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Book review: Australia Under Surveillance, by Frank Moorhouse

Sleepless: David Irvine said threats to our security were so serious that they kept him awake at night.AUSTRALIA UNDER SURVEILLANCE ByFrank Moorhouse Vintage, $32.99
Nanjing Night Net

I wish I still had that very old Disney comic that showed ducks in raincoats on a beach, hiding one behind the other under a jetty, all peering around the pylons through binoculars. Even before I understood the perennial question, “who will guard the guardians themselves?” I found the idea of spies, counter-spies, and counter-counter spies absurd.

David Irvine does too, he admits, in an interview edited in Frank Moorhouse’s new book. But as he prepared to retire as Director-General of ASIO, Irvine candidly told audiences around Australia how threats to our security were so serious that they kept him awake at night. Then he reassured them with examples of how ASIO was protecting them. I was reminded of a former employee of the US National Security Agency who joked to an audience in Washington that the job of the NSA was to scare people so they would go on paying for it. Australians pay vastly increasing amounts for ASIO.

Shortly before Irvine retired, ASIO and the AFP deployed more than 800 officers in night-time raids on houses in Sydney and Melbourne, which resulted in several arrests but just one prosecution. Was this a fishing expedition that failed, a training exercise, a tactic to scare would-be terrorists, or an anticipatory demonstration of ASIO’s and the AFP’s need for even more powers, which were soon to come before parliament? It may have been all four. We cannot know, because the raid was one of many activities about which we have few details, and ASIO is exempt from Freedom of Information applications.

Two other possibilities: either we are paranoid, or we have learnt from 1949 of enough egregious stuff ups not to trust ASIO. Moorhouse supplies a list of these, and Meredith Burgmann’s 2014 collection, Dirty Secrets: Our ASIO Files, contains more. An agency screened from public scrutiny, no matter how well intentioned, will inevitably develop contempt for those outside its select community, even while it owes its existence to the public, and is tasked to protect them.

Irvine, Moorhouse points out, sits on the Council of the National Archives, and his former deputy at ASIO is the Archives’ Director-General. The Archives, Moorhouse observes in one of the most disturbing sections of his book, are the only historical record the public has of the workings of ASIO and our five other intelligence agencies. Yet ASIO can refuse requests for release of files on grounds of “national security” even after the normal 25-year withholding period is over. ASIO can destroy information, and can decide which of its records to make available to the Archives. In practice, Moorhouse says, that means none.

So what, after Communism, does ASIO now protect us from? Terrorism, of course, and extremism or fanaticism, we are told. These labels are loose enough to provide the national security agencies with the ill-defined enemy necessary for their perpetual operation. They appeal to moral panic. Terrorism is already “the new normal”, according to Dick Cheney. It is an intractable threat that, Moorhouse observes, seems to excuse democratic governments behaving as badly as some terrorists. Yet in the 50 years to 2005, less than 1000 Australians died from wars and terrorism (Moorhouse cites Paul Sheehan), while 134,548 deaths on Australian roads were not considered a threat to national security. Moorhouse lists nine “terrorist” incidents in Australia since 1970. By my count, of the four deaths that occurred, only one did not involve the security agencies themselves.

ASIO has for long had a negative reputation among Australians old enough to remember the Cold War, to have seen their file, and to know if they lost a job, a promotion, or a government grant because of its contents, accurate or not. Younger Australians, however, may approach Moorhouse with reasonable, contemporary questions: if I have nothing to hide, why should I fear ASIO surveillance? If others plan acts of violence, shouldn’t ASIO intercept them by whatever means? If national security is endangered, isn’t it appropriate to reverse the onus of proof onto the suspect? Doesn’t ASIO need to operate in secrecy?

I hoped for answers from Moorhouse’s book, following his prizewinning Griffith Review essay, The Writer in a Time of Terror (2006-7). I found a discussion of what he calls the Dark Conundrum, the sly behaviour of a democratic government that contradicts its own espoused values, justifying behaviour of dubious legality in the name of political necessity and national security. This since Vietnam has become increasingly obvious to most alert Australians. He doesn’t mention the much more troubling Special Intelligence Operations, about which Australian citizens are not allowed to ask questions, and which journalists can be jailed for unwittingly revealing. He doesn’t refer to the Deep State, a linked intelligence community in the Anglophone countries that, according to Canadian author Peter Dale Scott, operates as an unchallengeable, permanent authority in parallel with impermanent governments. He doesn’t cite Glenn Greenwald or Jennifer Robinson, whose views on private ownership of information would illuminate his Conundrum. He admires the leakers Manning and Snowden, but calls Assange a hacker. In fact, WikiLeaks does not hack, but publishes information leaked to it, just as the news media do (and some of them hack).

Moorhouse burrows into his Conundrum, wandering down the dark passageways of his personal predilections: censorship, the politics of sexual preference, the French Revolution, nihilism, the human condition and more. His research assistant advised him to order his material chronologically, but that thread is abandoned. Every so often he comes up from the mine with a nugget of a question, asking, for example, if a secret agency is needed for the safety of a democracy; and whether a modern state can any longer keep its own secrets, let alone those of its citizens. But these reflections are left dangling, and Moorhouse admits his proposals for reform are unlikely to be adopted. Appending an extract from the Universal Declaration of Human Rights, he notes that Australia is a signatory, but doesn’t point out that its provisions have not been incorporated into Australian law. Neither have those of the Convention on Civil and Political Rights nor of the Rights of the Child. Australia is alone in the OECD in having no charter or bill of rights, a situation our political leaders show no inclination to change.

As “national security” is increasingly used to justify the erosion of such privacy and liberty as Australians have, many of us, like Moorhouse, are concerned about state surveillance of individual academics, writers, filmmakers, journalists, and particularly Muslims. But as Human Rights Commissioner Gillian Triggs has recently argued, the situation of Australia’s democratic institutions is worse: national security is being used to marginalise and overpower the judiciary, to concentrate power in the executive, to allow the armed forces to be deployed as and where the prime minister wishes, and to imprison people without charge or trial. The deep state is the new normal.

Alison Broinowski was a Senate candidate in NSW in 2013 for the WikiLeaks Party.

This story Administrator ready to work first appeared on Nanjing Night Net.

Book reviews: Strange Country; 100 Moments in Australian Painting

STRANGE COUNTRY: WHY AUSTRALIAN PAINTING MATTERS By Patrick McCaugheyThe Miegunyah Press/Melbourne University Publishing, $49.99.
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100 MOMENTS IN AUSTRALIAN PAINTINGBy Barry Pearce NewSouth Publishing, $49.99.

Two profusely illustrated books have recently appeared, both in one way or another offering an account of the past couple of centuries of Australian art and both, coincidently, limited to a consideration of painting only.

Patrick McCaughey is an art critic, art academic and long serving director of the National Gallery of Victoria in Melbourne and of the Wadsworth Atheneum and the Yale Centre for British Art in the United States. His Strange Country: Why Australian painting matters presents a most readable account of Australian painting; one which dips into art historical research, but also has a journalistic flair in the expression of strongly held convictions.

McCaughey was born in 1943, and when he was 17 he saw the inaugural Helena Rubinstein Travelling Scholarship Prize exhibition at the National Gallery of Victoria in 1960. From then on, he was hooked on Australian painting. His book commences with a quick overview of the modern Aboriginal art movement and then moves into a broad survey of early colonial painting, in which Nicholas Chevalier and ST Gill do not rate a mention. From here the account moves straight into the Heidelberg School, where we encounter interesting insights, such as the suggestion that the swagman in McCubbin’s Down on his luck (1889) is modelled on the pose of Durer’s Melencolia I (1514), but shown in reverse. Such quirky, but interesting observations are scattered throughout the book.

