Scott Morrison unveils Australia 2050 net zero emissions plan with no detail and no modelling
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast app, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at www.businessacumen.biz.
I am Leon Gettler. My job is to review and monitor the week’s news in business, finance and economics. I bring it all to you, every week.
This is episode number 39 in our series for 2021 and today’s date is Friday October 29.
First, I’ll be talking to Bob Sharpless, the deputy chairman of the Springfield City Group which is Australia’s first private company to create a Smart City. And I’ll be talking to Indeed economist Callam Pickering about the latest jobs figures.
But now, let’s talk to Bob Sharpless.
The Morrison government has spent nearly $13 million promoting its climate credentials to voters while refusing to release modelling underpinning its plan to cut emissions. It will spend $12.9 million of taxpayer funds on an advertising campaign that claims credit for Australia’s increasing uptake of renewables and cuts in emissions. Details of the costs of the “Making Positive Energy” advertising campaign were disclosed by officials from the Department of Industry, Science, Energy and Resources during a senate estimates hearing on Monday. The eye-watering sum includes a $10.45 million spend on television, cinema and billboard advertising, and $1.78 million spent on the development of a website for the campaign. The taxpayer-funded advertising campaign promotes Australia’s progress towards reducing greenhouse gas emissions and the increase in renewable energy technologies, and has primarily been run in the lead up to the COP26 talks in Glasgow. The campaign’s materials promote Australia as a leader in the uptake of solar energy and as supporting the increased use of renewables in industry and hydrogen production. The campaign does not mention the significant role played by state and territory governments – which have stepped in to fill a policy gap left by successive Coalition governments, which tried to pull down most of the policies responsible for the boom in renewables.
Scott Morrison says Australia’s commitment to achieve net zero emissions by 2050 will not be legislated, with five-yearly reviews by the Productivity Commission to measure job creation, in a pitch to regions that it won’t devastate them. The Morrison government has outlined a technological road map towards net zero emissions by 2050 that will require a contribution by every sector of the economy – including agriculture – and which relies in part on technologies that are not yet developed. The government plans to spend more than $20 billion in low emissions technologies by 2030, claiming this will leverage $60-$100 billion in private sector investment. The technologies include soil carbon sequestration — where carbon is removed from the atmosphere and stored in soil — carbon capture and storage (CCS), production of low-emissions steel, and other ways to reduce energy use. The 129 page document did not specify the cost of the sweeteners for the Coalition partner, the National Party. The government said its economic modelling, which it has not yet released, will result in individuals being $2000 better off, gross national income will be 1.6% higher and there would be a net creation of 62,000 jobs in regional mining and heavy industry. As part of the deal to secure the Nationals support, the Productivity Commission will review the new plan every five years to measure the impact reducing emissions has on regional communities. Australia has long dragged its heels on climate action, putting it increasingly at odds with strategic allies including the US and UK. It is one of the dirtiest countries per head of population and a leading global supplier of coal and gas. Controversially, Australia’s 2050 pledge offers no concrete plans to limit mining for fossil fuels and new coal-fired power stations. “We want our heavy industries, like mining, to stay open, remain competitive and adapt, so they remain viable for as long as global demand allows,” Mr Morrison wrote.
NBN Co and Australia Post have paid executives nearly $300 million in corporate bonuses during the COVID-19 pandemic, despite being put on notice by the Morrison government about lavish taxpayer-funded perks. Annual reports for the government-owned postal corporation and the company operating the National Broadband Network reveal generous payments in the 2020 and 2021 financial years.
Melbourne’s diners, drinkers, shoppers and motorists sent spending in the city soaring past $350 million in the first three days after the end of the sixth lockdown. Sales data compiled by NAB from its eftpos terminals around the city showed Melburnians spent over 20% more on Friday, Saturday and Sunday than the previous weekend, including what one NAB executive called a “mind-boggling” 2340% increase for beauty salons and barbers, where haircuts were finally possible. Spending in the cafe, restaurant, bar and club sector almost doubled in the city’s first three days of significantly eased restrictions. With the 15-kilometre limit scrapped, motorists lost no time getting back on the road. Spending at service stations was up 31%, and on general automotive was up 8% on the previous weekend. NAB, which handles about 22% of electronic payments in Victoria, recorded $76 million in sales in Melbourne and $114 million for the whole state between Friday and Sunday, indicating that total transactions exceeded $350 million and $518 million respectively.
