Several economists believe interest rates are firmly on hold after listening to Reserve Bank governor Glenn Stevens’ bi-annual update on the state of the economy.

Mr Stevens appeared before a parliamentary committee today to answer politicians’ questions about the Reserve Bank and economics.

HSBC chief economist Paul Bloxham said the testimony suggested interest rates were on hold for now.

Well overdue as sometimes the reserve bank goes into reaction mode after the horse has bolted & forcing the people to deal with severe austerity measures without the need for it. We are suffering Mr governor & it’s about time you had your finger on the pulse.

“Despite the market pricing cuts, the RBA seem very unlikely to be cutting anytime soon. Inflation is still the key concern and with their latest forecasts for above target CPI there is a huge hurdle for a direction change,’’ he said.

“Indeed, the risks to inflation are still to the upside, which suggests the next move will be up, not down. But, as the governor said today, in times of financial turmoil it is often best just to ‘sit still’. The clear risk is for a longer pause, with much depending on financial market developments.’’

He said Mr Stevens had suggested that when setting rates the bank must “consider not only the central forecast but also the possibility that things turn out differently from that forecast”.

“In the [question and answer session], the governor suggested that in periods of tremendous financial turbulence, it is often a good time to ‘sit still’ if you can afford to. Interestingly, he also suggested that he still feels as though the RBA is still ‘ahead of the game’ on inflation,’’ he said.

CommSec chief economist Craig James said Mr Stevens had not given any hints about rate cuts or increases.

“While the Governor feels he has inflation under control he noted that RBA forecasts “have inflation not exploding but going up’’,’’ he said.

“The Reserve Bank has revealed its estimates on how extra income from the increased terms of trade is used across the economy. Of every extra dollar earned from the resources sector, the RBA estimates that 50-60c stays in the country through taxes, wages, purchasing and returns to shareholders.’’

He said Mr Stevens also made a number of controversial statements

Sourced & published by Henry Sapiecha

Survey Reveals Depth Of NSW Solar Industry Crisis

A recent survey of 91 solar businesses in New South Wales has shown 25% have closed or will close their doors in the next month due to conditions sparked by the NSW government’s handling of the state’s Solar Bonus Scheme.

The survey, carried out by the Solar Energy Industry Association (SEIA), also found 416 solar jobs have been lost since November 2010 and a 93% drop-off in daily solar sales enquiries since that time.

A joint release from the SEIA and the Australian Solar Energy Society (AuSES) states a further loss of 108 jobs is expected by the end of this month and up to 3,700 jobs in the solar sector could go by the end of the year under current conditions.

While the situation in the state has proved to be incredibly challenging for the industry, some companies are toughing it out.

According to Jeremy Rich, CEO of national solar solutions provider Energy Matters, the company has no intention of closing its NSW branch.

“It’s a shocking situation in New South Wales and we really feel for people losing their jobs. Thankfully, we’ve built our company enough to withstand this current situation and we are continuing to install systems in the state; helping NSW households reduce their rapidly escalating electricity bills”.

“Regardless, something must be done in order to ensure a viable NSW solar sector. A fair approach can see the state regain its previous reputation for renewables support and more households will be able to reduce their energy costs. All the industry wants is a fair price paid to owners of solar power systems for the surplus electricity they generate – and not next year, as that will be too late. It’s needed right now.”

Mr. Rich points out that with NSW electricity costs rising by a staggering 17 per cent in July and further increases expected within the next 12 months; installing a solar power system in NSW is still a good investment – even during this period of feed in tariff limbo. Some electricity retailers in the state are offering feed in tariff arrangements and the NSW Government has stated new home solar power system installations in the state would be eligible for net metering.

The SEIA and AuSES have again written to the New South Wales Government, outlining their grave concerns that the results of a critical IPART review of solar feed in tariff arrangements in the state will arrive too late for the industry. The IPART review will not be completed and submitted until April next year.

“This is having a devastating impact on our industry…the policy vacuum has meant the solar industry has now ground to a halt in NSW,” states part of the letter.

Sourced & published by Henry Sapiecha

CONVOY PROTEST TO CANBERRA CREATES PROBLEMS FOR BUSINESSES

The ACT Government will seek a better financing deal from the Commonwealth to help pay for major national events after being hit with massive costs to ensure yesterday’s Convoy of No Confidence proceeded smoothly.

Only a small fraction of the thousands of people expected to take part in a Parliament House rally actually arrived in Canberra.

About 300 vehicles took part in the Canberra leg of the convoy, which culminated in several hundred people rallying on the lawns of Parliament House to demand an early election.

