16 Jul 19: Space to the moon, low wage growth, state position in indigenous, LNG export market

Day 2, we are on a roll.

Infrastructure

State versus federal funding of infrastructure

Comment on state versus federal funding of infrastructure, with each needing co-funding from the other. Consider the impact that infrastructure has on enabling entrepreneur activity in regions, adds to livability. Traffic and access is one reason why people move closer to the city, despite lack of affordability. Also, emphasis on treating digital infrastructure with the same importance as road and utilities. 

• Brisbane cross-river rail and Sydney Metro West need federal co-funding
• Melbourne East West link has federal funding but not state support
• Federal budget of $100B in infrastructure spending in April, 1/3 to be spent in next four years.
• Three areas proposed to fast track infrastructure: 1) Accelerate the more than 120 large projects; 2) Victoria's East West Link, commonwealth commitment of $4B; and 3) get 166 small urban congestion projects in detailed planning or under construction in 12 months.

Technology

Unlockd Google anti-trust case

• $200m mobile advertising company Unlockd went into administration last year after Google banned apps from its services.
• Had valuation of $200m after 2 years, raised over $60m, $20m ARR
• Founder Matt Berriman is assisting US Justice Department in an anti-trust case against Google.
• Previously gone public about struggle with bipolar disorder, highlight existence of mental health among business people
• Currently a backer and adviser to startups and consults to CEOs and board on digital transformation

Amazon Prime day discount wars

• Dominant retailers heavily discounting to counter Amazon Prime days, weeks after end of FY sales
• Likely to impact on margins, already under pressure from rising rent and labour, weak AU dollar, and lackluster consumer spending
• Amazon Prime Day estimated to generate more than $US4.1B in sales worldwide in 2018, up from $US2.4B in 2017
• Macquarie Bank analysts estimate 73,000 shoppers signed up to Prime June to Dec last year
• Prime members tend to spend twice as much as non Prime customers

IAG invests $16.8m in Carbar

• Carbar online car leasing startup, allows drivers and companies to hire cars without fixed contracts, subscribe to use a car for a non-refundable $1,000 payment, founded in Melbourne in 2016, expanded to Sydney in June
• Investment to be used to expand into Brisbane and Perth, target corporate customers, guarantees spot on board of directors
• Graduated from Caltex's Sark accelerator in 2018, provided access to Caltex's South Yarra petrol station

NNNCo (National Narrowband Network Co) raises $8m to take on telcos in internet of things

• $8m raised from India-based energy and environment company Enzen group
• Provides telco infrastructure required for networks of tiny sensors to communicate in IoT
• Clients include City of Gold Coast, Newcastle, and Hunter Water
• Comp0etitive market with Telstra, Optus, and Vodafone all offering narrowband networks. Plans to complement with middleware platform N2N-DL
• Valuation of $32m
• Investment will be to employ more staff in AU
• Enzen AU head office in SA

Chris Morris invests in Barcats

• Investment part of a $1.2m raise, comes on the board
• Barcats - platform to find staff for hospitality - launched in Christchurch last week, 2 years old, half the investment sucures business for next four years, on target for profitability in next 12 to 14 years
• Site has over 45,000 staff registered looking for work, 13.500 venues looking for staff. 55% of jobs are full time
• Cofounders own 60% of company

Energy and Climate Change

LNG export market

• Liquified natural gas has become a $50b+ commodity export market for AU, 21.2% upswing in 2018/2019 shipments, set to pass Qatar as the biggest exporter this year.
• Exported 75.1m tonnes last FY, generating $50.5m in revenue
• Majority of growth from new projects in WA and NT, and QLD exports also rose slightly (from 20.5m tonnes in 17/18 t 21.8m in 18/19
• Previous $200b+ investment in new production plants
• Increased exports have driven up prices for domestic customers, now 3 times historic rates of $3 to $4 a gigajoule
• Short term domestic prices rose last month from May to average of $10.84/GJ in Adelaide, $9.51/Gj in Victoria
• Prices in Asia fallen to $US4.30 per million British thermal units
• Global Energy Monitor report this month identified LNG as potentially worse than coal in contributing to climate change because of methane gas leaks
• EnergyQuest indicates bulk of AU LNG produced from relatively new offshore projects less likely to experience significant leaks

Australia position on Climate Change

• Foreign Minister Marise Payne comments following Chief of Defence Force warnings that China could seek to occupy abandoned islands resulting from climate change
• Australia signatory on the Boe Declaration with other Pacific Island nations, which affirms climate change is the single biggest threat to the livelihood and security of the nation
• Said Australia's infrastructure fund in the Pacific would stream climate adaptation and resilience through its investment in energy, in transport, and in water
• 2016 Defence paper outline threats from climate change as: higher temperatures, sea level rises, more frequent and intense extreme weather events, food shortages, and undermining economic development

