Winners and losers from first years of free trade agreements with China, Japan and Korea

Australian agricultural exports to China, Japan and Korea grew just $515 million during the last financial year, representing a 3 per cent jump.

That rise came despite political rhetoric that free trade agreements (FTAs) would allow farmers to immediately tap into lucrative markets and reshape Australia's economy as the mining boom wound down.

In the coming weeks, Australia will mark the second anniversary of its FTAs with Korea and Japan, and the first anniversary of the much-lauded Chinese deal on December 20.

ABC Rural has reviewed all agricultural exports, as listed by the Department of Foreign Affairs and Trade (DFAT), during the 2015 and 2016 financial years.

Two-way trade increases with China, falls with Korea and Japan

Trade experts warn the gains made in these countries are most likely the result of commodities already having market access, rather than the newly adopted FTAs.

They said it was too early to rate the effectiveness of the FTAs because some commodities would have their tariffs cut over 10 years.

It comes as recent KPMG modelling found a lack of market access had cost Australian businesses $14 billion in unrealised revenue from the three FTAs.

Industries also point to a weaker Australian dollar during the past year for having made exports cheaper and more appealing in foreign markets.

The gains agriculture made come as overall two-way trade with the three countries fell 2.5 per cent in the 2016 financial year.

Agricultural trade with China rose $48 million, up 0.5 per cent on the previous year.

Overall, two-way trade with China rose $3.3 billion, up 2.38 per cent.

Bigger agricultural gains were made in Japan and Korea at a time when the value of two-way trade with both countries fell.

Agricultural exports to Korea rose $339 million, while in Japan it rose $128 million.

Two-way trade with Japan fell $7.74 billion and $1.44 billion with Korea.

China: Winners and losers

China is Australia's biggest market for agricultural exports, with the trade accounting for about a fifth of all products heading overseas.

Farmers are regularly told China's growing middle class has an insatiable appetite from Australia's "clean and green" products like dairy, meats, fruits and vegetables.

The FTA, when fully implemented, will see China eliminate import tariffs on about 95 per cent of Australian products.

Dairy, beef, wine, seafood and horticultural products were all listed as the big winners when the deal was inked.

Based on DFAT's figures, the value of two-way trade increased 2.38 per cent to $141.89 billion.

The gains for agriculture were less, up 0.5 per cent, taking the overall value of agriculture trade to $9.88 billion.

This figure only includes six months of barley trade, which was the second-most-valuable agricultural commodity in 2015, because figures for this commodity are released after a six-month lag.

While rhetoric regarding China is focused on beef and dairy, wool continues to be the backbone of agricultural trade.

China takes more than 75 per cent of Australia's total clip, with the commodity accounting for a fifth of agricultural exports to the country.

Wool exports only grew about 1 per cent. But the continued dominance highlights the argument from experts and industries that market access is just as important as having tariffs removed.

Food products the big winners

The biggest winner during the year was so-called edible products and preparations, which include yeasts, baking powders, soups, sauces, condiments, mustards, ice-cream, and prepared food not included in other trade categories.

These exports jumped from Australia's 10th-largest commodity in 2015 to the second-largest in 2016, rising 225 per cent to $966 million.

Wood exports were another winner, with woodchips and rough exports rising in the rankings.

Fruit and nut exports, the latter of which have enjoyed major increases in plantings in recent years, rose 154 per cent to almost $239 million.

Most fruits and nuts will be tariff-free by 2019, down from as high as 30 per cent in some cases.

These exports have historically entered China through so-called grey channels, where produce is initially exported to Hong Kong and then taken into the mainland.

The citrus industry has been a leader in opening up "front door" access to reduce the risk of trade suddenly being shut down.

China has become the biggest market for citrus, with exports up 50 per cent.

But other fruits, including avocado, have not had the same success, with market access holding the trade back.

This was the fear that James Campbell, a former China-based ANZ executive turned Australian beef exporter, had when he described the FTA as "a ticket to [the] dance, but it's not an automatic money machine".

When the FTA was signed, China was Australia's third-largest wine market.

At the time, the industry warned the FTA would not be worth anything unless it came with enhanced trade relationships with China.

A 54 per cent jump in alcoholic beverages, worth more than $417 million in 2016, helped drive China to the top of Australia's wine exports, surpassing the UK and the US.

Milk, cream, whey and yoghurt exports increased $100 million, up almost 60 per cent to represent Australia's 13th largest export to China in 2016.

Mixed experience for meat producers

While beef made gains, up 14 per cent to $886 million, it was more than offset by losses from other meats.

There was a $155 million drop in non-beef meat exports, falling 35 per cent to $285 million.

The biggest loser of the year appears to be soft oilseeds and oleaginous fruits, which include canola exports.

The value of exports fell 96 per cent, with the $303 million fall taking it from ninth-largest export to 27th.

That came as farmers battled dry conditions that prompted reduced plantings and a canola crop virus that reduced yields.

Cotton was another loser. It is a crop China has heavily invested in in Australia, buying Australia's largest cotton farm Cubbie Station in 2012.

But exports fell from the fourth to fifth-largest thanks to a 26 per cent drop in value.

This came as the grains industry warned the FTA would do little to boost exports from cotton, wheat, sugar, rice and oilseed producers.

It is too early to assess barley exports because of a six-month lag before figures are released.

Barley was Australia's second-largest export in 2015, worth $1.46 billion.

In the first six months of 2015-16, only $448 million worth of barley had been exported to China.

Japan: Winners and losers

The Australia-Japan FTA, when fully implemented, will remove tariffs off 97 per cent of Australian exports.

In 2014, Japan was Australia's third-largest market for agricultural exports, behind China and the United States, taking about 9.5 per cent of exports.

Beef is by far Australia's major agricultural export to Japan.

The value of beef and most of the top five commodities exported to Japan remained steady between 2015 and 2016.

The exception was woodchips, the value of which jumped 37 per cent to almost $404 million, making it the third-largest export.

Fruit and nuts rose from the 13th-largest to ninth-largest export thanks to a 66 per cent jump in value, to be worth $107 million in 2016.

The sugar industry has been a vocal critic of Australia's recent FTAs.

Sugars, molasses and honey jump 58pc

Sugar is a commodity that already had market access, with Australia accounting for a third of Japanese sugar imports.

At the time of ratification, the Australian Sugar Industry Alliance described the Japanese FTA as "disappointing" and likely to lead to "very little change in Australia's access to the Japanese market".

In 2016, exports of sugars, molasses and honey jumped 58 per cent to almost $262 million, to become the seventh-largest export.

While the Government trumpeted the benefits the deal would have for dairy, the concerns the industry voiced have so far proven true.

While cheese exports remain flat, up 1 per cent, milk cream, whey and yoghurt exports fell 47 per cent, losing $24 million in value.

Butter exports, albeit a small industry to Japan, fell 15 per cent.

As with China, oilseed exports to Japan tanked. There was a 54 per cent decline, down $107 million to $90.9 million.

That meant the commodity fell from the seventh-largest export to the 10th-largest.

Korea: Winners and losers

Korea is the smallest, and oldest, of the three Asian FTA markets for Australian farmers.

This market represented the largest gains for agricultural exports during 2015-16, rising 12 per cent.

Like Japan, beef is the major export to Korea. The market added another 24 per cent.

As the top export, it was worth $1.32 billion, more than double the next-largest export, sugar.

The top four commodities kept their rankings in 2016, with sugar up 17 per cent to $617 million and wheat up 15 per cent to more than $406 million.

Wool was another commodity that benefitted from enhanced trade with Korea during the year, rising 57 per cent to $127 million.

Those gains came as competitor fibre cotton fell 70 per cent.

A $24 million slump in cotton exports meant the commodity fell from Australia's seventh-largest export to Korea to 13th.

North West Shelf royalty deductions not valid, audit finds

Part of $5 billion in royalty deductions claimed by the giant North West Shelf oil and gas project off the north coast of WA are not legitimate, a federal audit has found.

A report on the joint venture project, operated by Woodside, concluded the Department of Industry, Innovation and Science had not been efficient or effective enough in collecting royalties.

The Australian National Audit Office said "the existing assurance arrangements do not effectively address key risks to the accurate calculation of royalty payable".

North West Shelf producers reported $19.7 billion in revenue from petroleum sales between July 2014 and December 2015. The joint venture partners are Woodside and BHP Billiton, BP, Chevron, Japan Australia LNG and Shell.

A total of $1.9 billion in royalties was collected, including $600 million for the Federal Government and $1.3 billion for Western Australia.

More than $5 billion worth of deductions were claimed against that petroleum revenues in the same 18 months, including claims for operating costs, depreciation, cost of capital and joint venture participant costs.

But the audit office found "the Royalty Schedule does not permit all the deductions currently being claimed".

"On this basis, the ANAO has doubts about the eligibility of deductions claimed for the cost of debt and equity funded capital, excise paid on crude oil and excise paid on condensate," it said.

The North West Shelf operator's control procedures for royalty calculations has not been audited for 17 years.

Woodside said all the claimed deductions were allowable, and it had worked openly and in a cooperative manner on previous audits and reviews.

It also noted the report stated "the maximum potential underpayment of royalties is suggested to be in the order of $11.6 million, if all such deductions were found to be non-compliant".

Outdated royalty schedules

The Department of Industry, Innovation and Science (DIIS) relies on the WA Department of Mines and Petroleum's (DMP) compliance checks on deductions and does not further verify that only eligible deductions have been claimed.

