New Car Sales Hit Record High - Australia Car News

Sales of new motor vehicles jumped by the most in five months in August to reach their highest on record, a sign consumers have the confidence to splash out on big ticket items.

Government figures out this morning show new vehicle sales rose by a seasonally adjusted 3.6 per cent in August to 93,379, following a revised 1.1 per cent decline in July. Sales were up 6.4 per cent compared with August last year.

Sales of sports utility vehicles extended their meteoric run with an increase of 4.3 per cent to a fresh all-time high of 26,452. Sales of passenger vehicles rose 4.7 per cent, while sales of other vehicles, including trucks, edged up 0.4 per cent after a very strong result in July.

The robust vehicle numbers contrast with softness seen in retail sales for July and suggest consumer spending is not as weak as some fear.


Industry data out earlier in the month showed Toyota retained first place in the sales ladder with 19.2 per cent of the market in August.

Holden held second spot with 12.0 per cent. Hyundai and Ford tied with 8.3 per cent, while Mazda took 8.2 per cent.

Solar Incentives Slashed Under New Rules

The Baillieu government has cut incentives for rooftop solar panels for next year as part of a shake-up of how small-scale renewable energy is priced in the state.

The changes reduce the Victorian feed-in-tariff for solar to eight cents for each kilowatt hour fed into the grid in 2013 - down from the existing rate of 25 cents - and fulfils recommendations by the state's competition advisory body.

The changes will not affect customers with existing contracts and tariff rates. Households that have paperwork lodged by September 30 with electricity suppliers can also still get access to the existing 25-cent tariff.

A review released today by the Victorian Competition and Efficiency Commission recommends a six-to-eight cents a kilowatt hour tariff be put in place, with the government accepting the top end of that range for 2013.

The tariff will then be adjusted by the government each year in 2014, 2015 and 2016 based on the wholesale electricity price, before moving to a fully floating market price in 2017.

The tariff scheme will also be opened to other forms of renewable energy systems generating 100 kilowatts or less.

The changes fall short of calls by the renewable energy industry that a fair rate of tariff for solar was 12 to 16 cents per kilowatt-hour.

Announcing the changes this afternoon, Energy Minister Michael O'Brien said the falling costs of solar panel systems and rising power prices meant households were taking up solar without the need for over-generous subsidies from other power users.

He said an older 60-cents per kilowatt-hour tariff — closed by the Baillieu government last year — would cost Victorian households $41 million a year to 2024 through electricity bills in subsidies to homes with solar panels.

"People in public housing, tenants who cannot access solar, are paying higher electricity bills in order to subsidise the rooftop solar for other people. Now that wasn't sustainable at those rates, they were over generous," Mr O'Brien said.

Labor's energy spokeswoman, Lily D'Ambrosio, criticised the decision, saying thousands of Victorian families were installing solar panels to reduce their power bills amid increasing cost-of-living pressures.

''The Baillieu government has again shown it just doesn’t care about supporting families who want to reduce their energy costs while also doing their bit for the environment,'' she said.

Complacent Monopoly Unlikely to Innovate

Opposition communications spokesman Malcolm Turnbull says a monopoly service provider would not push itself to improve its effectiveness and efficiency for customers.

Mr Turnbull responded to a speech on Monday by NBN Co chairman Harrison Young, who said a natural monopoly could serve the entire market at a lower cost than at least two suppliers.

This thesis denied the "dynamic, creative forces" that only competition could deliver in the market, Mr Turnbull said.

"A monopoly is always likely to be complacent - there is nothing to stir it to innovate, to improve its efficiency," he said in his blog on Monday.

Mr Turnbull said the opposition supported all Australians having access to very fast broadband but it preferred the private sector to deliver that aim in a competitive environment rather than by a government-owned monopoly provider.

The coalition has criticised Labor's $37.4 billion national broadband network (NBN) as too slow and too costly.

Under Labor's plan, NBN Co will deliver high-speed fibre-optic cable to 93 per cent of homes, schools and businesses by 2021, with fixed wireless and satellite technology to provide the rest of Australia by 2015.

Mr Turnbull opposes the NBN's plan to roll out fibre to the home in Australia, preferring a mix of technologies including fibre, cable, wireless and copper.

Mr Young said ongoing analysis of NBN's plan was "good".

"We are spending a lot of the public's money," he said in his speech at a Committee for Economic Development of Australia event in Sydney on Monday.

"There ought to be scrutiny of our plans and performance."

He said the potential cost savings of a fibre-to-the-node network would depend on how far ahead planners looked.

The coalition has said it prefers a mix of technologies to provide broadband services as quickly and as cost effectively as possible.

As part of the coalition's policy, fibre-to-the-node (or corner) would underpin a significant part of its plan to provide broadband across Australia.

Mr Young said maintaining the copper that connected the nodes to the premises and coping with inherited information technology systems were both dear.

"The apparent cost advantage of fibre to the node decreases as you lengthen the time frame you look at," he said.

Gold Production Falls, But Miners Still Profitable

Australian gold production has fallen by 4 per cent over the last year.

A higher gold price has meant miners are now targeting lower grade ore and just 261 tonnes of the shiny metal was pulled from Aussie soil last financial year.

Dr Sandra Close, from mining consultancy firm Surbiton, says despite the drop, producers are still keeping their heads well above water.

"That's what's happened, they've been taking advantage of the high gold price and making the most of their deposits and treating slightly lower grade ore, so of course we have a little less gold," she said.

"But what's the most important thing there really is the margin between the sales price and the cost."

The Super Pit at Kalgoorlie, WA, is currently 3.7 km long, 1.5 km wide and 450 metres deep and one of the largest gold producers in the world. (Emma Wynne)

AustralianSuper to Manage Equity In-house

The Australian has reported that AustralianSuper, Australia's largest industry superfund, is planning to manage some of its $15 billion of Australian equity investments, which are currently managed externally.

AustralianSuper head of equities, Innes McKeand told The Australian that the fund was 'in the process of putting a platform in place' to oversee some of its Australian equity investments.
The move would be a blow to the funds management industry which is already struggling with low volumes, soft equity markets and fund outflows.

The moves come as active equities managers face pressure to perform in the face of a shrinking number of investment mandates, driven by super fund mergers and a shift to other asset classes.
Mr McKeand told The Australian that while AustralianSuper would continue to award mandates to external managers, its internal platform was being built 'to cope with a significant amount of funds' to be run by fewer than 10 fund managers.

It is thought that other funds such as UniSuper and Telstra Super are considering a similar move due to their build-up of an in-house stock-picking team.

Costs 'Could Rise' With NBN Plan Switch - Internet Australia

The chairman of NBN Co, Harrison Young, hopes to broaden the debate about the merits and cost of the government's National Broadband Network in a public speech today.

Mr Young will argue that changing the network design to the Coalition's preferred "mix of technologies" could increase the long-term costs of the network and fail to deliver key policy targets, at a forum about “Australia's Digital Future" and hosted by the Committee for Economic Development of Australia (CEDA) in Sydney.

