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.