Australians remain divided over the politics of the pandemic as the country reopens, research from Bastion Insights shows. The Morrison government is recording a rebound in perceptions this month, as the country hits vaccination targets, while in Victoria, NSW and Queensland, residents remain strongly divided. The research shows that concern over exposure to COVID-19 differs across settings and states. Overall, Australians feel most exposed about larger events (67% ) and travelling on planes and at airports (66%). Concern is also high about catching public transport (60%) and visiting shopping centres (56%), as well as restaurants, cafes and pubs (51%). Workplaces (33%) and personal gatherings with friends and family (30%) are perceived as lower risks. Victorians have higher concerns than their interstate counterparts about being in the workplace, commuting to work and attending gatherings of family and friends. A quarter of Victorians are also concerned about their financial situation. Two in five Australians are keen to embrace overseas travel, but there is hesitancy, with just one in five ready to jump on a plane to go overseas in the next three months.
Australia Post will spend $400 million to boost parcel operations around the country after a 32% surge in volume over the past two years and ahead of an expected record online Christmas shopping splurge. Consumers stuck in COVID-19 lockdowns pushed delivery systems to their limit during the pandemic, with Australia Post delivering more than 10 million parcels a week around the country. Newly named chief executive Paul Graham announced plans to boost spending on the government-owned company’s systems to more than $1 billion over three years. As part of the $1 billion program, $400 million will be spent by mid-2022 on new parcel facilities, fleet expansion and technology upgrades. Set to face Senate estimates for the first time this week, Mr Graham said recently opened parcel processing facilities in Brisbane, Sydney, Melbourne and Adelaide were helping to meet demand. Australia Post also has five new facilities being built in Perth, Melbourne’s Bayswater and Tullamarine, western Sydney and Botany.
Crown Resorts has escaped having the licence for its Melbourne casino cancelled, despite the Victorian royal commission finding the scandal-ridden casino giant is currently unfit to operate the business. Commissioner Ray Finkelstein found Crown’s behaviour disgraceful, and concluded that it must be found unsuitable to hold its licence. The James Packer-backed company will be allowed to keep its licence for two more years under close scrutiny from an external monitor, according to the inquiry’s 652-page report, tabled to the Victorian government on Tuesday morning. The state government appointed Stephen O’Bryan, QC, as the monitor, giving him “unprecedented” powers including the right to direct the Crown board and veto any of its decisions. The report also recommended that Mr Packer slash his share in the company by 2024, saying the Casino Control Act should be amended to require his private investment vehicle, Consolidated Press Holdings, to reduce its 37% shareholding to less than 5%. The report said the casino giant’s road forward “will not be easy” and Crown “will not be in control of its own destiny”. Commissioner Ray Finkelstein said that the economic role played by Crown in Melbourne and the fact it had already started reforming “tipped the balance” against completely cancelling the licence. Announcing the appointment of Mr O’Bryan, who was the founding commissioner of the state’s corruption watchdog, Gaming Minister Melissa Horne said he would have “unprecedented” powers as Crown’s so-called special manager. This includes the right to attend all Crown board meetings, direct the board and veto board decisions, and inspect all records, books and documents. She added that the government accepted all the 33 recommendations from the report. It has introduced legislation into Parliament that deals with nine of the key recommendations, including introducing laws on Tuesday morning to increase the maximum penalty for breaches from $1 million to $100 million. The royal commission uncovered Crown had hidden and failed to pay a multi-million dollar state gambling tax bill, facilitated money laundering through its hotels and exploited problem gamblers.
Australia’s biggest companies are abandoning plans to hold virtual annual meetings beyond the Covid-19 pandemic after facing a backlash from shareholders. Treasurer Josh Frydenberg granted companies relief from the Corporations Act, allowing them to hold virtual annual meetings until March next year rather than in person, usually in hotel ballrooms or corporate offices. But investors have fiercely rejected attempts to make virtual AGMs a permanent fixture, fearing they will lose the rights to eyeball and scrutinise company directors on their “one day of the year”. Following shareholder resistance companies including Qantas, Brambles, and Bendigo and Adelaide Bank have torn up proposed amendments to their constitutions to allow virtual AGMs. To strike a compromise and stamp out any creep towards digital-only AGMs, federal parliament introduced new laws this week giving companies permission to hold hybrid – a blend of in-person and virtual – meetings on an ongoing basis. The legislation also makes it clear that shareholders should be given a reasonable opportunity to participate in an AGM, even if they can’t attend in person. It is a move the Australian Council of Superannuation Investors has welcomed.
