Business News Releases

Mining subsidies exposed as a sham - QRC

A REPORT by an anti-mining 'think tank' claiming that the Australian resources sector was ripping money from state and territory government coffers has been exposed as nothing more than sham.

The Australia Institute, a founding member of the anti-coal and gas movement, released a report in June claiming that state and Territory governments across Australia were subsidising the Australian resources sector to the tune of $17.6 billion over a six year period between 2008/09 and 2013/14 .

An independent analysis by a former head of the New South Wales Treasury, Michael Schur, has revealed fundamental errors in a report that was designed to deceive the public into thinking state governments were funding the Australia's resources sector instead of vital public services.

Queensland Resources Council Chief Executive Michael Roche said it was no surprise the report by The Australia Institute, called Mining the Age of Entitlement, was deeply flawed.

‘The litany of errors that peppers the report are obvious,’ Mr Roche said.

‘The bulk of the expenditure claimed as a subsidy, $10.3 billion, is associated with the commercial provision of rail, port, water and electricity services and infrastructure from which the government generates significant income.

‘In addition, $3.7 billion in capital expenditure claimed as a ‘subsidy’ was spent by the government on items such as roads.

‘The TAI incorrectly asserts that capital expenditure on road projects associated with the resources sector constitutes a subsidy. Roads are funded largely through general taxation and are available to all vehicles whether private or business.

‘The remaining investments—comprising about 20 percent or $3.6 billion—aren’t associated with the mining and resources sector at all and appear to have been incorrectly categorised.’

‘There are a lot of very effective campaigns from anti-mining activists who want to shut down the fossil fuel industry in Australia, but this effort by the TAI takes the cake.’

Mr Schur, Managing director of Castalia Strategic Advisors, who undertook the report, said TAI's claims in its report were based on a flawed analytical framework and were, in the main, unfounded. 

‘Behaving commercially is mandatory for government-owned businesses - or public trading enterprises - it is embedded in the legal, policy and institutional frameworks by which they are governed,’ Mr Schur said.

‘All their expenditure is by definition therefore commercial, and cannot be a subsidy to the mining and resources sector.

‘Inexplicably, The Australia Institute claims that about $1 billion in Queensland passenger rail concessions are somehow a subsidy to the mining and resources sector and no logical reason is provided as to why this may be so,’ he said.

Mr Roche said TAI report was remarkable for turning out an instant collection of howlers asserting so-called subsidies such as:

A barge landing at Aurukun (there is no mine at Aurukun)
The capital cost of expanding the Meandu coal mine (supplying Tarong Power Station) is being recovered through electricity charges. The government owns the mine and the power station.
Rail infrastructure concessions totalling more than $1 billion over 2012-13 and 2013-14 were not for the benefit of resources companies (who pay full commercial rates for track use and freight services) but essentially a budget subsidy for passenger transport and unprofitable regional freight services.

‘Last financial year, resources sector companies spent almost $38 billion in Queensland on wages, goods and services and communities.

‘That direct spending injection is calculated to have generated total spending of $76 billion – one quarter of the state’s economy.’

A copy of the Castalia report can be found on the QRC website. 


Watch on Vimeo - Michael Roche in response to The Australia Institute’s report that has been exposed as a sham:  

QRCMichaelRocheTAIreport from QRC on Vimeo.



Tourism investment needed to capitalise on strong visitor growth - VTIC

 

VICTORIA's peak tourism body is calling on both major parties to commit to recommendations to grow tourism jobs in the state, as Melbourne Airport reports significant passenger growth for the past year.

Victoria Tourism Industry Council (VTIC) chief executive Dianne Smith said that with the appropriate policy, the tourism industry could create nearly 9,000 additional jobs for Victoria over the next two years.

Ms Smith’s comments come in the wake of Melbourne Airport reporting its total passenger numbers grew by 4 per cent during 2013/14 to 31 million passengers. International passengers increased by 9 per cent to 7.75 million; while domestic passengers grew by 2 per cent to 23.3 million.

"Both major parties must commit to our priorities if Victoria is to maximise the benefits of increased visitor numbers and drive further growth,” said Ms Smith.

VTIC recommendations include:

- Increase marketing efforts to attract more Asian visitors: targeted communications campaigns and funding to make Victoria’s key tourist attractions more appealing to this group are needed. 

- Commit funding to the expansion of the Melbourne Convention and Exhibition Centre: the centre is currently turning away around 17% of booking requests due to lack of capacity, so this is vital to ensuring Melbourne retains the significant economic benefit from being Australia’s business events capital. 

