The mining boom continues to drive a wedge between the economic performance of the states, but the disparity is collapsing as the mining boom slows. Western Australia remained the engine of the economy over the three months to September. ANZ economists observed growth contracted sharply in Queensland and South Australia. “The likelihood a number of mooted coal developments will be either delayed further or cancelled has increased, suggesting that investment in the mining and resources sector could be close to its peak in Queensland,” the bank said.
China’s new leadership believes their economy will remain one of the world’s fastest growing in the next year, but warned there could be risks as the nation becomes increasingly reliant on domestic consumption. China’s future growth is critical to Australia, given bilateral trade between the two countries is worth nearly $115 billion a year.
The Australian Financial Review
The slump in prices of Australia’s mining exports has cut national income at the fastest pace since the global financial crisis or the recession of the early 90s, jeopardising the Gillard government’s “surplus” and threatening to drive up unemployment. Former federal Treasury economist Geoff Carmody says the figures confirm the economy was in a recession during the first nine months of 2012 based on net income per person.
States and territories will be given broad discretion in the way they approve projects under commonwealth environmental laws, under COAG’s new draft standards for environmental law. Assessment powers already lie with the states, but under the proposed reforms states could strike bilateral agreements with the federal government allowing state governments to grant approvals. Industry has been pushing for the changes arguing that inefficiencies in existing environmental regulations are contributing to higher costs, constraining investment and holding back development. “The main thing that has been aggravating our members is double handling – that slows them down,” a BCA spokesman said.
Weakness in bulk commodity markets will continue to pressure Australia’s terms of trade until at least the second quarter of next year as iron ore and coal prices remain depressed, analysts warn.
Chevron has suffered a 21 per cent cost blowout at its Gorgon liquefied natural gas venture in Western Australia, with labour costs, poor productivity, logistics problems and weather delays driving the budget up to $52 billion. Vice chairman George Kirkland said the economics of the project, which will produce 15.6 million tonnes a year of LNG on the Barrow Island nature reserve off the WA coast, “are attractive.” “While investment requirements have grown, oil prices, which directly impact the overall revenue stream, have increased by approximately 80 per cent over the same time period.”
The West Australian
The West Australian reports this morning that the federal government may be backing away from its promise to shift environmental approvals to the states over concerns that handover could lead to a major increase in legal disputes. The move was due to start from March 2013 but Labor MP Andrew Leigh has suggested the government might not proceed with the plan. “We need to make sure that we have state governments which are able to put in place legally solid environmental approval processes… If we don’t have that then we shouldn’t be handing over these processes over to the states,” he told Sky News. Australian Chamber of Commerce and Industry chief executive Peter Anderson said it was important for governments to follow through on commitments to streamline green and red tape. Business wanted a single-track environmental approval process and was unconcerned about which level of government provided it, as long as it ended duplication, he said. A COAG business advisory group is due to meet with Ms Gillard and state leaders later today.
The Courier Mail
Queensland’s economy is in negative growth as public service cuts and a retracting mining sector combine to soften demand.
Darwin has the highest cost of living in Australia, with the most expensive rents, groceries, drinks, cigarettes and insurances in the country, a new report has found. The report also showed “severely” low rental vacancy rates of 3.1 people a house in Darwin, compared to the 2.73 national average.