Plastics

• 350 million tonnes of plastic are produced each year
• Disposable bags are prohibited, restricted, or taxed in 127 countries
• Damage to marine life, fisheries, and tourism along with impact of greenhouse gas from manufacturing exceed industries $US40b annual profits
• Coca cola plans to collect and recycle equivelant of every bottle sold globally by 2030
• Recycling rates in developed countries should reach 70% by 2030
• Single-use plastic is becoming socially uinacceptable

Inclusivity and Diversity

State position on Indigenous treaty

• VIC, WA, and NT making most progress on agreements
• Issues to be pursued: reparations, land rights and self-determination for Indigenous Australians
• Advantage of a treaty is it is a political negotiation rather than a court process involving litigation
• NSW: pursued an accord with regional Aboriginal bodies to have greater input into local service delivery
• SA: Stephen Marsh terminated treaty negotiations after coming to power
• QLD: Deputy Premier Jackie Trad announced Sunday that QLD would open negotiations for a treaty, indicated prospect of financial compensation and an Indigenous voice to Qld parliament
• WA: Settlement with the Noongar people could be regarded as nation's first smallT treaty and a model for future talks. $1.3B deal resolved a raft of native title claims in return for more than $750m in payments - including establishment of $600m trust - and transfer of 320,000 hectares of land in south-west including Perth.
• VIC: running elections for inaugural First Peoples; Assembly, will negotiate a framework for a treaty. Legislation passed last year includes provision of a self-determination fund.
• NT: Appointed former Australian of the Year Mick Dodson to oversea development of a treaty
• Federal: Minister Ken Wyatt said treaties a matter for the states
• Advantage of treaties over land use agreements, increased scope for self-governance for Indigenous communities, Canadian example where communities allowed to determine membership and make bylaws.

Labour and talent

Low wage growth  

• Survey of 251 executives
• More than 37% of CEOs expect to keep wage growth flat or 2%. 14% of CEOs said they would increase by 4% or more
• 30% of CEOs investing in automation to reduce labour costs
• Current 2.3% wage growth rate
• Low wage growth a macroeconomic global phenomenon
• Increased automation expected to maintain a low wage growth
• Unemployment expected to remain at 5.2%
• Less job switching also contributing to low wage growth. National switching rates declined to 8%, from 11% in early 2000s
• Treasury analysis suggests a 1 percentage point fall in job switching rate is associated with a 0.5% of a percentage point fall in average wage growth
• Most wage growth seen for lower paid workers
• Westpac's most recent agreement covering 30,000 employees granted 3.25% increase for next two years for those with salaries below $82,500

Uber drivers are not like casual employees

• Ruling handed down by Fair Work Commision
• Drivers not subject to other work obligations that affected casuals. Drivers not compelled to accept tasks. Decision based on level of control driver has.

Entrepreneur visa fails to attract offshore talent

• Entrepreneur stream introduced in the Business Innovation and Investment visa introduced in September 2016 as a National Innovation and Science Agenda initiative
• Criticised as too hard to access
• Less than 5 entrepreneurs applied from China, Hong Kong, Russia, Ukraine, UK, and Vietnam
• Visa requires at least $200k in funding, but most AU investors require proof of visa before investing
• SA trial running to November 2021 with fewer restrictions will be expanded nationally if successful. Applicants do not have to have investment committed. Proposals vetted by state of federal government entities, partnering with accelerators and incubators

Space

India launch delayed

• Launch delayed by a technical snag in 640-tonne, 14-storey rocket
• Countdown stopped at 56 minutes
• Other countries to land on the moon include US, Russia, and China

Moon overview

• China: In January, Chinese robotic spacecraft holding a small rover became the first to land on the far side of the moon. Sees first astronaut landing in 25 years
• India: Attempting launch to lunar south pole
• Israel: nonprofit SpaceIL tried a small robotic lander, but crashed 
• European space agency: put out concept of an international moon village by 2050
• Russia: Plans to send astronauts to moon by 2030
• US: Sent 24 astronauts to moon from 1968 to 1972. VP Mike Pence announced goal of putting Americans on the moon again by 2024, four years ahead of schedule and near end of Trump's 2nd term. Moor prgams called Artemis. First mission scheduled late 2020 to test the Space Launch System. 2nd mission 2022 with astronauts would orbit but not land on the moon. 3rd flight in 2024 would travel to Gateway, an outpost in orbiot around the moon, and from there travel to the lunar south pole
• Blue Origin - Jeff Bezos: Developing lander hopes to sell to NASA

15 Jul 19: Do we need Uranium startups, immigration visa overview, India to land person on the moon, and Facebook fines

Checked to see if the Fin Review Review was still up, and here it is. Not much has changed in the blogger platform, but so much has changed in my personal life, career, and the world in general. Strange to think I created this space seven years ago when we were still talking about the rise of social media.

Not committing to a daily post and this may be a one-off, but a daily reflection on the world is helpful. Have been looking for a daily scratch pad.

Format to be bullet points of the main data, with some commentary related to current focus on entrepreneur support and startups.