"VTIC strongly supports the Airport Rail Link project for the benefit it will bring to guests coming to Victoria for both recreational and business purposes and we hope this project progresses as a priority,” said Ms Smith.

“We echo Melbourne Airport CEO Chris Woodruff’s sentiments on the need to secure better outcomes for international air service agreements for Melbourne. We must also remember that Melbourne Airport’s curfew-free status gives Victoria a distinct advantage over other states and we must ensure that this is preserved well into the future.

“The airport experience is often an international visitor’s first impression of Melbourne, if not Australia, so the major works and improvements that Melbourne Airport outlined in their Annual Stakeholder Report are a great investment for Victorian tourism and the visitor experience.”

For more information on VTIC’s recommendations please visit www.vtic.com.au.

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Timely and decisive policy responses needed to stem rising youth unemployment

VECCI Chief Executive Mark Stone writes > OFFICIAL estimates suggest the national unemployment rate among 15-24 year olds is now 13.8 per cent and around 288,000 young people are now looking for work across Australia.

In Victoria, the youth unemployment rate is similar to the national average, although rates are higher in some regional areas.

The true picture of youth unemployment is likely to be much worse, when we consider that the official unemployment data excludes many youngsters who do not participate in the labour market at all.  A lack of employment opportunities and success in applying for positions can leave many job hunters demotivated to the point where they drop out of the job search market altogether. 

Once lower participation rates are taken into account, the real level of youth unemployment is likely to be at least one to two percentage points higher than the official estimates.

These are not just figures, they are real people.  As we know, there are major economic and social costs associated with having so many young people idle. 

Making matters worse is the fact that the consequences of youth unemployment can last for years.  Those who begin their careers without work are more likely to have lower wages and suffer joblessness again in later life. 

While undoubtedly a strong influence, not all youth unemployment can be explained by the current economic environment where consumer spending levels are well below what many employers require in order to justify taking on new workers.

Lack of qualifications can be a major barrier to youth employment.  In this case the candidate may be missing not only specialised skills and core competencies like literacy and numeracy, but more rudimentary ‘employability’ skills such as the ability to problem solve, initiative, self management and team work.

The tendency for young people to change jobs more frequently than their older counterparts also explains some youth unemployment, as they are classified as unemployed while searching for their next job.

High wages can also mute job prospects.  In Australia, the 3 per cent increase in the national minimum wage this year and the Fair Work Commission decision to increase award rates of pay for 20 year old retail workers may have been good news for existing job holders. However, as employers have to bear these higher costs, these decisions were arguably detrimental to new job seekers.

Realising that there are many influences on youth unemployment provides a guide as to where policy makers should focus their efforts.  VECCI’s Taking Care of Business 2014 State Election business agenda calls on both major parties to commit to a series of reforms that will help address youth unemployment in Victoria.

Among these is our recommendation to raise the payroll tax free threshold from $550,000 to $850,000.  This will lower business costs and create an incentive for employers to hire new staff, including youth.

We also want to see both sides of politics deliver the priority infrastructure projects Victoria needs to keep growing; maximising opportunities for apprentices and trainees.

Importantly, VECCI is calling for further reform of the education and training system. Reform is needed to support not only industries and workforces undergoing structural change, but the continued internationalisation and innovation characteristic of our high growth advanced manufacturing and service industries.

Recent State Government reforms to vocational education and training have sensibly sought to shift training funding towards specialised or skill shortage occupations. However as a consequence, funding for lower level qualifications that provide literacy, numeracy and work preparation skills for many young people has been reduced and both the workforce and employers have suffered.

VECCI’s recommended reforms alone will not solve youth unemployment, but they are needed as part of a coordinated response by state and federal governments to curb the prospect of a jobless generation.

*

The Victorian Employers' Chamber of Commerce and Industry (VECCI) is the peak body for employers in Victoria, informing and servicing more than 15,000 members, customers and clients around the state.

vecci.org.au  

Certainty restored for resource industry as unions fail in offshore visa challenge - AMMA

IN a decision that has restored certainty to both Australian and non-Australian nationals working in the offshore resource industry, the Federal Court has today rejected a challenge by two maritime unions to the Commonwealth’s offshore skilled migration visa arrangements.

The MUA and AMOU’s unsuccessful legal challenge is the latest chapter of ongoing attempts by Australia’s maritime unions to gain control over offshore resources work that historically takes place outside the unions’ traditional coverage.

By targeting the very small proportion of non-Australian skilled workers who provide essential international technical expertise to local projects, the unions’ campaign has directly threatened thousands of Australian jobs created both directly and indirectly through flow-on effects.

“The Federal Court’s decision today is a sensible decision that has restored certainty to a critical part of Australia’s economy,” says Steve Knott, CEO of resource industry employer group AMMA (the Australian Mines and Metals Association - the resource industry’s employer group).

