Monday, 14 July 2014


Components of job costing

  1. Track the costs involved in the job
  2. Make sure all of the costs are invoiced to the customer
  3. Produce reports showing details of costs and revenues by job
  4. Quotes – also known as estimates, bids, or proposals
  5. Fixed fee jobs
  6. Time and materials jobs
  7. Revenues
  8. Items
  9. Direct costs
  10. Standard costs

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Monday, 23 June 2014

Wall Street Seems Bullish

“The punchbowl remains on the table, the record player keeps spinning tunes — and the party’s still lively.”

That’s from John Stoltzfus, the Chief Market Strategist at Oppenheimer, summing up the state of the market.

It really doesn’t get any simpler than that. In the view of market participants, nothing has changed to derail the bull market. The economic data is decent, but not so hot that the Fed has to tighten. And the Fed has given no indication that it plans to remove the punchbowl (raise rates). And so the music spins, and the party is lively.

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Friday, 20 June 2014


You may have seen my other post on the AusIMM International Uranium Mining Conference in Perth 2014. I had the opportunity to attend, I have to admit I did not know a great deal about the industry and had my preconceptions before I attended but tried to go with an open mind. Needless to say there were protestors at the door to welcome me on the first day. If there ever was a subject outside of religion which would enrage unite people then Nuclear energy is it.

245932-3x2-340x227As it stands, the uranium market is still a young one whose “laws” have yet to become entirely clear. This tends to disorient observers and decision-makers who are anxious to predict its development. It has a number of characteristics which are sharply differentiated from those of other minerals, including other energy commodities. The commodity has only really been in use for 50 years and has had a couple of issues during that time. Many environmental groups are united against its use. So why are ethical funds investing in the commodity and its industry
A recent Corporate Watch Australia survey reveals that many so-called ethical investment funds invest in uranium mining. Ethical investment itself is booming: from its origins in 1984 with a fund nicknamed ‘Brazil’, because you’d have to be nuts to invest in it, the sector is now worth $2 trillion worldwide. According to the Responsible Investment Association of Australasia, Australian responsible investment portfolios grew from $4.5 billion to $17.1 billion from 2004 to 2007.
Many ethical investment funds use an approach known as ‘best of sector’. This means they do not rule out investing in any legal industry, but instead seek investment in companies that claim to be trying to improve their ethical practices. A sector cannot be ruled out on the grounds that it is simply wrong – if a company can show that it is making some gesture, however tokenistic, to improve its practices, it can be included in an ethical portfolio.
In the words of Yvonne Margarula, Mirarr senior traditional owner in the Northern Territory: “Uranium mining has … taken our country away from us and destroyed it … Mining and the millions of dollars in royalties have not improved our quality of life.” This is a common cry about any form of mining or resources think FMG and the Solomon hub or Tom Price. However, we still fly/drive/cycle and continue to buy the new phones as they hit the market. So how can this be balanced.
I think the stand out “take away” for me was the environmental slant on the discussion. This need for balance came through loud and clear. I have to credit Ben Heard of Think Climate Consulting for this bit of information. Not only does your Iphone require charging daily, it also remains connected to the internet through communication towers and internet substations/routers. The total consumption of your Iphone is around that of a common household fridge. So in short that is a lot of energy required to run your home right now along with your phone or the internet your computer is connected to. The next concept from that is the requirements of a emerging economy. What do they want when they get some spare cash? What is the main device for the majority of internet traffic in Bangladesh?
BP World Energy Report 2013
BP World Energy Report 2013
Pollutants from burning fossil fuels can create health hazards (illness and death). The most common of such emissions from electricity generation are small particulates sulphur dioxide (SO2) and nitrogen oxides (NOX). For an example of this think about Beijing.
What are our other power alternatives? Besides nuclear power the one providing 5.7% of total global energy demand right now. I challenge you to find a alternative which has the capability to replace coal or gas. I’m still looking, and yes the jury is out but I haven’t found one yet. Just imagine how much simpler and more optimised Australia would be, with plunging greenhouse gas emissions and better protection for all of us from escalating power prices if:

  • Nuclear power was considered a “viable thermal power alternative” in Government modelling
  • The assumed emissions intensity limit for new plant was 0t CO2-e because climate change is actually urgent, it demands an urgent response, nuclear can deliver exactly that service and any new plant other than zero-carbon plant, with all we know in 2012 and beyond, is virtual insanity
If I could send you to a couple of links:
Energy as it stands
Energy as it stands

Now Pandoras Promise gave a clear argument. In that America is aimed at an “energy cliff” with economic threats worse than the Great Recession, says Danny Roderick, CEO of Westinghouse. We can’t avoid that, he says, without a readily available supply of clean energy. The film “Pandora’s Promise,” “correctly suggests that nuclear power is the safest, most stable and most secure option for achieving that goal.”
Nuclear is clearly not perfect. I need to take some more time to look into the whole economical and environmental impacts. But just for a second open your mind to the idea that there is a better solution out there, however not complete it could change things over night if it was adopted.
I have not made up my mind but I understand we can not except the need for energy and development. I can not cover the whole topic here in one post. However, I have tried to touch on some common issues, others I have missed altogether. So I am emphasising the conversation; I am happy to hear from all new comers to nuclear power. Challenge your thought and mine. Tell me what you thought of the post and the videos, and what else you would like to know.

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Wednesday, 4 June 2014

AusIMM International Uranium Conference 2014

I will have the pleasure of attending and reviewing the AusIMM International Uranium Conference 2014 next week, with a big thanks to AusIMM.

Australia currently provides about 12% of the worlds Uranium. The first mine was built in 1906 at Uranium Hill, and then Mount Painter in South Australia in the 1930s. Following the Japanese Fukushima nuclear disaster in early 2011, many countries are scaling back their nuclear power production, with some setting deadlines for a complete shutdown of all nuclear power reactors. It is expected that this may impact on demand for Australian Uranium. State governments have now approved mine development in Western Australia and Queensland.

Despite the clear environmental benefits Uranium mining and its use has remained a point of controversy. China has new energy targets in place which will require clean fuel. Wether or not Australia is a player in that game will depend on how the industry progresses in the next few years. Even Hawke has been weighing in on the debate. 

We heard recently that the Japanese confirm that not one death has been caused by radiation from Fukushima. There may be some longer-term issues coming, but lets not forget the level of smog in China at present. 

How are we to venture forward in this world? 

The two day packed technical program will shed some light on the industry at the moment. The event boasts some very interesting keynote presentations by renowned Australian speakers, a variety of networking functions, a trade exhibition and more.

The speakers include:

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More points on the Pikkety Book

  1. Jim Hamilton
  2. Per Krusell and Tony Smith
  3. James Galbraith
  4. Update: Debraj Ray
  5. Update: Larry Kotlikoff
  6. Update: Jason Furman

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Monday, 2 June 2014

Deregulation of University Fees "a dirty word"

Illustration: John Spooner AAP

Currently, domestic undergraduate students in Commonwealth supported places at public Australian universities, pay a contribution of their tuition fees and the Australian Government subsidises the rest. The student contribution is set by the government and varies according to discipline category of the courses studied, with the top band including law, accounting, economics and commerce charging $10,085 student contribution per year.

Earlier in 2013 the Grattan Institute published Graduate Winners, a report which suggested that government subsidies for tertiary education should be cut, given the already strong incentives to pursue higher education, and the low net public benefits that students of certain disciplines accord to society.

The acceptance in the G08 university community of the need for reform is at a level rarely seen on any issue. The directions for reform are similarly clear. As Melbourne University vice-chancellor Glyn Davis has pointed out, while universities have been hoping and lobbying for years for more government money, the decline in funding per student seems inexorable. There is therefore now a broader acceptance of the need for fee deregulation, particularly with the opening of university education to thousands more students, and the increasing private benefit to those who complete university studies.

The Kemp-Norton recommendation seeks to level this playing field.

