Wednesday, November 10, 2010

Treasury warns over costings for the NBN

It's just a power-mad obsession with getting their way that makes the Labor party persist with this dog of a thing

TREASURY has warned cabinet it needs to give "very careful consideration" to the National Broadband Network's implementation study over coming months. The department argued that the project carried significant risks to the national balance sheet.

The advice to cabinet, originally suppressed when Treasury's incoming brief to the government was released under Freedom of Information laws in September, was revealed yesterday.

The release of the advice comes after the Department of Communications and Broadband revealed in its brief to the government that the company overseeing the rollout of the NBN disagreed with the McKinsey-KPMG implementation study over recommendations relating to the design of the high-speed broadband network and the nature of the prices and products NBN Co would offer to customers.

Treasury has identified the $43 billion NBN as carrying significant risks relating to competition and efficiency in telecommunications and related markets, which could have an impact on the public balance sheet.

It said the government's response to the NBN implementation study would set the parameters for outcomes in these areas for decades to come. "It therefore warrants very careful consideration by cabinet in coming months," the Treasury brief said.

Meanwhile, a proposed joint venture between the federal and Tasmanian governments to roll out the network has been scrapped. The move prompted claims the $43bn project was in chaos.

Under the now defunct plan, existing optic fibre owned by the Tasmanian government energy company, Aurora Energy, was to be transferred to the joint venture company, NBN Co Tasmania, in exchange for shares in the joint venture. NBN Co has now decided to enter a deal with Aurora to pay for use of that existing optic fibre.


Migrant skills go to the top of the list

The points system for skilled migrants that notoriously preferred hairdressers over Harvard scientists is about to be abolished. Immigration Minister Chris Bowen is scheduled to announce in Sydney tomorrow a new points system in keeping with wider reforms to skilled migration.

The reforms shift the emphasis to high skill levels and employee sponsorship, making it harder for overseas students with low-quality Australian qualifications to secure permanent residency.

Stricter rules for skilled migration have damaged the business model used by private colleges and universities to attract students and fee revenue.

In China, Tertiary Education Minister Chris Evans rejected any suggestion the commonwealth should compensate education providers for lost income. "It's not about us making up the shortfall. I mean, universities are a business," he told the HES. "Some universities have gone into the international student market in a larger way than others."

An officially sanctioned and relatively easy pathway from local qualification to permanent residency as a skilled migrant helped create a multibillion-dollar export education industry.

Now, graduates will have to fit within July's new skilled occupation list, which gives prominence to high-skill jobs in health and engineering, and pass a strict new points test.

"The current weighting of points test factors leads to perverse outcomes such as the situation where a Harvard qualified environmental scientist with three years' relevant work experience would fail the points test, while an overseas student who completes a 92-week course in a 60-point occupation [such as cookery or hairdressing] would, with one year's experience, pass," says a discussion paper issued by the Department of Immigration and Citizenship.

The test gave an advantage to low-skill occupations on the Migration Occupations in Demand List, which was axed in February by Senator Evans when he was immigration minister.

Monash University researcher Bob Birrell said a reformed points test would allow the government "to apply a more discriminating filter to select the best applicants". This was possible because earlier decisions had slashed the number of points-tested places available while the number of former students seeking those places had risen sharply.

The discussion paper says in these circumstances, "Australia can, and should, select the best and brightest migrants for independent migration".

Senator Evans said universities understood the danger of becoming too reliant on one market. "I think most of them have managed that risk quite sensibly over the years," he said. "They know they're vulnerable to such movements, as other industries are, and they'll just have to manage that as they work through the issues.

"But the fundamentally important issue at the moment is that the appreciation of the dollar is impacting on our export industries. It's going to impact on education. But it's not a question of the government picking up the tab for that lost revenue. They'll have to adjust their businesses. "My role is to try [to] support them by encouraging participation in international education in Australia."

February's discussion paper floats possible changes to reward superior levels of English and applicants with higher degrees. It also flags a relaxation of the emphasis on youth, saying the test "does not adequately recognise the trade-off between age and work experience, particularly for highly skilled professionals".

It canvasses a possible end to the points bonus enjoyed by those with relatives in the country or with Australian qualifications.

The paper says local qualifications attracted extra points because of "the general quality" of Australian education and the fact studies were undertaken in English. The poor English of foreign graduates from Australian institutions was one of the triggers for reform of skilled migration.

Maurene Horder, chief executive of the Migration Institute of Australia, said the new points system was keenly awaited. She said students and the market were anxious for clarity after a year of upheaval.

Sydney immigration lawyer Peter Bollard said reform was necessary since the old points test was not performing as expected. "It meant some people, especially with family sponsorship, could get through with very low skill levels," he said.


Australian government bribes asylum seekers to go home

THE Federal Government will offer incentives to asylum seekers who agree to go home. Immigration Minister Chris Bowen has announced Labor will provide asylum seekers who come to Australia by boat assistance to help them return to their country of origin. Mr Bowen said the aid would consist primarily of job training and placement, and small business start-up support.

The assistance recognises that some asylum seekers are returning to a country they haven't lived in for years, and where they may have limited assets and support networks, he said. "Properly targeted reintegration assistance for returned asylum seekers can minimise the risk that the return will be unsustainable and that returnees will again become displaced," Mr Bowen said.

The International Organisation for Migration (IOM) will deliver the assistance and remain in contact with returned asylum seekers to determine the effectiveness of the program.

Mr Bowen said similar assistance programs had been used by previous Australian Governments and were currently utilised by European countries to return asylum seekers who weren't found to be owed protection.


