Carbon plan may break us, says government-owned power generator

This will put the NSW Labor government at odds with the Federal Labor government -- as it reduces the value of the NSW government-owned power stations to zero -- which will make it a tad hard for NSW to raise money by selling off the power stations concerned. NSW Laborites are very influential at the Federal level however so an exemption for the power stations will almost certainly ensue -- which will mean that just about everybody is exempt! In a sane world, Rudd would give up on the whole thing in that case. I certainly don't think that a toothless law would impress the Greenies, which is whom it aims to please. The Green party has in fact already voted against the initial version of the scheme

The country's largest single power generator, Macquarie Generation, has warned that its viability is threatened by the Federal Government's proposed emissions trading scheme. Its concerns throw into doubt the State Government's plans to privatise the power industry by selling electricity retailers and output from power generators.

Under an electricity sales contract written with its main customer, the Tomago aluminium smelter in the Hunter Valley, Macquarie Generation carries the full liability for complying with the emissions scheme. Yet under that scheme, Tomago will receive free permits that ensure it is fully insulated. As a result, it will benefit from "double dipping" under the scheme, since its direct liability is offset thanks to free permits it will receive, while its power supplier, Macquarie Generation, has to bear the financial burden of the emissions scheme.

In its most recent annual report, tabled in State Parliament late last year, Macquarie Generation said its "profitability, value and remaining life could be negatively impacted" by the emissions trading scheme. Macquarie Generation "has a long-term, non-reviewable electricity supply contract resulting in [it] carrying the liability for compliance with the carbon pollution reduction scheme and provision of carbon permits in relation to the electricity supply contract", it said in the report. "If the contract counter-party and Macquarie Generation cannot agree on an equitable arrangement with regard to compliance with the … scheme, the corporation will likely face significantly reduced earnings and value."

In its so-called Statement of Corporate Intent for 2008-09, tabled earlier last year, Macquarie Generation said that "without a pass-through mechanism to customers, the emissions trading system will be almost equal to Macquarie Generation's current planned total revenues". Passage of the scheme would result in the two NSW aluminium smelters - Tomago and Kurri Kurri - being compensated in full for any exposure, by receiving free permits to offset the impact of the scheme.

The Greens MP John Kaye said the State Government had been "less than open" about the impact of the contracts on its electricity privatisation plans. "The costs of these fixed-price contracts have been hidden from public view for 2½ decades," Dr Kaye said. "Now the people of NSW will begin to see how much they have been paying and how much they will have to pay off into the future."

It was recently disclosed that the power contracts are linked to aluminium metal markets, and that recent volatility there had cost state taxpayers hundreds of millions of dollars.

A spokesman for the acting Treasurer, John Hatzistergos, said the Government was working with the Federal Government to ensure NSW received its fair share of compensation under the emissions scheme, but he could not comment on individual contracts, which were commercial-in-confidence.

Macquarie Generation has never confirmed the identity of its main contract partner, Tomago Aluminium, nor the size of the contract, which is believed to account for about a quarter of its annual revenues of $1.2 billion. Delta Electricity is contracted to supply the smaller Kurri Kurri smelter, which has capacity of 175,000 tonnes a year of aluminium, less than half the 530,000 tonnes of Tomago.

Both contracts were drawn up in the 1970s and 1980s when the Government was looking for buyers for large amounts of electricity output when it upgraded electricity generation capacity.

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Wealthy migrants pricing locals out of Sydney property market

This is an almost inevitable result of a high level of immigration anywhere and Australia's Leftist Federal government is deliberately and openly fostering a high level of immigration. The price problem would be much alleviated if more land for housing were released from restrictive land-use regulations but the Greenies would raise hell if that were done so the problem will only get worse

AUSTRALIAN families are being priced out of the property market by record numbers of highly paid skilled workers arriving from overseas. Research by The Sunday Telegraph has revealed for the first time how skilled immigrants - predominantly from Britain, India and China - are forcing house prices to some of the highest levels in the world when compared with average incomes.

