Rabobank's Agribusiness Bulletin

Posted by: Kylie Wilson

Below is a link to Rabobank's Agribusiness bulletin for March.  Many of our clients will find much of this information of interest given current economic conditions.
Agribusiness Monthly is prepared by our Food & Agribusiness Research and Advisory division. The report provides monthly commentary on Australian and New Zealand agricultural conditions.
Key highlights:

• Autumn climate conditions across Australia are expected to be mixed. Drought has been declared for most of the North Island in New Zealand, with the South Island challenged by ongoing dry conditions
• Official interest rate settings in Australia and New Zealand remained steady at the most recent central bank policy meetings. The focus continues to be on labour markets, both locally and abroad
• China has overtaken Korea in export volumes of beef from Australia, and is now the third largest export market behind Japan and the US, while exports to the Middle East broke records in February
• Dairy commodity prices have continued to rise on the back of continuing pressure on milk production and export supply in most key dairy export regions
• Australian wheat prices are expected to weaken relative to CBOT prices, making Australian exports more competitive on the global market

To view the full report, please click here.

Herron Todd White Rural Breakfast Seminar

Posted by: Megan Tilbrook

Anderssens' planning and environment team recently attended the Herron Todd White annual Rural Breakfast Seminar.
 HTW did not provide the positive forecasts for the rural property sector that I was hoping for.  The focus was on rural property in the northern States and it was clear that there have been relatively few sales during the last 12 months - many involving liquidated properties.  Due to the large amount of stock currently on the market, reduced buyer interest and restricted finance options it is expected that the next 12 months will continue to present challenges.
The seminar was concluded with an intriguing presentation on the Carbon market under the Carbon Farming Initiative, or the CFI.  The CFI as it presently exists poses several deterrents to property owners to get involved, with a permanence period of 100 years and the significant start up costs.  Currently high tech R&D is underway to minimise the set up costs and the risks.  From the talk in the room it was clear that there are developing opportunities for property owners to trade on the carbon market and that the way people deal with this commodity will be rapidly changing.

CSG Part 2 - Powers sought by the Commission in relation to managing CSG

Posted by: Nick Purcell

I recently wrote about the formation of the GasFields Commission in Part 1 of this blog series, including its role in managing the coexistence of rural landholders, regional communities and the CSG industry.  Given the impending passage of the legislation creating the Commission, I thought it might be worthwhile to identify the powers which were sought by the Commission and then briefly discuss the more interesting aspects of those powers in a series of blogs.  The Commission asserts that all powers sought by it are to serve its objectives, which are to manage and improve co-existence and sustainability between regional communities, rural landowners and the onshore gas industry. Those powers fall under eight “heads”, which are:

• Assessing the potential for co-existence
• Power to review regulatory frameworks and legislation
• Powers to get information
• Dispute resolution
• Power to publish and communicate information
• Leading practice/management
• Ability to seek external advice
• Miscellaneous Issues

Of those powers, it seems to me that the one with the greatest potential for controversy is the power for the Commission to provide advice and recommendations to the Government on the ability of the onshore gas industry, regional communities and landholders to effectively co-exist within an identified area.  The Commission’s Chairman, Mr John Cotter, recently emphasised that, whilst the Commission would provide advice and recommendations to Ministers and Government agencies, the ultimate decision on whether the CSG Industry could effectively co-exist within an identified area would rest with the Government of the day. On the face of it, such a power seems pretty straightforward. However, it seems to me that the concept underlying the proposed power represents a seismic shift in the rights of landholders. As far as the landholder is concerned, the current resources legislation permits resource companies to enter onto land to explore for resources and, ultimately, to develop those resource deposits. In both cases, the landholder’s interests are usually addressed by way compensation. The result is that the resource activity takes priority and the rural activity must surrender to it. If this proposed power were granted, then it would signal an intention from Government that, where the CSG Industry cannot co-exist with regional communities and landholders, then it is the CSG Industry that must go. This would reverse the existing statutory framework and exert a new primacy for rural landholders. Whether the Government of the day would act on a recommendation that the CSG Industry co-exist in an identified area is a question for another day. However, there seems little point in granting the power as it is currently formulated unless there was a preparedness to act. To do otherwise would merely preserve the status quo, and no change is needed for that.

CSG Part 1 - LNP's Resources and Energy Strategy Policy turning Landholders into Activists?

Posted by: Nick Purcell

Over the past few years I have acted for a number of rural landowners who had experienced, at first hand, the frenetic activity of Queensland’s resource boom. Some of those clients were affected by coal and gas exploration activities, whilst others had gas pipelines constructed across their lands. With that background in mind, I read the LNP’s “Resources and Energy Strategy” Policy, which was released prior to the last election, with some interest. You can find a copy of it here. The Policy had three key principles:

1. Fairer compensation to landholders, and land access arrangements;
2. Ensuring greater direct local benefits for the communities impacted; and
3. Rigorously monitoring industry impacts and enforcing stringent operating conditions.