Energy and Climate Change

Trump steps back from Uranium trade war

Wonder where nuclear sits in the transition to clean energy, particularly for Australia. Opportunity for startups to address some of the challenges with nuclear energy?

• Was a proposed 25% domestic sourcing requirement, could have resulted in a two-tier uranium pricing with high US and low abroad.
• Stocks of two US uranium miners dropped 36%, spot price for fuel edged up. 
• Fears that a "buy America" requirement would distort the market. 
• Three uranium mines in AU, AU is world's 3rd largest producer of uranium ore, 7,343 tonnes in 2017, valued at $575M, for electrical power generation. 1/3 exports go to US for nuclear power.
• Mines owned by BHP, Rio Tinto - majority owner of Energy Resources of Australia, and General Atomics, private US firm. 

Defence force chief Angus Campbell noted risk of China claiming and militarising islands abandoned to rising sea levels 

Climate change relationship to national security, although from a China perspective, could be seen as an island-building startup program.

• China island rebuilding program began in 2013, seven man-made islands militarised. 
• Claims islands impacted by rising sea levels

Australian cars more polluting

• Australian cars emit 8% to 42% ore carbon dioxide than UK counterparts
• Compared each country's best variants, AU cars about 27% worse on average
• May be evidence of "leakage", where manufacturers sell high-emitting vehicles in coutries with less rigorous standards
• Combination of high manufacturing costs for fuel-efficient cars and small size of AU market makes it expensive to import advanced vehicles. Taxation and duties structures hold back advancement of new technologies
• Carmaker claime that Emission standards need to wait for fuel quality improvements due to Australia's low quality, high sulphur petrol cannot power more advanced engines.
• Refuted by government and petrol industry
• Proposed fuel efficiency standards, estimate to save motorists $500/year in fuel costs

Labour and Talent

Op-ed, Canberra is the problem with the visa system

• Coalition government position to cut permanent immigration over the next four years
• Reduce to 160,000 per year, reduction by 30,000 from previous highs a few years ago.
• About 2 million people on temporary visas, including holiday makers, skilled workers, and nearly 00,000 NZ citizens.
• Large majority reside in Melbourne and Sydney. Likely to remain despite tweaks to encourage regional or other states
• Biggest increase to be from international students, set to dramatically increase. 600,000 international students in Australia as of last March. Concerns about imbalance in classes, many courses dominated by foreign students, usually Chinese.
• Universities focus on benefits, higher fees from international students. International education is Australia's 3rd largest exporter
• 90,000 skilled workers on temporary visas as of last March plus 70,000 family members
• Average base salary for skilled temporary visa holders is $95,000, ulikely to undercut local employment
• Temporary skilled migrants of working age account for 1% of workforce
• Some suggest use of temporary visas contribute to decline in businesses training existing workforce
• Imminent workforce challenges unlikely to be addressed by education and training alone
• Shortfalls of 123,000 nurses by 2030, 18,000 cybersecurity workers by 2026 (AU universities produce 500 graduates a year)
• Constant and unpredictable changes to temporary skills visa program undermines ability of business to plan workforce needs.
• 70% of those ion skilled visas live in VIC and NSW, which have lowest unemployment rates in the country
• Over 50% of temporary skilled visa holders work in four industries: accommodation and food services; professional, scientific and technical services; information and telecommunications; other services like personal care.
• Top four occupations granted visas last FY: developer programmers; ICT business analysts; university lecturers; cooks. Almost all under age of 50. 
• CEDA recommendations: review job assessment classifications and methods; remove labour market testing requirement for advertising to Australians first; review usefulness of Skilling Australia Find training levy, which may just transfer funds from company training budgets to government training initiatives. 

EY Badge System

• Internal online training modules, employees can earn bronze, silver, gold, platinum badges 

Inclusivity 

PM supports indigenous constitutional recognition but not enshrining a voice in Parliament

Commentary on proposed Indigenous voice to Parliament, one of three proposals in the 2017 Uluru Statement from the Heart. Notes that positioning as a third chamber is misleading. Be interested in a review of how all countries acknowledge first nations. With inclusivity and diversity, if it is not intentional it will always be a side issue and that thing we do over there.

Gender balance in national intelligence community

Gender balance will take a generation, but there is progress.

• 7,000 people working in National Intelligence Community
• 42% female, about 25% females in  senior leadership positions
• In three years, number of women in senior executive roles increased in ONI from 9% to 39%, and in ASIO from 35% to 39%
• NIC made up of six agencies: Office of National Intelligence; Australian Secret Intelligence Service, Australian Security Intelligence Organisation, Australian Signals Directorate, Defence Intelligence Organisation, plus intelligence arms of the Australian Federal Police, the Australian Transactions Reports and Analysis Centre, the Australian Criminal and Intelligence Commision, and Australian Border Force.
• Continued challenges in international sector.  
• Never been a female ambassador or high commissioner to Washington, Jakarta, Tokyo, or London. 
• Parliamentary Joint Committee on Intelligence and Security never had a female chairman and female membership was 18%.
• 1/3 of senior executives at main internationally-facing government departments are women, compared to 45% in public sector.
• None of the 33 white papers, reviews, and inquiries in the past 51 years on Australia's foreign and security policy have been led by women.