Although on occasion it is difficult to agree with some of McCaughey’s opinions, it is impossible not to admire the literary flourishes with which he discusses some of his selected paintings. When writing on Hugh Ramsay’s The sisters (1904), he observes “The compression of the composition, the closeness of the sitters to artist, breeds an airless claustrophobia. The alternating alertness and ennui of the sisters, bored by having to dress up in evening gowns in the middle of the day and pose in the over-heated studio, adds to the ambivalence of the painting. Far from being an essay in the feminine, the dying painter/brother is under scrutiny of his sisters, even as they fall under his gaze. A suffocating pall hangs over the work.”

His broad brush approach to Australian art history certainly takes few prisoners. In one sweeping overview sentence he notes “Hall and Lambert are now curiosities; perennial attempts to revive ‘late Streeton’ have petered out, and Heysen is hardly taken seriously outside Adelaide.” McCaughey champions Sidney Nolan and Fred Williams as the two giants of Australian painting and concludes with a rather cursory glance at contemporary art practice and with the tactful statement “all of these painters … they stand as representative for many who must go unmentioned …” Much is unmentioned in this book, but that which is mentioned is discussed with passion and understanding.

Although I was occasionally frustrated by the laconic nature of some of the discussion, as a whole, this account of Australian painting sparkles with intelligent insights and with some very memorable expressions in which wit and perception are united in flowing prose.

Barry Pearce in 2012 retired from his position as Head of Australian Art at the Art Gallery of New South Wales after 33 years in the job. This book is his personal final tour of the collection, pausing to discuss some of his favourite paintings. Apart from personal preference, the 100 selected paintings present something of a chronological account of the development of Australian art as held at the Sydney gallery, a collection which Pearce help to form and develop.

Except for a single bark painting, Indigenous art is excluded from this selection, in part, because he saw his brief as the curator for “Anglo-European Australian” art, but also in part because he felt that Indigenous and non-Indigenous art don’t really mix and when they are put together they do not really make sense. He writes “The intention [to combine Aboriginal and non-Indigenous art] was worthy, but in the end I believe nothing much was gained, other than a temporary frisson of aesthetic confusion in an attempt to identify similarity”. This is not an argument which I personally find particularly convincing simply because so many Australian artists, both Indigenous and non-Indigenous, draw on each other’s traditions and it is this, that to some extent gives Australian painting some of its distinctive character.

The strength of this book is that it is written by a person who has the eye of a curator, a person who is perceptive, passionate and at times possesses a forensic knowledge of the provenance of a particular painting under discussion. We are given wonderful accounts about the hunt for long-lost paintings involving ingenious detective work leading to profound joy on their rediscovery. There are also many passages of detailed observation of paintings and speculation on their evolution, sources and influences. Take for example the discussion of Ralph Balson’s Portrait of Grace Crowley (1939), where we learn not only the artist’s probable source, Millet, but also where he saw a reproduction of this source, an issue of the Studio magazine in the Sydney Art School library, and the reason of why he turned to this source, Julian Ashton’s teaching.

Pearce writes with passion on the paintings which he admires, for example Hugh Ramsay’s wonderful painting, The Sisters (1904), which the young artist painted virtually from his deathbed. Pearce writes “The Sisters shows not so much virtuosity or glamour in its dazzling render of gold and cream fabric, as a dance with the brush about transient beauty and an underlying sense of mortality.” It is such wonderfully evocative and insightful passages that make this book so rewarding to read.

Australian painting, which only a few decades ago in some of our art schools was pronounced dead and obsolete in the context of contemporary Australian art practice, in Patrick McCaughey and Barry Pearce has found two wonderful advocates who guarantee its high profile and ongoing viability.

This story Administrator ready to work first appeared on Nanjing Night Net.

Book review: The Peaceful People, by Paul Malone

Stewards of Sarawak: The Penan have survived British and Malaysian invasion of their forests. Photo: Phyllis Webster Only 20 per cent of the Penan people’s forests remain.
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THE PEACEFUL PEOPLE: The Penan and Their Fight for the Forest. By Paul Malone. Strategic Information and Research Development Centre, Malaysia. $27.

A theme in world history is Europe’s great colonial expansion and the resulting dispossession of indigenous peoples. Regular Canberra Times columnist Paul Malone documents the ironic variation wrought upon Sarawak’s indigenous Penan. They can “fondly recall” the relatively light touch of British Sarawak on their lands and lifestyle. With the Malaysian takeover of 1963, only 20 per cent now remains of the primary Sarawak forests they used to roam.

Malone had visited a remote Penan group in 1974. Back in Sarawak in 2006, he was talked out of repeating the experience. His inner reporter was galvanised to revisit the Penan the following year. He filed a Canberra Times story about Penan elder Kelesau Naan’s campaign to stop the logging. Naan’s suspicious death months later prompted further visits and ultimately this book.

The title clearly sums up the author’s view of  the Penan. “The world can surely learn something” from their peaceful society and its non-violent protests.

Malone notes the pitfalls of romanticising indigenous groups. But the colonial, ethnographic and missionary records locate the Penan as “starkly different” from other Sarawak tribes. They took no human heads nor animal sacrifices, lived by rotational hunting and sago gathering not rice cultivation, and kept to smallish jungle bands whoavoided rivers andharsh sunlight. They also memorised their significant campsites and gravesites down the generations, but their kind of land stewardship didn’t cut much ice at the land titles office.

Other tribes thought them fair game. Malone recaps several massacres of the Penan dating from as recently as the turn of the 20th century. Things got tough again when logging took off in the 1970s. Short of violence, the Penan used “every available means” of protest and blockade to halt the logging or at least get compensation. Charismatic Swiss activistBruno Manser communicated their cause to the outside world, but the deforestation went on.

Again, Malone trawls the records, re-interviewing Penan who knew Manser. The Penan being generally resistant to outside influence, he disputes that Manser manipulated them. He verifies Manser’s own reports of events.

The Penan have continued to be further displaced by a supply-side development strategy to dam Sarawak for “inexpensive hydropower” to attract industry. In Malone’s current assessment, a few Penan are still nomadic while a few hold good jobs. Most fall in between, their limited access to the cash economy constituting a shaky exchange for formerly self-sufficient lives. Groups that opted for “collaborative” negotiation seem to be better compensated than groups that resisted logging outright. But Malone visits one village that’s going its own way yet going well.

If Australia has a Sarawak, it’s Tasmania, another island economy in thrall to logging and hydropower. Critics looked askance at the cosy relationship between the Tasmanian government and former forest titan Gunns Limited. In Sarawak, critics have focused on the forest and financial interests associated with Abdul Taib Mahmud, long-term Chief Minister and now Governor of Sarawak. Malone re-presents some of this material. It is examined in depth in the Swiss Lukas Straumann’s Money Logging, recently co-launched in Sarawak with The Peaceful People.

Despite the ruthless upheaval of the Penan by capital and development, Malone ends on a buoyant note. To improve the lot of the settled Penan villagers of today, he recommends practical measures in curriculum, schooling, employment and tourism.

Paul Malone will talk about The Peaceful People at the Asia Bookroom on December 1. Lawry Place, Macquarie, 6pm. RSVP by November 30, 625 15191. Gold coin donation to the Indigenous Literacy Foundation.

This story Administrator ready to work first appeared on Nanjing Night Net.

Daughter of immigrants taking community leadership role

Cultural change: Margaret Tran has been named this year’s winner of the Newsboys Foundation’s new $5000 youth leadership award. Photo: Meredith O’SheaIt was five years ago at a school in Melbourne’s west that 16-year-old Margaret Tran saw the less-savoury side of multiculturalism.
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“There was a lot of racist name-calling and bullying,” she says. “Especially to the darker-skinned kids.”

Tran, daughter of Vietnamese migrants, says Asian children copped it too. “I told a teacher but it didn’t stop,” she says.

However, it was a catalyst that has driven her to become a student and community leader at a precociously young age.

