carbon tax. So we cannot see the % of rise in your costs from the rack unit rental, and henceforth cannot see the % rise in your prices that would be needed to simply cover that. I asked that before, and you said you do not know. You don't know your own fucking costs and revenue? This means you don't have a cashflow record, and you do not know where you cash is coming from and where it is going. That reason alone invalidates any usage of your figures. Because they are unknown and incomplete.

OK, you finally got your head around the first part in B. It's been a long road, but maybe, just maybe we can bring you to where intelligence and sense is.

 

My current expenses pre-carbon tax are irrelevant.

 

Do you know why?

 

Because I don't know what my extra costs are going to be after July 1. I only know one component of my costs that will change. I still don't know how much extra the diesel generators will cost me. I still don't know how much extra the second datacenter will charge me. I've no idea what my office's electricity is going to look like.

 

When I do know these things in July I can calculate exactly what the impost on my business will be.

 

The only thing I know is that due to the carbon tax, the cost to me of my racks is going up by a minimum of 6%.

 

D. Your figures are not verifiable, you can just claim any old bullshit, like retailers do when bashing online competition. Mine are, because they are not my figures, they are everyone's figures, and are published.

They're not your figures. They're the figures of several multi-national companies with huge budgets and amazingly large numbers of employees and a diverse range of products. IBM, HP and CSC own datacentres, not just clouds.

 

They are not the base standard of cloud providers in Australia.

 

E. Your sole business on it's own is not a valid sample or yard stick to benchmark CPI for the whole nation, get real.

Really, then explain to me why 64% of small businesses are worried about the impact to their business?

 

Why are people getting letters telling them of price increases due to the carbon tax?

 

$X cost for A component of expenses + $Y rise in cost of A component tells us fucking nothing at all, because it doesn't tell us the total business expenses, total revenue, and hence can not tell us anything about the % rise in business expenses, and thus cannot tell us what % rise in revenue you would need to make to cover those rises and those rises alone.

Maybe you need things repeated like those people who lose their short term memory.

 

I'm not talking about total business cost. You are.

 

I'm telling you my business costs are going up because of the carbon tax. That is undeniable. Your problem is you want to know how much. So do I. But until I am notified of all the increases, there is no point even trying to work out the cost increases above the current costs.

 

Maybe you need to run a business to work out that you're putting the cart before the horse.

 

Because that is EXACTLY what this is about - the % rise in revenue required to meet new costs while maintaining a consistent profit figure or %. You are unwilling or unable to tell us the % rise in revenue required to meet a rise of $150 a month.

Ah. Now we're talking about revenues, not costs.

 

Let me explain to you how that's going to work. Once July 1 comes and we get notified of all our increased costs from our suppliers, we'll calculate the total impost this tax brings upon our business.

 

Then we'll determine the exact number of clients as at July 1, put in a trended growth rate in terms of rack expansion and calculate the per-user component of the cost. Then we will add that component to our prices.

 

Until then, we know only that things are going to cost us more.

 

I've read it, you have not. Learn to understand that difference.

You've read a report about 3 multi-nationals. Does that report talk to Bluefire, OBT, Thinarc, Localis, Infoplex, geni, Brenner IT? Any of the actual Australian cloud providers, not international mega-corps who own parts of, or entire data centres?

 

You have stated here you do not have an 'accurate picture'. Therefore you cannot argue shit.

I can argue that my cost of a rack is increasing by 6% at least.

 

And that all my other datacenter costs will go up. Can't I?

 

Money re-invested back into the business is called expenses. It is appears on the cashflow under expenses. You might have an R&D line. You might be a research heavy industry and have 100 lines for R&D. But it will be on the cashflow and it will be in expenses.

If you want to talk strict accounting, I believe it appears in the balance sheet under shareholder equity as money retained in the business.

 

I'm not an accountant - I do the IT side of things.

 

To do R&D and retain money, whatever it's labeled as on the accounting side of things, you have to earn a profit. The lower your profit, the less you can retain in the business for R&D.

 

This tax reduces profit unless it's passed onto the business' client base.

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It sounds like you're both arguing over whether that 6% increase on the cost of a rack is greater than that shown by Treasury modelling, vs the cost of a rack is only a subset of the business's total expenses and thus is actually much less than a 6% rise in total costs.

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It sounds like you're both arguing over whether that 6% increase on the cost of a rack is greater than that shown by Treasury modelling, vs the cost of a rack is only a subset of the business's total expenses and thus is actually much less than a 6% rise in total costs.

Leonid wants to argue CPI will be higher than Government projections because increased expenses will be more than Government projections, which causes an increase in raised prices of goods and services by more than the Government projections.

 

He is using his own business as an example, and argues that 6% is the minimum cost.

 

He does not show what % that 6% would be in current total expenses, and what % increase in prices he would have to charge (% rise in revenue) to cover that.

