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We are witnessing the emergence of a new working poor

Brian Howe April 20, 2012

The divide between blue and white-collar workers has become much uglier.

THERE is a new divide in the Australian workforce. It is no longer between the blue-collar and white-collar worker, but between those in the “core” of the workforce and those on the “periphery”. Those in the core are likely to be in full-time employment, either permanently within organisations, in management positions, or possessing skills for which there is steady demand and for which they can charge a premium. They are likely to have sick leave, paid holidays and in many cases parental leave above the government’s minimum standard. For them, flexibility means the chance to work in a variety of industries, to work overseas, to earn good money freelancing or in a secure part-time arrangement. Periods of unemployment are likely to be short or voluntary.

Those on the periphery are employed on various insecure arrangements – casual, contract or through labour hire companies, on low wages and with no benefits. Many do not know what hours they will work from week to week, and often juggle multiple jobs to attempt to earn what they need. Their skills are low, or outdated, and they are not offered training through work. They shift between periods of unemployment and underemployment that destroy their ability to save money. Their work is not a “career”; it is a series of unrelated temporary positions that they need to pay rent, bills and food.

For them, flexibility is not knowing when and where they will work, facing the risk of being laid off with no warning, and being required to fit family responsibilities around unpredictable periods of work. For many, life on the periphery is not a temporary situation; there is no pathway into the core. For the past six months I have been the chair of an inquiry, commissioned by the ACTU, into the phenomenon of insecure work. In hundreds of submissions, and during hearings around the country, we have come across a multitude of stories from people on the periphery.

Although 40 per cent of Australian workers are in insecure work, this is a development of the Australian economy that has avoided proper examination for too long. For people in their late 20s, with children and mortgages and no time to retrain; or older men in their 50s who have lost full-time work, this is their permanent position. Increasing numbers of workers are engaged in unpredictable, uncertain work that undermines their security.

Others fear that the loss of a good secure job will push them into the world of insecure work they see around them. This uncertainty makes people more sensitive to rises in interest rates, power bills and petrol prices. For the first time in our history since Federation, Australia is seeing the development of a working poor. As long as we can retain our relatively high minimum wages and public health system, we will not see the extremes of poverty of the United States, but we will see a society with families where one or both parents work, but who are unable to save or own a home, and remain vulnerable to the slightest financial crisis.

What this means for social mobility and social cohesion is the great unknown, and a subject that is only obliquely referred to in political debate. This is particularly the case when combined with a growing number of inter-generational jobless households. The economic changes of the past two decades cannot be unwound. But the unforeseen consequences of insecure work must be addressed to continue to produce jobs that will preserve the Australian social contract that has provided a decent welfare safety net, and a chance at social mobility, for generations of citizens and migrants.

Changes are needed not only to our employment and labour laws, but to the role of government and the social security and tax transfer systems, to education, training and labour market transitions and, yes, to our trade unions. We are witnessing the emergence of a new working poor

Brian Howe April 20, 2012

Brian Howe is a former deputy prime minister of Australia.

 This is an edited extract of a speech he gave to the National Press Club on Wednesday.

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If you were to ask people what they want out of their politicians, most people will say clear and open leadership. The problem for politicians is that that the moment they attempt to provide leadership, the same people will argue any initiative into non-existence. Why? I dunno.

I think there is an argument and it is persuasive (I have presented all over the country on this theme, mostly to senior HR managers, about the new roles for HR managers in a climate change reforming world), that responding to climate change will create jobs, make some jobs and occupations obsolete, and add to the labour market woes confronted by employers. Hopefully we will see the genius of the market system, coupled with government intervention to prompt the development of the right skills, research, innovation and diffusion, and far-sighted employers looking after their medium term interests with their employees and unions, in operation here….

Rant Over. Back to work gerry, you verbose malingerer. No, blogging is not work.


Setting price will create ‘34,000 jobs’
Adam Morton
February 28, 2011

A CARBON price aimed at cutting greenhouse gas emissions by 25 per cent by 2020 could help create 34,000 jobs in regional Australia, research says.

To be launched today by independent MP Tony Windsor, the report by the Climate Institute predicts that a substantial carbon price, backed by renewable energy policies, would trigger tens of billions of dollars of investment in geothermal, large-scale solar, bio-energy, hydro, wind and gas.