As one of 15 students on Victoria’s Student Representative Council executive, she has presented to teachers at workshops, organised regional conferences and consulted the state education minister on student matters. High on the list has been that same schoolyard problem, bullying, but maturity has opened her eyes to the fact that many community problems are hard to resolve. “It is difficult to tackle bullying on a state-wide basis,” she concedes. “Bullying happens with adults too.”

This week Tran was named this year’s winner of the Newsboys Foundation’s new $5000 youth leadership award, which is a happier example of cultural change. The foundation was formed 121 years ago in a largely Anglo-Saxon Australia to help impoverished young boys who sold newspapers. The foundation was financed by newspaper companies in their boom years but it is run now as a philanthropic organisation. Curiously, the foundation has ended up in a better financial shape in the digital age than many of the newspapers. Now it has given one of its first leadership awards to the daughter of Vietnamese migrants.

Tran’s grandparents, Tri and Hoang Le, came to Australia in 1983 with their four children. One of them, Quien Le, who cooks part-time for the church, is the mother of Tran. Her father Can Tran, a courier driver with 15 siblings, is a church leader proficient at public speaking. “That is probably where I learnt,” Margaret Tran says. “I do church readings in Vietnamese.”

She attends Vietnamese school for three hours each Saturday and a Vietnamese youth group on Sundays. Both are aimed at retaining some of the family’s homeland culture. “I think that is important but I know that it is slowly fading away,” she says. “Many of my cousins in Australia don’t want to go to Vietnamese school any more. A couple of them say that they were born in Australia and they are Australian, why should they speak Vietnamese?”

Tran, who aims for a career as a paediatrician, has Duke of Edinburgh gold and silver awards and is putting part of her prize money towards a three-week trip next year by MacRobertson Girls School students to Nepal, where they are repairing an orphanage. “Young people aren’t just the leaders of tomorrow, they are the leaders of today,” Tran says.    

This story Administrator ready to work first appeared on Nanjing Night Net.

Jittery sellers making deals before auction

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million. This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.
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This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million.

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million.

This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million.

This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.

There are more than 1000 homes scheduled for auction on Saturday but buyers will be disappointed to hear that a large chunk of those properties have already sold.

Spooked by falling clearance rates and the prospect of competing with an unprecedented flood of listings, sellers are increasingly accepting offers prior to auction, new data from the Domain Group shows.

In November, there has been a dramatic jump in vendors selling prior, with almost half of all properties that have sold via auction campaign being snapped up without a hammer falling.

The senior economist for the Domain Group, Andrew Wilson, said the shift towards selling prior “was a sign of the turn of the market”.

“It’s no longer about buyers grabbing property, it is about sellers grabbing buyers,” he said.

According to the figures, 2765 properties have been reported sold via auction campaign this month with 1256 – 45 per cent – occurring before the scheduled auction date.

In October, just 37 per cent sold prior and  it was a similar scenario in September when 38 per cent sold before auction.

Unlike last year, which was consistent at about 40 per cent for all of spring, this year there has been a significant shift. Dr Wilson said that showed sellers were “getting nervous”.

Agents are reporting that in some parts of Sydney the lion’s share of auction campaigns is not eventuating in an auction.

“In the inner west and inner east Sydney I would suggest 70 per cent would be selling prior to auction,” said Matt Hayson of Cobden & Hayson.

“You have Christmas bearing down upon sellers, you’ve got a lot of stock on the market, you have agents fighting for buyers’ interest … there is definitely a shift towards selling prior,” he said.

Mr Hayson said during the past few months “a heap of property has sold, which has wiped out a huge pool of motivated ready-to-act buyers”.

“You would think the market has peaked.”

Despite this Mr Hayson said that sellers were “still getting good pre-sale offers”.

The agent with the most auctions on Saturday, Brent Courtney from McGrath Lane Cove, said more than half the auctions scheduled in his area were selling prior.

“Owners don’t want to take the risk of going to auction,” he said.

Shannon Whitney from BresicWhitney said it was a seasonal phenomenon with sellers typically more inclined to sell prior to auction in the final months of the year.

“If you don’t end up selling at auction you don’t have an after-sale period, you have Christmas,” he said.

Last weekend BresicWhitney sold one out of the six properties that went to auction on the Saturday, but five other properties scheduled for Saturday were snapped up beforehand.

The competition among sellers will also be fierce in December. Next weekend there are just shy of 1000 auctions scheduled and the following weekend there will be more than 800.

Dr Wilson said we are still in a sellers’ market but with so much stock coming up for sale, this December could “spell the end of the ball game”.

This story Administrator ready to work first appeared on Nanjing Night Net.

A week when directors did a bit of shopping

Skilled Group chief executive Mick McMahon Photo: Jesse MarlowDirectors doing a bit of buying dominated proceedings this week and for investors who like to see multi-director transactions it was an especially good week.
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The scorecard registered $6.7 million for buyers and $2.8 million for sellers.

Mick McMahon, who has been in the chief’s chair at Skilled Group for four years, was responsible for the lion’s share of the sellers’ tally.

Following the former Shell and Coles staffer’s appointment, the scrip enjoyed a terrific run, firming from $1.36 to close enough to $4.

That peak was reached last year and since then the shares have been in a pronounced down trend and are now fetching $1.94.

McMahon in recent days sold about $2.20 a share.

But earlier this year he did some very profitable option exercising and share selling.

In February, he exercised $2 million of options at $1.47 apiece and sold the resulting shares at $3.04 each, collecting a useful $4.2 million.

Elsewhere, there was multi-director buying of Seven Group Holdings shares.

Richard Uechtritz, former JB Hi-Fi mastermind, headed proceedings outlaying close enough to $700,000.

Other buyers from within the Seven boardroom were Ryan Kerry Stokes, Bruce McWilliam and Warwick Smith.

The shares have been falling for most of this year and recently hit $5.75 – the lowest level since 2010.

Other multi-director buying was done by directors of Sims Metal, Orica, Sundance Energy Australia, ALS, NEXTDC, Rubik, WDS, Champion Iron, Whitehaven Coal, Incitec Pivot, Patties Foods and Freelancer.

The Sustained Persistence Award goes to Simon Clausen, a non-executive director of Freelancer, self-styled as the world’s largest freelancing, outsourcing and crowdsourcing marketplace.

Freelancer scrip recently hit a 52¢ low – compared with $2.60 on the first day of listing last year.

Clausen has been a regular buyer this year.

This story Administrator ready to work first appeared on Nanjing Night Net.

Rio Tinto takes swipe at Glencore and promises shareholder returns like dividends and possible buybacks

Rio Tinto insists it can “materially” increase shareholder returns in the new year despite sliding commodity prices, and has indicated it is not afraid of striking a coal deal with Glencore at the right price.
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Rio chief executive Sam Walsh assured investors on Friday that he could keep his promise of returning cash to shareholders by slashing capital spending, reducing debt payments and continuing to lower costs.

Expected funding commitments for new mines in the iron ore, bauxite and coal divisions were overlooked on Friday and, after promising to spend around $US11 billion on projects at the start of the year, Rio is on track to spend just $US8.5 billion in 2014.

“Over the next five years we expect to generate strong free cash flow and we remain committed to materially increasing cash returns to shareholders in a sustainable way,” said Mr Walsh.

“I truly look forward to announcing this at our annual results in February next year.”

But with revenue sliding due to low commodity prices, Rio may need to use debt to fund its shareholder returns in February.

JP Morgan analyst Lyndon Fagan speculated on Thursday that Rio might not be able to fund its payout promise from cash generation alone.

“At spot prices, we estimate a small gap between free cash flow and dividend commitments,” he said, assuming Rio’s payout program was worth between $US200 million and $US700 million.

When asked on Friday if Rio would generate enough cash to cover the imminent round of shareholder returns, chief financial officer Chris Lynch said; “We do have both generated (cash) and balance-sheet capacity”.

Deutsche analyst Paul Young said Rio’s cash generation would accelerate in the second half of 2015, and the miner could cover the shareholder payout without using debt if it got the timing right.

