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Hot 2015

Hungary, Budapest, Budapest, Central Europe, View on the Parliament over Danube River.
Nanjing Night Net

Hungary, Budapest, Budapest, Central Europe, View on the Parliament over Danube River.

Hungary, Budapest, Budapest, Central Europe, View on the Parliament over Danube River.

Hungary, Budapest, Budapest, Central Europe, View on the Parliament over Danube River.

HOT 2015

PORTLAND, OREGON

Why here: With its craft distilleries, nano- and microbreweries, food trucks and skateboard- and bike-friendly streets, Portland has already hit every hipster’s travel radar. In 2015, two Hollywood films will shine a light on the liberal-minded city and the ruggedly beautiful state. Wild chronicles Portland author Cheryl Strayed’s trek along the West Coast’s Pacific Crest Trail. Instead of faking it, filmmakers rolled their cameras in locations throughout Oregon, including Bend, east of Eugene, and Portland’s Hotel deLuxe. Starring Reese Witherspoon, Wild opens in Australia in January. Fifty Shades of Grey opens here in time for Valentine’s Day. In the book, Ana and Christian’s first liaison unfolds at Portland’s Heathman Hotel. Naturally, there’s a Fifty Shades of Oregon package that rolls the Heathman, coastal and mountain stays, tub dining, beach bonfire, wine/aphrodisiac pairings, town-car transfers and more into a six-night $US7500 romp.

Don’t miss: Powell’s City of Books covers an entire downtown block. With more than a million new and used books, and intriguing staff reviews peppering the shelves, it’s possible to spend days in here.

Insider tips: Tourists flock to Voodoo Doughnut but Blue Star Donuts’ more sophisticated creations include blueberry, bourbon and basil, banana walnut fritter, real maple and bacon, and dulce de leche and hazelnut. Oregon is also home to the largest collection of covered bridges in the US West; most of the 50-plus bridges are in the Willamette Valley south of Portland.

Details traveloregon南京夜网, hoteldeluxeportland南京夜网, heathmanportland南京夜网, powells南京夜网, bluestardonuts南京夜网, covered-bridges.org.

The writer was a guest of Travel Oregon.

SEOUL, SOUTH KOREA

Why here: Long seen as crowded, corporate and a bit dull, South Korea’s capital has thrown off its over-earnest stereotype to reveal a city with a sense of style and fun.

Its identity as a UNESCO City of Design was underlined in 2014 with the opening of the Dongdaemun Design Plaza, a spectacular building resembling a vast silver spaceship. Containing a museum, a design market and restaurants on the site of a former baseball park and historic fort, it’s a compelling destination for both locals and visitors.

Another recent cultural addition is the city campus of the National Museum of Modern and Contemporary Art, next to an ancient palace and showcasing the imaginative work of local artists. Though undeniably up-to-date in execution, its art incorporates many elements of Korea’s culture and history: here a hint of Buddhism, there an echo of the division between north and south.

Seoul’s food also reflects this creative tension between old and new. Though its classic dishes are plentifully available in places such as the busy Gwangjang Market, chefs are also experimenting with modern expressions of traditional cuisine. In the Insadong district, for example, the restaurant Si Wha Dam serves playfully arranged dishes that mimic the appearance of Western staples such as pasta, while retaining a distinctly Korean flavour.

This traditionally tea-drinking nation has also embraced the international passion for coffee. You’ll find home-grown cafes in every corner of the city, even the heritage neighbourhood of Bukchon with its traditional Korean homes and their distinctive peaked roofs.

For more of the modern, hit the Hongdae district next to Hongik University. A hotbed of shops, cafes, bars and nightclubs, it’s an energetic expression of young creative Seoul. It’s the place to hang out at a cat cafe by day, before taking in a live K-pop band by night.

Don’t miss: On May 16, Buddha’s birth will be marked by the annual Lotus Lantern Parade through Seoul.

Insider tip: Don’t miss out on a visit to a jjimjilbang, the traditional bathhouse. Found all over the city, they offer a distinctly Korean cultural experience that’s also supremely relaxing.

The details ddp.or.kr, mmca.go.kr, siwhadam南京夜网, bukchon.seoul.go.kr, llf.or.kr, visitseoul.net, visitkorea.or.kr

Tim Richards

The writer was as a guest of the Korea Tourism Organisation.

KUALA LUMPUR, MALAYSIA

Why here: No city suffered more than Kuala Lumpur after  this year’s two Malaysian airlines disasters and its population’s response demonstrated its character.  Buddhists, Muslims, Catholics, Malays, Indians, Chinese and Tamils all grieved together in this city of blurred ethnicity, where different communities have grown up and live together in relative harmony.