In Victoria, the number of people employed in the electricity industry was projected to increase over the next two decades despite some job losses as coal-fired power plants closed.

 The new jobs would be concentrated in the state’s Western District, central highlands and the Mallee.

Climate Institute chief executive John Connor said the report, based on work conducted by consultants SKM-MMA and Ernst & Young, showed that clean-energy projects could provide an economic foundation to support strong regional populations.

It challenged claims that tackling climate change would cost jobs and hurt the economy.

“It is important we have a discussion about the costs and how to manage them, but it is also important to look at the benefits and how you achieve those,” Mr Connor said.

Mr Windsor said the report showed regional Australia could be a big winner as renewable energy projects were developed.

It is estimated nearly 6900 new electricity industry jobs could be created in Victoria by 2030.

Nearly 4600 would be in power plant construction and about 1200 in manufacturing. More than 1000 would be permanent roles running new plants.

The total number of jobs in the industry would rise over the next five years as wind and gas plants were built, dip in the second half of the decade, but then grow dramatically after 2020 as more clean-energy technologies became commercially viable.

The report suggests about 40 per cent of Victoria’s electricity could come from clean sources by 2030, up from 5 per cent today.

Gas-fired power, with about a third the emissions of brown coal, would also expand dramatically to provide about a third of the state’s electricity.

Specific projections for Victoria include:

■ More than 1500 jobs created in wind and geothermal energy in the south-west around Warrnambool, Portland and Hamilton.
■ Nearly 1200 new jobs relating to building and running large-scale solar plants in the Mallee.
■ About 600 new jobs in wind in the central highlands around Ballarat and Bendigo.
■ In the Latrobe Valley, the loss of about 500 permanent jobs in coal power, but the creation of 720 construction jobs building new gas and renewable plants.

The modelling does not consider the impact of the possible implementation of carbon capture and storage technology.

The jobs figures are based on a carbon price starting at $47 in 2012, the national 20 per cent renewable energy target, and policies to encourage clean technologies, including loan guarantees and tax credits.

The research won the support of the ACTU and several energy companies.

Tony Maher, the president of the mining and energy union, applauded the Climate Institute for focusing on jobs, skills and training as the key to Australia cutting emissions.

Julia’s brilliant backflip
July 2, 2010 – 1:18PM

Mal Maiden dissects Julia Gillard’s new mining tax. What does it mean for business and who is going to pay?

Is this a massive backflip by the government or a brilliant piece of re-engineering that sets Julia Gillard up for an early election? Both.

The new Minerals Resource Rent Tax is almost unrecognisable from the Resources Super Profits Tax it replaces.

Instead of being applied across the entire resources sector, it focuses on only two mining businesses, iron ore and coal, with the existing Petroleum Resources Rent Tax extending to the domestic oil and gas industry, including the fledgling coal seam gas projects in Queensland.

Prime Minister Julia Gillard and Treasurer Wayne Swan at today’s announcement. Photo: Andrew Meares

Instead of being an elaborate scheme that sees the government take 40 per cent of mining profits but also assume 40 per cent of the development costs and risk on each project, it simply taxes the miners at the mine gate, for 75 per cent of their income at that point, at a rate of 30 per cent.

This concession, that the miners pay only 30 per cent of 75 per cent of their income at the mine gate after costs to that point are deducted means that the real new resources rent tax rate is about 22.5 per cent, not 30 per cent as advertised.

Instead of forcing the big miners into a resources tax regime with the big mines still valued at book value, a fraction of their real worth, it gives them a choice (it’s complicated, but here goes): either bring their existing mines into the scheme at book value, in which case they will be able to aggressively create depreciation tax deduction over just five years, and will not be liable for the 30 per cent resources tax until their mine returns have exceeded the 10-year Commonwealth bond rate plus 7 per cent (about 12 per cent currently), or bring the mines in at market value (defined as cash flow plus the risk value of the resource) but write the value down in smaller increments over a longer period, up to 25 years, and have the tax imposed without a hurdle rate. It’s likely that the big miners will opt to inject their assets in at market value. In either case, they can claim what they invest in their mines as they go.

