Industry News

The Queensland Government has announced the appointment of Glen Dawe as the new Chair of Queensland Rail.

State Minister for Transport and Main Roads, Scott Emerson, said Mr Dawe’s appointment was part of the Queensland Government’s drive to improve rail services in the state.

“Mr Dawe brings significant experience as a rail operator to this role,” Mr Emerson said.

“I look forward to working with him to implement the Government’s vision to return to delivering a reliable, customer focused train services for passengers and regional customers.”

Mining giant Rio Tinto has announced a series of changes to its senior management team after chief financial officer (CFO) Guy Elliot announced he will retire at the end of 2013, while remaining on the company’s board.

Rio Tinto chairman Jan du Plessis commended Mr Elliot for his outstanding career during his 32 years at Rio Tinto.

“I would like to thank him on behalf of the Board for his invaluable contribution, particularly in recent years as he helped steer the Group through the global financial crisis and back to a position of financial strength,” Mr du Plessis said.

The company has announced Energy chief executive Doug Ritchie will take on the newly formed role of group executive Strategy at the start of January.

Diamonds and Minerals chief executive Harry Kenyon-Slaney will assume the Brisbane-based role of Energy chief executive from 1 September 2012. 

Rio Tinto Iron Ore International Operations president Alan Davies will be the new Diamonds & Minerals chief executive from 1 September 2012, based in London, and will join the Executive Committee. Alan Davies will retain responsibility for the Simandou iron ore project. Dampier Salt Ltd will transfer to the Diamonds & Minerals product group from Iron Ore. 

Australia’s largest businesses are increasingly less inclined to move their primary transaction banking relationship to a non-big four bank, according to recent research conducted by banking industry consultants East & Partners.

A recent survey of the country’s Institutional business markets show that the big four Australian banks continue to dominate the banking business of Australia’s largest companies, with a collective stake of 84 per cent of Australia’s top 5000 businesses.

The survey found that 91 per cent of those companies are very unlikely to consider a change to a non-big four bank for their banking business.

The survey found that 63 per cent of Australia’s top 500’s transaction banking relationships are currently subject to a period/term contract, whule 40 per cent of these contracts are set to expire within the next two years.

East & Partners’ Principal Analyst Paul Dowling commented, “With payments, cash and deposit business now central to bank relationships with their big customers, transaction banking is definitely the key market share battle ground.

Retail mortgage specialist Loan Market has found that inquiries for fixed interest rate mortgages have flat-lined since the Reserve Bank of Australia (RBA) lowered the official cash rate to 3.5 per cent.

Loan Market Corporate Spokesman Paul Smith said customer inquiries for fixed mortgages had fallen around 15 per cent of total home loan inquiries since the RBA made the series of cash rate cuts over May and June.

“The demand for fixed rate products has fallen as variables rates have basically intersected with fixed rates,” Mr Smith said.

Fixed rate products had spent the majority of 2012 around a full percentage point below variable rates, however with a downward outlook on rates; lenders aren’t shifting fixed rates parallel to variable rates.”

“The feedback from consumers shunning fixed rates is that they’re convinced home loan rates have further to drop and that they’re anticipating a period of prolonged low interest rates.”

Mr Smith that ongoing uncertainty in Europe would ensure that it will be some time before there was any real prospect of interest rates going up.

“Economic conditions outside Australia are expected to influence the RBA to further reduce the cash rate, however with two recent significant rate reductions as well as a bevy of daily mixed messages from Europe, it appears the RBA will be observing the impact of these before making another rate reduction,” Mr Smith said. 

Australia's seasonally adjusted unemployment rate increased 0.1 percentage points to 5.2 per cent in June, as announced by the Australian Bureau of Statistics (ABS). 

The ABS reported the number of people employed decreased by 27,000 to 11,500,500 in June. The decrease in employment was mainly driven by decreased full-time employment, down 33,500 people to 8,065,500, and was offset by an increase in part-time employment, up 6,600 people to 3,435,000. The decrease in employment was driven by a decrease in both male and female full-time employment.

The number of people unemployed increased by 7,200 people to 631,300 in June, the ABS reported.

