POLL: Lake council deficit tipped to top $27m

LAKE Macquarie City Council has projected an operating deficit of $27million for this financial year, a blowout of $13million in three months.
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Council documents show it projected an operating deficit of $14million at the start of the financial year.

But the council’s September budget review, to be considered at a council meeting on Monday, has revised that forecast to an operating deficit of $27million.

The council said there was a simple reason for the huge deviation.

A council statement mainly attributed ‘‘the appearance of a $13million discrepancy’’ to government grants received last year for work to be done this year.

Liberal Cr Ken Paxinos said questions needed to be asked about the ‘‘mismatch’’ in the council’s budget.

‘‘One of the basic accounting procedures is the need to match income and expenditure,’’ Cr Paxinos said.

‘‘We need to know where we are financially and our accounting practices need to be rock solid.’’

Labor Cr Daniel Wallace said a lot of councils had problems with their balance sheets, partly because of the timing of government grants.

‘‘It’s not just an accounting issue faced by Lake Macquarie,’’ he said.

News of the deficit projection comes a day after Newcastle City Council said it was considering cutting $19million from its annual budget to get back in the black.

Lake Macquarie council has taken a different route of higher taxes and bigger government. Lake residents will pay an average rate rise of 55per cent over seven years, with business rates to rise by 71per cent.

As reported last month, Lake Macquarie council plans to run budget deficits until 2016-17.

Cr Paxinos said he was concerned it would take so long ‘‘to get back in the black’’.

Cr Wallace said deficits were not a bad thing if the money was spent on infrastructure, but ‘‘they’re not good if they are spent on maintaining current levels of services’’.

Council general manager Brian Bell declined to be interviewed.

TAFE changes hitting staff and students

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A DIPLOMA in visual arts will set Hunter TAFE students back $12,500 a year from next year, more than double the annual cost of studying art at university.

Hunter TAFE has finalised the commercial fees for its fine arts and ceramics courses in 2013, after the state government scrapped subsidies because of, it said, poor completion rates and low job prospects.

The cost of one-year visual arts and advanced visual arts diplomas will go from $1300 to $12,500, but students are now able to apply for government HECS-style loans.

For a three-year University of Newcastle fine arts degree, the Australian student contribution for a subsidised place in 2013 is $5868 a year.

It would cost a domestic university student $17,600 by the end of their degree.

The Hunter Street diploma will be the most expensive in NSW, with other TAFEs charging between $7700 and $11,000.

There are deep concerns the hefty fees could put a nail in the coffin of Newcastle’s 120-year-old Hunter Street Art School.

NSW Teachers Federation Hunter Street representative Matthew Tome, who is head art teacher, said the prices were cost-based and good value, given the school’s quality. He said they should be compared to unsubsidised fees. At the University of Newcastle an international student paying unsubsidised fees would pay $70,500 for a degree.

Mr Tome said students did not pay back loans until they reached an income threshold.

Nine of the art school’s staff are expected to face redundancy.

‘‘We’re not thrilled,’’ Mr Tome said. ‘‘But we’ve been determined to keep the art school running.’’

Annelies Koch, 23, of Mayfield, has work in the final exhibition at the Hunter Street Front Room Gallery, which is being closed under the cuts.

‘‘Suddenly cutting the budget like this is disgusting,’’ she said.

A Hunter TAFE spokeswoman said fine arts programs had been finalised and were progressively being advertised on the website.

Students could apply for government-funded student loans, she said.


MORE than 40 Hunter TAFE staff are facing redundancy in the lead-up to Christmas.

The Newcastle Herald has obtained documents that show plans to consolidate and axe courses under the state government’s $1.7billion education cuts.

Staff have been sent ‘‘change initiative information sheets’’ that had a deadline to provide feedback by November 9.

The proposed job cuts include 18 jobs from tourism and hospitality, three in boatbuilding, three in business and computing, nine in fine arts and nine in information technology.

TAFE said it was still conducting consultation, no voluntary redundancies had been offered at this stage and any surplus staff would be managed in line with ‘‘excess employees’’ policies. Some could be redeployed.

NSW Teachers Federation Hunter TAFE organiser Rob Long said staff feared the job cuts were the start of things to come.

Up to 800 positions at TAFE statewide are expected to go.

Part-time and casual staff had also lost some or all of their shifts, he said.

Mr Long said they didn’t blame the institution but rather state government education cuts.

‘‘Living through it is personally traumatic,’’ he said.

‘‘Inevitably students will either have high costs, or heavy debt, and receive a poorer quality standard of education.’’

A Hunter TAFE spokeswoman said TAFE NSW had to make significant changes to its budget during the next four years to meet the state government’s efficiency targets.

‘‘We must adapt to our changing environment to remain competitive,’’ she said.

‘‘Every effort will be made, during this review, to minimise the impact on front-line services.’’