"DIIS has not set out the level of assurance it requires for royalty collections or agreed with DMP the specific administrative arrangements that would support a conclusion that the correct amount of royalty is being collected," the report found.

It also concluded there were "significant shortcomings" in the framework for calculating North West Shelf royalties — including a royalty schedule that had not been updated for a decade and no review of cost deductions since 2006.

The department has agreed to all the report's recommendations for improving royalty calculation and collection to ensure "the operational responsibilities of the Australian and Western Australian governments are clearly articulated".

But the DMP said it did not accept many of the comments in the report relating to its processes.

"[The department's] North West Shelf royalty revenue verification processes are robust and adequate, and the Commonwealth and State governments can be confident that royalties are being accurately assessed and collected," it said.

Perth Airport not 'at war' with Qantas over direct London flights, chief executive says

Perth Airport's chief executive denies he is at war with Qantas over plans to run direct flights to Europe but says the airline needs to firm up its commitment to the service before any commercial agreement can be reached.

Qantas wants the non-stop service to operate out of a domestic terminal, rather than the new international terminal, to make it easier for passengers with connecting flights.

But the airport says that would require major upgrades to the domestic terminal at a cost of about $40 million.

Airport chief executive Kevin Brown said discussions with the airline were progressing, and no options had been ruled out.

"In terms of some of the headlines we're 'at war with Qantas', we're not," Mr Brown said.

"We're in dialogue with Qantas in a discussion to look at a sensible outcome.

"There's a number of operational and commercial factors that play through in that arena."

Lack of quarantine facilities

One of those factors was the lack of quarantine and Australian Border Force infrastructure at the domestic terminals.

"To process international passengers requires many other bodies," Mr Brown said.

"We're still working with those bodies, as are Qantas, to find a way to effectively duplicate those services."

Mr Brown said current negotiations with Qantas were only around a single service from Perth to London, but he would like to see a commitment to additional services to other major European cities.

"We would obviously love to see those additional services as well but they're not firmed up at the moment," he said.

"The firmer the commitment then the easier it is to come to a commercial outcome."

Mr Brown said he would be disappointed if an agreement could not be reached.

"Yes, we would like to see it happen, we've made that plainly clear," he said.

"It can happen tomorrow if it wants to. We have an international terminal that currently operates these aircraft on a daily basis.

"It has plenty of capacity to handle these aircraft."

Potential 'enormous': Qantas

In a statement, a Qantas spokesman said discussions with the airport centred around what it would take to make the route work commercially.

"We're not going to elaborate those discussions publicly," he said.

"But they are based on a pretty standard set of pain-share, gain-share principles that are typical in airport and airline discussions.

"It's clear that the potential of the Perth-London route has struck a chord with West Australians, who want to see it happen.

"We think the potential is enormous, including for the airport itself when you consider what it would mean for their traffic flows if Perth becomes a jumping off point for Australians wanting to travel to Europe."

Qantas said it would cost the airline about $600 million to commit aircraft to the direct Perth-London route.

ABCC legislation should not just focus on union behaviour, Nick Xenophon says

Changes to the Government's industrial relations legislation proposed by Senator Nick Xenophon are in keeping with "core Liberal values" and should be adopted, an influential coalition backbencher says.

Former employment minister Eric Abetz says agreeing to overhaul security-of-payment laws for subcontractors in the building industry could get the Government's ABCC legislation passed before the end of the week.

"We do support the forgotten people in debates and often it is the subcontractors in the construction sector," Senator Abetz told AM.

"We do look after the aspirational small business people, that is what subcontractors are."

Senator Xenophon told the senate last night the ABCC legislation should not just focus on union thuggery on building sites.

"We cannot simply talk about the behaviour of some in the union," he said.

"We also need to talk about the behaviour of a number of principal contractors and the way that people have been left in the lurch, the way many thousands of subcontractors have not been paid, not been treated fairly and driven to the brink of bankruptcy."

The senate debated the ABCC bill until 12.45am last night.

One Nation senator Malcolm Roberts accused construction union bosses of "castrating the economy".

Labor senator Kimberly Kitching said the legislation showed the Government's "authoritarian streak" and likened it to a third-world dictatorship.

"Who would have thought Malcolm Turnbull was much like Fidel Castro?" she said.

Senate inquiry recommends creating national plan to transition from coal-fired power stations

A Senate inquiry into the retirement of coal-fired power stations has recommended the Federal Government create a comprehensive energy transition plan to help with the ordered closure of the country's coal-powered plants.

The interim report from the Environment and Communications References Committee, which was chaired by Greens senator Larissa Waters, was tabled in Parliament last night.

The committee handed down four recommendations.

Greens energy spokesman Adam Bandt said the recommendations looked at how to close coal-fired power stations to reduce pollution, balanced with the need to have a transition plan to help workers and maintain energy security.

"For the first time ever a Senate committee has said that Australia should have a plan for the orderly retirement of coal-fired power stations and their replacement with renewable energy," he said.

"Government needs a plan so we can grow the new industries in places like the Latrobe Valley, so that when a coal-fired power station shuts down, workers have a secure job to move in to.

"If you leave it until after the announcement and throw tens of millions of dollars at it, you don't create a sustainable industry, you don't create a secure future for people in the Valley.

"Let's make sure we do it in an orderly way that looks after workers, that looks after communities, that makes sure that the lights stay on."

Mr Bandt said the alternative was to allow boardrooms in Tokyo or Paris to make the decision, "as we found with Hazelwood", and to put the country's energy security and energy future in the hands of large overseas companies.

He said the report had divided the committee, with Liberal members planning to submit a dissenting document.

"The Liberal members have said let's leave it all up to the market and everything we're doing is fine," he said.

"But I think if you talk to workers in the Latrobe Valley, you wouldn't agree with the Liberals that everything we're doing is fine."

Industry support for transition plan recommendation

Australian Energy Council chief executive Matthew Warren said the council had been pushing for a national plan for 10 years.

"We've supported national schemes to introduce emissions trading or carbon taxes, and we still see that's absolutely crucial to delivering the transformation that we have to deliver over the next generation," Mr Warren said.

"So we agree with that fundamental recommendation of this report.

"We've really had a decade of stop-start in Australia. We can see that playing out in the Gippsland basin.

"When we had the announced closure of the Hazelwood power station a couple of weeks ago, our concern is not that an old power station is announcing its decommissioning, it's that we have no plan to replace it."

Sunset clause for power stations would help with planning

Mr Warren said the focus needed to be on reducing emissions rather than closing power stations.

"When we're regulating these type of commercial announcements [about station decommissioning], we're assuming that we know exactly the right time to do it, and almost by definition that's never the right time," he said.

"If we set the emissions reductions then we can work it out … with the right scheme that will signal to high-emission generators, like coal-fired power stations, that they've got a sunset period and they will operate to that and close at the appropriate time.

"We need to think hard about how we're going to run the system at the lowest cost while maintaining reliability."

Transition time needed to lessen impact

CFMEU Victorian mining and energy division secretary Geoff Dyke said without a good transition plan, closing the Latrobe Valley's coal-powered stations would devastate the area.

"If we're going to transition to renewables over a period of time, there needs to be a transition for coal closures and the impact on workers and the community," he said.

"What people don't realise is the low cost of brown coal-fired electricity helps maintain affordability.

"If all the brown coal generators close, we believe electricity would be unaffordable and obviously that would flow into manufacturing — you'd likely have a complete collapse of Latrobe Valley industry."

Scrapping TPP won't make a lick of difference

He has finally done it. The man formerly referred to in sections of the Australian media as "billionaire extremist", and more recently known as President-elect Donald Trump, has killed the Trans-Pacific Partnership (TPP).

He promised to do so all along. But in the furious bout of policy backpedalling and broken promises since his victory, our overlords in Canberra clearly thought there just might be a chance Mr Trump would persist with the free trade deal.

Canberra was heavily-invested in the concept in the 12-nation free trade agreement. And not just the Coalition.

The Opposition when in government toiled away on the project for years. But whichever party is in power get the glory and the photo ops when the deal is actually done.

So, how much worse off will we all be now that it has been consigned to the dustbin? Err, the short answer is it will not make a lick of difference. In fact, we may be better off.

For a start, there is nothing to be lost by not proceeding with a plan that was never implemented in the first place.

More importantly, the supposed benefits to Australia from the TPP were always illusory and were never subjected to proper analysis.

In fact, the Federal Government refused point blank to allow its own Productivity Commission to cast a critical eye over the deal.

The only immediate loss is that of face by the politicians who artificially inflated electoral expectations over the supposed super trade deal.

There is, however, a danger that, emboldened by hubris, the new president decides to reimpose old style trade barriers and inadvertently start a trade war.

Free trade deal rarely about trade

So, what exactly was wrong with the TPP? It is difficult to know where to start.

The problem with free trade deals is they rarely are about trade. In fact, trade usually is a side issue. And the TPP was a classic case in point.

The TPP primarily was a United States regional diplomacy document — a way to cement diplomatic and defence ties around the Pacific and shut China out of the picture.

The secondary objective, from America's point of view, was to get a better deal for its intellectual property rights, particularly for pharmaceutical, communications and entertainment corporations.

It wanted to extend patents on US products in order to shut generic manufacturers out for longer.

Plus, it argued to maintain tariffs and quotas for its rural industries unable to compete on the world stage.

That is anti-competitive, highly protectionist and certainly does not qualify as free trade.

