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Australian-Based Company to Build Coal Power Plant in PNG

An Australian company’s plan to build a coal-fired power plant in Papua New Guinea is a step closer to reality after a memorandum of agreement was reached with the local governments.

Since at least 2014, Australian-based Mayur Resources has been proposing to build a coal-powered power plant and coal mine in Lae, Morobe province. Now a MOA has been signed by the company, the Lae City Authority and the Morobe Provincial Government for a new 60-megawatt power station.

PNG’s Communications and Energy Minister Sam Basil said the plants will relieve Lae City of its blackouts and generate a K5 million or AU$2.09 million in revenue per year for Lae and Morobe governments, as well as 300 local jobs.

Basil said while PNG is a signatory to the Paris Climate Agreement, the country should have the right to use coal power. “Big nations are not reducing [coal emission], therefore, Papua New Guinea needs to be given a quota,” said Basil.

“In PNG, we’ve been denied that right [to burn coal] for a very long time. As mandated leaders from Morobe, we made a decision to make sure we provide cheap power for Lae City to develop into an industrial hub.”

Lae MP John Rosso said coal processing will be significantly more affordable than environmentally friendly alternatives such as hydro power.

“Of course we can utilize hydro power and solar power,” said Rosso. “However, we can’t always wait for this to happen in the next 20 years. We have situations with blackouts to address immediately and thus the coal power option is the way forward.

“When I looked at the facts and figures of how efficient coal power is used in Australia, it was encouraging to back the idea for the coal power plant to be established in Lae.”

PNG’s Conservation and Environment Protection Agency has endorsed the plan following an assessment.

Basil said the power facility will be ready in two years.

Afterpay Shares Hit by Upcoming Senate Inquiry

Afterpay shares dived following news that payday lenders, debt management firms and buy-now-pay-later platforms will be the subject of a new Senate inquiry.

The inquiry, proposed by Labor, is likely to pass the Senate after receiving support from the Greens, independent Derryn Hinch and Centre Alliance senators Rex Patrick and Stirling Griff.

“Financial counsellors are telling us that their clients are coming in with increased debts, as a result of predatory debt-management firms and other unlicensed financial services providers,” said Labor’s Jenny McAllister.

Consumer groups said the “debt vultures” often exploit consumers struggling to get loans from conventional sources, and operate with no regulation. “If you think the banks, insurers and superannuation funds are ripping people off, they are nothing compared with the exploitative conduct of this sector of the marketplace,” said Gerard Brody, chief executive at the Consumer Action Law Centre.

Afterpay shares have performed well this year, soaring 90 percent since January.

Falling 19 percent to $11.35, Afterpay was not the only financial company to get hit with the news. Cash Converters shares were down 12 percent to 26 cents, Money3 dipped 14 percent to $1.7, and Zip Co fell 12 percent to 93 cents.

Dominique Rui-Lin Teoh Frank Lowy

Billionaire Frank Lowy Urges More “Ambitious” Immigration Policy

Westfield co-founder and billionaire Sir Frank Lowy said Australia should embrace “ambitious” and “generous” immigration program.

In the Lowy Institute’s annual Lowy Lecture on Thursday night in Sydney, the businessman said the country should focus on immigration “targets” rather than “caps”, especially now that “our borders are secure”.

Lowy talked about his own past as an immigrant who fled Nazi persecution in Czechoslovakia and arrived in Australia in 1952.

“To imagine a better life for yourself and your family and to leave behind all that is familiar requires a special kind of courage,” he said.

“Australia needs more of that courage… We are focusing too much on the problems and forgetting about the opportunities of immigration. Let us learn from our history. Immigration has been great for Australia in the past. I believe it will be great for Australia in the future.”

Last year Australia recorded its lowest permanent migration level in a decade with about 162,000 permanent visa granted, compared with around 190,000 in the preceding four years.

Lowy also touched on the topic of Canberra’s relationship with the US and China. He said that the country’s allegiance should lie with the United States rather than the individual president.