Monthly aggregate hours worked showed a decrease in June, down 19.6 million hours to 1,602.1 million hours.

The ABS reported a decrease in the labour force participation rate of 0.2 percentage points in June to 65.2 per cent.

This month's article 'What's new in Labour Force' provides details regarding the impact of preliminary population estimates from the 2011 Census of Population and Housing and also the upcoming improvements to the labour force survey as a result of a holistic review of the entire ABS Labour Household Survey program.

More labour force results are in the June 2012 issue of Labour Force, Australia (cat. no. 6202.0), as well as the upcoming June 2012 issue of Labour Force, Australia, Detailed (cat. no. 6291.0.55.001) due for release next week on July 19. Both publications are available for free download (after release) from the ABS website - www.abs.gov.au.

Financial services group Perpetual Limited has announced it has undertaken its first major step in its Transformation 2015 program by reaching an agreement to sell its mortgage processing business (trading as Perpetual Lenders Mortgages Services or ‘PLMS’) to FAF International Property Services, an affiliate of First Mortgage Services (FMS).

Perpetual flagged its intention to sell PLMS as part of its Transformation 2015 announcement last month. As at the end of May, the business employed around 280 FTEs nationally.

Perpetual CEO and Managing Director Geoff Lloyd hailed the sale agreement as a major step towards the company becoming Australia’s largest independent wealth manager of choice.

“The sale allows us to refocus our Corporate Trust business on corporate fiduciary services, in line with the objectives of Transformation 2015. While PLMS is competitively well positioned, Perpetual ultimately was not its natural owner. PLMS fits better within a company that can add scale and technological innovation in this particular business activity, such as FMS,” Mr Lloyd said.

Terms of the sale were not disclosed and the transaction is not expected to be material to Perpetual’s net profit after tax. 

The Federal Government has announced a new high-level dialogue between senior business leaders from Australia and Hong Kong on RMB trade and investment.

Treasurer Wayne Swan said the high-level dialogue will be private sector led, and described it as a crucial vehicle for deepening the valuable market and building deeper trade links between Australia and Hong Kong and will be facilitated by the Australian Treasury, the Reserve Bank of Australia and the Hong Kong Monetary Authority.

Mr Swan said the initiative will bring together senior banking and other business leaders from Australia and Hong Kong to maximise opportunities from the wider use of the RMB in trade and investment in the Asia Pacific region.

“This important initiative will foster closer collaboration between our two economies on the potential to broaden RMB trade settlement, particularly in Australia's key commodity exports.  It will also support the development of new RMB-denominated financing and investment products and closer RMB banking and financial links,” Mr Swan said in a statement.

The dialogue will commence in Sydney next year before continuing in Hong Kong in 2014.

“Today's announcement is another example of the strong relationship across our two economies and our commitment to make the most of the opportunities in our region in the coming Asian Century,” Mr Swan said.

It builds on substantial steps already taken to support internationalisation of the RMB, such as the announcement in March this year of a RMB 200 billion (AU$30 billion) bilateral currency swap between the Reserve Bank of Australia and the People's Bank of China.

The Bureau of Resources and Energy Economics (BREE) has released a report that predicts national exports of liquefied natural gas (LNG) could more than triple to 63 million tonnes per annum by 2016-17.

The explosive growth predictions are the main findings of BREE’s inaugural Gas Market Report, released by Federal Minister for resources and Energy Martin Ferguson.

The report will be updated annually to provide an overview of the current state-of-play in the Australian gas market, as well as providing a snapshot of international developments in the market.

“Natural gas is increasingly the fuel of choice for developing economies because of its versatility and lower carbon emissions compared with other fossil fuels,” Mr Ferguson said.

“Australia is well positioned to take advantage of increased global LNG trade and is on track to become the world’s second largest exporter of LNG by as soon as 2015.

“BREE predicts Australian gas markets will change significantly in the short and long-term as a result of rising LNG production, particularly in eastern Australia.

“There are currently seven LNG projects under construction in Australia, including three at Gladstone in Queensland, which will see competition for domestically produced gas increase on the east coast.

The report further finds that while a tightening Eastern gas market is likely in the short to medium term, increased access to international markets and higher prices are likely to encourage the further development of resources and increase production over the medium to longer term. This, in turn, should moderate gas prices as supplies increase.