 

Some of the key commitments underlying those principles included:

1. Legislating “items and actions” that are subject to compensation for landholders;
2. Providing clarity that partnerships between landholders and CSG operators should not be limited to compensation arrangements;
3. Rigorously monitoring impacts to protect the natural environment and resources, including the establishment of a “dedicated” inspection and enforcement unit.
4. Establishing a Gasfields Land and Water Commission to manage the coexistence of rural landholders, regional communities and the CSG industry;
5. Establishing a Gasfields Community Leaders Council consisting of local Government, industry and community leaders;

 

Some months have now passed since the election and the implementation of this particular policy seems to be well underway. The now LNP Government has established both a Gasfields Commission and a Gasfields Community Leaders Council. Appointments have been made to key positions for both bodies, including the appointment of seven Commissioners to the GasFields Commission. It is also expected that the powers of the Commission will soon be legislated. In addition to that, the GasFields Commission has also convened a number of community forums in rural Queensland.

Without exception, clients who have sought advice from me about a proposed entry onto their land by a resources exploration company have told me that same thing: they are uncertain about their rights about the entry onto their land or compensation, they are anxious that the exploration activities will adversely impact on their property and livelihood and they feel that they have no control over what the exploration company can and can’t do on their property. In short, the landowner reposes very little trust in the explorer.

The CSG Industry should have been an unmitigated success story for Queensland: an abundant resource in great demand by a world energy market turning to a new source. But the Industry’s public relationship exercise has been so badly implemented that its only success seems to be the rate at which it has converted landholders into activists. 

Whilst it is early days, a properly functioning GasFields Commission and Gasfields Community Leaders Council, with the right people to guide its activities, may provide the means to bridge the schism between landholders and resource companies.

Friendly Fire - Flesh Wound or Fatal

Posted by: Scott Thompson

We may have handled the GFC better then most countries but the current slow economy is full of testing times for business owners.  The danger for businesses now is even greater then during the GFC as we experience a slow down due to economic lag and overseas financial fallout. Some businesses who struggled through the GFC and the couple of years that followed, will now be realising they have not rebounded as planned – they have been mortally wounded, business death for them is not far away.  As entrepreneurs and businesses discover, the tighter lending policy from the banks results in reduced cash flow funding options.  No matter how great your business runs tight fiscal control and management - you are always exposed to collateral damage.  Do not become default bankers for your clients by providing interest free unsecured loans. Complacency is your enemy. You must be vigilant in hunting debtors. This requires registering secured interests, a debtor recovery policy and quick results. Does this aspect of your business need attention?

Budget boon for first home owners and construction industry

 Posted by: Tony Allen

In the Joint Statement of Premier, The Honourable Campbell Newman and Treasurer and Minister for Trade, The Honourable Tim Nicholls on Monday, 10 September, 2012 it was announced that:

First home buyers will receive "$15,000 - up from $7,000 - when purchasing a newly constructed home or property off the plan, under the re-shaped First Home Owner Construction Grant (formerly First Home Owner Grant)" [FHOG].

The relevant facts about the FHOCG are:

• The Newman Government’s First Home Owner Construction Grant is worth $15,000
• The FHOCG is for first home buyers who are buying a newly constructed or off-the-plan property
• The FHOCG replaces the First Home Owner Grant which was $7,000
• Those first home buyers who are about to purchase an existing dwelling will have until October 11 to finalise their contract (to be eligible for $7000 grant)
• First home buyers signing contracts for new properties before September 12 will receive $7000 and those signing on or after September 12 will receive $15,000
• The program will be administered within existing arrangements in the Treasury department
• Major banks and financial institutions will continue to advertise the FHOCG in their loan marketing material, reducing the cost for taxpayers

The following eligibility criteria still apply:

• It must become your principal place of residence within one year of taking ownership.
• It must be your principle place of residence for at least six months.
• You must not dispose of all or part of the property within one year after you start to occupy the residence as your home.
• The property must be bought or built at a value under $750,000

If you would like to know more, contact our Tony Allen on 07 3234 3112 or email.

 

Minister "calls in" Jewel Development on the Gold Coast

Posted by: Megan Tilbrook

I read this week that the Deputy Premier and Minister for State Development, Infrastructure and Planning has made a decision to "call in" the proposed $1 billion Jewel development proposed for Surfers Paradise. This is an astonishing turn of events as it essentially means that two valid submitter appeals which were made to the planning and environment court against the Gold Coast City Council's approval will no longer have any effect. Mr Seeney will now make the final decision on the project in accordance his powers under the Sustainable Planning Act 2009. According to the Ministerial Media Statement from 11 July 2012, the aim is to kick start the slumped construction industry on the Coast, and to "ensure applications such as this do not languish or get bogged down in protracted legal proceedings". It is clear the Minister is of the view that some submitter appeals are creating "red tape" for approvals, potentially undermining the important role that members of the community can play in the planning process. The ability to appeal against an impact assessable development is a right that should not be taken away lightly. This is the first time a ministerial "call in" has been made by the Newman Government and will no doubt raise an interesting argument on the competing interests of submitters having their say and the significant delay that can occur as a result of court proceedings brought by submitters. Mr Seeney's decision on the proposed development is expected to occur by early August. The Ministers decision will not be able to be appealed on planning grounds.