Like Istanbul on Europe’s fringes, Kuala Lumpur  straddles Islamic and Western  sensibilities, but in a way that is “truly Asian”, to coin Tourism Malaysia’s catchphrase. This not only makes Kuala Lumpur an absorbing place to visit, with its fusion of influences and architecture styles, but also an important example of how people from different creeds can happily co-exist. DJ Calvin Harris’s first ever Malaysian gig, shortly after MH370’s disappearance, showed the unity, with groups of mixed ethnicity strolling arm in arm, Muslim girls in headscarves and “party responsibly” T-shirts strutting their dance moves and little sign of drugs or drunkenness.

With Bangkok recently beset by political unrest, Kuala Lumpur’s diverse culture and food makes it an inspiring alternative destination, with endless shopping possibilities in the malls of its central Golden Triangle district.   Luxury hotel brands are backing KL’s potential. A St Regis opens next year, new Four Seasons and W properties are due in 2017 and Harrods is developing its first, seven-star, hotel in the city. 2015 is Tourism Malaysia’s “Year of Festivals” so the focus will be on the city’s multicultural celebrations, including post-Ramadan Hari Raya festivities (September) and the Hindu Deepavali light festival (November).

Don’t miss: Petronas Towers, illuminated at night, viewed from the Sky Bar on the 33rd floor of Traders Hotel. shangri-la南京夜网/kualalumpur/traders/dining/bars-lounges/sky-bar/

Insider tip: For authentic local food take the “Off the Eaten Track” tour with foodtourmalaysia南京夜网

The details tourismmalaysia南京夜网.au/destinations/kuala-lumpur

Daniel Scott

The writer was a guest  Tourism Malaysia

SYDNEY

Why here: The high-rise cranes and street-level hoardings radiating from Darling Harbour are a clue that something big is going on (and up). Connect the construction sites and you’ll find Sydney is busy building a multi-billion-dollar “cultural ribbon” that will curve from Broadway to Barangaroo. Among the first attractions to open will be the 250-metre-long Goods Line North, a pedestrian-friendly corridor with elevated spaces running from Ultimo to the Powerhouse Museum (a southern half will connect to Central Station’s Railway Square). The northern end is due for completion in early 2015, coinciding with the opening of “starchitect” Frank Gehry’s first building down under – the University of Technology Sydney’s Dr Chau Chak Wing Business School. The 11-storey brick creation, which resembles a crumpled brown-paper bag, is already dividing critics. In May, as part of Vivid Sydney, a 500-seat theatre built from shipping containers will pop up in Barangaroo to host Here Lies Love, a disco musical from former Talking Heads frontman David Byrne and DJ Fatboy Slim about the colourful life of former Philippines’ First Lady, Imelda Marcos. The theatre will sit just south of six-hectare Headland Park, which opens in July at the northern end of Barangaroo near the Walsh Bay theatre district.

The former wharf’s concrete edge has been ripped out and replaced with 6500 sandstone blocks that hark back to the natural shoreline of pre-colonial times. Overlooking the radical overhaul is The Langham Sydney, which had its own revamp this year. Thirty million dollars later, the luxury hotel in The Rocks will reopen on December 2.

Don’t miss: Boat tours on the second Friday of each month offer a duck’s-eye view of the transformation of Sydney CBD’s western edge. The 30-minute tours include commentary from Barangaroo Delivery Authority staff.

Insider tip: Sydney Architecture Walks also explores the CBD’s rapidly changing western edge through its Three Suburbs Central architect-led bike tour (the next tour is January 31).

Details uts.edu.au, barangaroo南京夜网, sydneyarchitecture.org, sydney.langhamhotels南京夜网.au.

Katrina Lobley

DOWNTOWN LOS ANGELES, CALIFORNIA

Why here: Finally, LA has a centre. With pedestrian and cycle-friendly tree-lined streets, and hip residents moving into once-boarded-up warehouses, the revitalisation of Downtown Los Angeles is in full effect. At the Ace Downtown LA hotel, big name bands pull up to check in and check out the rooftop bar, complete with pool and DJs as well as the craft coffee roaster downstairs. Next door, the Theatre at Downtown Ace, once the United Artists silent movie house and a televangelist’s tabernacle hosts only the coolest events like An Evening with Patti Smith (Jan 29 – 30, 2015). Up the street, Jay-Z has brought his Made in America music festival to the once-seedy Grand Park.

The rejuvenated century-old Regent Theatre is another former movie palace cum concert venue in the Old Bank District that has just opened its doors with the attached Prufrock Pizzeria and a bar called The Love Song, a dual nod to T.S. Eliot. Nearby, the Tex Mex at Bar Ama and Italian fare at Bottega Louis has those in the know queuing for tables.

Admittedly, the new arrival of wellness store, The Springs, offering yoga, reiki and organic juices with an in-house horticulturalist who sings to the fig trees and palms might be a step too far but among the Banksy artworks and giant H&Ms and Zaras, remnants of the past gladly remain. The 97-year-old Grand Central Market opened 10 new food concepts in the past year and expanded to dinner hours Thursday to Saturday. Potion shop Farmacia y Botanica Million Dollar still sells charms, candles and oils to stave off jealousy, legal troubles and poverty. Now is the time to check out this quickly transitioning area before the big brand flagships well and truly take over.

