Author: Neville

Punt on pokies proves a big winner for Woolworths

Date December 10, 2012 31 reading now
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Colin Kruger

Business Reporter

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BETTER known for selling bread and milk, supermarket operator Woolworths is rapidly emerging as one of the world’s biggest poker machine operators.

With 11,700 machines in operation across Australia Woolworths pubs and gambling venture, ALH, runs more poker machines than six of the largest casinos in Las Vegas combined.

And what it earns from its gaming arm has changed significantly in recent months.

According to one industry estimate, Woolworths is now on track to earn more than $200 million a year from gaming.

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This means its gambling earnings will nearly match that of Australia’s fourth largest listed gaming operator, the Tabcorp spin-off Echo Entertainment.

The earnings boost has been triggered by changes to Victoria’s poker machine licence system in August, which smashed the monopoly of gambling giants Tabcorp and Tatts.

What was not known at the time is that the largest single beneficiary is Woolworths.

Woolworths’ ALH arm now operates more than one-third of the poker machines in Victoria’s pubs – 4677 machines – which is about the maximum allowed under current licensing arrangements.

Last month Woolworths shareholders rejected a proposal by GetUp! and poker machine reformers for a $1 bet limit across the company. A 2010 Productivity Commission report on problem gambling suggested $1 bets as a way to help reduce problem gambling.

According to the investment bank Citi, Woolworths’ pubs and gaming group ALH generated $140 million in earnings before interest and tax last year. The new licence model in Victoria means it will generate an additional $72 million in annual earnings.

”Profitability … should increase dramatically as per the new arrangements,” a Citi analyst, Craig Woolford, said. ”Although tax rates are increasing, the biggest benefit goes to ALH [Woolworths].”

The big change is that the $2.6 billion spent annually on 27,500-odd poker machines in Victorian pubs and clubs will no longer be split between three parties.

Tatts and Tabcorp have been removed from the equation and the spoils are now split between the state government and the pubs and clubs which act as owner-operators of the machines on their premises.

Woolworths has committed to spending more than $164.3 million on poker machine entitlements and a further $26.2 million on new machines. Indeed, Woolworths now operates 16 per cent of the poker machines in Victoria when the 2500 operated by Crown Casino are included in the statewide figures.

”The $164.3 million amount is in effect paying for the [gaming machines] that we already have,” a Woolworths spokesperson said.

”The transition means that we now have to buy machines and maintain them.”

The Baillieu government expects to receive $1.12 billion from taxes on poker machines this financial year, but it faces more than $1 billion in legal claims from Tatts and Tabcorp over the decision not to compensate them for the loss of their licences.

Read more: http://www.smh.com.au/business/punt-on-pokies-proves-a-big-winner-for-woolworths-20121209-2b3mu.html#ixzz2EbJbpGtJ

Climate change conforming to UN predictions: scientists

ABCUpdated December 10, 2012, 9:36 am

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A new report has confirmed the world is warming at a rate consistent with a 22-year-old prediction from the United Nations’ science body.

In 1990, the Intergovernmental Panel on Climate Change (IPCC) forecast the rate at which temperatures would rise over a 40-year period.

A report published today in the journal Nature says that at the halfway mark, the rate of warming is consistent with the original predictions.

Professor Matt England from the University of New South Wales says the findings send a message to doubters.

“Anybody out there lying that the IPCC projects are overstatements or that the observations haven’t kept pace with the projections is completely off line with this … the analysis is very clear that the IPCC projections are coming true,” he said.

“We’ve sat back and watched the two decades unfold and warming has progressed at a rate consistent with those projections.”

Recent climate change reports have shown global emissions are increasing by 3 per cent per year, with emissions now sitting at 58 per cent above 1990 levels.

Professor England says the IPCC has prepared forecasts for low levels of emissions right through to the high end.

“At the moment we are tracking at the high end in terms of our emissions and so all of the projections that we look to at the moment are those high-end forecasts,” he said.

“Without any action on greenhouse gas emissions, it will be those high-end IPCC scenarios that are extremely costly to society in terms of extreme events bearing out in time.”

Doha talks

The finding has been released in the wake of the latest climate talks in Doha, Qatar, which some critics say achieved little.

At the marathon talks, which had to be extended due to lack of consensus, almost 200 nations, including Australia, agreed to extend the Kyoto protocol till 2020.

But the world’s worst emitters, such as the US and China, are not part of that agreement.

Green groups say the Doha talks delivered a weakened Kyoto Protocol and no new money for helping poorer nations achieve cuts in emissions.