Tax office arrogance

The chief executive of the world's richest diamond field has made a rude discovery. He's been declared bankrupt in Australia. Rick Feneley reports

In his homeland, Zimbabwe, Andrew Cranswick endured death threats and the seizure at gunpoint of his company's multibillion-dollar diamond field. Now roaming in exile, he is powerless while crooked military men and cronies of President Robert Mugabe plunder the gems in defiance of court orders. For the moment, however, Cranswick is fuming not about Zimbabwe but Australia's attack on his civil liberties.

While the fourth-generation Zimbabwean was seeking his fortune at home, the Australian Taxation Office deemed that he was a resident of this country for tax purposes. The Federal Court agreed and, in his absence, ruled last week that the mining executive became bankrupt, owing almost $1 million in taxes and interest, on June 9 last year - the day he left Australia for the last time.

Cranswick protests that the ruling is unjust on multiple fronts: in the targeted years of 2005 to 2009 he was living and working not here but in Zimbabwe, which also claims him for tax purposes; his many visits to Australia were solely to visit his daughters, who live in Perth with his ex-wife; they now stand to lose their home, which their father insists he never owned, following the court's sequestration order; and he had no chance to defend himself because notification of the tax case was sent to his estranged wife's address rather than to the home he has owned in Zimbabwe since 1990.

"So, the ATO creates a fictional assessment of tax against non-existent income of a non-Australian resident and then they use that assessment to bankrupt that person without them being allowed a defence," Cranswick writes in reply to the Herald's inquiry.

"Any future defence or appeal is ruled out by the law and the effective house arrest/travel ban I will be placed under if I attend to defend myself."

A source says Cranswick, while in self-imposed exile, is currently a permanent resident of no country but his work keeps him moving through Zambia, South Africa, Mozambique, Swaziland and Britain. He is negotiating for his safe return to Zimbabwe, but Cranswick says he cannot dare to come back to Australia because authorities here have made it clear they would block his exit to Africa and Britain - and hence his livelihood.

"I suppose I might find some comfort in the curious truth that I am freer in Mugabe's Zimbabwe than I could ever have been in Australia," he writes.

Cranswick has been likened to Indiana Jones, which he finds embarrassing. Rather, he draws a comparison with the Crocodile Dundee star Paul Hogan, who temporarily lost his freedom to leave Australia amid a battle with the Tax Office.

Cranswick is chief executive of African Consolidated Resources, a London-registered company established by black and white Zimbabweans. In 2006 ACR discovered what is reputedly the world's richest diamond field, in the Marange district south-east of Harare, with potential turnover of more than $1 billion a year. Precious gem-quality diamonds, like stones to the untrained eye, littered the ground. "They were so common that children were using them in their catapults to shoot birds," wrote Jon Swain, the veteran foreign correspondent depicted in The Killing Fields, in The Sunday Times this year.

However, within three weeks of ACR's discovery, the Mugabe government declared it was cancelling the company's claim. It then invited the community to fossick for the gems. Thousands arrived for the diamond rush, but soon the military and security forces repelled them, killing as many as 200 people in a matter of weeks and igniting international outrage against Zimbabwe's own "blood diamonds" atrocity.

In September last year, Zimbabwe's High Court ruled that ACR was the rightful owner of the Marange field. But Swain reports that the minister of mines and army chiefs - in cahoots with two South African companies - continue to siphon millions of dollars each day from the site, even after a Supreme Court order in February for all mining to stop.

The diamond scandal is adding tension to the fragile coalition government that Mugabe has forged with the Prime Minister, Morgan Tsvangirai, and his party, the Movement for Democratic Change. Members of that party accuse Mugabe of building an election war chest and buying the support of the military by allowing soldiers to plunder the diamond field, according to a documentary screened on Britain's Channel 4 last week.

Armed men raided Cranswick's home and office in February. His colleague, facing a "trumped-up" accusation of fraud, was jailed but quickly released. Cranswick, hopeful of reclaiming the diamond field, will not be drawn on any criticisms of Mugabe. But when approached by the Herald he had "no choice" but to answer the attack on his integrity in Australia.

After marital strain dating back to the mid-1990s, his wife had decided Zimbabwe was not a safe place to raise their children and he agreed, reluctantly, to their move to Perth in 2002. He became director of a cattle farming enterprise that owned Moola Bulla Station, in the Kimberley, which handed over 8000 hectares to Aborigines and paid "several million dollars" in tax when it sold the property. Cranswick says he "might arguably" have been considered a tax resident in 2003-2004, but not from 2005 to 2009, the period claimed by the Tax Office.

By law, the Tax Office cannot comment on individual cases but it argued in court that Cranswick declared on his passenger cards - on 28 trips to Australia - that he was resident returning to the country and intended to live here for the next 12 months. But in June last year, on his final return to, and departure from, Australia, he had described himself as a visitor or temporary entrant. The Tax Office said he had bank accounts here, received payments from overseas and admitted he owned two properties in Perth.

"I do not own a house in Australia and have never owned a house there," Cranswick responds. "The longest stretch I spent in Australia was four months in 2003 … I have spent around 30 days a year in Australia over about six visits a year, solely to see my children.

"It appears the ATO now want to seize and sell my ex-wife's house … so it is not enough for them to deny me the right to visit my children, they now want them homeless. I would dearly have liked to have become a citizen of Australia, firstly to have the freedom to visit my children without visa restrictions, and secondly as a safe haven in the event that my residence in Zimbabwe becomes life-threatening, which has now indeed come to pass. This citizenship is no longer an option."


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