NSW Education Minister Adrian Piccoli said in September the cuts were necessary to help the government tackle billions of dollars in lost revenue.

The NSW Opposition said yesterday the TAFE cuts would contribute to a skills shortage in local government positions such as childcare and gardeners.


■ Tourism and hospitality (Glendale and Wyong campuses)

■Metal fabrication and welding (Glendale campus)*

■Information technology (Newcastle and Tomaree campuses)

■Boat building (Newcastle campus)

■Metallurgy (Newcastle campus)

■Subsidised fine arts (Hunter Street campus)

■Subsidised sculpture (Hunter Street campus)

■Subsidised ceramics (Hunter Street campus)

NEW IN 2013

■Bachelor of Early Childhood (Glendale campus)

■Diploma of Visual Arts (Hunter Street) $12,500

■Advanced Diploma of Visual Arts (Hunter Street) $12,500

■Certificate III Visual Arts (Hunter Street) $6000

* TAFE says no final decision

TO GO: Student Annelies Koch has work in the final exhibition at the Front Room Gallery. Picture: Max Mason-Hubers

Confused mayor votes against himself

FIRST he wanted to wire his own office for video and sound, now the Auburn mayor, Ned Attie, has surprised his colleagues by voting against his own motion.
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Cr Attie wanted to vet the credit card activity of the general manager, John Burgess, on a monthly basis with quarterly reports to council, but then a fellow councillor added an amendment that the mayor should make the same disclosure.

In an about face, the mayor voted against the successful motion at the meeting, which was later stopped after a five-councillor walkout over pecuniary interests stripped it of its quorum.

On Thursday, Cr Attie said he was confused by the proceedings of Wednesday night’s meeting. The mayor, who has previously asked staff to investigate the possible installation of cameras and listening devices in the mayoral suite, said in hindsight he had cast his vote in error.

”Quite honestly it got so confusing with people firing things left, right and centre it just confused me,” Cr Attie said.

”It was really an error; I really should just have voted with everyone. I don’t have an issue, I’ve got nothing to hide.”

The deputy mayor, Salim Mehajer, and Liberal councillor Ronney Ouiek were also hiding nothing in the debate that sparked the councillor walkout.

Both declared pecuniary interests in another proposal to increase the floor space ratios and building heights in zonings covering the Auburn and Lidcombe town centres.

But neither left the chamber, citing council’s legal advice on new state government legislation that allows councillors to vote on planning changes where they personally stand to benefit, as long as they declare their direct interest up front.

The law changes were introduced in August to stop councils losing quorum when voting on proposals covering all or a ”significant” part of the council’s area, where councillors could be reasonably expected to hold an interest.

But councillors were split on how ”significant” matter before council actually was.

Cr Ouiek said their refusal to leave the room was ”all kosher” and criticised his fellow councillors who left in protest.

”We did nothing wrong according to the act, so what’s the problem?”

”If every time the shit hits the fan they’re going to walk out, they’re not fit to represent the community.”

But Cr Campbell said alternative legal advice supported his claim the proposed changes related to ”very limited areas” and the two councillors should have left the chambers.

”I said that if [council’s] legal advice is correct, then the state government has legalised corruption,” he said.

Cr Campbell led the walkout of councillors Hicham Zraika, Tony Oldfield, Semra Batik and Irene Simms after his move to force the two councillors to leave on ethical grounds also failed.

”I was unable to remain in the chamber to facilitate councillors voting to determine the extent of their own financial windfalls,” he said.

The planning proposal in question is due to return to an Auburn council meeting on Monday night. Cr Simms said the state government needed to meet a council delegation to discuss the legislation.

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From postal clerk to chairman of the Post

John Stanhope.John Stanhope, the former chief financial officer of Telstra, has been named chairman of the federal government-owned Australia Post.
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He has been appointed to the position for four years, Communications Minister Stephen Conroy said.

‘‘Mr Stanhope brings to the role extensive experience in finance, commercial strategy and communications technology,’’ Senator Conroy said.

Mr Stanhope began his career in 1967 as a clerk at the predecessor of both Australia Post and Telstra, the Postmaster-General’s Department, moving to Telecom Australia after it split from the department in 1975.

By 1995, he was Telstra’s director of finance and was deeply involved in the three-stage privatisation of the telco and the marathon negotiation that culminated last year in Telstra’s agreement to take part in the national broadband project. He replaces David Mortimer, who retired in September.

He takes up his term as the Australia Post chief executive, Ahmed Fahour, reduces the group’s dependence on ”snail mail” by ramping up express delivery operations and expanding into digital mail.

Physical mail volumes are down 17 per cent since 2008 and Australia Post’s regulated mail business lost $148 million in the year to June 30. But non-regulated operations, including express parcels, earned $546 million. The group’s overall profit rose by 16 per cent to $281 million.

