News That's Fit To Punt - 29/Sep/2015

Circular Quay Revamp

The Baird Government wants to drop some money on Circular Quay and its wharves. Naturally it wants to sell off some assets and privatise stuff. It also wants to breakup Sydney Harbour Foreshore Authority and hive off  the various functions to various departments. Of course Mike Baird won't care if some jobs will be lost - because of course that's why a government privatises stuff - to carve off the barnacle state employees who could not be gotten rid of in any other way. 

Be that as it may, here's the article from the Shake-My-Head journal.  

"We're not going to make a decision that is not in the best economic interests of the state of NSW," Mr Perrottet said. 

The move is the latest push to privatise government assets perceived to be serving little public use and follows the announcement of a plan to convert historic government offices into a five-star hotel. 

As well as the properties owned by the government in Circular Quay are buildings currently operated by the Mercure and Four Seasons hotels at Darling Harbour and office space at Darling Park. 

Mr Perrottet said the plan would not the diminish heritage values of the area.
The plan coincides with the abolition of the Sydney Harbour Foreshore Authority, following a review of the agency. 

The organisation's functions and more than 100 of its staff will be transferred to other departments. 

The Premier said he expected most staff to be retained but would not categorically rule out job losses among bureaucrats. 

"The expectation is the vast majority of the roles will go to Government Property NSW," the Premier said. "We're trying to take away duplication and inefficiency in government."

Damn the SMH and its one sentence paragraphs. The picture that's emerging is that the NSW Government wants to sell off some prime real estate before the bubble pops. 

Property Bubble Isn't Ready To Pop.

I know we've been told there isn't a Property Bubble, but if there happened to be a Bubble, it's not yet ready to pop. You can go to the link and read through it but it won't tell you anything they haven't told you before. I'm sure it's all fine as long as China is sort of doing somewhere in the vicinity of "Business-As-Usual". 

Of course, China might not be doing such a thing nor doing well as hoped. Try this article for size:

On Friday, in a move that would make even Hewlett-Packard's Meg Whitman blush, Harbin-based Heilongjiang Longmay Mining Holding Group, or Longmay Group, the biggest met coal miner in northeast China which has been struggling to reduce massive losses in recent months as a result of the commodity collapse, just confirmed China's "hard-landing" has arrived when it announced on its website it would cut 100,000 jobs or 40% of its entire 240,000-strong labor force. 

Impacted by the slump in coal prices, the group saw its loss over January-August surged more than 1.1 billion yuan ($17.2 million) from the year before. In the first half of 2015, the group closed eight coking coal mines most of which had approached the end of their mining lives, due to poor production margins amid bleak sales. 

Chaiman of the group Wang Zhikui said the job losses were a way of helping the company "stop bleeding." The heavily-indebted company also plans to sell its non-coal related businesses to help pay off its debts, said Wang. The State-owned mining group has subsidiaries in Jixi, Hegang, Shuangyashan and Qitaihe in Heilongjiang province, which account for about half the region's coal production.

That's a lot of people to go lose their jobs in one hit. 

Just to give you a feel for what 100,000 in one fell swoop means, Australia's unemployment figure is something like 600,000. All the people losing their jobs in the collective withdrawal of car manufacturing from Australia is estimated to be about 20,000-30,000.

Maybe more eye-opening is the fact that the coal miners of the world are still profitable, even more so than the Chinese coal mining industry that hangs on cheap labour, despite the total devastation of commodity prices this year.

Of course, the good Tylers at Zero Hedge might be right: China might be heading straight into a hard landing. In which case there will be ramifications for Australia, and amongst the things it might hit would be that Property Bubble that everybody is pretending it's not a bubble. Let's face it, when the money stops flowing in China, it's going to stop flowing all the way out here and into the property market.

Oh, and look, here comes October, Month of Crashes!

Phoenix-ing Companies Under Scrutiny, Again

It took a long while but the Federal Government is finally on to the scourge of phoenix-ing companies.

At least $3 billion of debts are being shirked in the construction industry due to the insidious and illegal practice of phoenix activity, a Senate inquiry has heard. 

So-called phoenix companies are businesses that collapse one day with a pile of debts then rise from the ashes with the same assets and customers to avoid their bills.
They rip people off, go broke and emerge debt-free. It is a practice that has become the scourge of the construction industry. 

In the words of the Australian Taxation Office in a submission to the Senate: "Where such insolvencies result from intentional or systematic planning to become insolvent, we see this as a serious threat to the integrity of our financial, employment, regulatory, taxation and superannuation systems – harming both these creditors and all Australians."

