Tuesday, September 14, 2021

‘It’s a risky time for Labor’: Chris Kenny

Losing Fitzgibbon is sad. He was the last of the old-time Laborites who actually cared about the worker instead of transexuals and the rest of that fruity crew. The Labor party no longer represents the worker and the workers are noticing.

Much has been said about the backroom deal in favour of Kristina Keneally. As a former Premier she should have broad appeal but Western Sydney might not be included in that if it is still largely working class instead of ethnic. As S.M. Lipset noted in the '60s, the workers are "ethnocentic" and may not like having an American representing them. America is not popular with a lot of ethnics either

“There’s a fair bit happening around the Labor Party at the moment, and it might not be doing them much good,” he said.

“They’ve been doing okay in the polls, but they wouldn’t want to get too far ahead of themselves.”

It comes as Labor MP Joel Fitzgibbon has announced his retirement from politics at the next federal election.

Mr Kenny said Fitzgibbon “will be missed because he’s been a voice of reason”.

“Anyway, the other sign of hubris is something I mentioned last week, and that is the factional move to parachute Kristina Keneally into the safe seat of Fowler in Western Sydney,” he said.

“She’s doing it, apparently not for her own advantage, but to help the people of the Western suburbs.”


Australia's farmers on track for record-breaking season easily surpassing $70bn worth of produce

Where's that food shortage Greenies are always predicting? Agricultural output is trending up, not down

It is official. Australian farmers are having a record-breaking good time.

Government economists at the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) now expect the agriculture industry will grow a whopping $73 billion worth of produce this financial year.

If realised, it will be the first time farmers have broken through the $70 billion barrier, up from $66.3 billion in 2020-21 and $59.6 billion in drought-ravaged 2017-18.

Good weather across most of the country, combined with drought in Russia, Canada, and the United States, will boost returns for grain growers now expected to export $30 billion of winter crop — an increase of 17 per cent.

ABARES says sugar, cotton, and grain growers are on track to reel in almost $40 billion in 2021-22.

An almost insatiable hunger for protein, a return to good seasons, and herd rebuilding is expected to keep livestock prices near record highs, with the value of the red meat sector forecast to jump by 8 per cent this year to $33.5 billion.

The value of Aussie-grown fruit and vegetables is also expected to hit a record, hauling in more than $12 billion at the farm gate.

ABARES expects a global economic recovery to keep wool prices strong and the high cost of livestock feed in China to drive up demand for Australian dairy products.

"The forecast for next year is due to a combination of factors, all tumbling neatly into place," said ABARES executive director Jared Greenville.

"While there are risks related to mice, labour availability, and continued uncertainties due to COVID-19, we are expecting national production to remain robust."

The value of Australia's food and fibre exports is also expected to be a record, jumping by 12 per cent to $54.7 billion for 2021-22.

The latest commodity forecast, released by ABARES today, shows the value of Australia's farm production revised up by 12 per cent, or $8 billion, considered the largest revision made in a single quarter for 21 years.

Not all smooth sailing

ABARES has identified Australia's international trade relationships, access to farm workers, high international freight costs, and pests — in particular the mouse plague — as potential disrupters to the farm sector's good fortunes.

Distribution of the COVID-19 vaccine was also a concern.

"The speed of COVID-19 vaccine distribution is the key downside risk, especially in emerging and developing economies," today's report said.

"Continued outbreaks increase the risk of further virus variants which could be more resistant to vaccines, more infectious, or more likely to cause death or serious illness.

"This would slow the recovery in travel and discretionary spending, and lead to reduced prices for agricultural products."

The report did not discuss Australia's domestic vaccine rollout.

It said the loss of Australia's most valuable market, China, for wine and barley due to political tensions was still having an effect on returns.

"While agricultural exporters are proving adept at diversifying into new markets or taking advantages of changes in trade flows, this does come with transition costs and lower prices as has been seen for barley," Dr Greenville said.

He estimated the price of Australian barley had dropped by as much as 20 per cent since China introduced tariffs in May 2020.

According to ABARES, the value of wine exports will fall an extra 12 per cent in 2021-22 also due to tariffs imposed by China.

It said the labour shortage, exacerbated by COVID border restrictions, contributed to about a 5 per cent jump in the retail price of fruit and vegetables last year.