Mr Stanhope’s appointment is interesting given that he was lined up against the government and its National Broadband Company in the negotiations over Telstra’s participation in the broadband network – negotiations Telstra is now considered to have driven successfully.

He retired as CFO of Telstra at the end of last year and his experience at the top of that group as it managed its digital transition would have counted in the latest appointment.

Australia Post is also becoming a long-range privatisation contender. The government has not flagged a sale, but Mr Stanhope is well schooled in the process.

Mark Darras has been acting chairman of Australia Post since Mr Mortimer retired in September and will continue as deputy.

This story Administrator ready to work first appeared on Nanjing Night Net.

Alchemia seeks to pull biotech rabbit out of hat

One definition of alchemy is that it is a process by which paradoxical results are achieved or incompatible elements are combined with no obvious rational explanation.
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It is also supposed to be the forerunner of medieval chemistry, based on the supposed transformation of matter, leading to all that glittering gold.

By these definitions, ASX-listed biotech Alchemia, is well named. At 58¢, its shares have climbed 38 per cent since Radar mentioned the stock back in May when it was 42¢.

If there is any alchemy, we would suggest it has been at the hands of the corporate financiers and 19 per cent shareholder Allan Gray (previously Oribis Capital), which is making an absolute motza from the part of the $21 million it pumped into the company this time last year at 24¢ a share.

D-day is approaching for the company as it is about to split in two on December 5, and the question of what a company is worth has never been more vexing, at least for this columnist.

Alchemia’s market cap is currently just under $163 million, and we understand that chief executive Pete Smith and his team are racing around the US trying to raise about $US50 million ($A48.2 million) for its cancer treatment, which is supposed to improve the effectiveness of chemotherapy drugs and is in phase three trials.

Alchemia is being split into its fondaparinux drug on the one hand, which is relatively low risk and starting to earn good money (the reason behind all this), and on the other, its high risk cancer R&D.

Alchemia’s name and management will remain with the former, while the cancer R&D vehicle will be listed on the Nasdaq and on the ASX and will be called Audeo Oncology. Alchemia shareholders will own 70 per cent, and the new US shareholders will own the remainder.

Fondaparinux (code-named Jane within the company) is a generic version of GlaxoSmithKline’s drug used to remove blood clots and deep vein thrombosis. It is being manufactured and distributed by Dr Reddy’s and yesterday Alchemia said it received $1.5 million in net royalties for the June quarter.

By all accounts, this business is going well, having increased market share to about 41 per cent at the pharmacy level, and 6 per cent of hospitals. It will need to grow quickly to justify a market cap north of $100 million, and will be based on the effectiveness of Dr Reddy’s marketing.

At the current share price, the market is valuing Jane in the order of 40¢ a share, according to Scott Power of RBS Morgans, versus his valuation, which is about the current share price, of 58¢.

Radar’s scepticism has more to do with the 40¢ a share valuation of the cancer R&D business, which we think is on the high side, and was arrived at by the underwriters Leerink Swann and Oppenheimer & Co. If Audeo raises the $50 million or so as planned, this values the company, which will have the ASX code AKQ, at $160 million (more or less).

No doubt Alchemia’s cancer treatment is promising, and the company says that the recruitment for its final stage trials are going well, but we are talking about the riskiest end of the biotech curve. It’s said that the US Food and Drugs Administration would not approve aspirin if it were discovered today.

To our knowledge, Alchemia’s (soon to be Audeo’s) HA-Irinotecan compound, which at this stage is targeting bowel cancer, does not have the backing of a big pharmaceutical company. For valuation reasons, if a small biotech only has one or two products in development, the incentive is very strong for management to push that product through the various stages of development.

In any event, the $50 million raised will only be enough to fund its phase three program, the results of which are due in the second half of next year. It will need to raise more if it needs to run additional trials. Such is the life of a biotech.

Click here to access the fortnightly newsletter Under the Radar Report: Small Caps, edited by Richard Hemming. Visit here for more Under the Radar articles.

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Bestselling author Bryce Courtenay dies, aged 79

Bryce Courtenay … died aged 79.Obituary: the man who ‘made Christmas presents’Leave a tribute to Bryce Courtenay here
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EACH November for the past 20 years or so, Bryce Courtenay has produced a bestselling blockbuster that has delighted many thousands of loyal readers. This year’s offering, Jack of Diamonds, is little different in style or content. But it will be his last.

Courtenay, who has been suffering from stomach cancer, died in Canberra late on Thursday with his wife Christine, his family pets, Tim, the dog, and Cardamon, the Burmese cat by his side. He was 79. He knew he had little time left, but approached his final chapter with his characteristic cheerful spirits and brave face.

“We’d like to thank all of Bryce’s family and friends and all of his fans around the world for their love and support for me and his family as he wrote the final chapter of his extraordinary life. And may we make a request for privacy as we cherish his memory,” Mrs Courtenay said in a statement released by Penguin publishers.