“I regret that Mr. Trump does not see the great advantages that flow to America from its alliances and the global trading system,” said Lowy. He also urged Canberra to co-operate with Beijing without letting itself get dominated. “If you don’t look after your own interests, the person across the table certainly won’t.”

peabody energy mates in construction mining r u ok

Australian Mining Companies Join Suicide Prevention Program

As Australia celebrates R U OK Day, an industry has been working on its own awareness program. More than 1,000 construction and business sites across the country are taking part in MATES in Construction Fly the Flag Day, a campaign to raise awareness of suicide prevention.

MATES national chief executive Chris Lockwood said the number of participating sites has more than doubled last year’s, indicating greater momentum for the program.

“For the first time this year we have mining and energy businesses participating along with construction sites,” said Lockwood.

As part of its campaign, the organisation has trained over 140,000 workers to develop life-saving skills to recognise co-workers’ possible struggles and intervene when needed. According to Lockwood, 190 Australians who work in the construction industry take their own life each year, accounting for a suicide every second day. Australian Mining reported that construction workers are six times more likely to die from suicide than a workplace accident.

“The construction industry, which is predominantly male, has a culture that can often leave workers feeling isolated and not knowing how to ask for help,” said Lockwood.

“Factors such as job insecurity, high work demands, and financial stress combined with relationship breakdowns put workers in the construction industry at greater risk and MATES will continue to do all we can to prevent suicides in this and similar high-risk industries.”

Brad Geatches, MATES chief executive for Western Australia said that the industry was partly responsible for workers’ distress due to its competitive, insecure nature. However, ”society is generally becoming more aware of the issue of mental health and suicide, it’s coming out of the shadows, stigmas are breaking down,” said Geatches.

Rental Affordability Continues to Decline, AHIG Report Finds

Renters in NSW, Victoria and Queensland continue to suffer from the increasing gap between their household incomes and the median rents, a new report has found.

The 2018 Affordable Housing Income Gap Report revealed that while property prices and median rents across Australia increased by 82 and 76 percent respectively between 2006 and 2016, household incomes grew by just 40 percent.

“Over the past two decades, housing affordability in Australia has deteriorated at an extraordinary rate,” the report said. “Recent research by the Everybody’s Home campaign shows it is now generally accepted as fait accompli that home ownership is beyond the reach of average income earners and a significant proportion of the population has all but given up on the “Australian Dream”.”

Melbourne is the worst capital city for renters, as median rents were up 75 percent while incomes grew by merely 43 percent. Brighton and Brighton East were the least affordable suburbs to rent in the city, requiring 42 percent of an average renter’s weekly income to pay the median rent. Melton was the most affordable with 21 percent.

In Sydney, Woollahra led as the least affordable suburb with 44 percent of income required to pay median rent. Regional NSW did not fare better. Byron’s median rent at $590 was worth 48 percent of income, while Port Macquarie real estate took 34 percent of income for the median rent of $390.

Queensland had the most modest growth in prices. The increase in rents of 61 percent over the decade was also partially offset by the steady income growth of 40.5 percent. Eatons Hill was the least affordable locality in the Greater Brisbane area, while the localities of postcode 4184 were the most affordable.

Find the report here.

Sydney Property Prices Continue Dropping

Homes for sale Sydney today are $50,000 cheaper on average than last year, according to new figures released on Monday.

The latest CoreLogic home value index revealed that the median sale price of Sydney units, houses and townhouses overall has fallen 5.6 per cent in the past 12 months, dropping from over $900,000 in mid-2017 to $855,287 now. Median price fell 7.1 per cent for the detached house category, and merely 2.2 per cent for units.

The fall was driven by weak winter sales activity, with the median price dropping by 1.2 per cent over June, July and August combined.

Experts predict the downward trend in property prices would continue into 2019. Buyers of detached houses would be even better placed due to lower demand and more significant drops in prices.

Australian Business Conditions Continue Declining in July

Business conditions have slipped again in July across most Australian industries, continuing the downward trend starting in April.

The NAB’s monthly business survey revealed that conditions fell in the mining, manufacturing, retail and finance sectors. “The retail sector remains clearly the weakest, declining again in the month to see the retail conditions index fall to 0 points,” said NAB chief economist Alan Oster.

Construction became one of the few industries to have a “sharp” increase in conditions, which Oster said likely came from “the large pipeline of both residential and infrastructure-related work”.

Measures of trading and profitability also dipped in July, with the latter falling five points to +10.

