Thursday, February 20, 2014

Campbell Newman questions John Quiggin's power privatisation review

Quiggin is an old far-Leftist from way back.  His conclusions were perfectly predictable the moment he was hired

Economist John Quiggin's scathing review on energy sector privatisation across Australia is a "nice and interesting" academic exercise, Premier Campbell Newman says - but he urges people to examine the motive behind it.

Professor Quiggin's report found energy sector privatisation had been a "dismal failure" with increased power prices for consumers and large fiscal losses for tax payers.

It was commissioned by the Victorian branch of the Electrical Trades Union.

Despite not reading Professor Quiggin's report, Mr Newman turned his findings into an attack on the union.

"The first thing I ask, is what purpose has it been done for? As an academic exercise, it is nice and interesting, I look forward to having a look at it," he said.

"But why has the ETU spent their members’ money on this?  I'll answer the rhetorical question - we've already said we are not selling Ergon, Energex or Powerlink.  We've said that and down in Redcliffe today and yesterday and the day before, the ETU continue to run this deceitful campaign.  We are not selling the distribution and transmission entities, so what are they on about? Why do they waste their members’ money on this report?"

Mr Newman focused his attack on Redcliffe, where a byelection will be held this Saturday and said it was time for the union to "pack up and go".

"We have made a very clear commitment about asset sales, and yet the ETU down there in Redcliffe running a misinformation campaign," he said.

"It is just not true.

"... It is time for the ETU to tell the truth.  It is actually time for the ETU down in Redcliffe to pack up, stop harassing the people down there.

"The feedback we are getting are people are sick and tired of the ETU people being in their face and telling them these falsehoods.  They may as well pack up and go back to the various parts of Queensland they have come from, certainly most of them don't live in Redcliffe."

ETU state secretary, Peter Simpson, said the premier had "sour grapes".

"We are not harassing people, we have people in our ‘Not for sale’ campaign shirts, on the side of the road with street stalls," he said.

"If that is harassment, well I think the LNP are a lot worse than that.

"We are not harassing anyone, the feedback we are getting in Redcliffe is fantastic and I suggest the Premier has a taste of sour grapes from what I am hearing."

Mr Newman could not promise that power prices would go down if the government was given a mandate to sell the generating corporations, as it has planned.

But he said if "crazy schemes" such as the carbon tax and the Renewable Energy Target were scrapped, he could guarantee prices would decrease.

The federal government announced earlier this week it was reviewing the nation's RET, set by the previous Labor government at a fixed 41,000 gigawatt hours by 2020, with a report due to be delivered later this year.

"If the RET goes, I can assure people their prices will come down," Mr Newman said.

"That's the trouble.  We've had all these crazy schemes, but they actually haven't cut the nation's carbon emissions anywhere near what they would need to. In terms of the cost on the economy, we need to see these crazy Labor schemes going, we need to see people like Yvette D'Ath, call out to her federal colleagues and say 'well let's get rid of them' and then we will make a meaningful impact on people's cost of living.  That's what I can promise people."

The government will consider a win at the next general election, expected to be held early next year, as their mandate to sell assets.


PM  downplays role of climate change in current drought

Prime Minister Tony Abbott has played down the role of climate change in the drought ravaging much of inland eastern Australia.

And he has indicated that the coming relief package for farmers will not take into account future increases in extreme weather events predicted in a new report by scientists.

At the end of a two-day tour taking in Bourke and Broken Hill in NSW and Longreach in Queensland, Mr Abbott said the present period of extreme heat and dry conditions – broken in part during his weekend visit – was not unusual for Australia.

"If you look at the records of Australian agriculture going back 150 years, there have always been good times and bad, tough and lush times," Mr Abbott said.

"This is not a new thing in Australia.  "As the seasons have changed, climatic variation has been a constant here in Australia."

Mr Abbott, who has previously dismissed a link between climate change and October’s early-season bushfires in the Blue Mountains near Sydney, ruled out taking the issue of a warming planet into consideration when preparing his drought-aid package for cabinet later this week.

"Farmers ought to be able to deal with things expected every few years," Mr Abbott said.