It's not a practice limited to the construction industry. I've seeing a few times in the events business and film business. It's too easy to do and there's really no viable recourse if you are a creditor. Most small businesses can't go to court over debts of five figures. But swallowing losses of five figures to such 'enterprises' is debilitating. If it's six figures, it's still prohibitive to down tools and go to court and hope to win - if you lose, it's a double whammy. And so the practice continues with impunity.

The latest attempt to tackle the problem was back in 2012 when directors were made personally liable for the debts of the phoenix company in relation to non-payment of amounts withheld from employees' wages and super. 

To date, the various inquiries and changes to the law and ATO and ASIC crackdowns have had little impact. 

What is most concerning is it is getting worse.

That's not exactly pleasing to our eye to be reading that last line.

Somebody Leaned On This Guy

Back in late April, Tim Williams, the Chief Executive of Committee for Sydney came out swinging against the toll-road-centric road-buildit agenda that is becoming the norm for transportation  planning in NSW.

Dr Williams, whose organisation's members include major construction, finance and engineering firms, also called on the government to release the business cases for the new mega projects being proposed for Sydney which, to its detriment, remained in the thrall of road builders.

"There is no strategic or structural planner of Sydney at this point of time outside of RMS [Roads and Maritime Services]," Dr Williams told the Halloran Trust event at the university. 

"RMS is the structural planner for Sydney," Dr Williams said, before quoting George Orwell to the effect that Sydney was "a family with the wrong members in control".

"I'm sorry to have to say it but I think it is, I think we've got problems," he said. "I think in its current form, RMS needs to be reconstructed."

Dr Williams' presentation largely reflected familiar themes advanced by transport academics and urban planners. As cities became denser, governments needed to fit them with better public transport, cycling and walking facilities, rather than focusing on new motorways that encourage sprawl and car use. 

But the intervention is significant because it is rare for a big business group to press these points. Members of the Committee for Sydney include major engineering firms like Arup​ and AECOM, as well as finance companies like Macquarie Group, Westpac and ANZ. 

"We are in the presence of another road transport upheaval in this city," Dr Williams said, while showing a slide of the $15 billion WestConnex motorway and its proposed extensions to the north and south. 

"Which, by the way, we are not seeing in any other cities in the world," he said. "And that's the issue – many other cities in the world are taking their highway capacity out and I'm just wondering, what is so different about the Australian city experience that means that they're wrong and we are right? 

"We think this is a congestion-busting proposition and nowhere in Christendom does that appear to be the case – so what's going on?"

He kind of spelled out the common sense problems of just bunging in more toll-roads as the answer Sydney's transportation problem.

Of course, today we read this:

The chief executive of business lobby group the Committee for Sydney has apologised for his candid criticism of Sydney's toll-road agenda. 

Tim Williams used a recent presentation at Sydney University to argue the city needed a "public transport revolution" and that "all sides" of politics had got it wrong on transport planning. 

The criticism was powerful and unusual because of Mr Williams' position as head of an organisation that represents firms that might expect to benefit from the construction of new motorways, and particularly the $15 billion WestConnex project. 

But in a note to members this week, as well as in a letter to the Herald, Dr Williams backed away from the criticism, saying it reflected only his personal views.

"Some members will be aware that during an unscripted speech I recently gave at Sydney University I uncharacteristically commented from a personal perspective and went beyond the formal position of the Committee without clarifying I was doing so," Dr Williams wrote in a note. 

"I have apologised to all partners and to my board who have been very magnanimous although concerned for 'normal service to be resumed'," he wrote.
"I also apologise to members for this untypical event." 

Dr Williams' swift backdown on the presentation - which he supported with 95 slides - underlines the sensitivities around the WestConnex project, which at 33 kilometres is the largest motorway proposal in the country.

And in case you couldn't tell, that's what a guy who got leaned on to shut-the-fuck-up-and-get-with-the-program, says. You speak the truth, they threaten to take your livelihood away and so you recant.
That's how Room 101 works in 'Nineteen Eighty-Four' :"Under the spreading Chestnut Tree, I sold you and you sold me". It's kind of crazy that the powers-that-be think this makes the original speech not stand.

Oh by the way, if you click on the 95 slides link in the quoted bit above, it goes to a 404 Error page. Yes, they've taken down the 95 slides that show how fucked WestConnex was, so you won't see it. it has been made a non-article, because it never happened. Dr Tim Williams is lucky he wasn't made into a non-person and erased from history. These bastards are working hard to ram WestConnex through. They're not taking any prisoners and they don't care who they destroy along the way. It's a disgusting collusion between the state and private enterprise.