“They could announce a buyback mechanism which allows treasury to buy back stock when free cash flow is available, which means the buyback will probably be weighted toward the second half of next year,” he said.

In the wake of Glencore’s unsuccessful bid to merge its Australian coal operations with Rio’s earlier this year, Rio used the briefing to showcase the quality of its Hunter Valley thermal coal business.

Energy boss Harry Kenyon-Slaney said every Rio coal mine in Australia was currently profitable, despite coking coal prices sliding by 16 per cent over the past year and thermal coal prices falling 25 per cent over the past year.

“We do have the best coal assets in the Hunter Valley,” he said, adding that Rio had up to 100 years of coal at its disposal in the region.

Under a new coal strategy called “Hunter Blend”, Rio will try to improve co-ordination between its various Hunter Valley mines rather than treating them like individual operations.

The move is expected to help boost exports while cutting costs.

Mr Walsh said Rio was not opposed to transactions with other companies in principle, and he pointed to the sale of the Clermont coal mine to Glencore and Sumitomo in 2013 as evidence.

“We have a total open mind if there is somebody out there that is going to offer us a price that offers more value than we see in an asset. But this is not market day at the bazaar,” he said.

In a veiled swipe at Glencore, which also approached Rio about a full merger in July, Mr Walsh said some offers were not worth consideration.

“There are other transactions, and there is a range of them, that didn’t pass muster; they didn’t make sense. There may be synergies and that is terrific, but if you lose your shirt going into a transaction like that, then it doesn’t matter what the synergies are,” he said.

Most analysts believe Rio’s Australian coal assets are better than Glencore’s, with one suggesting Glencore would need to pay an equalisation fee if a coal merger went ahead.

Rio will continue boosting  iron exports on the same schedule that attracted criticism this year, but will do so in a less expensive way.

Rather than commit more than $US1 billion on building a new iron mine at Silvergrass in the Pilbara, Rio has vowed to defer that spending by at least one year, and achieve its targets using extensions to existing mines.

Rio has vowed to export 350 million tonnes from its Pilbara business by 2017, and will need to develop Silvergrass to reach 360 before 2020.

The iron ore price was fetching $US69.98 on Friday, having fallen from above $US140 per tonne in the past 12 months.

This story Administrator ready to work first appeared on Nanjing Night Net.

ATO ‘cowboys’ culture ruined lives, inquiry told

Hard slog: Des Lyons has had a long battle with the Tax Office. Photo: Chris HydeAustralia’s justice system rests on the premise that the accused is innocent until proven guilty.
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But according to testimony after testimony given to the federal inquiry into tax disputes, this often isn’t the case when it comes to the tax system.

“In the tax system, it is the obligation of the taxpayer to prove their case,” Gold Coast lawyer David Hughes told the inquiry during a hearing in Brisbane last month.

“They bear the onus of proof. As soon as the assessment is raised, even if that assessment is all but plucked out of the air, that assessment stands and the Tax Office has the full power of the legislature to recover that tax debt.”

One of the cases where the Tax Office made an incorrect assessment involved a client of Mr Hughes, 67-year-old Des Lyons, whose plight was mentioned at the inquiry and who BusinessDay spoke to.

Mr Lyons said after a “school bully” auditor left him with an incorrect $1 million tax bill and the ATO issued garnishee notices to his bank, the institution withdrew all funding and Mr Lyons nearly lost his marriage and had to sell his business – which he has bought back – his investment property, and his home.

His case is typical of numerous others coming up before the inquiry, and like others predates the arrival of new leadership brought in to revamp the ATO’s culture. It’s a culture where young auditors take an aggressive “revenue-bias” approach. Numerous testimonies to the inquiry refer to ATO auditors as “ideologues”, “cowboys” and “zealots”.

The inquiry has heard of other businesses being ruined, and lives being damaged, because Tax Office auditors go on “fishing expeditions” and cases drag out for years. Advisers talked of how, despite their clients having genuine grounds for appeal, they often settled because the financial and emotional cost of disputing a tax debt was too high.

Tax Commissioner Chris Jordan, a former policeman and former KPMG consultant, and Second Commissioner Andrew Mills, a former tax lawyer, acknowledge the need to resolve disputes quickly.

Mr Mills told BusinessDay: “In the past there have been cases that were protracted and poorly handled, but we are changing our approach to ensure our staff training addresses those kinds of issues and to try to stop this happening in the future.”

One of the main ways the Tax Office had changed the way it interacted with taxpayers was by picking up the phone to engage with taxpayers earlier, at the audit and the objection stage, he said. The Tax Office submission to the inquiry noted the agency had made reductions in the time it took to resolve disputes, with a median of 52 days in 2011-12 dropping to 39 days in 2013-14.

The agency was also offering an internal mediation service for individuals and small businesses, where trained officers facilitated discussions between parties at the audit stage to assist in narrowing or resolving disputes, Mr Mills said.

While some tax advisers said auditors were still reluctant to try the ATOs new internal program, Mr Mills said either the taxpayer or the ATO could request the service. “This is another way we are attempting to resolve disputes earlier at the audit or objection stage and prevent them from ending up at the Administrative Appeals Tribunal,” he said.

They are promising signs, but changing the culture of an organisation with more than 21,000 staff takes time.

And as NSW barrister John Hyde Page told the inquiry, while companies such as Chevron were able to devote resources to fighting the ATO, smaller taxpayers could not. “It is appalling that somebody’s treatment under the law should be materially affected by whether or not they can afford an expensive firm of lawyers to write them a letter of advice,” he said.

Of the $18 billion in debt owed to the Tax Office, small-business taxpayers ac­count for more than 60 per cent.

For those who fight their case, the ability to then get compensation is limited. Mr Lyons knows that all too well.

His case, which started in 2011 and dragged on for two years, was sparked because of a simple and relatively small GST error.

It could have been settled quickly and without pain, he said. But the auditor decided Mr Lyons was hiding income from his Gold Coast restaurant and, based on what Mr Lyons said turned out to be incorrect calculations, issued him with the hefty bill that included interest and penalties.

Mr Lyons said early in the audit process, before issuing the bill, the auditor had made comments like, “I am the sheriff and I am the law”, and after discovering that Mr Lyons didn’t have a tinny boat, told him: “A tinny might be all you have left by the time I am finished with you.”

“His attitude was very demeaning,” Mr Lyons said. “He was very very aggressive.”

Once the assessment was issued, the auditor used a garnishee notice. This is a common method used by the Tax Office to recoup alleged debt but for a small-business person it’s a frightening prospect and, according to evidence given to the inquiry, is the main factor that is destroyed people’s lives during tax disputes.

It allows the ATO to demand the taxpayer – or any person or business that holds money for the taxpayer, including their employers, financial institutions, real estate agents and solicitors – make immediate payments to the ATO. It can be a percentage of their wages or a lump sum amount. Deciding how much and when they pay is up to the Tax Office.

Not only is a garnishee notice issued before the taxpayer has a right to lodge a formal objection to the assessment, but hefty penalties and interest charges can be attached. In a recent review the Inspector-General of Taxation Ali Noroozi recommended the ATO not require taxpayers to pay penalty amounts until the dispute on the primary tax is resolved.

As with Mr Lyons’ case, when the debt collectors come knocking people have to sell their homes, their businesses, their assets. For those who have built their business over 40 years or so, who have wives and families, it is all too traumatic, leads to mental breakdowns, and contemplation of suicide.

To address some of the concerns raised during the inquiry and previous reviews, Mr Jordan has injected new talent into the ATO, including staff that worked  formerly in business. But that’s mainly at the senior level and a friendly and commercially minded attitude takes time to trickle through the organisation. The fact that nearly one-quarter of almost 3000 job cuts at the ATO have come from its audit team also isn’t instilling confidence in the agency. “This is clearly putting pressure on remaining staff to protect government revenue,” Shadow Assistant Treasurer Andrew Leigh says.