“The offshore resource sector uses a very small number of non-Australian specialists, but has created 70,000 jobs in Australia and injected $200 billion into our economy.

“This campaign is simply the maritime unions’ attempt to gain control over areas historically outside their legal reach and create a new source of membership revenue.

“It is well beyond time that some sensibility is restored in this area and Australia’s oil and gas operators can get on with creating jobs and economic value for our country.”

A separate challenge by a third maritime union, the AIMPE, was previously adjourned pending today’s decision. AMMA expects no material difference in the AIMPE’s case or the outcome.  

Background to this matter:

Today’s Federal Court decision is a significant development in a longstanding union campaign to have all offshore resources activities captured within Australia’s migration zone and thus within the reach of Australia’s workplace laws and union membership coverage.

The laws and regulations the unions are campaigning against have been in place in Australia since 1982 and are consistent with both international maritime law and resources work around the globe:

  • No Australian jobs have ever been threatened by the longstanding work arrangements for offshore resources work taking place in waters deemed outside of Australia’s migration zone.
  • The global vessel services originally targeted by the unions in this campaign use a small number of non-Australian specialist workers, and actually create many jobs for Australians.
  • The small number of international specialist workers (mostly from Europe) travel globally and are paid in accordance with their national laws and with international maritime law.

While the former Labor government took the unprecedented action of amending the laws to appease the maritime unions’ demands, the Federal Court has now upheld the Coalition Government’s steps to restore certainty to Australia’s offshore resource industry.

www.amma.org.au

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More jobs and prosperity for Queenslanders: QRC

QUEENSLAND'S peak resources sector body has welcomed the state government’s environmental approval for a new gas project that will benefit Bowen Basin communities for at least 40 years.

The Chief Executive of the Queensland Resources Council Michael Roche says Arrow Energy’s Bowen Gas Project (BGP) project, about 150km south west of Mackay will provide more than 1500 jobs during the construction phase from 2016, and about 700 permanent jobs.

‘The government’s approval of the environment impact statement (EIS) for the project supports Arrow’s announcement yesterday that it was beginning front-end engineering and design work for the proposed Bowen upstream gas project.

‘The environmental assessment of this project has been in train since 2012 and will now be assessed by the Australian Government.'

BGP involves developing Arrow’s tenements near its existing gas fields with staged expansion of about 4000 gas wells and gas infrastructure in an 8000km2 area. 

The project will supply local and export markets.

www.qrc.org.au

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East West Link must proceed to drive jobs and our transport needs

 

VECCI Chief Executive Mark Stone said VECCI has consistently supported East West Link as it will create jobs and be a vital part of Victoria's transport network.

"Business confidence takes a hit when decisions made by government do not come to fruition," Mr Stone said.

"I will request a meeting with the Opposition Leader to better understand why they have changed their longstanding position on this project.

"There is overwhelming support for this project among Victoria's major business and motoring groups, including the RACV, and it is also supported by a number of key union organisations.

"It will be of great detriment to our state if it is abandoned."

For VECCI's full Taking Care of Business election agenda visit www.vecci.org.au/tcob

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Announcement of dates of effect for tax concession repeals make a mockery of “less red tape”

 

THE Federal Government has announced the dates from which the small businesses concessions attached to the repeal of the mining tax will no longer apply.

The dates are the same as those proposed in the original repeal Bill (that was defeated in the Senate) for the instant asset and motor vehicle write off.

The government has however backdated the repeal of the company loss carry back concession. This concession was originally meant to be removed from the date of royal assent. The original repeal bill was introduced on November 11, 2013 so the removal of this concession from July 1, 2013 will come as a shock to small businesses.

The Minister for Finance, Mathias Cormann, has set the following dates of effect for relevant taxpayers:

  • abolition of the mining tax from October 1, 2014
  • abolition of the company loss carry-back from July 1, 2013
  • reduction of the instant asset write-off from January 1, 2014
  • abolition of accelerated depreciation of motor vehicles, also from January 1, 2014.

In relation to the instant asset write off, when eligible small business taxpayers are purchasing depreciating assets, the reduced threshold of $1,000 will apply from January 1, 2014 rather than the $6,500 threshold that was available before this date.

The accelerated depreciation for motor vehicles will cease to be available to eligible small businesses for motor vehicles purchased after January 1, 2014.

In respect of the loss carry-back concession, it cannot be claimed for the whole of the 2013-14 financial year as the government has backdated this change to July 1, 2013.

