The true cost of keeping the Liddell power plant open


Frank Jotzo, Australian National University and Zeba Anjum, Australian National University

For a long time, Australian governments have believed that the private sector should run the electricity sector. And successive governments have used market instruments to incentivise reducing emissions, by supporting renewables, discouraging coal use, or both.

Now things seem inside out: uncertainty about energy policy mechanisms is pervasive, and the federal government is attempting to broker a deal for the ageing Liddell coal plant to stay open past its planned decommissioning date. It’s possible the plan will require government payments – amounting to a carbon subsidy.


Read more: AGL rejects Turnbull call to keep operating Liddell coal-fired power station


Fear of supply shortages and an appetite for coal have combined with an inability to resolve the political side of energy and climate policy.

Power companies see coal as a technology of the past, but the government seems unready to accept that wind and solar technologies (already the cheapest option for new capacity in Australia) are the future of Australia’s power.


Read more: The day Australia was put on blackout alert


The latest suggestion amounts to deferring serious investment in renewables for a while, fixing up some of the old coal plants up so they can run a few more years, and buying time in the hope of keeping power prices down. Chief Scientist Alan Finkel has backed the idea, at least in principle.

The cost of delaying the inevitable

Commissioned in 1972, the Liddell power plant is the oldest of Australia’s large coal-fired stations (after the closure of the Hazelwood station). The New South Wales government sold it to AGL in 2014, at an effective price of zero dollars.

AGL announced some time ago that it will close the plant in 2022 and has considerable financial incentive to do so. This week AGL reiterated this. The latest suggestion is that Delta Electricity might buy and continue to operate Liddell.

What might be the benefits and costs of keeping Liddell running for, say, another decade? We do not know the plant-level technical and economic parameters, but let’s look at the principles and rough magnitudes.

Keeping the plant running longer will require refurbishments, defer the investment costs in renewables, and result in additional emissions, both in carbon dioxide and local air pollutants.

Refurbishment is costly. Finkel put refurbishment costs at A$500-600 million for a 10-year extension. Such refurbishment might achieve an increase in efficiency – as GE, a maker of power station equipment, recently argued – but perhaps not by much for a very old plant like Liddell.


Read more: Coal and the Coalition: the policy knot that still won’t untie


And refurbishment might not work so well, as the experience with the Muja plant in Western Australia shows: A$300 million was spent on refurbishment that ultimately failed. Spending big money on outdated equipment is not a particularly attractive option for energy companies, as AGL’s CEO recently pointed out.

Liddell’s power output during 2015-16 was around 8 terawatt hours – about 10% of present NSW power supply (it was more in 2016-17, and less in previous years). It might well be lower as the plant ages.

Ironically, the reduction in the Renewable Energy Target, from 41 to 33 terawatt hours per year, almost exactly matches Liddell’s present power output. With the original RET target, new renewables would have covered Liddell’s output by 2020.

Liddell emitted around 7.5 million tonnes of carbon dioxide per year in 2015-2016. With the assumed reduction in output and some improvement in CO₂ emissions intensity, the carbon dioxide output might be in the order of 5-6 million tonnes per year, or 50-60 million tonnes over ten years.

If the government were to pay for the refurbishment, as has been suggested, this would equate to subsidising CO₂ emissions at a rate of perhaps $10 per tonne, compared to the alternative of replacing Liddell with renewable power.


Read more: FactCheck Q&A: is coal still cheaper than renewables as an energy source?


At the same time, the government is paying for projects to reduce emissions, at average prices of around $12 per tonne of carbon dioxide, under the Emissions Reduction Fund. The contradiction is self-evident. Furthermore, keeping more coal plants operational deters commercial investment in any kind of new plants.

Of course this needs to be seen in the context of supply security, any subsidies that might be paid in future to renewable energy generators, and the possibility that a Clean Energy Target will determine overall emissions from electricity production irrespective of whether Liddell operates or not. It’s complicated. But the fundamental point is clear: paying for an old coal plant to operate for longer means spending money to lock things in, and delay the needed transition to clean power.

A possible compromise might be to mothball the Liddell plant, to use if supply shortages loom, for example, on hot summer days. But such a “reserve” model could mean very high costs per unit of electricity produced.

It is not clear that it would be cheaper than a combination of energy storage and flexible demand-side responses. And it may be unreliable, especially as the plant ages further. During the NSW heatwave last summer Liddell was not able to run full tilt because of technical problems.

