February, 2019

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.