The recommendation suggests that it would have a number of benefits:

First, it would reduce the cost to students of studying for higher education qualifications outside the university system. At present, most of these students have to cover the full cost of their course through the fees they pay, which usually means that they pay more than their university-enrolled counterparts. It’s hard to see the logic of this, given that these students are more likely to come from disadvantaged backgrounds. This is a great way of promoting access to higher education.

Second, the proposal would introduce more competition into the higher education market. The Kemp-Norton review itself celebrates the effect that increased market forces have already on the sector, especially in lifting quality and encouraging innovation. But the impact of the market is highly constrained at present — by the near-monopoly given to universities over government-funded places, and by the controls imposed on universities in setting student charges. The Kemp-Norton recommendation removes the first these constraints and paves the way for removal of the second.

Third, greater competition will bring with it greater diversity of institutions. For example, it would allow some institutions to focus entirely on teaching, unlike universities, which have dual missions of teaching and research. This would allow more specialised institutions to develop, addressing particular skills needs or student cohorts. Universities would have even greater incentive to play to their strengths, to improve quality and to articulate more clearly the benefits they offer compared to other types of provider — such as access to the country’s leading researchers in the classroom, opportunities to study in great universities around the world and qualifications that are highly sought after by employers.

Applying some basic economics of commercial business some of the deregulation issues will be addressed. Generally speaking public investment and subsidies are typically inefficient but in some cases such as education they are seen as essential to growth (Espinoza, 2012). Some subsidies however create perverse mechanisms in dynamic contexts.

The political economy of subsidies deals with the central question of how the political process interacts with the heterogeneity of interests in society to allocate subsidies and determine the pace of their removal. More specifically, do the decisions of elective officials always lead to the socially optimal use of subsidies in the manner described earlier?

The conclusions of a number of studies (e.g. see Gardner, 1996) are that subsidisation is correlated with the political influence of the beneficiaries (e.g. retirees and the elderly in the case of social security or middle and upper class groups in the case of educational subsidies). Or in other terms the class of the graduates and the class of the university.

A hierarchy of institutions results from their ‘donative-commercial’ revenue sources and from the radical differences among them in their successes -- past and present in raising and accumulating donative resources. These differences in donative wealth, in turn, strongly influence their current commercial circumstances. Schools that get a lot of donated money from endowments and legislatures and gifts can and do sell, in their commercial role, at a lower price or higher quality. “The market” for higher education is very different, then, from commercial markets and competitive market forces play out in much different environment. They may still work, perhaps, but they do so on a strikingly tilted playing field.

Subsidies have wide ranging effects, for example mortgage subsidies and high wages in the public sector have created “queues‟: the benefits of landing a public sector job (or getting a subsidised mortgages) may be so high that some would rather wait and stay unemployed (or rent an apartment) in the hope of obtaining the coveted benefit later in time rather than going for an alternative (private sector job; commercial bank mortgage).  Is it really that bad that there is an increase in university attendance due to low fees? Can we afford not to be competitive on a global scale in terms of education as wealth?

Distortions are highly inefficient and may be worsened by further government intervention: for instance, a wave of hiring in the public sector may decrease labor supply to the private sector (or increase unemployment) since job seekers understand that the probability of landing a government job has increased. Therefore, the distributive policies in the case of education should be evaluated carefully, taking into account both theory and experience with specific government programs, so that this kind of egregious distortions be removed. So can this be done with higher education? Can the market stabilise itself with the help of the government or does it require intervention?

Perfect competition – competition is affected between firms if they function in this kind of hierarchical market.

Two things, I think, can safely be said: that competition will take place largely within segments or ‘bands’ or ‘packs’ of similar schools within the hierarchy and that it will have a very different character within differently positioned bands. For those market segments toward the bottom, competition takes rather conventional economic forms – a competition for customers of ordinary input quality that focuses therefore on numbers, on quantity of sales, on filling seats. It emphasises price, convenience, and quality for a customer of modest aims and it is most regionally or ideologically limited. For market segments at the top of the hierarchy, donative resources are great, student quality is important and amplified, competition is national, and it focuses largely on position and maintaining or improving student quality (Clotfelter, 1992).

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Sunday, 1 June 2014