ABARES expects retail prices for fruit and vegetables will be similar again this year.


Australia now the biggest gold producer

What happened to South Africa? Black rule, I guess

Australia has become the biggest gold producer in the world, overtaking China for the first time.

It's great news for gold miner Red 5 which is ramping up efforts to begin production at its King of the Hill mine in Western Australia's Goldfields.

"We started constructing in October 2020 and we're on track for the first gold in about seven or eight months time, in the June quarter of 2022," Red 5 managing director Mark Williams says.

The miner is turning the switch back on at the open cut and underground gold mine it bought four years ago.

The timing is pretty good too, with spot gold prices hovering at about $US1,800 an ounce.

"We've been able to essentially beat the rush with the escalation in the pricing," Mr Williams tells The Business.

How did we top China?

China has been the world's biggest gold producer since 2007, with Australia the second largest producer for about a decade.

Gold analysts Surbiton Associates report China produced 153 tonnes of gold in the first half of this calendar year.

Australian gold miners produced 157 tonnes.

"That's the first time that's happened," Surbiton Associates director Sandra Close says.

But, she adds, it wasn't an increase in Australian production that led to the switch.

"The Chinese, I believe, have had some problems in the mines with some safety problems, some personnel being killed, so at the moment some of the mines are being investigated.

"We shall have to see what happens to gold production in the next six months, both in Australia and in China."

Australian gold production is rising

The last two years have been the best on record for Australian gold producers.

In the 2019/20 financial year 328 tonnes of gold was retrieved from beneath Australian soil — the most ever in a year.

Last financial year was the second best year, yielding 321 tonnes.

"We do have a larger number of smaller mines compared to some of the other gold mining countries such as, say, the US," explains Dr Close.

"That gives us a little more flexibility sometimes."

IBISWorld research predicts the $26 billion sector will see revenue rise 11.6 per cent this year "due to continued uncertainty about the effects of the COVID-19 pandemic on the global economy".

It says the growth is also due to an anticipated surge in industry output and higher gold prices.

Australian Bureau of Statistics data reveals investment in gold exploration rose more than any other commodity in the June quarter, up 19.3 per cent to $429.8 million.

Why does the gold price go up when everything else goes down?
Gold is known as a safe haven asset.

Generally the price of gold increases when there's political and economic instability.

"Gold is the one safe haven asset that everybody flocks to in times of difficulty, in times of turmoil and trouble," says The Perth Mint's chief executive Richard Hayes.

"Given where the world is today with COVID and the terrible problems that we've seen around the world, the demand for both gold and silver has gone through the roof."

But it's not always a straight line.

The gold price fell when the COVID-19 pandemic first took hold around the world.

"The initial reaction was quite negative — we actually saw in March 2020 gold prices fall roughly about 11 per cent and that was a reflection of a flight to safety and the market running towards the US dollar," explains Commonwealth Bank director of mining and energy commodities research Vivek Dhar.

Six months later, gold peaked at a new high.

"We have certainly seen a lot of volatility because up until August last year we actually saw gold track higher to lift above $US2,000 an ounce," he says

It's now come back down and is worth about $US1,800 an ounce.

"But it's held at the $US1,800 mark rather than the sort of $US1,200, $US1,300, $US1,400 mark that it was holding at pre-COVID," Mr Hayes adds.

"So certainly that's up by 20 to 25 per cent on where it was two years ago."

What about digital currencies like bitcoin?

Some argue digital currencies are giving gold a run for its money as the ultimate store of wealth.

But the extreme volatility of the likes of bitcoin and ethereum, where the price can move more than 10 per cent in a single day, has others arguing it's too risky.

"Bitcoin or ethereum coin exists in cyberspace. At the end of the day, it's simply an entry in an electronic ledger," argues Mr Hayes.

"If you look through history at commodities, where they have shot from relative obscurity to prominence, like South Sea pearls or the tulips out of Amsterdam, they all went through the same cycle that we're seeing now with cryptocurrencies — they went up spectacularly in value and fell just as quickly."

What else drives the gold price?

The biggest factor affecting the gold price right now is the US Federal Reserve and a weaker US dollar.

While the Reserve Bank of Australia is continuing with its tapering of bond buying, the US central bank is yet to move.