International and scale

Trump invites Morrison to state-level dinner, China to be discussed

• First invite since 2006.

Space

India to land unmanned rover on moon's south pole

• Land September 6 or 7. $US141M. Analyse minerals, map the moon's surface, search for water.
• Plans to send humans into space by 2022, only 4th nation to do so.
• US looking to send a manned spacecraft to the lunar south pole by 2024
• In April, an unmanned Israeli craft crashed into the moon in a failed attempt at the first privately funded lunar landing
• India's first lunar mission in 2008 orbited the moon and confirmed presence of water
• In 2013-14, India put satellite orbit around Mars
• Some question expense, India 1.3b people, widespread poverty, one of world's highest child mortality rates.

Technology

Facebook fines

• $US5B fin from US Federal Trade Commission
• Ireland's data regulator launched investigation over Cambridge Analytics leak, potential fines of 4% of annual global turnover, could cost FB $US2.3B based on 2018 revenue. The commission has almost 12 open investigations on FB and subsidiaries.
• Canada's privacy head announced in April he was taking FB to court
• In October, British regulators slapped 500k pound fine
• Belgian Data Protection Authority and Germany's Federal Cartel Office also looking into it

AI to be used to analyse data from foreign bribery probes

• Average data seized in an operation has gone from 10 terabytes of data in 2011 to 45 Tb in 2018
• Added a predictive analytics team and a pilot AI program.

Retail

Barneys New York explores bankruptcy

• Nearly 100 year old department store
• Others who have filed in past year: Sears Holdings, Toys r Us, Gymboree Group

Corporate

VCI Innovation: State of Play report

• Survey of 800 mining professionals across 399 companies, 
• Higher mining shareholder returns when junior staff drive innovation compared to when senior executives are the main driver
• Focus on one to three or three to five year timeframes failed to drive urgent or hard-edge improvements at the operational level and stymied major strategic change.

12 May 2014: Australia most pricey in G20 and World bank's review of global poverty limits

Nice quote from editor Jennifer Hewett concernng the Oppositions opposition of the budget:

All care, no responsibility. It's one of the few joys of being in opposition these days.

There is a lot of attention on tomorrow's pending budget.  I expect I will spend time reviewing the impacts once the announcement is made to avoid speculation.  

There are always perceived winners and losers in business. A story about CabCharge notes how a couple of up-start businesses are threatening dominance in the taxi industry. Another story on JB Hi-Fi outlined how the chain's looking to be last man standing in the CD and DVD market. 

With all this focus on budgets and spending, I found the stories appropriate that highlight Australia as one of the most expensive countries while at the same time a review by the World Bank shows how good we have it in relation to global poverty.

Australia most pricey in G20

Australia is the most expensive G20 country to live in, and ranks the fourth most expensive economy out of 177 countries measured by the price level index. Major factirs pushing the price up include:

• the mining boom
• high exchange rate
• unbroken economic growth for 22 years
• oligopolistic major industries
• relatively low unemployment
• high labour costs for business.

Multifactor productivity, which measures how efficiently labour and capital are contributing to output, declined an average of 0.6% annually over the past five years. Australia's minimum wage is the highest in the developed world. Comparison of 2013 real minimum wage in US dollars:

• AU: $29,982
• NZ: $23,127
• CA: $20,285
• UK: $19,674
• US: $14,978

Data from the Purchasing Power Parities and Real Expenditures of World Economies report released by he World Bank's International Comparison Program.

World Bank reviews poverty line

New estimates of purchasing power parity - which corrects for exchange rate distortions to calculate the amount of goods and services that money buys in each country. New calculations show the number of people living below $1.25 per day fell from 1.2 billion down to fewer than 600 million. New calculations will inform discussions about objectives of the UN's Millennium Development goals which have shaped aid policy since 2000 and expire in 2015. Initial considerations are that the poverty line will be raised from $1.25 per day to $1.75 per day. Africa is now home to four in ten of the developing world's poor.  

We have so much. The more I read, the more I question whether we re doing the most with what we have.

9 May 2014: 457 Visa stats, Aurizon and Qantas cuts, and Candy Crush average spend

457 Visa crackdown

Applications for 457 visas have dropped by 36.3%, there has been a 23.2% slide in 457 visas granted in 12 months to 31 March 2014. The previous government raised English language benchmarks and required employers to pay 457 visa holders market rates. There is not a "look local first" condition in place. Employers have to prove they have advertised vacancies but have been unable to find someone locally. Despite lower applications and awards, there are 11,780 457 visa holders in Australia, which is 5.9% higher than this time last year. Cooks are most frequent recipients. Most visas are granted to Indians, followed by workers from the UK and Ireland. Drop in applications is said to be due to increase in fees from $85 to $330 in June 2013.

