Australian news, and some related international items

Nuclear power costs prohibitive

Michael Chamley, The Entrance MARCH 21, 2023

It seems any mention of cheap, clean renewables gets the dander up some areas, whether they be advocates for more coal and gas burning or, over the past two Forums, nuclear power plants.

Had Blind Freddy (hereafter “Fred”) been able to see, he could have referred his fellow acolytes to the failure of nuclear power plants at Three Mile Island in the USA, Chernobyl in the Ukraine and Fukushima in Japan, all frightful results.

However, almost as frightening is the misinformation these Forum inputs contained about the general use of nuclear power.

Firstly, generating costs: The UK has nine operational nuclear power plants, and 11,000 offshore wind turbines (not a reliable comparison place for solar).

In 2021 the cost per MW  hour for wind generation was 37 pounds (A$67); the cost to generate a MW hour of electricity using nuclear was 100 pounds (A$181).

Cost to build: The UK’s latest nuclear power plant; Hinkley Point C; remains incomplete having started construction in 2017, with completion expected (after delays) in 2028.

The cost to date has been 32.7 billion pounds (A$67B), with costs having risen from the initial cost of 22 billion pounds (A$40B).

In the UK experts on energy are saying this station will produce the most expensive UK electricity ever.

Further, there is the added necessity for the power plants to be shut down for maintenance for extended periods. sometimes one-two weeks or more, when their generating capacity is offline, much like coal and gas generators now.

Of course the letters did not include this in their analysis of “intermittency”.

Large wind/solar farms are constructed in two-three years and wind farms cost $2-4M per MW hours.

I also refer Fred to the 2021-2022 Gencost report completed by the CSIRO and AEMO.

In it they stated that wind and solar was the cheapest form of electricity generation (as anyone with rooftop PV will attest), even when taking into account costs associated with storage (batteries or pumped hydro) and related transmission upgrade costs.

The cost of nuclear power would be the most expensive form of power at $16,000 per KwH to produce (Small modular reactors SMR’s Gencost report), with wind and solar under $2000 per KwH.

One of the parties at the coming election is advocating SMR’s for a street near you.

Gencost stated of SMR’s: “Following extensive consultation with the Australian electricity industry, report findings do not see any prospect of domestic projects this decade, given the technology’s commercial immaturity and high cost.

“Future cost reductions are possible but depend on its successful commercial deployment overseas.”

By that time, Australia will be powered by renewables by a mixture of wind, solar, pumped hydro/storage, hydro electric and battery storage – all clean, all sustainable and no radioactive byproducts to dispose of.

March 21, 2023 Posted by | business, Queensland | Leave a comment

$18 million a job? The AUKUS subs plan will cost Australia way more than that

The cost could come in below $300 billion, or easily approach $500 billion.

a large element of old-fashioned pork-barrelling involved.

war with China in the next few years (over Taiwan) isn’t a persuasive argument for submarines that won’t be delivered until the 2030s.

March 17, 2023, John Quiggin, Professor, School of Economics, The University of Queensland

Australian governments have a long and generally dismal history of using defence procurement, and particularly naval procurement, as a form of industry policy.

Examples including the Collins-class submarines, Hobart-class air warfare destroyers and, most recently, the Hunter-class “Future Frigates”.

The stated goal is to build a defence-based manufacturing industry. But there is also a large element of old-fashioned pork-barrelling involved.

In particular, South Australia has nursed grievances over the shutdown of local car making, centred in the state, following the withdrawal of federal government subsidies. The closure of the Osborne Naval Shipyard in north Adelaide would be politically “courageous” for any government.

So the projects roll on, despite technical problems (the six Collins-class subs were plagued by problems with their noise signature, propulsion and combat systems) and cost overruns (the three Hobart destroyers cost $1.4 billion more than the $8 billion budgeted). The $35 billion plan for nine Hunter-class frigates may yet be abandoned given budget constraints.

All these previous ventures are dwarfed by the AUKUS agreement, which involves projected expenditure of up to $368 billion.

As Richard Denniss of The Australia Institute has noted, the precision implied by this number is spurious. The cost could come in below $300 billion, or easily approach $500 billion.

Military case lacking

The case for such a massive investment in submarines has proved hard to make in a simple and convincing way. The “Red Alert” articles published this month by The Sydney Morning Herald and The Age has helped to raise alarm about China. But the warning Australia could find itself at war with China in the next few years (over Taiwan) isn’t a persuasive argument for submarines that won’t be delivered until the 2030s.

Other questions have emerged.

In different ways, former prime ministers Paul Keating and Malcolm Turnbull have questioned the sense of a renewed alliance with the United Kingdom. The UK in a state of obvious decline, and Labour leader Keir Starmer, likely to be Britain’s next prime minister, has been noticeably lukewarm in his support for AUKUS, saying: “Whatever the merits of an Indo-Pacific tilt, maintaining security in Europe must remain our primary objective.”

Then there’s the view, held by many experts, that what has made submarines such potent weapons in the past – stealth – is unlikely to endure. Underwater drones and improved satellite technology could make our subs obsolete even before they are launched.

What about the jobs?

In these circumstances, the easiest political strategy to sell the AUKUS package is to present it as a job-creation program.

This is an appealing path for the federal government, given Prime Minister Anthony Albanese’s yearning for “an Australia that make things”. Albanese’s Twitter account has published tweets extolling the economic benefits of the deal, but none about what the submarines will actually do to make Australians safer.

The obvious response is that the 20,000 jobs the government says the program will directly create over the next 30 years will cost more than $18 million apiece.

But that actually understates how bad the case is.

Where will we find the skilled workers?