 

He argues he doesn't have enough data yet to show increased expenses, and therefore the amount he needs to increase prices by. (Not enough data to show, yet insists Government projections are wrong? Hmmmm)

 

There are lots of obvious problems and flaws in that argument. He's not providing the data that would support his premise. A single business isn't a yard stick to measure all businesses by. And of course, he does have enough data to show minimum expense rise, thereby being able to show minimum rise in his prices to compensate.

 

You can repeat your bullshit all you want. You're making an awful lot of assumptions. The figures I reference are from the report I linked. Looking at any industry across the board will reveal likewise; electricity increases are going to mean fuck all to actual expense rises, and in turn to actual cost rises.

Look at your report. Look at the companies it references. They're multi-nationals. Their costs are different to Australian cloud providers.

 

They also do different things.

Somebody cannot read. The report is SOLELY on Cloud Computing in Australia, as per the title of the report. The report doesn't cover or include other activities, ONLY cloud computing, and ONLY within Australia.

 

The market share for AUSTRALIA, is 12% for CSC Computer Sciences Australia Holdings Pty Ltd, 20% IBM A/NZ Holdings Pty Ltd, 25% HP Enterprises Australia Pty Ltd, and 43% other (all other businesses within Australia).

 

Each industry report's figures are ONLY for that industry, and are AUSTRALIA specific.

 

Learn to read.

 

No we won't be listening to you, because you're full of shit. "I'm a business owner, you're not, therefore I am right, and the Government is wrong, and the rest of the industry is wrong wrong wrong." is not an argument, not only are you making assumptions, and assuming authority. But it is also ad-hominem. The amount of logical fallacies here is horrendous, you're also assuming, that somehow, your sole business is a good benchmark of performance of all business across Australia, and in turn how it will affect the CPI (the central point), when you cannot even show us how your business will be affected at all.

No I think we will be listening to me instead of you. The rest of the industry is not wrong - they're going to be hit with higher prices as a function of the carbon tax. They've already been informed of it.

 

The government is wrong. This much is true because businesses have already been informed of price rises on individual goods and services of 3%+.

 

Secondly - apparently I can't show my business won't be affected. Apparently that extra $150 a month won't affect me. That's not a function of the carbon tax.

 

LALALALAALA... *fingers in ears* Oh look fairy unicorns!

 

You haven't provided any evidence what so ever, just your usual anecdotal bullshit. You haven't even provided actual figures. Your $2500 + $150 figures count for nothing without current expenses and current revenue. It doesn't and cannot show anything without that. You need to provide current expenses and current revenue to use them as an example. You need to provide those figures, then you need to prove those figures are real, and then you need to prove that this is actually a benchmark comparison to how the CPI will be affected.

 

 

 

 

 

Thanks for abusing me while stating the exact same thing I said I had said and then clarified (which you did not quote because it destroys your point)

You're welcome, it's because you're lying idiot. Your statement is self-contradictory from the very beginning which is what I have been pointing out, except you claim you never said that, when you did.

 

 

 

 

My current expenses pre-carbon tax are irrelevant.

 

Do you know why?

 

Because I don't know what my extra costs are going to be after July 1. I only know one component of my costs that will change. I still don't know how much extra the diesel generators will cost me. I still don't know how much extra the second datacenter will charge me. I've no idea what my office's electricity is going to look like.

 

When I do know these things in July I can calculate exactly what the impost on my business will be.

 

The only thing I know is that due to the carbon tax, the cost to me of my racks is going up by a minimum of 6%.

Your pre-carbon tax expenses and revenue are completely relevant.

 

Do you know why? BECAUSE YOUR FUCKING FIGURES YOU PROVIDED ARE MEANINGLESS WITHOUT THEM!

 

You claim that the Government is wrong. Cost rises will be more. CPI will be more. Your concept of this stems from you being told your costs will rise by at least $150.

 

Without these figures to complete them, you cannot even claim your expenses will be higher than what ther Government projects. Because you have not data. With them you can show that costs will rise by at least X% due to 6% rise in proportion of Y% expenses. With Revenue, you can show that that revenue will need to rise by (100 / revenue * (revenue - expenses*x%))% to cover those costs.

 

You also imply that your somehow, your business performance, and hence expenses will be representative of all business, because you state the Government is wrong, costs will be more, based on your own business figures.

 

 

 

 

 

 

 

 

D. Your figures are not verifiable, you can just claim any old bullshit, like retailers do when bashing online competition. Mine are, because they are not my figures, they are everyone's figures, and are published.

They're not your figures. They're the figures of several multi-national companies with huge budgets and amazingly large numbers of employees and a diverse range of products. IBM, HP and CSC own datacentres, not just clouds.

 

They are not the base standard of cloud providers in Australia.

 

 

Are you retarded?