Mr Hughes told the inquiry: “If the current commissioner stays for a long tenure, the culture will change over time.” But he said the executive had expressed concerns to him privately that the message was not getting through to the troops.

The inquiry has to decide whether to recommend to the government to change the law to allow taxpayers to get proper compensation if they have a genuine case against the Tax Office.

Inspector-General Noroozi has flagged introducing a taxpayer bill of rights that is legally enforceable and allows people to claim compensation if they are mistreated. But introducing such a change would need to be balanced against the potential loss of revenue that might result if more people made claims. The possibility of more claims is high, given that the Tax Office is the third-most complained about agency to the Commonwealth Ombudsman after Centrelink and Australia Post.

The inquiry is also looking at whether the Tax Office should be split, so that its policing and administrative functions are separate, something Treasurer Joe Hockey hinted could happen before the Coalition won government.

The ATO and Treasury both oppose a split. Mr Jordan told the inquiry the ATO’s independent review area ensured that if taxpayers had a gripe, they could go to someone in a separate area from the officers who did the audit to review the original decision.

But as it stands this independent review is available only for the big end of town, and in any case while the Tax Office thinks it is working beautifully, tax advisers don’t think it is independent enough.

Some want the review area to be taken out of the Tax Office and a new agency to be created. Others say it should stay within the ATO but have a separate commissioner.

Mr Lyons, who is considering whether to seek what limited compensation might be available to him under the system – and whether he is eligible would be at the discretion of Mr Jordan – said he was glad the Tax Office had brought in leadership with business acumen.

“Chris Jordan’s seen it from the other side of the fence and he says he is taking steps to fix things,” Mr Lyons said. “I hope that’s what he will do. I hope he will make a big change, so taxpayers are treated fairly and not treated like people that are criminals.”

This story Administrator ready to work first appeared on Nanjing Night Net.

Jabiluka still has development potential says ERA

Trojan horse: The Ranger uranium mine in Kakadu National Park. Photo: Glenn CampbellThe uranium miner based near Kakadu National Park still considers the famous Jabiluka Mineral Lease to be an important asset and appears to be in no mood to have it absorbed into Kakadu’s official borders.
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Jabiluka is a sacred site to the Mirarr traditional owners, but is also potentially lucrative uranium deposit that has been earmarked for development at various times in the past four decades.

A precedent for absorbing contentious mineral leases into Kakadu was created last year, when the Australian government formally ruled that a mineral lease over the Koongarra region, held by French uranium miner Areva, would become part of the national park.

The mining lease over Jabiluka, which was the scene of an anti-mining blockade and hundreds of arrests in 1998, is held by Energy Resources of Australia (ERA), which has promised not to mine Jabiluka until the traditional owners give their blessing.

The Mirarr have shown no sign of changing their mind, but when asked about the prospect of Jabiluka being absorbed into the National Park, ERA chief executive Andrea Sutton said: “For us Jabiluka is an important asset.”

Ms Sutton stressed the company was not about to break its vow to the Mirarr, but was also not ready to give up on the asset.

“In accordance with the long-term care and maintenance agreement, we will not develop Jabiluka without the agreement of traditional owners, so our policy on that has not changed,” she said.

“We will continue a dialogue as we need to with the (Mirarr) if required, but it is under that agreement and we will not develop it without agreement.”

Australian Conservation Foundation spokesman Dave Sweeney said it was clear that ERA, which is 68 per cent owned by Rio Tinto, still held distant hopes of developing Jabiluka one day.

“There is no doubt that the golden goose for ERA is Jabiluka,” he said.

ERA’s current proposal to extend mining at the nearby Ranger lease, which is viewed by some analysts as a marginal project at current uranium prices, was a “Trojan horse” for development of Jabiluka in the future, Mr Sweeney said.

Former environment minister Peter Garrett was part of the 1998 blockade before he was elected to Parliament in 2004, and when asked this week if he believed it was time for Jabiluka to be absorbed into Kakadu, he said; “The exploitation of uranium within the World Heritage property of Kakadu National Park, effectively against the current wishes of significant traditional owners and others, is a historical aberration and ought to finish as soon as possible.”

This story Administrator ready to work first appeared on Nanjing Night Net.

Big retailers make a splash with brand colours

Refreshing approach: Craigieburn Central’s streets and walkways have been thoughtfully conceived, with the main retailers forming an anchor to the design. Rezoned: Craigieburn Central, once just paddocks, is a welcome new kid on the block. Photo: John Gollings
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Housing subdivisions have been multiplying in recent years, particularly in many outer suburban areas around Melbourne. Craigieburn, 26 kilometres north of the city, is one such area. Unfortunately, while the houses spread along the main arterial roads, many services such as shopping centres lagged behind. So Craigieburn Central, a collaboration between Lend Lease and NH Architecture, is a welcome “new kid on the block”. “Previously this area was paddocks, before it was rezoned,” NH Architecture principal Roger Nelson says.

Rather than design a generic centre, enclosed within one large building mass, Lend Lease and NH Architecture were keen to create a different model, one that included streets and pedestrian walkways. These streets and walkways have been thoughtfully conceived, with the main retailers forming an anchor to the design. Colour-coded to capture each brand, the five anchor retailers are expressed internally and externally using their corporate colours. So Target, for example, features a colour palette of red and white. Others are designated in orange, green and blue. “We wanted to articulate the major stores, but we were also keen to create a series of signposts through the site. So, as soon as you leave your car, you know exactly where you are going,” NH Architecture design director Fabian Jungbeck says.

Covering 60,000 square metres of gross leasable floor space, including specialty stores, Craigieburn Central also features fresh food areas, akin to a market, as well as dining halls and cafes. “Since the global financial crisis of 2008, centres such as these need to be cost-effective. The budgets to include superfluous detail are few and far between,” says Nelson, who was keen to express materials as honestly and transparently as possible. “You could say it is a brutalist approach, where buildings express their materials, rather than a series of layers.”

One of the key buildings, for example, articulated in red and white metal cladding, features overscaled graphics, with a series of arrows, large and small, gesturing patrons to follow a certain path. Another building, clad in green metal, has super graphics of abstracted vegetables. These ploys not only provide important signage and pathways through the Craigieburn Central site but also conceal plant equipment on the roof. “There’s a strong industrial design aesthetic. But much of this harks back to the history of the region, with many of the brickworks located in the northern suburbs,” Nelson says.

Brick, used for some of the exterior as well as interior walls, also appears in the design. Red-brick walls feature on the exterior of the large dining hall, as well as making their presence felt inside. NH Architecture was also keen to signpost interior spaces. So rather than simply endless metres of plaster, there’s vibrant colour, punctuated by sculptural folds in the ceilings. At other points, a series of “cut outs”, made from different hues of green aluminium, animate a space. And to complement these playful ceilings is loosely grouped furniture in punchy colours.

NH Architecture was also conscious of creating protected outdoor spaces in the design. “We wanted to create a community, not just a series of stores. There had to be more than just a car park and a few stores at the destination,” says Nelson, who included outdoor cafes in the mix. And rather than leave one’s car and immediately enter a sealed environment, the indoors and outdoors read as one, including vibrant canopies delineating entrances.

“We want people to explore the centre and come here for more than just shopping,” Nelson says.

This story Administrator ready to work first appeared on Nanjing Night Net.

Capital gain: Mystery buyer of Makers Mark building revealed

Show time: Alex Theatre is the new name for the former George Cinema. Photo: Jim LeeGolden Age Sunrise Development is the mystery buyer of the Makers Mark building at 464 Collins Street, a site likely to be Melbourne’s next pencil-thin building.
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The historic low-rise building was reported as under offer in August. On a 483-square-metre block, the ministerial-approved permit allowed for the airspace to be replaced with a 55-level office  and apartment tower.

Golden Age is also developing the Victoria One tower at 452Elizabeth Street after recently completing projects in Little Collins Street and South Melbourne. Investor’s world

An investor is paying more than $23million for the former Praemium House  at 406 Collins Street.