Courtenay recorded a farewell message in October in which he said his “use-by date has finally come up”. He said he didn’t mind that he had only a short time to live because “I’ve had a wonderful life” and he added: “All I’d like to say as simply as I possibly can is thank you, thank you, thank you, thank you.”

In a final interview for Penguin, the man who has regularly been Australia’s most popular novelist said he was going to die at precisely the right time, while he still had his intellect and energy. “The time is right, it’s beautiful, it’s gorgeous.”

His long-time publisher and friend, Bob Sessions, who will deliver the eulogy at the writer’s funeral, told Fairfax when Courtenay let him know him that Jack would be the last book he was stunned and saddened. And there was the question of the book – the plan had been for there to be two.

“I said to him, but what about Jack? And Bryce said ‘don’t worry, I’ll tell them what happens’. And he also took the opportunity (in the book) to say farewell to his readers.”

Sessions said Courtenay’s strength as a novelist was that he was a marvellous storyteller. “I often likened him to Charles Dickens and I don’t say that lightly. He tells sweeping stories and he had larger-than-life characters. And the readers had a sense of learning something about the world.”

Courtenay had always wanted to be a storyteller and writing The Power of One, which was published in 1989, “changed his life”. Courtenay, then 50, was in advertising and, according to Sessions, “overstressed, drinking several bottles of wine a day, and smoking a hundred cigarettes”. He realised his lifestyle would be the death of him and he changed it to write. Courtenay always said becoming a writer was the proudest moment in his life.

Bryce Courtenay’s reputation for storytelling in print extended to the telling of his own story, which was frequently embellished. He was born in South Africa in 1933 and brought up partly in an orphanage. There he told stories to avoid being bullied and also learned to box. When I interviewed at his former home in Bowral he said a schoolmate told him: “If you can’t bullshit your way out then you better know how to fight.” Courtenay added that he had been bullshitting ever since.

He got a scholarship to a smart school in Johannesburg and when he left opted to study journalism in London. He paid for that by becoming a “grizzly” man doing dangerous work with explosives in the copper mines of the then Rhodesia.

In 1958 he left London for Sydney and the beginning of what he called his love affair with Australia. But he didn’t manage to get into journalism and started writing advertising copy. His plan was to work until he was 35 and then write novels. But with his son Damon a haemophiliac, he needed a regular income and eventually reached the top of the advertising business. Signing a $1million publishing deal for The Power of One when he was 55 changed all that.

He followed up the story of Peekay the orphan with the heart-rending April Fool’s Day, the story of Damon and his death from Aids, which he  contracted from a tainted transfusion in April Fool’s Day.

Courtenay wrote a further 19 novels, including Jessica, Tommo & Hawk, and Sylvia, starting each one on the last day of January and completing it by August. He delivered the book to Penguin chapter by chapter so the book could be in the shops in time for Christmas. But he didn’t stop there: he also had a serious say in how they were marketed.

Courtenay loved Australia. He loved what it had given him. “It’s the only country where you’re entitled to reinvent yourself,” he told me in Bowral. “Look at me – I’ve reinvented myself as an author.”

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200 years of fairy tales

Prince Charming, actually actor Andreas Richhardt, supports Sleeping Beauty, played by actress Elisabeth Knoche, at Sababurg Palace near Hofgeismar, Germany. Photo by Sean Gallup/Getty Images Little Red Riding Hood, actually actress Dorothee Weppler, wears the local Schwalm region folk dress with its red cap as she walks through a forest on the estate of Baron von Schwaerzel in Willingshausen, Germany. Photo by Sean Gallup/Getty Images
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Little Red Riding Hood, actually actress Dorothee Weppler, wears the local Schwalm region folk dress with its red cap as she walks through a forest on the estate of Baron von Schwaerzel in Willingshausen, Germany. Photo by Sean Gallup/Getty Images

Little Red Riding Hood, actually actress Dorothee Weppler, wears the local Schwalm region folk dress with its red cap as she walks through a forest on the estate of Baron von Schwaerzel in Willingshausen, Germany. Photo by Sean Gallup/Getty Images

A memorial showing brothers Jacob and Wilhelm Grimm, authors of Grimms’ Fairy Tales, stands in a small park on November 20, 2012 in Kassel, Germany. Photo by Sean Gallup/Getty Images

Books of Grimms’ fairy tales stand on display for sale at the Grimm Brothers Museum in Kassel, Germany. Photo by Sean Gallup/Getty Images

A museum administration employee, at the request of the photographer, looks at a painting of brothers Jacob and Wilhelm Grimm at the Grimm Brothers Museum in Kassel, Germany. Photo by Sean Gallup/Getty Images

Visitors walk among busts of brothers Jacob and Wilhelm Grimm in the library at the Grimm Brothers Museum in Kassel, Germany. Photo by Sean Gallup/Getty Images