Then there was the thorny issue of Investor State Dispute Resolutions.

That is a measure that allows a foreign corporation to launch legal action against a sovereign government if it enacts legislation or regulations that harm a company's business interests.

The hearings are held in secret at a secret location — an idea that does not quite gel with the concept of "free" or democracy.

The combined effect of all these measures was to elevate the legal status of multi-national corporations, any of which openly flout their tax obligations, above the rights of citizens in the countries in which they operate.

To give our federal pollies credit, they did manage to face off against the US and refused to give ground on extending patents, particularly on medicines.

But that was only after an outcry from those who understood what went down in the US-Australia free trade agreement more than a decade ago.

Just as now, it was intellectual property rights that formed a large part of that deal — a baffling 11,500-word chapter that is open to legal interpretation and allows firms to cherry pick their obligations.

Deal adds cost, complexity to international trade

When it was signed in 2004, Tony Abbott was health minister and promised the deal would not have any detrimental impact on Australia's health system and the Pharmaceutical Benefits Scheme.

Unfortunately, as a result of that trade deal, from 2007 on, the Australian Government could no longer use a method called "reference pricing" to screw down the cost of medicines.

Ironically, in his first budget, then treasurer Joe Hockey cited the soaring cost of health care as one reason for an austerity drive.

"Over the past decade, the Pharmaceutical Benefits System has increased by 80 per cent," he told the Parliament.

Economists generally are in favour of free trade. But few endorse free trade agreements, particularly bilateral agreements.

That is because, rather than enhancing free trade, they distort trade patterns. Rather than do the best deal possible, trading partners engage with each other because of a preferential agreement.

The Australian National University's Crawford School estimates the Australia-US free trade agreement costs us about $53 billion a year.

During the past few years, the Productivity Commission has penned a series of damning reports on our free trade deals.

The commission argues that trade deals add to the cost and complexity of international trade and found that, in any case, hardly anyone uses them. No wonder the Government ran scared about giving the commission a look in on the TPP.

New recession won't make anyone great again

In a wide-ranging report in 2010, the commission pointed out the best way to take advantage of free trade is to dismantle your own trade barriers.

We have already done that. So too have many other nations. And that is one reason why free trade deals these days deliver very little in terms of economic benefits and instead have become a mask for anti-competitiveness and protectionism.

Mr Trump may have done Australia a favour in scrapping the TPP. But if he acts on his pledge to reimpose old style trade barriers, Professor Warwick McKibbin and Dr Andy Stoeckel reckon Australia will end up a major casualty.

Imposing a 40 per cent tariff would cause America's GDP to decline 1.2 per cent. If everyone else retaliated, they estimate the US economy would shrink more than 5 per cent and enter a deep recession, sparking a 5.6 per cent fall in Australian economic growth.

That will not make anyone great again.

Third-generation solar PV cells under development in Australia

A collaboration between the CSIRO, the Australian National University (ANU) and a local technology company has come up with a new type of solar photovoltaic (PV) cells that do away with silicon metals and rare earths.

Technology company Dyesol said the new panels have the potential to be a global technology disruptor.

The key to the new technology is perovskite, a material first discovered in the Ural mountains in Russia in the mid-19th century.

Managing director Richard Caldwell said perovskite was a general name for a whole class of compounds that had a chemical lattice structure, which made it particularly good at capturing energy and then converting that energy into a flow of electrons.

Mr Caldwell said this third generation of solar PV was not only for panels, but could literally be embedded in building materials.

"Perhaps things like roofing material, windows, and facades," he said.

"So you embed this material at the time of initial manufacture and you have a building which is effectively solar-enabled.

"It's also got some additional functionality which is the generation of electrons, commonly known as electricity."

There have been other perovskite-based solar photovoltaic cells in the last decade, but these latest ones have a greater ability to convert sunlight into electricity.

And doing away with the need for silicone metals is far more environmentally friendly on its own.

"The production of silicon metals is generally quite heat intensive," Mr Caldwell said.

"You have to raise the temperature to 1,122 degrees Celsius to refine the material to get it to a level, which means there's a lot of embedded energy in the existing technologies.

"That goes against the grain because the idea is to produce cheap, clean and green technology that leaves a minimal carbon footprint."

There are economic benefits too.

"Silicon-based solar PV probably has a payback period of around two and a half years, whereas the payback period [recouping of costs] in these new technologies, including perovskites, is about three to six months," Mr Caldwell said.

Some of the applications that will be suitable for perovskite-based solar PV are determined by geography.

"Places like Northern Europe, for example, they're not very suited to silicone metals, so our technology has what's known as a low-light premium, which means it performs quite well in low light conditions," Mr Caldwell said.

"Or in areas where they have haze or pollution, silicone depends very much on direct exposure to the sunlight; it's very dependent on the angle of the sun, and it is relative to the sun itself.

"And countries in Northern Europe, and the UK, are a good place for us to set up our market entry strategy."

Hanjin collapse is tip of iceberg in struggling shipping industry

The global shipping industry is in dire straits with international rates low for five years, and for some vessels, the current day rates are covering less than 5 per cent of costs.

South Korea's Hanjin shipping company collapsed in September, owing $8 billion in debt. It left 97 ships stranded around the world unable to pay for fuel or other fees, with $14 billion worth of goods stuck on board.

"These ships cost the shipowner about $18,000 a day to put to sea, some of them have been accepting day rates of $750 a day. They are losing money hand over fist," said Teresa Lloyd, chief executive of Maritime Industry Australia.

"This has been the longest and most sustained downturn in rates that any part of the industry has ever seen, it's absolutely dire at the moment."

In Australia, the Hanjin California was seized for a month in Sydney and the Hanjin Milano was stranded outside the Port of Melbourne. Woolworths, Big W, Masters and Pacific Brands all had goods tied up on those ships.

"Hanjin had been in financial difficulty since the GFC in 2008. There's an oversupply of vessels in the market," said Ryan Eagle, partner at Ferrier Hodgson.

"Hanjin had been loss making for a number of years, particularly the last 5 years."

With the stranded ships finally unloaded, attention has turned to selling the shipping company's assets.

"They've sold in the order of $40 million which is a very small part of overall debt of $8 billion," said shipping lawyer Ernie van Buuren, who represents a number of Australian businesses owed money by Hanjin.

"They're small amounts in terms of service providers like tug operators, pilots in Australia, to larger amounts running in to the millions of dollars," he said, adding that his clients are unlikely to see any of that money.

"They're not secured creditors which is part of the problem. Some of them are participating in the rehabilitation procedures in Korea at the moment."

"Whether they're likely to get money is still to be seen but it's not very optimistic."

Few buyers for Hanjin's ships in crowded market

There will be few buyers for Hanjin's ships as the global market is already oversupplied. Shipowners ordered new ships a decade ago when the market was strong, and they are still being delivered today.

At the same time there is less demand as the export of goods has declined, particularly as China's booming economy slows down.

Globally, shipping is an industry in consolidation.

In response to Hanjin's collapse, Japan's three biggest shippers, K line, MOL and NYK will merge their container businesses, and other smaller companies are likely to be swallowed up.

"The top 10 are really going to control about 77 to 80 per cent of world container fleet," said Mr van Buuren.

Australia's shipping industry is hollowing out as companies move their headquarters to Asia, where tax breaks and cheap labour are offered.

"There's been at least half a dozen move to Singapore, move their headquarters, offices, take their strategic decisions. Singapore has done that very successfully, there's an economic cluster for Singapore," said Ms Lloyd.

That has left Australian businesses that supply the shipping companies struggling and millions of dollars of business going offshore.

"There's manning, crewing, providoring, stewardship … lifeboat manufacturers, paint companies, the service industries that make sure the ship is at sea.

"When head office making those decisions is in Australia, it's good for Australian businesses," said Ms Lloyd.

Rojana keeps muted outlook for next year

Budget and strategy review in December

A guard inspects the area around Rojana Industrial Park. The company predicts flat land sales in 2017. pATTARAPONG CHATPATTARASILL

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SET-listed Rojana Industrial Park Plc (ROJNA) expects flat sales of land next year as the weak economic outlook persists and curbs investment, says independent director Amara Charoengitwattanagun.

She said land sales in 2017 will remain at 400-500 rai, below the target of 500-600 rai announced earlier this year.

The global economy has not yet fully recovered and this will have an adverse impact on the Thai economy as well as investment, Mrs Amara said.

"The company expects next year's land sales to be flat as we have not seen any positive signs to help improve the economy and investment in Thailand," she said. "We cannot expect any rise in land sales and revenue."

Rojana plans to review its investment budget and investment strategy next month.

The existing business plan does not have the company expanding any projects next year. However, it will continue with the third phase of its 110-megawatt power plant, worth US$115 million.

Rojana will also continue with its plan to develop a combined 3,000 rai of land for industrial estates in Rayong and Chon Buri provinces.

"As global and domestic economies are uncontrollable and unpredictable, we want to have a conservative investment plan to be safe," Mrs Amara said.

She expects the government's massive investment in infrastructure projects to boost the country's investment in the economy eventually.

As a weak economic outlook remains, Rojana sees few of its clients ready to expand their business or start new investment projects, except for Chinese investors, Mrs Amara said. Because Chinese investors keep investing, the company plans to develop a new industrial estate to accommodate specifically this group in the future, she said.

Rojana posted a net profit of 39 million baht in the third quarter this year, rising from a net loss of 142.1 million baht in the same period last year.

