Saturday, December 31, 2011

Retail regulation archaic

The Post reports that Cairns Central shopping centre is backing the deregulation of shopping hours in Queensland. 
Cairns' largest shopping mall has backed the campaign and said current regulations and trading hours were "out of touch" with southern states.
Cairns Central marketing manager Suzy Pickard said it supported any regulatory change to make shopping more convenient for customers such as extended trading hours.
"The current regulations and hours in place do seem out of touch with other states, and do appear to disadvantage the productivity of Queensland retailers and limit the flexibility of when Queenslanders can shop," Ms Pickard said.
The Australian National Retailers Association, which represents businesses turning over at least $100 million annually, wants deregulated trading hours, as recommended by a Federal Government report.
The Productivity Commission has recommended deregulation of shopping hours and specifically pointed a finger at Queensland. Having shopping hours regulated by the QIRC is somewhat archaic. Political support for retail deregulation prior to the forthcoming election would be a (pleasant) surprise. Queensland Economy Watch has previously posted on the PC report and regulated shopping hours.

We probably don't notice the restrictions as much in Cairns where more liberal trading hours are permited for tourism. However, the situation earlier in 2011 where Easter and public holidays closely coincided was diabolical. The Sheridan St IGA which traded throughout the period in the city was stripped of many products, including fresh produce such as meat, with visitors almost having to fight over the last available packet of mince or resort to pet food..

Queensland still under water?

The Port Phillip Leader has reported that Queensland remains flooded: 

"AFTER swamping floods and battering cyclones during 2011, a great part of Queensland is still under water."
Perhaps they were refering to the local economy? Apart from that it's a very positive review of Palm Cove and the tourist attractions of the Far North.

Tuesday, December 20, 2011

Indonesian Beef

An interesting post at The Conversation by Clive Peters from the Centre for Animal Welfare and Ethics at UQ:  Australia owes Indonesia an apology over live export calamity

However, the affront to Indonesian pride by Australia’s ban on the trade, apparently without consultation with Indonesian authorities (let alone Australian cattle producers), has set back the trust between the two countries a long way. To act in this way with our closest neighbour, one of the world’s major trading nations since the seventh century, was disrespectful. It provided the perfect incentive for Indonesian authorities to reaffirm their intention to become self-sufficient in beef production, an aspiration that they have held for at least 30 years.
Beyond the ethics this also reveals the irrational economics of the Indonesian policy of self-sufficiency in beef production and the costly environmental externalities:
The only way in which this can happen is by cutting down native forest in less populated islands, such as Sumatra, Irian Jaya and Kalimantan in Borneo, thereby providing jobs to the rural poor, stemming the migration to cities and reducing reliance on imports to maintain food security. Indonesian authorities have been settling people from highly populated Java to Sumatra for over four decades, and with United Nations assistance, provided them with cattle from which to make a living. The transition from forest fringe, small-scale agriculture to cattle farming has met many difficulties: disease outbreaks in the cattle, poor productivity, unsuitable ecosystems for livestock farming, soil erosion and lack of forage for the animals.
Well, it would be irational if we were a reliable supplier. The Indonesian policy reminds me of  a tropical version of Allen Sanderson's satirical call for a coffee industry to replace aoutomobiles in Detroit.

Sunday, December 18, 2011

Plains of Promise

The latest proposal to develop agriculture in North Queensland was announced this week. Bob Katter is reported to be delighted but sceptical at the same time.

The Gillard and Bligh Governments will invest $10 million in an historic plan that marks a significant step forward in realising the potential of new irrigated agriculture in the Flinders and Gilbert catchments in north Queensland.
Federal Minister for Regional Australia Simon Crean joined Queensland Premier Anna Bligh and Queensland Minister for Agriculture Tim Mulherin in Richmond to announce the North Queensland Irrigated Agriculture Strategy (NQIAS).
The $10 million investment includes:
  • $6.8 million from the Federal Government, (including $800,000 from CSIRO), for CSIRO to conduct a comprehensive assessment of surface water storage options in the Flinders and Gilbert River catchments, and identify new irrigated agriculture techniques that could be extended right across northern Australia;
  • $3 million from the Queensland Government to undertake on-farm demonstration projects and systems analysis to develop practical farming approaches; and
  • $200,000 in shared funding for a feasibility study to develop a meat processing facility in north Queensland.
Indonesia this week also announced big cuts in live cattle exports from Australia perhaps contributing to the push fopr meat processing. Australian Agricultural are also developing an abbottoir near Darwin as well as a proposal for a boutique abbottoir near Broome.  