Inspired move

And instead of applying to all mines, the tax also exempts iron ore and coal miners with profits of less than $50 million. This is an inspired idea, and like the proposal to limit the scope of the tax and exclude not just quarries and other low value operations but copper, nickel, gold and bauxite mines it came from the big three miners who were negotiating the deal, BHP Billiton, Rio Tinto and Xstrata.

These two measures see the number of companies affected by the new tax fall from about 2500 under the original proposal to about 320, significantly reducing the risk that the deal will be seen as one cooked up by the big three miners for the big three miners.

The existing 40 per cent Petroleum Resources Rent Tax is also being extended, to cover not just offshore projects but the entire Australian oil and gas industry, including the merging coal seam gas producers and exporters in northern Queensland, and the oil and gas groups will also be able to elect to inject their assets at market value, and expense their development costs as they go.

Gillard makes the call

So if radical change to the original proposal qualifies as a backflip, this certainly is one. But it’s a backflip from a tax proposal that was launched and prosecuted by Kevin Rudd, not Julia Gillard. Treasurer Wayne Swan was involved in the talks this week, but the key figures were Gillard, who in personal calls to BHP chairman Jac Nasser and other convinced the big miners that she was genuine about settling the dispute, and resources minister Martin Ferguson, who Gillard inserted into the process after her appointment as PM.

And it is one that has been achieved at a manageable cost to the budget. The tax take in the first two years to 2013-14 falls by $1.5 billion to $10.5 billion, as the government loads in higher commodity price assumptions that are closer to what is actually being achieved this year, cuts its linked cut in corporate tax by one percentage point to 29 per cent, and axes its poorly received exploration tax rebate.

The deal seems to cover all the bases. It satisfies Gillard’s only condition, that the government’s tax take from the resources boom rise. And it exempts most mines from a new tax, while charging those captured by the regime less than the 50 per cent plus total tax rate they faced under the Rudd version.

The iron ore and coal miners will pay corporate tax after the resources tax has been paid, and when coal and iron prices are high as they now, will face a total tax bill of more than 40 per cent, with a maximum above 45 per cent, according to one person close to the negotiations.

There’s a way to go. The Greens have been making ominous noises about blocking a compromise, for example. But Gillard’s backflip is politically marketable – and an election campaign must surely now be just around the corner.

From: AAP January 11, 2010 11:40AM

THE number of jobs advertised in major newspapers and online rose by 6 per cent in December, the strongest monthly growth in two-and-a-half years.

Overall job ads averaged 149,063 a week, with newspaper job ads rising by 11.6 per cent and internet job ads increasing by 5.6 per cent, an ANZ survey shows.

The rise in December follows a 5.2 per cent increase the month before and it was the strongest monthly growth since May 2007.

ANZ acting chief economist Warren Hogan said total job advertisements have recovered from the recent low in July 2009 as they continue to improve each month.

“This is already translating into employment growth and helping to keep the unemployment rate relatively stable, despite accelerating population and labour force growth,” Mr Hogan said.

“This sustained improvement in job advertisements and actual employment has come relatively early in this economic recovery cycle, indicating the mildness of the downturn Australia has experienced over the past 18 months.”

The report comes ahead of labour force figures for December from the Australian Bureau of Statistics on Thursday.

Financial markets expect the number of new jobs created increased by 10,000 in December, and the unemployment rate rose 0.1 percentage points in December.

The number of jobs advertised in major metropolitan newspapers averaged 10,631 a week, and were 4.8 per cent higher than 12 months ago, the ANZ survey says.

Online job ads averaged 138,432 a week, but they were 24.1 per cent lower than in December 2008.

Mr Hogan forecasts the job market to continue to improve in the coming months.

“In the near term, the forward indicators appear positive for some solid employment growth in December and over the summer months, although probably at a slower pace than seen in the past three months,” Mr Hogan said.

“The ANZ (and other) job ads surveys are improving rapidly, retail sales turnover grew strongly in November (retail trade is currently Australia’s second largest employing sector, behind health services), business investment and construction are regrouping, and the AiGs three industry surveys (manufacturing, services and construction) all indicated net expansion of employment in December.”

ANZ expects the unemployment rate to peak at around six per cent by mid-2010.

From: AAP January 11, 2010 2:56AM

Western Australia has the nation’s fastest growing economy, buoyed by mining

Growth economies revealed
WA and ACT at the top
NSW the nation’s poorest performer

AUSTRALIA’S largest state and the nation’s smallest territory would on the surface appear to share little in common.

