Even England, the home of the 1980s Thatcherite ideas on public policy has come to realise the folly of many of those policies. There is of course a fundamental inconsistency in the financial arguments for the sale of these assets. On the one hand, it is claimed that the government has to sell the assets because of the alleged financial crisis facing Queensland. On the other hand, it is asserted that the sales will not occur for several years – when the crisis is expected to be over.
Prof Bob Walker & Dr Betty Con Walker
16 November 2009
— Walker Report – 19112009
Let us try to understand debt and who owes it. In our quest please let us not go searching desperately for dubious ill-defined argument that masquerades as data (i.e. Hacket-Jones’ attempt to explain debt in ‘Queensland Government Borrowings’ by analysing government borrowings for infrastructure in terms of individual (or household) debt (see Revenue Review.)
I would like to address the issue of ‘privatisation’— a word that historian, Humphrey McQueen, refutes because it employs a capitalist term — he prefers ‘sell off’ or ‘sell out’. Fair enough. Nonetheless I will stick with ‘privatisation’ here because that is what the Qld Labor government says it needs to do in order to retire the debt that Hacket-Jones says he is so worried about. All they both want is to increase the wealth of the rich.
Sale of public assets
The Queensland government proposes to sell QR national (or ‘QR National’ as the company is called) to raise money to pay off debt. On 1 July 2010, Queensland Rail (QR) separated into two companies: Queensland Rail (QR) and QR National. Queensland Rail (QR) is a government owned business (GOC) which operates ‘the passenger service business and assets, including ownership of the metropolitan rail networks. Government will retain regional freight networks and associated operations’ (see QR Chair and CEO Welcome Sale Decision.) It is QR National that is to be sold.
We have heard all the usual privatisation rhetoric in the build-up to the sale of QR National touted as the biggest sell off of public assets since Telstra in 1997. Phrases have been bandied about by the Premier, Treasurer and their advisors. We’ve heard the political justifications like ‘reducing budget deficit’, ‘reducing debt’, ‘improve our credit rating’, ‘proceeds spent on other things’ (hospitals, schools, roads?), ‘reducing risk’, ‘increasing efficiency’, ‘reducing costs’, ‘selling like the rest,’ ‘selling before the price falls’. See some of this rhetoric in ‘Xstrata’s own trains could derail QR growth’ – THE AUSTRALIAN 22 September 2010.
Never has the economic reality behind the rhetoric been publicly debated nor has the economic justifications for the sale been critically discussed in parliament. The government did not tell the people of its intentions to sell QR prior to the last state election. Government advisors, stock brokers, consultants, contract lawyers, ministers all stood to make hundreds of millions out of the deal touted to be worth $7 billion. Shares need to be sold, contracts drawn up, briefings to be prepared, and roadshows to be run.
The truth is the Labor government is trying to improve its re-election prospects — $7 billion can buy a lot of votes (‘Loan completes preparation for QR National float’ – THE WEEKEND AUSTRALIAN, 9-10 October 2010).
Whether the ALP government will be successful is another matter.
Method of sale
To pay for these public assets it was intended that QR be sold to a mining consortium interested in railways (i.e. a trade sale). For a variety of reasons this method of privatisation (sale) fell through.
This left the Qld Treasury with the option of a float (sale) of shares in QR National. Since this was unlikely to raise the amount sought (the Qld government thought it needed more to win an election?) Treasury chose to take out a loan as well as selling shares in the QR National. So last week it borrowed $3 billion from a syndicate of banks (the main ones being Goldman, Credit Suisse, Bank of America plus Commonwealth). So the QR National float is therefore debt financed as well as equity financed (‘Investors link state rail and mining profits’ – THE AUSTRALIAN 21 September 2010).
The debt finance is raised via a $3 billion bank facility – in fact two facilities, one of three years and the other of five years. In exchange for the loan the banks get interest over the period of each facility and repayment of the principal at the end of the period(s). $2.5 billion of this money is to be spent on expansion of the rail network and the other $500 million goes to government.
Tomorrow the Treasurer will issue a prospectus for the sale of shares in QR National. He will not announce the number of QR National shares retained by government until his advisers have completed their roadshows to stockbrokers in Brisbane, Sydney, Melbourne, Hong Kong, Singapore, London, Edinburgh, Frankfurt, New York, Toronto, Boston and Los Angeles. Presumably, if insitutional investors shy at this opportunity to buy shares, the treasurer will retain a bigger stake. Some rail competitiors have announced their desire to use the QR tracks to transport their own coal.
