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  • Fed ministers stayed at Obeid lodge – Sydney Morning Herald

    Fed ministers stayed at Obeid lodge – Sydney Morning Herald

    Posted on 3:25 AM with No comments

    AAP

    New senate leader Stephen Conroy and cabinet minister Tony Burke admit staying at Eddie Obeid’s Perisher ski lodge as federal Labor figures become embroiled in the former party powerbroker’s corruption inquiry.

    Senator Conroy issued a statement saying he’d stayed at an apartment owned by Mr Obeid in 2005 or 2006 after Mr Burke and another federal Labor minister, Bill Shorten, were named at a NSW Independent Commission Against Corruption (ICAC) inquiry.

    Former NSW Labor factional boss Mr Obeid told a hearing on Tuesday Mr Burke, a NSW Right factional leader, and Mr Shorten, a Victorian Right faction chief, had been invited to stay rent-free at his family’s Perisher ski lodge.

    The same hospitality had been extended to other Obeid political friends, including former NSW premier Morris Iemma, current NSW Labor leader John Robertson and former NSW minister Ian Macdonald, he said.

    “We are generous people and we like to share our generosity with our friends,” Mr Obeid told the ICAC on Tuesday.

    Mr Shorten denied ever staying at the Obeid family’s ski lodge.

    He said through a spokesman on Tuesday that he had never been to Perisher and cannot ski.

    Mr Burke said in a statement that he had stayed twice at a Perisher Valley apartment owned by Mr Obeid.

    “I declare two separate stays at this accommodation in the period 2004 to 2006,” the Minister for Sustainability, Environment, Water, Population and Communities said.

    “On both occasions I stayed with my family.

    “On neither occasion was any member of the Obeid family present.”

    Mr Burke said the parliamentary rules relating to the declaration of MPs’ interests excluded those received in a “personal capacity”.

    However, some MPs routinely declare such gifts for the sake of transparency.

    Senator Conroy, who became a minister in 2007, was not named in the ICAC hearing on Tuesday.

    But the minister for broadband later confirmed he too had stayed there, when no member of the Obeid family was present.

    “Given media interest in this matter, I wish to declare one stay for two days at this apartment in either 2005 or 2006,” he said in a statement.

    Mr Burke was not a government minister during the period he stayed at the apartment.

    ICAC is investigating claims Mr Macdonald rigged a 2008 tender process for coal exploration licences in the Bylong Valley, and whether Mr Obeid and his family gained substantial financial benefit from it.

    Mr Obeid on Tuesday denied seeking or receiving any insider information from Mr Macdonald regarding valuable coal tenements in the Bylong Valley, west of Newcastle, which are the subject of the hearings.

    He agreed that Mr Macdonald had stayed “rent free” at the Perisher ski lodge and that his sons had probably picked up bills for meals he had at the restaurant there.

  • Dependence on coal a bad strategy with shift to renewables unstoppable

    Dependence on coal a bad strategy with shift to renewables unstoppable

    Posted: 04 Feb 2013 01:30 PM PST
    By Richard Denniss, via The Conversation

    Last week, Greenpeace released a report calling for a halt to Australia’s burgeoning coal exports and pointing to the catastrophic climate impacts they would cause.
    In response, Mitch Hooke, chief executive of the Minerals Council of Australia, took a standard industry line: “the proposal to stop Australian coal exports won’t stop global coal use – it will just send Australian jobs offshore and deprive state and federal governments of billions in revenue”.
    Arguments that the strength of the Australian economy is heavily dependent on digging up and shipping out as much coal as possible, as quickly as possible, are common. Of course, they also imply that economic arguments trump any concerns about contributions to climate change.

    But leaving that aside, how true is it? Would slowing or halting Australia’s coal exports really deprive Australians? What would it mean for Australian jobs?
    Research by The Australia Institute suggests that slowing down the pace of coal exports would actually result in enormous benefits to the Australian economy. It would allow our other key export industries – including manufacturing, tourism, education and agriculture – to expand, employing more people and paying more tax.
    Because these industries are all far more labour intensive than mining, less subsidised and mostly better taxpayers than mining, it would lead to more jobs and increasing state and federal revenue in the long run.
    It’s no accident that the unprecedented expansion of mining in Australia has been accompanied by a sharp decline in many of our most important long-term export industries.
    The relentless stream of manufacturing job losses, decline in tourist arrivals and overseas students, and declining agricultural exports are the collateral damage of allowing a breakneck mining expansion without regard to its impact on the rest of the economy.
    The problem is that the more mining you have, the less you have of everything else.
    For two decades from the early 1980s, exports from Australia’s non-mining industries were steadily increasing as a percentage of our GDP. This was a sign of an increasingly healthy diversified economy, better able to pay its way in the world. Then in the early 2000s, with the onset of the mining boom, something changed, and these industries have been heading south ever since.