A market model to pay for reserve capacity would surely do better than government direction.

Australia’s energy companies have been calling for a mechanism to support new clean investment, such as the Clean Energy Target. And many would no doubt be content to simply see a broad-based, long-term carbon price, which remains the best economic option. If the policy framework was stable, private companies would go ahead with required investment in new capacity.


Read more: Finkel’s Clean Energy Target plan ‘better than nothing’: economists poll


The ConversationMeanwhile, federal and state governments are intervening ad-hoc in the market – making a deal to keep an old plant open here, building and owning new equipment there. It is the worst of all worlds: a market-based system but with extensive and unpredictable intervention by governments that tend to undermine investor confidence.

Frank Jotzo, Director, Centre for Climate Economics and Policy, Australian National University and Zeba Anjum, PhD student, Australian National University

This article was originally published on The Conversation. Read the original article.

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Dry winter primes Sydney Basin for early start of bushfire season


Matthias Boer, Western Sydney University; Rachael Helene Nolan, University of Technology Sydney, and Ross Bradstock, University of Wollongong

It might feel like the depths of winter, but Australian fire services are preparing for an early start to the bushfire season. Sydney has been covered with smoke from hazard reduction burns, and the New South Wales Rural Fire Service has forecast a “horrific” season.

Predicting the severity of a bushfire season isn’t easy, and – much like the near-annual announcements of the “worst flu season on record” – repeated warnings can diminish their urgency.

However, new modelling that combines Bureau of Meteorology data with NASA satellite imaging has found that record-setting July warmth and low rainfall have created conditions very similar to 2013, when highly destructive bushfires burned across NSW and Victoria.

Crucially, this research has found we’re approaching a crucial dryness threshold, past which fires are historically far more dangerous.


Read more: Climate change to blame for Australia’s July heat


How to measure bushfire fuel

On September 10, 2013 several bushfires in Sydney’s West caused havoc well before the official start of the bushfire season. These were a precursor to fires that destroyed more than 200 properties a month later. Warm, dry winter weather had dried out the fuels in Sydney’s forests and bush reserves beyond “normal” levels for the time of year.

The timing and severity of those preseason fires were a reminder that the region’s forests are flammable all year round; they can burn whenever the fuel they contain dries out past a certain threshold.

In most forests, there is an abundance of fuel in the form of leaf litter, dead twigs, branches and logs, lower vegetation such as shrubs and grasses, as well as higher foliage and branches.

The flammability of all these different kinds of fuel depends largely on their moisture content. Leaf litter and fine dead branches on the soil surface can dry out in a matter of days, whereas logs may take weeks or months to lose their moisture. The moisture content of shrubs and tree canopies varies depending on the amount of water in the soil, so they reflect the overall rainfall and temperatures across a whole season.

The flammability of an entire forest is therefore a complex calculation of all these different kinds of fuel (both alive and dead) and their different moisture levels.

Mapping Sydney’s forests

In a recent collaborative study, we combined data from a Bureau of Meteorology project that maps water availability levels across Australia with satellite imagery to develop new tools for mapping and monitoring moisture levels of different fuels in forests and woodlands.

We checked these tools by modelling fuel moisture levels during fires in NSW, Victoria and the ACT between 2000 and 2014, and comparing our predictions to historical bushfires.

Our research has identified critical dryness thresholds associated with significant increases in fire area. Rather than a gradual increase in flammability as forests dry out, when dead fuel moisture drops below 15% subsequent bushfires are larger. Another jump occurs when dead fuel moisture levels fall below 10%. We found similar thresholds in growing plants, although their moisture content is measured differently.

These dryness thresholds are pivotal, because they may represent the breakdown of moist natural barriers in landscapes that prevent fires from spreading. Understanding these mechanisms makes it possible to predict fire risk much more accurately.

As part of this project we compared the fuel moisture in Sydney Basin’s forested areas in 2013 and 2017. As shown in the chart below, currently the live fuel moisture level is tracking well below the 2013 values, and is approaching a crucial threshold (indicated by the dotted line).

The moisture content of dead fuel has been more variable, but it has also dipped below the 2013 curve and, if warm dry weather continues, could reach critical levels before the end of August.