Analysis
Queensland Rail was built up by workers over a period of 150 years. Most (but not all – indigenous people had their wages stolen) workers received wages for the work done at QR. But were these wages just reward for what was achieved? No.
Generations of railway workers put their lives into this publicly owned railway. As commerce in Qld increased and changed workers adapted to those changes. QR served primary and secondary industries. It transported people over the most decentralised state in the Commonwealth of Australia. Where Qld Railways once carted huge quantities of agricultural produce, cattle, sheep, and sugar to port and market, QR National now freights to port the largest amount of metallurgical coal in the world.
Two-thirds of the metallurgical or coking coal (for use in smelters mainly in Japan, India and China) transported on the oceans of the world comes from Queensland. By contrast the Hunter River Valley in NSW exports mainly thermal coal (for power generation). Workers at QR from fettlers to clerks, from fitters & turners to railway conductors made all this possible. QR’s expansion has been funded by taxes from those workers during the last 150 years.
Now a select few advisers will benefit from the sale. They will make tens, perhaps hundreds of millions of dollars. Government argues that it desperately needs to retire debt. Yet it is prepared to sacrifice revenue that comes with ownership in its bid to cash in on 150 years of labour and therefore surplus value contributed by workers. Already jobs have been lost and services curtailed to fit in with the growth machine greedy for profits. Government debt has already been increased in preparation for this sale. The government is improving rail infrastructure in order to make the sell off more palatable to investors, both local and overseas.
Will the gamble pay off? Pundits hope that it will. They quote examples like Canada that privatised its freight rail in 1995 to promote.
“The heroic benchmark in this respect is Canadian National, the freight rail operator privatised by the Canadian government at the end of 1995. It had been cutting jobs and unprofitable routes before the float, and continued to do so after. The shares were sold for $C3.32 in 1995. Today they are changing hands for more than $C66 (A$65.90).” — QR National sales push stops all stations in The Age Oct 09, 2010
But what is the underlying economic justification for this sale? Is it based purely on rhetoric?
It is a gamble because it presumes continued growth in coal when carbon is causing damage to the planet. Scientists argue that carbon is underpriced. If the price of carbon goes up, demand will decrease say the economists.
But the owners of the great coal monopolies like Rio Tinto, BHP Billiton and Xstrata who wish to extract even greater profits from their mines will tighten their contracts with QR National for greater supply at less cost. Will they run QR into the ground in the interests of their shareholders? These companies and their executives seek to exploit the indigenous land owners by signing up ILUAs (Indigenous Land Use Agreements). For example a Clermont Aboriginal Community Development Fund has been set up by
Rio Tinto Coal Australia and the Wangan & Jagalingou people who signed an Indigenous Land Use Agreement (ILUA) in May 2008 (see Rio Tinto Coal Australia – Clermont Aboriginal Community Development Fund.
Rio Tinto will do anything to extract coal and convey it to port. They are a greedy mob, those miners. All in the name of development and growth. But who benefits? Perhaps a few people who can afford to own shares, certainly the advisers who will cash in at the float. A few aborigines may get a cadetship here or there. A few may get even jobs. The politicians? Well, the labor politicians are taking the big gamble hoping that the $7 billion from the QR National float will buy them government. But then the Labor Party did nothing to justify their position in government, so what do they really lose?
Meanwhile the workers and their unions have gone quiet. Perhaps they think it is all over because the shares are being floated. Do they think the fight is lost?
Nothing is over till it’s over and there is still much to know… to be continued when the ASX releases the QR National prospectus on 10 October 2010.
Ian Curr
October 2010
See also QR National – where science meets spin
References
Privatisation – sell off or sell out? The Australian experience by Bob Walker and Betty Con Walker.
The Language of Money by Edna Carew
The Town that was Murdered by Ellen Wilkinson
Das Kapital by Karl Marx edited by Friedrich Engels
QR National/QR Annual Report 2008-2009
I would like to revisit this debate now that the Qld government has sold (via a 99 year lease) the Port of Brisbane to a consortium for $2.1B.