One has a vast supply of mineral resources that has made it the engine room of the domestic economy, thousands of kilometres of coastline and a capital city regarded as the most isolated in the developed world.

The other is situated neatly between Sydney and Melbourne, is about 150 kilometres from the Pacific Ocean and has about half its land set aside as nature parks and reserves.

So comparisons between Western Australia and the Australian Capital Territory are stark, but CommSec says in terms of economic performance they cannot be split at the top of the pack.

CommSec chief economist Craig James said based on eight key indicators, WA and the ACT are Australia’s two best-performing economies.

“Western Australia is the fastest growing economy, buoyed by mining-related construction and investment,” Mr James said in a research note.

“And solid growth in residential construction and property sales has propelled the ACT to the top of the economic rankings.”

Mr James said he expected WA to remain in the lead in early 2010 as the state benefitted from the strong recovery in the Chinese economy, but the outlook for the ACT was not as certain.

“The ACT and Tasmanian economies may slip modestly down the leader-board as the global economy recovers, with Queensland and Victoria having the greatest potential to move up the rankings,” Mr James said.

The eight indicators were economic growth; retail spending; business investment; construction work done; population growth; housing finance; dwelling commencements and unemployment.

WA topped three categories – economic growth, business investment and construction work, while the ACT was judged the best in terms of housing finance and dwelling starts.

New South Wales came in last in four categories – economic growth, unemployment, construction work and dwelling starts.

In terms of the overall standings, Tasmania held the title three months ago, but has slipped to third.

Mr James said smaller states and territories such as Tasmania and the ACT have not suffered as badly as the bigger states during the US financial crisis.

South Australia fell from second to fourth, while Queensland was one spot back in fifth place.

Mr James said Victoria was one of the big improvers over the past three months, climbing one rung into sixth.

Northern Territory was seventh, while Australia’s most populous state NSW was the nation’s worst performing economy.

Mr James said NSW had the potential to lift off the bottom of the economic leader-board if faster population growth could be translated to increased construction, investment and overall economic growth.

“NSW should benefit from the ending of the US financial crisis via a stronger job market,” Mr James said.

“But it is a long way behind the other states and territories due to the stagnant activity in the construction sector.”

From: AAP January 10, 2010 4:41AM

Car production in Australia has plunged to its lowest level since 1957.

CAR production in Australia has plunged to its lowest level since 1957, with manufacturers hit by the global economic slump and the high Australian dollar.

Despite strong local car sales, helped by the federal government’s business tax breaks, exports to markets such as the Middle East and the United States have all but collapsed, Fairfax newspapers say.

The industry is set to be further buffeted by a January 1 tariff cut that has lowered the price of imported models relative to locally produced cars.

Figures from the Federal Chamber of Automotive Industries show Australia produced just 225,713 vehicles last year, almost 100,000 fewer than in 2008 and 55 per cent of the output in 2004.

The chamber’s chief executive, Andrew McKellar, told Fairfax a “crucial factor” this year will be the speed of recovery in export markets, warning that the high dollar poses a serious long-term threat to the competitiveness of the industry.

Separate figures from the Bureau of Statistics confirmed the dramatic collapse in exports.

The export slump will leave Australia’s car industry even more heavily dependent on taxpayer-funded assistance, which is mainly provided through the Government’s $6.2 billion car industry plan.

Industry Minister Kim Carr said production had been running at half its usual pace, although local producers had fared better than elsewhere in the world, given no major companies had gone broke.

23 October, 2009 | Media Release

The ACTU has welcomed the Rudd Government’s draft National Green Skills Agreement announced today which will equip thousands of apprentices in emerging and existing industries with the skills to help tackle climate change.

Mandatory green skills will be included in all apprentice training from the end of 2010.

“The skills of our plumbers, construction workers, electricians and other specialist trades workers will be fundamental in ensuring that Australia is able to move quickly and flexibly in creating a sustainable, low carbon economy,” said ACTU President Sharan Burrow at today’s Green Skills Forum in Melbourne.

“It is estimated that we are going to need to re-train and upskill about 3 million workers in the next 20 years to meet the challenge.

“Unions are already working hard in this area.