A museum administration employee looks at busts of brothers Jacob and Wilhelm Grimm at the Grimm Brothers Museum in Kassel, Germany. Photo by Sean Gallup/Getty Images

First and second-edition books of Grimms’ Fairy Tales lie in a display at the Grimm Brothers Museum in Kassel, Germany. Photo by Sean Gallup/Getty Images

The Pied Piper of Hamelin, actually city tourism employee Michael Boyer, leads local children dressed as rats through a quiet street in Hameln, Germany. Photo by Sean Gallup/Getty Images

The Pied Piper of Hamelin, actually city tourism employee Michael Boyer, leads local children dressed as rats through a quiet street in Hameln, Germany. Photo by Sean Gallup/Getty Images

A man walks his dog past town hall in Bad Karlshafen, Germany. Photo by Sean Gallup/Getty Images

A house stands reflected in a river on November 19, 2012 in Wuelmersen, Germany. Photo by Sean Gallup/Getty Images

Rapunzel, actually 13-year-old actress Anna Helver, lets down her hair from a tower balcony of Trendelburg Castle to her prince in Trendelburg, Germany. Photo by Sean Gallup/Getty Images

Rapunzel, actually 13-year-old actress Anna Helver, greets her prince, played by actor Daniel Stuebe, on a rampart of Trendelburg Castle in Trendelburg, Germany. Photo by Sean Gallup/Getty Images

Rapunzel, actually 13-year-old actress Anna Helver, lets down her hair from a tower balcony of Trendelburg Castle to her prince in Trendelburg, Germany. Photo by Sean Gallup/Getty Images

Rapunzel, actually 13-year-old actress Anna Helver, lets down her hair from a tower balcony of Trendelburg Castle to her prince in Trendelburg, Germany. Photo by Sean Gallup/Getty Images

Prince Charming, actually actor Andreas Richhardt, supports Sleeping Beauty, played by actress Elisabeth Knoche, at Sababurg Palace near Hofgeismar, Germany. Photo by Sean Gallup/Getty Images

Prince Charming, actually actor Andreas Richhardt, supports Sleeping Beauty, played by actress Elisabeth Knoche, at Sababurg Palace near Hofgeismar, Germany. Photo by Sean Gallup/Getty Images

Germany is celebratingthe 200th anniversary of the Grimm brothers by acting out their famous fairy tales.

The Grimm brothers collected their stories from oral traditions in the region between Frankfurt and Bremen in the early 19th century, and the works include such global classics as Rapunzel, Little Red Riding Hood, The Pied Piper of Hamelin, Cinderella and Hansel and Gretel. 

All smear but no evidence against Gillard, says Howes

THE national secretary of the Australian Workers Union, Paul Howes, has told those accusing Julia Gillard of wrongdoing as a lawyer almost 20 years ago to put up or shut up.
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With the Deputy Opposition Leader, Julie Bishop, claiming Ms Gillard  to be ”less than honest” in her answers about the matter and vowing to pursue the matter in Parliament next week, Mr Howes said that other than innuendo and accusation, no-one had produced a skerrick of evidence against the Prime Minister.

”This is all smear,” Mr Howes told Fairfax Media of accusations concerning Ms Gillard’s knowledge of the antics of her former boyfriend and AWU union official, Bruce Wilson.

As an industrial lawyer with Slater & Gordon, Ms Gillard represented Mr Wilson and the AWU from 1992 to 1995.

With Ms Gillard’s assistance, Mr Wilson and his colleague, Ralph Blewitt, established a fund, called the Workplace Reform Association. Hundreds of thousands of dollars were siphoned from construction company Theiss into the fund for the personal use of Mr Wilson and Mr Blewitt.

Ms Gillard says she had no idea the fund was to be used for improper purposes and said she helped with the legal work to set it up, believing it would be used for legitimate union purposes such as workplace safety and re-election of officials.

”I provided advice as a solicitor. I am not the signatory to the documents that incorporated this association, I was not an office bearer of the association,” she told reporters in August.

”I had no involvement in the working of the association. I provided advice in relation to its establishment and that was it.”

During this period, Mr Wilson organised the purchase of a $230,000 property in Fitzroy, Melbourne.

It was bought by Mr Blewitt as an investment property and Mr Wilson lived in it.

It was later discovered that more than $100,000 of the purchase money was taken from the union association by Mr Wilson.

Ms Gillard attended the auction with Mr Wilson and visited the house regularly as his boyfriend.

At all stages she has denied knowing at the time that money from the fund was used to buy it.

On Melbourne Cup day this year, she said: ”I was not in charge of the conveyancing file”.

There is pressure for police to reopen the investigation into the rorting and Mr Blewitt has returned to Australia from Malaysia, where he now lives.

He says he will talk to police if granted immunity from prosecution.

But there is no suggestion he has anything linking Ms Gillard to the wrongdoing of himself and Mr Wilson.Mr Howes said the matter was investigated exhaustively all those years ago.