    The reason is that mining “crowds out” other exporting industries, which flows onto the rest of the economy, creating what we call the “two-speed economy”.
    It has done this primarily through driving up the exchange rate, and creating an acute skills shortage.
    The unprecedented rise in the Australian dollar is primarily driven by increasing commodity prices, and the massive $260 billion influx of foreign capital to fund the construction of mines and gas fields.
    A further cause is that Australia has high interest rates relative to other developed countries, which means it attracts more overseas investment and further drives up the dollar. The Reserve Bank has cited the mining boom as a reason for every interest rate rise since 2005.
    This has had a devastating impact on our non-mining exporters. Manufacturers who were receiving $100 for a product sold into the American market a few years ago now receive less than $70 for the equivalent item. The dollar has also appreciated by a similar amount relative to most of our other markets. Hotel rooms, meals and tours and university courses are similarly more expensive for those thinking of visiting Australia.
    Australian tourism visitors have dropped by around 250,000 over the last decade, as more Australians holiday overseas, and overseas tourists go elsewhere. This is during a 20% boom in global tourism over the last decade.
    Since the beginning of the mining boom, Australia’s rural sector has lost $43.5 billion in export income. This includes $14.9 billion in 2010-11 alone. These losses have occurred because the mining boom has forced the Australian dollar to historic highs. The beef industry took a $2 billion dollar hit last year alone.
    Manufacturing job losses are announced with depressing regularity, with well over 120,000 manufacturing jobs disappearing since the GFC.
    Adding fuel to the fire, the mining boom has created an acute skills shortage. This is simple supply and demand. If you plan to build $260 billion dollars’ worth of mining projects at once, it will create enormous demand for a narrow set of skills that are also important to other industries. This makes it much harder for other businesses to recruit and retain employees.
    These businesses will also have to compete with the inflated wages being offered by the miners. The economic consultants for Clive Palmer’s China First mine acknowledged this impact alone would cost around 3000 jobs in manufacturing and tourism, and that’s just one mine!
    Hooke’s concern about Australian jobs is especially interesting when you consider that the coal mining industry is highly capital intensive, and a very small employer. It employs around 38,000 people nationally, less than a third of one percent of the workforce, compared to around one million in manufacturing, half a million in tourism and 327,000 in agriculture.
    With a capital-intensive industry crowding out labour-intensive industries, it seems likely that the net effect of the expansion of the coal industry will be job losses for Australia as a whole.

    Crowding out of these industries also means a loss of tax that these industries would have been paying. The mining industry pays an effective corporate tax rate of around 13.9%, compared to the industry average of 21%.
    To take the latest year available, 2009-10, mining companies paid $6.8 billion in company tax, amounting to just 2.2% of government receipts.
    The coal industry also pays around $4 billion dollars a year in royalties to the states. Although royalties are technically considered taxes, the minerals are the raw materials of mining in the same way that wheat is for a baker, or bricks to a builder. Bakers and builders pay market prices for their raw materials, and the costs are not considered as a tax.
    The difference is that the Australian people own those minerals, and the state government sells the minerals to mining companies on our behalf. It is hard to imagine that if the minerals were owned by a private company, like bricks or wheat, they would be sold for around 7% of their market value. This special treatment of the mining industry could be seen as a huge subsidy in itself.
    As it stands mining is highly subsidised, to the tune of at least $5 billion dollars a year, which makes subsidies to manufacturing look modest.
    Mitch Hooke’s claim that “the proposal to stop Australian coal exports won’t stop global coal use” is true, as far as it goes. But no one would seriously suggest that it would. Other countries will continue to export coal.
    What it will do is drive up the coal price considerably, because Australia is the world’s largest coal exporter. In fact, Australia has a larger share of the world’s coal exports than Saudi Arabia does of oil, and no one would doubt the effect on global oil prices of Saudi Arabia reducing its oil exports.
    This will have the effect of our customer countries – primarily Japan, Taiwan and India – reconsidering investing in coal for their energy infrastructure.
    Luckily they already are. India has had to scrap huge coal power plants due to coal price fluctuations and difficulties in securing enough coal that have led to massive blackouts. This has led to rapid ramping up of solar targets to 10GW by 2017.
    This shift to renewable energy is gaining pace around the globe with renewable energy investment exceeding fossil fuel in 2011. This is an unstoppable trend, and is great for the developing nations who will be able to avoid dependence on volatile and ever increasing fossil fuel prices, and the myriad of health and pollution problems associated with burning coal.