The median predicted dead fuel moisture content and live fuel moisture content in forest areas of the Sydney Basin Bioregion in 2013 and 2017. Black dashed horizontal lines indicate fuel moisture threshold values. The start dates of major fires in 2013 are indicated by orange vertical lines.
Author provided, Author provided

In another worrying sign, mapping shows critically dry live fuel is much more abundant in 2017 than it was in 2013.


Remotely sensed live fuel moisture content in forest areas of the Sydney Basin Bioregion in July 2013 (left) and July 2017 (right). Click to enlarge.
Author provided

It’s clear that much of the Sydney Basin is dangerously primed for major bushfires, at least until it receives major rainfall. Forecasts for windy but largely dry weather in coming weeks may exacerbate this problem.

These new insights into landscape-scale fuel dryness provide a powerful indicator of what might be expected. They also build our capacity for week by week monitoring of fire potential.

The ConversationPreparation by both fire management authorities and exposed homeowners is now an immediate priority, to cope with the strong likelihood of an early and severe fire season.

Matthias Boer, Associate Professor, Hawkesbury Institute for the Environment, Western Sydney University; Rachael Helene Nolan, Postdoctoral research fellow, University of Technology Sydney, and Ross Bradstock, Professor, Centre for Environmental Risk Management of Bushfires, University of Wollongong

This article was originally published on The Conversation. Read the original article.

Clearing homeless camps compounds the violation of human rights and entrenches the problem


Cristy Clark, Southern Cross University

On Wednesday evening, the New South Wales state government passed legislation empowering police to dismantle the Martin Place homeless camp in the heart of Sydney’s CBD. This follows similar actions in Victoria, where police cleared a homeless camp outside Flinders Street Station. Melbourne Lord Mayor Robert Doyle proposed a bylaw to ban rough sleeping in the city.

In March, the UN special rapporteur on the right to housing, Leilani Farha, censured the City of Melbourne’s actions, stating that:

… the criminalisation of homelessness is deeply concerning and violates international human rights law.

As the special rapporteur highlighted, homelessness is already “a gross violation of the right to adequate housing”. To further discriminate against people rendered homeless by systemic injustice is prohibited under international human rights law.


Further reading: Ban on sleeping rough does nothing to fix the problems of homelessness


Real problem is lack of affordable housing

In contrast to her Melbourne counterpart, Sydney Lord Mayor Clover Moore had been adopting a more human-rights-based approach to resolving the challenges presented by the Martin Place camp.

After negotiating with camp organisers, Moore made it clear her council would not disperse the camp until permanent housing was found for all of the residents. As she pointed out:

You can’t solve homelessness without housing — what we urgently need is more affordable housing and we urgently need the New South Wales government to step up and do their bit.

It’s no secret that housing affordability in both Sydney and Melbourne has reached crisis point. And homelessness is an inevitable consequence of this. But we have seen little real action from government to resolve these issues.

The NSW government has been offering people temporary crisis accommodation or accommodation on the outskirts of the city. This leaves them isolated from community and without access to services.

In contrast, these inner-city camps don’t just provide shelter, food, safety and community; they also send a powerful political message to government that it must act to resolve the housing affordability crisis.

Having established well-defined rules of conduct, a pool of shared resources and access to free shelter and food, the Martin Place camp can be seen as part of the commons movement.

This movement seeks to create alternative models of social organisation to challenge the prevailing market-centric approaches imposed by neoliberalism and to reclaim the Right to the City.


Further reading: Suburbanising the centre: the government’s anti-urban agenda for Sydney


We should be uncomfortable

It is not surprising that right-wing pundits have described these camps as “eyesores” or that they make NSW Premier Gladys Berejiklian “completely uncomfortable”. The breach of human rights these camps represent, and the challenge they pose to the current system, should make people uncomfortable.

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Unlike most comparable nations, Australia has very limited legal protections for human rights. In this context, actions like the Martin Place and Flinders Street camps are one of the few options available to victims of systemic injustice to exercise their democratic right to hold government to account.

In seeking to sweep this issue under the carpet, both the City of Melbourne and the NSW government are not only further breaching the right to adequate housing, they are also trying to silence political protest.

It is clear from Moore’s demands, and the NSW government’s own actions, that the Martin Place camp is working to create pressure for action. What will motivate the government to resolve this crisis once the camps have been dispersed?