The building is identified at ground level by a statue of Atlas holding the world.

Developed as the Atlas Assurance Co Ltd building in 1958, and also once known as Concept House, 406Collins Street was listed last month by local private investors, who paid $14.6 million for the building in 2006. The 12-level building on a 410-square-metre block was offered with a concept plan for a 50-level apartment tower, which also covered the neighbouring property. The owner of that site –410Collins Street – also listed the property last month via a different agency. That site is expected to fetch about $27 million separately, with the proposed skyscraper scheme unlikely to proceed.

Colliers International’s Matthew Stagg and Leigh Melbourne marketed 406 Collins Street with Ryder Commercial’s George Harris and Mark Ryder. Hotel moves in

A hotel will be refitted into a West Melbourne office, which was, until only a couple of years ago, the headquarters of the Australian Labor Party’s Victorian branch.

The double-storey building at 356-362 King Street, on the north-west corner of Walsh Street, sits on an 1150-square-metre block near the Flagstaff Gardens.

Formerly owner-occupied by the ALP, the asset sold to the current owner for $3.4 million in mid-2012. Later that year, the ALP Victorian branch spent that same amount on a luxurious 596-square-metre replacement office in Docklands within ING’s Waterfront City precinct. Factory to go

One of the western suburbs’ best-located factories – surrounded by parkland – is  believed to be selling to a developer, who will exploit the recent rezoning to allow the large plot to be replaced with houses.

The West Footscray site at 41-49Robbs Road is understood to be exchanging for more than $7.5million. On 7879 square metres about seven kilometres from the CBD, the site also has frontage to Glamis Road and Exhibition Street.

With factories to the north and houses to the east, the industrial block has been offered with a planning scheme (not a permit) for a 49-townhouse project. It is unknown whether the new owner,  believed to be an interstate builder, will propose a higher-density complex.

Last month, a developer paid $8.4million for the nearby former 501 Receptions site in Barkly Street, Footscray. The 6271-square-metre site was offered with a permit for a five-level apartment building.

Fitzroys agents Chris Kombi and Dean Alexander marketed Robbs Road with CBRE’s Jamus Campbell and Mark Wizel. Flemington tower

In what is a familiar Melbourne tale this year, the new owner of an inner-city block has applied to make a permitted project taller and denser.

This time, at 1 Ascot Vale Road – aysite many Melburnians will recognise as the northern boundary of the Racecourse Road roundabout (and opposite an entrance to the Flemington Racecourse) – developer Caydon is seeking to builda 23-level, 409-unit complex.

The proposed building would replace a permitted 21-level, 381-unit apartment tower.

Only a few years ago, the block,  3773 square metres,  carried a permit for a 21-level, 219-unit complex. Officer build

An 11.2-hectare development site in outer south-east Officer has sold to a residential developer for a speculated $10 million. Lot 2 Brunt Road, at the intersection of Rix Road, is within Melbourne’s urban growth boundary. Paul Sutherland and Grant Sutherland of Sutherland Farrelly said there was strong interest from  prospective purchasers. George now Alex

Alex Theatre is the new name for the St Kilda premises known for years as George Cinema.

Entrepreneur Aleksander Vass, who bought the Fitzroy Street assetthis year, is converting the space into a new arts hub for live shows. Vass bought the asset from a developer who had proposed replacing the three cinemas with 21 apartments. Tally Ho sale

The Zagame family has sold prior to auction a prominent restaurant at an entrance to the Tally Ho business park in Burwood East.

The two-storey, 856-square-metre complex at 380 Burwood Highway is fully leased to China Express, which pays annual rent of $350,000. Listed with price expectations of about $7 million, the asset is speculated to have traded for closer to $8.5 million.

The campaign targeted investors and developers who might consider replacing the 5071-square-metre block with a taller complex; possibly with offices atop a ground floor retail space. Vinci Carbone marketed it.

Tally Ho, across 26 hectares at the south-west corner of Springvale Road, is considered Melbourne’s first large-scale suburban office park and includes as tenants Hewlett-Packard, Motorola, VicRoads and Whirlpool.

For years, 380 Burwood Highway was a Zagame-occupied restaurant. Educated move

Classrooms will replace jail cells at the former Carlton Police Station with the new owner revealed as Sydney’s Education Development Association. The training organisation, whose services include social outreach initiatives, paid $3.64 million for the historic buildings in July 2013. The deal, on a long settlement, was only finalised recently.

Said to have accommodated notorious 1920s gangland figure Squizzy Taylor more than once, 334-344 Drummond Street ceased operating as a police house in 2010 after 130 years.

The low-rise administration offices and six-room bluestone jailhouse occupy a 910-square-metre site close to the University of Melbourne and Royal Melbourne Institute of Technology.

The former Brighton police station was listed for sale at about the same time as Carlton.

On a 1047-square-metre block, 27Wilson Street sold for more than $2.4 million to a resident who planned to renovate it into a family home.

[email protected]南京夜网 Twitter: @marcpallisco

This story Administrator ready to work first appeared on Nanjing Night Net.

Uranium mining in Kakadu at a crucial point

The Ranger uranium mine in Kakadu National Park, with its tailing dams almost full after the wet season. Photo: Glenn Campbell ERA chief executive and managing director Andrea Sutton. Photo: Glenn Campbell
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The town of Jabiru was built quickly to support the mine.

The skies above Jabiru are busy. Birds of prey circle endlessly.

Brown falcons or whistling kites are a constant presence above this part of Kakadu National Park.

It creates a fitting mood for a place facing an uncertain future. Jabiru is a town in limbo.

Four decades after arriving, uranium miner Energy Resources of Australia (ERA) will decide soon whether it will continue digging here.

There is a chance it will choose not to,  which will bring down the curtain on perhaps nation’s most controversial mine, Ranger.

Built on the faultlines of environmental and indigenous land rights policy, Ranger is at a defining moment. It has provided fuel to nuclear power stations of the world but the end of its working life is in doubt.

Depressed commodity prices, revived environmental concerns and tightening purse strings have made the decision over a new mining development at Ranger a close call.

Having reluctantly accepted mining on their ancestral lands, the indigenous people who live beside the nation’s biggest uranium mine could soon watch their industrial interloper depart.

Whether life will be better when the mine goes is far from clear.

The end of mining at Ranger would be cause for celebration for some.

Environmentalists have long despaired at a mine so close to one of the nation’s most famous national parks.

The fact Ranger produces uranium – the radioactive nature of which can be dangerous in certain circumstances – has only turbo-charged the opposition.

“The exploitation of uranium within the World Heritage property of Kakadu National Park, effectively against the current wishes of significant traditional owners and others, is a historical aberration and ought to finish as soon as possible,” former environment minister Peter Garrett said.

Mr Garrett was minister when ERA was granted permission  to conduct further exploration at Ranger. His decision was constrained to ruling on matters relevant to a certain environmental act.

The process for environmental approvals for the development of the mine is ongoing under a new government but Garrett said Ranger had been a blot on the landscape since day one.

Most affected over the past 37 years have been the indigenous Mirarr people, whose traditional lands have hosted the mine.

As late as the 1970s, the Mirarr people lived in these monsoonal wetlands, with little intrusion from white Australian culture.

“There weren’t many white people out here permanently before 1980, something like six or so across the whole region,” said Justin O’Brien, the chief executive of the Mirarr’s modern corporate organisation, the Gundjeihmi Aboriginal Corporation.

The town of Jabiru was built quickly to support the mine and within one year the Mirarr had become a racial minority.

A sealed road connection to Darwin came only in 1974, and the first stage of Kakadu National Park was not declared until 1979, in what many viewed as a political compromise to offset the nationwide controversy over uranium mining in the region.

With an ancient culture that places special importance on the land, the construction of several huge mining pits was distressing for the Mirarr people.

