WA company with Chinese & UK backing announces a desire to mine near, extract water from and potentially pollute Clarence River catchment waters

Corazon Mining Limited exploration site

The Daily Examiner, 29 September 2017, p.1:

JUST 35km north-west of Grafton is a block of private land with the potential to change the face of Clarence Valley’s industry as we know it.

Mt Gilmore, which lies between Fine Flower and The Gorge, has been revealed to be home to several deposits of high-grade cobalt.

Now Western Australia-based company Corazon Mining is trying to work out just how big that deposit is, and whether it’s worth mining.

On June 16 2016, Corazon announced it had secured the right to earn up to 80% of the Mount Gilmore Cobalt-Copper-Gold Project from private company Providence Gold and Minerals Pty Ltd.

Their project tenure included one granted Exploration Licence covering an area of approximately 25km by 15km, and over the past couple of months they have been drilling to in an effort to find precious metals.

Corazon managing director Brett Smith said so far, things were looking good.

“We’ve been saying that this is one of the highest- grade cobalt deposits in Australia, we just don’t know how big it is,” he said. “There was a lot of gold and copper prospecting there back in the late 1800s, early 1900s, and so it’s amazing where it’s located how little modern exploration has gone on there.”

The reason they have their eye on cobalt, rather than gold or copper, is that the element’s value has risen exponentially in recent years due to its use in lithium-ion batteries.

Mr Smith said demand from the battery sector had tripled in the past five years and was projected to double again by 2020.

It is most commonly used in smartphones, laptops, and electric vehicles.

“Cobalt is the most expensive raw material used for building lithium-ion batteries, paying about $61,000 per tonne,” Mr Smith said.

“A lot of people have been exploring for cobalt in NSW but are looking at oxide deposits. Ours is a bit different in that it’s a sulphide deposit, and they are fairly rare to be cobalt dominant.

“It’s all in vogue at the moment so we’re pretty hopeful this can be used to produce cobalt salts for batteries.”

Mr Smith said the company was currently on its second drill program, which they hoped could be used to accurately determine the lay of the land.’

Exactly what mining exploration licence is this newspaper article talking about?

Well according to NSW Planning & Environment on 1 September 2017 it is  EL8379 granted to Mt Gilmore Resources Pty Ltd on 23 June 2015.

So who is Corazon  Mining Limited?

The company’s 2016-17 Annual Report states:

Corazon Mining Limited (ASX: CZN) (“the Company” or “Corazon”) is an Australian based company exploring and developing the Lynn Lake Nickel-Copper-Sulphide project in Canada and Mt Gilmore Cobalt-Copper-Gold project in Australia.

It has three main exploration projects -  the Lynn Lake and  Victory projects both in Manitoba Canada and the Mt Gilmore Project in NSW Australia.

This is the corporations current Board of Directors:

Clive Jones, Non-Executive Chairman - 4,235,330 fully paid ordinary shares, 5,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $154,607

Brett Smith, Executive Managing Director - 7,107,131 fully paid ordinary shares, 10,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $417,250

Adrian Byass, Non-Executive Director - 9,357,370 fully paid ordinary shares, 7,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $144,600

Jonathan Downes, Non-Executive Director - 11,154,512 fully paid Ordinary Shares, 5,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $190,557

Mark Qiu, Non-Executive Director (appointed 18 August 2017) - 1,269,300 fully paid ordinary shares, total annual remuneration unknown

Robert Orr is company secretary and Chief Financial Officer, shareholding unknown, total annual remuneration $114,360.

The last annual report indicated that the company share structure comprised 1,039,283,317 fully paid ordinary shares held by 2,135 individual shareholders and, 60,000,000 unquoted options are held by 10 individual option holders.

The largest options holders are Brett Smith with 10 million held and Zenix Nominees Pty Ltd with 20 million held.

On 1 December 2016 the Company announced the issue of 3,410,840 shares to key management personnel in lieu of cash-based salary. This strategy was implemented in order to conserve cash reserves for operational expenditure.

Corazon Mining appears to be operating at a loss and apparently paid no tax in 2016-17.

Corazon Mining Limited’s Purchase Agreement for the Mt Gilmore Cobalt-Copper-Gold joint venture project:

Under the terms of the agreement with Providence and subject to Corazon completing due diligence to its sole satisfaction on or before 30 June 2016, Corazon has the exclusive right to earn up to an 80% interest in the Project as follows:

Corazon can earn an initial 51% interest by:

* Issuing Providence 25 million Corazon Mining Limited shares

* Paying cash reimbursements of costs totalling $100,000

* Spending $200,000 on exploration within the first 12 months from the date of satisfaction of all conditions precedent (“Commencement Date).

Corazon can earn a further 29% interest (totalling 80%) by:

* Completing $2M  in exploration within 3 years of the Commencement Date

* Paying $150,000 in cash or shares upon the earlier of the commencement of the third year and Corazon spending a minimum of $500,000 on exploration

* Paying $250,000 in cash or shares upon earning 80% equity in the Project.

Corazon has the opportunity to extend this earn-in period by one year by paying $50,000 in cash or shares.