EXTRA COSTS: Convoy no show a low blow for stocked up businesses

Thousands of Canberra residents took the day off, worked from home or arrived at work late to avoid the traffic chaos which was expected to accompany the arrival of the trucks, four-wheel-drives, caravans and other vehicles in the convoy.

The decision by so many people to stay off the roads and the smaller-than-expected size of the convoy meant that many major roads were free-flowing during the morning peak period.

Chief Minister Katy Gallagher welcomed the smooth passage of the protest but said the Government was unhappy with the wasted effort by ACT Government agencies in managing the event. Northbourne Avenue and the Tuggeranong Parkway both recorded declines of 25 per cent in traffic levels between 8am and 9am yesterday as commuters tried to avoid the congestion that never materialised.

There were 400 less vehicles on Northbourne Avenue in the one-hour period and 770 less on the Tuggeranong Parkway.

Plans to coordinate traffic lights on Northbourne Avenue only had to be activated twice throughout the morning.

Ms Gallagher said she would be having words with the Commonwealth Government over the ACT having to shoulder the brunt of protest actions.

TORTURE OF CATTLE AND SLOW GRIZZLY DEATHS IN WA GOLDFIELDS

Five cows have been cruelly shot and tortured in what a cattle station owner says is only the latest incident of animal cruelty in rural WA.

The heifers were discovered at Mt Monger Station, near Kalgoorlie, yesterday afternoon.

“They were shot in the stomach, let [to] walk around and then shot in the chest. They were basically tortured,” Mt Monger Station owner Brendan Jones said.

“One was shot, it’s been wounded and it’s down, so they’ve just cut it’s throat and let it bleed.

“They stuck a stubby in its mouth and cigarette butts in its ears.

“[The culprits] are sick as.”

Mr Jones said a low-calibre gun was used, adding to the inhumanity of the shootings.

The incident has attracted much media attention today but Mr Jones said it was not uncommon and Australia’s outrage over alleged torture of live cattle sent to Indonesian slaughter houses was hypocritical.

“We’re subjected to this ridiculous activity constantly,” he said.

“If it’s not shooting cows it’s shooting cross bows into sheep.

“The general public would be horrified by what we see.”

“The Australian government has thrown some pretty big allegations against the Indonesians … they’re killing cows to survive, we’ve got people here killing cows just for the sport of it and that’s damning on Australia.”

Mr Jones said the cows, owned by a neighbouring station, were temporarily on his property while a boundary fence was repaired.

They had been shot from a road that ran through the property.

He said there was nothing that could be done to prevent further attacks. Fences were cut and the properties were as large as one million acres, making security difficult.

He hoped today’s social media climate would help police track down the culprits.

REPORTERS DIE IN AIR CRASH AT LAKE EYRE

Police are not expecting to find any survivors from the helicopter crash that likely killed a three-man ABC news crew in a remote location over Lake Eyre in South Australia overnight.

Reporter Paul Lockyer, cameraman John Bean and pilot Gary Ticehurst had been working on a third documentary on the Lake Eyre region, following up on previous reporting by both Lockyer and Bean, when the helicopter they were travelling in crashed near the edge of Lake Eyre.

TRIBUTES FLOW: Colleagues remember Lockyer as country boy with ‘bushy brows’

Police have said it will take “some time” before positive identifications of bodies could be made, or details of the crash could be uncovered.

“(The crash site) is spread over a fairly large distance. Just by the sheer intensity of the fire it is making it difficult,” Assistant Commissioner Neil Smith, of SA police, told reporters in Adelaide.
View Three ABC workers killed in helicopter crash in a larger map

Fears for the trio began when they failed to arrive for a planned dinner last night.

Just prior to the crash the helicopter had landed, and the occupants had spoken to a tour guide. Shortly after departing, the tour guide has told police that he noticed a large fireball in the distance.

Wednesday 17 August 2011

Committee to examine National Memorials proposed for Canberra

The National Capital Committee is to conduct an inquiry into the administration of the National Memorials Ordinance 1928 which covers the building of memorials of national significance in Canberra.

“The administrative processes supporting the Ordinance have been criticised recently and need to be examined,” said Senator Louise Pratt, Committee Chair.

“There are a number of current proposals for National Memorials and some of these have attracted public interest,” she said.

“The inquiry will allow us to set the framework for how the National Memorials Committee should operate.”

Senator Pratt added that the inquiry will also look at how to improve transparency in the administration of the Ordinance.

