Monday, November 19, 2012

Australia is likely to fall off a “growth cliff”

Australia is likely to fall off a “growth cliff” when the resources investment boom ends in the next few years because the economy is not becoming more productive, says Michael Chaney, chairman of National Australia Bank and Woodside Petroleum.

Economic growth was likely to slow to less than 2.5 per cent after 2015 because of burdens on business, including overlapping state and federal environmental regulations, and Labor’s industrial relations system, which made the workplace less ­flexible, along with other problems, he told The Australian Financial Review.
Mr Chaney’s warning is particularly significant because Woodside will soon make a decision on whether to build the $40 billion Browse gas project at James Price Point in ­Western Australia.
“Every major project under evaluation, including Browse, has to confront this issue,” he said. “Unless you are highly productive in Australia, projects will go offshore and construction jobs will go offshore.”

A reported $20 billion blowout in the cost of Chevron’s Gorgon gas project in WA has raised concerns across the industry, and in the investment community, that Australia’s high costs, combined with lower gas prices, could lead to the cancellation of one or more of the $100 billion-plus of liquefied natural gas projects waiting for clearance.


  1. Shell rethinks Arrow LNG as costs blow out

    ROYAL Dutch Shell is reviewing the ownership structure of the planned $20 billion Arrow coal-seam gas export project in Queensland as cost blowouts continue to plague the sector.

    The oil and gas giant has begun talks with third parties to help it develop the project but says it may delay approval as it waits for the overheated construction market to cool.

  2. It is way past time Carol Martin admitted the awful truth - this mining boom will only make things worse for the more disadvantaged among us.A whole lot worse.For the majority of Australians there is no upside to this.Look at the mess mental health is in.Public transport.Cancer treatment.Low paid workers.It is a long list.

    What does Barnett do?Gives over $300 million to the Chinese to grow sugar.Wants to give $400 million and cut royalties for Oakajee.The $600 million pond around the bell tower.The stadium in the swamp - free for Packer.It is a long list.

    The gas plant at JPP is doomed no matter what,but in any case,does anyone seriously see Aboriginal kids being looked after first given the Premiers to do list?

    We all know the direction we are headed in - and its the usual one - rich get richer and poor get poorer.

    And if you think its bad now just wait until the bill comes in!And the cuts to health and education and training etc are bought in to pay for it all.

    By some miracle they think there is a way to build at JPP - it will be the end of any hope we had to have a half decent community.So not only will things get worse but we will have the worlds most foul polluting machine - "the fridge" - to drag us down into the depths of despair that no benefits package could put a dent in.

    Barnett and Martin must have a very low opinion of us.They think people believe this gas plant nonsense?Heavy industry is the big killer and everyone knows it.

    1. Westpac chairman Lindsay Maxsted also expressed concerns about how the dollar would affect the economy's transition into its next phase, saying he ''struggled'' when thinking about how businesses could regain their competitiveness in the face of the high currency.

      ''It's the first time ever that since commodity prices have come off we haven't seen an adjustment to the Australian dollar,'' he said.

      Talk of a ''growth cliff'', alongside the high dollar, raises the question of where future jobs growth will come from.

      Despite all the investment in mining, the latest figures show the industry employs about 2.5 per cent of the workforce, or 270,000 people. This compares with 962,000 in manufacturing and 1.2 million in retail - industries that have been cutting jobs due partly to fierce overseas competition caused by the dollar. With many businesses reluctant to hire when the outlook is so uncertain, most economists also expect unemployment to drift higher next year.

      In another blow to companies competing with miners for staff, the boom has also pushed up the cost of hiring skilled workers in key trades and professions.

      The chairman of Manufacturing Australia, Dick Warburton, bemoans that the high cost of labour is ''the biggest legacy'' of the commodities bonanza for manufacturers.

    2. This year, juvenile offenders were apprehended for almost half of all crimes in the Kimberley.

      In September, children as young as 13 were responsible for a horrifying sexual assault on a 22-year-old backpacker who ventured into back streets of Broome on her way home from the pub.

      The Shire has already announced plans to improve street lighting in the back streets of Broome, hoping it will reduce crime.

      However, Ms Banks believes the vast majority of young people who loiter are not necessarily up to no good, but simply bored or escaping trouble at home. Picked up with her 15-year-old friend just after 9pm, Shantelle, 17, agrees that even though it is scary, many of her friends walk the streets at night "to get out of their bad situation".

      "Some of them are in bad homes and they just want to get out . . . they have parents that are always fighting or using drugs," she says.