But Climate Change Minister Greg Combet says the talks were a stepping stone towards striking a deal by 2015 that will include biggest polluters.

“The science is telling us very clearly that we need a wider international agreement including all the major emitters, including the US and China, they’re the biggest polluters in the world,” he said.

“At this conference we’ve taken further steps towards having those countries included in a wider agreement.
“The Kyoto protocol is just a stepping stone on that path.”

The Unsung World

Posted: 08 Dec 2012 11:06 AM PST

Biodiversity offsets threaten both the survival and the meaning of nature.

By George Monbiot, published on the Guardian’s website, 7th December 2012

Propose a get-out clause and – however many warnings and caveats you wrap round it – before long it will be used. This post is about the dangerous new concept the government has seeded in the minds of developers and planners.

The idea is called biodiversity offsetting. It involves trading places: allowing people to destroy wildlife and habitats if, in return, they pay someone to create new habitats elsewhere. In April the UK government launched six pilot projects to test the idea, which would run for two years.

Four months ago, I wrote this:

“The government warns that these offsets should be used only to compensate for ‘genuinely unavoidable damage’ and ‘must not become a licence to destroy’; but once the principle is established and the market is functioning, for how long do you reckon that line will hold?”

The answer, it seems, is “not very long”. A year and a half before the pilot projects have been completed, the new spirit of destruction is roaming the land. A place of outstanding wildlife value is now being considered for demolition, and biodiversity offsetting is being mooted as the means by which it can be justified. It’s hard to believe that this scheme would still be receiving serious consideration if the mother of all excuses had not been proposed by the government.

Lodge Hill, close to Gillingham in north Kent, contains what could be the UK’s highest concentration of nightingales. The species has suffered an astonishing decline in this country – over 90% in just 40 years – partly as a result of the destruction of its habitat. This site – of just 325 hectares – contains roughly 1% of the remaining population. It is one of the very few places where, on a summer’s night, you can still hear the full nightingale orchestra, a sound that would once have been familiar to people across much of the country.

Medway Council has proposed that the land at Lodge Hill be turned into a development of 5,000 houses. This, according to a report by the British Trust for Ornithology, could destroy the area’s entire population of nightingales. Even if some birds continue to use the adjoining woods, they are extremely vulnerable to cats, as they nest close to the ground. The pets arriving with the new homes are likely to snuff out what John Clare called “the old woodland’s legacy of song.”

So how do you justify the unjustifiable? You commission a consultancy (the Environment Bank) to investigate the potential for offsetting: in effect moving the habitat and its nightingales somewhere else. It reported that:

“offsetting could work in principle for nightingales in Kent – it is technically
feasible but it is neither straightforward nor guaranteed”

If a site of around 500 hectares were found and stocked with suitable habitat, a similar number of nightingales might establish itself there. But no one can be sure it will work. If it doesn’t, by the time we find out it will be too late: the new habitat will take at least a decade to establish, while the existing habitat will be destroyed and the houses built in just two or three years. If the experiment fails it cannot be reversed.

The report suggests two principal means by which new nightingale habitat could be created in Kent. One is to coppice existing woodland: cutting the trees at ground level so that they resprout to create the shrubby growth that nightingales use. The other is to take an area of agricultural land and either plant it with scrub or allow scrub to regenerate naturally.

This invites two obvious responses. If woods are chosen, the offsetting process would not be creating wildlife habitat, but merely changing an existing habitat into something different. Coppicing favours some species at the expense of others, particularly those which require large trees, dead wood and an undisturbed understorey. What’s good for nightingales may be bad for woodpeckers.

If 500 hectares of fields – a bigger site than Lodge Hill – can be taken out of agricultural use to compensate for the destruction of the nightingales’ homes, why not spare Lodge Hill and build the houses in the fields?

The prospect of offsetting in this case looks to me like the “licence to destroy” that the government warned against. Rather than compensating for “genuinely unavoidable damage” it looks as if it could be used to justify avoidable destruction: trashing a remarkable place for an unremarkable project which could be built elsewhere.

This case illustrates the danger inherent in the principle of offsetting. It makes nature as fungible as everything else. No place is valued as a place: it is broken down into a list of habitats and animals and plants, which could, in theory, be shifted somewhere else. It subjects our landscape and wildlife to the same process of commodification that has blighted everything else the corporate economy touches.

The notion of a “like for like” replacement is bogus. No two places are the same. No place that has been planned and measured and designed and planted as a wildlife habitat is the same as one that has arisen spontaneously, or that has always been there. Much of the delight of nature is that it is unscripted, spontaneous, unofficial, that it owes little or nothing to human design.