“The Plumbers’ Union (CEPU) in Victoria has already set up a “Plumbing Industry Climate Change Action Centre” which is aims to up-skill the state’s 21,000 plumbers and set up similar centres nationally.

“Water management is one area where we are creating new jobs and expertise and an area in which Australia can lead the world.

“However, the creation of hundreds of thousands more jobs and apprenticeships in other clean energy and clean tech industries are on hold because Australia’s climate change laws are being blocked in the Parliament.

“We urgently need national policies in place to drive investment and a fast but fair transition to a low carbon economy.

“Australia is already being left behind, with the rest of the world moving quickly to take advantage of a $6 trillion global market in clean tech products, services, expertise and technology,” the ACTU President told the forum.

More information
The Hon Julia Gillard MP: Address to the Green Skills Forum

Esky no longer dinky-diJuly 2, 2009 – 12:13PM

Outdoor recreation company Coleman Australia has bought the Esky brand from Nylex and plans to expand the iconic Australian brand internationally.

Esky becomes the latest high-profile Australian brand to fall into overseas control. Bonds clothing and Arnotts biscuits are among other brands to transfer either ownership or production – or both – abroad.

The Esky brand was bought from Nylex, which is currently in receivership, for an undisclosed sum.

Coleman Asia Pacific president Simon Traynor said he expects the brand to be profitable from day one and is executing expansion plans immediately.

”As of this morning I’ve had conversations with my Japanese counterparts and we will be presenting the Esky brand and the range at the end of next month to a number of customers across Asia,” he told AAP.

The Kansas-based company is also hoping to take brand to South Africa, North America and Europe in the longer term.
Mr Traynor said there were synergies between the Coleman and the Esky brands.

”Twenty years ago there was a licensing agreement between Coleman and Esky that not only meant the Nylex factory manufactured Coleman coolers, but that the Coleman sales team sold the Esky brand into camping stores,” he said.

Coleman has brought Esky personnel across with the acquisition.

Insolvency firm McGrathNicol assumed management responsibility for Nylex’s assets and business divisions in February and has executed the Coleman agreement.

Completion for the sale will take place on July 19.

July 1, 2009 – 9:49AM

Activity in the manufacturing sector continued to decline in June, although the pace of easing slowed, a survey showed.

The Australian Industry Group/PricewaterhouseCoopers Performance of Manufacturing Index rose by 0.9 index points in June to 38.4 points, seasonally adjusted.

June marked the 13th consecutive month that the index was below the 50-point level, indicating contraction in activity.

AiGroup chief executive Heather Ridout said on Wednesday some sectors had benefited from the federal government’s fiscal stimulus packages, lower interest rates and a lift in consumer confidence during June.

“While the slowing in declines in manufacturing inventories, employment and deliveries is encouraging, the continued weakness in new orders and production raises doubts as to whether this trend will be sustained,” Ms Ridout said in a statement.

“There will need to be an improvement across all sectors in the months ahead, particularly automotive, transport and construction industries which reported weakness and impeded manufacturing production in June.”

In the survey of more than 500 companies, four of the 12 sectors – machinery and equipment, textiles, basic metal products and fabricated metal products – recorded easing in the decline of activity.

Two sectors, food and beverages, and clothing and footwear, reported increases in activity during June, reflecting the effects of the federal government’s second stimulus package and generational-low interest rates, the report said.

New orders remained weak, while employment, deliveries and inventories declined at a slower rate.

PricewaterhouseCoopers global leader of industrial manufacturing, Graeme Billings, said weak markets were placing pressure on the ability of firms to manage costs and maintain profit levels.

“The weakness in manufacturers’ markets illustrated by continued declines in new orders puts further pressure on profit margins as prices continue to fall at the same time as input prices and wages growth remain stable,” Mr Billings said.

“This only re-emphasises the need for firms to continue to focus on ensuring cash flow through such strategies as reducing unit costs through inventory and supply chain management and managing debtors and creditors effectively,” Mr Billings said.

Reko Rennie
June 11, 2009 – 11:45AM

Australian aircraft engineers have blasted Jetstar and Qantas for using cheap maintenance facilities overseas after a Jetstar plane’s cockpit caught fire and forced an emergency landing in Guam early this morning.

The engineers union has disputed claims by Jetstar management that the aircraft had been maintained in Australia, saying its last major maintenance check occurred in the Philippines.