As Nelson Mandela argued in 1991 at the ANC’s Bill of Rights Conference:

A simple vote, without food, shelter and health care, is to use first-generation rights as a smokescreen to obscure the deep underlying forces which dehumanise people. It is to create an appearance of equality and justice, while by implication socioeconomic inequality is entrenched.

We do not want freedom without bread, nor do we want bread without freedom. We must provide for all the fundamental rights and freedoms associated with a democratic society.

Mandela’s words were hugely relevant to apartheid South Africa, where a ruling elite had established a deeply racist and unjust system that linked political disenfranchisement and material deprivation. But they also resonate today in Australia where inequality is on the rise – driven in large part by disparities in property ownership.

The ConversationHomelessness is a deeply dehumanising force that strips people of access to fundamental rights. The policies that are creating this crisis must be seen as unacceptable breaches of human rights. We need to start asking whether our current economic system is compatible with a truly democratic society.

Cristy Clark, Lecturer in Law, Southern Cross University

This article was originally published on The Conversation. Read the original article.

Abbott scores big win on party reform as Coalition continues to trail in Newspoll


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Tony Abbott’s ‘Warringah motion’ for party reform was passed by 748 votes to 476.
Daniel Munoz/AAP

Michelle Grattan, University of Canberra

The Abbott forces are seeking to drive home their sweeping Sunday victory in winning rank-and-file endorsement for reforming the New South Wales Liberal Party by putting a three-month deadline on the changes being ratified.

A special convention of party members voted overwhelmingly for motions from the former prime minister’s Warringah federal electorate conference (FEC) backing plebiscites for preselecting all candidates and direct election by the party members of those who run the party organisation.

This comes as the latest Newspoll, published in The Australian, shows the Coalition continuing to trail Labor 47-53% in two-party terms. This is the 16th consecutive Newspoll in which the government has been behind.

The Coalition’s primary vote rose one point to 36%, while Labor also rose one point, to 37%. One Nation slipped from 11% to 9%; the Greens fell from 10% to 9% since the last poll a fortnight ago.

Malcolm Turnbull’s net satisfaction improved four points to minus 20; Bill Shorten’s net satisfaction was static on minus 20. Turnbull widened his lead as better prime minister from eight points to 11 points.

At the convention of NSW Liberal Party members, the plebiscite motion was passed by 748 votes to 476, and the accompanying motion by a two-to-one margin.

The endorsement of the “Warringah” model is a huge challenge to the factional grip of the state division held by the moderates and soft right.

The changes would likely see the division move to the right, in line with the political colour of its rank-and-file, and make it harder for moderates to win preselections.

But the reforms have to be approved by the state council before they take effect. Given the majorities on the key votes were so decisive, and backing crossed factional lines, it would be hard for the current powerbrokers to resist the general thrust. But there could be a struggle ahead over timing and detail.

Walter Villatora, president of the Warringah FEC, said after the two-day meeting: “These reforms now need to be ratified, which I expect will happen within three months.”

“Somewhere up above in Liberal Party heaven Robert Menzies is looking down and smiling. The party membership have clearly spoken. The era of brutal factionalism is over,” he said. “The NSW Liberal Party is now the most democratic division in Australia.”

But a statement by state president Kent Johns suggested there would not be any rush. “The convention result reflected the members’ desire to reform some of our organisation’s internal processes, and serves as a clear demonstration of participation by our membership,” he said.

“Members showed their support for introducing a plebiscite model to ensure that the NSW Liberal Party continues to preselect the best candidates …

“Discussions at the convention will inform the development of the party’s modernisation plan, which will be prepared by me and the state director, Chris Stone. Constitutional amendments will be prepared over the coming months by our constitutional committee, and proceed to the party’s governing body – state council.”

Turnbull positioned himself carefully in his address to the convention on Saturday so as not to be caught in the firing line if the Abbott push won.

He stressed his support for plebiscites, saying every member should have a say in selecting candidates. It was widely believed, however, that he would have preferred a more circumscribed model.

But the convention voted down or didn’t reach motions attempting to impose some restrictions. These included having a longer eligibility period and an “activity test” before members could vote, and the grandfathering of electorates with sitting members.

In the Warringah model the only condition on party members voting in the plebiscites would be that they must have been a member for two years.

The present preselection system has candidates chosen by panels comprising local delegates and non-local members.

Neither Turnbull nor premier Gladys Berejiklian were at the convention when the vote was taken.