Almost 115,000 permanent skilled visas were issued last year, compared with just over 40,000 in 1998-99 - an increase of 187 per cent. During the same period, the median house price rose 168 per cent, from $156,600 to $420,600.

Although the number of migrants is relatively low compared with total property transactions, which have averaged 500,000 a year over the past 10 years, experts say property-price inflation is driven not by what the average buyer can afford to pay, but by the highest bidder. And because skilled migrants command above-average salaries, they pay above-average prices. As a result, a relatively small number of highly paid buyers can have a disproportionate effect on house prices.

"There's no question the number of skilled migrants is a key factor in driving up prices," John Edwards, of property monitor Residex, said. "You need only two highly paid buyers at an auction to take the price of a property well above what any other party could afford to pay."

Proof of this theory came when Mr Edwards plotted a chart of the increase in skilled migration alongside national house-price growth. "It correlates at a rate of 98 per cent, which is almost unheard of," he said. "It even has an 18-month time lag, which is obviously the period between immigrants arriving in Australia, getting themselves settled and when they first purchase a property."

Coinciding with the surge in skilled immigration, the median Australian property now costs 5.5 times the average household income, and about eight times income in Sydney. That compares with a ratio of 2.5 times household income in the US and five times income in Britain.

Property prices in the US and Britain have collapsed, but neither country approached Australia's peak of six times income even before their markets crashed. Australia's skilled migration program is likely to keep prices rising for years to come. As The Sunday Telegraph revealed last week, the median Sydney house price is forecast to hit $1 million by 2020.

"We need immigration for our economy, but the fact they have higher-than-average incomes at a time when the supply of housing is constrained, inevitably results in prices going up," AMP Capital chief economist Shane Oliver said.

Other economists, however, say the shortage of housing supply is only partly to blame. "The fact there is a shortage of property doesn't necessarily mean prices have to keep rising," Steve Keen, professor of economics at the University of NSW, said. "There was still a shortage of property in the UK when its housing prices crashed."

The list of skilled professions issued by the Department of Immigration and Citizenship is dominated by high-earning professions such as accountants, IT workers, engineers and health-related specialists, from chiropractors to radiographers.

Meanwhile, the number of visas issued to unskilled families has been falling for years, from around 60,000 in 1995 to about 50,000 last year, further increasing the bias towards high earners. The result is a higher proportion of higher paid workers among skilled migrants, even as the number of skilled visas is reduced. Last year, the Government cut permanent skilled migration visas by 14 per cent from 133,500 to 115,000. It has proposed a further cut to 108,100 for 2009-10, a reduction of almost 20 per cent on previous levels.

[Skilled migration visas are only one of several ways to migrate legally to Australia. The present Federal government is reorienting the migrant intake towards less skilled people while increasing numbers overall. But low-skilled people still have to be housed so that will bid up prices in poor suburbs, which will be MUCH more disruptive than the situation described above. When poorer native-born people find themselves priced out of housing in their old suburbs while immigrants are increasingly moving in, the result could well be explosive -- JR]

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Queensland Government backflips on foreign language studies

Learning a foreign language in late primary school seems a good idea to me. It will very rarely lead to fluency in the language concerned but it will lead to an understanding of how all languages -- including English -- work. The most beneficial language in that direction is of course Latin -- as both the grammar and vocabulary of English have been heavily influenced by Latin

THE State Government has backflipped on its controversial decision to drop the mandatory status on the teaching of foreign languages in all state schools following The Courier-Mail report this morning.

Acting Education Minister Stephen Robertson moved to separate the Bligh Government from the Education Department changes, stating the "optional" approach to foreign languages in Years 6, 7 and 8 was not Bligh Government policy and was not endorsed by cabinet.

"It is not in accordance with our commitment to providing all students with a world-class education - of which LOTE (Languages Other Than English) is a very important part - and this optional approach will not continue,” Mr Robertson said. An "urgent" review has now been ordered "to ensure schools meet the requirements of Government policy".