Don’t miss: The Broad Museum, with an adjacent architecturally designed public green space plaza is set to open in Autumn 2015. Holding contemporary artwork from philanthropists Eli and Edythe Broad’s private collection, the museum will feature more than 2,000 individual works by approximately 200 artists. Admission is free, with a charge for temporary special exhibitions.

Insider tip: Be sure to visit the Los Angeles Public Library in the Goodhue Building on Flower Street. You can walk in and take a one-hour tour of the magnificent building with its sphinxes, rooftop pyramid, and eight-storey chandeliered atrium. Renowned writer, Susan Orlean is currently writing a tome dedicated to it. Book and vinyl record lovers should also visit The Last Book Store, a spectacular room selling piles of books and records from a dollar each.

The details  acehotel南京夜网/losangeles, visitcalifornia南京夜网.au, www.thebroad.org.

Andrea Black

The writer travelled as a guest of Visit California.

SANTIAGO, CHILE

Why here: Ay, caramba! This South American gateway, for Australian travellers at least, is often overlooked in the gallop to Peru, Rio, the Andes or Buenos Aires, but if safe, lively, likeable and fantastic value feature in your holiday wish list, the Chilean capital is an essential stopover. As well as a distinguished heritage of Spanish colonial churches, neo-Renaissance banks and public buildings, Santiago brings an artsy vibrance to the traveller’s table, but you need to pick with care from the city’s 32 comunas. Tiny Bellavista is where Santiago wears its skinny ripped jeans, a colourful collage of hipster boutiques, cool cafes, sassy bars  and galleries of avant-garde artworks, and also the former residence of Nobel poet Pablo Neruda, whose home still commands homage. Don’t miss the barrio’s cite with its rows of painted houses arranged along narrow alleyways. Bellavista is also a promising nightlife zone, whatever your taste might be. Barrio Lastarria is an emergent coolzone, populated with students from the surrounding universities and home to cafes that spill across the pavements, and some of the city’s grandest public art galleries, with a sprinkling of fine boutique hotels in the blend. You’re mixing it with dog walkers in elegant Vitacura, and a leisurely class whose primary aim is to be thin and wear the right accessories, but its tree-shaded boulevards and gardens are prime territory for a Saturday stroll.

Don’t miss: The flea market held every weekend in Plaza Mulato Gil de Castro, off Merced Boulevard, Barrio Lastarria.

Insider tip: Emporio La Rosa, ice cream made by angels, in multiple locations. Vanilla with rose, spicy chocolate and mango with green tea are standouts.

The details southamericatourism南京夜网

Michael Gebicki

The writer was a guest of LAN Airlines and the South America Tourism Office.

BREAKOUTS

VALPARAISO, CHILE

Sprawled across a half-Colosseum of leaping hills that rise from Chile’s Pacific shore, frisked by a sea breeze, Valparaiso has become the country’s cultural cauldron, a hubble-bubble of creative energy, vitality, and itchy spirits out to bend the rules. It feels like a Latino Berlin, with sunshine. Temperamentally as well as topographically, there are two Valpos, as residents style their city. El Plano is the plank of the city surrounding the port, a rough-and-tumble neighbourhood better left to its own devices. Rising steeply from El Plano is Cerros, 45 hills that are accessed via ascensores, clanking, creaking, Victorian-era funiculars that hoist passengers from the grid of streets on the city’s ground floor. Where they leave the well-informed visitor is the writhing streets of Cerro Alegre and Cerro Concepcion, furnished with a mad and chaotic tangle of Frenchified manor houses, Swiss-style cottages, turreted mansions and creaking iron shanties with Romeo-and-Juliet balconies. Built when Valparaiso was a key player in the maritime trade of the Americas, these were once the houses of merchants, entrepreneurs, shipwrights and mariners. Many constructed their houses from corrugated iron carried as ships’ ballast, tacked onto timber frames, with fanciful touches as their imagination dictated, and painted in Popsicle colours. Chromium yellow, turquoise, pink, lime – no colour was too outlandish. Hard times came Valpo’s way when an earthquake flattened the city in 1906, closely followed by the opening of the Panama Canal, effectively short-circuiting Valparaiso’s importance as a port. Anyone who could left town, but cheap housing, a sunny climate and the louche, anything-goes style of the portenos proved a magnet for writers, artists and musicians. Among them was Chile’s Nobel-winning poet, Pablo Neruda, who celebrated its mad, dishevelled spirit in his Ode to Valparaiso, and whose former hillside residence, La Sebastiana, is now one of the city’s prime attractions. However it is only over the past few years when rehabilitation funds have poured in and the city notched up a World Heritage listing that Valpo has undergone a rags-to-recherche renaissance. Signs of urban renewal are everywhere. The outrageously florid Palacio Baburizza, an art nouveau pile built by a Croatian immigrant made good, has now become the Fine Arts Museum.  Nearby, the French-colonial Palacio Astoreca, teaming a lipstick red facade with white-rimmed window frames, cuts a fashionable figure in the smart hotel lists. The city’s former prison has been repurposed as a cultural centre in an edgy design by marquee Santiago architects HLPS. Threaded through the cultural landmarks is a piquant, raffish assembly of galleries, restaurants, boutiques and bars with the international boho arts brigade a prominent feature. Some of these artists have taken their brushes to the streetscapes, decorating the houses with huge murals that celebrate, criticise, inflame and entertain. A distinctive South American voice emerges in the narrative works that spread wings as they abandon mundane reality – magic realism transported from print to walls, paint instead of pen.