Later a spokeswoman for Turnbull said that as the prime minister had said at the convention: “He has long supported that all Liberal Party members have a direct say in preselections. The PM wants to ensure that every member of the party knows that their voice is heard and respected.

“The PM made it clear yesterday that plebiscites for preselections are a good idea, but hardly a new one. Every other Liberal party division has adopted them,” she said.

Abbott emailed members in his electorate: “This is a great advance for our party – and it would not have happened without the hard work of the Warringah conference led by our president, Walter Villatora.

“There’s more to do, of course. Democratisation now has to run the gauntlet of state council; but this is potentially a wonderful new start for our party. A revitalised, less factionalised party will be really important to winning the next election.

The Conversation“This is a big ‘thank you’ to all Warringah Liberals. Let’s now do our best to build on this success.”

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Blaming migrants won’t solve Western Sydney’s growing pains



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Many people in culturally diverse populations in Western Sydney have lived in Australia for many years, if not several generations.
Shutterstock

Shanthi Robertson, Western Sydney University and Kristine Aquino, University of Technology Sydney

Population growth has profound impacts on Australian life, and sorting myths from facts can be difficult. This article is part of our series, Is Australia Full?, which aims to help inform a wide-ranging and often emotive debate.


Western Sydney is one of the fastest-growing regions in Australia. It’s also one of the most culturally and linguistically diverse, as a key arrival point for refugees and new migrants when they first settle in Australia.

Various public figures and media outlets have connected asylum-seeker intake and immigration to traffic congestion and queues at hospitals in Western Sydney.

However, this kind of reaction can pin the blame for infrastructure and affordability problems on culturally diverse populations who may have already lived in Australia for many years, if not several generations.

Growth from international and domestic migration

Greater Western Sydney includes Blacktown, the Blue Mountains, Camden,
Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield
Hawkesbury, Liverpool, Parramatta, Penrith, the Hills Shire and Wollondilly.

We examined census data compiled by WESTIR Ltd, a non-profit research organisation based in Western Sydney, partly funded by the NSW Department of Family and Community Services. These data show that Greater Western Sydney’s population increased by 9.8% between 2011 and 2016. Over the decade from 2006 to 2016, it grew by 16%.

About 55% of those living there were born in Australia, and about 39% where born elsewhere (the remainder did not state their place of birth). Most put English or Australian as their first response when asked about their ancestry.

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New births are slightly down in the region, meaning growth is coming from other sources. This includes new international migration arrivals, but also incoming residents from other parts of New South Wales and interstate.

Greater Western Sydney has long-established cultural and linguistic diversity. The percentage of residents born overseas has increased from 34.1% in 2006 to 38.7% in 2016. Overall, the west accounts for 50.2% of the overseas-born population for the whole of metropolitan Sydney.

Reasoned debates on sustainable migration intake levels are a crucial part of discussions of urban and regional growth. There are valid criticisms of “Big Australia” policies, based on resource and environmental sustainability.

But while the number of new arrivals settling in Western Sydney has increased steadily since the second world war, with a significant jump over the last decade reflecting accelerated skilled migration policies to fill labour shortages, the majority of overseas-born living in the region are long-term settlers who have been in Australia for ten years or more.

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Increasing diversity does not always mean more new migrant settlers

The data show that 64% of Western Sydney residents have at least one parent born overseas. This is greater than the number of those born overseas. This correlates with national data indicating that Australian-born second-generation migrant residents outnumber those born outside of Australia.

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So while critics may look at non-white Western Sydney residents and assume they are recent migrants, what they’re often really seeing is multiple generations of multiculturalism. Most of these people are long-term local residents, not necessarily a sudden influx of new arrivals.

In addition, not all overseas-born residents are permanent settlers. Australia takes far larger numbers of temporary entrants than it has in the past. Most of these temporary visa holders, such as international students and temporary skilled workers, live in major metropolitan areas and their surrounds, like Western Sydney.

While some portion of these populations do stay on longer-term, they are not all permanent settlers who will add to long-term population growth. Net migration figures, which take into account people who depart Australia every year as well as arrive, and exclude short-term visitors, have generally been decreasing over the past six years.

Who do we define as ‘migrants’?

New Zealand citizens moving under Trans-Tasman agreements and migrants from the United Kingdom are still among the largest migrant groups in Greater Western Sydney.