The full report can be found here (.pdf)

The Federal Government has released its guidelines for the $6 billion Regional Infrastructure Fund, which it says will unlock investment in communities dealing with the impact of the mining boom.

The multi-billion fund is derived from the proceeds of the Federal Government’s Minerals Resource Rent tax and will pay for major road, rail, ports and other economic infrastructure that supports growth.

Making the announcement at Rockhampton earlier this week, Prime Minister Julia Gillard said the spending formed a major part of the ‘spreading the benefits of the boom’ initiative.

“The release of these guidelines today means that all communities - state and local governments and other stakeholders - will now be able to submit detailed proposals to Infrastructure Australia for assessment.”

Infrastructure Australia will be charged with advising the Federal Government on how best to allocate funding over nine years.

The plan will bring together Federal, State and Local governments, to work with the resources and agriculture sectors and other industries and relevant stakeholders from Gladstone, Rockhampton and Mackay, as well as mining communities across the Bowen and Galilee Basins and the region.

The RIF guidelines are available at:www.infrastructure.gov.au/infrastructure/rifp/index.aspx

Environmental group Friends of the Earth has released a report that accuses the current Murray-Darling Basin Plan of failing to protect at least half of the Basin’s 16 internationally recognised wetlands.

The report comes as the group sends a delegation to the Ramsar Convention on Wetlands in Romania, delivering the report to the Ramsar Convention Secretariat for urgent consideration.

“Australia has an international responsibility to protect these globally significant wetlands and the world deserves to know they are being put at great risk,” Friends of the Earth Campaigns Coordinator Cam Walker said.

“It’s disgraceful that Australia would consider a plan that risks so many Ramsar listed wetlands while the convention’s major meeting is taking place.”

Australian Conservation Foundation Healthy Rivers Campaigner Jonathan La Nauze echoed Mr Walker’s sentiments, saying that healthy wetlands were integral to Basin communities.

ACF and FoE are calling on Federal Environment Minister Tony Burke to require the Murray-Darling Basin Authority to model the return of at least 4000 gigalitres of water to the river.

The Federal Government has opened the final round of public consultation on its plans to create the world’s largest network of marine reserves.

The final call for comment comes after Federal Environment Minister Tony Burke outlined the reserve network on June 14, which once proclaimed under national environmental law will increase the country’s marine reserve network to more than a third of Commonwealth waters.

Mr Burke said the last public consultation period is the final piece in a long and detailed consultation process in developing the network. The 60-day public consultation process will be conducted by the Director of National Parks and will close Monday, 10 September.

At the conclusion of the period, the Director of National Parks will deliver a final report for the Minister detailing the comments he has received over the consultation period.

For more information go to www.environment.gov.au/coasts/mbp/reserves/index.html

The South Australian and Northern Territory governments have joined forces to welcome delegates at the Australia China Resources Symposium, in a bid to show off their rapidly expanding minerals and energy sectors.

South Australian Minister for Mineral Resources and Energy, Tom Koutsantonis, in partnership with Northern Territory Minister for Primary Industry, Fisheries and resources, Kon Vatskalis, jointly welcomed delegates to the Symposium Adelaide. 

Mr Koutsantonis said that while Western Australia was broadly recognised as the country’s leader in minerals and energy exports, South Australia and Northern Territory were rapidly becoming viable investment opportunities for China.

“We recognise that China is playing an increasingly important role in our overall economic development, with substantial growth in exports, education, migration and resources investment,” Mr Koutsantonis said.

Mr Koutsantonis said the South Australian Government had developed the SA/NT Alliance to host the event and promote business opportunities between China and central Australia.

“Together our regions are well-placed to serve as a central resource corridor to meet China’s requirements for key mineral commodities such as copper, uranium, iron ore, and base and precious metals,” Mr Koutsantonis said.

China Mining Club of Australia President Dr Hou Mingjin, Minister Counsellor Qiu Deya of the Chinese Embassy, and Mr Yu Yi, Vice Chairman of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers and Exporters, are among the 200 participants at the two-day Symposium at the Hilton Adelaide.

