Not a crisis, but a serious problem for the long haul

From https://www.brookings.edu/testimonies/rising-debt-not-a-crisis-but-a-ser…

Testimony by Alice M. Rivlin, Senior Fellow – Economic Studies, Center for Health Policy, before the Joint Economic Committee of the United States Congress on September 8, 2016:

…..our national debt is high in relation to the size of our economy and will likely rise faster than the economy can grow over the next several decades if budget policies are not changed. Debt held by public is about 74 percent of GDP and likely to rise to about 87 percent in ten years and to keep rising after that.

This rising debt burden is a particularly hard problem for our political system to handle because it is not a crisis. Nothing terrible will happen if we take no action this year or next. Investors here and around the world will continue to lend us all the money we need at low interest rates with touching confidence that they are buying the safest securities money can buy. Rather, the prospect of a rising debt burden is a serious problem that demands sensible management beginning now and continuing for the foreseeable future.

What makes reducing the debt burden so challenging is that we need to tackle two aspects of the debt burden at the same time. We need policies that help grow the GDP faster and slow the growth of debt simultaneously. To grow faster we need a substantial sustained increase in public and private investment aimed at accelerating the growth of productivity and incomes in ways that benefit average workers and provide opportunities for those stuck in low wage jobs. At the same time we need to adjust our tax and entitlement programs to reverse the growth in the ratio of debt to GDP. Winning broad public understanding and support of basic elements of this agenda will require the leadership of the both parties to work together, which would be difficult even in a less polarized atmosphere. The big uncertainty is whether our deeply broken political system is still up to the challenge.

…..There are three necessary elements of a long-run debt reduction plan:

Putting the Social Security program on sustainable track for the long run with some combination higher revenues and reductions in benefits for higher earners.
Gradually adjusting Medicare and Medicaid so that federal health spending is not rising faster than the economy is growing….
Adjusting our complex, inefficient tax system so that we raise more revenue in a more progressive and growth-friendly way and encourage the shift from fossil fuels to sustainable energy sources…..

Amristar moving forward

Amristar Solutions Pty Ltd (now a wholly-owned subsidiary of Amristar Pty Ltd – formerly iDelve Pty Ltd) have engaged Lieblich & Associates as business consultant to assist with special projects. Steve was formerly on the Board of both companies for over ten years, much of that time, as Chairman.

The Lieblich Superannuation Fund, which is a related entity of Lieblich & Associates, holds 20% of Amristar Pty Ltd.

Construction Contracts Act – Adjudication has taken on

Since our last update in November 2016, we conducted six adjudications of payment claim disputes under the Construction Contracts Act (2004) WA. The disputed amounts have ranged from $30k to over $1 million.

Steve has also successfully resolved two commercial disputes by mediation in the first half of 2016, and an expert-determination matter has also crossed his desk.

Dispute-Resolution Activity continues at a high rate

Steve was appointed to adjudicate the following four disputes in October 2015

**adjudication of two payment-claim disputes under the Construction Contracts Act WA, between a contractor and subcontractor on a major public infrastructure building site. The aggregate value of the claims is approximately $2.5m.

**adjudication of two payment-claim disputes under the Construction Contracts Act WA, between the principal and a contractor on a regional, renewable-energy project. The aggregate value of the claims is approximately $100k.

Increased Dispute-Resolution Activity

The first quarter of the 2015-16 financial year has been busy for Lieblich & Associates in the resolution of commercial disputes, the largest being over approximately $1.25 million, including the following in July and August of 2015:

**adjudication of a payment-claim dispute under the Construction Contracts Act WA, between contractor and subcontractor on a commercial construction

**arbitration of a dispute related to payment for services, between a WA business and a contractor in another state

**adjudication of a payment-claim dispute under the Construction Contracts Act WA, between contractor and subcontractor on a public infrastructure building site

**adjudication of a payment-claim dispute under the Construction Contracts Act WA, between contractor and subcontractor on a multi-residential construction

**adjudication of a payment-claim dispute under the Construction Contracts Act WA, between contractor and subcontractor on a commercial construction

Disputes resolved in May include a $3million payment-claim dispute

May has seen continued busy dispute-resolution activity, as listed below.

The value of one of the payment disputes in the adjudications under the Construction Contracts Act (WA) set a record for Lieblich & Associates at almost $3million.

**Adjudication of a payment-claim dispute of approximately $250k between a building management systems contractor and his client in a major government facility construction project. The matter was resolved by the mutual consent of the parties.

**Mediation of a dispute over quality and payment for mechanical work, which was successfully resolved.

**Adjudication of a payment-claim dispute of approximately $3million between a scaffolding contractor and his client in a major government facility construction project. The matter was resolved by the mutual consent of the parties.

Continuing busy dispute-resolution activity

The summer has been very busy with dispute-resolution activity, as listed below. The value of the payment disputes in the adjudications under the Construction Contracts Act (WA) ranged from $150k to $2 million.

December 2014 construction contract adjudications:
** 9 invoices in a building-services contract for the construction of a shopping centre
** a payment claim in a power-station construction contract
** electrical works in a regional community-centre upgrade

January 2015 mediation:
** business-sale dispute.

March 2015 mediations:
** a tenancy dispute between a small business and a government agency
** dispute between two businesses that had a commercial alliance including a sub-tenancy agreement

March 2015 construction contract adjudications:
** progress claim dispute in a contract for construction of a multi-residential building
** final claim dispute in a construction contract to build a private residence

April 2015 construction contract adjudication:
** building-services contract for a major government project

Adjudications under the Construction Contracts Act are quick and inexpensive, but not free.

In recent months, applicants for adjudication under the Construction Contracts Act (WA) 2004, have requested that we extend credit for the costs of the adjudication. We’ve been sympathetic to these requests, encouraged by the party’s written commitment to make payment at a later date.

We now find in two instances that we must pursue the debt in a court of competent jurisdiction, in accordance with section 44(12) of the Act.

Applicants for adjudication should note that section 44(8) of the Act states that “An appointed adjudicator may at any time require one or more parties to provide a reasonable deposit, or reasonable security, for the, or any anticipated costs of the adjudication.”

Furthermore, in accordance with section 26(1)(d) of the Act, they must (amongst other things) “provide any deposit or security for the costs of the adjudication that the adjudicator …requires under section 44(8) …”

Finally also note that in accordance with section 31(2) of the Act “An appointed adjudicator must …dismiss the application without making a determination of its merits if …[amongst other things] the application has not been prepared and served in accordance with section 26…”

Thus a failure to provide the requested security for costs of the adjudication may result in the application being dismissed.

Busy period for dispute resolution

This holiday period has been an extremely busy one. Celebrations and festivities aside, Steve has been busy in December and January with 6 payment-claim adjudications under the Construction Contracts Act (WA). The average value of the payment claims in those disputes exceeds $500k.

Steve has also been appointed to mediate between two parties in dispute over the trade-sale of a business, later this month.