As both an American and Australian, I understand Nationalism. I am also conscious of the high price for Australian labor, which contributes to challenges with the case for local manufacturing particularly for multi-nationals deciding where to invest. I have supported a few 457s in my time and have never regretted it. 

Aurizon cuts

Aurizon is cutting another 480 jobs in Queensland maintenance operations and is looking to negotiate a new enterprise agreement with unions to allow compulsory redundancies.. It has cut over 2000 jobs (22% of the workforce) since late 2010 without forced redundancies. They are shrinking their locomotive fleet by 28%, and wagon fleet by 12% by fiscal year 208 to simplify its rolling stock,  which has included 59 kinds of locomotives and 297 kinds of wagons. Aurizon also plans to stop providing maintenance service to Queensland Rail and cut jobs in workshops in Redbank and Townsville.

Resource sector slow down, not sure what else to expect. Unions will talk about stopping "eroding job protections" but there are no protections in life. If demand is not there, then decisions are made.

A lot of Candy Crushing

King Digital, owner of Candy Crush, says popularity of the game has peaked in its first quarterly reporting as a public company. Players spent US$429 million,  down from US$493 million in the previous quarter. Amount spent across all their games rose to $US641 million, contributed by Farm Heroes Saga, whose daily users have doubled to 20 million since 2013. The growth of Farm Heroes Saga came at the expense of a 20% increase in marketing expenses since last quarter. 352 million people are playing its games, up 16% from last quarter. Number of users spending money declined from 12.2 million to 11.9 million, but average amount spent increased to $18 per month. King says barriers to new competitor entrants are increasing, since its large user base allows it to cross-sell content and analyse user data to improve gamer experience. It is also expanding into China.

What are we really investing in when we Candy Crush? Apart from time or money, our most valuable resource is our attention.  What else could we do with this investment?  What difference could we make?

Qantas targeting $1bn debt 

Qantas looking to achieve $800 million in cost savings and reduce debt by $1  billion by June 2015 to return to profitability. To cut capitall spending by a further $200 million to bring net capital spending to $800 million. Goal is to reduce annual cost base of $11.6 billion by 10% over next three eyars. Wants to lower cst gap with Virgin to about 5% to icnrease Qantas'margin advantage. Challenges include high competitive industry and an elevated Australian dollar fuel price. Expects international capacity growth into Australia will moderate from about 9% this financial year to 4% to 5% first hallf of the 2015 financial year. Domestic market growth exxpected to be about 3.5% and could moderate to 2.5% first half of FY. Expects to reduce number of full time employees by 2200 by en of June and another 1800 by end of June 2015, meaning only 1000 would remain for 2016 and 2017 FY. Other cost savings includ simplifying its fleet by retiring aging 767s and some older 747s for a combined annual cost benefit of $155 million. Also working througb pross and cons of selling the $2.5 billion frequent flyer business.

20133 reports had Qantas at 33,265 staff, which puts the total drop at around 12% of their workforce.  'That's a lot of change for a fair amount of people.

08 May 2014: Fighting among leaders, NBN versus water, and value of tech stocks

Fighting among leaders

Two stories.  In one, NSW police ore reviewing footage of a fight between billionaire gaming mogul James Packer and Nine Entertainment Co boss David Gyngeli.

In another, Clive Palmer is suing Qld Premier Campbell Newman for $1.1 million for defamation in aggravated damages.

How do we expect the next generation to behave if our commercial and political leaders cannot learn how to get along? Whether we throw physical or legal punches, I have to ask, how is it that we would choose to live and resolve our differences?  

Extra cost for NBN

The NBN is expected to cost between an additional $900 million and $1.4 billion to roll out to rural areas. This is based on a Boston Consulting Group report that found an additional 620,000 homes and businesses which will need faster broadband in the bush by 2021, up from the original 230,000 estimated.  This is included in the $41 billion budget. Ericsonn's $1.1 billion contract to build a wireless network is running about 12 months late.

Increase in scope, schedule and budget should not be a surprise, given that over 70% of all projects go over in one of the three variables. I understand the challenges, and the need, to bring connectivity to such a remote landscape. And yet I am challenged by the fact that even as we struggle with getting wireless to remote regions, other countries struggle in a similar way with getting clean water. If I were to think as a global citizen with a choice of where to spend $41 billion, would I choose wireless or water? And if I choose wireless, would I then have a responsibility to use that wireless for a common good? Even as I question, I type this using a 4G connection card on the train on my way home. Am I doing the most with what I have?

Twitter stocks plunge

Twitter stocks fell 18%, but still more expensive than Facebook or LinkedIn. Twitter stocks gained 23% from the IPO in November 2013. Market value is at $US19.2 billion. Monthly user activity in Q1 reached 255 million, 25% year on year growth compared to 30% in previous year.