According to Corazon Mining;

The Project is located only 35km from the major centre of Grafton in north-eastern New South Wales. Project tenure includes one granted Exploration Licence (EL8379 – one year old), covering an area of approximately 25km by 15km……

On 22 August 2017 the Company issued 139,856,665 fully paid ordinary shares at an issue price of $0.014. The share issue was comprised of:

- an issue of 120,000,000 shares to Hanking Australia Investments Pty Ltd under a Subscription Agreement for a $1,680,000 investment in the Company;

- an issue of 7,356,665 to sophisticated investors to raise $102,993; and

- an issue of 12,500,000 shares to Providence Gold and Minerals Pty Ltd pursuant to the Company’s Earn-in Agreement with Providence in respect of the Mt Gilmore Project. Under this Agreement, Corazon has the exclusive right to earn up to an 80% interest in the Project. The shares have a total valuation of $175,000.

On the same date, the Company also issued 85,000,000 options to Hanking Australia Investments Pty Ltd following their investment in the Company. The options were issued with an exercise price of $0.03 and an expiry of 22 August 2019.

On 18 August 2017, Dr Mark Qiu of Hanking Australia Investments Pty Ltd was appointed to the Company’s Board of Directors.

China Hanking Holdings Limited, registered in the Cayman Islands and listed on the Hong Kong Stock Exchange, is the parent company of Hanking Australia Investments Pty Ltd.

The second largest shareholder in Corazon Mining Limited is Crescent Nominees Limited, a private equity firm registered in Northern Ireland since 2014 and owned by venture capitalist Crescent Capital NI Limited.

As part of NSW Minerals Week Corazon Mining Limited had a booth at the 14th Sydney Resources Round-Up in May 2017 where interested geologists could view their sulphide core from the 2016 Cobalt Ridge drilling program. 

Area in which the proposed cobalt mine would be situated

Satellite image of Mount Gilmore (height 372m) situated just above the Clarence River system at The Gorge

It doesn’t take a genius to look at this image and see the potential for heavy rain episodes over Mt. Gilmore leading to surface water runoff into Clarence River tributaries.

So the first question is; what happens if Corozon Mining was granted a mining licence by the NSW Berejiklian Coalition Government and one or more of its heavy metal contaminated holding ponds were breached during such a rain period? The potential exists for any such breaches to result in long-term contamination of surrounding soils and water courses, as well as higher sediment levels in surface waters.

Heavy metal and metalloid concentrations within stream-estuary sediments already occur naturally in NSW north-eastern coastal rivers and current Clarence River levels are also the result of historic mining in the upper catchment below the Dorrigo Plateau region.

This leads to a second question. Can a river system, which supplies drinking water to est.126,008 residents (Census 2016) along with water to farmers, graziers and commercial fishers in the Clarence Valley and Coffs Harbour City local government areas, safely tolerate higher heavy metal and metalloid concentrations in that water? Communities relying on the Clarence river system might not be happy with the thought of any increase in localised or overall toxicity.

Given that mining is a thirsty business and water used in its extractive processes has to come from nearby surface/groundwater sources, there is a third question which immediately springs to mind. In the face of increasing impacts from climate change can we afford to have the environmental water flow in the Clarence River system compromised further?

Then there is the question of required associated infrastructure, including transport of ore via trucks and rail – need I say more?

One has to wonder when Clarence Valley Council was going to mention this proposed mining activity to residents and ratepayers because it is highly likely that this mining company or someone acting on its behalf has approached either the Mayor or council administration.

UPDATE

NSW Planning & Environment mapping of EL8379

https://minview.geoscience.nsw.gov.au/#/?lat=152.64729140322308&lon=-29.387643207430074&z=11&bm=bm1&l=mt2%3Ay%3A100

The NSW Northern Rivers have been asking for a fair go for decades

                          

To be filed under The more thing change the more things stay the same……….

Saturday, 7 March 1931

Trove, retrieved 13 August 2017

Surprise, surprise - those Murray-Darling Basin water raiders have slithered over the horizon once more and are eyeing off the Clarence Valley river system yet again

With so little fanfare that much of  Northern Rivers region missed it, the NSW Berejiklian Government reopened the March 2016 inquiry into augmentation of water supply for rural and regional New South Wales on 28 May 2017, with Terms of Reference published in July 2017.

This Upper House inquiry is chaired by Robert Brown MLC, from the Shooters, Fishers and Farmers Party and its reporting date has been extended to 30 March 2018. 

Current committee membership is as follows:

Robert Brown MLC, Shooters, Fishers and Farmers Party, Chair

Mick Veitch MLC, Australian Labor Party, Deputy Chair

Jeremy Buckingham MLC, The Greens

Rick Colless MLC, The Nationals

Scot MacDonald MLC, Liberal Party

Greg Pearce MLC, Liberal Party

Penny Sharpe MLC, Australian Labor Party

Daniel Mookhey MLC, Australian Labor Party

Paul Green MLC, Christian Democratic Party

* Jeremy Buckingham MLC (Greens)is substituting for Dr Mehreen Faruqui MLC for the duration of the inquiry.

* Matthew Mason-Cox MLC (Liberal)  is substituting for Hon Greg Pearce MLC for the duration of the inquiry.