"Once you start getting into very severe events – one-in-20, 50, 100-year events – that’s when I think people need additional assistance because that is ... beyond what a sensible business can be expected to plan for."

A new report by the Climate Council – formed with public funding from the ashes of the Climate Commission, which the Abbott government abolished – says heatwaves are becoming more frequent, more intense and lasting longer.

It says Melbourne, Canberra and Adelaide were already experiencing the number of annual hot days that had been forecast for 2030 in the first decade of the century.

The report, by Professors Will Steffen and Lesley Hughes and UNSW researcher Sarah Perkins, said: "Record hot days and warm nights are also expected to increase across Australia over the coming decades.

"For both northern and southern Australia, one-in-20-year extreme hot days are expected to occur every two to five years by the middle of the century."

Records melt

Those three cities, as it happens, have each broken heat records this summer.

Adelaide has had 13 days of 40 degrees or more, beating the previous record set more than a century ago, of 11 such days. Melbourne has hda seven days above 40 degrees, the most in any calendar year just six weeks in, while Canberra has had 20 days above 35 degrees, the most for any summer, the Bureau of Meteorology said.

The Climate Council report highlights the effect that increased heat is expected to have on agriculture, including reduced crop yields and lower livestock productivity.

The three regions  Mr Abbott visited all had their hottest six-month period between August and January, with rainfall as little as one-fifth of normal levels.

Cabinet is expected to consider an extra $280 million in low-interest loans for farmers, among other measures. 

Touring the Mount Gipps cattle and sheep station north of Broken Hill on Monday, he said there was  "a world of difference" between companies seeking handouts and farmers needing help to get through the drought.

Graziers have been offloading their livestock throughout much of inland eastern Australia as they battle to cope with drought and declining feedstock.

John Cramp, the owner of  Mount Gipps,  said the recent extreme heat in his region had seen his cattle remain near their water troughs rather than go in search of remaining grass.

"They won’t leave their water, they won’t poke out and get some feed," Mr Cramp said, adding that in his view "climates have always changed".


Trans-Pacific Partnership is a big deal, but hardly anyone knows

The Trans-Pacific Partnership could be Australia's biggest trade deal for decades, but most people have not even heard of it. A new survey by the Australia Institute found 55 per cent of respondents did not know about the TPP, as it is known. Another 19 per cent said "I'm not sure."

Consumer groups say the trade pact - which involves 12 Asia-Pacific nations including Australia and the US - could have a significant impact on consumers across the region. There are claims it will increase the cost of medicines, films, computer games and software. Critics believe it could compromise environmental protections and allow foreign corporations to sue Australian governments if their policies reduce future profits. A leaked draft suggests the US is pushing for criminal penalties, even jail, for illegally downloading popular television shows.

With issues like those at stake, you would expect debate about the TPP to be raging. But the Australia Institute survey found just one in 10 voters had even heard of it.

If the TPP is such a big deal, why is public awareness so low?

One reason is that trade pacts like the TPP are never hot topics. It's hard for the media to sustain interest in such an arcane and slow-moving process - the TPP negotiations have already been going for nearly four years. They are also shrouded in secrecy. It's become a convention for international trade agreements to be discussed behind closed doors. The TPP negotiating texts remain confidential under an agreement signed by the previous Labor government when the talks started. The Department of Foreign Affairs and Trade claims this confidentiality "safeguards our negotiating positions and strategies, which cover sensitive national interests in relation to market access and Australia's trade and commerce more broadly".

The Abbott government claims there has been "a lot of consultation" across industry sectors affected by the agreement, but consumer groups say they have been excluded from any meaningful dialogue. They've had to rely on leaked draft texts to get a sense of what is going on. Choice says it doesn't know what the final agreement will contain.

When voters were informed of the TPP's agenda they had strong opinions about many of the issues, the Australia Institute survey revealed. Nearly nine out of 10 surveyed wanted the public to have a say before the agreement was signed (only 5 per cent disagreed).