Mr Young's speech outlines three "interwoven" aspects of the NBN – a super-fast broadband network that will cost about $40 billion to construct - the telecommunications market structure, infrastructure and future applications and benefits of the network, according to a draft copy obtained by Business Day.

While saying he wants to stay out of the debate about whether fibre to the premises is needed when fibre to the node technology exists, Mr Young says that “if you retain Telstra infrastructure as part of the national broadband network, even just the last bit, you will not have accomplished the separation of [Telstra] wholesale from retail that was a major objective of Project NBN”.
A fibre-to-the-premise model runs fibre optic cables all the way from an exchange into households, while fibre-to-the-node only runs fibre cable from the exchange to an air-conditioned street side cabinet – the node - serving dozens of premises but keeping the copper wire between the node and households.

Mr Young also says fibre-to-the-node is more expensive over the long term than NBN Co's current design.

“The apparent cost advantage of fibre to the node decreases as you lengthen the time frame you look at. In the long run, as Keynes famously said, we are all dead. Estimating costs is an engineering problem. Deciding on the relevant time frame is a policy question.”

Opposition communications spokesman Malcolm Turnbull has promised a Coalition government would deliver “very fast broadband sooner, cheaper and more affordably” using a mix of technologies, including fibre-to-the-node.

A future Coalition government would also keep the pay-television and internet cable owned by Telstra and Optus, which is connected to about 1.2 million households in wealthy inner-city areas.

NBN Co has struck commercial deals with Telstra and Optus to buy their cable customers and decommission the cable, a move that is heavily criticised by the Opposition.

But Mr Young will today tell the CEDA audience that since the cable networks were only built in suburbs containing Australia's wealthiest households, forcing NBN Co to keep to cables and not build fibre would create the “ironic situation that the wealthiest suburbs have the lowest-quality broadband in the country”.

NBN Co's super-fast fibre network will start operating at 100 megabits per second, but can be upgraded to 1 gigabit per second and faster speeds in coming years. The existing cable network does not have the same upgrade capacities.

Mr Young, who is a director at the Commonwealth Bank, former director at the Bank of England and former chair of Morgan Stanley Australia, lays out the policy and market reforms the current Labor government wants to achieve and says natural monopolies can be the most most efficient use of society's resources.

Using the example of bridges, he says building two toll bridges right next to each other would halve the flow of traffic on each bridge and push tolls to cover the owner's construction costs higher than a single bridge-owner would have to.

Further, NBN Co will not become another Telstra because it is not allowed to sell services at the retail level, he says.

“The problem with Telstra is not that it is a regulated monopoly supplier of wholesale services but that it has been able to behave like a monopolist in the provision of retail services, which is not a natural monopoly.”

Mr Young will be speaking alongside the chair of Regional Development Australia, Dave Abrahams, managing director of IBM in Australia and New Zealand, Andrew Stevens, head of customer relationship management and Medibank, Dermot Roche and head of telecommunications research at Ovum, David Kennedy.

Solar Australia: Fotowatio Plans to Build Australia’s Largest Solar-Power Project

Fotowatio Renewable Ventures, the solar-power plant developer backed by U.S. energy investor Denham Capital Management LP, won the right to build a 20-megawatt project near Australia’s capital.

Fotowatio will participate in the Australian Capital Territory’s feed-in tariff program, which rewards generators of solar power by paying above-market prices for the electricity, Simon Corbell, ACT minister for the environment and sustainable development, said today in a statement.

The Royalla solar farm, to be built about 25 kilometers (16 miles) south of Canberra, will become the largest in Australia by 2014, according to the statement. The venture will help in an effort to lower carbon emissions and shift away from fossil fuels, the ACT government said.

Fotowatio, which is based in the Netherlands, sought a new project in Australia after losing a competition earlier this year for federal government funds to build a large-scale solar plant in New South Wales state. Denham Capital in March reached an agreement with Fotowatio to invest $190 million in solar projects in markets including Australia.

A Tipping Point For The Australian Economy?

Tipping Point: The prevalence of a social phenomenon sufficient to set in motion a process of rapid change; the moment when such a change begins to occur. - Oxford English Dictionary

As social science writer Malcolm Gladwell says in his book of the same name, when the tipping point is reached little things can make a big difference.

Fortescue cuts spending staff as ore prices fall

While Gladwell was largely writing about society and ideas, in the markets the impact of the tipping point, the butterfly effect, or whatever you want to call the apparently minor change can be even more extreme. With the price for assets, both physical and derivative, already set at the margin, when sentiment shifts it doesn't take long for things to change significantly.

Over the past few weeks, sentiment towards Australia and the sustainability of the mining boom has been shifting. While for some time at Macro Investor we've been talking about the fall in bulk commodity prices and the impact this move will have on national income, it's now entered the mainstream consciousness globally.
Everywhere from Financial Times to the Sacramento Bee the talk is that the mining boom is over, that China is not going to stimulate its own economy in the manner it did last time, that the forward-looking indicators of global growth are parlous. Australia has gone in a short space of time from the lucky country to the country whose luck is running out.

But on the main stage we still see business leaders, top commentators and politicians in a tizz, either denying there ever was a mining boom, saying it never mattered anyway, or reassuring us that it will endure for another 20 years.

And just to add to the confusion, the Australian government has distracted the electorate by removing the carbon price floor of $15 a tonne and offering big new packages for dentistry and education. With risks to balancing budgets from mining now compounded by risk to budget blowouts from carbon, schools and teeth, our much-vaunted AAA-rating will come under question if the government isn't clear and careful.

Less cocky

While we don't want to get into a partisan slinging match, foreign investors and media are watching with incredulity.

Before, Australia looked so smart: it had escaped the GFC, its banks were worth more than Europe's (despite serving a tenth the population) and its residential property market continued to outstrip wages, rents and inflation.

But now, Australia looks dumb: it's hitched its wagon to a flailing Chinese dragon, its got a series of budgetary black holes and its political debate looks as crazy as a Republican primary.
In a week where the headline economic news is likely to be dominated by industrial production data, European central banks and US non-farm payrolls, there are some serious questions being raised about the state of affairs down-under.

What happened to Australia's counter-cyclicality? What happened to Australia's competitive advantage? Are Australia's banks really worth that much when you can get a Credit Suisse and a Standard Chartered for the price of a CBA?

Moreover, are Australia's houses good value when a shack in Byron costs more than a flat in Paris? Are Australian wages reasonable when a truckie in Kalgoorlie earns more than a team in Jo'burg? Is Australia's dollar fairly priced when it buys you an ice-cream in Brisbane for the same as a dinner in Singapore?

Flagging

When those answers are met with incredulity or proclamations that we're the best country in the world and that's the way things are, don't expect more than a cool response from the international hedge fund and asset management community.