Don’t miss: Evening cocktails on the terrace of the Palacio Astoreca Hotel.

Insider tip: Take a walking tour with Valpo Street Art Tours for an intimate, expert view, conducted by former street kids.

The details southamericatourism南京夜网,

valpostreetart南京夜网

MICHAEL GEBICKI

The writer was a guest of LAN Airlines and the South America Tourism Office

BUDAPEST, HUNGARY

When I first came here during the fading days of Communism, Budapest was weary, dirty and dilapidated. Over two decades of repeat visits, I’ve watched this sleeping beauty awaken as its soot-scarred buildings are cleaned, squares are planted with flowers and trees, and residents emerge in newfound energy and the latest fashions. With luxe hotels sprouting like mushrooms, river-cruise ships invading the quays, restaurants at every two paces and budget airlines flying in, visitors numbers have soared.

Budapest has turned itself into one of Europe’s most impressive capitals, confident and ever-changing. The city is abuzz with fashion shows and film festivals, always-evolving boutiques and a seeming over-supply of cafes and eateries; some have garnered Michelin stars for their contemporary reinventions of Hungarian cuisine. Hungarian wine is on the improve too, with city wine bars now providing chic tasting spaces. Lively ‘ruin pubs’ – the Budapest version of pop-up bars – are invigorating disused spaces and derelict buildings.

The improvements keep on coming: the city’s just-launched public bicycle system (bkk.hu) now allows locals and visitors alike to pedal around on green bikes for free, or for a minimal fee if it takes more than a half-hour to get from one bike station to another.

What I also like about Budapest is that the dividing Danube River gives you two cities in one. Hilly Buda has history and disgorges tour groups for sweeping views and looks at the cathedral and royal palace. The painted pastel facades of the old town are lovely. Across the river, flat Pest is the pulsating heart of the contemporary city. It’s also the flamboyant showcase of the former Austro-Hungarian Empire. Budapest is the epitome of a grand fin-de-siecle European city, topped by Hapsburg eagles and Greek muses, knitted together by iron bridges, graced with neo-Gothic spires like the set of a light opera. It seems a fitting setting for séances and anarchists, carriages and crinolines.

Pest’s buildings are a marvel of neo-classical and Art Nouveau glory, its public baths and cream-cake cafes a wonder of flamboyant Victoriana. Rattling yellow trams make me think of Freud. The curlicue, red-silk, gilt-gaudy opera house is magnificent. In October, the prestigious Liszt Ferenc Academy of Music (lfze.hu) reopened after a two-year overhaul that has seen its lovely Art Nouveau architecture and interior re-emerge, and a new concert hall added. Budapest has always been music mad.

Budapest is a multi-layered city and it isn’t all waltzes and hazelnut cakes. The haunting Jewish neighbourhood has never recovered from WWII, though reconstructed Dohany Synagogue (Europe’s largest) is wonderful, and lately Jewish cuisine has seen a revival in the trendy restaurants of the Seventh District. There isn’t much left from the Communist era except shuffling suburban babushkas, left behind by the new Hungary. But there are interesting exhibits on Communist times in the Hungarian National Museum (hnm.hu). Memento Park (mementopark.hu) is a photographer’s joy: a knacker’s yard of colossal Soviet-era busts and statues removed from around the city.

Don’t miss: Overlooked terrace gardens studded with ornate pavilions and arcades have always tumbled down the hillside from royal palace to river. Now Varkert Bazar has been sumptuously renovated; cultural spaces, shops and cafés are moving in. See varkertbazar.hu

Insider tip: Been before? Then venture away from the city centre into the Eighth District, a former no-go area whose scrubbed-up aristocratic buildings are being transformed with cafes, art galleries and great bars, well away from weekend stag-party crowds.

The details budapest南京夜网

BRIAN JOHNSTON

The writer travelled as a guest of Viking River Cruises.