* Paul Green MLC and Penny Sharpe MLC will be participating for the duration of the inquiry.

A poorly advertised public hearing scheduled for 1 August 2017 in Lismore (with details sent to media on 31 July 2017) excluded Northern Rivers residents from giving evidence unless they represented a small number of invited groups.

It appears the committee had also determined that Clarence Valley Council was to be asked its view on diverting Clarence River system flood water.

Given flood water is already diverted to the purpose built Shannon Creek side dam to ensure a sustainable water supply for the est. 125,103 residents (Census 2016) currently living in Clarence Valley and Coffs Harbour local government areas, there are no prizes for guessing where any additional water diversion would be allocated.

Yes, that paragon of sustainable water mismanagement - the cluster of councils, industries, irrigators and water traders within the Murray-Darling Basin.

It will come as no surprise that Griffith Council is still pursuing a Clarence River dam and divert scheme. North Coast Voices reported on its obsession in August 2016.

This is what the Griffith City Council Deputy mayor, Dino Zappacosta of Zappacosta Estate Wines in Hanwood, told the inquiry on 1 March 2017:

The issue that my committee, Build More Dams, has looked at is that we need more water because farmers are crying out for more water. We need new water. By "new water", I mean water that is not currently being used at all. We looked at various options, including the Clarence Valley area, where millions and millions of megalitres of water flow out into the sea for what seems to be no real benefit at all for the community of the Clarence region, other than for the natural farming land and the fishery industry there.

It soon became apparent that, appart from the notion of free water at the expense of Clarence Valley communities’ social, cultural, aesthetic, environmental and economic values, Griffith Council knew little about how this dam and divert scheme would work.

The Hon. RICK COLLESS: You have been talking about the Clarence River diversion scheme. Is it correct that that is essentially restricted to the Mann River subcatchment?

Mr ZAPPACOSTA: To the best of my knowledge, it covers most of the tributaries—for example, the Boyd River, the Mann River, the Nymboida River and the Timbarra River. They are highlighted on map 2, which was provided to the Committee.

The Hon. RICK COLLESS: I am a little confused about the way the map reads. It appears as though the water is coming out of the Mann River catchment, which is a subcatchment of the Clarence. The divisions appear to be above the confluence of the Nymboida and the Mann. You recommend a 23 per cent Clarence River diversion, but the question is: What percentage of is that of the Mann River flow and what environmental impact will that have on the Mann River below where it is diverted? We should keep in mind the history of the Snowy River and what has happened there over the past 50 years. Does anybody have any thoughts about that? Mr ZAPPACOSTA: I will have to take on notice exactly how much comes from the Mann River itself.

The Hon. RICK COLLESS: What is the reduction in flow from the sub-catchment rivers below where the water is diverted from them? What environmental impacts will that have on those rivers?

Mr ZAPPACOSTA: I appreciate the question. I think what you are asking is something we should dig into a bit deeper; there should be a study of it, preferably a feasibility study.

The Hon. RICK COLLESS: There needs to be a lot of work done on this, as you would appreciate.

While the Director of Utilities at Griffith City Council stated:

As an engineer I see the great benefits of supporting a scheme such as the Clarence River diversion scheme, not only from a water augmentation point of view. My directorate covers water supply as well as the flooding impacts caused by rainfall run-off. The Clarence River diversion scheme is not only a supply scheme but a flood mitigation solution, as the general manager mentioned. In my research I have referred to the document entitled Lower Clarence Flood Model—Update 2013 produced by BMT WBM consultants. They happen to be the same consultants who undertook our flood study and provided our flood mitigation options. They work across the State and they are well versed in flooding, from the Northern Rivers down to our area.

The Clarence River catchment on the far North Coast of New South Wales is one of the largest catchments on the east coast of Australia. It is approximately 20,000 square kilometres. It is above the towns of Grafton, Maclean and Yamba, and it is home to more than 20,000 people. The lower Clarence Valley has a long history of flooding, since settlement in about 1850. Bear with me as I read out the dates of the flooding events. I was just going to say a number, but it has more of an impact when you follow the years of flooding that the area has endured due to the large catchment that sits above it. Floods were recorded in 1863 and 1864. There was a record flood in 1890 in which two people lost their lives and there was extensive damage to the rural area. Further floods occurred in 1921 and 1928. Since 1945 the incidence of major flooding has been much higher, with floods occurring in 1945, 1946, 1948, 1950, 1954, 1956, 1959, 1963, 1967, 1968, 1974, 1976, 1980, 1988, 1996, 2001, 2009 and 2013.

There is a regular occurrence of extreme flooding in the Northern Rivers catchment, below the Clarence River. Section 4.4 of the Lower Clarence Flood Model—Update 2013 acknowledges that "the river flows originating from upstream of Grafton dominate flooding in the Lower Clarence Valley". Diversion of the Clarence River flows for that area towards the west, and the 25 per cent or 23.8 per cent that will be captured, diverted and controlled, will be of great benefit to flood mitigation in the Northern Rivers area. The document further says that it will maximise the investment from the Government not only to help solve water augmentation issues but to reduce the financial and human impacts flooding has in the northern coastal areas. The Clarence River diversion scheme was documented in 1981 by David Coffey and he estimated costings back then. We have done a projection to a present-day cost of approximately $10 billion. There are statistics on the map that I have provided to the Committee.