I appreciate Twitter is an instant news source, but the majority of the traffic is noise. What would it look like if we values products based on the value they returned to humanity? I suppose there is a discussion about how you measure that value, but for the majority, when I consider the value of our time here on Earth and the contribution to that value from reading my Twitter feed... it does not make a compelling case.

Climate change affecting US

The Third National Climate Assessment, a 4- year 850 page report developed by 300 scientists and technical experts, outlines the impact climate change is having across eight geographical areas in the US and on key sectors in the economy including agriculture,health, energy, water, and transport. US carbon dioxide levels fell in 2012 to their lowest levels since 1994 due to a surge in natural gas use, yet current efforts to address climate change are insufficient.

I saw another link about a big sheet getting ready to fall off the Antarctic which is expected to cause escalating increases in coastal sea levels.  Parts of humanity are making some changes, but for the most parts I expect we will only change when it is on our front door.  

Culture with financial benefits

Former Commonwealth Bank Chief and Future Fund chairman David Murray emphasised the importance of strong corporate culture in promoting financial stability and claims analysts are not placing enough emphasis on people.

Why is it that this becomes a thing only when someone who is older and wiser says it is a thing? Saying "it is about the people" seems to be relegated to HR consultants and grey haired wisdom.  

07 May 2014: Starting up again

It has been eight months since my last post here on the FIN Review Review.  This has been a bit of an experiment over time. Originally, this was an email I sent out to my team and people I thought might be interested.  I later expanded it to this blog with the intent of tracking trends day by day.

It eventually got to the point of taking around an hour and a half every day, to the extent that I would take a week's worth of papers home with me and spend my Saturday mornings catching up. When I transitioned to a new Management Consultant role in September 2013, my attention focused on getting my feet under me both in a now company and a new career.

And yet, the FIN Review still calls me, even taunts me from the pile where it sits in my company's lobby. It beckons me with promises of patterns of commercial practices. I sense within its pages a clear articulation of the insanity of the capitalist mandate, the futility of our quest for success, and the faint hope of applying innovation and finite resources towards the benefit of humanity as compared to personal gain and corporate greed.

So today I pick it up again with a new refined focus.. Perhaps less details, with a bit more opinion and reflection. This blog, like my life, is just an experiment. I invite you to observe and take what you may find of value.

10 September 2013: Cost of gambling and AU most desirable place to live

Egg industry stats

• Australian Egg industry turns over $445 million per year.
• The Australian Egg Corporation directors are appointed by a one-hen, one-vote policy, weighting control to the three biggest egg producers: Pace Farm, Sunny Queen Farms, and Farm Pride. The three control 54% of the egg market (IBISWorld report).
• Costs in the egg industry increasing due to new rules for mandating larger cages and consumer preferences for free range eggs, pushing smaller players out of business. 
• Consumption has also risen due to the popularity of cooking shows.
• In July, Federal Court agreed with the ACCC that Baida (owns Steggles and Lilydale) misled customers when it claimed its hens were "free to roam in large barns", when in fact the chickens were unable to move more than a metre.
• [CR: Increased regulation to address a social concern making it hard for smaller business to compete. The higher price of the free range eggs is passing the cost of our conscience back to the consumer.]

 Australia most desirable place to live

• Boston Consulting group survey of 28,000 people living in 11 countries.
• 34% picked Australia as the country they most would like to live, followed by Canada, the US, and Switzerland.
• Key reasons were economic opportunity, education, and standard of living.
• 84% of Australians say they have more positive experiences in an average day, more than the OECD average of 80%.
• [CR: We have it so good.]

Abbott government councils

• Prime Minister's Business Advisory Council
  Chaired by Maurice Newman, AC. To include representatives from the manufacturing, agriculture, services, resources, and information sectors.
• Ministerial Advisory Councils
  Consists of business, non-profit organisations and other industry stakeholders to: advise on cutting red and green tape, improve the administration of grants and procurement, aand provide broader consultation on policy matters
• Australian Tax Office
  To appoint four part-time commissioners from the private sector, based outside Canberra and ideally from regional areas and small business.
• Prime Minister's Indigenous Advisory Council
  Comprise indigenous and non-indigenous Australians from the public sector and business community with a deep understanding of indigenous culture.
• Agriculture and Forestry Advisory Councils
  Co-chaired by industry experts and the minister for Agriculture, Fisheries and Forestry.
• Child Care Advisory Council
  Co-chaired by an expert and the minister.
• Community Business Partnership
  Chaired by the Prime Minister, to include prominent individuals from the business sector to advise on transferring oversight of the welfare system to the community sector.
• Energy and resources Sector Advisory Council
  Meet twice a year to advise on industry consultation on policy and legislation.
• Gambling Sector Advisory Council
  Comprises club and gaming venue representatives, meet with government four times a year.