The new owners comprise Global Infrastructure Partners, Industry Funds Management and funds managed by QIC Limited – each having 27% stakes. A minority stake is held by Abu Dhabi Investment Authority (ADIA).
Curiously, one of the major shareholders is QIC Ltd (formerly Queensland Invesment Corporation) which is state owned.
Is the Queensland goverment selling public assets to itself?
Well not quite. It is using super funds to buy into a private consortium – QPort. QIC is a GOC whose shareholding Ministers are Anna Bligh MP, Premier and Andrew Fraser MP, Treasurer.
Qld Tresury Corporation (QTC) holds $17 billion in funded super assets that the treasurer refuses to account for when he claims that the state needs to retire $15billion of state debt. This issue has been hotly contested by financial experts, Prof Bob Walker and Betty Con Walker in the debate over the need for the sale of public assets including QR National. They analyse the trasurer’s chicanery thus:
One obvious question is: what the price too low for such a big diversified port handling large shipments of containers, grain, meat, live animals, cotton, vehicles, and coal to growing economies in Asia and the Middle East? Well, if you take out the state owned QIC stake yes it is pretty cheap. Fraser tries to inflate the price by adding in $200million in road works that the consortium is suposed to be funding.
Ian Curr
Nov 2010
A retrospective by Channel 7 on the history of Qld Rail.
[youtube=http://www.youtube.com/watch?v=AIk5izdSo2U&feature=related]
Hello John,
Your first point is incorrect — it should read:
QTC does not use taxpayer money to buy the computers.
It uses the bank’s upfront payment. This payment by the bank is for the right to the income stream from the computer leases under QTC’s securitisation contract.
Part (if not all) of QTC’s justification for the securitisation arrangements with the banks is that the government does not have to stump up the money to buy the computers.
It is the income stream from the individual departments that comes mainly (but not all) from taxpayer funds.
If I was running this program I would use taxpayer funds to buy the computers and forget about the securitisation deal with the banks. When the computers come to the end of their effective life (an accounting term not a computing one) I would give the computers to the students and buy new ones thus returning to the taxpayers (or their children) part of their tax contributions.
I don’t really have much of a problem with the rest of your comment.
However, you see, I am not really interested in making a classical Marxist analysis of the GFC, I leave that to people far better qualified in classical Marx than I — people like Humphrey McQueen or Peter Harvey.
I am more interested in understanding the Queensland government’s economic justification for privatisation.
It is here that the role of government comes in.
For example should government run railways, why and how?
Till now Queensland workers have built a railway system that services the most decentralised state in the commonwealth. When I was in my early twenties I could travel from Brisbane to Cairns thanks to Queensland Rail. And all that for a modest sum affordable to a student. I even travelled part of the way in the conductor’s car on a goods train. It was slow but cost me nothing. The train carried wheat and molasses to market. I was later to work loading goods trains with barley and wheat for the Australian Wheat Board which also owned all the wheat for export to places like China and Iraq. So, in the short span of my life, the ownership of the means of production has changed markedly from state (under Bjelke-Petersen) to private hands (under Labor). Is this justified? If so, how can it be? I am yet to hear the argument made coherently by our Treasurer, Andrew Fraser, who is so keen to privatise public assets.
A privatised QR National would change that railway system and gear it up for making profit from hauling coal.
Whereas, previously the government funded railway tracks to service this large state, QR National will want to concentrate its capital investment on just that section where most of the profit is found.
Just look at the map of the railway in the coal fields and you will see what I mean.
What this says to me is that capitalist development is narrow, it trends toward monopoly, it concentrates where profit lies and does not care about human need. When one industry is no longer a source of profit, capitalism destroys that industry and builds another in its place. There is an interesting history of the ancient town of Jarrow which explains this far better than I can. It is written by Ellen Wilkinson and is called ‘The Town that was Murdered’. Here are the opening lines to that book:
Ian
PS here’s that map
Ian,
Lets see if I have got the computer example right this time, because how you have presented it is even worse.
1/ The government uses tax dollars to buy computers
2/ The government gives tax dollars to department budgets to lease computers from the government.
3/ On the basis of the government leasing the computers to itself, it securitises the cash flows. The “income stream” is really just money circulating between different ledger columns of the govt. account. (same as how banks securitise assets).