A new survey released by Newspoll has shown that more than half of Australians mistakenly attribute symptoms of dementia as being a normal part of ageing.

Delivering a speech at the National Press Club, President of Alzheimer’s Australia, Ita Buttrose, said the survey showed a disturbingly prevalent misunderstanding of dementia.

The survey found that nearly one in five Australians said that if a family member had memory loss or confusion they would think it was a natural part of ageing. Ms Muttrose said the results reflect a lack of awareness and stigma surrounding dementia that can lead to social exclusion.

“The findings of the study suggest that many people hold negative attitudes towards people with dementia. Of the 616 people who responded to the survey, over half indicated that people with dementia can not be expected to have a meaningful conversation,” Ms Buttrose said.

“Over a third said that people with dementia could be irritating and one in ten indicated that they would avoid spending time with a person with dementia.

“Instead of supporting people at a time of great difficulty and challenge, the instinct for many in our community is to turn their back and walk away.” Ms Buttrose said.

The release of the survey coincides with a study, Exploring dementia and stigma beliefs, a pilot study released by the University of Woolongong exploring the attitudes of Australian adults aged 40 to 65 years.

The NSW Public Service Association warns job cuts and budget reductions at the Centre for Road Safety could compromise more than a decade’s progress on reducing the state’s road toll.

PSA Assistant Secretary, Steve Turner, says job cuts will jeopardise the ongoing safety of pedestrians, cyclists and road users across NSW.

"The State Government's decision to slash jobs at the Centre for Road Safety will apply the brakes on innovative policy programs designed to save lives on NSW's roads," Mr Turner said today.

"Cutbacks at the Centre for Road Safety will compromise the centre's ability to deliver specialised work including road safety education programs for children and high-impact public campaigns such as the 'pinkie' advertisement telling young drivers that "no one thinks big of you" when you speed.

"The NSW Government has denied frontline services will be affected by its 1.2% cut in staffing across agencies, but what could be more frontline than effective road safety programs?

"Only last month, Minister for Roads Duncan Gay announced that for the first time revenue raised from speed cameras would go towards road safety programs, yet we now hear the specialist staff driving these initiatives will lose their jobs.

"We need an explanation from the NSW Government on how it can possibly make our roads safer while taking the axe to our road safety experts and their support staff," Mr Turner said.

The NSW Opposition claims that the Coalition Government plans to axe almost 900 jobs from local courts and prisons in NSW.
 
Opposition Leader John Robertson said confidential NSW Treasury documents showed an estimated 881 jobs would be cut from the sector over the next four years.
 

Some cuts have already taken effect, with recent closure of the Youth Drug and Alcohol Cour.

The Victorian Government has unveiled its long-term strategy to help guide the Latrobe Valley through future changes and challenges being imposed by the Federal Government’s carbon tax.

"The Roadmap, which delivers on a key election commitment, showcases the region's competitive strengths and advantages and provides a long term plan for industry and employment growth in the Latrobe Valley," State Minister for Regional and Rural Development Pater Ryan said.

The Roadmap outlines the following initiatives:

• An expanded Latrobe Valley Industry and Infrastructure Fund (LVIIF) - An extra $5 million is being provided to expand the LVIIF to $15 million to support business and deliver greater employment outcomes. The Fund will also be redesigned to be more flexible and responsive to business needs;
• Industry Planning – Funding is being provided to develop growth plans for energy, food, aviation and tourism in the Latrobe Valley. This includes $80,000 towards a new Gippsland aviation industry plan and $80,000 provided to Destination Gippsland Inc to develop a new tourism industry plan;
• Investment prospectus - $400,000 has been allocated to support the development of a marketing and investment prospectus highlighting key competitive attributes and opportunities and attract new investors to the Latrobe Valley
• Accelerated business growth program – $300,000 is being allocated to target high performing firms to expand their potential and look at strengthening supply chains across the region;
• Small business support – An additional $225,000 will be provided to the region's local governments to provide business advice, broker support and unlock further potential in the small business sector;
• Competitive advantages from brown coal - The Victorian Government believes that brown coal can, and should play a key role in our energy future. The Victorian Government is encouraging companies developing low emission coal upgrading technologies in the Latrobe Valley and is progressing a new coal allocation framework to open up new reserves of coal.