Accept the principle of biodiversity offsetting and you accept the idea that place means nothing. That nowhere is to be valued in its own right any more, that everything is exchangeable for everything else, and nothing can be allowed to stand in the way of the graders and degraders. That is not an idea I find easy to swallow.

www.monbiot.com

Millions wasted in dump bungles

EXCLUSIVE by LINDA SILMALIS
The Sunday Telegraph
December 09, 201212:00AM

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It has become far cheaper to dump rubbish over the border, even with extra fuel and transportation costs. Picture: David Earley Source: The Sunday Telegraph

MILLIONS of dollars set aside to improve the state’s infrastructure are being lost as waste operators dodge a $95 levy by dumping Sydney’s rubbish in Queensland.

Every day scores of B-double trucks loaded with soil contaminated with asbestos, heavy metals and household rubbish are being unloaded at Queensland waste stations.

The practice began on July 1 after the NSW government increased the rubbish dumping levy in the state by $10 to $95.25 at the same time as the Queensland government scrapped its waste taxes altogether.

Waste operators have told The Sunday Telegraph that it had become far cheaper to head north on the Pacific Highway, even with extra fuel and transportation costs.

The Sunday Telegraph has also been told of instances where landfill operators have dug up old rubbish and loaded it on to trucks to send it across the border.

Under State laws, the levy is returned per tonne for rubbish taken from a landfill site – a regulation designed to encourage recycling.

Dial A Dump Industries operator Ian Malouf – whose $300 million landfill site in western Sydney was opened with great fanfare by the NSW government late last year and formally began receiving waste last month – said the volume of rubbish was well down on expectations prior the levy hike. “It is madness. The guys have told me that it is too expensive to tip their rubbish here and I understand that, but it is a completely mad situation,” he said.

“The amount of revenue that should be going to NSW for roads and infrastructure and other things is basically being lost because Queensland has removed its levy.

“Also, it’s such a carbon contradiction because half the rubbish being trucked over to Queensland is the by-product of recycled products. So here people are recycling rubbish, then burning up fuel to truck it to Queensland.”

Mr Malouf, whose rubbish dump is regarded as the biggest in the southern hemisphere, said each Queensland-bound B-double truck represented just under $4000 worth of lost revenue to NSW in waste levies.

NSW Waste Contractors & Recyclers Association executive director Tony Khoury, who has written to NSW Premier Barry O’Farrell about the situation, said around 2000 trucks per month were heading to Queensland.

“I know of one case where around 10 trucks a day are being ordered to collect waste to take to Queensland,” Mr Khoury said.

“If every truck is around $3800 per load, that’s millions of dollars in lost revenue to the state government each month.”

Magnificent seven’s money-making machine

Date December 8, 2012 15 reading now
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Kate McClymont

Senior Reporter

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A ‘sure thing’ turned sour and took big names with it, writes Kate McClymont.

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Wealth estimated at $665 million … Travers Duncan. Photo: Michele Mossop

It must have seemed like an eternity for Travers Duncan as the 80-year-old sat in the witness box at the state’s most sensational corruption inquiry waiting for an intercepted telephone call to be played.

Duncan, one of the nation’s wealthiest men, was estimated by BRW’s Rich List to be worth a mere $665 million. But here he was being grilled remorselessly over his involvement in Cascade Coal, which won a mining exploration licence which has engulfed the Labor party and has now spilled over into the very richest of our nouveau riche.

The tall, forceful Duncan hasn’t had so much bad press since the Australian Federal Police and the Corporate Affairs Commission raided the offices of his company White Constructions in 1988. Duncan and several other White directors faced the possibility of five years jail when they were charged under the Companies Act with making untrue statements and non-disclosures in a prospectus.

Made $500 million … Brian Flannery. Photo: Glenn Hunt

The matter was ultimately dismissed in 1994 by Federal Court Justice Alan Neaves, who said the evidence was ”not capable of satisfying a jury beyond reasonable doubt”.

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This time, it is another of Duncan’s ”White” companies – White Energy – that has landed him before a major corruption inquiry.

When counsel assisting the Independent Commission Against Corruption Geoffrey Watson, SC, claimed in his opening address last month that the allegedly corrupt granting of coal exploration licences by then minister Ian Macdonald back in 2009 had the potential to make ”rich men even richer” he was not exaggerating.

Investor … John McGuigan. Photo: Paul Miller

Take those magnificent seven who invested in a private miner Cascade Coal. In August 2008, just as the family and associates of the controversial Labor MP Eddie Obeid were snapping up properties around the Bylong area, near Mudgee, an events company reinvented itself as a coal miner to be called Cascade Coal.

