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Arrium - Onesteel

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My impression of Australia since relocation is that it is very expensive to live here. We have almost no income at the moment and groceries are our biggest expense. I can't see Australia getting any cheaper.

For me, this is completely worth it, this is 'gods' country. Sunny days, warm nights, great food....wonderful parks and things to do outdoors. This is heaven and not a day goes by that I am not so grateful for the opportunity to live in Queensland, Australia.
 

Australia could both export gas but require that the Australian market be served first at a particular price. The remainder would then be sold overseas to the highest bidder.

This would seem to give us the best of both worlds.
 
SirRumpole said:
Australia could both export gas but require that the Australian market be served first at a particular price. The remainder would then be sold overseas to the highest bidder.

This would seem to give us the best of both worlds.
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But since the liquifaction capacity is not owned by the public, this seems unlikely.
 

I don't see it like that at all, the gas exports have caused more drilling and more production to supply the export market, and a massive increase in the total annual royalties paid to government and land holders.

your argument is a bit like saying wheat or rice exports don't generate value, because they increase the price of grain in local markets, but that's false, the exports cause a lot more grain to be produced, and value from that grain distributed throughout the economy.

Sure if you isolate the gas supply and limit its customer base to one city at the end of one pipeline, you will get an artificially low gas price, but opening up the market through a dynamic gas net like apa have built in the last 15 years and adding some export capacity, creates a lot more activity in the market generating jobs, taxes, dividends, interest payments, etc etc.
 
SirRumpole said:
Exactly. Whose stupid idea was it that Australian businesses and consumers must pay the export price ?

.
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you mean market price.

You probably don't care about paying market price for any other exported commodity, eg Wheat, Rice etc.

any way, you won't ever be paying the same as the export market, Because it costs money to load the gas onto a ship and ship it to asia, exports are also limited by terminal capacity.

When a producer decides to sell locally or export, he is looking at the price he can sell locally vs the price he can sell to the export market, given the extra cost of freezing the gas and the energy lost in transport, he will be willing to sell cheaper into the aussie pipeline system, the export market will always have to be higher than local before they ship.
 
sptrawler said:
but our Governments seem to be every one else's b!tch.
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Imagine if there were 7 Billion humans drifting through space on a large ball shaped space ship, and all the humans had divided themselves into groups that controlled various parts of the space ship, and there was one group that made up only 0.003% of the population, controlled a giant section of the space ship containing a large chunk of the farming land and a huge amount of the natural resources.

Now I can't see a problem with this small group that is rich in natural resources selling some their resources into the market, if they don't how can they expect to continue to receive all the imports they rely on, and when resources eventually run out in other parts of the space ship, can this 0.003% really hold back the other 99.997% from just taking the resources by force?

I know people get feelings of tribalism, but I don't see a difference between a chinese or Australian that wants a hot shower, I am not interested in keeping prices artificially low and chinese prices artificially high, I think the market should decide who gets the resources, and if prices rise, we will just invest more and create more jobs, more taxes and more royalties in the process.
 

If we had a world government then your view may have more relevance, but the fact is that we are divided into nations that have long term strategic interests and all countries look after themselves and their own people.

That's what governments are there for, not to support some ideology that no one else enforces.
 

There is no reason to not export (especially because we rely on imports of most things), and there is no reason to create artificial low prices when you have the ability to stimulate increased production and build export industries.

As I asked before, do you think we should curb exports of wheat and rice to create lower prices here? how long do you think lower prices would stay around before those industries built on exporting those commodities die off.
 


You blokes are all off topic......This thread about Arrium Steel and what the management, the unions and state and federal governments are going to do about it or will it be an Emerson "WYALLA WIPE OUT"?:topic
 
noco said:
You blokes are all off topic......This thread about Arrium Steel and what the management, the unions and state and federal governments are going to do about it or will it be an Emerson "WYALLA WIPE OUT"?:topic
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Agree, maybe start another thread because i'm quite interested in this. IT seems it is not clear whether the LNG industry is good for Australia or not, even from all the articles i read. I still cannot find an unbiased argument.
 

Given that "our" resources (mainly water but also future soil productivity) are being used for food production I think we have the right to satisfy the Australian market first, under price control if necessary.

Businesses that export to giant world markets would suffer very little if they have to subsidise a small market like ours, given what subsidies other countries and cartels like the EU pay to their farmers.
 
I think the real issue is the taxation of the corporation doing the export, if australia does profit via taxation of the export, good be it iron ore/gas/food, the trouble as is now blatantly obvious, is that the multinationals do not pay taxes, so as a nation only taxing its citizens, priority should be in employing australians and keeping the resources in (value added as much as possible)
Shouls the Rio, BHP,Chevron pay the right amount of taxes AND royalties to buy from Australian people the stuff they export, there would be no such talk in this forum
 

What has wheat, rice, meat and sugar got to do with steel production?

:topic again.
 
qldfrog said:
Shouls the Rio, BHP,Chevron pay the right amount of taxes AND royalties to buy from Australian people the stuff they export, there would be no such talk in this forum
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+1

We have a natural advantage and are basically giving it away for the cost of extraction.

It's a bit like saying that you or I run a business and that we have some "edge" in that business which gives us an advantage over competitors. We have 3 options:

1. Protect that edge with patents, trademarks and so on and use it to run an ongoing business with an advantage in the market place.

2. Sell the "edge" for the cost of paper and printing, or its electronic equivalent, required to transfer the knowledge.

3. Sell the "edge" for a price far higher than its actual cost, instead reflecting its underlying value.

Nobody in their right mind would choose option 2 but that's pretty much what we're doing with mineral exports. Giving away the resource as such, placing no value on it beyond the simple cost of extraction.

Forestry's the classic example. Proponents of that industry in Tasmania used to point out how many people it employed and the value of exports. Then someone worked out that most of the benefits came from the paper mill and craft users who collectively use less than 10% of the wood, extraction of the other 90% being responsible for a minority of the benefits (and zero actual profit) and virtually all the environmental impact and controversy (paper is from plantation pine, even the Greens support logging for craft uses). So you can take 6 million tonnes of wood out of the forests and sell it as chips, or you can take one tenth of that and process it, and each produces a similar economic benefit.

Given that iron ore, bauxite, gas etc are all finite resources it's just crazy to be pursing a policy of maximum extraction for minimal return. I wonder how well WA's economy will be going in 2100 when the iron ore and LNG industries are something that children are taught about in history lessons at school and the only ongoing activity is a niche tourism operator taking people to see some holes in the ground and remnants of the gas plants? It's a finite resource, it won't last forever and the lifespan is decades not centuries at the present rate of extraction (even shorter if it scales up further).
 
Gas - There was a lot of fuss about the carbon tax which applied during the period 2012 - 14 and it became a major political issue, ultimately being repealed when the Coalition were elected to government.

The rate of that tax was $23 per tonne in 2012-13 and $24.15 per tonne in 2013-14 and supposedly this was to bring about the ruin of Australian industry, was costing every home and business money and so on. In particular it was going to kill the Whyalla steel works according to political claims at the time.

Thus far the Qld LNG industry has increased gas prices equivalent to a carbon tax of about $20 on natural gas. So that's roughly the same impact on gas prices as the actual carbon tax we did have, with the only difference being in who gets the money.

The increased gas prices are costing the Whyalla steelworks around $20 million a year to my understanding which is a significant share of the gap between costs and revenue from that operation.
 
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