Australia already has a shortage of the type of skilled workers required to build the nuclear-powered subs: scientists, technicians and trade workers. Our existing training programs are unlikely to fill the gap. So, the new jobs will mostly be filled either by diverting skilled workers from other industries or by additional immigrants.

The government is grappling with the policies that can meet this existing shortage. Our migration program, for example, allocates extra points for technical skills in short supply, putting skilled workers ahead of people whose motive for migration is to be with their families and friends.

The “Job Ready Graduates” policy introduced by the Morrison government subsidises science, technology, engineering and mathematics degrees, at the expense of humanities and social sciences. This policy is now under review, but may well be maintained in some form.

Such is the scale of the problem that the government’s pre-election commitment to deliver a White Paper on Full Employment (inspired the Chifley government’s 1945 White Paper) has been sidelined by a focus on how to increase the supply of skilled labour, through vocational education, immigration and delayed retirement. Hence the title of the “Jobs and Skills Summit” in September 2022.

There is no indication the shortage of skilled tech workers is going to be resolved any time soon. It is, then, a mistake to boast about the number of technical jobs that will be created by AUKUS.

It would be more accurate to say that, just as the massive financial cost of the submarines will come at the expense of spending on social needs, the workers required to build them will divert skills from addressing needs such as decarbonising the economy.

Perhaps, like previous submarine deals, this plan will be scrapped before consuming the stupendous sums of money now projected. But in the meantime it will divert the Australia’s government from addressing urgent domestic problems.

March 20, 2023 Posted by | AUSTRALIA - NATIONAL, business | Leave a comment

Productivity Commission casts doubt on the federal government’s decision to build nuclear-powered submarines

The Productivity Commission noted that for many years, the defence sector had received effective subsidy rates for domestic production of up to 300 per cent, compared to zero for most other parts of the economy.

It said that given the large sums of money involved in defence, more scrutiny from outside the sector was needed.

Australia should reconsider building its own defence equipment, review finds By Shane Wright, March 19, 2023,  

The Productivity Commission has cast doubt over the federal government’s decision to build nuclear-powered submarines in Australia, using its major report into the nation’s economy to argue for a complete re-appraisal of how the country meets its defence needs.

In the same week Prime Minister Anthony Albanese signed off on the AUKUS submarine project with the United States and Britain, at a cost of between $268 billion and $368 billion, the commission’s five-year review of productivity found that in most cases Australia was better off not developing its own defence production capability.

The commission’s report, Advancing Prosperity, made 71 recommendations across more than 1000 pages of analysis. It follows a long-term decline in Australia’s productivity growth rate, which over the past decade has slipped to its lowest level since the 1950s.

Part of the report focused on government infrastructure spending and procurement, particularly around defence, which it noted had for years suffered from “imperfect processes” and huge cost overruns.

It found there were problems in defence spending due to the complexity of much of the equipment, the need for a high-skilled workforce and the costs associated with integrating new technologies with old. This meant in almost all cases, Australia should avoid building its own defence equipment.

“Depending on the context, buying an already proven technology from overseas and not quickly, if ever, developing a domestic production capability is likely to be optimal in many contexts,” it found.

“A sophisticated domestic capability to use, store and maintain equipment would still be required regardless of where it was sourced from but would involve lower costs than domestic production and assembly.”

Under the AUKUS deal, Australia will obtain three Virginia-class submarines from the United States – to arrive in 2033, 2036 and 2039.

In the 2040s, Australia will build a new type of submarine, the SSN AUKUS, based on an updated version of the current British Astute-class submarine and featuring American parts.

The Productivity Commission noted that for many years, the defence sector had received effective subsidy rates for domestic production of up to 300 per cent, compared to zero for most other parts of the economy.

There was also less transparency around projects as governments cited national security grounds. But the commission said these reasons did not justify “the present level of opacity”.

On Sunday, Defence Minister Richard Marles refused to be drawn on the individual cost of the submarines to be supplied under the AUKUS agreement.

Since announcing the project, the government has been at pains to talk up its benefits to the Australian economy, particularly in South Australia and Western Australia.

Last Friday, Albanese said the submarines would create 20,000 jobs directly in Australia and “many tens of thousands” more through the broader economic impact of the project.

“What this will do is highly sophisticated manufacturing will lead to a renaissance of high-value manufacturing in Australia. That money, that economic activity stays right here,” he told ABC radio.

The Productivity Commission said the focus on local industry needs had added to the cost problems around many defence projects. It said that given the large sums of money involved in defence, more scrutiny from outside the sector was needed.

“Defence procurement is ripe for deep and disinterested scrutiny of its processes. There are strong grounds for re-thinking defence procurement, drawing on advice from those outside Defence,” it found.

“The productivity and efficiency benefits of better practices are large given the $270 billion of anticipated defence spending over the next decade.”

Apart from an outside examination of defence spending, the commission also argued all government spending needed closer inspection. It backed the public release of cost-benefit analyses of public projects.

The Grattan Institute’s transport and cities program director, Marion Terrill, said the growth in the number of “mega-projects” demanded more scrutiny.

She said two-thirds of the current major infrastructure projects under way across Australia are worth more than $5 billion, which meant the potential for cost blow-outs was increasing.

The $100 billion cost range for the submarine project meant it faced the same problems as a major infrastructure project.

“The larger the projects, the bigger the contracts, the greater the chance of a cost overrun and the size of that cost overrun being larger. We’ve got to the point where a $100 million project is little more than a rounding error,” she said.

Terrill said she backed the commission’s call for more transparency around public projects.

“We need to look at these projects in terms of taxpayers being shareholders, so it’s only fair that they understand why a decision has been made on their behalf but also the underlying assumptions around the costs and benefits.”