Cascade’s investors included Duncan and his partner Brian Flannery who made $500 million each when they flicked their coalminer Felix Resources to China’s Yanzhou Coal for $3.54 billion in 2009.

Then there was John Kinghorn, whose reputation took a hit after he floated RAMS Home Loans only days before the global financial crisis hit. He pocketed more than $650 million but investors were wiped out.

Good timing … John Kinghorn. Photo: Louie Douvis

Also investing in Cascade were former Baker & McKenzie law partners John McGuigan and John Atkinson, who have also made their fortunes in the resources industry.

Richard ”Digger” Poole, who arrived from Perth several years ago to hang out his shingle as a boutique investment bank, Arthur Phillip, was also an investor. He and his former flight attendant wife, Amanda, had all the trappings of the newly wealthy – flashy cars, designer rags and the mandatory overseas holidays. Cascade’s office was at Arthur Phillip.

In 2010, White Energy offered to pay $500 million for the small private company Cascade Coal, which had picked up the Mount Penny exploration from the NSW government for $1 million.

Resources wealth … John Atkinson. Photo: Jim Rice

Cascade’s successful bid for the exploration licence at Mount Penny may have gone unnoticed but for two things.

The first was the extraordinary coincidence that Eddie Obeid’s family and friends had all secured key properties in the same area proposed for an open-cut mine.

The other crucial development was the November 2010 announcement to the stock exchange that White Energy was offering an astonishing $500 million for Cascade, whose only asset was the Mount Penny licence.

Close to Macdonald … Greg Jones.

The problem was, several of the White Energy directors – including Duncan, Kinghorn, Flannery, Atkinson and McGuigan – just happened to own Cascade and stood to make a handsome $50 million each if White’s shareholders approved the deal.

But throwing a spanner in the works was the pesky press, who began asking about the proposed sale and raising nasty questions as to whether the Obeid family was in on the Cascade deal.

Also raising eyebrows was the fact some of the owners of Cascade had hidden their identity by owning Cascade shares through the intriguingly named Lost Ark Nominees. Even more interesting was the timing of Lost Ark’s bullish $28 million investment in Cascade – the day before White’s announcement to the stock exchange that it was planning to buy the company for $500 million.

Boutique bank … Richard Poole. Photo: Michel O’Sullivan

Kinghorn, of RAMS Home Loans, Allco and Krispy Kreme fame, held about 14 per cent of Cascade through a private company but he also held another 12.5 per cent on behalf of someone else.

That someone else turned out to be Greg Jones, one of the closest friends of the man in charge of the coal tender – Macdonald. Jones had known ”Macca” since the early 1980s, when the pair were caught rorting expenses while employed in the office of then Labor minister Frank Walker.

Jones, who was also a long-time business associate of Kinghorn and McGuigan, had been telling his eastern suburbs mates, including property developer Denis O’Neil and luxury car dealer Neville ”Croaky” Crichton, that he was on to a ”sure thing” in the way of a coal deal. ”It was going to be a ‘multi-bagger’,” he told friends.

In investment circles, ”multi-bagger” is used to describe an investment that is expected to return at least several times a much as the original investment.

This week, the identities behind the Lost Ark investors were revealed. Among the cast of veritable movers and shakers in the business community were Jones’s drinking buddies Crichton and O’Neil.

The Lost Ark syndicate was brought together by Peter Gray and Brent Potts, the former stockbroking partner of the late disgraced Rene Rivkin.

It included Potts’s great mate from Monaco, Bobby ”Bothways” Pittorino, along with Peter ”Talky” Newton, well-known corporate raider Sir Ron Brierley, Travers Duncan’s children Andromeda and Campbell, stockbrokers Richard Granger and Rex Adams, who now work alongside Potts and Gray at Blue Ocean Equities.

Other investors were Wayne Seabrook and Simon Keyser from boutique stockbroking firm Ironstone Capital, and Anthony Levi who works with Poole at Arthur Phillip.

At the same time they were investing, analysts from Potts’s stockbroking firm Southern Equities were spruiking the merits of the White Energy and Cascade purchase.

It now transpires that the $28 million the Lost Ark syndicate invested in Cascade, was channelled by Cascade director Poole – via a solicitor’s trust fund – into the family coffers of the Obeids.

There is no evidence any of the Lost Ark people were aware their money was going to the Obeid family.

The Cascade investment has turned out to be a dud for everyone except ”the boys”. This was the nickname for Labor powerbroker Eddie Obeid’s five sons – Damien, Paul, Gerard, Moses and Eddie jnr.