Whipping up the patriotism might work when you're playing for a home crowd, but it won't impress those who observe our situation from the perspective of distance or neutrality.

Some are seeing this sudden crescendo of negative overseas sentiment towards Australia as a crowded trade, but it's perhaps crowded for a reason.

If commodity prices do not recover sustainably then the mining boom is very close to its peak. A large current account deficit is in the offing as LNG construction and still-too-high consumption drives big imports but export revenues fall heavily.

Then there's the drive to government surplus which supports the nation's public and private credit ratings and keeps at bay the ever-present questions about our expensive houses.

Indeed, once the herd starts moving, those in the way better move out of the hooves' way.

Short sighted

With the Australian dollar where it is despite no action from the US Federal Reserve and with Aussie bank credit default swaps pricing in smooth sailing despite brewing September storms in Europe, both these assets are looking like obvious shorts.

And with China facing a situation where it cannot risk stimulus without risking inflation, despite a rapidly weakening construction and export market, signs are few that there'll be a rebound in mining in the short term.

Things look rosy when viewed within the prism of Australia's unique position in the global economic landscape, but look beyond our shores or the last reporting season and confidence looks misplaced or worse.

Just like that fabled moment in time, when the grounds of the Imperial Palace in Tokyo were worth more than the entire real estate market of California, we wonder if a tipping point has been reached for Australia.

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Australian Capital Cities: Where's Hot, Where's Not

DARWIN was Australia's best-performing capital city for property values during the past quarter - up 5.2 per cent - and showing year-on-year growth of 4.2 per cent, according to the latest figures from RP Data.

The RP Data-Rismark August Hedonic index shows Adelaide is the weakest performing capital city, with the change in dwelling values sliding 2.2 per cent during the past three months.

The monthly figures were more optimistic though for Adelaide, showing 1.4 per cent growth for August.

Sydney and Melbourne both recorded only 0.1 per cent growth for the month, but are performing better for the quarter, at 2.4 per cent and 2.5 per cent respectively.

RP Data research director Tim Lawless, said the figures showed a flat winter season that could be the foundation of a strengthening Spring.

Combined with the lowest transaction levels since the late 1990s, prices could also soon be expected to drift upwards after years in the doldrums.

"Spring is going to be better than last year,” Mr Lawless said.

"This is the first time that we have seen total listings across the capital cities the same as they were last year.”

Mr Lawless said lower listing levels were good news for vendors because it meant there was not as much choice in the market which could improve prices.

"In November last year, the listings were 30 per cent higher than they are now,” Mr Lawless said.
"They are currently only 0.5 per cent higher than last year, which means that we have a good benchmark level."

From a supply perspective, it’s a sign that there aren’t as many homes on the market at the moment and that means homes are selling a bit faster and vendors discounting a little less but transaction numbers stabilising.”

Mr Lawless said transaction volumes were at their lowest since 1998 - and were currently lower than during the Global Financial Crisis.

"At the moment based on June data, transaction volumes are 7 per cent lower than the same time last year,” Mr Lawless said.

"We’re averaging 30,000 sales each month and that’s fairly steady across 2012.”

But the lack of stock was being treated calmly by potential buyers who are showing patience about finding exactly the right home.

"A lot more people are attending local houses and showing interest in the market place but there is still not a level of urgency that will push buyers into making a purchase decision rapidly,” Mr Lawless said.

“Purchase decisions won’t be rushed, buyers are playing vendors off against each other and are negotiating pretty hard.”

Figures from the data showed:

- Hobart prices grew 3.9 per cent for the year to date
- Sydney prices grew 1.9 per cent for the year to date
- Darwin prices grew 8.4 per cent for the year to date
- Brisbane prices grew 0.6 per cent for the quarter
- Perth prices lifted just 0.2 per cent for the quarter

Over Regulation Driving Mass Exodus in Australia's Resources Sector

 

The New Trend for Primary Sector resource Companies operating in Australia is to go offshore seeking reallocating their capital to projects with less overhead cost and greater certainty.

2012 Has seen the introduction of a Carbon Tax (Carbon Trading System) and a Mining Tax which combined with a heavily reduced Iron Ore price and weakening demand has seen any new or planned venture on paper, look far less economical.

There has been an incremental shift in Australian Companies increasing profiles overseas where the cost of business are seen as being significantly less such as Papua new guinea and South Africa.

The Australian Governments Justification for the Mining Tax (Resource Super Profits Tax) are basically two fold:

The Commodities Prices are rising so fast the taxation system is unable to stay in-line with the super normal profits mining companies are experiencing during this resources boom.

Most of our mining companies are majority foreign-owned and are receiving a huge windfall at the Australian taxpayer’s expense.

The Carbon Tax will also progressively increase the costs of production capabilities for miners and primary resource companies in an indirect way through increased costs such as electricity which is one key input to mining and yielding primary resources, some to a break even and shut down point where the cost of production is outstripped by costs and economics uncertainty. 

The outcome of these creeping legislation's are that incrementally Australian companies will and have been considering a more international approach as the disincentives to operate inside Australia grow to a level were companies will be forced into this position.

The eventuation is that the price put on commodities in Australia will ensure that they are plentiful for generations to come as the opportunity cost of mining in Alternate resource rich countries becomes too much. 

This Legislation is effectively creating commodities world where 3rd world countries seek out cheaper countries to do business in and in a way at least its almost like Australian Government was slow to catch on to Globalisation and outsourcing production to countries with cheaper labour and less Government Bureaucracy where businesses and economies thrive.

Energy Build Costs in Australia Very Worrisome, Says Shell

A SENIOR Royal Dutch Shell executive said today the cost of building energy projects in Australia is becoming "very worrisome" as the European oil giant prepares to decide whether it will spend billions more dollars in the resource-rich nation.

Shell has already committed almost $US30 billion to Australian gas-export projects being built over the next five years. The company's Australian head, Ann Pickard, said the figure is poised to become $US50 billion if final decisions are made on other projects that Shell has on the drawing board.

"So the costs have to stay competitive," Ms Pickard told a conference.

Australia is central to the growth plans of many big oil companies including Shell and Chevron as they attempt to meet intensifying demand for cleaner-burning fuels from fuel-strapped Asian nations such as Japan and rapidly industrialising countries such as China. Natural gas has overtaken oil to count for 51 per cent of Shell's total fossil fuel output.

Australia's vast natural gas reserves, political stability and proximity to Asia make it an attractive place to invest. Over $US175 billion worth of gas-export projects under construction on its coastline stand to catapult the country above Qatar as the world's biggest liquefied natural gas, or LNG, exporter by the end of the decade. LNG is natural gas chilled to liquid and exported by sea.

The industry here though faces challenges. A lack of skilled labour combined with a surge in development activity that's also occurring in the country's booming mining sector has squeezed labour supplies and made Australia one of the most expensive places in the world to produce LNG. And a soaring Australian dollar is making locally-based skills and equipment more expensive for foreign-based companies.