The Snowy Mountains scheme would have cost $10 billion in present-day money, so there are similar costings in the schemes. The 1,100 gigalitres diverted per annum from the Clarence River has generated $1.82 billion in agriculture. The scheme means that 23.8 per cent of the flows that would be heading down to flood people can be diverted. When you equate the $550 million a year in flood damages with the cost of a diversion scheme, 1,100 gigalitres can generate $1.8 billion a year in agriculture growth. The additional water means that 118,000 hectares of viable open country can be farmed. The offset of diversion and flood protection is that it is beneficial to all. That is where I will leave it.

The public hearing in Griffith was reported thus by The Area News on 2 March 2017:

HIGH-profile Griffith water users and city officials enjoyed a rare opportunity to sit face-to-face with Members of the NSW Upper House on Wednesday to discuss their handling of water….

The Honourable Rick Colless, The Honourable Paul Green, The Honourable Matthew Mason-Cox and The Honourable Penelope Sharpe were on hand to hear the concerns of the community….

Along with wanting to fix the water sharing plans, the other hot topic was the Clarence River Scheme, initially conceptualised by David Coffey in the 1970s.

The plan outlined diverting river flows westward from high rainfall catchments in the Northern Rivers.

According to Griffith City Council, the scheme will benefit lands south of the Dumaresq River while also providing flows into the Murray River, reducing the reliance for Murray-Darling Basin allocations to fill the original allocation to the basin. 

“We have looked at various options and we look at the Clarence Valley area where there are millions of millions of megalitres of water flowing out into the sea for what seems to be for no real benefit,” Councilor Dino Zappacosta said.

Griffith City Council general manager, Brett Stonestreet said it’s time the scheme is looked at again.

“It provides new water to give this state another shot in the arm,” he said.

“It also looks at potentially reducing flooding impact of the coastal communities adjacent to the Clarence by 25 per cent.

“There is a huge amount of money that can be generated and inland communities rediscovered and regenerated through new water.”

Mayor Dal Broi was pleased with how the inquiry was conducted and the feedback from the Senators.

“Some of the questions that were asked by the panel members, we know now what they are thinking,” he said.

“They were very receptive to the concept of new water so whether it's the diversion of the Clarence or lifting the wall on Burrinjuck Dam ... they were very receptive to that because we tried to make the point that the limited resources at the moment.”

“We need new water if our regions are to grow and have a better long-term sustainable allocation.”

Not content with bringing down the largest river system in Australia in order to line their own pockets, these wanabee water raiders just keep on coming after what they see as more 'free' water for the rorting.

Clarence Valley Council gave evidence at the re-opened inquiry on 1 August and the only question of interest to the water raiders came after a few minutes of questioning at Page 26 of the Lismore public hearing transcript:

The Hon. GREG PEARCE: Thank you for your submission. In your submission you talk about this idea of diversion of the Clarence River to west of the Great Dividing Range. Could you give us a bit of a background on that proposal and what your council thinks about it?

Mr ANDERSON: I will start but Mr Mashiah might finish. Our council has resolved six times that they do not support the diversion of the Clarence, and each time that has been unanimous in regard to council's position. That is based on the fact that damage to the environment and the ecological systems that work within the Clarence River emerge from there. 

The CHAIR [Robert Brown MLC, Shooters, Fishers and Farmers Party]: You probably cannot answer this, but that is an all-encompassing position of council?

Mr ANDERSON: Yes.

The CHAIR : I wonder what the council's position would be on the diversion of floodwaters only.

Mr ANDERSON: Again, Mr Chair, like you said, I cannot answer that question.

The CHAIR: What I am asking you is that I guess the council's resolutions were not burrowed down to that extent to be able to answer that question. We might ask Clarence council for an opinion on that.

The Hon. GREG PEARCE: Are those decisions supported by an independent side to pick advice? How were they derived?

Mr MASHIAH: There was a Healthy Rivers Commission inquiry into the Clarence in I think it was 1999, from memory, and part of the outcome of that commission inquiry was the importance of regular flood events in terms of the fishing industry and also the cane industry. I believe you have representatives from the cane industry here with us later.

The CHAIR: This afternoon, yes.

Mr MASHIAH: And also in terms of fisheries, one of the aspects that Clarence Valley Council has been active in for the past 20 years is trying to manage the floodplain to address issues such as acid runoff.

The CHAIR: Solid sulfate soils.

Mr MASHIAH: As the sulfate soils and particular acids run off. So we have done things like open floodgates and—

The CHAIR: And you should be congratulated.

Mr MASHIAH: Thank you, Mr Chair, for that. I will pass that on to the relevant staff who have been coordinating that. The regular flushing of those areas, which are fish breeding grounds, by floodwaters is very important. So if floods were diverted there are significant concerns from the fishing industry about the ongoing viability of the industry because the grounds where fish breed, according to the studies that have been undertaken, would then be adversely impacted. So that is one of the reasons that the fishing industry has very strongly opposed, through our estuary management committee in particular and through the estuary management plan, any diversion of water and we have tried to ensure that the fish breeding grounds are protected.