The ATO has advised that it will waive all penalties and interest in instances where taxpayers have chosen not to prepare their returns on the basis of the government's announcement of these measures, if they seek to have their income tax assessments amended within a reasonable time.

As the original repeal bill was introduced in November 2013 and these changes received royal assent on September 5, 2014 — almost a full year afterward — the date of implementation has come as a surprise to Taxpayers Australia and the wider small business community.

Head of Tax with Taxpayers Australia, Mark Chapman, criticised the new measures.

“With the mining tax itself not being abolished until October 1, 2014 the government appears to be on a tax grab from small businesses by making these measures retrospective. In addition, the added burden of amending tax returns to comply with the new law when taxpayers have claimed these concessions in good faith in accordance with the law as it stood at that time is unfair and contrary to the principle of reducing red tape.

“In relation to the loss carry back concession, removing the ability to claim this measure for the 2014 income year entirely, given that the original bill proposed the measure would apply from the date of royal assent, is even more disappointing,” Chapman added.

“The small business community badly needs certainty and clear guidance from the government rather than backdated measures that leave them further out of pocket even after they have, in some cases, lodged their tax return and paid their liability for the year.”

Taxpayers Australia is a not-for-profit organisation committed to a fairer and more transparent taxation system for every Australian taxpayer. Its aim is to provide taxation practitioners, superannuation professionals, small businesses and individuals with up-to-date, informative and above all understandable information about taxation – to ensure that every Australian pays the right amount of tax and not a cent more.

Visit our website: www.taxpayer.com.au

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457 Visa improvements to support local jobs and growth, says resource industry

 

AUSTRALIA’S resource industry employer group, AMMA, welcomes Minister for Immigration Scott Morrison today flagging the government’s support for removing cumbersome and unnecessary bureaucracy from Australia’s valuable skilled migration programs.

“The resource industry’s use of skilled migration has declined in recent years, but where we do employ international specialists, their expertise and skills are often critical to safety, performance and supporting a large number of aligned Australian jobs,” says Steve Knott, AMMA chief executive.

“It is encouraging to have our Immigration Minister publicly acknowledge how skilled migration supports both economic growth and employment opportunities for the Australian workforce, after an unfortunate politicisation of the skilled migration debate under the previous government.

“The minister also reaffirmed what employer groups like AMMA have long maintained, which is that misuse of the 457 Visa system is isolated and there has certainly been no widespread rorting.”

Speaking at the National Press Club, Minister Morrison also voiced the government’s early support for some changes to the 457 Visa program recommended by its 457 Visa Integrity Review Panel.

Changes such as new processes to speed up skilled migration Labour Agreements for Australian businesses are in-line with AMMA’s recommendations to the Panel.

“We have seen major resource industry projects wait up to four years to secure a Labour Agreement to cover a small number of valuable and necessary international workers. The current negotiating process is extremely difficult and time-consuming,” Mr Knott says.

“This has a very real impact on job opportunities for Australians. Skilled overseas workers have never been used to replace Australian jobs, rather they complement the skills available here with new global expertise and support projects delivering great value to Australia’s economy.

“Skilled migrants support short-to-medium term skills shortages when Australians are unable to fill such roles. They pay tax from day one, and create local jobs.

“In 2013, the Reserve Bank estimated our industry directly and indirectly accounted for 1.1 million jobs in Australia. With 457 Visa applications in 2013 numbering just 1,340, skilled migration clearly provides a small, but important contribution to our industry’s wider employment opportunities.”

Other proposed changes include more practical and effective standards for English language testing to fix an array of existing problems. AMMA also supports the proposed reduction in market salary rate comparisons from $250,000 to $180,000 per annum.

“Clearly employers should not be burdened with onerous salary comparison requirements for high income earners being paid more than $180,000 per year,” Mr Knott says.

Despite a recommendation from the Review Panel, the Minister indicated the government did not support the complete removal of Labour Market Testing measures. With Edith Cowen University research showing it can cost employers up to $70,000 to sponsor a 457 Visa holder, AMMA has long argued such measures are completely unnecessary and cumbersome.

AMMA is next week (Tuesday 16th September) hosting its 2014 Skilled Migration Conference in the Perth CBD. This is a practitioner-based event open to resource employers.

www.amma.org.au

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Government announces back dating of tax support provisions removal

THE Council of Small Business Australia (COSBOA) has expressed extreme disappointment with the Federal Government’s decision to back date the removal of tax support provisions for small business as a result of the mining tax repeal, which was announced earlier today.

Peter Strong, Chief Executive of COSBOA said that the change should not be back dated as this creates confusion and extra paperwork for the small business community as well as those who, in good faith, purchased goods and/or claimed these as part of their tax return.