”Ultimately, the union tried to pursue these people 17 years ago. We provided all the evidence we had on file to the DPP in Western Australia and Victoria. We provided it to the police,” he said.

”The authorities in WA and Victoria declined to prosecute. They said the union wasn’t the aggrieved party. The aggrieved party was Theiss.”

The opposition is striving to keep the matter in the public spotlight to damage Ms Gillard. Ms Bishop is promising more next week.

But Mr Howes said it was time to produce some evidence or go away.

”There’s been a lot of innuendo and accusation. I’ve yet to see a single scrap of evidence that shows anyone other than Ralph Blewitt and Bruce Wilson did anything wrong.”

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Tax plan could backfire, Rio Tinto warns

RIO TINTO has warned that the federal government’s plan to crack down on the tax minimisation strategies used by global companies such as Google and Amazon could ”come back to bite” Australia if other countries started doing the same.
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The comments by the mining company came as the federal Assistant Treasurer, David Bradbury, cautioned that Australia’s corporate tax base risked becoming unsustainable if authorities failed to keep pace with dramatic structural changes in the global economy.

Mr Bradbury outlined plans to convene a specialist reference group of business leaders, tax experts, academics and community representatives to examine measures to combat the practice.

He said the digital disruption brought about by the internet and changes in technology had transformed the way economic activity was occurring.

He said these changes were putting pressure on the corporate tax system in Australia.

”Increasingly, governments are discovering the lack of effectiveness in the digital age of international tax concepts created for the industrial age,” Mr Bradbury told an Institute of Chartered Accountants national tax conference.

He proposed that corporate tax should be based on profits that reflect the ”economic activity” attributable to Australia. Currently, corporate tax in Australia is levied on the source of activity.

Company documents filed with Australian, European and Asian authorities show the Australian arms of Apple, Google and eBay are part of complex networks of subsidiaries held by their US parents

through intermediary companies in tax havens.

In April, the Tax Office hit Apple with a $28.5 million bill for back taxes. Google Australia declared a loss of $3.9 million last year and paid just $74,176 in Australian tax, despite generating revenue of more than $1 billion here.

But Rio Tinto’s tax head for the Asia-Pacific region, Ross Lyons, said if the government started tinkering with the source-based tax regime, and instead focused on where income was generated to try to capture companies such as Google, then it could end up costing the government revenue.

Speaking after the event, Mr Lyons said from Rio’s perspective, the big miner did not have any income sourced in China and that’s why Rio pays a very low amount of income tax: because that’s the way a source-based tax system works and the Chinese accept that.

”[But] if the government wants to start unravelling that sort of concept in Australia to try to tax foreign taxpayers on the basis that they should be paying more tax because they’ve got sales in Australia, watch out, [because] other countries might start doing the same to us,” he told BusinessDay.

Mr Lyons said if the Chinese government suddenly said it would start taxing some of the income that Rio Tinto booked in Australia and paid tax on in Australia, then companies like Rio could make use of the double tax agreement between the two countries.

”We could claim credit relief in Australia for the Chinese tax paid, so the loser would be the Australian government at the end of the day, because the tax agreement makes it quite clear that you don’t tax income twice,” he said.

Mr Lyons said the Henry tax review offered a better alternative for what the government was trying to do.

”The Henry review actually said [to] look at a more modern expenditure-based tax that deals with e-commerce and deals with destination as to where the business spends its money.

”I think that kind of idea is what the government needs to start looking at,” he said.

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Now for the real click frenzy – US shopping marathon starts

Add this to the list of things some people are thankful for: stores open in America on Thanksgiving Day. That’s how Janet Guerrero, 24, felt when shopping on Thursday afternoon at a Wal-Mart in Westbury, Long Island, because she had nothing to wear to dinner. “It’s an emergency,” she said.
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This year, Target has joined Wal-Mart and Gap in being open at least part of the day, and some retailers will be open throughout the day, a trend that began to take hold in 2011.

Walmart’s US discount stores, which have been open on Thanksgiving Day since 1988, will offer some “Black Friday” deals at 8pm local time and special deals on some electronics at 10pm. Target has moved its opening from midnight to 9 pm on Thursday and Toys R Us is opening at 8pm.

“It’s a recognition that retailers need to be more aggressive and want to show their physical stores are important,” Moody’s senior analyst Charles O’Shea said.

While he didn’t see enormous crowds out in Vauxhall, New Jersey, he did see about 15 people lined up already at a Best Buy, which opens at midnight. At a Target in Westbury, only two lone shoppers were in line for a 9 pm opening. Still, for retailers, any crowd could make the effort worth it.

“It’s a finite pie – if you can get a bit more by being open, then do it,” O’Shea said.

Other retailers, such as JC Penney, are holding out and will not open until Friday morning, so shoppers trying to get all the deals will need a lot of stamina.