The CHAIR: I just made the observation that most of those fish breeding grounds would not be the same areas of land that are subject to high residential development or business or commercial or other aspects. In other words, you are not talking about the township of Grafton itself, you are talking river peripheries, flooded-out areas, for breeding concerns?

Mr MASHIAH: The challenge is that the urban footprint on the lower Clarence floodplain is probably about 1 to 2 per cent of the total surface area and all the urban areas are surrounded by rural areas. So it is very hard to work out how you manage that 1 or 2 per cent without adversely impacting the other 98 per cent, or vice versa, how do you manage the 98 per cent without adversely impacting 1 or 2 per cent of urban area?

The CHAIR: The 2013 flood, you have described it as a major flood, correct?

Mr MASHIAH: It was the flood of record at Grafton.

The CHAIR: I am wondering how the 2013 flood would have enhanced the fishery on the Clarence?

Mr MASHIAH: The main issue with the 2013 flood—I guess with any flood in the Clarence the flood behaviour in the upper river is a lot different to the flood behaviour in the lower river because of the tidal influences in particular and also how wet the floodplain is already. The 2013 event was actually three floods.

The CHAIR: And they rolled up on each other?

Mr MASHIAH: Yes, within a three-week period—quite distinct flood events.

The CHAIR: So it was a prolonged flood.

Mr MASHIAH: It was a prolonged flood and that meant there was significant inundation of back swamp areas, and I understand that there were some areas that effectively were areas that were flushed that had not been flushed in floods probably since 2001, so it is probably 12 years. So from an ecological perspective, talking to our environmental scientists, I understand that it was actually quite beneficial because the bigger floods only get into those areas once every 10 to 20 years.

The CHAIR: Were there any concurrent blackwater events for the fishery?

Mr MASHIAH: Not that I can recall, and I think that is a result of the management measures that have been undertaken on the floodplain because most of the farmers now operate the floodgates and so only shut the floodgates when there is actually a flood coming and open them fairly soon afterwards.

The CHAIR: So it is their responsibility to operate their own floodgates, is it?

Mr MASHIAH: That has been passed on to them, yes.

The CHAIR: Do you have any oversight of that?

Mr ANDERSON: Yes, we do, and we work with those groups and undertake training et cetera . It is a two-way street of communication: they tell us what they need and, vice versa, we provide training associated with that and inductions and operate that through a number of committees et cetera as well.

Evidence was also given by the NSW Professional Fishermen’s Association (commencing Page 38) the NSW Canegrowers Association (commencing Page 45) and the Clarence Environment Centre (commencing Page 56).

See https://www.parliament.nsw.gov.au/committees/DBAssets/InquiryEventTranscript/Transcript/9964/Uncorrected%20transcript%20-%20Lismore%20hearing%20-%201%20August%202017.pdf

One has to wonder why the committee members of this reformed Water Augmentation Inquiry didn't seek the views of those holding Native Title (See Yaegl People #1 & Yaegl People #2) over the Clarence River from the waters approximately half-way between Ulmarra and Brushgrove right down to the eastern extremities of the northern and southern breakwater walls at the mouth of the river.

After all they are significant stakeholders in any discussion of water policy and water management in the Clarence River catchment area.

The other matter of note, arising from North Coast Voices somewhat belated discovery that the water raiders were back on the scene, is the suggestion that not all Clarence Valley councillors had forewarning that council staff were appearing before the inquiry on 1 August.

If true this would be a disturbing indication that council administration has retained some of the bad habits it acquired under the former general manager who was handed his hat in March this year.

The Ladies Who Bake (and organize, lobby, raise funds & volunteer) come out against coal seam gas exploration, mining and production

The Country Women’s Association (CWA) of New South Wales came together for its annual conference on 22-25th May 2017 for the 95th time and debated policy.

Photograph: The Land, 25 May 2017

At this conference the CWA passed the following motion:

Maules Creek Branch (Namoi Group):

Preamble: The results of hosting unconventional gas on farms are properties devalued, mortgages refused, insurance covers rejected, destroys families, divides communities, drains aquifers and turns land into dead zones, sick children, suicide and mental breakdowns.

“That the policy of CWA of NSW shall be to support a ban on unconventional gas exploration, extraction and production”.

With the largest women’s organisation in Australia now having this policy endorsed by one of its founding chapters, NSW Nationals leader and MP for Monaro John Barilaro’s statement that he saw no reason why the coal seam gas industry should not be supported in areas of the state where it would not affect prime agricultural land is not looking as robust a proposition as he perhaps thought two weeks ago.

Will cuts to Sunday penalty rates become a textbook example of unintended consequences?

ABC News, 23 February 2017:

Let's start by calling a spade a spade. Sunday penalty rates have been cut by the Fair Work Commission. Not "equalised" or "brought in line" with Saturday rates. Cut.

Business, big and small, has been seeking this cut for years, saying Sunday penalties are a legacy of a bygone era where families went to church — one that's costing them a tidy sum.