The fact that a 1977 act of Parliament allowed mining to go ahead on Mirarr lands without their express consent – despite the same act giving a right of veto to most of the nation’s other indigenous groups – only entrenched the feeling of dispossession and resistance to the mine.

“There hasn’t been a great history of fairness or equity here. Mining was imposed upon people and it marginalised people,” Mr O’Brien said.

But over time the Mirarr have scored some important wins, which have improved the relationship with mining to a degree.

ERA’s desire to mine a sacred site close to Ranger called Jabiluka was largely put to bed in 2005, after a decade of campaigning that resulted in thousands travelling to Kakadu to create an anti-mining blockade, which   resulted in hundreds of arrests.

ERA has promised not to mine Jabiluka unless the Mirarr give their consent.

There was also the signing of a revised agreement for Ranger last year, ensuring greater royalty flows to the Mirarr and creating a system for back-payments.

Royalties for Mirrar, calculated on revenue from annual production at Ranger, tally about $49 million over the past four years.

ERA estimates it has paid $62.7 million to indigenous groups over the same period, on top of the royalties paid to federal and territory governments.

Mr O’Brien said the relationship between the Mirarr and ERA, while always cautious, was better now than in the past.

“Coming off a hell of a low base, the relationship with them is pretty good at the moment compared to other times,” he said.

While acknowledging the pain of the early years, some of the mining industry’s more considered minds privately ponder whether, now the egg is scambled, the Mirarr will truly be better off if ERA decides to end mining at Ranger in the next few months.

The mine dominates the local economy. ACIL Tasman judges ERA to be the source of 87 per cent of Jabiru’s regional gross value added activity in 2012, as well as leasing 66 per cent of private dwellings in the town. More than a third of local school students were children of mine workers.

Malcolm Fraser, the prime minister who controversially approved mining at Ranger in 1977, said he had no regrets.

“I think there has been a benefit. It was always intended to be of benefit to the Aboriginal people,” he said this week.

The traditional owners’ representatives in 1977, the Northern Land Council, did eventually agree to mining going ahead, he added.

Mr Garrett was less convinced.

“Whilst there has been income flowing through to certain parties, on balance it has not been a positive for the traditional communities,” he said.

The Mirrar might be asked soon to approve a mine extension at Ranger. ERA has spent the past three years evaluating a new undergound mine that would operate until 2021, when the licence expires. It if wanted a new licence it would have to apply for one.

Mr O’Brien said it was too early to say if Mirarr elders would give their consent should ERA decided the underground project was viable.

ERA estimates the extension project, known as the Ranger 3 Deeps, would deliver $10 million to $30 million in annual royalty flows to the Mirarr if approved, but Mr O’Brien said the Mirarr’s decision would not be based on money.

“You don’t see much naked self interest here. When you ask some of the older women about the big financial implications of their decisions, particularly Jabiluka, which is ruled out by young and old, they say ‘don’t worry, none of that was here before’,” he said.

“People might say ‘how can a small clan of Aboriginal people who have benefited from mining even think twice about it?’ Well, because they live downstream and below the bloody thing.

“You have hundreds of incidents, leaks and spills. It is with all that in mind that the Mirarr consider the current proposal at Ranger 3 Deeps.”

A precedent for refusing the cash exists nearby. Traditional owner of Koongarra, Jeffery Lee, turned his back on millions of dollars worth of royalties from French uranium miner Areva. Instead he had his land absorbed into the national park.

Nor would the Mirarr be short of a dime if the royalty flows ceased.

During Mr O’Brien’s tenure the Mirarr’s money has been invested in an array of stocks, bonds and financial instruments, with millions put under the management of firms like Morgan Stanley and Sydney’s Harper Bernays.

The portfolio includes a stake in the 15-story Scarborough House building in Canberra that houses the Federal Health Department.

Mr O’Brien acknowledged that some spending might need to be curtailed if the royalty flows from mining were to cease. But he said the Mirarr could still look after their families and fund the odd social program.

Some in the mining industry believe younger generations of Mirarr will prove more open to mining than the current elders.

Mr O’Brien insisted the Mirarr remained united.

“There will be one view,” he said.

“Those elders rarely make a major call on anything without everyone being present.”

About 12 per cent of ERA’s workforce are indigenous, and while it would be happy to employ Mirarr people, no Mirarr people work for the company.

Bad timing

As fate would have it, ERA could barely have picked a worse time to evaluate a new uranium development.

Prices for uranium have been depressed since an earthquake and tsunami sparked a nuclear crisis in Japan in 2011.

Most Australian uranium miners haven’t made a profit since. ERA has received just $US46 ($54) a pound for its product during most of this year. That is 12 per cent below the price it received in 2009.

Commodity prices are not the only threat to the project going ahead. A series of events over the past year have shaken investors’ confidence.

A tank failure in December last year spewed toxic substances around the Ranger site and prompted a six-month shutdown. Despite official surveys suggesting none of the substances escaped into Kakadu, a fierce debate ensued over the mine’s social licence to operate in such a delicate and difficult location.

The exploration results for the project have also fuelled concerns, with some analysts expressing alarm at the quality of some sections of the underground geology and cases of unstable rock formations.

At the same time ERA’s 68 per cent shareholder, Rio Tinto, is aggressively cutting back capital spending on new projects.

With Rio focused on boosting dividends rather than building large numbers of new mines, many doubt it will be willing to spend the hundreds of millions of dollars that would be required to go ahead with a new underground mine at Ranger.

When the geological concerns were reported to the market in July, Credit Suisse published the most pessimistic research note on the project to date.

“We believe the results of the Deeps resource drilling are poor,” the note said.

“Ranger Deeps either adds value or there is close to none, and risks are increasing towards the latter. If ERA announces at the end of this year that Ranger Deeps is not viable, then the share price should collapse to very low levels.”

The geological results have been better since then, with the amount of uranium in the Deeps estimated now to be 6 per cent higher than thought previously.

Credit Suisse no longer covers the company. Among those that do, most analysts say the project’s chances are finely balanced.

“If uranium prices can hold above $US40 per pound, then the project potentially looks more viable than it has done for much of the past year. But the project may yet require higher prices still,” Bank of Montreal analyst Edward Sterck said.

JP Morgan analysts said the weak uranium prices, combined with the 2021 expiry of the mining lease, put ERA in a difficult position.

“We believe the project likely needs prices of $US50 per pound to $US60 per pound over the life of the project,” they wrote.

RBC Capital Markets noted recently the underground project comprised 99 per cent of ERA’s share price value, meaning the ultimate decision would have a very “binary” impact on the stock price.

RBC analyst Chris Drew said he thought the project was probably viable but continued weakness in the uranium price could limit enthusiasm for it.

“It is going to depend a lot on the uranium market. The main thing is the resource looks consistent with what they were expecting. You’ve also got some good grades there as well, so it would support an economic operation based on our relatively conservative uranium price forecasts,” he said.

ERA chief Andrea Sutton said the geological results had been consistent with expectations, and sufficiently good for the company to conduct less drilling than planned.

The spot uranium price enjoyed a small surge in early November, and while the longevity of that rise is unclear, Sutton said the company was confident the price would rebound in the medium term.

“You look at the challenges of climate change, Japan’s power needs and the construction in China, and we do still see that medium term (uranium demand) strengthening,” she said.

Confidence at the crossroad

While some remote communities face poverty and unemployment when a local mine shuts, the Mirarr are confident they can thrive in the modern economy when mining eventually does leave town.

With Kakadu on their doorstep, tourism is already an established industry, and the Mirarr run a handful of small businesses in the region focused on the tourist dollar.

One Kakadu highlight tourists do spend money on are the hearty barramundi fillets Peter Wilson serves at Kakadu Lodge.

Cooked in the pan and served with a melting knob of herb butter, the barramundi is one of the reasons Mr Wilson’s outdoor bar and bistro won a Gold Plate at this month’s Territory dining awards.

But despite his apparent success, Wilson said tourism in Kakadu was getting harder.