      Shantelle has HYPE's number stored in her mobile phone because taxi drivers often refuse to drive down the back streets.

      By 10pm, the HYPE phone is running hot and teenagers under the influence of drugs and alcohol are roaming the streets.

      Ms Banks' co-worker, nursing student Ellen Piesse, fields calls as they drive back and forth between homes, service stations and phone boxes, ferrying as many children as possible.

      If they come across young people in a well-lit area, they encourage them to call their parents. With just one car, they must quickly judge which children are most at risk of harm.

      “Stay at your mate’s place until we come and get you – we don’t want you walking the streets,” Piesse tells some callers, who must wait up to an hour.

      HYPE workers often find children as young as six on the streets without adult supervision and unable to identify a safe place.

      In that case, they have to phone Crisis Care for help. Often, young people they strike up a rapport with will disclose sexual abuse, violence or thoughts about suicide.

      “I spoke to one kid and said ‘what have you been doing today’ and he said ‘digging my cousin’s grave’ – he was 10 years old,” Piesse says. “That’s when it hits home.”

    3. DO THEY CARE? - no they couldnt care less.

      The State Government has defended its decision not to extend its Stolen Wages Reparation Scheme, which is due to end next week.

      The program was set up in March to compensate indigenous workers who had their wages held in trust by successive state governments until the early 1970s.

      At least 1800 people have applied for the $2000 payment and the Aboriginal Legal Service says not enough consideration has been given to the task of helping people through the process.

      The ALS has called on the government to keep the scheme open until March 2017, but the Minister for Indigenous Affairs Peter Collier says that is not necessary.

      "We did open applications for six months and we had a very comprehensive attempt to engage with the people that were directly involved," he said.

      "What we did do as an act of good will we extended it by a further three months."






      He is an artist best known for wrapping the Reichstag in Berlin and for siting thousands of coloured umbrellas across valleys in Japan and America. Now Christo is creating for Abu Dhabi a colossal structure that he claims will be the world's biggest permanent sculpture. Estimated construction costs of $340m (£212m) would also make it the world's most expensive.

      A 150-metre-high, flat-topped pyramid would be taller than St Paul's Cathedral or St Peter's Basilica and would overshadow the Great Pyramid of Giza – creating Abu Dhabi's answer to Egypt's pyramids or Mecca's Kaaba.

      The Mastaba, made out of 410,000 multicoloured oil barrels, is planned for what Christo describes as a "spectacularly beautiful" desert landscape, Al Gharbia, 100 miles from Abu Dhabi city.

      Speaking to the Observer, Christo said a site near Liwa oasis has been approved. The region boasts some of the world's highest dunes, with gazelles among the wildlife. Stacked barrels painted in colours inspired by the yellow and red sands will recreate the visual effect of an Islamic mosaic, he said: "When the sun rises, the vertical wall will become almost full of gold."

      OH YEAH

  3. West Australian mining communities are worse than those in Queensland when it comes to drunken violence and the state's mining bosses take less responsibility, according to a study examining violence committed by men.

    The Queensland University of Technology report studied the higher rates of assault, violence, debilitating injuries, car accidents and suicide in regional Western Australia, Queensland and New South Wales.

    The workers then get bused to these pubs that are surrounded by wire mesh, they drink hard and get plastered, get into fights, sleep it off and go again.

    The university's head of justice studies, Professor Kerry Carrington, spoke to people in two remote WA towns but would not name them because the small population meant individuals canvassed would be easily identified.

    "These (communities) are in a David and Goliath struggle, these are little people in a community that have very little voice, that are watching these massive, powerful, big mining companies build these work camps on their door steps," professor Carrington said.
    "In one Western Australian mining community, which was surrounded by work camps housing about 8000 mostly male workers, the rate of violence was 2.3 times the state average.

    The workers then get bused to these pubs that are surrounded by wire mesh, they drink hard and get plastered, get into fights, sleep it off and go again."

    She said the three-year study, published in the British Journal of Criminology, revealed a lack of entertainment options other than alcohol for fly-in, fly-out mine workers often led to a spike in violence, a higher risk of sexually transmitted diseases and mental health problems.

    But the situation was "much worse" in WA than in Queensland because of the number of young men with high disposable incomes living in towns with very serious gender imbalances, Professor Carrington said.

    "Queensland is regulating these social impacts somewhat by forcing mines to plan for them but WA does not have the same policy," she said.

    "The big problem we had in the WA mining industry was that (mining executives) refused to talk to us and didn't see it as their problem. That's because they sub-contract out their workforce."