They also argue it's a legacy that's been costing jobs, with many employers choosing not to open on Sundays, or to maintain just a skeleton staff (although ask yourself, just how many retailers, restaurants, cafes and bars are actually shut on Sunday?).

But the cuts to Sunday penalty rates could become a textbook example of unintended consequences, where a move supposed to increase employment instead hurts the economy and increases business failures and job losses.

Why? Because the hundreds of thousands of retail and hospitality workers affected by this decision are also customers.

What do you think happens when you cut someone's pay packet by as much as 25 per cent for their Sunday shifts?

(For a typical permanent retail worker on the award who always works Sunday shifts this will cut their annual pay by about $3,500).

They either have to work more, or they have to cut their spending to match their new, lower wage.

Given that unemployment is stubbornly high at 5.7 per cent, and underemployment is near record levels, it seems unlikely they'll actually be able to get more work to make up the lost pay — and, remember, these staff already work Sundays, so it's not like they'll benefit from any increase in jobs on that day.

According to the Australia Bureau of Statistics (ABS) an est. 850,300 people were employed in the accommodation and food industry sector in November 2016 as their main job and another est. 1.25 million people have their main job in the retail sector [ABS 6291.0.55.003 - Labour Force, Australia, Detailed, Quarterly, Nov 2016].

An est. 54.7 percent of female employees in the accommodation/food industry work part-time and an est. 45.3 per cent males do likewise. While in retail an est. 54.6 per cent of females and 45.3 per cent of males work part-time.

In accommodation/food businesses part time employees work for an average of 16.1 hours while in the retail trade part-time employees work for an average of 16.7 hours.

Underemployment appears to be highest in the food and hospitality sector, third highest in the retail sector and females highest in both sectors. [Workplace Gender Equality Agency, Gender composition of the workforce: by industry, April 2016]

Females with only one job were more likely to work on weekends - 73% compared to 68% for males.

These statistics tend to confirm that “hundreds of thousands” of single person and family households will be hit by cuts to Sunday penalty rates as set out in the Fair Work Commission’s 4 yearly review of modern awards – Penalty Rates Decision covering Hospitality, Fast Food, Retail and Pharmacy Awards and, I have no doubt that their loss of income will affect local economies to a significant degree.

The reductions in Sunday penalty rates we have determined are set out below:

Award Sunday Penalty Rate

Hospitality Award full-time and part-time employees: (no change for casuals) 175 per cent -> 150 per cent

Fast Food Award (Level 1 employees only)

Full-time and part-time employees: 150 per cent ->125 per cent

Casual employees: 175 per cent ->150 per cent

Retail Award Full-time and part-time employees: 200 per cent ->150 per cent

Casual employees: 200 per cent ->175 per cent

Pharmacy Award

(7.00 am – 9.00 pm only)

Full-time and part-time employees: 200 per cent ->150 per cent

Casual employees: 200 per cent ->175 per cent

Local and regional economies on the NSW North Coast - where often low levels of employment opportunity combined with the fact that few hospitality/food outlets in tourism-orientated towns and none of the big retail stores currently close on a Sunday anyway - suggest that this wages cut will be nothing more than a straight forward cost saving for local businesses, with no or very little additional full-time, part-time or casual employment eventuating.

That a backlash to the Fair Work Commission decision appears inevitable is indicated by this online poll active on the day the decision was published:

http://www.smh.com.au/business/workplace-relations/penalty-rate-cuts-who-gains-and-who-will-be-hit-the-hardest-20170222-guj8bv.html

Baird may be gone but mining versus farming land conflicts remain

NSW Dept. of Industry: Energy and Resources:

On 1 December 2016, the Mining and Petroleum Legislation Amendment (Land Access Arbitration) Act 2015 was commenced to reform the land access arbitration framework. It introduced a range of improvements in line with recommendations of the 2014 Walker Report. Read more about the Walker Report.....

In line with the recommendations of the Walker Report, the Act requires the holder of the prospecting title to pay the reasonable costs of a landholder’s participation in negotiating the access arrangement (section 142).

To ensure these costs do not become uncontrollable at the stage of negotiation, they have been capped at $1,500 for exempt prospecting operations and $2,500 for assessable prospecting operations (both exclusive of GST). The explorer must pay the GST amount in addition to the landholder’s capped costs. Caps are set out in a Ministerial Order published in the NSW Gazette.

No cap has been set on the reasonable costs payable by an explorer at mediation and arbitration as these processes can vary substantially depending on the circumstances. The explorer must still cover the landholder’s costs in making the access arrangement during these stages of the process.

The particulars of each case at mediation and arbitration are to be considered in the determination of reasonable costs at these stages. Nothing in the legislation prevents a titleholder from paying an amount above these caps. If parties cannot come to an agreement on reasonable costs, the arbitrator or the courts will make this determination.

See: Mining and Petroleum Legislation Amendment (Land Access Arbitration) Act 2015 No 41

The Land, 9 December 2016:

NEW regulations to balance mining and gas development against private property rights threatens to cause perverse outcomes, pushing landholders to lock the gate and head straight to court.

