Sunday, 8 September 2013

Open for business, but how long is a piece of fiber optic cable

Looks like he has finally got his feet under the table. 

Well that was disappointing for me personally but perhaps Abbott is not such a bad thing. 

Things have been going back and forth in the ALP camp for some time, although admittedly I do like the policy perhaps economically speaking it’s a good thing Ruddy is out.
First off the bat will be the removal of Carbon Tax laws in the first sitting of the new house this October. 

In an election debate where the real question on climate policy – how to reach the targets guided by the science (i.e. 25 per cent or more) – has never been raised by the mainstream parties, Abbott revealed that he was quite prepared not to even make it to first base/believe in Science. If the budgeted $3.2 billion proved to be insufficient to reach the 5% reduction target – as Treasury and private analysis conclude unanimously – he would not spend another dollar to ensure that it does.

Putting aside Australia’s record high temperatures over the last 12 months, and just three weeks ahead of the IPCC report, the fact that the ALP couldn’t agree on the tax has left us in the same situation we are in now with the non-believer Abbott. Perhaps once he has brought the house together he can return some confidence to the market.

On that note, if he can bring some order to things his side the hung senate should hopefully be a bit easier to navigate.  The persuasion may be in his favour so should be able to deals but when there are deals to be made in the senate there is a price to pay. As the numbers stand, eight minor party senators from separate groups, some of them virtually unknown entities with no track record and no known policies, will be given the power to decide whether or not each government bill should be passed.

We owe this miracle to the fact that roughly 25% of the votes on Saturday went to the downright odd and obscure parties. It’s almost as if the ‘people’ couldn’t care less, or realise that we are between a rock and a hard place with these two. A gloating winning speech followed by a gloating outgoing speech on the night told a different story. Even if this was a time when you 'know you have given it your all', and time for the old guy to step down we could have had more positive change then this. As the ALP seeks to maintain as a fighting force for the future I hope for all of us we are directed towards a more definite and confident market in the interim.  

Thursday, 5 September 2013

How good is it really?

Tomorrow I will have the chance to vote in my first Australian election as a proud citizen of this country. There are quite a few things worrying me about the progress of the electioneering so far. Normally (at least in the English elections) I have decided well before, the parties have distinct divisions and there is no faux presidential race. As much as I don’t like Cameron, conservative policy is straightforward.

A word of warning, my views are distinctly Keynesian. Australia rode through the last recession on the back of the commodities, although the $900 from Rudd was a nice boost to the pokies and TV sales.

1) All of the economic changes are being proposed for the very near future. As such, a change of government is unlikely to have major implications for the growth, currency or interest rate outlook. A change of government is unlikely to result in a major shift in the regulatory of macroeconomic landscape, with limited implications for the growth outlook.

2) Australia currently has a structural budget deficit that is expected to persist at least until 2017/18. As a result, the next government is likely to face some tough choices on the structure of Australia’s tax system and the sustainability of government expenditure moving beyond the next parliamentary term. A reduction in foreign aid proposed by both parties (note not the actual reduction but a proposed holding back on the total increase this financial year) is not only sensible but also necessary.

3) Marriage policy here is a joke, and this needs to be resolved as soon as possible. Even some of the most conservative countries have moved forward on this.

4) Carbon pricing or tax is really important but a reliable solution needs to be offered. The ALP proposed bringing forward the emissions trading scheme to 1 July 2014 and cutting back Energy Security Fund from $4.3 billion to $2.5 billion.

The Coalition committed to abolish carbon price. Abolish the Climate Change Authority, Climate Commission, and the Energy security fund. Retain the Clean Energy Regulator and the National Greenhouse and Energy Reporting Scheme (NGERS) as part of the administration of the Emissions Reduction Fund.

I don’t believe that sweeping hard-line statements are the way to bring about the correct change here. Rudd's about turn made it clear that no one was really sure what was working. But some policy is better than none at all. 

Europe can claim to be ahead here: since 2005 it has had a cap-and-trade scheme which sets a limit on emissions and allows companies to trade pollution permits up to that level, thus putting a price on carbon. But the scheme is complex and has been undermined by vast exemptions—flaws which apply to China’s new scheme, too. The European Parliament will vote on an emergency fix on July 2nd. Even if a compromise is passed though, it will merely stave off collapse for a year or so.

Right now I don’t think any government or senate offers the right solution to this. I’m torn because my industry depends upon high demand, but I believe a staggered approach to allow some freedom to companies but bringing in a tax over time is the correct way to manage climate change.Corporate governance is becoming more important, over time with combined policy and public accountability I believe the right changes will come. 

Whoever wins the upcoming election; the completion of the election itself could provide a boost to the economy and that is a win for everyone. As I have been reminded many times in the last few weeks, it’s not about voting for who you want to win, it’s about trying to figure out who is telling less lies.

Tuesday, 3 September 2013

12 Technologies Set To Transform Mining

Emerging technologies are set to change the way miners operate over the next decade.

Delivering improved productivity, cost savings, and safety advancements a report from the McKinsey Global Institute has identified 12 technologies that could drive economic transformations in coming years.

While not all will directly impact mining, they will play a role in mining’s supporting sectors including manufacturing and health.

The report explains that the combined application of all 12 technologies, including advanced robotics, energy storage, and mobile internet could have a potential impact of between $14 trillion and $33 trillion a year in 2025.

Topping the list is mobile internet which is expected to improve worker productivity and service delivery.

Enhanced communication technology has not only improved mine site safety but transformed the way safety is managed.
The roll out of the Federal Government's National Broadband Network is expected to create a wealth of opportunity for the mine sites it touches, and the increased bandwidth that comes with the NBN will enable the facilitation of increased remote mining operations.