POINTER

View all the cities – and the rest of the Hot List – from the November 22 edition on traveller南京夜网.au.

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

Sydney scientists hope for pot boom

Medical potential: Labor is offering bipartisan support for the legalisation of medicinal cannabis use within NSW. Photo: Gary MalerbaMany ill people hope that NSW’s moves toward a medical marijuana trial will eventually bring them relief.
Nanjing Night Net

But some of Sydney’s leading medical researchers hope it signals an opening of attitudes – and funding – that brings Australia into an age of medical discovery and industry via the cannabis plant.

“In coming decades our understanding is there will be widespread applications for a range of chronic conditions, everything from diabetes to asthma to obesity to PTSD,” said Dr David Allsop, a research fellow in psychopharmacology and addiction medicine at Sydney University.

Premier Mike Baird is expected to announce details this week for funding of three clinical trials. The trials, he says, will be an opportunity “to bring together the best minds in medical cannabis research”.

“I see no reason why NSW cannot also lead the world in this field,” he told Fairfax.

That may have perplexed its advocates who point to medical marijuana’s use in Israeli hospitals and legal status in 23 American states, Spain and Canada.

But scientists say NSW is well positioned to lead the way, because of the exciting pre-clinical research already being undertaken here in spite of restrictions and the potential to involve the state’s fledgling but growing industrial hemp crops, legalised six years ago.

But their hope also reflects the fact that in scientific terms, marijuana is novel and unexplored despite its being used casually for millennia.

THC, marijuana’s psychoactive component, was discovered only in the mid-1960s.

The body’s system of biological receptors for marijuana was found only in the 1990s.

The latest discoveries predate the writing of most medical curriculums, said Associate Professor Nick Lintzeris, also of Sydney University. “We’re in the [early stage] of an impending tsunami of medical uses for cannabis once we get over the fear”.

But THC is arguably not its most interesting potential medical component.

There are about 100 other “cannabinoid” compounds in marijuana. Many produce the opposite effect to that which makes recreational users stare at their hands and order pizza.

THC-V decreases the appetite. It has, scientists say, potential as an obesity treatment; a kind of “anti-munchies”.

About 50 clinical trials worldwide are under way relating to the use of another compound, cannabidiol, or CBD, believed to counteract many of THC’s mind-altering effects.

Part of what makes researchers so interested in marijuana is that only about 10 of its roughly 100 compounds are well enough known for trials to be feasible. The scientific potential of the other 90 remains unexplored.

Pre-clinical research is under way in Sydney.

Researchers here recently completed an animal study looking at the compound’s effect on Alzheimer’s.

They bred mice to have similar symptoms to sufferers of the degenerative disease and then injected them with CBD.

The mice showed major improvements in memory; it brought their mental performance back to the levels of healthy mice.

Oxford-educated Sydney University pyschopharmacology professor Iain McGregor is one of Australia’s leading experts on drugs and the brain.

His research has looked at the effects of marijuana compounds on pain, epileptic seizures and appetite.

He thinks treatment for Australia’s growing problem of methamphetamine addiction should be one of the drug’s first applications: something for which there is little treatment other than agonising detox.

“You’ve got something [cannabidiol] that reduces cravings for stimulants and that treats psychotic symptoms.

“It’s a barbecue stopper. Why can’t we do that study now?”

The answer, of course, relates to the burden of researching a drug that is not legal.

Professor McGregor was recently involved in a study that analysed the kinds of marijuana in wide use in NSW.

They found, perhaps unsurprisingly, it was geared heavily towards THC.

But interestingly, it had very little cannabidiol, the compound credited with so much of its medicinal benefits.

The medical experts advising the NSW government have suggested it allow children with epilepsy, chemotherapy patients and the terminally ill to openly trial treatment for their conditions.

Medical marijuana often comes as a tincture, which can be ingested, or even applied to the skin. It can also be grown to have almost no psychoactive properties; it won’t get you high.

But researchers hope the Premier’s changes will spur the freeing and funding of research into marijuana’s therapeutic value.

“Is this a marginal area that’s only going to affect some minor conditions or are we on the verge of a modern rediscovery?” Associate Professor Lintzeris said. “All the data suggests it’s the latter: We’re talking about a mega-billion-dollar industry.”

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

Under siege: Defence Minister David Johnston feels the pain

Out of sync: Defence Minister David Johnston in the Senate on Wednesday. Photo: Andrew Meares Biggest warship ever: The HMAS Canberra is getting ready to launch. Photo: Christian Pearson
Nanjing Night Net

Out of sync: Defence Minister David Johnston in the Senate on Wednesday. Photo: Andrew Meares

Out of sync: Defence Minister David Johnston in the Senate on Wednesday. Photo: Andrew Meares

Out of sync: Defence Minister David Johnston in the Senate on Wednesday. Photo: Andrew Meares

David Johnston Photo: Christopher Pearce

Defence Minister David Johnston was still simmering with anger when he walked into the Senate chamber on Tuesday afternoon for Question Time.