So, if tax payer money buys the computers, leases the computers and guarantees the redemption of the securitised assets – then how can you say that any of this is “are NOT taxpayer funds”? The only money on top of taxpayer funds is money multiplied in the debt transaction – which became negative in the GFC.
Capitalism and the state do not justify securitisation as a profit strategy but as a risk management strategy. The profit of this process is with the banks who, once an asset is fungible through securitisation and held in a bank, effectively becomes the property of the bank to invest as it wishes – including creating more artificial income streams through lending to other banks of the same conglomerate and securitising and selling those assets.
*******
The U.S. sub-prime mortgages were not the cause of the GFC and the culprits were not zealous commission salespeople.
Sub-prime mortgages were created to make home ownership more accessible to poor people. They were issued with a calculated risk that some will default, which is why the project was guaranteed by government. No matter how many mortgages were issued, the ratio of payment to default will be the same.
The real problem is the bundling of these debts and securitising them. As fungible assets they were valued the same as any other less risky debt.
The problem is the extent to which the banks levereged the bundled debts, not the nature of the mortgages themselves.
********
You say….”The modern world of finance and banking is a long way from the time of Marx.” This is exactly my point on the other thread. The nature of modern banking simply does not fit into the Marxist analysis because Marx does not analyse fractional banking and the so-called money multiplier effect.
I believe a Marxist framework could be a great tool in analysing banking in the basic premise of historical materialism – being able to distinguish the real economy (as described by Marx) and the illusory economy of creative (and legal) bank accounting.
Marx’s analysis that banking was exploitative because of crime and corruption (rather than the nature of banking itself) is still valid in that, after Marx, the corporate criminals seized control of the state and legalised their criminal practices. The historical moment of this was the construction of centralised reserve banks, beginning in the U.S. in 1913.
**************
The so-called annual report to the U.S. securities and exchange commission (which is not what the link in your post is) is just filing a copy of the Qld. budget report, the same one that can be found on QTC’s website.
Hello John,
Perhaps I did not explain my QTC computer lease example well enough.
Firstly, I should point out to reader(s) the securitisation of the leases is not hypothetical nor an example, it is one of the things QTC does. Secondly, as I state clearly above, the computers are not leased on the open market (as you say) they are leased to government departments, schools and TAFEs. It is the budgets of these departments that have to pay for the computers. It is these lease payments that create the revenue stream (not as you seem to think private interests purchasing leases on the open market).
QTC then sells the revenue stream from the computer leases to private banks like ANZ, NAB, Commonwealth, Suncorp etc. It is this financial arrangement or product that is the securitisation. It is the funds raised under these contracts that are used to buy the computers for the schools, so they are NOT taxpayer funds, at least not initially. That is part of the motivation behind entering into these securitisation arrangements. The initial purchase price of the computers does not come from consolidated revenue, it is off budget. Of course the lease payments to the banks over the life of the arrangement DO come ultimately from the taxpayer or, in the case of TAFEs, from student fees.
These kinds of contracts I have described achieved dominance in capital markets in the mid 1980s. Of course there are earlier versions of them, various notes like promissory notes is one example. The modern world of finance and banking is a long way from the time of Marx. It is way different from my childhood. Even hire purchase was illegal when my parents bought their farm at Moggill in the 1950s. When hire purchase was introduced in the early 1960s both my parents frowned upon it as being the tool of charlatans and con men. Of course they were right. The interest charged on loans to buy a fridge or a car were exorbitant.
Modern securitisation arrangements are often complex legal documents. I have read a number of these documents. The packaging of a lot of revenue streams involves a number of variables and requires precise legal definition. Where Lehman Bros failed was that they did not known what was behind those bundled income streams (i.e. the ‘no-doc’ mortgages) simply because the ‘banks’ that had issued the loans did not know what was behind them. There had been a proliferation of “no-doc” mortgages and other toxic loans, sold by commission-driven salesmen and then purchased by Lehman and other Wall Street banks. It was not the securitisation vehicle that failed it was the charlatans that lent money to american workers seeking finance for a home and who could not afford to pay them back because they were on such low wages or became unemployed.
Why do you think the QTC borrowings in the hyperlink you provided above have anything to do with these complex securitisation arrangements? Why aren’t they simply a listing of government borrowings that have been declared in the normal way with such regulatory agencies like the ANNUAL REPORT of the QUEENSLAND TREASURY CORPORATION that is registered with SECURITIES AND EXCHANGE COMMISSION?