Marles on Sunday rejected suggestions that Australia had given the United States a commitment to assist in a war over Taiwan in return for the purchase of its Virginia-class submarines.

“The answer to that is, of course not. Of course not. And nor was one sought. I’ve listened to that conjecture from a number of commentators. It is plain wrong,” he said.

“What Australia would do or not in respect of any future conflict will be a matter to be considered at that time by the government of the day.”

March 20, 2023 Posted by | AUSTRALIA - NATIONAL, business, weapons and war | Leave a comment

$200billion nuclear submarine deal could cost the average Australian taxpayer about $13,000.

A $200billion nuclear submarine deal could cost the average Australian
taxpayer about $13,000. This is effectively the equivalent of every
Australian buying a new small car – an astonishing outlay on just a handful
of boats. But experts say the deal – despite the extraordinary price tag –
could be worth every cent.

Daily Mail 13th March 2023

March 15, 2023 Posted by | AUSTRALIA - NATIONAL, business, politics, weapons and war | Leave a comment

I just want a Ferrari, sorry, a nuclear submarine, no matter the cost

by Rex Patrick | Mar 14, 2023 more

Prime Minister Anthony Albanese has just committed Australia to spending $368 billion on somewhere between three and five second-hand US Virginia Class submarines, and a follow on build of eight next generation British AUKUS nuclear submarines. It’s a strategic blunder, writes former submariner Rex Patrick, and it’s not even going to happen the way the PM has suggested.

I just want a Ferrari. All my mates tell me they’re great cars. Never mind that, financially, I’m already struggling to keep up with the house repayments and, over time, the wife and kids are going to have to miss out on some of life’s niceties and even essentials; no orthodontic treatment to straighten my daughter’s teeth, no tutor to assist my son through extension maths and the wife won’t be able to afford to go back to uni to get her masters.

But I’ll look good cruising down Jetty Road at Glenelg in my shiny red machine. Now, just between you and me, the Ferrari’s not so good for going off-road or towing the family caravan, but hey, otherwise it is a great car.

Nuclear capability

Coming back from my Ferrari dream, it’s true that nuclear submarines are good. I know, because I’ve spent time at sea on them.

There’s nothing like taking the submarine down to 200 metres and turning up the power on the reactor to get to 30 knots, and then staying there, knowing you have almost unlimited power. It allows you to deploy great distances, arriving quickly. That’s important for the power projecting nations that sit as permanent members of the United Nations Security Council; China, France, Russia, the UK and the US all have nuclear submarines.

Our first priority is supposed to be defence of Australia, and our Defence Force should be configured for that, first and foremost. Even those who think we must automatically join the US in a war against China need to understand US strategy and what Australia’s role would likely be.

China depends on imports for 72% of its oil consumption, and the overwhelming majority of China’s oil imports must pass through maritime chokepoints over which the United States has significant influence. China’s dependency is complicated by the fact an overwhelming portion of its energy imports come from its west. 43% of its oil is sourced in the Persian Gulf, 25% from the Gulf of Aden and Africa and 9% from the Americas, with the overwhelming majority of that passing through the Malacca Straits. Security of supply would be a significant weak point in any conflict China finds itself involved in with the US.

In time of conflict the United States Navy, perhaps in conjunction with European or other regional coalition partners, could secure the Straits of Hormuz. India, part of the Quad, could assist with operations from the Persian Gulf through to the Andaman Seas.

Indonesia, Malaysia and, particularly, Singapore would exercise control over the Malacca Straits with Indonesia and Australia jointly responsible for shutting down Chinese oil carriage through Sunda and Lombok (and up through Makassar Straits). With these routes controlled, the only remaining option for China would be to re-direct shipping around Southern Australia.

Australian submarines are not needed in the South China Sea. The US will rely on Japan’s 20 submarines, South Korea’s 23, and Vietnam’s six, and Malaysia’s two and Singapore’s six. Our submarines have a role to play in shutting down the Sunda and Lombok Straits, or Chinese ships passing through Australian waters. This is a role that can be carried out by far less expensive conventional submarines.

The pros and cons of going nuclear

Of course, it’s true to say that it’s handy to have a reactor when you are detected by enemy anti-submarine forces. Speed can be a very useful asset.

The flip side is that smaller conventional submarines are better performers in littoral waters where they can silently lie in wait, lay mines or covertly deploy Special Forces.

Unsustainable price

The purported cost of this program is “up to” $368 billion dollars. That’s an incredible amount of money to spend, and particularly on a single capability.

Australia has $970 billion dollars in gross debt. It will rise to a trillion dollars next financial year. Albanese says that out Defence budget will increase to 2.5% of GDP. That’s an extra $10 billion per annum, on top of a structural deficit of $50 billion a year, already rising to $70 billion.

With Stage 3 tax cuts set to kick in next year, and revenue from coal and gas exports likely to decrease, it hard to work out how AUKUS will be paid for, other than by spending cuts.

Nation building spin

The Government has started to offset concerns about the spend and placate the punter by saying that this is a nation building project. But this is just spin.

Yes, shipbuilding creates trade jobs which can be utilised in a range of different industries other than defence. The same is true for the electronic engineers and software engineers that work on submarine combat systems.

But as for where a lot of workforce investment will take place, it will be in nuclear technology. This investment will not translate into benefits for the Australian economy, because there are no plans for us to have a civil nuclear industry. Even if Australia were to take a decision to go there, the US will not grant the nuclear technology release or transfer approval.

Any investment in a nuclear workforce will be a sunk Defence cost.