Friday, December 16, 2011

casino pays out

Reef Casino has announced its estimate of final distribution for the year and further improvement in trading, albeit with a caution on the financial outlook. Profit for the first half of the year was $4.6 million.  

Rental growth from the Reef Hotel Casino has continued in the second half. Our current estimate of the distributable net profit for the full 2011 year is between $11 million and $12 million or between 43.7% and 56.7% better than 2010. While distributable net profit for 2011 is estimated to be better than 2010, the estimated total distribution for 2011 of 20 cents per unit is maintained at last year’s level due to continuing economic and financial uncertainties arising from financial problems in the Euro zone and the undertaking of
Project L2 at the Reef Hotel Casino. Work on Project L2 is set to start in early 2012 and it will be a complete renovation of Level 2 of the casino at a cost of $2.5 million.

Thursday, December 15, 2011

Unemployment: everything goes up

The latest employment data from ABS does not appear to be encouraging with the unemployment rate for the Far North in November up again to 9.2%. However, the underlying story for this month was that everything went up.

The number employed was up by 4,400 from the previous month, which is above average for the year. The number unemployed was also up by 1,300 as the participation rate rose by 2.6 percentage points. That participation rate is near the top of the range for the last year.

The volatility in this monthly data can be seen in the female unemployment rate which has gone from 10.1% in June, down to 4.7% in September, and now back up to 9.8% in November. These subsets are typically flagged with a warning on sample size.

Loose change has been quietly gazing at the economic storm clouds in Europe while trying to comprehend the narrow teutonic mind and it's belief  in the virtuous contradiction of an expansionary fiscal contraction (separate post required). Unemployment in Spain is above 20% with youth unemployment (under 25 yo) at 46%!

P.S. With all this unemployment about can anybody advise of a good reliable roof plumber who can complete some roof repairs with less than a months wait?

Saturday, December 10, 2011

Percentage Points

xkcd is always fun and this revived recollections of some of the problems that the King Parrot, now the LNP candidate for Cairns, had with basic percentages during his previous career in what now passes for journalism.

Wednesday, December 7, 2011

Tableland tea time

Tea may not be our highest profile local agricultural product so it came as something of a surprise to discover that the Atherton Tableland provides for 15% of Australian domestic tea consumption: 'Rain, sun and love' make Tableland tea a top notch drop.
North Queensland may not be the first place that springs to mind when you think of the great tea-growing regions of the world. But, just like the misty, terraced hills of Sri Lanka, mountains of west China and Assam in the foothills of the Himalayas, the Atherton Tableland has all the essential natural ingredients for producing top quality tea.
The post does make it clear that the Tableland is not in a position to be a bulk commodity exporter of tea and is reliant on a quality branded product into the domestic market. A search of my usual chart source provided nothing on tea, however this link to auction prices in Kenya indicates that tea has been quite a solid performer among agricultural commodities, doubling over 10 years.

Coffee prices have outperformed tea over that period and remain a standout among agricultural commodities coincident with the explosion of the coffee culture. High profile demographer Bernard Salt, a tea drinker, has taken exception to the coffee culture and demanded that Tea drinkers must rise up against the coffee-swilling elite!

Monday, December 5, 2011

Visa Pricing Transformation

An aspect of the MYEFO revenue measures last week which has drawn little comment were changes to Visa charges:
The Government will restructure visa application charges (VACs) bringing them into line with international benchmarks, increasing revenue by $613.3 million over four years. This measure is also intended to encourage online processing, resulting in a more efficient and sustainable visa processing system.
Loose Change is ignorant of the complexities of visas and whether such charges are significant for visitations, although it wouldn't seem to a positive for inbound tourism unless there are benefits in the 'transformational' component of online processing. However, they do seem to think visa charges are significant for student visas:
Base VACs will increase by at least the Consumer Price Index (CPI), with the exception of student visas (where the base VAC will decrease by five per cent) to support the competiveness of Australia's international education sector, in line with the recommendations of the Knight Review.
Loose change has previously posted on student visas and education. Meanwhile there is a report elsewhere of an apparent skills shortage in the tourism sector: Australia’s Tourism in Trouble: In Need of Foreign Workers. Special travel visas are suggested to fill a claimed labour shortage of 35,000 jobs in the tourism sector?