The Jetstar A330-200 aircraft – flight JQ 20 – left Osaka’s Kansai International Airport for the Gold Coast just before 11pm last night (AEST) carrying 186 adult passengers, four infants and 13 crew including 9 cabin crew and 4 pilots.

Jetstar in forced landing
A cockpit fire has forced an international Jetstar flight carrying 203 people into an emergency landing on the Pacific island of Guam.
Jetstar chief executive officer Bruce Buchanan said a computer error message identified a fault with a heating element in a cockpit window that caused a small fire.

The pilot managed to extinguish the fire and send out a mayday call before conducting an emergency landing at Guam airport.

The Australian Licenced Aircraft Engineers Association is angry about comments by Jetstar management that link the latest cockpit fire incident to Qantas engineering within Australia.

Jetstar spokesman Simon Westaway stood by his statements and told The Age the less than two-year old plane was checked in Australia only last month.

“The last major check on that aircraft is what’s called an A-check was undertaken in May of this year and it was undertaken by Qantas engineering in Australia,” Mr Westaway said.

But Steve Purvinas, the engineers association’s federal secretary, said the Jetstar A330 last underwent major maintenance in Manila in December 2008.

He said this was the second emergency landing forced by cockpit smoke in 18 months.

“Qantas group A330 aircraft have never undergone major maintenance in Australia,” Mr Purvinas said.

“This is the second cockpit smoke emergency landing on a Qantas group aircraft in 18 months and in both cases the aircraft had undertaken maintenance in the cheaper overseas facilities.

“The previous incident occurred in February 2008 on a Boeing 747 and resulted in an emergency landing in Sydney.”

He said Qantas and its subsidiary Jetstar were lucky the two cockpit incidents occurred in an area of the aircraft that was easily identifiable and accessible.

“Qantas are blessed that these incidents didn’t occur in cargo holds or electronic equipment bays,” he said.

“Qantas need to come clean about the high level of overseas maintenance on Australian aircraft or better still, bring the full workload back to Australia where aircraft maintenance over a long period of time has proved to be second to none.”

The Australian Transport Safety Bureau has sent investigators to Guam to examine the aircraft, while the US-based National Transportation Safety Board and Qantas would also investigate the incident, Mr Buchanan said this morning.

“It’s no human error.”

Mr Buchanan said the aircraft went into service in August 2007 and the window was one originally fitted by the manufacturer.

Passengers – most of whom were Japanese nationals except for 44 Australians – were unaware of the incident and there was no smoke or fire in the cabin. No one was injured.

“He’s (the pilot) called a mayday and diverted into Guam and all passengers and crew are safe,” Mr Buchanan said.

“In fact most of the passengers were unaware until they got onto the ground and the captain informed them of what actually happened.”

The flight landed safely without incident at Guam International Airport at 2.20am (AEST).

Mr Buchanan commended the crew’s quick actions in putting the fire out. He said the chief pilot had 14 years’ experience flying with Qantas.

“I’d just really like to commend the pilots … they’ve reacted swiftly and in a very professional manner,” Mr Buchanan said.

Jetstar will send a plane from Sydney at 11am today to collect the passengers and crew, who are being accommodated in hotels in Guam. The plane is then due to depart from Guam at 6pm to fly back to Brisbane.

The island of Guam is a US territory, located in the Pacific Ocean about 2100 kilometres east of the Philippines.

The aircraft is the same model as the Air France flight which disappeared over the Atlantic Ocean earlier this month.

A team of ATSB investigators, including operations, electrical engineer and licensed aircraft maintenance engineers, will travel to Guam this morning to commence the investigation.

A passenger on board the flight, Adam Power, told 3AW he could smell something for two hours before the plane descended.

“I think their main aim was to just keep us calm. There were no bumps or anything like that, just a heavy smell. I wouldn’t say it was a fire smell, it was like someone was cooking or something like that. A different sort of smoky smell … it was a weird smell.”

He said they were told there were “technical difficulties” while they were in the air, with the passengers being told there was a fire after they had landed.

He said that the jet landed about half an hour after the announcement, but the smell was present for about two hours before that.

Mr Power, a musician, said the worst thing was he had to cancel a gig schedule for tonight in Brisbane. “I’ve got to call the manager of that bar. Hopefully he’ll believe me.”

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