Australians must work harder: Treasury head

Treasury Secretary Martin Parkinson is warning Australians face declining living standards if they do not work harder.

The debate has resurfaced after a state-controlled Chinese mining company bought 43 farms in northern New South Wales.

abc.net.au | Jun 30, 2011

By Lexi Metherell, staff

Dr Parkinson says Australia cannot rely on the mining boom alone. (AAP: Alan Porritt, file photo)

In a strongly worded speech in Melbourne last night, Dr Parkinson blamed what he called populist media campaigns for undermining bipartisan support for reform.

The Treasury Secretary said Australia could not rely on the mining boom to prop up the economy and if productivity was not improved, incomes would take a dive.

“Our productivity growth, again measured in terms of both labour productivity or multi-factor productivity, has slowed and importantly there’s little reason to believe it will improve in the immediate term,” he said.

“Indeed the rate of improvement in the living standards of Australians, or at least that part that’s captured by income measures, has already begun to deteriorate, even with the sustained and unprecedented rise in the terms of trade.”

Dr Parkinson, one of Australia’s most powerful government officials, has also sounded a note of caution in the growing debate over foreign ownership.

He warns politicians to tread cautiously.

“The issue around whether foreign ownership, whether it’s of the mining sector or of agricultural sector, has to be handled quite carefully,” he said.

“You can see there have been a number of political interventions this week.

“I just hope that they are handled with clear recognition of where Australia’s national interest lies.”

The debate has resurfaced after a state-controlled Chinese mining company bought 43 farms in northern New South Wales.

The Greens, independent Senator Nick Xenophon and Nationals Senator Barnaby Joyce want a review of foreign investment laws.

Senator Joyce says they need to be tightened to guard rich agricultural land for food production.

And independent MP Tony Windsor wants what he calls “sensitive lands” to be protected from mining.

But Dr Parkinson says foreign investment is in Australia’s national interest because there simply is not enough capital domestically to invest in developing assets.

“Once we get into the world of discouraging capital from any source, you know it’s got to be a legitimate source, but once we’re in the world of discouraging capital to come to Australia we are actually making a deliberate decision to lower our own potential wealth,” he said.

But at the same time, Dr Parkinson says Australia needs to get the right price for its valuable non-renewable resources, suggesting there is scope to increase taxes on the mining sector.

“Once sold, those assets cannot yield any further return for Australia’s citizens,” he said.

“This means that it is critical that society receives an appropriate return on the assets rather than the value being captured solely by the Australian and foreign shareholders of the companies that sell the assets.

“Arguably, this is not presently the case.”

Dr Parkinson says economic reforms should make it easier for people to move to rapidly growing mining areas.

He says lower stamp duty – which could encourage people to sell their houses and move – and other reforms that would make it easier for people to transition to new jobs were a sensible approach.

“Tax reforms that improve resource allocation and improve mobility, and especially state taxes such as stamp duty and property tax,” he said.

“Appropriate reforms to tackle climate change at minimum cost also make sense.”

Foreign shock troops enter Bahrain to put down protests

Foreign troops enter Bahrain as protests continue. AFP

CNN | Mar 14, 2011

(CNN) — Foreign troops arrived Monday in the strategically and financially important Persian Gulf kingdom of Bahrain after a month of citizen protests, the Bahraini government said.

Saudi Arabia, Bahrain’s giant neighbor to the west, appears to have provided at least some of the troops, who arrived under the banner of the Gulf Cooperation Council.

In a statement, the government described the troops as “coalition forces” but did not say what countries were represented. Their mission was equally vague: “The GCC Peninsula Shield coalition forces arrived in the Kingdom of Bahrain today following recent events, to help protect the safety of citizens, residents and critical infrastructure,” it said.

The Saudi state news agency said its government had responded to Bahrain’s request for help in view of the importance of security there.

According to the state news agency of the United Arab Emirates, southwest of Bahrain, it too “decided to send a security force to keep the peace in the Kingdom of Bahrain” at that country’s request.

Anwar Mohammed Qerqash, the UAE minister for foreign affairs, described the move as part of his country’s responsibility within the Gulf Cooperation Council to bring “security and stability to the region.”

It was not clear how many foreign security troops had entered Bahrain. Various parts of the Bahraini government referred CNN questions to other government offices on Monday.

A witness said dozens of armored vehicles and buses full of soldiers crossed Monday afternoon from Saudi Arabia into Bahrain afternoon via the causeway linking the two countries.

The Gulf Cooperation Council comprises six Gulf states — Bahrain, Saudi Arabia, Kuwait, the United Arab Emirates, Oman and Qatar — and encourages cooperation among members in a number of areas, including the economy and security.

The movement of forces came on the same day that protesters seized control of a key part of the capital city of Manama, a Human Rights Watch official said.

About 100 demonstrators blocked access to the Bahrain Financial Harbour with barricades such as trash cans and cinderblocks, in effect shutting down the commercial district, Faraz Sanei said.