Objective facts are important, I am not talking ideology here.
I am trying to make an objective analysis of government finance as it exists.
I am being careful not to confuse ideology with my analysis of the facts.
Ian Curr
ian,
Securitisation has been a part of capitalist banking since the 17th century.
Government bonds have everything to do with securitisation because that is the way future tax revenue is converted into immediate cash through the sale of bonds. It is the reserve bank or government guarantee that gives these bonds value.
Your example of computer leases is correct but income from assets is not all that is securitised, any income stream can be securitised including tax revenue.
Lets look at the computer example, for it is a good one. The taxpayers fund the purchase of computers which are leased on the open market to create a cash flow to borrow money to buy or lease computers for schools. This is how Qld is doing business across the board. Instead of taxpayers funds buying computers for schools directly, they engage in this financial merry-go-round that leaves maximum assets circulating, accumulating – and multiplying – within the banking system. While these assets cannot be used by the public, they still sit in the account books as public assets. This works as long as the amount of money multiplied is equivalent to or more than the debt repayments but when that crashed in the GFC it created a major crises connected to all areas of revenue and expenditure, not just a simple simple deficit.
It is ideology alone, the inadequate Marxist framework, in whatever mutated form, that dismisses the importance of debt in the privatisation debate and a broader understanding of the contemporary economic forces..
Hello John,
You wrote:
Why don’t you write to Gerard Bradley, the Under Treasurer of the State of Queensland and ask?
Ian
PS The A$ 4,487,553,000 worth of Global A$ Bonds that the Qld Treasury Corporation registered with the SECURITIES AND EXCHANGE COMMISSION on June 30, 2009 have nothing to do with the Qld government securitisation contracts.
A Bond is a Debt instrument issued by government, semi-government and statutory bodies as well as corporates. Bonds are generally fixed interest securities with interest paid half-yearly, and are of medium to long term.
As mentioned above securitisation involves a contract for selling income streams. As far as i know securitisation arrangements are not regulated by the Reserve Bank; in fact the Tax office has shown a little interest (but not much) in recent years because they (the securitisation contracts) pose technical questions in ‘GST and finance leases and securitisation» arrangements’
To explain, the Qld government sells leases on government computers (say) to banks in exchange for money up front. The government then uses that money to buy new computers for schools, TAFEs and government offices. The banks that bid for the income streams from the computer leases get a margin for providing the money up front. In the scheme of things the margin is not that great. But the risk to the bank is small with government contracts so many of them bid for these contracts. The advantage to the government is that they do not have to use their own funds to buy the computers. The disadvantage is that they forsake the revenue from the leases from the individual departments, schools and TAFEs that use the computers. QTC became involved in this activity to stop individual schools and departments from going out and cutting their own deals of purchase of equipment. They consolidated the whole operation into one section of QTC with trained lawyers and accountants doing the deals with the banks – that was the theory behind it anyhow. I know that, back in the day, there were competent public servants in certain departments (like Main Roads) cutting these kinds of deals. Securitisation has been around since the mid 1980s and you a right if you think Lehman Brothers went under because of the securitisation contracts. Lehman Brothers bought ‘no-doc’ housing loans where workers simply could not pay. The difference between QTC and Lehman Brothers is that QTC is the seller in the arrangement described above and Lehman Brothers were the buyers. Of course the crucial difference for Lehman Brothers was the high risk and the amounts involved.
For me this is a side issue but if you choose to write to the Under Treasurer you may wish to run a draft of the letter past me just to check on the technical detail. I will help you as best I can to find out the answer to your question.
My interest as expressed in my essay Queensland Rail — in the Public Debt is to begin an intellectual debate (as opposed to an ideological debate)on the role of government — what enterprises should government run, how and why.
Ian Curr
October 2010
p.p.s
But the real problem, which I have not yet been able to find details of because of commercial in-confidence regulations, is how much of consolidated revenue was invested in the stock exchange prior to the GFC – money that sat in the stock market and on account columns of government spending at the same time.
I used the example on the other thread of Commonwealth Aboriginal housing money being perpetually given to Qld (and NT) who announces the existence of the funding but never actually spends it.
This is the state money that crashed in the GFC but still exists in the columns of the state account books. The creative restructuring of this debt – through hidden accounts of government owned corporations and dissipated into private sell-offs such as QR – is the real economic plan.
