A Gillard government plan aimed at saving struggling local industries could see major resources and infrastructure companies forced to prove they spend heavily with local manufacturers. Union leaders have led the call to mandate local content. However, the resources sector has hit back at the union campaign at a time of growing industry warnings over poor competitiveness, including Chevron’s announcement of a $9 billion blowout at its Gorgon project because of the rising cost of labour and materials. Resources Minister Martin Ferguson has argued against mandating local content, declaring last year there was “no place” for the policy.
Rents in Darwin and Perth have risen sharply in the past year, with the cities’ populations swelling on the back of major resources and energy projects and major growth in the construction industry. A report from Australian Property Monitors shows average house rents increased by 16.6 per cent in Darwin last year second only to Perth where prices grew 17.5 per cent. “Both those cities have experienced quite rapid population growth, as a consequence of the economic opportunities in those states,” Housing Industry Association economist Geordan Murray said.
Labor’s legal advice suppressing the latest quarterly revenue figures from the Minerals Resources Rent Tax is further indication that the impost is yet to raise a cent, according to former senior tax official John Passantt. A Treasury minute written yesterday told ministers they cannot see the quarterly MRRT figures because this would allow individual taxpayers to be identified “by a process of deduction” and therefore breach privacy provisions in the tax law. “There’s a validity to the argument that stands up — at least if there was no revenue collected,” said Mr Passant, who was an assistant tax commissioner before retiring in 2008. “(But) if there was $200 million collected I don’t see how that could be used to identify who paid it.”
The Australian Financial Review
Iron ore prices have fallen for the fifth straight day, tumbling almost 5 per cent overnight in their biggest one-day decline since November 2011. Spot prices plunged $US8.30 to $US145.50 a tonne. Iron ore miners said they expected some weakness in pricing heading into the new year break at the start of February after a surge in restocking activity at the Chinese mills helped push prices up more than 80 per cent to a 15-month high last week.
West Australian Labor leader Mark McGowan has said he would allow proponents of the controversial $40 billion Kimberley gas hub to switch sites or pipe the gas to the Pilbara in a last-ditch effort to ensure the gas is processed onshore. If successful at the state election on March 9, Mr McGowan would immediately meet with all stakeholders to discuss the project’s future.
“I’d call the parties together to say, firstly, I want an Aboriginal benefits package, and I want it processed onshore, and then work out a way of doing that.”
Prominent WA property commentator Gavin Hegney, chairman of Hegney Property Group, says investors in the state’s resources-rich Pilbara region should get out now or risk major losses. “If you’re playing with all the money you’ve got, you’re taking a massive risk in the current market,” he said. The Pilbara housing market is likely to recorrect as a result of the $1 billion state government’s Pilbara Cities project, which aims to grow Karratha and Port Hedland to cities of 50,000 each.
Government support to develop Australia’s agriculture assets would be a better investment than subsidising car makers, according to National’s Senator Barnaby Joyce. “It stands to reason that we are more likely to be exporting food to South-East Asia than exporting cars,” he said. Senator Joyce said the benefits of investment in agriculture were obvious. “If people from overseas can see the future in Australian agriculture and they’re gaining a substantial foothold in the prime sections of Australian agriculture, then there should be a flashing light going off for the rest of Australia.”
The West Australian
WA Premier Colin Barnett has backed the Federal Government’s action to stop Apache Energy exploring for oil near Ningaloo reef. “I doubt that a drilling and exploration program would have much impact but you always do err on the side of caution if you are talking about a World Heritage listed area,” Mr Barnett said.