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In many local government areas in Western Sydney – such as Wollondilly, the Hills Shire, Penrith, Hawkesbury and Campbelltown – England and/or New Zealand feature in the top five countries of birth of overseas-born residents.

If anxieties about migration and population in Western Sydney are based on genuine sustainability concerns and not xenophobia, why target mostly refugees and non-white migrants? Why focus only on areas with large non-white and non-English-speaking background populations?

Migrants do use infrastructure, but also drive economic and jobs growth

It’s never as simple as one new arrival “using up” an allocation of limited resources, whether jobs, housing, or seats on trains. In fact, new arrivals fill the gaps of an ageing workforce, and current migration policies are targeted to favour younger migrants and specific skills shortages.

Western Sydney, like many regions in Australia, has an ageing population. Residents aged 65-74 years increased from 6.2% in 2011 to 7.2% in 2016.

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Large-scale infrastructure – whether the slated new airport or the Westmead hospital – requires young and often skilled workers.

Nationally, recently arrived overseas-born residents have a lower median age and a higher level of education than Australian-born residents.

Infrastructure problems are also problems of policy, planning and funding, rather than just population numbers. Problems in transport and health infrastructure in Western Sydney cannot be easily solved by reactive anti-immigration attitudes or policies.

Cuts to programs like the humanitarian program or skilled temporary work visas, where the intake numbers remain relatively small as a proportion of the overall population, will not solve those infrastructure problems.

Western Sydney is growing, and with growth comes growing pains. But equating the region’s rich cultural diversity with a population crisis is the wrong message to send.


The ConversationYou can read other articles in the Is Australia Full? series here.

Shanthi Robertson, Senior Research Fellow, Institute for Culture and Society, Western Sydney University and Kristine Aquino, Lecturer in Global Studies, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.

Partial exclusion for Lee Rhiannon after marathon special Greens meeting


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The federal parliamentary Greens are taking on the power of the party’s hard left NSW branch.
Mick Tsikas/AAP

Michelle Grattan, University of Canberra

The Greens have imposed a partial exclusion from their partyroom on radical New South Wales senator Lee Rhiannon, after her behaviour over the schools legislation.

Her colleagues were angry that she authorised a leaflet urging people to lobby senators to vote against the bill, on which the Greens were negotiating with the government. The nine other Green MPs wrote to the party’s national council about her conduct.

While the letter cited the leaflet, the concern about Rhiannon went further. Party sources said they had not been informed that she had been bound by the party’s NSW branch to oppose the legislation. Eventually all Green senators voted against the bill, after the government did a deal with ten other crossbenchers.

The issues with Rhiannon involved trust in her and the ability of the hardline NSW branch to bind MPs – a power it is accorded under the party’s federal constitution.

At a marathon meeting of more than four hours in Melbourne on Wednesday, it was decided that the structural problem needed to be resolved.

The partyroom asked the national council to work with Greens NSW “to end the practice of NSW MPs being bound to vote against the decision of the Australian Greens partyroom”.

This was supported by all MPs except Rhiannon.

The partyroom also passed a motion “that NSW senators be excluded from partyroom discussions and decisions on contentious government legislation, including within their portfolio responsibilities, until these issues are resolved”. At present Rhiannon is the only NSW senator.

Rhiannon and Adam Bandt, the Greens’ only lower house member, voted against the motion.

In a statement after the meeting, acting whip Nick McKim said: “To function as a national partyroom, and to be a genuine alternative to politics as usual, we need to have faith and trust in our processes.”

The ConversationThere is some uncertainty about how a battle with the NSW branch – controlled by the “watermelon” faction, a description reflecting its hard left position – will play out. Some in the party fear the situation could be inflamed, while others will welcome the branch being finally taken on.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

No flies on Australia’s richest union


Michael West, University of Sydney

Imagine a company that received millions of dollars in government grants each year, paid no tax as it held charitable status, owned recruitment agencies and also owned a law firm that fought against penalty rates for young workers and workplace leave for victims of domestic violence.

There is such a company. It is called the NSW Business Chamber Limited. Its financial statements show the chamber recorded revenue of A$190 million last year, of which $5.8 million came in government grants.

It is difficult to tell without more intimate knowledge, but the accounts suggest the folk at the chamber may be living high on the hog.