The National Memorials Ordinance 1928 defines the membership and responsibilities of the Canberra National Memorials Committee (CNMC).

The CNMC has the power to approve the location and character of National Memorials. Membership of the CNMC consists of the Prime Minister, the Minister responsible for the Ordinance, the Leader of the Government in the Senate, the Leader of the Opposition in both the House and Senate and two residents of the ACT.

Senator Pratt called for submissions by 9 September 2011. Terms of reference are available.

It intends to make its findings public by the end of the year.

MORE BOAT PEOPLE STILL COMING EVEN AFTER THE MALASIA SWAP DEAL WITH AUSTRALIA

A BOAT carrying around 62 asylum seekers, including at least two children and several women, reached Christmas Island yesterday, the fourth vessel to have arrived since the Malaysia plan was signed by the federal government.

The small but very crowded boat was escorted by the Navy into Flying Fish Cove at 2pm, bringing the total number of asylum seekers set to be sent to Malaysia to 269.

Interviews with the 102 asylum seekers who were on the third boat, which arrived on Thursday, have revealed a third of the passengers were unaccompanied minors, bringing the total of lone teenagers facing deportation to Malaysia to at least 44, not including the latest boat.

”A lot of them were quite young, 16 or 17,” a source inside the immigration detention centre said.

Immigration officers questioned passengers from the third boat until 3am on Friday, subjecting those claiming to be under 18 to age determination interviews.

”There was a lot of crissed-crossed examination to try to make them admit they were not minors,” said the source.

The federal government is being scrutinised by the High Court over its plan to return 800 asylum seekers to Malaysia, with no blanket exemptions. The return of unaccompanied teenagers, in particular, will be examined. An injunction prevents any transfers until a full bench hearing on August 22.

There were four family groups on the third boat, who ”reacted very peacefully” when they reached the Phosphate Hill detention centre and were told the matter was in court.

A week earlier, families, teens and a seven-year-old child who arrived on the first boat began a hunger strike when informed they would be returned to Malaysia. They are now eating again. ”I think they have a small amount of hope they will be kept here,” the source said.

The third boat included 31 unaccompanied minors, 60 single adult males, and five males, four women, two boys and a girl in family groups.

Following agreement by the Papua New Guinea government to reopen a refugee processing centre, the Gillard government quickly regeared its message to people smugglers yesterday.

”If you are thinking of making a boat journey to Australia … it’s very clear to you that you may be sent to Malaysia or Papua New Guinea, but you are not going to be processed in Australia,” said the Immigration Minister, Chris Bowen.

But Mr Bowen said it would take ”several weeks” to reopen Manus Island as a centre because it needs to be upgraded. He also confirmed the United Nations High Commissioner for Refugees would not endorse a Papua New Guinea solution.

? One of the people smugglers who allegedly organised the infamous 2001 SIEV X voyage in which 350 asylum seekers died is believed to have been tracked down in New Zealand and could soon face charges in Australia. Iraq-born Maythem Kamil Radhi was arrested in New Zealand late last month and is now fighting extradition to Australia, where he could be jailed for up to 20 years if found guilty of people smuggling.

SECURITY RISKS FOR USERS IN THE PROPOSED NEW NAT BROADBAND

PREVIOUSLY secret documents show the federal government was warned that the national broadband network would expose taxpayers to ”considerable financial risks”, only weeks after the ambitious high-speed internet plan was unveiled.

Treasury told the government it would have to consider shielding the network from private-sector rivals to help it be viable.

The documents show that Treasury’s concerns about the network were long-held, and appear to reveal a shift in competition policy goals.

According to internal reports released in response to a freedom-of-information request, Treasury officials flagged the risks of the project weeks after it was announced by former prime minister Kevin Rudd in April 2009.

”Considerable financial risks to the Commonwealth remain, including uncertainty over the likely extent of private sector involvement,” a report dated May 29, 2009, says.

Mr Rudd had unveiled the network – announced after the surprise scrapping of a $4.7 billion broadband tender – as the ”largest nation-building infrastructure project” in Australian history. Despite its concerns, Treasury also said the project could benefit consumers by breaking Telstra’s stranglehold in the market. ”From a competition policy perspective, the government’s announcement provides an excellent opportunity to address long-standing problems in the sector – the risk is that this opportunity is wasted or compromised,” the report also said.

A separate minute to Treasurer Wayne Swan, in December 2009, also said the government faced an ”important policy choice” over how much to shield the taxpayer-funded NBN Co from private-sector competitors. It said a key consideration for the government in 2010 would be: ”The extent to which NBN Co receives some temporary protection from competition during the network build phase to help underpin its viability.”