For the first nine months this year, it posted a net profit of 10.3 million baht, well below 555 million from the same period the previous year.

ROJNA shares closed Friday on the SET at 4.54 baht, unchanged, in trade worth 2.64 million baht.

Exports down 4.2% in October

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Customs-cleared exports unexpectedly dropped in October after two months of gains, according to Commerce Ministry data released on Monday.

Exports fell 4.22% from a year earlier, compared with the median forecast for a rise of 2.15% in a Reuters poll and a 3.4% increase in September.  The export value in October was US$17.78 billion.

The export decline was due to slow global trade, weaker shipments of gold and oil products plus last year's high base of comparison, a ministry official said. Imports rose a better-than-expected 6.5% from a year earlier.

Economists had expected a rise of 3.6% after an increase of 5.6% in September. That produced a trade surplus of US$250 million for October, compared with expectations of $1.90 billion and the previous month's $2.55 billion.

Much of the materials that Thailand imports are assembled into completed goods and shipped out again.

Exports to Japan rose 8.9% in October, while shipments to the US fell by 4.7% and an even bigger drop of 9.2% to the European market. 

The 10-month export value was $178.25 billion, down 1.02% from the same period of 2015.

Exports, worth about two-thirds of the country's GDP, have contracted for the past three years, frustrating the military government's efforts to revive the economy.

Last week, the state planning agency forecast exports would be flat this year, rather than fall 1.9% as previously projected. It expected the economy to grow 3.2% this year, up from 2.8% last year.

Oil prices fall further in Asia, yen gains hit Tokyo

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HONG KONG - Oil prices sank further in Asian trade on Monday on fears a planned cut in output will not be agreed by top producers this week, while the dollar retreated against most of its peers after its recent surge.

Tokyo's Nikkei index dipped by Monday's break

Both main crude contracts slumped around 4% on Friday owing to disagreements over how to implement a reduction deal, with Iran and Iraq pressing to be excluded and Russia suggesting it will only freeze output.

News that Saudi Arabia, the kingpin of the OPEC cartel, had walked out of talks on Monday -- and suggested demand will pick up in 2017 -- has fanned fears a hoped-for settlement will not be reached before its twice-yearly meeting Wednesday.

"With so many toys being thrown out of their prams now in oil quota tantrums, its hard to see who will pick them all up by Wednesday's deadline," Jeffrey Halley, senior market analyst at OANDA, said in a note.

In early trade Monday Brent and West Texas Intermediate were down almost one%.

The losses weighed on energy firms, with Australia's Woodside down 2.5%, Tokyo-listed Inpex losing almost two% and CNOOC in Hong Kong off 1.2%.

Despite the losses most regional stock markets were up, extending last week's gains on bets Donald Trump's spending plans will ramp up growth in the US economy.

- Hong Kong-Shenzhen link -

Hong Kong added 0.4% with dealers welcoming Friday's announcement that a long-delayed link-up between the bourse and Shenzhen's market will start on December 5. Shenzhen, however, was only marginally higher, while Shanghai was up 0.5%.

The scheme will give Hong Kong traders access to the mainland's second stock exchange, the world’s eighth largest with a market capitalisation of $3.3 trillion as of September.

The tie-up follows a similar "stock connect" between Shanghai and Hong Kong launched two years ago, which gave foreigners new access to Chinese companies not quoted elsewhere, and enabled mainlanders to trade in Hong Kong.

Elsewhere Seoul was up 0.2%, Singapore added one% and Wellington added 0.1% but Sydney dipped 0.3%.

Tokyo shed 0.8% by the break, with exporters hit by a slight recovery in the yen against the dollar.

The greenback has come off multi-month highs touched last week -- fuelled by bets on a US interest rate hike in December -- as traders take a breather.

The dollar tumbled to 111.65 yen, having almost hit 114 yen at the end of last week, while higher-yielding currencies also made inroads.

The Australian dollar, South Korean won, Indonesian rupiah and Mexican peso were also sharply up on the US unit.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.8% at 18,234.90 (break)

Hong Kong - Hang Seng: UP 0.4% at 22,808.31

Shanghai - Composite: UP 0.5% at 3,277.11

Euro/dollar: UP at $1.0632 from $1.0603 Friday

Dollar/yen: DOWN at 111.65 yen from 113.08 yen

Pound/dollar: UP at $1.2478 from $1.2457

Oil - West Texas Intermediate: DOWN 40 cents at $45.66 a barrel

Oil - Brent North Sea: DOWN 41 cents at $46.83

New York - Dow: UP 0.4% at 19,152.14 (close)

London - FTSE 100: UP 0.2% at 6,840.75 (close)

France seeks to woo back Asean visitors

The Eiffel Tower lit with the blue, white and red colours of the French flag is reflected in the Trocadero fountains in Paris, France, November 23, 2015, a week after a series of deadly attacks in the French capital. (Reuters file photo)

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France has kicked off a fresh campaign to woo back Asean tourists, a market whose growth has been sluggish since the deadly terror attacks a year ago.

The France Tourism Development Agency, known as Atout France, has teamed with up with 13 French firms, including Air France and Club Med, to launch a series of roadshows in four targeted countries in Southeast Asia.

They are Indonesia, Malaysia, Singapore and Thailand, which constitute the bulk of visitors from the region to France.

The launch of the Douce France (Sweet France) roadshow coincides with the first anniversary of the terror attacks in the French capital, which killed 130 people and devastated the country's tourism industry.

In spite of the adverse effect of the terrorist attacks, total tourist arrivals in the first 10 months of this year rose by 8.1%, and combined arrivals from Asean are still on the rise.

Asean tourist arrivals look certain to be just over 600,000 this year compared to nearly 500,000 last year, Morad Tayebi, Atout France's Asean regional director, told the Bangkok Post.

The expectation is for Asean arrivals to grow to about 700,000 next year if everything goes well, he said, acknowledging that restoring confidence will take time.

The Singapore-based official believes travel confidence will be fully restored over the next six months as the French government is doing it utmost to prevent such deadly incidents from happening again.

Among France's key Asean source markets, only arrivals from Singapore and Malaysia declined in the past year, while other Asean countries saw an increase.

Last year Malaysia ranked top in terms of Asean arrivals with 150,000, followed by Thailand with 130,000 and Singapore with 120,000.

Asean as a whole represents France's second-largest tourist market in Asia after China.

Thai arrivals this year are expected to surpass 130,000, rising to some 170,000 next year, Mr Tayebi said.

In Thailand, Atout France is working to speed up the visa application process, identified as the major impediment for Thai tourists, to make them on par with Indonesia and China in order to increase tourist figures.

"We're trying to enable Thais to get tourist visas within 48 hours after submission of the application," Mr Tayebi said.

Atout France also expects to see a similar jump in traffic from Indonesia following the visa streamlining that went into effect in January.

By next year, Indonesia will surpass Malaysia as France's largest source market from Asean with over 150,000 visitors, Mr Tayebi said.

The US$60 visa fee is probably not an issue because the amount is small relative to overall travel costs, but streamlining the visa process makes a big difference, he said.

The French government aims to attract 100 million foreign visitors in 2020, compared with 85 million last year.

Lessons from the United States

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When Donald Trump gave his presidential victory speech to a shocked nation on Nov 9, he pledged to every citizen of the land that he will be president for "all Americans". Yet many Americans, especially people of colour, LGBTs, Muslims and immigrants, are now living in fear. Fear for their lives, their families, and their future.

It's not an unsound fear (as many Trump supporters failed to empathise), since a wave of hate crimes and race-related harassment rolled out not even 24 hours after his speech.

Esra Altun, a Muslim student at San Jose State University, was choked when a man yanked her hijab from behind her while walking to her car. Natasha Nkhama, a junior at Baylor University, was shoved off the sidewalk while walking to class by another student who told her "No n*****s allowed on the sidewalk". Even Asian-Americans, who are usually left alone, were targeted.

The Southern Poverty Law Center counted 700 cases of hateful harassment or intimidation only a week into Trump's victory. And though people argue that racism and hate crimes have been around long before Trump came into the picture, you can't deny that his shocking election campaigns and improbable victory finally released the monster that's been lurking in the dark underbelly of US society for decades.

Trump's overt display of racism, sexism and bigotry during his campaign has left racists and hard-core conservatives empowered to comfortably say and do whatever they please, and his lazy attempt to stop such vile acts (he did as much as saying "stop it" on CBS' 60 Minutes) seems to legitimise them even further.

What's happening in the US is horrifying. The "alt-right" -- which some believe to be a euphemism for neo-Nazism -- is on the rise, and the country that used to pride itself as the melting pot of the world is now a country where the minority are feeling more disenfranchised than ever. There's no easy way to solve it, and it's going to take a lot of education, energy, activism and reconciliation on the perpetrators' part in order to even try to close Pandora's box again.

The already disturbing spikes of hate crimes and harassment has also brought up another upsetting occurrence: Thais, who are already known for our casual racism (white = good, black = bad) and lack of political correctness (our obsession with Hitler imagery), are showing even more ignorance than usual.

Some Thais say that we shouldn't believe media reports on racist cases, and since this is 2016, racism no longer exists. All of this because the speakers themselves never faced any form of racism. These same people did not understand how insulting it was when a popular TV host recalled a story that her friend was called "Jackie Chan" by Westerners abroad.