Such cost pressures are building at a time when companies mull whether to start exporting LNG to Asia from North America and East Africa, potentially increasing competition for Australian projects, particularly those not currently under construction.

Shell hasn't yet made a final decision on whether to proceed with a massive LNG venture in Queensland with PetroChina that will attempt to chill gas trapped in coal seams for export. And although Shell's just increased its shareholding in the Browse LNG development in Western Australia, an investment decision on that project isn't expected until next year.

"I'm hoping we can get some more projects going but the costs here are getting to be very worrisome," Ms Pickard told reporters.

Shell is hoping it can source workers more easily and more cheaply by timing a final investment decision on its Queensland LNG joint venture a few years after three rival developments there. Still, Ms Pickard said it's possible Shell could process its gas through a rival LNG plant in Queensland rather than build its own plant.

"That's certainly an option. But the intent of PetroChina and Shell, of course, it to continue with our own project," she said.

As for Browse, joint venture partners including Woodside Petroleum Ltd. (WPL.AU) are spending over $US1 billion investigating the commercial viability of piping the gas to a new LNG plant in the environmentally sensitive Kimberley region.

Shell's decision this week to almost triple its stake in the project by taking Chevron's 17.5 per cent interest has fanned speculating the resource could be processed on a floating LNG, or FLNG, vessel instead. A pioneer of FLNG technology, Shell is targeting first production from the world's first FLNG vessel from its Prelude field, located near Browse, in 2016.

"We'll take the cost estimates and see if we've got a commercial project in the Kimberley or not. Then, obviously in consultation with the government, we'll make a decision on whether we'll go forward in the Kimberley or look at other alternatives," Ms Pickard said.

Legacy of the Sydney Metro Line Land Grab

THE defunct Sydney Metro is still sitting on a $100 million property empire, with at least two office towers about to be demolished more than two years after the former Labor government pulled the pin on the project.
 
In late 2009 the department behind the short-lived Rozelle-to-city Metro line snapped up $124 million worth of property along the proposed route, including several CBD office blocks, and spent hundreds of thousands of dollars more to turf tenants out of some of the buildings.

In February the following year premier Kristina Keneally killed off the project, which by that stage had already cost the taxpayers $356 million.

However, instead of selling off the property portfolio - or at least releasing the properties to earn some much-needed income - the department has held on to the buildings, and two of them are about to be demolished.

Property records reveal Sydney Metro still owns at least seven buildings it bought during the spending spree; some of those are just standing empty.

The biggest single purchase, the $45 million building at 8 Castlereagh St, has since been relet. Two adjacent 11-storey office blocks in Clarence St, above Wynyard Station in the city - which cost taxpayers a whopping $39 million - have sat almost entirely vacant for the past 2 1/2 years.

At 30 Clarence St, just the ground floor retail space remains occupied after the former government spent more than $500,000 in compensation to tenants to end their leases.

Next door at No. 36 the last of the tenants moved out in July after the 10 other floors sat empty for months.

Both buildings are now set to be demolished to make way for the Wynyard Walk, an underground passage linking the station to Barangaroo.

In late 2010 Ms Keneally announced the $300 million Walk as an alternative link to Barangaroo after the Metro axing left the $6 billion redevelopment with limited public transport.

CBRE leasing agent Tim Molchanoff said similar B- and C-grade buildings rented for upwards of $520 a square metre, meaning the government had also missed out on $3.4 million in rent.
A spokesman for Transport for NSW said all the other buildings were leased.

"These seven properties were acquired by Sydney Metro and all are now owned and managed by Transport for NSW,"

Clean Energy With a Pinch of salt

A sodium-ion battery being developed in Australia is set to increase solar energy use and reduce our dependence on fossil fuels, according to researchers.

Although bulkier than commonly used lithium batteries, sodium-ion batteries will be cheaper, less toxic, and more environmentally friendly, said Manickam Minakshi, a chemistry and mineral scientist at Murdoch University, in Perth Australia.

“Our water-based sodium-ion battery has shown excellent potential for affordable, low-temperature storage,” he said.

Better batteries

Other batteries used for renewable energy storage – such as molten salt or molten sulphur – only work at high temperatures, making them expensive and impractical. Also, like lead-acid batteries, they are very corrosive and environmental pollutants, which aren't problems with sodium-ion batteries, said Minakshi.

The Murdoch team is now moving towards large-scale commercialisation, and the future could see these batteries connected to solar panels in every home. “This is a very exciting time,” said Minakshi.
The new sodium-ion battery has particular potential when coupled with the green power of solar energy. Widespread use of power from solar panels is limited because there are periods known as ‘non-generation’ times, when power cannot be produced. These include, for example, overcast weather or night-times.

Power in the dark

“Using solar energy panels to get power will only make sense when you can store the power when the Sun’s not shining,” said Stephen Thurgate, vice-president of program development partnerships at Sydney’s Macquarie University.

Murdoch’s new sodium-ion batteries could have applications in small networks with their own battery systems or ‘smart grids’ that use information and communication technology to reduce dependence on centralised power stations, said Thurgate.

While commonly used rechargeable lithium batteries have a higher voltage, making them more suitable for transport and vehicular power sources, they come with a lot of issues, said Minakshi.

Sodium: cheap and abundant

Lithium, for example, is more expensive and far less abundant than sodium in the Earth’s crust.
Another advantage of sodium-ion batteries is that they have a higher density, meaning they are able to store more energy for their weight. Combined with their low costs, they could open up affordable green energy to the developing world.

Lithium and sodium share similar chemical properties, but the sodium ion is 2.5 times the size of lithium, and a big challenge for the Murdoch researchers was finding a ‘host material’ for these large ions.

“Ions travel out of the cathode and into the anode to form a current,” said Minakshi. “As an imperfect analogy, you can think of them as mesh filters that ions pass through. We had to find materials with larger gaps in their mesh.”

Paving a path for alternative energy technology

Murdoch’s new development doesn’t spell the death of the lithium battery, which is still ideal for transportation because of its lighter weight, said Danielle Meyrick, deputy dean of the School of Chemical and Mathematical Sciences. “Sodium is slightly heavier and is much more suitable for stationary energy storage applications [such as] industry,” she said.

The sodium-ion technology could also enable the use of renewable energy in households, moving away from traditional energy generation sources.

“This kind of battery facilitates security of supply and continuity of electricity supply to households," said Meyrick. “It facilitates storage in times when there’s no sunlight, when there’s no wind, [and] when there’s no snow.”

Although there is more research to be done on finding the optimum scale of the battery and cell size, Thurgate said the findings were promising.

“The fact that [sodium-ion batteries are] based on readily available materials, that it’s an aqueous solvent [water-based] – so there’s no fear of the thing being flammable – [and] the fact the energy density is very high... are all great,” she said.

Carbon Shift to Ease Scrapping of Tax: Coalition

THE Coalition says the linking of Australia's carbon price to Europe's will make it easier for Tony Abbott to axe the scheme, by giving firms a market to resell unnecessary forward-dated permits. 
 