An alliance of Cotton Australia and NSW Farmers, Irrigators and Country Women’s Association (CWA) hit out at the caps on costs to be borne by mining and gas explorers, saying they fall short, leaving landholders potentially thousands of dollars out of pocket.

The group issued a statement “calling out the NSW government” and putting it on notice ahead of a compulsory review of the new regulations, set to kick off in six months. 

“The caps announced by the NSW government are a far cry from the actual costs likely to be incurred,” said NSW Farmers president Derek Schoen.

NSW CWA president Annette Turner said “unfortunately, (the regulation) fails to live up to the promise of a balance between landholders and resource companies”.

To be continued.....

SGS Australian Cities Accounts 2014-15 and regional New South Wales

SGS Economics and Planning’s Australian Cities Accounts 2014-15 makes some interesting observations about regional New South Wales.

When looking at GROSS DOMESTIC PRODUCT - VOLUME MEASURE 2014-15: Regional NSW it finds this economic profile:

GDP ($ millions) $128,944 - that is $128.9 billion

Annual GDP Growth 2014-15 0.6%

Average Annual Growth (04-05 to 14-15) 0.8%

Share of NSW GDP (2014-15) 8.0%

Contribution to GDP Growth Whole Period (1989-90 to 2014- 15) 4.3%

“Growth of 0.6 per cent in Regional New South Wales was in the face of weakness across a range of industries”.

“…worst performing regions in per capita terms were Regional New South Wales, Brisbane and Queensland”.

Economy.id estimates that the Gross Regional Product for 2015 in Northern Rivers local government areas was worth:

Clarence Valley - $1.73 billion

Ballina Shire - $1.77 billion

Byron Shire - $1.47 billion

Lismore City - $2.05 billion

Kyogle Council supplied its own data which did not go beyond 2012, stating that its GRP was $330.8 million in 2011/12.

Total Estimated  Northern Rivers GRP – in excess of $7.02 billion.

Editor asks are "Councils being set up to fail?"

The Daily Examiner, editorial, 6 December 2016, p. 12:

These are interesting times inside the walls of Clarence Valley Council, with Wednesday's meeting regarding the Fit for the Future response exposing the fault lines.

There are differences between the elected councillors and also between some of those councillors and the council staff.

As a result, the proposed plan of action to become fit for the future was torn up and a new set of guidelines put forward.

Questions will be asked as to whether the councillors and staff can join forces to make the new approach work, but the real people who should be questioned regarding problems in local government throughout the state are Premier Mike Baird and his ruling Coalition.

Their attitude towards councils is nothing short of antagonistic.

There has been the series of forced amalgamations that have produced plenty of angst. Part of the amalgamation push was the Fit for the Future process, and to require councils like Clarence Valley's to submit their Fit for the Future response just a couple of days after the announcement of a miserly rate-pegging rise is harsh. Such decisions are being made by councils elected less than three months ago.

It begs the question: are councils being set up to fail to make further amalgamations easier?

How the Clarence Valley council rates and charges fight played out at the end of 2016

It would be foolish to think that the issue of Clarence Valley Council rates and charges has been permanently settled since the local government election in September this year.

The constant pressure of cost-shifting by state and federal governments means that regional councils in particular are prone to financial stress.

The fact that during previous elected terms Council in the Chamber appears to have agreed to expenditure which exacerbated this situation is regrettable but remains something that has to be faced. 

I await the beginning of the 2017 local government year with interest.

The current state of play……

The Daily Examiner, 19 October 2016:

NEW Clarence Valley Mayor Jim Simmons has used his casting vote twice to ensure his council applied for a special rate variation.

At Tuesday's council meeting a Mayoral Minute calling for an organisation review of the council and a general manager's report outlining a Fit for the Future Improvement Plan and Special Rate Variation were fiercely debated.

The Mayoral minute ostensibly called for the appointment of a consultant to review the council's organisation, but quickly moved to debate on the SRV.

In his minute the mayor said the council needed make an application for an SRV in case it becomes necessary once the review was completed.

In debate he repeatedly stressed this was not an application for an SRV. He said this could only happen at budget time in June next year.

But for some councillors the SRV was totally off limits.

Councillors Peter Ellem and Greg Clancy said they would not vote in favour of any motion in favour of an SRV.

And Cr Andrew Baker said an SRV was an admission the council was not prepared to do the hard work in balancing the budget.

The voting was Crs Jason Kingsley, Richie Williamson, Arthur Lysaught and Jim Simmons in favour.

Against: Crs Baker, Ellem, Clancy and Debrah Novak.

The Daily Examiner, 1 December 2016:

CLARENCE Valley Council has missed its State Government-imposed deadline to submit a plan to show it will become Fit for the Future.

At an extraordinary meeting in Maclean yesterday, councillors voted down a staff-prepared proposal which included an application for a 9% special rates variation.

The deadline for the council to submit its proposal to the Office of Local Government was midnight last night, which the council general manager Scott Greensill said could not be met.

The gallery was filled with council staff, who came to see the outcome, which according to information in the report to the meeting could result in the loss of 63 jobs at the council over the next nine years.

Mayor Jim Simmons, who spoke in favour of the plan, used his casting vote to defeat the proposal.