“The retailers are taking what was a very plannable sport that was four or five hours where you can get things done and turned it into a marathon,” Trutina Financial chief investment officer Patty Edwards said. “I think the retailers have diluted the sport.”

Even some higher-end retailers had select stores open on Thursday. But crowds were thin at the flagship Lord & Taylor on 5th Avenue, where workers voluntarily signed up for holiday shifts for an extra compensation day and holiday pay.

At other stores, workers were not so happy to have early openings encroach on their Thanksgivings. A petition asking Target to “save Thanksgiving” had 371,606 supporters as of Thursday afternoon.

But shopper Pamela Herman, 54, who works in marketing at Mt. Sinai hospital, was drawn in by the extra discount of 50 percent on already reduced items and said she would not have bothered to come in without the sale.

Traditionally, retailers enticed shoppers with “doorbuster” deals early Friday morning. Then they shifted to midnight following Thanksgiving. But many shoppers lured into stores by earlier openings on Thursday may just be window shopping.

More than 50 per cent of consumers will do some form of “showrooming” during the Black Friday weekend, said Kevin Sterneckert, vice president of retail research at Gartner Group.

“They will buy things because they looked at it in the store. They will touch and feel what they are interested in and then buy it online on Monday, either from the same retailer or a different online retailer,” Sterneckert said.

At the Kmart on 34th Street in Manhattan, Charles Montague, a 55-year-old mover, was browsing the aisles just to kill time. “I don’t holiday shop,” he said emphatically. “I buy stuff all year long, not during some man-made holiday.”

That window shopping has not put a crimp into online sales, however. Online Thanksgiving 2012 sales are already up 16.4 per cent over Thanksgiving 2011 for the same period, according to IBM.

The stakes are high for US retailers, which can earn more than a third of their annual sales in the holiday season. Investors hope holiday sales will help retail stocks cap a strong year. The Standard & Poor’s retail index is up almost 27 per cent this year, compared with a 10.6 per cent increase for the broader S&P 500.

The National Retail Federation, an industry trade group, forecast a 4.1 per cent increase in retail sales during the November-December holiday period this year, down from the 5.6 per cent increase seen in 2011.

Consumers heading into the holiday shopping season remain worried about high unemployment and possible tax increases and government spending cuts in 2013. Also, lasting effects of Sandy, the storm that lashed the densely populated East Coast in late October, could cut into how much shoppers can spend on the holidays.

According to a Reuters/Ipsos poll, two-thirds of shoppers said they were planning to spend the same amount as last year or were unsure about spending plans, while 21 per cent intend to spend less and 11 per cent plan to spend more.

“My family decided not to buy (Chanukah) presents this year – only for the kids. It’s too expensive,” said graduate student Danielle Slade, 29, from Jericho, Long Island.


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EU leaders enter bitter fight over budget

European Union leaders have begun what is expected to be a long and bitter session on a long-term budget for the region.
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With each of the 27 nations having the power of veto over the 2014-20 budget, the summit negotiations that began late on Thursday could stretch over the weekend, perhaps without result as leaders staked out starkly different visions of Europe’s future.

While British Prime Minister David Cameron is seeking to keep payments into EU coffers down as low as possible, French President Francois Hollande called for sustained subsidies for farming and development programs for poorer nations.

Mr Cameron voiced the concerns of several other countries that do not want to see an increase in the bloc’s spending plan at a time when many member states are cutting budgets at home.

‘‘No, I’m not happy at all,’’ Mr Cameron said about EU President Herman Van Rompuy’s latest offer to cap spending for 2014-20 at 1 trillion euros ($1.25 trillion).

‘‘Clearly, at a time when we’re making difficult decisions at home over public spending, it would be quite wrong – it is quite wrong – for there to be proposals for this increased extra spending in the EU,’’ Mr Cameron said.

The EU budget primarily funds programs to help farming and spur growth in the bloc’s less developed, and it amounts to about 1 per cent of the EU’s gross domestic product.

France’s Hollande said that was worth fighting for, adding he would be happy to walk away from the meeting if his demands were not met.

‘‘No country should have a privileged position,’’ Mr Hollande retorted. ‘‘I come here to find a compromise, not to set an ultimatum.’’

The European Commission, the EU’s executive arm, supports more spending, arguing that cross-border initiatives will help create the economic growth and jobs that the bloc of a half-billion people needs, particularly during a financial crisis that has pushed some countries into recession.

The amount of work Mr Van Rompuy has to do to bring the conflicting views closer together was highlighted earlier on Thursday as the bilateral meetings preceding the summit overran, forcing the opening discussions to be delayed by 2.5 hours until about 10.30pm local time.

Calling on all for a compromise, Mr Van Rompuy said ’’it is necessary and, I am convinced, it is within our reach. So, dear colleagues, let’s get down to business.’’

Several leaders were already anticipating the possibility of failure and the need to hold another summit in the new year to negotiate a deal.