Dismantling of our sovereign submarine build capability

We will see an Australian flagged submarine in our waters in the early 2030’s. At that time we will start decommissioning Collins Class submarines and the workforce in Adelaide, who carry out full cycle dockings and life of type extension. That activity will stop, and 700 jobs will go.

The Government tells us that we will start building next generation SSN AUKUS submarines in 2040. But they are wrong. Once the Adelaide workforce is disbanded, we won’t rebuild a submarine build workforce. We will just buy an AUKUS submarine from the UK, or perhaps more US Virginia class boats instead.

Opportunity cost

There is a real tension building to our north. We need to have a Defence Force that can deter and, if that fails, fight.

This multi-billion dollar program will come at a great opportunity cost. What significant other capabilities do we miss out on as we fund this program? In that respect there is tragedy in the way we are moving forward.

Will it happen?

We’ve seen our future submarine go from an Australian “Son of Collins” under Rudd, to a Japanese submarine under Abbot, to a French submarine under Turnbull, to a US and UK submarine under Morrison and Albanese. The reality is that as Governments change moving forward, and that includes in the US and UK, the program will change again. And that’s not to mention significant changes that could take place in our geo-strategic circumstances.

In 2040, when we are purportedly going to start building an AUKUS submarine here in Australia, Anthony Albanese will be 77. You and I will be reading the second edition of his political memoirs, picked up from the discount bin at the front of the local bookstore. There’ll be a different program underway.

I’d love a new Ferrari, but I’d have to pay for it, so it just won’t happen. Unconstrained by the need to pay for it themselves, the Prime Minister, supported by a few Admirals, just wants nuclear submarines.

March 15, 2023 Posted by | AUSTRALIA - NATIONAL, business, weapons and war | Leave a comment

‘We need a plan B’: Unions have ‘deep concerns’ about AUKUS pact.

The shipbuilding federation – which represents unions including the AMWU, Electrical Trades Union and the Australian Workers Union – is urging the government to build an additional six conventionally powered submarines in Australia before the arrival of a fleet of nuclear-powered submarines.

The shipbuilding federation – which represents unions including the AMWU, Electrical Trades Union and the Australian Workers Union – is urging the government to build an additional six conventionally powered submarines in Australia before the arrival of a fleet of nuclear-powered submarines.

Matthew Knott, February 7, 2023

Labor’s traditional union allies say they harbour deep concerns about Australia’s plan to acquire a fleet of nuclear-powered submarines and fear the AUKUS pact will not deliver the promised bonanza of Australian manufacturing jobs.

The federal government is preparing to announce the details of its nuclear-powered submarine plan in March, with preparation under way for Prime Minister Anthony Albanese to travel to Washington for a possible joint press conference with US President Joe Biden and British Prime Minister Rishi Sunak

During a visit to Washington over the weekend, Defence Minister Richard Marles said AUKUS would create “thousands” of new local jobs and expressed confidence Australia would not be left with a capability gap between the retirement of the current Collins class fleet and the arrival of nuclear-powered vessels.

Despite Marles’ assurances, Australian Shipbuilding Federation of Unions national convener Glenn Thompson said he remained “apprehensive” about a possible capability gap and urged the government to develop a backup plan in case AUKUS falls over.

“It’s one thing to say that this is going to create thousands of jobs, but you actually have to be able to build something well in advance of whatever AUKUS comes up with,” said Thompson, an assistant national secretary of the Australian Manufacturing Workers Union (AMWU).

“It’s of great concern to us about where the workforce is coming from and how are we addressing the issue of Australia’s sovereignty.”

Thompson noted there had been no pledge from the government that AUKUS would create as many local jobs as the 5000 positions promised under the cancelled contract with French company Naval Group.

The shipbuilding federation – which represents unions including the AMWU, Electrical Trades Union and the Australian Workers Union – is urging the government to build an additional six conventionally powered submarines in Australia before the arrival of a fleet of nuclear-powered submarines.

Marles last week stated definitively that the government “has no plans for any conventionally powered interim submarine capability, as we move towards gaining the nuclear-powered submarine capability”. Senior defence figures, including in the Navy, have fiercely resisted the idea of an interim conventional submarine.

“There’s a whole lot of uncertainties,” Thompson said of the AUKUS pact. “I just think from a capability perspective the country needs to have a plan B.”

Thompson said he feared local construction of the nuclear-powered submarines would not begin until the late 2040s or early 2050s, a decade after the Collins-class vessels begin being decommissioned.

“It’s very rare that these defence projects deliver on time,” he said. “By the mid-2040s you could have two-thirds of the existing fleet retired, so there could be a substantial capability gap.”

Marles told The Sydney Morning Herald and The Age last month that AUKUS would be “a genuine three-country collaboration”, raising expectations Australia will acquire a joint next-generation submarine model combining American and British technology.

While not specifying what proportion of the submarines would be built in Australia, Marles said the Osborne Naval Shipyard in Adelaide would play a major role in the project.

“We must develop an industrial capability in Australia,” he said. “That’s the only way this can work, and that’s what will be expected of us by both the UK and the US.”

Marles told parliament on Monday the government was “on track” to make its AUKUS announcement in the very near future.

He said while there had been a “very real potential of a capability gap opening up with our submarines, I am confident that the pathway we announced will provide a solution to this”.

February 9, 2023 Posted by | AUSTRALIA - NATIONAL, employment, weapons and war | Leave a comment

Bill Gates’ profitable involvement in the nuclear industry, even in radiation detection equipment

Did You Know?  Paul Waldon.  Fight to stop a nuclear waste dump in South Australia 3 Feb 23.