Thais don't realise that we also have a monster lurking below the surface. People with darker skin are generally seen as unattractive or even morally bad, as seen on numerous advertisements that tastelessly use black faces. Some of our insults are literally the names of our neighbouring countries. We have an unexplained obsession with Hitler that comes out in Nazi-themed school parades, and Hitler superhero murals in leading universities.

It's a grand comparison, but in a way, our unconscious bigotry is scarily similar to the conservative extremists of the US and elsewhere. Thailand too, needs education, and we should learn, and not take example from the mistakes, crimes and social crisis that's happening in the States. Hopefully, Pandora's box will never be opened here, and Thailand will never reach the point where our ignorance will incite hopelessness and fear in other people's hearts.

---

Apipar Norapoompipat is a features writer of the Life section of the Bangkok Post.

Thailand on front lines of tobacco control

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Thailand has won praise from a United Nations conference on tobacco control for its success in fighting off legal challenges from the tobacco industry in the last two years.

Thailand requires some of the world's largest pictorial warnings and is moving toward plain tobacco packaging, as shown in the mockup above, which prohibits the use of logos, colours and branding. Photo: Chanat Katanyu

The conference commended Thailand and six other countries for conveying the message to the tobacco industry that public health and human rights must prevail over trade considerations.

The message was delivered at the seventh Conference of Parties to the World Health Organisation Framework Convention on Tobacco Control (FCTC), held in Greater Noida, near New Delhi, from Nov 7-12.

"We must applaud the bold action taken by many parties during the last two years and it is reassuring that the treaty and the standards adopted by [the conference] have helped you protect your decisions against legal challenges," said Dr Vera da Costa e Silva, head of the convention secretariat.

"To name a few examples, Australia, Kenya, Thailand, India, Uruguay, the United Kingdom and France have shown a steady approach to tobacco industry-initiated court cases, showing that international trade cannot expand at the expense of health and human rights."

Thailand and India now require pictorial warnings on cigarettes and other tobacco products covering 85% of the space on packets. Only Nepal has a higher requirement, at 90%, a standard that Vanuatu will adopt next year. Thailand and India, particularly the latter, also levy high taxes on tobacco products.

Thailand, along with Laos and Vietnam, also dedicates tobacco excise revenues to tobacco-control programmes, according to a report by the Southeast Asia Tobacco Control Alliance (Seatca).

However, a new Seatca scorecard, measuring FCTC compliance in Asean, places Thailand third with a 67.1% enforcement rate after Singapore (80.5%) and Brunei (71.%). The scores reflect factors such as protection from tobacco industry interference, price and tax measures, packaging and labelling rules, smoke-free environments, protection from exposure to tobacco smoke, education, communication and public awareness; tobacco advertising, promotion and sponsorship; tobacco dependence and cessation programmes.

This month's meeting in India adopted significant decisions relating to tobacco industry interference, electronic nicotine and non-nicotine delivery systems, civil liability, tobacco-control strategies that reflect gender-specific risks, and economically sustainable alternatives to tobacco growing.

According to the FCTC, tobacco will kill about one billion people in the 21st century and by 2030, over 80% of all tobacco-related mortality will be in the low- and middle-income countries.

The 180 participating nations also adopted a resolution to ensure that non-tobacco producing countries do not start producing tobacco. As well, they agreed that governments of producing countries should do more to explore alternative crops that provide farmers with similar or better incomes.

India and Bangladesh proposed to collaborate with Southeast Asian countries in finding alternative crops and livelihoods for tobacco farmers.

"We will arrange a meeting of tobacco farmers with the ministries of commerce and agriculture," Arun Kumar Panda, an additional secretary in the health ministry, told Asia Focus.

India, Thailand and Uruguay also proposed the creation of expert groups to devise recommendations for combating legal challenges from the tobacco industry.

Around 30 million farmers in India, mainly located in Prime Minister Narendra Modi's native Gujarat and the two southern states of Karnataka and Andhra Pradesh, grow tobacco. While the Gujarat farmers grow tobacco for beedis (slim and cheap Indian traditional cigarettes), the southern farmers produce flue-cured Virginia (FCV) tobacco. The country earns around US$4.5 billion from taxes on tobacco products.

Surprisingly, only 11% of the tobacco grown goes into legal cigarettes that contribute 87% of India's tobacco excise revenue. The rest is consumed in the form of illegal cigarettes, beedis, smokeless tobacco such as khaini (raw tobacco) and gutkha (a combination of areca nut, slaked lime and paraffin wax, sweet or savoury flavourings and tobacco), according to the Tobacco Institute of India.

Ravi Mehrotra, director of the Institute of Cytology and Preventive Oncology under the Department of Health Research, says 82% of smokeless tobacco users live in the WHO's Southeast Asia region, which groups Thailand, Indonesia and Myanmar with India, Sri Lanka and Bangladesh.

He cited a 2014 study estimating that 350,000 people die from smokeless tobacco in India every year, including 100,000 cancer deaths.

Manoj Reddy, manager for exports with the Indian Tobacco Board, told Asia Focus that the country exported raw tobacco and tobacco products worth $901 million to 100 countries. He said it would be difficult to find alternative crops as remunerative as tobacco, a cash crop grown in light and heavy black cotton soil.

Ironically, the Indian government owns more than a 30% stake in Indian Tobacco Co Ltd, which has major stakes in hotels, consumer goods and tobacco production. Recently, the Union Health Ministry asked the government to withdraw its stake.

Former RBA board member John Edwards backs negative gearing change to secure AAA credit rating

Former Reserve Bank board member John Edwards has become the latest economic heavyweight to warn that Australia's prized AAA credit rating is in jeopardy without significant budget repair.

Dr Edwards told The World Today that the Government needs to consider tax increases and take hard decisions on tax concessions, including negative gearing for real estate investments.

"I think our credit rating could be at risk if we are not more attentive to repairing our budget deficit," Dr Edwards said.

"We can do it quicker than the Government is forecasting and more confidently.

"But I think we have to recognise that it's going to take some tax increases mainly in the form of withdrawing existing concessions.

"We're not going to be successful in keeping a AAA credit rating unless the agencies are confident that we are going to close that deficit and, at the moment, I don't think they would be."

Dr Edwards agreed reform of negative gearing was a priority after NSW Planning Minister Rob Stokes raised the prospect, hinting at a split on the issue with Commonwealth Treasurer Scott Morrison, who has repeatedly said changes to negative gearing are not on the agenda.

"I think it would be helpful to reduce negative gearing if only to enhance the rate of growth of tax revenue which is what we need to do if we're going to close the deficit," said Dr Edwards, also a former economics advisor to prime minister Paul Keating who, as treasurer in the 1980s, rolled back negative gearing for a short time before reintroducing it.

Dr Edwards raised the urgency for tough policy decisions in his Lowy Institute paper, "How to Be Exceptional: Australia in the slowing global economy", which was released today.

In the paper, he argued Australia has a chance to avoid any fallout from Brexit and Donald Trump's election as US president, but only if the Government implements difficult reforms.

Dr Edwards said to avoid an age of "secular stagnation", the Government needs to make work more attractive for women, keep older people in the workforce and provide better retraining for displaced workers.

"The only way to do it is to think about it in the longer term. This is a 30-year challenge, not a four-year challenge," Dr Edwards added.

"The policies we need to pursue are not all actually that expensive and they have a big payoff in terms of economic growth."

Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog.

Bank rate rigging spreads as ANZ, Macquarie hauled into court over Malaysian ringgit cartel

ANZ and Macquarie Bank have been hauled into the Federal Court over alleged attempts to manipulate the benchmark rate of the Malaysian ringgit.

The action taken by the Australian Competition and Consumer Commission (ACCC) alleges traders at both banks engaged in cartel conduct in attempting to influence the daily rates used for currency trading.

The allegations date back to a series of trading days in 2011.

ANZ has admitted to 10 instances of attempted cartel conduct and has submitted to the court to pay a penalty of $9 million and contribute to the ACCC's costs, while Macquarie is facing a $6 million penalty and costs.

Both banks have accepted a series of facts the ACCC has put before the court.

These include that a Macquarie trader regularly contacted traders from ANZ and other Singapore-based banks in private online chatrooms about daily submissions in relation to the benchmark rate for the Malaysian ringgit.

"On various dates in 2011, traders employed by ANZ and the Macquarie trader attempted to make arrangements with other banks that particular submitting banks would make high or low submissions to the Association of Banks in Singapore (ABS) in relation to the ABS Malaysian ringgit fixing rate," the ACCC said.

While Macquarie was not one of the banks authorised to make rate submissions to the ABS panel, the trader often initiated discussions with panel traders, including those from ANZ.

The ACCC pursued the banks via the cartel provisions under the Competition and Consumer Act.

"I personally believe that the action we've taken today will send a message to the boardrooms and senior managers of banks that I think will help shape behaviour," ACCC chairman Rod Sims told ABC News.

"They did have this action brought to their attention, they acted in relation to the individuals and acted in relation to future compliance policies.

"I think we need to be clear that this occurred in 2011, that's a long time ago, and I think the banks would argue with some justification that they're trying to address the issues that have been brought to their attention."

ACCC estimates turnover on forward contracts worth $10b

The ACCC estimated the 2011 turnover in Australia for trades in the Malaysian ringgit forward contracts the traders were seeking to manipulate was approximately $9 to 10 billion.

"ANZ and Macquarie's customers included Australian companies," the ACCC noted.

The ABS benchmark rates are used as reference rates for settling non-deliverable forward contracts (NDFs) and, given they are not widely traded outside Singapore, rates must be set by a panel banks submitting their views on the appropriate rate each day.