However, business confidence remained relatively consistent, rising one point to +7. Employment index also rose five points to +10. “The employment index – based on historical patterns – is consistent with jobs growth of around 23,000 per month, which should see the unemployment rate continue to edge lower over the rest of 2018,” said Oster.

Mining industry had the highest employment index, followed by finance, business and property services and construction.

“Overall, the survey results are broadly in line with our outlook for the economy for the rest of 2018,” said Oster.

“The business sector looks relatively healthy, and we expect to see enough employment growth to see a gradual reduction in spare capacity, which should in time see a rise in wage growth, and a more general lift in inflation.”

Philip Lowe Crawford Forum Flickr

Immigration-Driven Population Growth Key to Economic Success, RBA Governor Says

The Reserve Bank governor has named immigration-driven population growth as the reason Australia outpaces other advanced economies.

In a speech in Sydney, Philip Lowe said the nation’s high immigration levels helped in slowing down the rate of population ageing, lowering the old-age dependency ratio and driving higher than average growth in recent years. Lowe said the influx of new migrants, whose median age sat between 20 and 25, helped upturn the demographic trends.

“Over the past five years, over 80% of net overseas migration has been accounted for by people under the age of 35,” said Lowe. “This has implications for future economic growth and the pressures on government budgets.”

Over the past ten years Australian population has grown by 1.5 per cent to reach 25 million on Wednesday, compared to other advanced economies which have less than 1 per cent growth.

Lowe’s comment followed the news that the federal government has cut permanent migration intake by 10 per cent over the past 12 months to 162,417, the lowest number in a decade. Home Affairs Minister Peter Dutton said this was a result of departmental crackdown.

Amazon Continues Dominating Cloud Infrastructure Market

Amazon Web Services continues to dominate the cloud computing infrastructure market, although Microsoft is catching up with its Azure offering.

A new report by Gartner found that the worldwide market for infrastructure as a service (IaaS) public cloud services grew 29.5 per cent with a revenue of US$23.58 billion in 2017, increasing from 2016’s $18.213 billion. The top four vendors – Amazon, Microsoft, Alibaba and Google – represented 73 per cent of the market, with Amazon holding a little more than half of the market share.

“The top four providers have strong IaaS offerings and saw healthy growth as IaaS adoption is being fully embraced by mainstream organisations and as cloud availability expands into new regions and countries,” said Sid Nag, research director at Gartner.

On the second spot, Microsoft took home a $3.13 billion in revenue in 2017, a 98 per cent growth from the previous year’s $1.579 billion. This growth is expected to continue after the company’s latest quarter, which saw the revenue from Azure public cloud service increasing by 85 per cent from the same period a year ago.

Alibaba and Google also saw a significant growth of 63 per cent and 56 per cent respectively. Gartner attributed Alibaba’s rise to its investment in research and development.

“This reflects a fundamental change in what and how organisations are consuming technology,” said Nag.

“Some legacy infrastructure offerings, such as IUS, are seeing lower and slower uptake that impacts the combined IaaS and IUS market… Additionally, a groundswell of demand for cloud-skilled personnel is forcing technology providers to change how they compete to meet this exploding demand.”

Sydney Rental Vacancy Rates Hit Record High

Rental prices in Sydney are expected to continue slipping as vacancy rates reach a 13-year high.

A report by property analysis firm SQM Research found that 2.8 per cent of Sydney’s rental properties were empty in June, increasing by 0.3 per cent from May and almost a full percentage point from a year ago.

SQM’s managing director Louis Christopher said the figures could be attributed to the rising supply of new apartments and the easing population growth due to people’s move to cheaper cities and regions.

“Sydney rents are now down for the year and it is likely rents will continue to slip as there is still a lot of supply coming in the pipeline,” said Christopher in the report.

“I believe Sydney will shortly record a fall in its population growth rate due to a relatively recent steep rise in interstate migration towards Queensland.”

The buyers’ market is also cooling, with home prices falling by 4.9 per cent over the past year. According to CoreLogic, this is caused by stricter loan terms, increase in number of listings, and declining activity from local and offshore investors.

“I think this is the only time in my career that I can say with certainty that Sydney is now a buyer’s and a renter’s market, simultaneously,” said Christopher.