The 58-year-old former barrister was fuming over what he saw as an attempt by the government-owned shipbuilder, the Australian Submarine Corporation, to sabotage him several days earlier. During a Senate inquiry, Stuart Whiley, the acting head of ASC, had appeared to lowball the price it would cost to build 12 new submarines locally – citing a figure of between $18 billion and $24 billion, roughly half what the government believed it would cost.

Johnston saw this as a direct attempt to undermine the government’s increasing attraction to sourcing the submarines more cheaply offshore, perhaps even from Japan, given the new chumminess between that country’s prime minister Shinzo Abe and Tony Abbott. And it came on top of his mounting frustration over the troubled Air Warfare Destroyer program, in which ASC plays a key role.

Seeing an opportunity on Tuesday to create mischief, Labor senators homed in with a few well-aimed questions. They struck political gold.

Johnston began paying out on the ASC in spades, suggesting it had no more than a one-page document to justify its submarine costings and appearing to mock its staff by suggesting they were just looking for jobs. Goaded by jibes from Labor, he went further, eventually bellowing across the chamber, “you wonder why I wouldn’t trust them to build a canoe?”

It was a reckless comment from the man nominally in charge of the process. Johnston didn’t stop to think what effect his remarks might have on the morale of ASC’s staff, or on the navy’s submariners, who entrust their lives to the maintenance the ASC performs on Australia’s existing Collins class submarines.

The next morning, facing  a rare censure motion by the Senate, Johnston tried to dismiss his outburst as a regrettable “rhetorical flourish”. Yet  even his supporters were admitting the remarks were plain dumb. South Australian MPs, who face the wrath of voters if the Adelaide-based submarine program and its thousands of jobs are sent offshore, were furious.

More seriously for the government, it brought to the surface long-simmering issues over Johnston’s competence, rivalries within Cabinet and the centralisation of power in the Prime Minister’s office.

Tony Abbott, who went to last year’s election vowing to scrap the carbon tax, stop the boats and balance the budget, has had Defence thrust to the top of his list by international events such as the rise of Islamic State and the downing of flight MH17, and domestic controversies over defence pay, and fresh revelations this week about the scale of sexual and physical abuse inside the defence force.

Those are just the immediate issues. Asia is going through a profound strategic shift to which Australia’s policy makers are still trying to formulate a calibrated response.

The canoe outburst thrust into the open a question many were asking privately: was David Johnston up to the job?

The weight of opinion is that Abbott will soon decide he is not, with many commentators tipping Johnston would be among the first moved in any Cabinet reshuffle. That said, Abbott firmly backed Johnston this week, and government insiders point to the Prime Minister’s track record of making only rare changes to his team.

Still, unfavourable comparisons are being drawn with Immigration minister Scott Morrison’s record. Love or loathe his policies, Morrison has delivered beyond expectations on what Abbott asked him to do – and he is said to want the Defence job.

Johnston, by contrast, has been seen as  ineffectual and gaffe-prone. And this week he notably failed to front for a press conference or interview on two landmark reports brought down on sexual assault and abuse in the military, instead making only a brief statement to the Senate.

Former and current defence insiders describe Johnston as a “nice guy” who is strong on technical detail. He can talk anyone under the table on the intricacies of submarine propulsion systems or the body armour systems worn by Special Forces soldiers.

But he is seen as weak on the bigger strategic picture, and a poor prosecutor of a political case, including to his Cabinet colleagues, and as too easily steamrolled by powerful figures in the Prime Minister’s office.

“He can talk nuts and bolts and serial numbers, but he has never worked out how it all fits together strategically,” says former deputy of the Defence department Hugh White, echoing a view shared by a number of others who would only speak off the record.

Allan Behm, a former senior defence official who worked for Greg Combet when Combet was defence materiel minister, agrees.

“The problem with Senator Johnston is that he doesn’t really understand the dynamics and complexity of the task that Defence faces, both in fielding a fighting force virtually at a moment’s notice, and at the same time undertaking what are very complex and very long-term procurements,” Behm says.

Johnston, he says, “is a very decent man, but he is simply not a breakthrough type person and he is not decisive”.

Another source who has observed Johnston’s style  says: “Almost all the problems that David faces are his fault. He is a talker, not a doer – too often he agrees with the last person he spoke to. In defence, you’ve got to be the boss.”

The big picture stuff is instead being handled by the Prime Minister and his office, particularly by the intellectual driving force on international security, former diplomat Andrew Shearer. Or on the strategic side, it is Foreign minister Julie Bishop who does most of the talking. As it happens, she is also Johnston’s most powerful backer – some say his lifeline as a minister – their close alliance dating far back in Western Australian Liberal politics.