    This article was co-authored by Mark Ogge. Mark is the Public Engagement Officer at Canberra-based think tank, The Australia Institute. His work involves communication of key research findings about the impacts of the mining industry on other crucial sectors of the Australian economy, especially manufacturing, tourism, education and agriculture.
    Richard Denniss is Executive Director of the Australia Institute. The Australia Institute is funded by memberships and donations from philanthropic trusts and individuals to our Research Fund. Where particular pieces of research are commissioned, this information is disclosed as part of the research.
    The Conversation
    This article was originally published at The Conversation. Read the original article.

  • BP Deepwater bill rises by $4.1bn

    BP Deepwater bill rises by $4.1bn

    Total charge for 2010 oil spill stands at $42.4bn, as company races to prevent civil trials reaching court
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    Terry Macalister

    guardian.co.uk, Tuesday 5 February 2013 10.10 GMT

    Smoke billows from a controlled burn of spilled oil during the BP Deepwater Horizon disaster. Photograph: Sean Gardner/Reuters

    The financial damage resulting from the Deepwater Horizon spill in the Gulf of Mexico continues to mount at BP, which has taken a further $4.1bn charge in the final three months of 2012, bringing the total impact so far to $42.2bn (£27bn).

    The oil company has settled criminal charges with the US Department of Justice, but will suffer further financial hits as it prepares for a final civil trial scheduled to start later this month.

    Worst case scenarios could mean a further $20bn of liabilities, but BP expects them to be very much smaller and is still desperately working on an out-of-court settlement to avoid the trial.

    The latest numbers resulting from the Deepwater disaster were released by BP on Tuesday morning as part of its fourth-quarter and full-year financial results, which showed the company had already sold $37.8bn of assets even before its sale to Rosneft of its half share in the Russian joint-venture TNK-BPx§.

    That disposal has not been completed yet, but BP’s overall group production – excluding TNK-BP – was down 7% in the final three months to 2.29m barrels of oil equivalents a day.

    The output figures were damaged by the sale of assets to pay for the Macondo blowout in 2011, and they helped drive down quarterly underlying replacement cost profits by 20% in the final period, to $4bn from $5bn.

    The $4.1bn Deepwater charge, however, was considerably better than analysts had forecast, and despite the downturn BP chief executive, Bob Dudley, gave an upbeat assessment of where the company had reached.

    “We have moved past many milestones in 2012, repositioning BP through divestments and bringing on new projects,” he said. “This lays a solid foundation for growth into the long term. Moving through 2013 we will deliver further operational milestones and remain on track for delivery of our 10-point strategic plan, including our target for operating cash flow growth, by 2014.”

    BP expects four new major upstream projects to begin production by the end of 2013 – Angola LNG, North Rankin 2 in Australia, Na Kika 3 in the Gulf of Mexico, and the Chirag Oil project in Azerbaijan.

    A further six major projects are expected to come onstream through 2014 while the major upgrade of the Whiting refinery in Indiana is expected to come online in the second half of 2013.

    “We aim to be a focused oil and gas company, creating value by growing long-term sustainable free cash flow,” said Dudley, who made clear the company had learned lessons from the Deepwater Horizon accident, which caused the worst marine pollution in US history, by adding: “We will deliver this through safe and reliable operations, and through disciplined and paced capital investment into a portfolio rich in high-margin opportunities.”

  • Obeid family assets being watched

    Obeid family assets being watched
    Updated: 16:30, Tuesday February 5, 2013
    Obeid family assets being watched

    The NSW Crime Commission, which has the power to freeze proceeds of crime, is keeping a close eye on the Obeid saga unfolding before the ICAC, Premier Barry O’Farrell says.

    The Independent Commission Against Corruption (ICAC) is investigating claims former NSW mines minister Ian Macdonald rigged a 2008 tender process for coal exploration licences to favour Labor kingmaker Eddie Obeid.