The opposition's acting climate change spokesman Simon Birmingham said Australian firms buying emissions permits in the European carbon market would not be left holding worthless paper when the Coalition abolished the Australian scheme.

“They will have a safe and clear way to offload those permits back into the European scheme,” Mr Birmingham said.

“We've always made it clear that it was possible to abolish the carbon tax and this further demonstrates there is absolutely no impediment to doing so.”

Labor yesterday moved assuage business fears about the impact of the carbon tax by dumping the scheme's controversial $15 a tonne floor price, a change that could slash hundreds of millions of dollars from annual company costs.

The scheme will be linked to the European carbon price from July 1, 2015, allowing Australian firms to buy and sell permits on the world's biggest carbon market.

But the move exposes the government to a potential multi-billion dollar budget hit, with emissions permits in Europe currently trading at about $8 a tonne - far below the $29 a tonne figure the government is relying on to reap a forecast $9.2 billion in revenue in 2015-16.

Australian Industry Group chief executive Innes Willox said linking the scheme to Europe was a good move.

But he said it was difficult to see the European carbon price getting up to $29.

“It's fanciful,” Mr Willox told Sky News, although he added: “This is a positive move in the long term.”

Mr Willox said there were a “whole lot of balls in the air” with the Coalition's policy.
“Business needs long term certainty ... the certainty of a regulatory framework,” he said.

Climate Change Minister Greg Combet said the EU carbon price had been hit hard by the eurozone financial crisis, but it would recover.

“It is three years away,” Mr Combet said. “The treasury modelling is something we stand by.”

Australia, EU ETS to Link in 2015

The Australian government today confirmed it will not enforce its carbon floor price when its emissions trading programme commences in 2015 as it moves to link with the EU Emissions Trading System (ETS).

Emitters in Australia are required to pay for every tonne of carbon dioxide they emit, currently at a fixed price of A$23 (US$23.87). It was originally proposed that from 1 July 2015, that price will be allowed to float within a band.

However, the Australian government and European Commission today announced that, from that date, Australian firms can use EU allowances (EUAs) for compliance and, by 1 July 2018, EU ETS participants will be permitted to use Australian allowances for compliance. To enable this linkage, the planned A$15 floor price will be scrapped.

And while Australian emitters can use international credits, such as EUAs, for 50% of their compliance from 2015, the cap on Kyoto credits – such as certified emission reductions (CERs) from Clean Development Mechanism projects – will be restricted to 12.5% of an emitter’s liability, said the government, from the previous 50%. “Linking the Australian and European Union systems reaffirms that carbon markets are the prime vehicle for tackling climate change and the most efficient means of achieving emissions reductions,” said Australia’s climate minister Greg Combet.

“Starting today, Australian liable entities can purchase [EUAs] for future compliance in Australia,” he added. “These arrangements provide Australian businesses with access to a larger market for cost-effective emission reductions and provide European market participants with enhanced business opportunities.”

“This would be a significant achievement for both Europe and Australia,” said the EU’s climate commissioner, Connie Hedegaard. “It is further evidence of strong international cooperation on climate change and will build further momentum towards establishing a robust international carbon market.”

“This is an impressive development – a first of its kind in having two major economies link their carbon pricing programmes,” said Dirk Forrister, Geneva-based president of lobby group the International Emissions Trading Association (IETA). “IETA members – and economists worldwide – have advocated the potential cost-savings benefits of linking for over a decade, so we are extremely pleased with this news, even as we continue studying the details.”

EUA prices were firmer this morning, up 2% at 8.30 GMT to €8.30 (US$10.42) for the benchmark December 2012 futures contract.

“It is a bit of much-needed positive news,” said one London-based trader.

“There might have been some knee-jerk buying this morning, but it’s too early in the day for the EU-Australia linkage to have a significant price impact,” countered Geoff Sinclair, head of carbon sales and trading at Standard Bank in London.

“If it remains in legislation, this might add around 100 million tonnes of demand to the EU scheme, although the extent to which it does will rely heavily on relative prices and exchange rates, so this doesn’t get the EU off the hook when it comes to the need for a set-aside [of EUAs to address massive oversupply in the EU ETS].

“At the same time, the linkage is likely to make the Australian scheme more palatable in terms of domestic politics, which is likely to boost investor confidence about its longevity,” he added.

“The removal of the floor price, the linking with the EU and the limit on the use of Kyoto units all impact the shape for the forward price curve from 2015 onwards,” said analysts at Westpac in Sydney. “Subject to the release of the actual legislation, the aggregate impact of these changes is that the EUA price will now become the primary influence on the [Australian carbon] price rather than the CER price.

“Further, the removal of the administrative complexity of hedging the price floor’s ‘top-up fee’ will presumably free up Australian liable entities to access cheap, cost-effective options in international markets sooner rather than later.”

The Australian government foresaw some kind of measure to require Australian emitters buying CERs below the floor price to pay a top-up fee – an administratively complex exercise, that is now unnecessary.

The Australian and EU authorities hope to agree on how to link their respective emissions registries, which track trades of allowances, by the middle of next year. However, the European Commission still needs to receive a mandate from member states to enter into negotiations for the two-way link.

Government to Scrap Carbon Floor Price

After weeks of secretive talks between the Gillard government and the Greens, Climate Change Minister Greg Combet has announced Labor will scrap the planned $15 floor price on carbon permits in a major overhaul of the carbon pricing scheme.

Following intense lobbying from business and threats by the independent MP Rob Oakeshott to block the floor price, the government will ditch the mechanism and instead restrict the purchase of cheap overseas permits from developing countries.

A limit on the amount of United Nations-backed permits that Australian companies can buy will effectively prop up the price at home.

Climate Change Minister Greg Combet plans to scrap the $15 carbon floor price. Photo: Alex Ellinghausen

Mr Combet also announced plans to link Australia's scheme to Europe's emissions trading scheme from 2015, which is likely to have the effect of matching the two prices.

 

The link with Europe means that Australian companies can start buying European permits - which are now trading at $9.80 - right away to meet their future liabilities.

This could make the carbon price cheaper overall for Australian businesses, though the European price is likely to rise by the end of the decade as the European Union moves to make restrictions of its own.

Australian companies will only be able to meet 12.5 per cent of their liability under the Australian carbon scheme with the UN-backed permits.

And from 2018 - or possibly sooner - Australian companies will be able to sell credits in Europe. This could be a boon for farmers, who can generate credits through changes to their land practices, such as tree planting, though Mr Combet said that aspect was still to be negotiated.

The carbon price, which came in on July 1, will initially be fixed at $23 and will rise slightly over the next two years, when it becomes a floating-price emissions trading scheme.

Europe has the largest emissions trading scheme in the world. A linkage means that carbon permits can be traded back and forth between Australia and Europe. The idea is that the free market then finds the cheapest possible way to reduce carbon. From an environmental viewpoint, it does not matter where the carbon cuts are made.