“He is desperately overshadowed by Julie Bishop,” Behm says. “If you saw him in Washington or at the NATO meetings, Julie Bishop does all the talking but these are essentially defence meetings.”

Journalists calling Johnston’s office to ask about Iraq are routinely referred to Abbott’s office.

It’s not unique for the Prime Minister to take the lead on defence at a time of international conflict. Howard’s defence minister Robert Hill during the last Iraq War used to refer to himself acidly as “the minister assisting the prime minister for defence”.

But insiders say it is amplified in Johnston’s case because his standing with the PM’s office is marginal.

“I don’t ever remember a government that has operated this level of control over a senior minister,” one security veteran said.

Does this actually matter? Supporters of Johnston points out that it makes sense for the defence minister to concentrate on the nuts and bolts stuff, that his detailed technical knowledge allows him to hold Defence to account and make a useful contribution to meetings of the National Security Committee of Cabinet.

But there have been some odd ideas floated. Abbott originally wanted to send about 1000 Australian soldiers to Ukraine to help secure the crash site of MH17, but was told such a force on Russia’s doorstep was dangerous. He is also keen on a jump-jet variant of the Joint Strike Fighter, turning the new amphibious warships – one of which, the HMAS Canberra was commissioned in Sydney on Friday – into aircraft carriers. It is widely seen as unfeasible.

To be sure, the wheels haven’t fallen off defence. But the minister’s weakness means things aren’t going as well as they could, some observers say.

“You can get away with it when nothing much is going on,” one well-placed source says. “But this is the busiest national security committee … that we have laid eyes on for a long, long time. They have a lot on their plate, so if you are trying to get to Andrew Shearer or to Abbott , you stand in a very, very long line and, as a result, not much happens. There is no intellectual time left in a lot of these people’s heads.”

Allan Behm puts it this way: “The best counsel for Abbott would be to find a more energetic and confident defence minister.”

It’s also been a rocky road inside Johnston’s own office. Along with several other ministers, he had his first chief of staff, senior defence official Simeon Gilding, imposed on him by Abbott’s office. Johnston chafed at the imposition, clashing with Gilding and eventually demanding a new chief of staff – a move his supporters say shows he can stand up for himself.

Yet Johnston was blocked when he tried to take the task of steering the forthcoming 2015 Defence White paper out of the hands of his own department and give it to prominent defence analyst Alan Dupont. He also chose former defence official Ross Babbage for another key advisory role. But both appointments were overridden in what one observer termed a pincer movement by Abbott’s’s adviser Shearer and Defence department head Dennis Richardson.

“Johnston was unable to prevent that happening, even though he had personally invested his authority in both appointments,” one first-hand observer said.

But the stoush that really spilled over into the public sphere came after former general Jim Molan – who helped draw up Abbott’s boats strategy – went to work for Johnston in August. He clashed with Johnston’s new chief of staff, Sean Costello, and the arrangement lasted just three weeks.

Molan told Fairfax Media that he encountered interference as soon as he took up the job. The first time he visited the office and asked to speak with Johnston, he was told to make an appointment, he says.

Supporters point out that Johnston has had successes: cracking the whip on the beleaguered Air Warfare Destroyer project, and winning a six per cent funding increase this year while other portfolios were slashed.

Other sympathisers point out that its an incredibly hard job, given the size, complexity and peculiar internal culture of Defence. White calls it a “minister killer”.

If there is one achievement that would secure a legacy for Johnston, it is solving the submarine conundrum.  But to steer a course through the high passions, vested interests, political pitfalls and sheer intimidating gravity of the submarine decision requires a strong, focused minister.

Johnston, who speaks some Japanese, was interested in the country’s Soryu Class boats even while in opposition – well before Abbott and counterpart Shinzo Abe hit it off as leaders and set the stage for a sharing of submarine technology.

One seasoned observer says Johnston was too eager to go down that path.  “He got into a pickle by appearing to be less than principled and dispassionate. He vindicated his preference (for Japan) before they had done any proper analysis.”

Now the field seems open again – largely a three way race among Japan, Germany and France with Sweden a distant fourth.

“The world must look at us and shake their head,” says Mark Thomson of the Australian Strategic Policy Institute. “I talk to the shipbuilders from overseas and the people who want to sell us submarines and they’re frustrated because they don’t know what is going on.”

The right decision on submarines would give Johnston a place in history. But if the rife speculation is correct and he has just months left, that chance has already slipped through his fingers.

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

State election result likely to be close

More than 1.1 million people have already voted in the state election. Photo: Jesse MarlowANALYSIS
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For weeks Coalition strategists have been predicting a tightening of the polls. At times, it seemed like waiting for a drought to break.

Then, about half way through the campaign, a few fat drops of rain fell. Napthine’s people started sounding vaguely optimistic.

There was talk of snaring Labor seats such as Yan Yean, to Melbourne’s north, Eltham and Ivanhoe to the north-east and the Ballarat seats of Wendouree and Buninyong. Even the south-eastern seat of Narre Warren North was seen as a possibility.