So far, both major parties have been strong supporters of the TPP. Australia joined negotiations when Labor was in power and the first round of negotiations was held in Melbourne in 2010. The Coalition government has been an enthusiastic participant since taking office last year. Trade Minister Andrew Robb claims many conspiracy theories are being peddled about the TPP. His spokesman said the claims of secrecy were overblown and a "straw man set up by anti-traders" in an attempt to undermine the negotiations.

Robb argues the TPP will promote regional economic integration in the Asian Century and give Australian businesses big trade opportunities. The countries involved in the TPP are responsible for 40 per cent of the world's gross domestic product and 26 per cent of its trade.

Robb says the text of the TPP will be "publicly released and subject to parliamentary scrutiny prior to its ratification" once the negotiating parties come to any agreement.

But consumer groups fear that process will not allow adequate public consultation.

They are not the only sceptics. The benefits of regional trade deals such as the TPP have been questioned by some economists who champion free trade but favour broader multilateral agreements. A study by the government's own Productivity Commission Report on Bilateral and Regional Trade Agreements concluded that the benefits of such agreements "have been oversold" and called for an improvement in the process.

A deal as significant as the TPP should be fully debated in the community. It's not good enough that just one in 10 voters know about it.


Drop in asylum seeker boat arrivals hits charter operator's bottom line

Prime Minister Tony Abbott's mission to 'stop the boats' has taken a toll on airlines that once racked up big business flying intercepted asylum seekers across the region.

Fly-in fly-out and charter operator Alliance Aviation Services is searching for new clients to offset a downturn in ad hoc charters from the Department of Immigration and Border Protection now that unauthorised boat arrivals are at a standstill.

The Brisbane-based airline reported a 34.2 per cent fall in half-year underlying earnings to $7.1 million in the first half, based on a 9 per cent fall in revenue during the period as flight hours per aircraft fell.

Chief executive Scott McMillan attributed the lower earnings in part to the airline doing "a lot fewer charters" for the government since Prime Minister Tony Abbott was elected in September.

"It is a change in government policy," Mr McMillan told Fairfax Media of the loss of work, which he said had also affected other airline charter groups.

The Immigration Department reported maritime arrivals of asylum seekers had reached the lowest level in five years in the fourth quarter of 2013 and were 85 per cent lower than the same period of 2012. No new boats have arrived since December 19.

Mr McMillan said charters for the government and other businesses had typically brought in 20 per cent of Alliance's revenue, but he was seeking to reduce that by gaining exposure to more long-term resources contracts even though they tended to carry lower margins.

Alliance is currently in exclusive negotiations on a major contract in the mining sector which it could service with its existing fleet of Fokker aircraft following the return of a wet leased Boeing 737 in December. Mr McMillan said the new contract would help boost utilisation and profitability.

Alliance has forecast underlying earnings of $16 million to $17.5 million this year, down from $23.4 last year, but expects to return to beat the 2012-13 figure in the 2014-15 financial year.

Alliance declared a fully-franked interim dividend of 3.6¢ a share, down from 4.8¢ the prior year, but said the current payout was at the top end of the approved dividend policy.

The company's shares have fallen by 37 per cent over the last 12 months, compared with a 6 per cent rise in the benchmark S&P/ASX200 index over the same period.

Mr McMillan said his airline had been able to hang onto all of its contracts, despite some being put out to tender when they were up for renewal. Alliance competes against the regional/FIFO arms of Qantas Airways and Virgin Australia Holdings as well as other operators like Cobham Aviation Services.

Mr McMillan said he was more positive about the state of the mining market now than he was six months ago and expected it to improve again in six month's time.

"On the back of BHP and Rio's results they have done a pretty good job improving the efficiencies of the operations and getting costs down," he said. "The lower Australian dollar is helping everyone. Projects that probably were marginal are coming back."

Cobham Aviation Services chief executive Peter Nottage said he didn't think the resources sector would dive further, but expected a plateau for a point.

"It is a tough cycle, but we are riding the cycle okay," he told the Financial Review this week. "We are seeing fairly intense competition for new business and when renewals come up. That is compounded by competition between the two major airlines to get corporate accounts."


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