"A delay to tapering is likely to provide less support for the US dollar than otherwise and that should be positive for gold," Mr Dhar explains.

"While the inverse relationship between gold and the US dollar has deviated significantly in the past, in recent months movements in the US dollar have provided a reliable steer of gold price movements."

Which means we could see the gold price, and its contribution to our economy, rise again.


AGL faces investor climate push ahead of coal demerger

AGL, the nation’s heaviest greenhouse gas emitter, is set to face pressure from shareholders to commit to stronger decarbonisation targets and detail how its demerged businesses will match their spending plans with the goals of the Paris climate agreement.

As investors prepare to cast their votes ahead of AGL’s annual general meeting, prominent proxy advisor Institutional Shareholder Services has recommended backing an activist-led push for stronger climate action because it would allow shareholders to make an informed decision about the looming demerger.

“Additional disclosure is needed regarding the expected assumptions on future power prices and maintenance and fuel cost and demand for fossil fuel power generation,” said the firm, which advises large investors on how to vote on board appointments, executive pay and other corporate matters.

AGL last month reported a $2.06 billion full-year loss, largely driven by the continued influx of new wind and solar power driving down wholesale power prices across to levels where coal is increasingly unable to compete, and warned of further profit pain to come.

Responding to the pressures of the clean-energy transition, AGL is proposing to split itself into two companies: AGL Australia, to hold its power, gas and telecommunications retailing divisions as well as some cleaner generation assets; and Accel Energy, which will own its carbon-heavy coal and gas-fired power stations.

Oil and gas sector ‘losing appeal’ even as prices recover

The motion to be heard at AGL’s investor meeting on September 22 was prepared by the Australasian Centre for Corporate Responsibility (ACCR), a shareholder activist group, and calls for the company to set out “short, medium and long-term” targets for the direct and indirect carbon emissions of both the demerged entities.

“AGL saw a 34 per cent decline in net profit after tax in financial year 2021,” ACCR climate director Dan Gocher said. “But these losses will pale in comparison to what lies ahead if AGL continues to do nothing.”

With its fleet of power plants across the country, AGL is Australia’s top carbon emitter, accounting for 8 per cent of national emissions. Like heavy polluters worldwide, it has faced a rising tide of pressure from activists and increasingly climate-conscious major investors to improve its carbon credentials and, in particular, reduce reliance on thermal coal.

AGL is preparing to shut down its Liddell coal generator in NSW next year but is not scheduled to close the neighbouring Bayswater plant until 2035. Its newest coal plant, Loy Yang A in Victoria’s Latrobe Valley, is licensed to run for another 27 years until 2048.

AGL has urged investors to vote down the ACCR’s resolution, saying the targets it calls for would require the accelerated closure of AGL’s coal-fired power stations before adequate replacement capacity being developed and would jeopardise the supply of reliable and affordable electricity to customers.

“AGL understands the critical importance of decarbonisation of the electricity sector and the acceleration of the energy transition,” the company said. “However, AGL does not consider it is in the best interests of Accel Energy or AGL Australia to make the commitments set out in this resolution at this time.”

A company spokeswoman said that AGL, for more than a decade, had been investing in renewable and flexible generation as part of its pathway to decarbonisation and was committed to achieving net-zero emissions by 2050.

“Our proposed demerger will position both organisations to continue to deliver and build on that commitment,” she said.

AGL splits off coal power stations as green shift accelerates

“As part of the proposed demerger, AGL Energy will set separate climate commitments for Accel Energy and AGL Australia, enabling each business to focus on their respective strategic opportunities and challenges presented by the accelerating energy transition.”

Last year, more than 20 per cent of AGL’s investors supported a motion filed by the ACCR calling for the company to bring forward its coal exit plans.

AGL has pledged that both demerged companies would put their climate reporting to a non-binding advisory shareholder vote at their first annual general meetings.


Also see my other blogs. Main ones below:

http://dissectleft.blogspot.com (DISSECTING LEFTISM -- daily)

http://antigreen.blogspot.com (GREENIE WATCH)

http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)

http://edwatch.blogspot.com (EDUCATION WATCH)

http://snorphty.blogspot.com/ (TONGUE-TIED)


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