Cost of problem gambling in Victoria

• Annual costs in Victoria 2010 to 2011 associated with problem gambling between $1.5 billion and $2.8 billion, borne by around 30,000 Victorians (findings from Victorian Competition and Efficiency Commission).
• Costs from two areas: costs associated with "excess gambling expenditure" by problem gamblers ($1 billion to $1.4 billion); and intangible costs associated with impacts on mental well-being for problem gamblers and their families ($400 million to $1.2 billion)
• Costs to Victorian government, including costs of treatment services and costs to health, human service and justice systems between $74 million and $147 million.
• [CR: If we are looking for a place for savings, that looks like a place to start. But are those gross costs, meaning do they account for the revenue gained from income from the problem gamblers? Perhaps that is another question to ask.]

Coles pursuing banking licence

• Coles pursuing an ADI license which would allow them to take deposits under its own name rather than in partnership with a bank.
• Parent Wesfarmers will hold the license, requires $50 million in Tier 1 capital.
• Process could take 3 to 12 months.
• 171 ADIs operating as of June 2013.
• Partially mirrors approach by British supermarket chain Tesco.
• Wesfarmers has a market capitalisation of $47 billion, already issues car insurance.

New Wentworth Holdings investment company

• New activist investment company created, billionaire investor Alex Waislitz raised $30 million from high-profile investors.  
• Wentworth Holdings to be renamed to Thorney Opportunities.
• New entity to target listed Australian companies where long-term value can be unlocked. Looking at four or five investments, but not ten at one time.

New surf brand from ex-Billabong CEO

• Former Billabong CEO Derek O'Neill setting up new rival surfwear brand. Took a $2.5 million payout 16 months ago after 20 years with Billabong.
• Teaming up with Paul Naude, also previously 20 years at Billabong, previously head of American business, now signed up as master licensee in Europe for O'Neill's rival brand.
•  O'Neill also took around six former senior Billabong executives, including Terry Strumpf (former VP of merchandising and design and president of Xcel brand), Rob McCarty (senior design director), Vince de la Pena (VonZipper VP), and Karen Sarver (VP of administration).
• [CR: The start up culture is attractive, particularly when the current culture is poor.]

Banking system upgrades update

• Commonwealth Bank recently completed a mammoth rip-and-replace.
• NAB positioned core upgrades as part of a 10-year tech-led transformation plan.
• Westpac CIO Clive Whincup says core upgrade lower priority, focus first to complete an online transformation, build the infrastructure required for Asia expansion, and overhaul the core investment platform in its BT Wealth division (will replace eight existing legacy systems with a platform from Swiss vendor Avaloq).
• Westpac mobile strategy cross platform. Used to follow Apple first strategy, now looks to head where the handset market is leading. Surging popularity of Google Android led to changing priorities, also developing on Windows mobile and tablet. Agrees with recent reports suggesting Windows could soon have enough of a market to be relevant.

9 September 2013: Election recap, farmer sentiment, and gender grad imbalance stats

The elections are over and I have moved to a new career. Feels like a good time to re-start the Fin Review Review to keep with the "fresh start" theme. 

The election

• Abbott's promises for scrapping carbon and mining taxes will likely wait until June when the new Senate sits.
• Green's leader Christine Milne "everyone elected has an obligation to uphold the policies they were elected on." [CR: not sure how that holds up to the sport and motoring enthusiasts who squeaked in on preferences.]
• Coalition beat Labor 53% to 47%. Coalition secured 81 seats (could be 87), Labor 51 (could be 57). Labor's primary vote of 35% was lowest in the century.
• In the senate as of current count, Coalition lost one seat to hold 33 spots, Labor lost six spots to hold 25. Greens picked up one to reach 10. Potential 8 independents and minor party Senators.
• When voters dumped Labor on Saturday but opted in droves to give their votes to minor parties instead of the Coalition, they created a nightmare for then new government beyond July 2014. [CR: I am sure there is a life lesson in here about knowing what you don't want but not necessarily getting what you do want.]
• Clive Palmer of the Palmer United Party: registered with the electoral commission two months ago, spent close to $20 million on then campaign, $12 million in advertising, won 5.6% of then primary votes, 11.3% support in Qld. Does not plan on giving up his business interests as an MP. [CR: Apart from potential conflicts of interest, I am just thinking about the time involved. Usually, I stop doing my old job when I get a new one... but that may just be me.]

Rabobank farming sentiment survey shows confidence higher

• Survey of 1,000 primary producers across varying geographies and commodities: 21% had a negative view, 46% positive.
• Confidence at 15-month high, 75% of farmers expect agriculture economy to improve or remain steady after five quarters of negative sentiment.
• Rabobank CEO Thos Gieskes, speaks of the need for flows, incoming from foreign investment, outgoing from exports.
• Geiskes says to help feed exploding world population, amount of food produced needs to double but productivity is lagging. Year-on-year productivity growth was about 1.3%, needs 1.7% to realise opportunity.
• R&D spending needs to increase, farming needs to become less labour-reliant and more capital intensive. Challenge to double production with less land, less water, and less fertiliser.