  • The radiation detection equipment manufacturing company ThermoFisher is a Fortune 500 corporation that posted revenues of over $11 billion for the last quarter of 2022.
  • Bill Gates is the biggest shareholder with 108million+ shares in Republic Services, and he more than doubled his profits ($3Bil.) in a few short years “not” by spending money to clean up his mess but by letting the community of St Louis sit on it. St. Louis a town where cancer clusters are common, and Bill doesn’t live.

February 4, 2023 Posted by | AUSTRALIA - NATIONAL, business | Leave a comment

Nuclear submarines will be ‘massively expensive’ – (even Australia’s right-wing is waking up to this!)

Nuclear submarines will be ‘massively expensive’

Former ASPI Executive Director Peter Jennings says Australia’s nuclear submarines will be “massively expensive”.

“I’ve said for the whole thing including training and bases and weapons, as well as the submarine itself, think of about one per cent of gross national product, so something like AU$20 billion a year forever,” he told Sky News host Peta Credlin.

December 9, 2022 Posted by | AUSTRALIA - NATIONAL, business, politics international, weapons and war | Leave a comment

Mining lobby tricks government with its big taxpayer fairytale, swaps Deloitte for EY Callum Foote | Nov 29, 2022 |

The Minerals Council of Australia has duped Energy Minister Madeleine King into repeating its highly inflated claims of how much taxes its mostly foreign multinationals members pay. Callum Foote reports on an $85 billion PR scam.

The Minister for Energy, Madeline King, has repeated claims from mining lobby group, Minerals Council of Australia, that the mining industry made payments of $43.2 billion in company tax and royalties to Australian governments in in a speech given at the ​​NT Resources Week conference. The figures were repeated on ABC Radio without question.

As revealed here last year, Big Four consulting firm Deloitte used to do the misleading report for the mining lobby. This year it is another Big Four firm, Ernst & Young. The EY report, has – like Deloitte’s previous work – failed to disclose that up to 60% of the tax that they claim the mining industry pays is returned in the form of GST refunds.

They have included GST paid but not refunded, which is massively misleading. The false claims come at a critical time for the mining and energy sectors which are reaping record profits, partially at the expense of energy customers, and the minerals lobby is threatening a public campaign against the government if efforts are made to increase taxes and royalties.

The big GST swindle

The tax numbers produced by EY are derived from the ATO’s Corporate Tax Transparency data and, while their methodology differs somewhat from that of Deloitte’s last year, the report still fails to disclose the GST refund the minerals industry enjoys.

The report avoids mentioning that the mining industry, as an exporting industry, legitimately receives a huge GST refund every year.

A different set of ATO data, the Taxation statistics 2019-20 reveals that over $7.5 billion was refunded to the mining industry as a whole in 2019-20 which is the latest year that data is available.

Over the last decade years, almost $85 billion have been returned to the mining industry through GST refunds, which equals 55.7% of the $152 billion in company tax paid by the industry as a whole.

In the accounting profession, company taxes are regarded as deriving from company revenue. That is, income from a business comes in, costs such as wages are paid which leaves gross profit upon which company tax is paid. Taxes like GST and PAYG are *collected* for the government, not *paid* by the company.

According to forensic accountant Jeff Knapp “GST doesn’t come through the revenue of the company into profit, which would be ‘company tax’. It is collected from customers, just as PAYG is collected from employees”. These taxes are not paid by a company, they are collected, for government, on behalf of a company.

The claims made by MCA CEO Tania Constable regarding the amount of tax paid by her industry have been used to defend against calls for higher mining taxes: “A new tax on Australian mining companies would seriously undermine our international competitiveness, resulting in jobs losses across the country and devastating many communities which rely on mining,” she said.

The Minerals Council refused to defend its claims when approached, numerous times, for comment about its members receiving GST refunds and the misleading nature of the report.

EY has been contacted for a comment, along with the MCA and Minister for Energy.

Running the line

Compared to last year’s report, this year’s has received far less attention. In 2021, Australia’s major media organisations, News Corp and Nine Entertainment were duped by the mining lobby’s false claims about its contribution to Australia.

This year, it’s mainly the industry outlets such as Mirage News, Australian Mining and Mining Magazine that have repeated the claims.

It should be noted that Deloitte’s report considers only the minerals industry, excluding oil and gas from its analysis. This is important because gas corporations are presently the most profitable of all minerals thanks to the Russian invasion of Ukraine and soaring energy prices. This sector is notorious for tax avoidance and dollar-for-dollar avoids more tax than any other sector. The PRRT, a tax which was designed to capture more of this wealth, is regarded as a failed tax. 

GST data for the minerals industry is only available for four years between 2015 and 2018. During this period, GST refunds to the minerals industry averaged year-on-year 60% of the company tax total, compared to the mining industry’s overall 61%. In 2018 the figure was higher, with minerals at 36% to mining’s 32%.

So why have royalties and company tax been singled out?

It appears the report was intended from its inception to provide an exaggerated view of the contribution of the minerals industry to Australian governments to ward off attempts to increase taxes.

First commissioned in 2014 under MCA’s then-CEO Brendan Pearson – who has been more recently employed in the Prime Minister’s office – Deloitte’s report was used as proof in an argument that supported the MRRT being repealed.

Pearson said the report “underlines that we are paying an effective tax rate above 40 per cent, when you combine the tax rate and the royalties”.

Royalties and taxes are two entirely separate concepts and to conflate the two is misleading. However, it is a well-worn strategy used by the mining industry to make it appear as though they are paying a higher tax rate than they really are.

Brendan Pearson was forced out as CEO of the Mineral Council in 2017, when BHP took issue with his pro-coal, anti-Paris Agreement lobbying. BHP threatened to review its membership with the MCA, with Rio Tinto signalling it would do likewise if Pearson did not step down.