"ANZ has agreed the employees unsuccessfully attempted to influence the setting of benchmark rates used to settle NDF contracts for the Malaysian Ringgit on 10 occasions in 2011," ANZ said in a statement.

"The three employees involved are no longer employed by ANZ."

ANZ's chief risk officer Nigel Williams said the bank has an obligation to ensure its staff, both in Australia and overseas, comply with the law at all times.

"While there is no evidence that FX (foreign exchange) benchmarks in Singapore were successfully influenced, we accept responsibility and apologise for the actions of our former employees," Mr Williams said.

"We have made significant improvements to our compliance, training and monitoring systems to ensure this does not happen again."

The rate rigging allegations are similar to a number of cases the Australian Securities and Investments Commission (ASIC) is pursuing against NAB, ANZ and Westpac over the rigging of Australia's bank bill swap reference rate, or BBSW, dating back to 2012.

In August, NAB, ANZ and Macquarie were named in a class action launched by two US-based fund managers against 17 international banks and broking houses involved BBSW trading in the US.

Foodora, Deliveroo food delivery services face legal challenge over claims couriers are independent contractors, not employees

Food delivery services Foodora and Deliveroo are riding a wave of popularity with consumers. But like ride-sharing service company Uber before it, they face a legal challenge over the claim their army of cycle couriers are independent contractors, not employees.

"We think these companies are exploiting ambiguities in the law to underpay these workers and we are going to bring a case to make sure it stops," said Daniel Victory, a lawyer at Maurice Blackburn, who is taking a test case to court.

As a former Deliveroo rider, Alison Millward would strap a big box on her bike to deliver meals to hungry customers on demand.

"I was on one of the better contracts, so I was earning $18 an hour plus $2.50 per delivery. But people who started a couple of months or even weeks after me went down to $16 an hour and you had people on even $14 an hour," she said.

"The rider has to provide [their] own bike as well as helmet and we have to provide all maintenance for those by ourselves.

"On Deliveroos side, they provide the box for the food as well as the uniform, which you have to pay a $220 deposit for."

It is what is known as the the "gig" economy revolution, which supposedly offers convenience to customers and flexibility for workers.

"I think the claim that we're contractors is pretty absurd," Ms Millward said.

"We wear the uniform, basically when you sign up they send you detailed instructions on how to get an ABN [Australian Business Number]. Everyone I know at least isn't working as a courier for other companies."

In Australia, there is a clear cut award for bicycle couriers in Australia of over $22 per hour with penalty rates on Saturdays and Sundays, but they are only applicable if riders are employees.

"It's in unchartered waters and we're going to go out and set the conditions that suit us the best and the conditions that suit us the best are to engage workers like they're independent contractors," said Professor Sarah Kaine, who works in the industrial relations field at UTS.

"Despite riders doing the same job, they're not getting the same pay."

There are also concerns many riders do not realise they are getting a bad deal. Up until three months ago, Deliveroo was hiring riders as young as 16.

"The riders for Deliveroo and Foodora are likely to be short-term migrants, backpackers, the types of workers that unfortunately in Australia we've come to understand don't know their rights very well and often get exploited," Professor Kaine said.

Companies making huge profits 'off the back of these riders'

For these start-ups, it is a lucrative business.

London based Deliveroo recently received "unicorn status", with a valuation well over $US1 billion. Foodora is owned by Deliver Hero, which is valued at about $4 billion.

"Really you'd have to say it's the big companies that are winning. Your Foodoras, your Deliveroos — they are the ones who are really making huge profits literally off the back of these riders," Professor Kaine said.

The ABC contacted both Foodora and Deliveroo to ask them specific questions about their respective business models.

In a statement, Deliveroo said its current minimum rate of pay is $9 per delivery, and riders are required to have insurance.

Foodora said its workers earn $20-$26 an hour on an average night, and can earn more than $30 an hour on a busy one and its workers appreciate the flexible working hours.

But Mr Victory said the challenge "was about whether or not people are paid the minimum rates of pay and entitlements that allow them to live a dignified existence.

"One of the benefits of these riders being employees is that they would all be all covered by an award that gives them minimum rates.

"Because these riders are independent contractors it means these companies can offer different rates for different riders and most of those rates appear to undercut the award rates."

Executive pay: Top companies get thumbs down from investors at AGMs

More of Australia's top companies than ever before have seen investors give the thumbs down to executive pay packets, and the company AGM season still has weeks left to run.

Just over 100 of all listed companies saw a so-called "first strike" vote against executive pay last year.

It looks like that number is set to rise as investors voice their dissatisfaction with company performance.

Executive Remuneration Reporter principal Kym Sheehan follows the meetings closely, and said investors are clearly unhappy with this year's results.

"The consensus appears to be that this has been a disappointing results season, so when you get disappointing results, but you see that executives are earning their annual bonus, there immediately is a question as to how does that happen?" she said.

There has been a significant investor vote against executive pay packets, known as a strike, at several of the top 100 listed Australian firms so far this year, with more likely to come.

The list reads like a roll call of some of Australia's biggest corporations including CSL, Woodside Petroleum, AGL Energy, Boral, and Goodman Group.

Even the biggest of them all, the Commonwealth Bank, saw a historic first strike in the wake of a series of scandals.

Allan Goldin, a director at the Australian Shareholders Association represents small retail investors at AGMs through proxy votes.

"Obviously CBA stands out, it is our biggest company, it should be the forerunner of corporate governance," he said.

"So having a big strike against them, that's a really bad look."

Mr Goldin said companies like Goodman Group, Metcash and Boral should not have seen a strike vote but did, which was surprising as they were not expected to have corporate governance problems.

Two strikes and you're (potentially) out

The two strike rule itself is relatively new. When more than a quarter of shareholders vote against executive pay at an AGM, that is strike one. If it happens again the following year, that is strike two.

This sets in motion a vote to spill the board and directors must stand for re-election.

"It's a sign that the behind the scenes negotiations ... where the chair of the board goes out and meets with key investors, hasn't resulted in them giving their support," Ms Sheehan said.

The eight first strikes among Australia's top 100 companies so far, compares to just four last year and three in 2014.

"If you are getting a first strike it usually means you haven't been talking, you haven't been communicating with the institutions, you haven't been communicating with the retail shareholders," said Mr Goldin.

"You have believed, I am sure in most cases, that what you are doing is right, but you haven't paid enough attention to getting the message out and listening to the feedback."

BHP spinoff South32 narrowly avoided a first strike vote at its AGM late yesterday.

Meanwhile, other big listed companies have come close to the feared first strike this year, including Tatts and Tabcorp, amid their plans for a merger, and Nine Entertainment, thanks to a disappointing performance during the year.

The other major banks - ANZ, Westpac and NAB - will hold AGMs next month.

IBM to pay more than $30m in compensation for census fail, Prime Minister Malcolm Turnbull suggests

Computer giant IBM will pay more than $30 million in compensation for its role in the bungled census, Prime Minister Malcolm Turnbull has indicated.

The Prime Minister described the four Distributed Denial of Service (DDoS) attacks that caused a 40-hour outage inconveniencing millions of Australians as "utterly predictable, utterly foreseeable".

"I have to say — and I'm not trying to protect anyone here at all — but overwhelmingly the failure was IBM's and they have acknowledged that, they have paid up and they should have," he said.

"They were being paid big money to deliver a particular service and they failed."

Mr Turnbull said the settlement would "absolutely cover" the costs of the outage, which has been billed at close to $30 million by the Australian Bureau of Statistics (ABS).

"It would not be an exaggeration to say we had a collective sense of humour failure about IBM's performance here and they have fessed up, they've paid up and we are going to learn the lessons of this incident very diligently," he said.

The Prime Minister's comments came after his cyber security adviser Alistair MacGibbon released a scathing report describing the census as a serious blow to public confidence in government services.

The Government has also accepted all recommendations from a Senate inquiry report into the census, which found it was plagued by poor preparation, inappropriate tender processes and changing ministers.

ABS put too much faith in IBM: Turnbull

Despite blaming IBM for the failures, the Prime Minister also criticised the ABS, saying it should have better managed the contract with the computer giant.

"What is very clear is that the ABS put too much faith in IBM, and to be fair, IBM is one of the biggest brand names in the computer world," he said.

Mr Turnbull said the census would continue to be held online, provided the Government and contractors learned all lessons from the bungled census.

"This was not a particularly clever attack or some great international assault on the census, this was a series of common or garden, utterly predictable, utterly foreseeable denial of service attacks," he said.

Opposition Leader Bill Shorten said the Turnbull Government needed to accept responsibility for the census failings.

"They had three years to prepare for the census," he said.

"They had one job and they couldn't even do that properly."

At a Senate inquiry in October, IBM blamed one of its subcontractors for failing to follow geo-blocking protocol to prevent the DDoS attacks. This has since been denied by the subcontractors.

IBM Australia managing director Kerry Purcell offered an unreserved apology for the company's role in the census earlier this year but said no-one had been disciplined or sacked.

"There have been a lot of personnel changes at IBM as a consequence so I suppose heads have rolled there," Mr Turnbull said.

How a young Brisbane family with a baby live in an 18-square-metre tiny house

A movement is emerging towards smaller and more sustainable homes, as the dream of buying a house increasingly becomes out of reach for most young people in Australia.