Telco mobile customer count statistics by year, in millions of customers

• Telstra: 2011 (12.20), 2012 (13.80), 2013 (15.10)
• SingTel-Optus: 2011(9.10), 2012 (9.51), 2013 (9.53)
• Vodaphone Hutchison Australia: 2011 (7.20), 2012 (6.84), 2013 (6.03)
• There are 31 million active mobile subscribers in Australia (for perspective, the population of Australia is 23 million)

Coalition education promises

• Schools
• Match Better Schools funding over four years - $2.8bn plus "secret deals"
• $70m for independent public schools
• $22m for reading and writing in remote primary schools
• $10m trial of online language learning for pre-school children
• 40% of year 12 students studying a foreign language within a decade
• More science, technology, engineering, maths (STEM) study for year 12 students
• MBA-style executive education for principles
• Vocational education and training
• Income-contingent loans up to $20,000 for apprentices
• Higher education
• $100m New Columbo Plan to send Australian students to Asia
• $100m boost to medical research by cutting grants to 'fringe' research areas.

MOOC on the walking dead

• University of California Irving to launch a cross-disciplinary MOOC based on The Walking Dead TV show.
• Course to cover topics including post-disaster nutrition, human survival, and stereotypes in Darwinian environment.
• Experiment to see if tying pop culture to traditional academic ideas improves learning.
• [CR: Cool, make it relevant. Will have to try Zombifying grade 5 math to see if it takes.]

Gender imbalance in education

• 60% of domestic undergraduate completions in Australian universities in 2012 were women. 50% more women than men complete bachelor's degrees.
• 59% of students from Australian universities studying abroad in 2012 were women. 44% more women than men studies abroad.
• 70% of Australia's indigenous undergraduates in 2012 were women.
• Julia Gillard set a target of 40% of 25 to 34 year olds holding a bachelor's degree by 2025. By 2012, 36.8% of 25 to 34 year olds held a bachelor's degree (40.5% women, 33.1% men).
• In 2012, undergraduate completions increased 13%, and the population of those aged 25 to 34 years old also increased 13%.
•  [CR: Yes, but in what courses? And are the opportunities the same for the graduates? Interesting to see the extent that the leadership imbalance towards men is driving the imbalance in education.  Will be interesting to see the impact in tow to three generations.]

Fewer Americans seeking jobs

• Participation rate 63.2% lowest since 1978, blamed on baby  boomers entering retirement and jobseekers giving up.
• Unemployment at a four-year low of 7.3%, but if adjusted for participation rate of 2008 would be 11%.

Yahoo!7 returns to Google

• Decision last week by Australian Yahoo!7 to align with Google and move away from Microsoft's Bing. Yahoo!7 not tied up with global agreements due to joint venture with Seven West Media.
• $1.8 billion spent on search advertising annually
• Google used for around 92% of searches in Australia (about 65% in the States). Australia is one of the best performing markets in terms of share.
• Yahoo!7 used for 2% to 3% of searches, Bing used for about 5%.

FIN Review review on pause

The FIN Review Review is on pause for the moment as I focus on other areas.  It may be a long moment.  

Thanks for reading!  

Chad

28 September 2012: Government car maker subsidies and Dick Smith plan

AU government paid subsidies of $3 billion over the past decade to car makers Toyota, Ford Australia, and GM Holden. Manufacturing impacted by high dollar, expensive raw materials, and global competition. Government's $5.4 billion New Car Plan will run from 2011 to 2020. Other assistance to the car industry, such as tariffs, estimated at around $670 million a year.   Manufacturing industry overall has shed 125,000 jobs over the past four years. [CR: From my seven years in manufacturing, I get this. Technology changes in digital requires learning new languages and updating hardware. By comparison, staying on top of technology in manufacturing requires millions in capital investment. It is easy to get left behind, and nearly impossible to remain competitive without assistance.]

Dick Smith plan: Sold by Woolworths to Anchorage Capital Partners for $20 million. Earnings before interest and tax last year was $24.6 million. Anchorage Capital Partners believes private equity is the way to turn around a business, "do it outside the day-to-day ASX-listed conventional board room environment and below the radar." Plan is to fix the business, make it perform better, then let the "exit [sale] take care of itself." CEO Nick Abboud's plan is to restock the "bibs and bobs" of electronics accessories. Says that is where the margins are and it will drive foot traffic, then get cross-selling across computers and televisions. Will maintain current store network, introduce more private label products (currently 14 percent of sales), improve markdown management, merchandise mix, online sales, marketing and store layouts. Before the sale, Woolworths "cleared the decks" with 44 store closures. Currently 325 stores achieving EBIDTA profit, no debt, and net assets of $290 million. [CR: I always like a clear strategy on the part of the equity firm and the CEO. "This is what we are going to do" and then they do it. Will be interesting to look back in 12 months and see how effective this was.]