Pearson, landed on his feet taking up a senior advisory role regarding international trade and investment in former Prime Minister Scott Morrison’s office in 2019.

BHP and Rio Tinto, who are the MCA’s largest members, declined to be interviewed for this story.

November 29, 2022 Posted by | AUSTRALIA - NATIONAL, business, politics | Leave a comment

Climate change, not China, is Australia’s real security danger

The definitive case against nuclear subs The Saturday Paper, Albert Palazzo -adjunct professor at UNSW Canberra. He was a former director of war studies for the Australian Army. November 12, 2022 “……………………………………………………………. Too many security officials hold to the mistaken belief that China is the most significant threat Australia faces. In fact, climate change deserves the top spot. Climate scientists, United Nations officials and military commanders themselves, including current US Secretary of Defense Lloyd Austin, consider climate change an existential threat to survival. Any threat posed by China is much more limited. At worst, China’s challenge to the US-led world order could result in America’s withdrawal from the Western Pacific. Climate change could lead to the end of the human project and take countless other species down with us.

China represents, at most, a second-order threat, but it is China that draws the obsessive focus of much of the current generation of security thinkers. It does not make sense for Australia to invest so much in a weapon system that has no utility against the nation’s most dangerous threat, yet this is what is happening.

Advocates of nuclear-powered submarines also propose that constructing these vessels in Adelaide will help sustain a sovereign shipbuilding industry. In fact, the opposite is the likely result. Once in service these vessels will actually increase Australia’s dependence on the US and foreign contractors. This is because many of the sub’s critical components, weapons and systems will be made by foreign parties. Australian sailors might even need shadow US sailors to co-staff technical positions until Australia generates enough nuclear-savvy personnel of its own.

The government has announced it will invest between $168 billion and $183 billion in what it has called a national naval shipbuilding enterprise, with the goal of sustaining and growing a domestic shipbuilding capability and securing Australian jobs for the future. Such a capability is a noble goal, but what has been left unexplained is why it should be such a priority compared with foreign-dominated industries that are more critical to the nation’s future wellbeing.

Last summer, for example, Australian transport risked grinding to a halt as a result of the urea crisis, which led to a serious shortage of AdBlue, a vital diesel fuel additive. Without AdBlue, the nation’s fleet of long-haul trucks would have stopped moving, resulting in supermarkets running out of food, farmers not harvesting their crops and the mining industry coming to a halt. Yet there has been no talk of taxpayer-supported AdBlue production in Australia. Similarly, many medicines are imported, as are a host of important everyday items, such as baking powder and matches. Unlike shipbuilding, these industries apparently warrant no support.

If one wanted a truly sovereign defence industry, then the product that might mandate the level of support proposed for the subs is microchips. Virtually all military and civilian technology contains chips, yet Australia is happy to remain fully reliant on overseas suppliers for this most important of components. Establishing a domestic industry would require a huge subsidy, as well as additional investment in tertiary education and precursor manufacturing processes. Without these chips, however, no weapon system is truly sovereign.

So why the nuclear-powered subs, if they make so little sense? The obvious answer is to support the alliance. Instead of aiming for self-reliance, Australia has always preferred to seek the protection of a great power. But there is another reason: like a kid in a lolly shop, Australia has been given permission to buy the biggest treat on display. Nuclear-powered subs are one of America’s most closely guarded technologies. If Australia gets them, it will be a clear sign that, like Britain, we have been admitted to a very exclusive club, the inner sanctum of US security. What is missed, however, is that being in the inner sanctum generates a massive obligation – and some day that bill may fall due.

November 12, 2022 Posted by | AUSTRALIA - NATIONAL, business, climate change - global warming, politics international, weapons and war | Leave a comment

Never mind Australia’s economic problems, health crisis etc – Weapons for Zelensky is the big need.

Zelensky: Australia to deliver ‘significant’ new support for Ukraine, The Age Matthew Knott, October 6, 2022  Ukrainian President Volodymyr Zelensky has revealed Australia is preparing to ramp up support for his nation’s war against Russia by announcing a new tranche of military assistance, including donations of heavy weapons.

In an appearance via video link at the Lowy Institute think tank in Sydney, Zelensky urged the global community not to give in to Russian President Vladimir Putin’s “nuclear blackmail”………………..

Asked what Australia could do to help Ukraine, Zelensky said the Albanese government had been preparing a “significant package” of assistance that will be announced soon.

“This process is ongoing as we speak and I’m very grateful to that,” he said. “It’s not only small arms but heavy weapons as well.”

Zelensky said that, for the upcoming round of assistance, Australia had been negotiating with other countries to announce a joint support package for Ukraine.

Ukrainian Ambassador to Australia Vasyl Myroshnychenko has publicly asked Australia to provide Ukraine with a supply of anti-ship missiles known as Harpoons and howitzer long-range weapons.

Ukraine is also asking for an additional fleet of 30 four-wheel drive vehicles on top of the 60 already provided…………………..

He also called for “new and tough sanctions against Russia” as a punishment for its invasion of Ukraine.

October 6, 2022 Posted by | AUSTRALIA - NATIONAL, business, politics international, weapons and war | Leave a comment

Hard-Wired for Corruption -The arms trade and Australia’s lax monitoring regimes

Chris Douglas concludes that from an anti-bribery/corruption risk perspective, Naval Group should not have been put on the shortlist for the Future Submarines program, let alone selected to partner with Australia to build the submarines. The ‘contract of the century’ was mired in unacceptable risk from the outset due to Defence’s poor risk-management processes and non-existent specific anti-bribery/corruption measures. A formal inquiry is needed both to examine how this deeply flawed decision was reached and to help prevent the situation recurring in future major defence procurement projects.