    The inquiry has heard the Obeid family stood to make tens of millions of dollars in the process.

    Greens MP John Kaye on Tuesday called on Mr O’Farrell to request a freeze order from the crime commission, which has the power to seize assets and can compel witnesses to give evidence.

    Mr O’Farrell later told reporters the crime commission is monitoring the ICAC proceedings and is in ‘close contact’ with the ICAC itself.

    But he said he wouldn’t be personally contacting the crime commission about the matter.

    ‘I don’t intend to interfere with the NSW Crime Commission’s operations any more than I intend to interfere with the operations and the hearings of ICAC,’ the premier said.

    He added that there are no powers available to government to suspend a mining exploration licence.

    Any other action would have to wait until the conclusion of the ICAC hearings, he said.
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  • The Operation of Caretaker Conventions (ANTONY GREEN)

    February 05, 2013
    The Operation of Caretaker Conventions

    As long as governments have the confidence of the House of Representatives, or in the case of supply matters the approval of the Parliament, and as long as they are not acting illegally, they can continue to make all the normal decisions that a government is required to make.

    When a government does not have the confidence of the House, they are limited in the functions they can perform. Any matter that requires the approval of the Governor General at an Executive Council meeting could be declined as the Governor General would not have to accept advice from Ministers without the confidence of the House.

    In the modern era, periods when the government does not have confidence are almost entirely limited to the period between when the Parliament is dissolved for an election and when it is clear that a new government can be formed. The conventions would also apply to any baton change period if a government lost the confidence of the House.

    To cover this period, a set of ‘caretaker’ conventions have developed, governing what the government can and cannot do.

    A brief summary of the conventions can be found in Appendix K of the Australian government’s Cabinet Handbook (7th edition). You can find a copy of the handbook at http://www.dpmc.gov.au/guidelines/docs/cabinet_handbook.pdf and Appendix K is on Page 51.

    A full set of the current rules can be found at http://www.dpmc.gov.au/guidelines/docs/caretaker_conventions.pdf. This document is prepared for the use of the public service and is designed to give some backing to public servants who choose to say no to a government request during the caretaker period.

    The first paragraph of Appendix K sets out in broad detail what the caretaker conventions are about.

    By convention, the Government ensures that important decisions are not taken in the caretaker period that would bind an incoming government and limit its freedom of action. The basic caretaker conventions require Government to avoid implementing major policy initiatives, making appointments of significance or entering major contracts or undertakings during the caretaker period and to avoid involving departmental officers in election activities.

    Paragraph 2 then sets out when the Caretaker period is to apply for (my emphasis added):

    The caretaker conventions operate from the dissolution of the House of Representatives until the election result is clear or, in the event of a change of government, until the new government is appointed. However, it is also accepted that some care should be exercised in the period between the announcement of the election and the dissolution. There is no caretaker period for separate half Senate elections.

    So what happens when a Prime Minister does what Julia Gillard did last week in announcing an election more than six months before the dissolution of Parliament? What is meant by “some care should be exercised in the period between the announcement of the election and the dissolution”?

    The first thing to say is that the conventions are not directly enforceable by the courts, but may be taken into account and enforced indirectly.

    Trying to get a court to enforce the wording of Paragraph 2 would be very diffcult as it is nothing more than a guidance note. The Cabinet Handbook is written by the public service under instruction from the government. It can easily be re-written, and a new version is usually issued after every election.

    For instance, the inconclusive nature of the 2010 election result meant the public service had to adopt a new set of guidelines to cope with negotiations with cross bench members. You can find a copy here http://www.dpmc.gov.au/guidelines/docs/guidelines_post_election_consulation.pdf)

    It can be argued that paragraph 2 was written with the intent of covering the normal election announcement period, of the election date being announced a few days before the dissolution was proclaimed. The rule is designed to stop government making lots of quick decisions at the last minute.

    But was it intended that this section apply to an election announced six months before the dissolution?

    Posted by Antony Green on February 05, 2013 at 10:28 AM in Electoral Law, Federal Politics and Governments | Permalink
    Comments

    Presumably this ‘some care’ guidance is not relevant for fixed term governments. Therefore it would seem unlikely that it could reasonably refer to an extended period such as this.

    COMMENT: Parliaments with fixed terms re-write these provisions. The UK has re-written all the caretaker conventions in its Cabinet Manual to deal with having passed fixed term legislation, providing a clearer definition of the caretaker period.