The inquiry has heard that ”the boys” orchestrated a 25 per cent stake in Cascade Coal in return for agreeing to let Cascade deal with their ”farm” consortium.

Having the land owners on board is an attractive proposition to mining companies in that their access to the land is not being blocked by unhappy farmers.

But by late 2010, the Obeid name had become synonymous with controversy, the commission has heard, and therefore, the good people at Cascade had to go to great pains to hide the Obeids’ payout.

”Jimmy, what are you thinking, you can’t say this,” Poole said in an email to his underling James McGuigan in August 2009.

James McGuigan is the son of John McGuigan. Since July 2012, James McGuigan has been Cascade Coal’s sole employee but in 2008, he was working on the Cascade deal at Poole’s firm Arthur Phillip.

”Jimmy” had raised the ire of his boss by drafting an agreement between Cascade Coal and Buffalo Resources, which was a company associated with the Obeids.

In his evidence this week, McGuigan conceded that ”By that point in time [August 2009] I understood they [the Obeids] were very controversial people, yes.”

”So it would be damaging to put them in?” he was asked by Watson. ”Ah, yes,” McGuigan replied hesitatingly.

”Jimmy, this needs more work. Remember, this document could easily end up in court one day so it needs to be accurate,” Mr Poole continued in his email.

”Quite prescient of Mr Poole?” Mr Watson said sardonically. ”You could say that,” McGuigan replied.

McGuigan had a torrid time in the witness box. It transpired he had told a private ICAC hearing in July he knew the Obeids were involved with Cascade. But in his evidence this week, McGuigan said he was flustered during the hearing and had made a mistake.

”I suggest to you that an inference could be drawn that you’ve changed your evidence because suddenly you realise it was prejudicial to you?” Commissioner David Ipp suggested.

Following James McGuigan into the box was his dad’s business partner Duncan.

Duncan, who is chairman of White Energy, and one of the investors in Cascade, was in an ebullient mood when he settled into the witness box just before 3pm on Thursday.

Within an hour, his life had been turned upside down.

Read more: http://www.smh.com.au/nsw/magnificent-sevens-moneymaking-machine-20121207-2b11c.html#ixzz2ESrBACT1

Troubled UN climate talks spill over

by Sara Phillips for ABC Environment, ABCUpdated December 8, 2012, 5:30 pm

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International talks aiming to address global climate change have been extended amid fears they may collapse altogether.

Talks at the United Nations Climate Change Conference in Doha, Qatar, aimed to finalise an agreement on cutting greenhouse gas emissions to replace the Kyoto Protocol.

The key issues under consideration were the extension of the Kyoto Protocol, which expires at the end of December, and aid for developing nations who will be most affected by the changing climate.

The conference was due to wrap up late last night (local time), but will now resume after talks stalled in the dying hours.

Dr Chuks Okereke, from the School of Human and Environmental Sciences at the University of Reading, says tension between developing and developed countries has delayed negotiations.

“The biggest stumbling block at the UN climate negotiations is the tension between developing and developed countries,” he said.

“From the developing world perspective, the developed countries have failed in their commitments on three counts: domestic emission reductions; technology transfer; and, most crucially, finance.Â

“Climate change is ultimately a question of justice and those who have contributed the most should assume responsibility in solving the problem.”

The Kyoto Protocol, drafted in 1997, aimed to reduce the world’s greenhouse gas emissions by around five per cent from 1990 levels by the end of 2012.

Instead, global greenhouse gases have risen around 58 per cent in that time.

Green groups and scientists say while a global treaty to address emissions by 2015 has been agreed upon, it does not go far enough.

Lidy Nacpil of Jubilee South Asia Pacific, an alliance of environmental and social justice organisations, says the wording is vague and ineffective.

“[It’s] a million miles from where we need to be to even have a small chance of preventing runaway climate change,” she said. Â

Ms Nacpil is based in the Philippines which is currently experiencing devastation as a result of Typhoon Bopha.Â

“As civil society movements, we are saying that this is not acceptable,” she said.

“We cannot go back to our countries and tell them that we allowed this to happen, that we condemned our own future.Â

We cannot go back to the Philippines, to our dead, to our homeless, to our outrage, and tell them that we accepted this.”

While expectations were low for the Doha meeting, the failure of the talks to drive the formation of a treaty has raised doubts about the future of the United Nations climate negotiations.
Asad Rehman, spokesperson for Friends of the Earth International, described the meeting as “an empty shell, an insult to our futures”.

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