"The Roadmap will guide future development in the Latrobe Valley by providing an immediate and co-ordinated set of actions and, importantly, leverage Commonwealth Government assistance and funding opportunities," Mr Ryan said.

The Roadmap is attached and also available at 
http://www.rdv.vic.gov.au/business-and-industry-programs/latrobe-valley-industry-and-employment-roadmap 

A report released by an expert panel has found that Victoria’s energy consumers are being disadvantaged by the appeals system for regulatory decisions on energy network charges.

State Minister for Energy and Resources Michael O’Brien welcomed the report from the Standing Committee on Energy Resources, saying it backs the State Government’s push for changes to the regulatory regime for network changes.

"This report strongly backs the Coalition Government arguments that the current appeals regime is not delivering the best results for consumers," Mr O'Brien said.

The current appeals regime in the National Energy Market, known as the Limited Merits Review, determines how electricity companies can challenge regulatory decisions regarding what they can charge for “poles and wires” infrastructure, which make up over 40 per cent of consumers’ bills.

The review is in two stages. Stage one considered how the regime has operated to date. Stage two will make recommendations for improving the regime for the future.

The first stage of the process has now been completed and the panel has found the Limited Merits Review process is not fulfilling the intended policy objectives and does not appear to be providing adequate consideration of the long term interests of energy consumers.

The full review can be found here

The Western Australian Government has called on businesses to submit their Expression of Interest (EOI) for the General Industrial Areas (GIA) to be developed near Onslow.

State Lands Minister Brendon Grylls said interested companies were invited to provide information and their requirements through a LandCorp EOI survey.

The 100ha GIA will form part of the Ashburton North Strategic Industrial Area (ANSIA), being developed 12km south-west of Onslow in support of major new gas resource projects.

Spanning 8,000ha, the ANSIA also encompasses a State port; a common-user-coastal area; multi-user infrastructure corridors; and a heavy industry area for liquefied natural gas and hydrocarbon processing.

Mr Grylls said the GIA would play an important role in helping to optimise the ANSIA’s overall capabilities, and assist in developing functionality, by accommodating businesses which would support the ANSIA’s proponents in construction and operation.

“The State Government is committed to providing enough industrial land within the area and supporting the Onslow community,” he said.

The Minister encouraged businesses to register their interest quickly. The EOI opened Wednesday July 11 and closes 12pm Wednesday August 8.

The survey can be accessed here

The Queensland Government has outlined its interim response to the recently released Commission of Audit into the state’s finances, with Treasurer Tim Nicholls pledging the Government will return the state’s finances ‘to a position of strength’.

Speaking in Parliament, Mr Nicholls outlined the Government’s initial response to the Independent Commission of Audit’s Interim Report, which was released on June 15.

Mr Nicholls outlined the need for a savings target of over $4 billion over the next three years, revealing a four point plan that will underpin the State Government’s strategy.

The four principles outlined by Mr Nicholls are:

• To stabilise then significantly reduce debt; 
• To achieve and maintain a general government sector fiscal balance in 2014-15; 
• To maintain a competitive tax environment for business; and 
• To target full funding of long term liabilities in accordance with actuarial advice 

“The Commission of Audit found that achieving an operating surplus is not sufficient for the Government to attain fiscal sustainability or to improve or even maintain its credit rating,” Mr Nicholls said. 

“A fiscal balance is a more accurate reflection of a state’s true financial picture, as it combines the operating balance with capital expenditure. 

“This is why the Government is now aiming to achieve a fiscal balance in 2014-15.”

The full response can be found here

Protests of up to 3000 people are continuing outside the Grafton Gaol following an announcement by the NSW Government that it will sack 108 workers and close part of the facility.

According to news reports, the police riot squad has been deployed to Grafton, ahead of an expected attempt to break picket lines with trucks to transfer inmates.

NSW Opposition Leader John Robertson visited the picket line, stating that a State Labor Government would re-open the gaol.

"These jobs inject up to $29 million into the local economy. When you remove this sort of investment from the Clarence, the flow on impacts will be disastrous,” Mr Robertson said.