“Direct salary and other costs of providing services” was $101 million last year (up sharply from $78 million in the prior year). A further $68 million was “employee benefits expense”, while the bill for cars was $2.8 million. The travel and entertainment chit was $2.5 million.

Chief executive Stephen Cartwright said today that the NSW Business Chamber had a strong focus on assisting SMEs (small to medium-sized enterprises) and conducting not-for-profit work such as training and apprentice schemes and advocacy. It was a “union” of sorts, he said, and like other unions it was a not-for-profit organisation.

Asked whether it was appropriate for the chamber to be claiming tax subsidies and government grants in view of the fact that it owned a law firm and recruitment agencies run to make a profit (and which, by their chamber parentage, immunised them from tax), Cartwright said these businesses helped to finance programs such as the chamber’s boot camp for unemployed youth in Western Sydney.

According to its financial statements, the chamber’s “core mission” is to “create a better Australia by maximising the outcome and potential of Australian businesses”.

There is a broader public interest issue at play here. While
other unions are struggling financially, the chamber is sitting on a plush investment portfolio of $184 million in shares, bonds and trusts, besides $13 million in cash.

The chamber owns the law firm, Australian Business Lawyers & Advisors Limited (ABL), and although ABL does not file financial accounts – as these are consolidated in the chamber’s accounts – it does appear to have a robust workload.

This week, ABL’s chief executive, Nigel Ward, and director of workplace relations, Luis Izzo, won a case in the Fair Work Commission that reduces penalty rates for workers in the hospitality industry.

These were big proceedings, which ran for 39 days, featured 130 lay witnesses, a dozen expert witnesses and nearly 6,000 public submissions.

The Australian Charities and Not-for-profits Commission (ACNC) regulates charities at a federal level. Its records show the chamber was registered in 2014 under the criteria “purposes beneficial to the general public and analogous to the other charitable purposes”.

While pursuing charitable purposes, ABL, on behalf of the chamber, has appeared in a raft of common issue proceedings in recent years acting for employers against union and employee claims including:

• award flexibility

• leave for blood and bone marrow donors

• casual and part-time employment

• family and domestic violence leave.

In the latter proceedings, the ABL’s Nigel Ward opposed an ACTU claim and argued against leave entitlements for victims of domestic violence.

Cartwright “strongly disagreed” with the proposition that arguing against entitlements for low-paid workers and victims of domestic violence was not a charitable exercise.

“We are required to be there by the Fair Work Commission,” he said. “It’s a necessary part of the workplace relations system … Our job is to go down there and act in the best interest of the country and employment. Without this, capital walks away.”

On the matter of how businesses operating for a profit could be consolidated into the chamber’s accounts and therefore not pay tax, he said this practice was appropriate as the cashflow was expended in not-for-profit activities assisting the chamber’s 13,000 members.

The $2.8 million expense for motor vehicles was for a fleet used by customers, often in regional areas, Cartwright said, and executives did not have company cars.

The chamber’s auditor, PwC, picked up $437,000 last year and $565,000 the year before and appears to have a conflict of interest in that its non-audit fees for tax advice and such exceeded its audit fees.

The chamber has also made political donations disclosures over the years. Both major parties have been beneficiaries, with the bulk of donations going to the Liberal Party. It has also funded election advertising in NSW. However, Cartwright said the chamber was “fiercely non-political”.


The ConversationThis column, co-published by The Conversation with michaelwest.com.au, is part of the Democracy Futures series, a joint global initiative between The Conversation and the Sydney Democracy Network. The project aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.

Michael West, Adjunct Associate Professor, School of Social and Political Sciences, University of Sydney

This article was originally published on The Conversation. Read the original article.

‘Liveable’ Sydney has clear winners and losers


Roberta Ryan, University of Technology Sydney and Yvette Selim, University of Technology Sydney

Sydney is frequently placed in the top ten of global “liveability” rankings. But despite the growing popularity of the buzzword liveability, questions remain about what it actually entails. What does a liveable city look like? How do we measure liveability? And, most importantly, liveable for whom?

The idea of liveability and liveability rankings has some usefulness. However, such rankings mask the disadvantaged, marginalised and excluded within cities, including Sydney.

In yet-to-be-published research, our analysis of Australian Bureau of Statistics (ABS) data from 1991, 2001 and 2011 indicates there are clear “winners” and “losers” in Sydney. Despite the strong economic growth in the 1990s, there is still a clear divide between eastern and western Sydney.