‘In the arms business, it’s always a time of war’, wrote Roeber. Without war, there is no revenue, no profit, no growth. Countries with established arms manufacturing industries therefore have a perpetual economic driver towards conflict and warfare.

To give just one example, there is no visibility around what or how much weaponry Australia has exported to Saudi Arabia or the United Arab Emirates during the years of the Yemen war. Michelle Fahy 1 Aug 22, The international arms trade, worth around US$200 billion a year, represents less than 1 per cent of world trade yet is said to account for about 40 per cent of its corruption. While estimates vary, there is little dispute amongst long-term arms industry researchers that it is the most corrupt industry on the planet. Indeed, it is said to be hard-wired for corruption.

The World Peace Foundation (WPF), housed at Tufts University in America, produces extensive research on the global arms trade, including a compendium of corrupt arms deals. It says that ‘Corruption within the industry is often treated in terms of isolated incidents, when it is, in fact, representative of the business model for the industry’.

This finding is supported by research for Transparency International’s (TI) Government Defence Integrity (GDI) index, which assesses the quality of controls for managing corruption risk in defence and security institutions. The GDI shows that 86 per cent of global arms exports between 2016 and 2020 originated from countries at moderate to very high risk of corruption in their defence sectors, while 49 per cent of global arms imports went to countries at high to critical risk of defence corruption. Australia is rated as a moderate corruption risk in the GDI, with two key areas of concern being the lack of transparency in defence procurement and weak anti-corruption safeguards on military operations.

The legal trade in arms has long been known for its susceptibility to corruption. This is due to the high value and complexity of arms deals, the close association between the arms industry and political power, and the secrecy claimed necessary for national security, all of which shield arms-related activities from scrutiny. As arms industry expert Joe Roeber pointed out, ‘Defence goods are complex and each contract contains a mix of special requirements. Comparison is remarkably difficult and effective monitoring by public watchdogs is all but impossible. An unknowable price can be manipulated to accommodate any amount of covert payments’. Further, there are very few major arms deals on offer globally each year—usually less than 10 in the range of tens of billions each meaning competition is intense—while only a small number of people make the decision on what to buy…

‘In the arms business, it’s always a time of war’, wrote Roeber. Without war, there is no revenue, no profit, no growth. Countries with established arms manufacturing industries therefore have a perpetual economic driver towards conflict and warfare.

For example, in the month leading up to Russia’s invasion of Ukraine, and just days after a horrific attack in Yemen by the Saudi-led coalition using a Raytheon missile that killed 90 people and injured 200, Raytheon’s CEO told investors that global tensions represented ‘opportunities for international sales’, and that he expected to ‘see some benefit’ from ‘the tensions in Eastern Europe [and] in the South China Sea’. Meanwhile, Just Security has noted that the ‘well-documented risks of corruption in the arms industry and the potential for profiteering from an arms race in the Ukraine war’ are risk factors embedded in the massive flow of lethal weaponry from the West into Ukraine…

Blanket secrecy

All countries justify secrecy around arms-related activity with claims of protecting ‘national security’. The Australian government, for example, imposes a high level of secrecy over its arms procurement, sustainment and export deals, with politicians and the Department of Defence resisting demands for greater transparency…

Australia also relies on ‘commercial-in-confidence’ justifications to protect arms industry interests. This, in combination with national security claims, has led to almost blanket secrecy around Australia’s arms exports. To give just one example, there is no visibility around what or how much weaponry Australia has exported to Saudi Arabia or the United Arab Emirates during the years of the Yemen war. The government has only released information about the number of export permits it has approved or declined (by March 2021 Australian approvals to these two nations topped 100). However, permit numbers are not useful, as not all permit approvals translate into actual exports, and permits can cover numerous types of equipment, small or large quantities, extend for varying time periods, and even cover multiple destinations.

This is significant because the decades-long UK Campaign Against the Arms Trade has amassed a ‘mountain of evidence of corruption in arms sales to Saudi’ showing that bribery is central to the Saudi government’s approach to arms deals. Andrew Feinstein, author of the exhaustively researched 600-page book The Shadow World: Inside the Global Arms Trade, told ABC radio in 2018 that he had never seen a Saudi arms deal that didn’t involve ‘massive amounts’ of corruption, and that the percentage of a Saudi contract paid in bribes could be up to ‘about 35 per cent of the contract price’. The United Arab Emirates is also known for its secrecy, corruption, and money laundering links.

Australia’s decreasing commitment to anti-corruption measures

Australia’s extraordinary current spending on military capability—$270 billion in a decade, on top of the usual defence budget—means the domestic arms industry is awash with cash. At the same time, the public’s limited ability to scrutinise this spending has been eroded further by a defence minister, Peter Dutton, who has restricted Defence’s engagement with the media. The combination of record sums of money and little scrutiny provides fertile ground for corruption.