The floor price was intended to create certainty for potential investors in clean energy. But businesses complained it would be an administrative headache.

Without a restriction of the UN-backed international permits, the Australian price could crash to as low as $3 or $4. The Greens have been concerned that a very low carbon price would not be enough to drive investment in cleaner energy such as wind, solar and wave power.

Today's announcement is also likely to have an effect on negotiations between Energy Minister Martin Ferguson and electricity generators who could be paid billions of dollars to phase out their dirtiest power plants.

The likely price of carbon over the next decade is one factor in deciding the value of these power plants. They may argue that scrapping the floor price raises the value of their assets.
The Greens have already backed the changes.

Independent MP Rob Oakeshott said this afternoon he would also support the legislation.
He said the announcement would protect Australia's emissions trading scheme from some ''very difficult decisions into the future''.

Opposition Leader Tony Abbott said the changes showed the government was all at sea on the carbon tax.

''You can't fix it. You've just got to scrap it,'' Mr Abbott told reporters in Rockhampton.

''We haven't had the carbon tax for two months yet and they've admitted there is a fundamental flaw at the heart of the carbon tax.''

Mr Abbott said there would be a ''huge hole'' in the budget as a result of the decision.

''If you can't take the price for granted, you can't take the revenue for granted, and if you can't take the revenue for granted, you can't rely on the compensation,'' he said.

However Mr Combet said the government would not reduce household assistance payments and tax cuts set up to compensate for the price impacts of the carbon tax.

Asked if he was contemplating any further changes Mr Combet said: ‘‘no’’.

''We will not be cutting any household assistance,'' he said.

''We committed to it and you might recall that there are further tax cuts that have been legislated from 2015 as well.''

Australian Mining Boom Peak Years Away

THE government's efforts to talk up the longevity of the mining boom will be boosted today by an influential report that predicts mining industry investment is still several years away from peaking. 

And the report by economic forecaster BIS Shrapnel predicts other sectors of the economy will lift to fill the gap when the mining sector inevitably slows.

A series of cabinet ministers insisted yesterday the mining boom had further to run, in an attempt to counter fears of a slowdown after BHP Billiton's decision last week to shelve its $30 billion Olympic Dam expansion and Resource Minister Martin Ferguson's controversial declaration that the boom was over.

Against a dreary outlook for the prices of Australia's key exports, BIS Shrapnel believes the value of contracted resource projects means mining investment would not peak until 2014, with Queensland and Western Australia tied up with major projects for three to five years.

"After that, non-mining investment will stabilise and start to pick up, taking over as the engine of growth and smoothing the transition," says the BIS report, to be released today.

It suggests lower interest rates will boost retail spending, which had been held back by low confidence and weak demand rather than the Australian dollar.

"Over time, capacity constraints outside mining, such as those already evident in the construction sector, will prompt a broadening of investment beyond mining," it says.

Frank Gelber, chief economist at BIS Shrapnel, said the realisation that the investment mining boom was finite would cause people to "overreact on the pessimistic side".

"All of a sudden, the glass seems to have become one-quarter full, but nothing has changed," he told The Australian in a reference to Reserve Bank governor Glenn Stevens's optimistic glass-half-full depiction of Australia's economy.

"Our report aims to dispel some of the panicky discussion about the end of the boom," Mr Gelber said, predicting economic growth of 3 per cent this year and next.

BIS Shrapnel believes continued strong commodity prices will keep the Australian dollar high "for a few more years", putting pressure on other trade-exposed industries.

Trade Minister Craig Emerson said yesterday the mining boom was not even halfway through, while Workplace Relations Minister Bill Shorten noted that his department was projecting that another 100,000 jobs would be created in the mining industry over the next five years.

"Mr Ferguson is right: we might have reached the peak in prices, but volumes are still increasing and there are still plenty of projects," Mr Shorten said, attempting to paper over any divisions in cabinet.
"I don't think that the contribution that mining is going to make in jobs and economic output for Australia has at all peaked." Wayne Swan said the mining boom was better understood "as a series of booms - a boom in prices, a boom in investment and a boom in exports".

The Treasurer said that while the price boom had passed its peak, "the investment boom still has some way to run" and the Bureau of Resources and Energy Economics had forecast commodity export earnings to reach a record $209 billion this financial year as higher volumes offset lower prices.

JPMorgan chief China economist Haibin Zhu, visiting Sydney last week, told Sky Business's Australian Business on Friday night Chinese demand for Australia's resources would slow but remain at a very high level over the next five to 10 years.

"What follows the recent boom is going to be far from a bust," he said, pointing out the Chinese government was intent on stabilising the country's growth at a lower but more stable level.
He warned that China's one-child policy would sap its potential economic growth rate by about one-quarter within the next five to 10 years.

"The share of working-age people in the population is shrinking and the number of workers will start to decline in the next few years," he said.

Mr Gelber also dismissed the impact of the carbon tax on BHP's decision to shelve its Olympic Dam copper, gold and uranium mine expansion, arguing it would go ahead once construction costs eased. "Such a long-term project means it is hard to predict ultimate prices and demand," he said.

Mr Swan said he was "pleased" to see discussion about the longevity of the mining boom. "But behaving as if the investment pipeline has suddenly run dry is not only false, it's irresponsible," he said, pointing out the Reserve Bank governor had said mining investment would not peak for a few years yet.

Aussie Banks Worth More Than Europe's Combined

FOR the first time in history the value of Australian banks are now worth more than the Eurozone. 
 
The Commonwealth Bank made a net profit of almost $7.1 billion, the biggest ever reported by an Australian bank. That boils down to a daily profit of almost $19.5 million or more than $13,000 a minute.

 ANZ  posted a $4.4 billion profit for the nine months to June, an increase of 10 per cent.

CBA chief executive Ian Narev told the Adelaide Advertiser that he is “proud and not embarrassed” by the massive profit surge. He said the results boil down to strong Australian economy and the confidence of their shareholders.

“The people who own this group. . . 60 per cent of them are Australian households directly, that's 800,000 Australian families, “Another 20 per cent of our shareholders are Australians who own them directly through their pension funds.

“So the shareholders who we are doing well for are millions and millions of Australian households,” said Mr Narev.

ANZ's Australian, New Zealand and Asian operations, chief executive Mike Smith told news.com.au the group attributes their success to effective management of ongoing funding and competitive pressures. He also said ANZ had picked up market share in deposits, mortgages and business lending

Other financial analysts have said the massive profits can be explained by the fact that unlike European and American banks, Australia have not loaded up on subprime debt, bad real estate loans or “piles of dodgy foreign debt”.

Home Owners Forced to Take Super - Australia Mortgage

HOME owners have raided their superannuation funds of a record $100 million in last-ditch bids to avoid foreclosure, new government figures have shown.