There was no police presence, he added.

“What we are witnessing in Manama is no peaceful protest,” Bahrain’s Foreign Minister Khalid al-Khalifa said. “It’s wanton, gangster style takeover of people’s lives,” he said on Twitter.

A pro-government group of lawmakers was urging the king of Bahrain to impose martial law for three months in the wake of the protests.

The arrival of the troops followed a day of clashes between protesters and security forces that resulted in the hospitalization of more than 1,000 people, human rights activists said.

The protests were the latest in a series that has swept across the Arab world this year, toppling the leaders of Tunisia and Egypt, but it was not clear that any other country had taken the step of calling in foreign troops for help.

“Temporarily, it should calm the situation,” said Simon Henderson, director of the Gulf and energy policy program at the Washington Institute for Near East Policy. He noted that the administration of Barack Obama has been urging political dialogue but said Monday’s move was not what the U.S. president meant.

“Sending in Saudi forces is hardly encouraging political dialogue,” Henderson said. “The great danger is, it will actually worsen the situation by encouraging Iran to get involved. Not militarily, probably, but certainly diplomatically and rhetorically.”

The underlying concern is that Iran, an overwhelmingly Shiite state, could seize the opportunity to meddle in Bahrain’s internal affairs. Bahrain has a Shiite majority population, but its rulers are Sunni.

Saudi Arabia’s eastern province is home not only to many of the country’s rich oil fields but to its largest concentration of minority Shiite as well. In recent weeks, Shiite demonstrators there have protested the Saudi government, whose leaders are overwhelmingly Sunni.

The Saudi government would presumably be concerned that any uprising by Shiite Muslims in Bahrain could inspire the Shiite population in nearby Saudi Arabia to follow suit.

Protests on Sunday appeared to have been among the most violent since last month, when police tried to clear the capital’s Pearl Roundabout, leaving seven people dead, according to demonstrators.

Most of Sunday’s injured suffered gas-related injuries, including burns and breathing problems, according to Nabeel Rajab, president of the Bahrain Center for Human Rights. Doctors and nurses were among the injured. At least five people were in critical condition, and at least two people lost their eyes because of bullet injuries, he said.

Manama was sealed off Monday, journalists there said. The highway stretching from the Pearl Roundabout to the Bahrain Financial Harbour was blocked by trees and other debris.

The government denied accusations Sunday that unjustified force was used against protesters at the harbor, along a key highway and at Bahrain University.

Britain’s Foreign Office warned Sunday against all travel to the Gulf kingdom until further notice, saying, “The risk of further outbreaks of violence has increased.”

The nation’s Independent Bloc of lawmakers called on Bahrain security forces to intervene to protect national security and stability, the Bahrain News Agency reported Sunday. The bloc is composed of the 22 pro-government members of the lower house of the legislature.

“Extremist movements are resorting to escalation and sectarian mobilization, which led to an unprecedented disruption of security and hostile sectarian polarization at health and educational institutions,” the group said in a statement.

The members of parliament asked King Hamad to enforce a curfew and deploy security forces across the country.

During protests in the tiny island nation, moderates have been demanding a constitutional monarchy, and hardliners have called for the abolition of the royal family altogether.

China’s CNOOC buys one-third stake in Colorado, Wyoming energy project

China’s CNOOC Ltd has agreed to pay $570 million for one-third of US firm Chesapeake Energy’s shale oil and gas project

AFP | Jan 31, 2011

BEIJING — China’s CNOOC Ltd said Monday it has agreed to pay $570 million for one-third of US firm Chesapeake Energy’s shale oil and gas drilling project in the American states of Colorado and Wyoming.

The investment in the 800,000-acre (323,749-hectare) project in two basins is the second deal between the firms since October and signals greater efforts by both energy-guzzling countries to develop the hard-to-reach resources.

CNOOC’s wholly owned subsidiary CNOOC International would buy the 33.3 percent stake, the Chinese company said on its website. In addition, it will fund two-thirds of the drilling costs up to $697 million.

“It is a great pleasure to establish further cooperation with Chesapeake in shale oil and gas development,” said CNOOC chairman Fu Chengyu.

“The project highlights the joint interests of energy companies in both US and China to accelerate the development of shale oil and gas, increase energy supply and reduce greenhouse gas emissions.”

Chesapeake announced in October it had reached a deal with CNOOC to sell about a third of its interest in the Eagle Ford Shale project in South Texas for $1.08 billion.

Chief executive of the Oklahoma-based company, Aubrey McClendon, said the latest deal would “provide the capital necessary to accelerate drilling” in the project in northeast Colorado and southeast Wyoming and create thousands of jobs.

Shale gas comes from deep reserves that were thought inaccessible until the advent of new drilling methods. But costs still are usually above conventional gas, and some environmentalists worry about pollution in drinking water.

Chinese companies are investing in resources from Australia to Africa to Latin America as Beijing tries to secure access to raw materials needed to fuel the fast-growing economy.