    Posted by: LittleLoudGuy | February 05, 2013 at 10:47 AM

    Interestingly, the DPMC’s “Guidance on Caretaker Conventions” (at Section 7.5) provide for pre-election consultation with the Opposition from the date an election is “announced” (or three months from the expiry of the HoR, whichever comes first).

    This permits the Opposition to “have discussions with appropriate Departmental officers”, subject to “approval”.

    The DPMC’s “Guidance” carefully distinguishes this entitlement from the “Caretaker Conventions” as it is the subject of separate Guidelines, first tabled in 1976, with the current arrangements tabled in the Senate in 1987.

    Of course it would be open to the Government to submit new guidelines that address the particulars of the present situation (or even simply deny approval until a time closer to the election). But it is clear that the “Consultation Guidelines” anticipated a period well in advance of whenever the House might be dissolved and the Caretaker Conventions took effect.

    COMMENT: The UK Cabinet Manual goes into much greater detail on this point.

    Posted by: Smurray38 | February 05, 2013 at 10:58 AM

    If tomorrow the Coalition announced a policy for the election, would the Government be able to pass legislation or enter into contracts etc that would prevent that policy being implemented if the Coalition won government?

    Alternatively, would the government be able to implement the policy to nullify its impact. e.g. if the Coalition announced a tax cut, would the government be able to enact the same tax cut by putting it into l-a-w?

    COMMENT: In theory, any law passed by one government can be undone by a law passed by a future government. In practice it gets much messier, and providing compensation for contracts undone by a new government is one of the messy points in this area.

    Sometimes a doomed government can have its ability to operate limited by an opposition. The last NSW Labor government found itself unable to proceed with some of its electricity privatisations when the opposition spooked bidders out of tendering for purchase.

    Posted by: SomeGuyOnTheInternet | February 05, 2013 at 11:21 AM
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  • Dissecting Eddie’s charming manner

    Dissecting Eddie’s charming manner

    The Daily Telegraph
    February 05, 201312:00AM

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    LABOR powerbroker Eddie Obeid didn’t rise to his level of prominence and authority within the NSW ALP without possessing a certain amount of charm.

    The enormous number of factional deals Obeid accomplished over decades of Labor Party involvement is testament to his persuasiveness.

    But while Obeid’s gifts for deal-making were remarkably effective within the ALP, they don’t seem quite as useful inside the Independent Commission Against Corruption.

    During a stunning day of evidence yesterday, Obeid presented his complete range of tactical gambits.

    He blustered, smiled, interrupted and distracted.

    Geoffrey Watson SC, the counsel assisting the inquiry, wasn’t buying any of it. Nor was ICAC Commissioner David Ipp.

    For once, Eddie Obeid may have encountered men who are immune to his usually winning ways

    “I’m warning you,” Ipp said at one point. “Answer the question or you will be held guilty of contempt. You persist in not answering the question and interrupting.”

    Besides his attempts at evasion, Obeid presented an image of amiable confidence, eventually drawing a warning from Watson that he cease smiling.

    Obeid’s response was telling: “I will not be intimidated by you or anyone else.”

    That certainly seems to be the case. As the hearing continues, Obeid seems to have been the most confident of all people so far called to answer questions.

    He was buoyant even before he entered yesterday’s hearing.

    Asked by a television reporter if he feared losing his empire, Obeid smiled again and answered: “Far from it.”

    If it wasn’t already the best show in town, Eddie Obeid yesterday confirmed ICAC’s top tier theatrical status. Time will tell if he’s still smiling when the inquiry concludes.

    Commuters are fed up

    IT’S an item of faith among Sydney commuters that one drop of rain on our roads means traffic jams and delays across the entire city.

    Yesterday we found that one train incident can cause similar delays throughout the Sydney rail system.

    The problems began even before most commuters were awake, at 4.30am, when a train dislodged overhead wiring at Waverton station. As those wires came down, so did the hopes of any rail users for a quick journey to the office, school or factory.

    Nearly 12 hours later, after painstaking and cautious work with the rail system’s hugely powerful electrical structures, Sydney’s trains were finally back on schedule.

    If state politicians need any reminders of how significant trains are as an issue, they need only have monitored the fury of thwarted travellers. Sydney’s workers are completely fed up with our sub-standard train system. Yesterday’s outage may have been the final straw for many who usually rely on trains to get them to work.

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