The surge in mortgage-holders seeking emergency access to their savings has alarmed housing and social welfare groups, who warn many families are still struggling to meet loan repayments despite steep cuts in the interest rate

With distressed owners receiving an average of $15,250 each, there are also concerns some super accounts could be drained of more than a third of their value. The number of households in serious financial trouble has worsened despite mortgage lending rates falling about 1 per cent in the past six months and nearly 3 per cent since their peak in mid-2008.

Figures obtained by The Sun-Herald showed 6500 home owners were given emergency access to their super last financial year to prevent an imminent foreclosure.

A Commonwealth Department of Human Services report found $99.38 million was released, up 25 per cent on 2010-11 and well above the disbursements in the aftermath of the global financial crisis.
It also marks the third year in a row that the number of people applying for, and being granted access to, their nest-egg has increased.

A campaign manager for Australians for Affordable Housing, Sarah Toohey, said years of house price growth had seen debt balloon and forced households to devote an unsustainable amount of income to meeting mortgage repayments.

''It's alarming and it shows that housing affordability is about more than just interest rates,'' she said.
''The sheer size of what people have to borrow to get into the housing market now really puts household finances under strain.'

Gold Prices Boost Newcrest Profit

NEWCREST Mining's full year profit is up 23 per cent due to rising gold prices and the company expects gold production to rise in the current financial year.

Newcrest today posted a net profit of $1.12 billion for the year to June 30, up from $908 million in the previous corresponding period.

Revenue of $4.4 billion in the year to June was an eight per cent increase on the previous year's $4.1 billion.

Newcrest produced 2.29 million ounces of gold in the year to June, a drop of 10 per cent on the previous year.

The company said it expected production in the 2012/13 financial year to be in a range of 2.3 million to 2.5 million ounces.

Copper production in the year to June of 76,015 tonnes was up one per cent on the previous year.
Newcrest said it expected copper production in 2012/13 to be in the range of 75 thousand tonnes to 85 thousand tonnes.

The statutory profit was a record for Newcrest.

Its underlying profit of $1.1 billion, up two per cent from last year, was also a record.

The difference between the headline and underlying profits related to $46 million gained from the sale of two Queensland projects to Evolution Mining during the year.

Newcrest benefited from a higher realised gold price for the year of $1,609 per ounce, which was 17 per cent or $231 per ounce higher than the previous year.

Elsewhere, cost of sales increased by nine per cent to $2.601 billion, its gold sales fell by six per cent to 2.3 million ounces and production was down 10 per cent.

The company blamed the cost hikes on increased mining activity pushing up the cost of labour, fuel and energy, and negative currency exchange factors.

Newcrest says it plans to pay a final ordinary dividend of 23 cents per share (15 per cent franked), bringing the total to 35 cents per share, 17 per cent higher than the prior year.

It's interim distribution of 12 cents was unfranked.

Subsidy Cut Halts Solar Expansion

A SOLAR panel supplier has axed its plans to expand into Queensland after the government revealed it would slash the benefit for supplying power back into the grid - from 44¢ per kilowatt hour to 8¢.

Madison Australia's rethink came as industry lobby group Clean Energy Council argued the policy change could put thousands of jobs at risk, saying householders would reconsider the benefits of installing solar panels given the time taken to recoup their investment.

But Energy Minister Mark McArdle described the solar industry as viable, saying the scheme needed to be changed because all energy users were paying extra on their power bills to subsidise the feed-in tariff for solar panel owners.

Mr McArdle announced yesterday the feed-in tariff for providing power back to the grid would be cut to 8¢ per kilowatt hour, but anyone already in the Solar Bonus Scheme as of July 9 would continue to receive the 44¢ benefit.

Madison Australia director Yorath Briscoe said his Melbourne-based solar installation and retailing company was about to sign contracts in coming weeks to expand into the Gold Coast market.

He said the company had been planning to directly employ six staff in Queensland and contract up to 18 tradespeople, but the cut to the feed-in tariff would hit demand.

“There's going to be massive demand the next 10 days but after that there will be nothing,” he said, adding the company would no longer pursue the Queensland expansion plans.

“It's quite shocking that a government would pull the plug like this.”

The Clean Energy Council said under the current Queensland system, an average householder would break even on the initial investment after 4.5 years.

The average payback period would jump to about 10 years under one scenario modelled in research commissioned by the Clean Energy Council before yesterday's announcement.

But the cost of buying and installing solar panels was expected to progressively decrease in coming years so the break-even point could be less than 10 years for future customers, a council spokesman said.

Online Orders Surge As Retailers Lag - Online Shopping Australia

The number of online orders to Australian businesses increased by almost a third during the 2010-11 financial year.

The Australian Bureau of Statistics research released on Tuesday showed that local businesses received online orders worth $189 billion in the 12 months to June 30, 2011, an increase of $46 billion, or 32 per cent, on the previous corresponding period.

However, the data also showed that only 28 per cent of business said they had received orders via the internet, a mere 13 per cent increase on the previous year.

In contrast, more than half of businesses in Australia, 51 per cent, reported placing orders for goods and services on the internet in last financial year, up nine per cent in the previous year, ABS data showed.

In another troubling sign, just below 40 per cent of business reported ‘‘some form of innovative activity’’ in 2010-11, the ABS said, with 66 per cent of large businesses reporting activities to boost efficiency and lower costs. Only 30 per cent of companies with four employees or less reported the same, the ABS said.

The gap between businesses receiving orders online and those placing them highlighted the demand for changes by local industries and the constraints that many businesses in Australia work under. The slow pace of innovation in Australia has held back the nation’s overall productivity, an area of concern for the central bank and economists.

RBA forecasts of economic growth routinely factor in improvements in productivity to achieve the expansion, yet productivity in Australia has lagged in recent years.

RBA governor Glenn Stevens recently urged politicians to follow the suggestions of the productivity commission in order to boost the the efficiencies and lower the cost in the economy.

Australia’s economy, while expanding by 1.3 per cent in the first quarter, has been riven by disparities in performance between mining and non-mining states and industries.

Macquarie senior economist Brian Radican said that internet usage in Australia is lower than in the comparable economies of the US or UK.

Yet, the distances in Australia suggest that the internet usage for commerce could have a larger benefit locally.

“A deeper embrace of its use by Australian business could arguably have a bigger benefit here than it would in other regions,” he said.

Across all sectors 40 to 43 per cent of businesses had a website.

But while 97 per cent of large business had a website, only a third of small businesses reported having one.

“If firms can drive some of the costs out of businesses, they can produce more for less,” he said.
However, Mr Radican cautioned that Australia’s weaker productivity was also driven by industrial relations challenges and other factors.

Sydney's Housing Market to Continue to Grow

Sydney is Australia's most populous city and its housing sector offers investors unique opportunities with the security that comes with investing in a large and rapidly expanding market.

Property prices in Sydney have increased 25 per cent in the last four years, during which many other housing markets around the world have stagnated or even gone backwards.