It comes after The Courier-Mail revealed the mandatory status of foreign languages had been dropped in Queensland, with the changes implemented state-wide last year. Education assistant-director general Yvana Jones said the status was dropped because a one-size fits all approach didn’t work in state schools, with research showing children were disengaging from LOTE and resources could be better targeted. About 298, or nearly one-quarter, of state schools chose not to teach either a language or intercultural investigations under the LOTE program last year, according to figures supplied by the Department.

Ms Jones said principals had to get the permission of their school community before they could drop a foreign language. The move attracted widespread criticism from experts and critics.

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The rise and rise of the regulators

In 2009, more than 50,000 pages of new laws were enacted at the federal, state and territory levels. These were in addition to the 100,000s of pages of existing laws.

The consequences are serious. The first is that Australia will cease to be a world leader in being governed in accordance with the rule of law, and instead become ruled by law (there being a fundamental difference). Secondly, the rule of law will be progressively replaced by the rule of the regulator, the antithesis of the rule of law.

As the number and complexities of laws increase, there is a corresponding decrease in knowing and voluntarily observing the laws by the community. And, as it becomes practically impossible for the community to know, let alone apply the law, ensuring compliance is passed to the persons charged with administering the laws - such as ASIC, ACCC, ATO - the regulators. However, it is not practical for the regulators to enforce the mass of laws against everyone, nor even against one person, all the time. They therefore announce how they will apply the law, impose penalties on those who act otherwise, and reward those who act in accordance with their blessings. A few are prosecuted as a warning to the rest of the community. In this way, the rule of the regulator begins.

The result is a fundamental shift in the relationship between the individual and the law. Increasingly, the relationship is not of the individual knowing and complying with what the law states, but of knowing and complying with what the regulators state the law states, and then knowing the extent to which the regulators will apply the law as stated by them.

For many, the new relationship focuses on not being seen by the regulators; keeping the lowest possible profile on those matters that the regulators prioritise for enforcement. What is of practical importance is the relationship of the individual with the regulators. For in such an environment few have the time, fortitude or money to be visible to the regulators and to apply the law in a way that differs from the one taken by the regulators. This new relationship can also be readily observed by the practical necessity of going cap in hand to the regulators for approval to carry out many transactions. For example, in the last eight years the ATO has issued more than 80,000 private rulings on what it says the law says (these rulings became law to the applicant, regardless of what the High Court might declare the law to mean for the rest of the community). No new law administers itself. More and more people are required to be employed by regulators to enforce an increasing number of laws. This becomes difficult, and the next stage in the shift to regulator rule begins.

One of the first signs of this shift is the conferral on the regulators of more and more powers of search, access to private property, detention, telephone tapping, together with the increase in penalties. This happens not because a material number of Australians have suddenly become terrorists or members of organised crime. Rather, the intimidation of existing powers is believed insufficient to obtain compliance, so greater powers and harsher penalties are deemed necessary. Yet the futility of forcing compliance in this way was seen centuries ago by the penalty of hanging for stealing a loaf of bread. Further, the regulators increasingly find it difficult before an independent court to obtain a conviction. The regulators know that a crime has been committed but are frustrated because they have not the powers to get the evidence or get the court to agree with their view of the law. For those who doubt whether Australia is at this stage, they need look no further than the recent unsuccessful prosecutions by ASIC.

One of the other signs of the rule of the regulator is the attempt to reverse the onus of proof so that the regulators can get convictions to send a clear message to the rest of the community. The Australian courts are a real impediment to regulators in this regard as they insist that no one is presumed to be guilty unless proved so. However, if an Act reverses the onus of proof a court can do nothing. The legislative attempts to reverse the onus of proof come in several forms, often behind a government announcement (regardless of political persuasion) that it is "streamlining" or "codifying" the existing laws. This is often accompanied by government publicity demonising the group to be subject to the new law. It is fundamental to the Australian way of life that everyone, whether an alleged terrorist or member of organised crime group, or an ordinary Australian, is presumed to be innocent until the prosecution proves otherwise. Any attempts to weaken that principle must be strongly and loudly resisted.

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