Telstra has joined Team Australia on China. Telstra and the Australian government have finalised a deal to buy and operate the largest telecommunications company in the Pacific, in a move largely seen as an effort to counter China’s influence in the region. The deal comes after China’s biggest telecoms operator had shown interest in buying Digicel Pacific. Digicel is the largest mobile phone carrier in the Pacific with operations in Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti The $2.1 billion deal to acquire and run Digicel Pacific is being funded largely by the government, which will provide $1.9 billion toward the acquisition. Telstra said it would contribute $360 million and own 100% of the company’s ordinary equity. The deal, which is expected to be completed within the next six months, is “consistent with Australia’s longstanding commitment to growing quality investment in regional infrastructure,” the Department of Foreign Affairs and Trade said in a statement.
Patrick Terminals is seeking to end decades of union conditions and controls over its workforce in the face of a two-year bargaining stand-off, potentially forcing hundreds of wharfies on to the industry minimum. The stevedore applied to the Fair Work Commission on Tuesday to terminate its agreement with the Maritime Union of Australia on the basis the deal was “no longer fit for purpose” and restricted its ability to meet customer needs at a time of huge strain on supply chains due to the pandemic. Patrick has proposed maintaining its 1081 wharfies’ salaries, leave and other pay rates for six months but all other conditions, including controls over recruitment and manning, would be wiped out on termination and revert to the award. It comes as the MUA notified Patrick that its members would undertake 12-hour stoppages three days a week at Melbourne from next week and 24-hour strikes at Sydney and Brisbane, along with rolling one-hour stoppages and overtime bans.
Housing affordability across Sydney has collapsed to its lowest level in at least a decade and is on track for the same point in Melbourne as the benefits of record low interest rates are overwhelmed by soaring property prices and stagnant wages growth. Analysis by Moody’s Investors Service shows the jump in Sydney’s median house price, now at $1.3 million, means a household with an annual income of $135,000 will spend more than 45% of it servicing their new mortgage. In February, they needed 36% of their income. It’s little better in Melbourne, where the median house price is now more than $960,000, with households spending an average 32.1% of their incomes on the mortgage. Melbourne households were paying 29.7% of their incomes towards their mortgages in February.
Australia’s largest bitcoin mine will come online in Byron Bay later this month, after local digital infrastructure company Mawson Infrastructure Group inked a deal with renewable energy powerhouse Quinbrook Infrastructure Partners, setting the scene for a rollout of crypto mines across Australia. The mine is set to add around 0.4 exahash (a measure of computing ‘horsepower’) to global crypto mining operations, and will be 100% powered by renewable energy generated at the Quinbrook site. Bitcoin mines, which are essentially large data centres with computing power dedicated to solving complex algorithms that secure and power the blockchain, can be turned on and off quickly. This gives power generators like Quinbrook an aveue to direct their energy should the broader Australian electricity grid require less supply, like during the middle of the night, or turn off if the electricity grid requires more. Quinbrook currently manages the Cape Byron Infrastructure Fund which owns and operates a portfolio of biomass power stations near Byron Bay in NSW.
Social media giants will face fines of up to $10m for serious privacy breaches, under reforms proposed by the Australian government. The reforms would also require platforms to verify users’ ages, get parental consent for children and cease disclosing personal information, if requested. They will include criminal penalties for repeated refusals to provide information requested by the Office of the Australian Information Commissioner. On Monday the attorney general, Michaelia Cash, released draft legislation and a consultation paper arguing more needs to be done to protect children against “harmful tracking, profiling, or targeted marketing” on online platforms. Separately, the Nationals MP Anne Webster has introduced a private member’s bill to parliament to make social media companies liable as publishers if they don’t take down allegedly defamatory material within 48 hours of receiving a notice from the eSafety commissioner.
And that’s it for this week. And next week, I’ll be talking to Domm Holland, the Aussie entrepreneur and co-founder of American payments company Fast which provides a single click checkout button, freeing consumers of the need for passwords or the need to re-enter personal details. And I’ll be talking to BIS Oxford Economics’ chief economist in Australia, Sarah Hunter.
In the meantime you can catch me on Facebook, Twitter and LinkedIn. And if you want leave a comment.
Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week