Visitors to Kakadu have been sliding since 2000 and the demographics that do visit are often not the highest yielding.

“Last year was the worst year for tourism ever that I can remember. This year is marginally better, but it would need to be,” he said.

He is convinced the Jabiru region cannot survive on tourism alone.

“In this region you have a 100-day season. You have 100 days of viable occupancy that is profitable, then you’ve got maybe 100 days of break-even occupancy and then you have got 160 days of pouring money down the toilet,” he said.

“It needs diversification. For the town to thrive it needs commercial input into it, people who want to be service providers and have businesses not just based on tourism.

“The big challenge for Jabiru is what it wants as its focus after ERA, and that is very much my focus too.”

Uncertainty over the longevity of ERA is not the only thing undermining investment in the town. Jabiru exists under a similar lease to the one the mine operates under, meaning no business has certainty of tenure beyond 2021.

“Why would any business person invest in infrastructure when they know there is uncertainty about what is going to happen,” Mr Wilson said.

Without fresh investment in facilities, the decline in tourist numbers could be hard to turn around, he said.

“At the moment we are just going through the motions.”

Mr O’Brien stressed that tourism wasn’t the Mirarr’s only option beyond mining, with land management also a big opportunity.

Investigations into carbon farming in Kakadu suggest 35 to 50 jobs could be created in that industry, while the Mirarr are also optimistic about the trend for indigenous rangers to be spread through the national park in land-caring and maintenance roles.

“There are many social co-benefits that come with that sort of work in terms of working on country and they are long articulated,” Mr O’Brien said.

Should the economic and regulatory hurdles be cleared there is one last uncertainty surrounding the Ranger Deeps project that could yet become an issue.

ERA and the Mirarr appear to disagree over whose will would prevail under a scenario where the company wanted to proceed but the Mirarr did not.

Mr Sutton said ERA would work closely with the Mirarr to help them understand the full impact of the project, and the company hoped to win their support.

But when asked if ERA legally required permission from the Mirarr to conduct the extension, the company indicated it did not.

“ERA has an authority to mine and produce uranium oxide at the Ranger Project Area until January 2021,” ERA said in a statement.

Mr O’Brien had a different view.

“I would say that in this day and age, particularly given the ignominious history of conflict here, that is a requirement,” he said.

When asked if that requirement was stated explicitly by law, Mr O’Brien said: “You could argue that it is, and you could argue that it is not.”

Perhaps there’s one last battle to be fought over Australia’s most contentious mine.Yellow cake road

1969: Ranger ore bodies discovered

1977: Federal parliament grants right to mine at Ranger

1980: Mining begins

1981: First drum of uranium produced

1994: Mining complete in Pit 1

1996: Mining approved in Pit 3

1997: Mining of Pit 3 begins

1998: Large protest sees hundreds arrested

2009: Discovery of 3 Deeps underground resource announced.

2011: Fukushima disaster sends uranium price diving

2012: Mining complete in Pit 3

2013: New agreement with local indigenous groups Federal government declares fresh environmental assessment required Tank failure results in toxic leak

2014: Draft environmental impact statement submitted to government.

2015: Target for start of mining at 3 Deeps

2021: Right to mine expires

This story Administrator ready to work first appeared on Nanjing Night Net.

Parko signs off with summary of challenges and opportunities ahead

One of Tony Abbott’s first acts on becoming Prime Minister was to sack the secretary to the Treasury, Dr Martin Parkinson. Parkinson’s crime was to believe, as did the government he had been serving, that we need to take effective action against climate change.
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Abbott also sacked Parkinson’s obvious successor at Treasury, Blair Comley, for the same crime. It was a disgraceful, vindictive way to treat loyal and proficient public servants.

But Parko’s departure from Treasury was delayed, first so he could help the new government prepare its first budget and then because his experience was sorely needed to help Abbott and Joe Hockey prepare to chair the G20 meeting this month.

But the time for his departure has finally arrived and this week he gave one of the last of many speeches during his distinguished career.

It was a tour of the short-term and longer-term challenges and opportunities that lie ahead. He professed to be very optimistic about our prospects, but I found his remarks pretty daunting.

Starting with the rest of the world, Parkinson observed that, even this far on, the big, developed economies’ recovery from the global financial crisis was slow and uneven. Forecasts for global growth next year had been downgraded again, to 3.75 per cent, following a pattern that had become familiar over the past few years, he said.

“We now have a situation where 200 million people around the world are looking for work. As the International Monetary Fund’s Christine Lagarde noted, if the unemployed formed their own country it would be the fifth-largest in the world.”

The financial crisis led to rapid accumulation of public debt, and governments in many countries had neither the political support nor market tolerance to use deficit spending to stimulate their economies, he said.

In normal times countries might use monetary policy to offset fiscal tightening, supporting demand by cutting interest rates and boosting economic activity by having their exchange rates fall. But many countries already had their interest rates at zero.

So their efforts to cut spending and raise taxes while their economies are still so weak – known as a policy of austerity – ran the risk of weakening demand further and making the budget deficit bigger.

Many countries had resorted to “quantitative easing” – metaphorically, printing money – to offset the budgetary tightening. Trouble was, we are yet to see the massive increase in funding this has generated translate into growth-inducing investment, he said. It was leading to too much financial risk-taking (buying high-priced shares and bonds) but not much economic risk-taking (increasing production capacity).

This was why our move to get each of the G20 members to agree to take measures that would cause their growth over the next five years to end up 2 per cent higher than otherwise, particularly by increased investment in infrastructure, made so much sense.

In the short-term construction phase it adds to aggregate demand. If it’s done well it adds to the economy’s supply capacity and boosts productivity for the long term. And if you price access to the infrastructure properly, it might even help the budget in the medium term.

Turning to our economy, the short-term outlook was dominated by our transition from resources investment-led growth and risks associated with continued weakness in the global economy and the potential for renewed financial instability, he said.

But our transition to broader sources of growth was occurring more slowly than we might have expected. In particular, the dollar hadn’t fallen as much as expected, considering how far commodity prices had fallen, so the boost to the non-mining economy hadn’t been as great as hoped.

The limited fall in the dollar was explained by the big countries’ quantitative easing, which was pushing their currencies down relative to ours.

Our consumers were also cautious in their spending and businesses seemed unwilling to invest until they saw consumer spending picking up. It was looking likely the economy will have grown below trend for seven of the eight years to 2015-16.

The long-delayed return to healthy growth created a risk that cyclical (temporary) unemployment turns into structural (lasting) unemployment. However, working the other way was our moderate growth in wages, which was a sign that the labour market was adjusting flexibly, even though it was also likely to be limiting consumer spending.

Turning to our longer-term challenges and opportunities, our big opportunity arose from the shift in the centre of global economic growth to Asia. By 2050, four of the five largest economies in the world would be in our region: China, India, Japan and Indonesia.

In this decade, the number of Asian middle-class consumers would equal the number in Europe and North America. These people would increase their demand for a wide range of goods and services that we could help supply.

But if we were to grasp these opportunities, we would need to work for them, and work hard, he said. There were no grounds for complacency.

We must use the opportunity provided by all the present reviews – of the tax system, the workplace relations system, the financial markets, competition policy and the functioning of our federation – to make decisions that improve our productivity growth and position ourselves to reap the most from our prospects.

Our other big problem was achieving a more sustainable fiscal position – getting the budget back to surplus. Australia had a “structural” budget problem – that is, one that wouldn’t disappear once the economy had returned to normal growth – requiring a sustained and measured response, involving people giving up benefits.

It was important we start the process of repairing the budget now, he said. We had recorded 23 years of consecutive growth and the budget projections were based on an assumption that this would continue for another decade.

Such an outcome – 33 years of uninterrupted growth – would be without precedent. Get it? We’re unlikely to be that lucky.

Ross Gittins is the economics editor.

This story Administrator ready to work first appeared on Nanjing Night Net.

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