Who defines and rates liveability?

The term liveability has proliferated in planning and public discussions, but few definitions are provided.

Liveability is usually captured by published indices. Broadly speaking, there are three categories of indices: those that focus on decision-making from the perspective of individual lifestyle preferences, the firm, and policymakers.

The best-known liveability indices are developed commercially. These include the Economist Intelligence Unit’s Global Liveability Index, the Mercer Quality of Life Survey, PricewaterhouseCoopers’ Cities of Opportunity Quality of Life, and the Global Liveable Cities Index.

More recently, Sydney suburbs have been ranked according to various liveability indices (such as Domain Liveable Sydney 2016 and the Urban Living Index). However, overall these liveability indices tend to simplify or disregard crucial factors.

These indices tell a particular and incomplete story about the city. When viewed through the lens of spatial geography, it is clear that Sydney’s ranking as a liveable city requires greater recognition of the ways in which some Sydneysiders experience inequality and disadvantage.

What did our study find?

We compared ABS data from 1991 or 2001 to the data from 2011, focusing on four issues: income, unemployment, travel to work, and housing tenure.

Our analysis of employment found that the proportion of people employed in Greater Sydney slightly increased (94% in 2001 compared with 94.3% in 2011) and the unemployed decreased (6% in 2001 compared with 5.7% in 2011). People in full-time employment decreased while the number of people working part-time increased, bringing it almost on par with the Australian figure.

However, the data does not reveal the disparities in people’s incomes according to where they live. When we viewed the data spatially, it was evident that people who live in the central city, inner east, inner west and the north shore of Sydney have higher weekly incomes than those living in the western parts of Sydney.

Income levels in Sydney

Highest-income areas are shown in red, with lowest-income areas in blue.
Author provided

Our analysis also found spatial disparities in the way people commute to work. Driving remained the main form of travel (49.2% in 1991 compared to 53.8% in 2011), demonstrating continued car dependence in Sydney.

The disparity between east and west was evident in people’s opinions and preferences about travel. People in eastern Sydney felt more able to live close to where they work (72% compared with 62% in western Sydney).

People in western Sydney were less likely to feel they had the transport they needed (86% compared with 91% in eastern Sydney). But, interestingly, they also felt that transport was less important than eastern Sydney residents.

Finally, our analysis of housing tenure over the 20 years to 2011 found the level of outright home ownership fell by almost 10%. The proportion of people with mortgages increased (26.6% in 1991 compared with 33.2% in 2011), as did the number of people renting (28% in 1991 compared to 30.4% in 2011).

Housing tenure in Sydney

Areas with highest rates of outright home ownership are shown in blue, with areas of highest rates of mortgages in red.
Author provided

To sum up, the winners: live in the city, inner east, inner west and parts of northern suburbs, have relatively easy access to well-paid work, and own their homes.

The losers: live further from the concentrations of economic activity (jobs), have higher job insecurity, longer travel-to-work times, poorer transport choices and connections, lower incomes, more rental stress, less time with families, and poorer reported wellbeing.

Our analysis aligns with other recent research – see, for example, findings by the Grattan Institute, the Australian Department of Infrastructure and Regional Development and the Australian Housing Urban Research Institute.

How can liveability be better shared?

How then do the various liveability indices account for spatial inequality and disadvantage? In 2012, the Economist Intelligence Unit added a category based on “spatial adjustments”. The Spatial Adjusted Liveability Index now makes up 25% of the Economist Intelligence Unit’s liveability score.

Various programs and policies have also been designed to tackle liveability. These are helpful initiatives, but a more holistic and interdisciplinary approach is needed. Approaches to liveability need to be integrated (both place-based and people-based).

  • First, to be effective, institutions need to decrease fragmented responses.

  • Second, greater social inclusion is vital. This includes participatory approaches to planning and equitable access to jobs, services and amenity.

  • Third, cities need co-operative governance whereby citizens can affect decision-making through legitimate involvement.

The ConversationA greater focus on these recommendations might bring Sydney a little closer to being a liveable city for all.

Roberta Ryan, Professor and Director, UTS Institute for Public Policy and Governance and UTS Centre for Local Government, University of Technology Sydney and Yvette Selim, Senior Researcher and Lecturer, UTS Institute for Public Policy and Governance, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.