The tiny house movement is well established in the United States, where it grew steadily in the wake of the Global Financial Crisis, but is a fledgling idea in Australia.

The houses are not much bigger than a caravan, but have been providing a small growing rebellion to Australia's McMansion housing trend.

Lara Noble and Andrew Carter built their freestanding tiny house in a friend's backyard in Red Hill, within walking distance of Brisbane's CBD.

They rent the land and brought in the tiny house, which they designed themselves.

Ms Noble said they could never have afforded to buy a standard house so near the centre of the city, where they needed to be for their work as an architect and carpenter.

"We started over a year ago scheming about the idea of building a tiny house," Ms Noble said.

'We've had heaps of support too from the community in legitimising tiny houses, which is really exciting at the moment."

Putting minimalist ideals to the test

And putting their minimalist living ideals to the ultimate test, they have just added a new addition to their tiny house in the form of Charlie, their four-week-old daughter.

"I think she's loving it. It's hard to know yet, she's too young to speak," Ms Noble said.

Mr Carter said they hope to show there are alternatives to the lifetime mortgage, and energy-sucking homes in Australia's growing urban sprawl.

"When Charlie's two or three years old that will really test this form of housing for ourselves," Mr Carter said.

"We're under no illusion that this will suit the three of us forever.

"But at the moment it's perfect and for a lot of people at a certain point in their lives its perfect.

"We're following in the footsteps of a lot of people especially in the US — they're miles ahead of Australia in tiny houses.

"Tiny dwellings are nothing new.

"It's often portrayed as this new sort of craze but living in small spaces used to the norm and we've lost our way in Australia."

'Much more than just a shed'

While it may be only 18 square metres inside — about the size of two car parking spaces — Mr Carter said the tiny house was much more than a shed.

"It's confined to two and half metres wide so it can travel on the road without special permits," he said.

"The kitchen's running down one side (of the house), on the other side there's a foldout bench to become a dining table or a desk you can bring chairs in for a lounge," Mr Carter said.

"Down the end there is as close as we can get to a full bathroom, so the shower is bigger than most of the showers we had in share houses.

"We wanted to have as nice a house as we could afford and our solution on our budget was to make the house very small and still fit it out with nice things."

"To make it feel wider we've put the deck — a demountable deck which you can assemble like a Meccano set — off to the side.

"The windows are aligned and there's high louvres to get really good cross and stack ventilation in the space … it's really responsive if you want to cool it down quickly."

Even the bed has some space-age appointments to make the most of the limited space.

"There's a remote control and we push a button and the bed will drop down (from the roof)," Mr Carter said.

"And it squeezes between the paintings on the walls and the pictures and drops down onto the lounge."

Negative gearing: What you can and can't claim if your investment property is empty?

New property developments are bursting out of the ground across Australia, particularly in Victoria and New South Wales.

Australia has more than two million landlords yet despite the boom in new properties up for grabs, thousands are sitting empty.

In Sydney alone, some 80,000 properties are vacant.

In taxation statistics from the Australian Taxation Office, the amount of net rental loss claims has decreased from the 2011-12 to 2013-14 financial years, while net rental incomes has increased.

But according to property tax specialist Shukri Barbara, many foreign investors who have bought properties outright reap more benefits by leaving them empty.

"If you don't have a need for cash, and all you're doing is sinking your funds into an asset, then in the current economic environment in Australia, particularly in Sydney and Melbourne, the markets are thriving and the values are thriving because of low interest rates," he told 702 ABC Sydney.

"Given the large number of developments, it's not surprising that, especially overseas people, leave them empty.

"If you don't need the cash ... you can leave it empty."

Are owners getting tax benefits?

Negative gearing a property is possible when your rental expenses exceed your rental income.

Those expenses come from items like loan interest, maintenance costs, strata fees, rates and taxes and insurance.

People who negatively gear expect the house value to appreciate; that by taking a loss now, the house will sell for more than what they bought it for.

If a home is left empty by choice and there is no rental income coming in, then you are unable to get a tax deduction from the government.

If you try and claim rental losses when there is no revenue, Mr Barbara said that was when the Tax Office would put you on their radar.

"[ATO] will start putting in the query to do an audit," he said.

"They'll look at whether it's a genuine investment purchase.

"You have to demonstrate an effort that it is being put out for business."

What happens if you can't find a tenant?

Mr Barbara said if the property stood empty while you had it listed with a real estate agent in the process of looking for a tenant, all the expenses would be allowed for a tax deduction.

He cited some of his clients in north Queensland who had been unable to find renters for their older property given a massive new development next door that was able to offer cheaper rent and newer premises.

While the rental property remains vacant, the owners are still able to negatively gear that property.

"The concept is that you are in the business to make a profit out of rental," Mr Barbara said.

Can you negatively gear a holiday home?

If your holiday house is purely there for you to enjoy, then you can't claim it as a tax deduction, Mr Barbara said.

However, if you make it available for short-term rentals and have it listed with an agent, then you are allowed to apportion the expenses for those periods.

For example, if you stay in your beachside house for two weeks and rent it out to other holidaymakers for the rest of the year then you can claim a tax deduction on those 50 weeks.

Advertorial Webster University: The world is your classroom

Webster University Thailand offers the country's only American degree program and a truly international learning experience.

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With its headquarters based in St. Louis, USA, Webster University has a total of eleven campuses located across nine countries worldwide.

Webster's Thailand Cha-Am/Hua Hin Campus opened in 1999 and offers undergraduate programs across a range of disciplines including Business, Communications, Marketing and Media while graduate and select undergraduate programs are offered in Bangkok at Empire Tower, Sathorn. It is also the only university in Thailand that is fully accredited in both the USA and Thailand. Furthermore, Webster sets itself apart even more by being the only institution to offer an English-language Psychology major and a globally renowned International Relations program. The university also offers MBA evening programs and online courses to accommodate working adults.

As a truly global academic institution, Webster University understands the importance of giving students the chance to interact with individuals from other countries, cultures and backgrounds. As such, Webster focuses on providing world class American-standard education in a multicultural environment through its Global Citizenship general education curriculum.

According to Webster University Thailand's Rector, Dr. Keith E. Welsh, "this is what we call personal excellence, which we help the student to discover and understand themselves within the global picture."

In an effort to provide a truly multicultural and international learning experience, Webster offers its students the opportunity to broaden their actual, as well as their intellectual horizons. This is done through a number of incentives, including by "providing a free round trip ticket to any Webster campus worldwide."

This means that, along with the intensive cultural immersion that students experience during their time in Thailand, there is also the opportunity to study additional courses at Webster campuses in China, Africa, Europe, or the USA. For transparency and efficiency, Webster's overseas course fees are pegged to the student's primary campus tuition rates, meaning that there are no unnecessary financial surprises as well.

Over 70 percent of Webster's faculty is comprised of foreign nationals, providing a valuable first-hand experience for students to interact with individuals from a variety of nations across the world. In addition, by having English as the language of instruction, students are provided with a strong foundation by which to enter the increasingly competitive global job market.

To build-upon Webster's pre-existing diversity, faculty members from across the network are also actively encouraged to assume temporary teaching assignments at other campuses. The ever-present "fresh faces" at the whiteboard not only assists to diminish familiarity fatigue, but also promotes a dynamic study environment where students can "sample" a diversity of teaching approaches. This approach also exposes students to different classroom management styles and a variety of English linguistic characteristics from around the world.

With class sizes strictly limited to twenty-five students or less, students receive a personal attention that is not found in larger university lecture halls. This results in instructors "knowing who you are, being in a better position to mentor you, to write recommendations, and oversee your individual educational progress. They also function as advisors and guidance counselors."

Webster University Thailand hosts students from around the globe, many from non-English speaking countries. To accommodate this, the school also provides a writing and ESL support center to help non-native speaking students to improve their English communication skills. A program is also offered to help new arrivals smoothly transition to college life.

The staff and faculty at Webster Thailand are always on hand to support students through their university studies. Not only does the university offer 50% scholarships for graduate degree programs alike, it is also there to help graduates to enter the job market. The Webster Thailand Career Services Department has helped previous students secure internships and employment with leading Thai and international companies including; Hilton Hotels, Spa-Hakuhodo Advertising, Bangkok Hospital, Sheraton Hotels International, and polyester-fiber manufacturer Indorama Ventures.

With its American degree accreditation, international instruction and campus network spanning four continents, Webster is the "small university with a global reach".

To learn more about Webster University Thailand call +66 (0) 21 066 599 or www.webster.ac.th or visit Webster's Bangkok Academic Center at Empire Tower, Sathorn, 4th fl. (EM Space Zone) or main Cha-Am/Hua Hin Campus in Phetchaburi.

Bangkok at beta stage of smart city

Mr Preiss says Bangkok can use its megacity status to leverage advanced technologies and manage services more effectively.

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Bangkok has been classified as having moderate development potential for an innovation-driven smart city among top global cities, according to a study released by Nokia.

The Finnish telecom equipment maker analysed 22 cities that are paving the way in smart city investment.

The "Smart City Playbook" study was commissioned by Nokia and conducted by Machina Research.

"Bangkok is still at the beta stage in the drive towards a smarter city," said Harald Preiss, head of North Asia for Nokia.

Bangkok's development pace is on par with that of China's Wuxi, but lags behind advanced cities like San Francisco and New York.

Mr Preiss said Bangkok is classified as a megacity that can leverage technology, particularly the Internet of Things (IoT), to manage city services in a more efficient and smarter way as well as ensure public safety while enhancing sustainability.