Since then, telecommunications firms have protested against ”anti-cherry-picking” laws that stop potential rivals to the NBN from building their own network in the most commercially viable inner-city areas.

The minute also suggests ”promoting infrastructure-based competition” as a policy goal once the network has been built – but critics now say this goal has been abandoned.

The opposition communications spokesman, Malcolm Turnbull, seized on the apparent shift in policy as proof the project was developed on the run. ”Just two years ago, Treasury was still working under the assumption that it should be a policy priority to ‘promote infrastructure-based competition’ after the NBN was built,” Mr Turnbull said.

”But that has now been stamped out entirely, thereby overturning several generations of microeconomic reform and returning us to a time when governments used their power to prevent the private sector from competing with government-owned businesses.”

A spokesman for Mr Swan said the commercial viability of the NBN had since been proved in its business case – released last December – and the government had worked closely with the competition watchdog.

”The NBN and structural separation of Telstra are the holy grail of competition reform in the telecommunications sector,” the spokesman said.

When the Treasury documents were prepared, the department was led by Ken Henry, who was also on the government panel that urged Mr Rudd to scrap its previous tender for a $4.7 billion national broadband network.

The documents also provide new details on negotiations between Canberra and Telstra, which is urging shareholders to approve an $11 billion deal with NBN at a vote in October.

NOT TODAY DEAR CHINA, I THINK I HAVE A HEADACHE-SWAN

TREASURER Wayne Swan appears that he may soon have another foreign investment headache on his hands, as a Chinese entrepreneur says he has Beijing’s backing to step around Australian investment rules and become the world’s fourth force in iron ore.

Liu Han, chairman of the sprawling Hanlong conglomerate, has told local media that the Chinese government and its banks were backing his ambitious overseas investment plans including a takeover bid for the Australian-listed iron-ore hopeful Sundance Resources.

He claimed his Hanlong Group would become one of the world’s top four iron-ore producers within 10 years. This would give China ”a say” in iron-ore price negotiations and stem as much as $80 billion in national losses flowing to the big producers, he said.

But despite a generous credit line from China’s Export-Import Bank, and his claim to be pursuing national strategic rather than private commercial objectives, Mr Liu says his status as a private entrepreneur will enable him to step around Australian foreign investment rules.

”Every company in Hanlong Group is private,” reported China Business News, paraphrasing comments from Mr Liu. ”Australia is a rule-of-law country, the Australian Government doesn’t have a law that can resist these takeovers.”

The comments may complicate the foreign investment approval process for possible future investments by the Hanlong Group and other private Chinese companies in Australia, although the Sundance bid is unlikely to raise serious concerns because the primary assets are in Africa.

The $1.3 billion Sundance bid was lodged by Australian-registered Hanlong Resources, whose parent company is the privately held Sichuan Hanlong Group.

Chinese state-owned enterprises have so far accounted for an overwhelming majority of China’s overseas resource investments. The investments have caused bilateral tensions since Chinalco’s complex $US19.5 billion bid for a stake in Rio Tinto in 2009.

After the bid failed, a Chinese internal post-mortem acknowledged international suspicion of state-owned entities and recommended greater assistance and funding for Chinese private entities to achieve Chinese strategic goals.

”When state-owned enterprises ‘go out’ they will face the problem of their government background,” said the report prepared for the State Council by the Development Research Centre, as revealed by BusinessDay in March 2010.

”Therefore it is … necessary to encourage private capital to go out in the field of natural resources,” it said.

The Australian Foreign Investment Review Board’s stated preference for private investors can be difficult to apply to China, where the state-private divide is not always clear-cut. All large successful private companies require a degree of symbiosis with relevant tiers of the Chinese Government – or they at least must pay lip service to government objectives – in order to protect themselves and pursue their own interests.

Liu Han told China Business Times that the powerful National Development and Reform Commission had confirmed its support for Hanlong’s overseas development. Mr Liu also said ”money is fundamentally not a problem” thanks to funding from several sources, including the Export Import Bank, and that he would be prepared to on-sell shares to other domestic companies if his bid succeeds. He said Hanlong aimed to ”solve the long-term demand and supply problem in the iron-ore market” and thereby stem what he said was $70-80 billion in annual losses that are flowing to the three iron ore giants, Vale, Rio Tinto and BHP Billiton.

Sundance had planned a two-stage $7.7 billion iron ore project in Cameron and Congo. Hanlong claims the mine could provide up to 200 million tonnes of iron-ore imports to China each year.