There is $5 billion dollars of securitised bonds on the record but stock market investments are not, they are secret..
p.s.
“The Budget papers reveal borrowings of $57.7 billion next financial year, growing to $85.5 billion in 2012-13.”
http://www.abc.net.au/news/stories/2009/06/16/2600001.htm
So, the 18 billion dollar new debt, of which $11 b goes to paying old debt, is added to the old $50b debt.
On top of this, Qld has $5b of securitised notes and bonds……
http://www.sec.gov/Archives/edgar/data/852555/000119312510139389/d18ka.htm
…….. that, while representing positive assets on account books, actually represent debt as the bonds mature – long after the short term profit or cash flow has been spent.
And then there is all the debt of the government owned corporations which is not included in treasury’s figures.
From the U.S. Securities Exchange Commission.
“Queensland Treasury Corporation’s 2010-11 Indicative Borrowing Program Update”
http://www.sec.gov/Archives/edgar/data/852555/000119312510139389/dex99cix.htm
“Following the release of the State budget on 8 June, Queensland Treasury Corporation (QTC), today announced its estimated funding requirement for the financial year 2010-11 will be $18 billion.”
“the $18 billion indicative borrowing program comprises $11 billion to refinance maturing debt and a net $7 billion of new borrowings to fund Queensland’s capital works and asset procurement requirements”
The Qld. budget papers……
http://www.budget.qld.gov.au/at-a-glance/2010-11/queensland-state-budget-at-a-glance-2010-11.pdf
…….estimate total state revenue for the period will be $40 billion and total expenditure, not including debt repayments, will also be aprox $40 billion.
http://unlearningtheproblem.wordpress.com/
Ian,
1/ The Hacket-Jones info was about Qld’s debt relative to the other states. It was a per-capita figure of government debt, not individual debt, which is that Qld’s per capita debt is 200 – 300% more than the other states. Victoria has the lowest debt which, I suggest, is the reason they have the best hospital system, not because they have a superior class of health bureacrats.
You will note on the other thread that I said personal debt cannot be compared to per capita state debt.
Your attempt to align me with the arguments of Hackett-Jones has nothing to do with anything I have said.
2/ What is unusual about the Qld sell-off of QR, as compared to the previous Qld. and NSW sell-off of electricity production, Telstra etc. is the absence of “all the usual privatisation rhetoric”. Instead the government has justified the sell-off in terms of debt and the GFC – and only in very thin one-liners. There has been no free market ideology from Bligh in this case. She seems to want to say as little as possible about it.
3/ Your description of the method of sale seems to suggest the banking mode is central to this process of government fund raising. Why then do you seem to resist my suggestion that debt is a central problem here?
4/
And finally, while what you say is true about the exploitation of workers and Aboriginal people, this does not go to the core of the problem. (It can be argued that the rail network itself, by opening up frontier production and markets and transporting police quickly over long distances was itself key to the invasion – just watch U.S. cowboy and Indian movies).
Why is the government taking this debt path? Why do they resist strongly asserted A.L.P. and union policy? Why do they resist public opinion?
This sell-off is political suicide – why are political opportunists so committed to it?
The coal industry is not behind this, their interest is in the ground, not the transport network – as evidenced by their disinterest in buying QR. It is the working class investors that will, via their bank or stock advisors, be suckered into buying shares.
It is the banks that have forced this on and they can do so purely and simply because of Qld’s debt – and the strings attatched to State money while that debt is outstanding.
As I mentioned on the other thread, Beattie invested state money on the stock exchange to create a cash flow to pay for debt and public services together. The decimation of these assets in the GFC severely reduced the states capacity to pay debt and provide public services.
We both fiercely agree in our opposition to privatisation but I do not reckon your analysis deals with the central issue of debt.
The anti-privatisation rhetoric at present seems to try and undermine Bligh’s reasons by saying that a/ The debt is not that bad – often comparing it to household debt, b/ The financial situation has improved or 3/ the debt has been exaggerated.
We should instead be exposing the reasons why we got in this debt rather than denying the problem.
The only way to stop privatisation is to tell the banks to shove their AAA credit rating up their arse, cash in all our chips on the Wall St. casino and get back to the real economy. This is a much bigger issue than just QR.
http://unlearningtheproblem.wordpress.com/