“We can only express disbelief that the back dating was kept in place.  This shows a complete lack of understanding about the way small businesses operate. The logical decision would have been to keep these provisions in place, pending the outcomes of the Tax Whitepaper that the Government has commissioned,” Mr Strong said.

“Another issue is that the changes take effect half-way through the last financial year. No government should implement changes to the tax system half way through a financial year.  To think that 2.1 million small business people wake up every day and go to the Treasury website to check what changes to the tax system may have occurred is totally unrealistic.”

This announcement will only impact small businesses and not big business, Mr Strong also noted.

 

http://www.cosboa.org.au/

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New mine law delivers a recipe for economic growth

 

QUEENSLAND’s peak body for the resources sector has welcomed the passage of the Mineral and Energy Resources (Common Provisions) Bill, which delivers a recipe for regional economic growth.

Queensland Resources Council (QRC) Chief Executive Michael Roche says this important legislation again demonstrates that the Minister for Natural Resources and Mines, Andrew Cripps remains focused on enabling regional growth and development by streamlining unnecessary regulation.

"This Bill streamlines the objections process for the grant of a mining tenure but does not limit or remove a right to object to the mining project, rather, objections are considered as part of the project’s environmental authority," Mr Roche said. 

"Communities and landholders remain important stakeholders and still retain a genuine opportunity to raise concerns over a mining project’s environmental impacts.

"The amendments reduce unnecessary duplication in Queensland’s approvals processes," he said.

Mr Roche said QRC would also like to acknowledge the chair of the Parliamentary Committee, Ian Rickuss, the hard-working member for Lockyer, who succeeded in keeping the committee hearings on this legislation grounded in reality while they were surrounded in controversy.

"Mr Rickuss and the majority of committee members have demonstrated that they can see past the cheap theatrics and focus on the actual issues at hand, which are fair process, regional growth and delivering regional jobs," Mr Roche said. 

"The committee hearings were a good opportunity to hear the important concerns of genuine landholders."

The Bill introduced a number of important reforms including:

implementing the 2012 findings of the Land Access Implementation Committee—on which peak agricultural groups worked closely with peak resource industry bodies under an independent Chair
a new process for ensuring that the maximum resource extraction occurs when coal and coal seam gas tenures overlap—that’s good news for Queensland as it means jobs and royalties will be maximised
providing new powers to ensure legacy boreholes can be swiftly made safe; and
a simple and consistent system of restricted land for all resource tenures—that’s good news for landholders.

QRC remains committed to working closely with the industry’s stakeholders, including landholders, rural and regional communities and peak agriculture bodies with whom we share an interest in seeing regional Queensland grow and develop.

www.qrc.org.au

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Buyback loophole unfair - accountants

 

IN A FISCAL deficit environment that Australia finds itself in, it’s time to have a hard look at the share buyback scheme loophole that continues to reduce the Commonwealth revenue line, says the Institute of Public Accountants (IPA).

“The share buyback system is inequitable and reduces Australia’s revenue options to fund other initiatives, especially those supporting small business,” said IPA chief executive officer, Andrew Conway.

“People on higher marginal tax rates receiving a dividend have to pay ‘top-up’ tax and are therefore, much less likely to participate in share buyback schemes.

“This creates an inequitable distribution of franking credits and reduces the attraction of buybacks for specific groups of taxpayers. Off-market buybacks are mostly attractive to low tax paying shareholders.

“Given that one of the principles of developing tax policy is equity, then this issue should be considered in future tax reform, so that all taxpayers receive the same treatment.

“For entities that pay no tax and superannuation funds paying no or up to 15 percent tax, share buybacks can be a genuine benefit as they receive the additional incentive of an imputation rebate from the Government.

“While buybacks may be a useful tool for corporate entities in terms of capital management, they come at a cost to the taxpayer, as Treasury coffers miss out on top up tax due to  skewed  distribution of franking credits.

“Telstra is the first major listed company since the GFC that has announced a buyback and no doubt there will be many more to follow.  Therefore, it may be timely to consider the tax treatment of buybacks, for the benefit of all taxpayers and for the benefit of companies that are offering share buybacks.

“The Government should seriously look at the artificial streaming of franking credits which buybacks create,” said Mr Conway.

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally recognised professional accounting bodies with more than 24,000 members and students in over 51 countries.  The IPA is a member of the International Federation of Accountants, the Accounting Professional and Ethical Standards Board and the Confederation of Asian and Pacific Accountants.  The IPA was recognised in 2012 as Australia’s most innovative accounting organisation and listed in the top 20 in the 2012 BRW Most Innovative Companies List.  

www.publicaccountants.org.au

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