$12 for a toasted sandwich

The Sydney Morning Herald has an interesting feature on the two-speed economy of booming WA:

But the truth is that the so-called patchwork economy is not neatly divided along state borders. It is a region-by-region, suburb-by-suburb proposition that is affecting Western Australia just as dramatically as the non-mining states.
A quick look at the ABS data shows the unemployment rate in the sluggish Lower Western region at 5.1%. Which sounds fine but is still well above the 3.9% average for the state. Back in 2007/8 Lower Western was recording numbers lower than 3% and it has recently been as high as 7% in the typically volatile regional data.

Meanwhile a toasted sandwich is $12 in Karratha and the price of a coffee in Perth is well above Melbourne. I can only wonder how that 114 luxury apartment development in Karratha is going for insurance?

Saturday, December 3, 2011

The economic consequences of the potato

Widely reported this week by our diligent mejia was the existence of a potato glut. Potatoes are dirt cheap, even when scrubbed! The Cairns Post has, of course, framed this in a provincial local context which is not worthwhile even linking. The ABC Far North rural reports:

Charlie McKillop
Potato prices have slumped to new lows in recent weeks amid claims a glut of spuds from Far North Queensland is causing an oversupply.
Potato grower and representative on AUSVEG, David Nix says the current crop is the largest in the history of potato growing on the Atherton Tableland.
He says potato production has spiked right across the country and has affected returns all growers.
The problem started in South Australia where the bulk of potatoes come from, he says.
"They started this slide by putting very, very cheap washed potatoes into Melbourne and then it reached into Sydney, then it came into Brisbane and they were selling them for not much more than the freight it cost to get them there," he says.
"Prices have just tumbled every week 'til it's down to a point where it's no point going any cheaper, you might as well just plough them in. And there are thousands of tons here, we've got a wave of potatoes in front of us that's not going to disappear," he says.
"There'll still be potatoes here and there'll be growers with them in cold rooms, paddock stored potatoes, I can't see this glut disappearing this side of January."
KS Global Economics notes the reference to South Australia in context of current controversy on Murray Darliing water allocations but without a constructive clue as to relevance. Meanwhile, the finger pointing continues elsewhere in ABC reports:
An oversupply of potatoes in the northern states is driving down prices.
Peak industry body AusVeg expects the oversupply could last into the new year, and says it's a great opportunity for consumers to buy potatoes at a low price.
Les Horsfield has been growing and selling potatoes at Thorpdale in Victoria for more than 45 years.
He says there are too many potatoes coming out of Queensland, and that'll drive down demand for Victorian brush potatoes when they begin harvest next month.
"Potato price is exceptionally low. In fact I'd say it's nearly the worst I've ever seen it," he said.
"The potatoes are coming out of North Queensland and the freight price of course is significant - it's just under $200 a tonne from Atherton to Melbourne.
"And the demand is the worst it's ever been, so of course the price is the worst it's ever been."

KS Global Economics simply asks why so many potatoes were planted in the first place? Nobody seems to have asked this question? It is noted that there is in fact a potato levy included in the Federal budget papers.

The potato has much to answer for in history. The Irish potato famine decimated the population of Ireland but also provided a flood of migrants to destinations such as Australia.

What is astounding is the extent of change driven by such as the European expansion into South America. The tomato, potato, and venereal diseases were all transmitted back via the colonisation of South America in the 16th century.

Even what we now regard as traditional, such as the Italian tomato cuisine, is comparatively recent in our culture. A more epicurial aspect on the potato glut has been posted at Kitchenslut.


Thursday, December 1, 2011

Crime in Queensland

The Annual Statistical Review from the Queensland Police Service is worth browsing. Crime always makes a good tabloid headline or shock jock rant but the statistics are not all so bad with crimes against the person continuing a long term downtrend. Crime rates in the Far North for this classification are generally well above the Queensland average although the report does note and comment on regional differences. Crime has a significant social and economic cost.