‘‘Germany wants to reach a goal, but there might also be the need for yet another stage,’’ Chancellor Angela Merkel said.


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Investors find life in RIM ahead of BlackBerry 10 launch

Shares of Research In Motion surged 17.3 per cent in Toronto on Thursday on rising optimism around RIM’s soon-to-be-launched BlackBerry 10 devices that will vie against Apple’s iPhone and Android-based smartphones.
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The rally in RIM shares was sparked by National Bank analyst Kris Thompson, who boosted his price target on RIM shares to $US15 from $US12. Thompson believes that there is more money to be made in the stock ahead of the early 2013 launch of the make-or-break new line of devices.

It was the second vote of confidence this week for the Canadian company, which has struggled to compete with the iPhone and with devices running on Google’s market-leading Android operating system. On Tuesday, Jefferies & Co analyst Peter Misek, who has been one of RIM’s most influential critics, raised his rating and price target on the stock.

RIM shares, which have now risen in the last seven straight trading sessions, rose to their highest level since May on the Toronto Stock Exchange on Thursday and ended the day at $C12. The US market, where trade volumes usually top those in Toronto, was closed for Thanksgiving on Thursday.

It was the biggest percentage gain in the stock since April 2009, when RIM shares rallied after the company’s results topped market expectations.

Thompson, who has an “outperform” rating on RIM stock, said he raised his price target due partly to the “positive sentiment building in the industry” ahead of BB10’s launch.

“The new management team is executing by maintaining the BlackBerry subscriber base, managing costs and cash, and seemingly readying a February 2013 BB10 global platform launch,” he said in a note to clients.

Earlier this week, Misek said a favorable reaction from telecom carriers to the new devices and the BB10 operating system that runs them was behind his decision to lift his rating and price target on RIM.

The BlackBerry maker, a smartphone pioneer, hopes BB10 will rescue it from a prolonged slump. RIM shares peaked at over $US148 in 2008 before diving more than 90 per cent.

The stock is up more than 90 per cent in the past two months as the launch date for the BB10 devices nears. The stock has now enjoyed seven straight days of gains.

RIM promises its new devices will be faster and smoother than previous smartphones, and will have a large catalog of applications, which are crucial to the success of any new line of smartphones.

Thompson said he now expects RIM to ship about 35.5 million devices in fiscal 2014, up from an earlier estimate of 31.6 million. RIM, whose sales slump has been particularly pronounced in North America, shipped 7.4 million devices in its most recent quarter, ended September 1.

RIM has said it plans to roll out a touchscreen version of its BB10 smartphone initially. Phones with the mini QWERTY keyboards that many long-time BlackBerry users rave about will come a few weeks later, while lower-end versions of both devices will be launched later in the year.

“The shipments boost reflects about one more month of BB10 product availability plus a little extra for the positive sentiment building in the industry from our discussions,” Thompson said.

Analysts had expected the new devices to go on sale in March. But RIM said earlier this month it plans to launch them on January 30, leading many to speculate they will hit store shelves around mid-February.

Chief executive Thorsten Heins told Reuters last week he is confident that the new BB10s will provide RIM with a framework for growth over the next decade.

Earlier this month, the new platform and devices won US government security clearance, which would allow both US and Canadian government agencies to deploy the new smartphones as soon as they are available.


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Smith takes new tack in outing stingy bankers

Guest speaker at the Hands Across Canberra luncheon Dick Smith at the Gandel Hall, National Gallery of Australia.Entrepreneur Dick Smith would throw the country’s richest bankers out of the country if he could, saying they’re the ”height of capitalism”.
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The self-starter, speaking at a Hands Across Canberra function on Thursday, accused his millionaire counterparts of being ruthless and greedy.

”In America you’re a social pariah if you’re wealthy and not known as a philanthropist, whereas here many of my very wealthy friends donate nothing at all,” he said.

The accusations didn’t stop there, with the businessman saying Australian executives lied to the public about their charity handouts. ”I believe most of them are lying or telling fibs … I’ve asked the big charities whether they get large amounts of money anonymously and they say never,” he said.

Mr Smith’s earlier plan to name and shame Australia’s richest people into donating both time and money was unsuccessful and he has now taken a new path.

His strategy, which has the working title ”Undermine Your Bank Executive”, involves encouraging staff to boycott working overtime until their bosses donate to charity.

”Maybe it might make bank executives fulfil their obligations to give publicly and generously, because the only reason they get $10 million or $20 million a year is because there are 22 million people here running this fantastic country,” he said.

Mr Smith explained the joy that giving can have on a person. ”I do it for selfish reasons: it makes me feel good,” he said.

Hands Across Canberra is aimed at building bridges between community organisations and members of the business community on a one-on-one level. ”Although the event was not directly about raising funds, we were pleased to receive more than 50 donations of support and Dick Smith was spotted filling out a card,” an event spokesman said.

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