Bangkok has rolled out public WiFi, environmental monitoring systems using sensors detecting air and water pollution, close-circuit television and mobile surveillance monitoring systems to improve security as well as intelligent transportation systems.

Mr Preiss said Bangkok can leverage more advanced technologies through the use of data analytics, augmented reality, the IoT and intelligent systems to further enhance efficiency.

"Bangkok has high potential to exercise full-scale implementation plans for public safety and traffic management -- the key priorities for cooperation in the digital economy," he said.

He said Bangkok is a more advanced city compared with other big cities in Thailand like Phuket since the Bangkok Metropolitan Administration is pushing hard to ensure the capital keeps up with other Asian cities.

The availability of nationwide fourth-generation wireless broadband networks could support new generation services and the setting up of mobile smart city services and projects. In addition, the high growth of the country's mobile data usage will prompt telecom operators to expand their networks further to serve surging demand.

Local mobile data traffic is expected to grow by up to 200% this year, and keep growing at this pace over the next few years, he said.

Nokia is willing to share its experience and knowledge to help cities evaluate the economic impact of smart cities, Mr Preiss added.

It is estimated that there will be 41 megacities by 2030, up from 20 currently. Up to 70% of the global population will live in cities by 2050.

Nokia has already completed the acquisition of Withings, a French maker of wearable devices and digital health products, for US$191 million.

The move is part of Nokia's strategy to move into consumer healthcare wearables and digital healthcare.

"We can provide complete and fully integrated solutions to the healthcare sector. Thailand is well positioned to be the medical hub of Asean," Mr Preiss said.

Sovereign fund taking shape

PTT Plc, the country's largest company, is 66% owned by the Finance Ministry and its funds as of Sept 5, 2016. (Bangkok Post file photo)

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The government is seeking to set up an investment holding company next year for government shareholdings, part of a wider effort to improve the performance of state enterprises.

A law to boost the governance of such firms and enable the creation of the holding company may be enacted by March, according to Ekniti Nitithanprapas, the director general of the State Enterprise Policy Office.

"We’d like the holding company to work in an efficient way like Temasek or Khazanah," Mr Ekniti said in an interview in Bangkok on Wednesday, referring respectively to Singapore’s state-owned investment firm Temasek Holdings Pte and Malaysia’s sovereign fund Khazanah Nasional Bhd.

State enterprises are planning 446 billion baht of investment in 2017, according to the policy office. That’s equivalent to about 3% of gross domestic product, underlining the importance of ensuring the companies are managed well.

The new law is supposed to create a policy committee and a master plan for the sector, as well as boost transparency, formalise the way directors are appointed and evaluate corporate performance.

"This reform is crucial for long-term economic development," said Santitarn Sathirathai, head of emerging Asia economics at Credit Suisse Group AG in Singapore. "Ministries are in charge of state enterprises and often wear too many hats as shareholders, rule setters and referees, which sometimes breeds conflict of interest and inefficiencies."

"We’d like the holding company to work in an efficient way like Temasek or Khazanah," says Ekniti Nitithanprapas, the director-general of the State Enterprise Policy Office. (Bangkok Post file photo)

The stock market signals there’s scope for government businesses to be better managed.

The State Enterprise Policy Office’s website lists six companies as publicly traded state enterprises: oil explorer PTT, Krungthai Bank, Thai Airways International, Airports of Thailand, broadcaster Mcot and energy explorer PTT Exploration & Production.

An index of those companies has climbed 23% in the past five years, less than the 54% advance in the benchmark SET index, according to data compiled by Bloomberg.

The government said a number of listed and unlisted businesses will go into the holding company. Details haven’t been finalised yet. There were 52 state enterprises with total assets of 13.5 trillion baht and liabilities of 10.6 billion baht as of June 2016, according to the State Enterprise Policy Office’s website.

While the proposed law is a welcome initial step, the key will be how well it’s implemented and whether directors have enough independence and power, according to Mr Santitarn.

The reform is a priority for the government, according to Mr Ekniti.

The comparison with Temasek evokes the earlier phases of Singapore’s investment firm, which was founded in 1974. Temasek originally owned shares in former state-owned companies and began directly investing in foreign equities in 2002. It doesn’t direct the decisions and operations of its portfolio companies, according to its charter, and the Singapore government isn’t involved in Temasek’s investment decisions.

The annual growth decelerated to 3.2% last quarter, one of the slowest expansions in the region. The junta is leaning on increased public investment, subsidies for farmers and cash handouts for low-income earners to bolster an economic outlook clouded by political flux.

The farming sector needs change, now

With a year still left in office, Prime Minister Prayut can concentrate on problems in agriculture - particularly the plight of rice farmers. (File photo)

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With just about one year left in office, Prime Minister Prayut Chan-o-cha and his government will have to give a high priority to existing problems in agriculture -- especially the falling price of rice. Thai farmers have suffered financial hardship due to repeated crises over low rice prices. The government's failure to address the problems in a timely manner will make its economic development goals hard to achieve.

The Prayut government will have to push for practical and sustainable solutions to agriculture woes and bridge the income gap between farmers and urban residents, otherwise the issue will be politicised by politicians wanting to make rice part of their political campaigns in an effort to woo rural voters. In the end, they are likely to come up with extreme farm subsidy policies which would be a huge fiscal burden on the country and yield no sustainable development, as we have seen in past years.

Its failure to lift the income threshold of small-scale farmers and improve their livelihoods means the agriculture sector will remain a key factor that decelerates the achievement of its economic development goals. Thailand will hardly become a "secure, prosperous and sustainable" nation as pledged by the premier.

Wichit Chantanusornsiri is a senior economics reporter, Bangkok Post.

A rice crisis always hits the government hard. Most of the measures introduced to tackle falling rice prices were not sustainable. They were offered by different governments to serve the political agenda of ruling parties and were a huge financial drain on the country, notably the rice-pledging scheme initiated by the Yingluck Shinawatra government from 2011-2014, which resulted in accumulated losses of approximately 536 billion baht over the course of four harvesting seasons.

Such a pledging policy is a temporary quick fix to boost farmers' incomes. The policy would be fiscal suicide if it is continued further. High supply, due to unsold pledged rice stored in silos and government warehouses, will continue to push down the market price of rice.

Under the rice-pledging scheme, the Yingluck government bought every single grain at a pledged price of 15,000 baht per tonne for normal rice breeds and 20,000 baht for jasmine rice -- 40-50% above the then market price. However, as of today, the prices are still lower than the expectation of the then government-- about 7,000 baht per tonne for normal rice and 11,000 baht for jasmine rice.

The Prayut government has taken action against those involved in the implementation of the policy for their alleged negligence that caused losses of 178 billion baht from the 2013-14 rice crop. Ms Yingluck, who chaired the body overseeing national rice policy, is required to pay 20% of the total loss, or 35.7 billion baht. Recently, Justice Minister Paiboon Koomchaya said he received a list of 6,000 state officials suspected of malfeasance and will investigate the cases.

Meanwhile, the current government has tried not to repeat the same mistake. Instead of buying rice from farmers at above the market price and storing it in government warehouses, the Prayut government opted to "pledge rice in farmers" barns and offer 90% of the market price. Each rice grower will be given 1,500 baht per tonne for their storage costs and 2,000 baht for improvement and harvesting costs. The project costs 38 billion baht.

However, none of these subsidies or cash handouts are long-term solutions. Farmers should be allowed to take the lead in empowering themselves.

I would like to share an example of a resilient farmer in Phichit, Somsak Kruaewan, who learned from his failure and reinvented his career.

Mr Somsak started with traditional farming like most people -- growing typical crops such as rice, durian and rubber. He later decided to take a high risk in exchange for a potentially high return by making a huge investment in a new orange orchard and running it as mono-crop agriculture. Unfortunately, it eventually became a huge failure resulting in a one-million-baht debt to the Bank for Agriculture and Agricultural Cooperatives (BACC).

However, he refused to be let down by the crisis and decided to enrol in a training course that the BACC offered to its borrowers in default. The course helped him to gain a thorough understanding of farming and business planning and allowed him to reflect on what he did wrong. He said it helped him realise that he should have started his orange orchard on a smaller scale and eyed practical profits. Without in-depth knowledge, he at that stage had no idea about how to manage disease and pests that often ruined his orchard. With high investment in the hopes of high returns, he ended up with huge debts and losses.

After graduating from the course, Mr Somsak started all over again but focusing on a smaller-scale investment in multiple cropping and organic farming and adopting His Majesty the late King's sufficiency economy principles. Eventually, he cleared his debt and turned his home into a community learning centre for other farmers.

In my opinion, farmers usually run into similar problems Mr Somsak faced when he was initially running the orange orchard. Mr Somsak's experience could have been used as a model for other small-scale and poor farmers.

Instead of mainly providing annual farm subsidies as rescue measures for farmers, I think that governments should allocate a budget for the state to provide training programmes for farmers nationwide to help them stand on their own feet and encourage them to adopt multiple cropping and organic farming. The state can pay farmers for attending the courses or provide them temporary debt repayment suspension. This should be a worthy investment that would benefit both farmers and the country over the long term.

The current administration should therefore use agriculture as a key factor to accelerate its economic ambitions. The failure to address problems in this crucial sector will bog down the country's development and widen the income gap. In the end, these problems will be used as a political tool by politicians who want to rise to power without taking due consideration how much their policies will cost the country's fiscal standing.