His reasoning was that a councillor missing from the meeting, Cr Greg Clancy, was a strong opponent of the SRV proposal.

"This proposal would only be voted down at the next meeting in December, so I will vote against it now," he said.

Cr Andrew Baker foreshadowed a lengthy nine-point motion during question time. An amendment from Cr Karen Toms reduced this to eight points when he agreed to remove a section relating to council's tourism services.

This became the motion on the defeat of the officer's recommendation……

Cr Peter Ellem supported Cr Baker's motion.

He said the opposition to it was coming from a rump of the former council and council staff who had failed to listen adequately to the new members of council and the public.

He said the job losses and figures in the report were designed to scare councillors into voting in favour of an SRV, which he said the community could not afford.

That final Council resolution set out below is one that was amended by Williamson/Lysaught during the preceding motion vote which occurred sometime between 3.10pm and 4.06pm.

The Mayor adjourned the meeting at 4.06 pm and resumed at 4.13 pm.

COUNCIL RESOLUTION – 13.063/16

Baker/Novak

That Council:

1. Adopt a Fit for the Future Continual Compliance Policy for immediate implementation and a Nil-Deficit General Fund Budget Policy for 2017/18 and subsequent years with each General Fund Budget to encompass at least:

a. Operating Performance Ratio at or better than breakeven to satisfy Benchmark 1.

b. Building and Infrastructure Renewal at or better than 100% to meet or exceed Benchmark 3.

c. Infrastructure Backlog Ratio of 2% or less to satisfy Benchmark 5, after an initial utilization of

$17.7 million of own Capital Reserves is applied to infrastructure backlog reduction by the

actions required at 3 and 4 below.

d. Asset Maintenance Ratio of 100% or more to meet or exceed Benchmark 5.

e. Already-adopted efficiency measures, revenue increases, expenditure reductions and other

measures adopted for financial sustainability purposes.

2. Commence Fit for the Future Continuing Compliance immediately by:

a. Adjusting the 2016/17 adopted budget deficit by any amounts realised from the adoption of

this resolution and,

b. Adjusting current budget projections to include the results of a Business Case review of the

Depot Rationalisation Project that is to include current known costs and projections together

with the items at 7a, 7b and 7c below and with this revised business case to be reported to

Council February 2017 and,

c. Implementing the actions required in following Sections 3 to 8 inclusive.

3. Adopt a Fleet Financing Policy that requires all fleet renewals and acquisitions to be financed by external commercial financing where item cost is prorated monthly over the planned economic life of the asset.

4. Create an Infrastructure Backlog Accelerated Reduction Reserve of $17.7 million by the transfer of all of the Fleet Reserve Fund of $10 million or such other final amount when calculated and by additional capital to emerge from the adoption of the Fleet Financing Policy and:

a. Apply Internal Fleet Hire funds emerging from this Fleet Financing Policy estimated: $3.53m

remaining 6 months 2016/17, $3.33m 2017/18, $1.1 million 2018/19, $0.41 million 2019/20,

$0.14 million 2020/21 for an estimated total $8.6 million over 54 months and subject to final

calculation amount to be inserted here to firstly reach the $17.7 million required for the

Infrastructure Backlog Accelerated Reduction Reserve amount and then to apply to other

Benchmark shortfalls and,

b. Apply fleet disposal income funds emerging at end of economic life disposal of fleet items

estimated at $8 million over 48 to 60 months and subject to final calculation amount to be

inserted here to firstly reach the $17.7 million required for the Infrastructure Backlog

Accelerated Reduction Reserve amount and then to apply to other Benchmark shortfalls.

5. After accounting for the adopted forecast reductions that will result from depot rationalisation  natural attrition and other adopted efficiency savings measures, develop a workforce model that results in no nett reduction of adjusted workforce numbers with such model to be developed by inclusion of selected reductions to consultant and contract engagements in favour of maintaining at least current Council FTE workforce numbers.

6. Receive a report to the February 2017 Ordinary meeting and to subsequent meetings as necessary with such report to include:

a. Options and variations available for delivery of this resolution and,

b. Effects of implementation on subsequent budget forecasts and,

c. The capability and constraints of this resolution being implemented by existing Council

management expertise alone and,

d. The likely cost and benefit of further resolving the implementation of this resolution by the

engagement of external administration services.

7. Adopt a Business Case Reporting to Council Policy for pre-acquisition reporting on all proposed capital acquisitions of $100,000 or above to show all financial costs and benefits and alternatives if any with each report to include:

a. The Cost of Funds using best commercial borrowing rates available to Council at the time

and,

b. The Cost of Funds using best commercial investment rates available to Council at the time

and

c. Any depreciation amounts attributable to the expected life of the acquisition.

8. Make a Fit for The Future Submission to the Office of Local Government showing the amended budget results and forecasts resulting from adoption of this resolution Sections 1 to 7 inclusive together with any other already-adopted future savings and revenue-increase measures to be implemented by Council to achieve financial sustainability.

Cr Williamson and Cr Lysaught left the meeting at 4.41 pm prior to the voting taking place. [my red bolding]

Voting recorded as follows

For: Simmons, Ellem, Novak, Toms, Baker

Against: Kingsley