Australia’s performance on anti-corruption measures has nose-dived in recent years:

  • It recorded its worst ever score on a global anti-corruption index in 2022, dropping four points (from 77 to 73) and falling to 18th place. Australia has now dropped 12 points in a decade, from a high of 7th (85 points) in 2012.
  • Its membership status at the Open Government Partnership risks being put under review because it has ‘acted contrary to the OGP process’ and failed to submit its latest national action plan.
  • Its negligible attempts to investigate and prosecute cases of foreign bribery have been criticised by the Working Group for the OECD’s Anti-Bribery Convention (it expressed concern over ‘the continued low level of foreign bribery enforcement… given the size of Australia’s economy and the high-risk regions and sectors in which its companies operate’ and ‘its long-standing challenges in attributing wrongdoing to corporate entities’).
  • It has been named an ‘international laggard’ in expanding anti-money-laundering laws in line with recommendations by the G7’s Financial Action Task Force, one of only three countries, alongside Haiti and Madagascar, to have failed to do so. Australia now risks being put on a grey list of countries that don’t meet international money-laundering standards. (Australia has been resisting anti-money-laundering regulation for fifteen years.)
  • A dedicated federal anti-corruption body still has not been established…

Red flags

‘The biggest corruption risk in an arms deal is a company’s decision to pay bribes to secure the deal’, says Sam Perlo-Freeman, former Program Manager for Global Arms and Corruption, World Peace Foundation, Tufts University. Decisions to pay significant bribes are made at a company’s highest levels, and while no amount of technical anti-corruption measures will eliminate high-level corrupt behaviour, strong whistleblower protection mechanisms can increase the probability of exposure. Other anti-corruption measures are also important, particularly at lower levels where zealous company employees might be tempted to cut corners to advance their careers. However, such technical measures do not tackle the underlying political and economic drivers of high-level corruption in the arms industry, where winning large deals is necessary for corporate survival and price is not the primary concern. As Joe Roeber noted incisively, bribery in this context ‘is not just a simple add-on to the procurement process, but distorts the decisions. What would the equilibrium level of trade be without the stimulus of corruption?’ …

No evidence has emerged of…extensive corrupt practices in Australia, but there are regular red flags of possible arms industry corruption. Chris Douglas, a 31-year veteran of financial crime investigation for the Australian Federal Police, who now runs his own consultancy, is an Australian expert in anti-bribery and corruption measures. He says that such compliance programs are a necessary component of good corporate and public governance—essential for preventing corruption in the defence industry. Although he has lodged numerous Freedom of Information requests (FOIs) with the Defence Department about anti-bribery/corruption measures on major procurements, he says, ‘I have not detected an ABC [anti-bribery/corruption] program being used in any of the major defence projects I have examined’.

Douglas says that the Department of Defence ‘has not caught up with modern corporate management practices’ and has no understanding of how to use anti-bribery/corruption risk-based assessments to manage the significant risks posed by bribery and corruption in its projects, particularly major ones. As he puts it: ‘That any department would not undertake an ABC risk assessment when such large sums of money are involved, in an industry that is rated high for corrupt behaviour, speaks volumes about a poor culture within that department’.

Repeated cost blowouts and delays are just two of the red flags for corruption that are regularly found in Australian defence procurement and sustainment projects. The cost of these to the public is substantial.

While there are numerous examples of red flag projects, here are just three.

Naval Group—submarine contract

This contract was abandoned with the arrival of AUKUS, but the original deal with Naval Group requires a public inquiry to examine the full extent of the process by which the internationally lucrative ‘contract of the century’ was awarded. The need for an inquiry has been amplified given the shock shredding of Defence’s largest ever contract, a decision which made international news and may yet cost Australia billions.

Continue reading

August 2, 2022 Posted by | AUSTRALIA - NATIONAL, business, reference, secrets and lies, weapons and war | Leave a comment

Australia’s price tag for nuclear submarines could soar by $billions

AFR Andrew Tillett, Political correspondentJul 20, 2022

New US government reports warn that Australia could be saddled with billions of dollars of higher costs to build the most up-to-date nuclear submarines, and have cast fresh doubts on America’s defence industry being able to contribute to a speedy acquisition of boats.

Defence Minister Richard Marles wants to announce a preferred design and acquisition pathway in the first quarter of next year, but the Congressional Research Service said the US Navy’s Virginia class submarine program was suffering from construction delays and a maintenance backlog, curtailing the availability of boats already in service…………………………….. (subscribers only)

July 19, 2022 Posted by | AUSTRALIA - NATIONAL, business, politics international, weapons and war | Leave a comment

Uranium is losing the new energy market battle.

Uranium is losing the new energy market battle. Uranium is being bypassed
in the rush to embrace renewable wind and solar energy sources, leaving
nuclear power floundering well short of its once anticipated potential.

 Mining Journal 14th July 2022

July 14, 2022 Posted by | AUSTRALIA - NATIONAL, business, uranium | Leave a comment

Kerry Schott: why new coal or nuclear plants are a dumb idea

Mark Ludlow AFR, 7 June 22, ”…………………………………………It seems whenever there is an energy crunch or crisis, supporters of a nuclear industry say it would be the solution to Australia’s energy woes? Do you think nuclear will ever be an option in Australia?

My view of it, at the moment, is it’s a price thing. The last plant the English built cost an enormous amount of money. It’s much more expensive than coal.

It’s the cost of building the plant and dealing with the waste. Once up and running it’s not too bad, but the capital costs and the operating cost of dealing with the radioactive waste is a problem.

If you’re in the UK or France you have a population of 50 million. We don’t have that many people.

And the small-size modular plants they talk about are not being built because they are expensive.

Having gas as a standby is far cheaper. And nuclear, like coal, has to run all the time.

You still have the problem that it’s producing radioactive waste and not being dispatched.

Any other solutions to smooth out the bumps in the transition to a low-emissions economy?

The other thing we need is more transmission. To get prices down you need more zero-cost power, which is the wind and the sun. So, you need more of that in and need more transition.

Yes, there is a cost of transmission, but it’s bringing in many gigawatts of renewable energy at zero cost. So net-net, it’s a benefit.

The danger of building too much transmission is very slim because it takes ages to build it for starters. If anything, we’re lagging in the race rather than getting ahead of it……………………………

June 11, 2022 Posted by | AUSTRALIA - NATIONAL, business, politics | Leave a comment