 

Posted Image

 

 

 

 

 

 

E. Your sole business on it's own is not a valid sample or yard stick to benchmark CPI for the whole nation, get real.

A. Really, then explain to me why 64% of small businesses are worried about the impact to their business?

 

B. Why are people getting letters telling them of price increases due to the carbon tax?

 

A. http://www.climatespectator.com.au/comment...less-carbon-tax

 

B. Provide credible proof, and http://www.news.com.au/money/cost-of-livin...v-1226366534694

 

 

 

 

 

Maybe you need things repeated like those people who lose their short term memory.

 

I'm not talking about total business cost. You are.

 

I'm telling you my business costs are going up because of the carbon tax. That is undeniable. Your problem is you want to know how much. So do I. But until I am notified of all the increases, there is no point even trying to work out the cost increases above the current costs.

 

Maybe you need to run a business to work out that you're putting the cart before the horse.

No, you're telling us a bunch of bullshit.

 

Your problem is your claiming the Government is wrong, and the CPI will go up more than claimed, due to business costs going up more than projected. You cite your raised costs as an example. You state this a MINIMUM of your raised costs. Therefore, with CURRENT expenses and CURRENT revenue. We can see based on the provided figures what YOUR business (and not business in general!) expenses would rise by as a % MINIMUM, and what MINIMUM price rise % would be needed to cover that!

 

If you do not wan't to provide that. DO NOT USE YOUR FUCKING FIGURES AS AN EXAMPLE OF COSTS INCREASING MORE THAN WHAT THE GOVERNMENT IS PROJECTING, BECAUSE YOU CANNOT SHOW THAT WITHOUT THOSE FIGURES, LET ALONE TRY TO PROVE IT. HINT: YOU COULD SHOW MINIMUM AMOUNT AS A % YOU NEED TO RISE YOUR PRICES BY ALREADY. YOU DO NOT NEED JULY 1 INFORMATION FOR THIS.

 

And again, you're making assumptions there.

 

Don't you get tired of using ad hominem to try and discredit an argument?

 

 

Ah. Now we're talking about revenues, not costs.

 

Let me explain to you how that's going to work. Once July 1 comes and we get notified of all our increased costs from our suppliers, we'll calculate the total impost this tax brings upon our business.

 

Then we'll determine the exact number of clients as at July 1, put in a trended growth rate in terms of rack expansion and calculate the per-user component of the cost. Then we will add that component to our prices.

You insist that everyone's costs they will pass on will be larger than the Government's projections.

 

You cite your raised costs of a minimum of $150 per rack per month as an example.

 

This doesn't show your passed on costs will be larger than the Government's projections, it also does not show that your increased expenses will be more than the Government's projections. It simply is a value with no context. You do not need to wait till July 1st to see these figures, because you state that it is the MINIMUM rise you will face.

 

 

 

 

Your claim costs will rise by more than the Government projects. You are only stating this, you are only making a statement of contradiction. You are not providing evidence. There is a lot of evidence stacked against you. Such as:

 

A. The bulk of cost increases from the carbon tax are going to be energy costs.

 

B. They are going to be around 10-20% for businesses. And 7% or so for home expenses, etc.

 

C. Utility expenses are only a few percent in any industry I've looked at so far.

 

 

 

Given, if A, B, and C are true. Then the Government's projections look about right.

 

You state the Government's are wrong. Which of A, B and/or C do you disagree with? Provide credible evidence.

 

 

Until then, we know only that things are going to cost us more.

 

 

 

You say your cost rises are minimum X.

 

You can clearly work out minimum expense rise %, and minimum revenue increase % to cover minimum expense rise.

 

Show those figures, or retract your business as an example. Without that you cannot show that costs are higher than Government projections.

 

 

 

You've read a report about 3 multi-nationals. Does that report talk to Bluefire, OBT, Thinarc, Localis, Infoplex, geni, Brenner IT? Any of the actual Australian cloud providers, not international mega-corps who own parts of, or entire data centres?

They are not the major players in the Australian market, like it or not, the 3 companies listed in the report are THE major Australian Cloud Computing providers. The 3 companies mentioned hold 57% of the Australian cloud computing market, the remaining 43% is divided among everyone else. Everyone else's figures are included. The figures are an overall picture of the *entire* industry.

 

The figures again, are ONLY Australian, and ONLY for cloud computing. The report is on Cloud Computing in Australia. CSC Computer Sciences Australia Holdings Pty Ltd has 12% of the Australian Cloud Computing Market share, their revenue for 2009-2010 was $4.6 billion. In 2011-2012 the ENTIRE revenue for Cloud Computing in Australia was $1.1 billion (for 2009-2010, it was more precisely $1107.1 million in revenue, for everyone, in the entire industry). The report's financial figures are ONLY for Cloud Computing and ONLY in Australia.

Edited by Athiril

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