Then the heavens closed again. In the second last week of the campaign the optimism on the Coalition side seemed to evaporate and a sense of gloom once again settled.

Finally, right at the end of the campaign, the latest Fairfax Ipsos poll shows the long-awaited tightening has now started to occur after a relentlessly negative advertising assault and spending spree in marginal seats.

Labor’s primary vote is down, the Coalition’s is up and, depending on how you measure it, the two-party preferred result is on a knife edge.

The question is whether it will be too little, too late for the Coalition.

First, more than 1.1 million people – representing about 29 per cent of total enrolments – have already voted.

Never before have voters flocked in such numbers to early polling booths.

In retrospect, however, Labor was clever to have launched its campaign well before the start of the caretaker period. In general, Labor has also conducted a slicker, smarter campaign.

Second, if the Coalition’s primary vote really does end at up at 42 per cent as the poll suggests, it is probably still too low to win.

At the 2010 election the Coalition won with a primary vote of 45 per cent, and then it only just scraped over the line with the narrowest of majorities.

On the other hand, according to the poll, Labor’s primary vote is now just 35 per cent, a far from emphatic endorsement from voters. To win with a primary vote like that, Labor will probably need to mop up something like 85 per cent of Greens’ preferences, slightly above the level of the 2013 federal election.

Third, the final result will depend on how things pan out in the key marginals, particularly in the “sandbelt” seats to the south-east. Labor seems relatively confident it will win back one or two of the four seats it lost in this area in 2010, although there are no guarantees. But it is likely to lose the Ballarat seat of Ripon.

In net terms, Labor needs to win just two seats. As things stand now, it will probably achieve this, although things are less certain than a week ago. Chances are it will be close.

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

Denis Napthine in new grants row

Premier Denis Napthine.Denis Napthine is embroiled in a new regional grants row after his government took just one day to approve a $300,000 grant upgrade for a Warrnambool street where his former horse race partner is proposing the city’s largest apartment complex.
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On October 29, just days before going into pre-election mode, the government notified Warrnambool Council it had approved funds for an upgrade of Gilles St Warrnambool. The council made a formal application for the grant the day before.

Gilles St is also the location for a proposed $20 million, nine-level apartment complex, lodged with the council just weeks earlier by a mystery developer, Baybern Developments Pty Ltd.

Corporate searches reveal that Baybern’s sole director is Colin McKenna, the wealthy Warrnambool businessman, who owns the thriving meat and dairy empire, Midfield Meat.

In April the The Age revealed Mr McKenna and Dr Napthine  jointly owned racehorse Spin the Bottle, sparking a conflict-of-interest controversy around Dr Napthine’s role as Premier, local MP, racing minister and racehorse owner, and public subsidies to booming businesses.

Last week The Saturday Age also revealed that the government approved a regional growth fund grant to assist the expansion of Midfield Meat onto council land, despite advice to Premier Napthine that such use of the fund was “not appropriate”.

Two weeks ago Dr Napthine and Warrnambool mayor Mike Neoh announced the $850,000 upgrade of Gilles Street, in the south of the regional city’s CBD, including the $300,000 grant.

The announcement of the Gilles Street upgrade surprised Cr Neoh’s council colleagues, who have focused for many years on designing, and securing funds for, a separate scheme: a revamping of the central city area.

“It is very curious that this funding has been obtained when a major [apartment] development has now been lodged for the end of this little obscure street,” said councillor and Liberal Party member Peter Hulin.

“I am deeply disturbed at many issues within our council and I have made the Premier aware of my concerns on numerous occasions.”

A spokesman for Dr Napthine confirmed that the grant was in response to a council application, and finally approved by regional cities minister Peter Ryan.

“The Premier was not involved at any stage of the decision-making process.,” said the spokesman.

He said the (first stage) of the project aimed to enhance the northern end of Gilles Street. This is a section of the CBD that has previously been referred to locally as “the Gaza Strip” due to its location between two busy nightclubs, and its reputation as a hotspot for violence, said the spokesman.

He said Dr Napthine had not known that Mr McKenna was behind the proposed apartment development, the biggest residential complex ever proposed in Warrnambool.

On the day of the announcement a senior council officer linked the funding of the Gilles Street works to Mr McKenna’s apartment project, noting that the proposed tower “added to the need for modernising Gilles Street”.

Cr Brian Kelson described the announcement as a “bolt out of the blue”.

“I can’t understand why we’re acting on this at the speed we are with the CBD revitalisation being listed as number one on the council’s priority list, ” he said.

Warrnambool Council failed to respond to repeated requests for comment from The Age.

But it told the ABC it had had been in discussions about the Gilles St grant since January.

Public comment to the council on the McKenna apartment tower proposal closed on October 29.

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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.

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