The reason that Sydney's housing prices have continued to rise is simple - more people want to live there. Famous for its landmark Harbour Bridge and Opera House, Sydney is the business and financial capital of Australia, with an ideal climate and a relaxed yet cosmopolitan lifestyle.

Sydney has nearly five million residents and its annual population growth rate of 1.6 per cent is higher than the Australian average. It is also higher than that of any major western city outside Australia, yet less than half of this increase comes from births.

Most new Sydneysiders are overseas arrivals who come to Australia to start a new or better life, seeking employment or education opportunities for themselves or their children. They have created a steady demand for around 30,000 more dwellings each year, pushing up prices and making Sydney the most expensive city in Australia to buy a house.

The median price of a Sydney house is now around A$620,000 (S$786,740) and it is rising. Landed properties can be purchased on the outskirts of Sydney for around half this amount, but they are located far from the city centre. Sydney's idyllic harbour side location brings problems, as much of the land is locked away in parks or reserves and there is less available for housing. The urban footprint has spread as far south, north and west as there is land available.

It is almost impossible for overseas arrivals to buy a home until they settle and establish themselves, which can take many years. This has led to a rise in Sydney's rents, which are higher than any other major city in Australia.

High rents and prices have changed Sydney's landscape. They have led to the abandonment of the dream of a landed home for many young Sydneysiders and led to a boom in apartment living. Over half of Sydney's dwellings are apartments or "home units" as the locals call them.

The new medium and high-rise apartment blocks contain gymnasiums, swimming pools and garden barbecue areas. The units are fitted out to attract renters, while their design lowers maintenance costs for investors. Many of the suburbs where this transformation is occurring - such as Pyrmont, Ultimo, Camperdown, Double Bay and Broadway - are located close to the central business district and in the urban centre itself.

What makes these dwellings ideal for investors is that prices for home units are still less than 70 per cent of those of similar sized houses.

The Sydney inner urban market is unique because there are fewer development projects in the pipeline than there are in other cities such as Melbourne even as the rental demand is far higher. Rents in these areas are escalating as a result and housing investors from Singapore can buy off-the-plan units with confidence, knowing that both the rental yield and the value of their investment are likely to rise in the coming years.

'It's the Boom Times Baby - Why So Sad?'

AUSTRALIA'S top book keeper today asked the nation, Why are you so gloomy. 

• Aussies are acting like this is Greece
• We have a "surprisingly bright" future
• Some areas are under stress however

 The national economy has "an incredibly bright future," Secretary of the Treasury Martin Parkinson told a Senate estimates committee today.

Australians had "a lot to be optimistic about", but there was an overwhelmingly negative sense dominating the view of the economy, "as if we live in Greece".

We are enduring "the boom with gloom," Dr Parkinson said.

It was an upbeat projection of the economic fate of Australia at a time when job losses in airlines, the finance sector and manufacturing are painting dismal forecasts by some observers.

And it clashed with the Opposition's claim that the introduction of carbon pricing from July would cost jobs and close down companies.

"If you look at business and consumer confidence they are surprisingly low given the set of circumstances confronting Australia," said Dr Parkinson.

"I'm not in any way attempting to downplay the fact there are parts of Australian business that face very serious challenges in terms of transforming to gain advantage from the opportunities open to us.

"But I do think the whole mind set is overdone. It's almost as if most Australians think we live in Greece. We don't. We actually have an incredibly bright future ahead of us.

"Yes there are challenges, but there are always challenges. The opportunities we have in front of us are of a sort we've never seen before."

Under questioning, Dr Parkinson said his personal thinking was "somewhat surprising that there isn't, in a sense, more focus at the national level, at the opportunities open to us".

"But there is an overwhelming negative sense about much of the national discussion and debate...
Yes we have a multi-speed economy at the moment and there are some parts that face significant challenges but Australians have a lot to be optimistic about."

Dr Parkinson said governments here and overseas had to decide on a trade-off of new wealth and the need to improve the nation's health, welfare and environment.

"The classic question raised in China is: Do we wait to get rich before we address these challenges, or do we do them as we try and get rich," he said.

"And it's a question that every country faces."

Alumina Rejects Wagerup Carbon Tax Claim

Alumina Ltd says the high cost of construction in Western Australia rather than the carbon tax is a key reason that the expansion of its Wagerup alumina refinery has stalled.

WA's Environmental Protection Authority on Monday granted AWAC, Alumina and Alcoa's joint venture company, an extension until September 2016 to substantially commence the expansion that was first given environmental approval in 2006.

The Australian newspaper this week reported an Alcoa spokeswoman as saying the company would not revisit the expansion until it had a clearer picture of the full impact of the carbon tax, due to start on July 1.

The media report also cited the need to secure energy supplies, which Alumina chief executive John Bevan concurred with on Thursday.

But, Mr Bevan said, it was 'not the case' that the carbon tax was the key reason the project was not yet going ahead.

'The capital cost of building in WA is high, as seen with BHP's Worsley (refinery),' Mr Bevan told a conference call for analysts.

The cost of expanding BHP Billiton's Worsley alumina refinery in WA has blown out substantially due to factors including inflationary pressures and the stronger Australian dollar.

This had prompted analysts to speculate recently that the asset may be sold by the mining giant.

Alcoa last week announced that AWAC could close one of its two Australian aluminium smelters, Point Henry in Victoria, in the face of continuing difficult global economic conditions for the industry.

The company warned in January that it planned to close or curtail about 12 per cent of its global smelting capacity to improve its competitiveness amid falling aluminium prices and escalating raw materials costs.

The Point Henry announcement triggered a parliamentary furore, with federal Opposition Leader Tony Abbott blaming the possible closure on the government's carbon tax.

Prime Minister Julia Gillard labelled his comments a disgrace given that 600 jobs at the smelter hung in the balance.

'It (the potential Point Henry closure) is really not firm at this stage,' Mr Bevan said on Thursday, adding that Alcoa's global curtailments would occur in the next four or five months.

In delivering a near fourfold surge in full-year net profit on Thursday, Alumina said costs at Point Henry and its other aluminium smelter in Portland, Victoria, were last year pushed up by increased alumina and coke prices, and the rising Australian dollar.

Alumina booked a net profit for the 12 months to December 31 of $US127 million ($A119.16 million), up from $US35 million ($A32.84 million) for the 2010 calendar year.

Mr Bevan said margins rose after the company moved to price some of its alumina on an index/spot basis.

Morningstar analyst Mark Taylor said a 55 per cent rise in underlying earnings to $US128 million beat the investment research firm's forecast of $US113 million ($A106.02 million).

The company to maintain its full year dividend at six cents per share.

Mr Bevan said the company was cautious on the outlook for 2012, reflecting volatile pricing conditions, a strong Australian dollar and high input costs.

Conditions deteriorated towards the end of 2011, with prices for Alumina's products falling significantly.

Shares in Alumina closed up 1.5 cents, or 1.3 per cent, at $1.17.

Alumina Rejects Wagerup Carbon Tax Claim