THE RESOURCES industry has kept Queenslanders working through the COVID-19 response and is playing a central role in the economic recovery according to the latest State of the Sector report said the Queensland Resources Council.

QRC chief executive Ian Macfarlane said a survey of the State’s top resource leaders in May found strong momentum in employment growth over the next 12 months.

“Every resource job matters and our sector is doing the heavy lifting with the State’s employment with 63 percent of the companies surveyed maintaining or growing workforces while 5 percent were expecting to increase employment numbers significantly,” Mr Macfarlane said.

“Queensland’s coal and mineral miners were in a substantially better position going into the COVID-19 crisis than the previous commodity price lows five years ago with 50 percent of companies expecting operations to remain in the lowest cost quartile and nearly 90 percent sitting in the bottom half of the cost curve.

“Costs in Queensland’s oil and gas industry have crept higher with all operations remaining in the top half of the cost curve and three quarters in the highest cost quartile," Mr Macfarlane said.

“Part of the sector’s success was its immediate response to the crisis and its ability to work with all levels of government to protect the public health of the communities in which we operate by strictly adhering to the advice of the State’s Chief Health Officer and implementing further measures.

“More than 70 percent of our members said the Queensland Government had performed well or exceptionally well when compared to other Australian jurisdictions and when compared to international jurisdictions 83 percent said the government had performed well or exceptionally well.

“Concerns weighing on the sector include contractions in the global economy, raising capital and the health impacts of the coronavirus around the world.

“Sentiment amongst companies towards the global economy dropped a further 19 percent to a record low from the previous report.”

www.qrc.org.au

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AUSTRALIA's superannuation savings pool has withstood the COVID-19 financial crisis so far, falling just 0.3 percent in the 12 months to April 30, 2020, while bolstering cash reserves.

Australia’s prudential regulator for the superannuation system, APRA, has just released its latest quarterly industry snapshot. It shows the superannuation system is in remarkably strong shape given the economic shock of COVID-19.

This should give Australia’s 12 million super fund members and their families confidence that while their superannuation has been buffeted by COVID-19, their superannuation savings are safe.

Illustrating this, while APRA’s figures show Australia’s superannuation savings pool contracted 7.7 percent during the three months between December 2019 and end March 2020, over the 12-month period to end of April 2020, it decreased by just 0.3 percent..

The 2019 year was one of the best ever for superannuation savings in Australia.

“Compared to the 23 percent fall in global stock markets in first quarter of 2020 as well as the 14 percent fall over the 12-month period to March, this is a stunning result,” said Alex Dunnin, executive director of research and compliance at Rainmaker Information.

Mr Dunnin said even though the SelectingSuper MySuper performance index, which is compiled by Rainmaker, fell 11 percent during this three month period, over 12-months the index is down only 4 percent.

As a result, Australia’s superannuation savings have only fallen to March 2019 levels..

During the 2008-09 Global Financial Crisis the SelectingSuper index fell as low as -21 percent.

But not all parts of the superannuation sector are weathering the COVID-19 crisis equally.  

The not for profit (NFP) super fund segment comprising corporate, public sector and industry super funds, contracted 5 percent in the March quarter.

Comparatively, the retail super fund sector contracted more than twice as much, up to 12 percent. Self-managed super funds (SMSFs) contracted 9 percent in the same period.

“Two-thirds of the decrease experienced across the superannuation savings pool came from APRA-regulated NFP and retail funds," Mr Dunnin said.

“While the retail super segment holds roughly one-quarter of superannuation savings assets compared to the NFP segment that holds half, each segment fell by about the same amount in dollar terms.

“APRA figures show the retail super fund segment holds 24 percent of their investments in Australian equities, compared to just 15 percent by  NFP funds.

“Retails funds are more vulnerable to fluctuations in equities markets, however, industry super funds with a larger share of their investments in unlisted assets such as real property, infrastructure and private equity were better insulated from the worst of these equities falls.”

Liquidity also became a concern for some superannuation market commentators and politicians when the government announced the Early Release of Superannuation scheme on March 22, with speculation that some super funds may find it difficult to pay these early redemptions.

Super funds with investments in unlisted assets such as property, private equity and infrastructure were singled out for special mentions because of concerns they may have too little set aside in cash reserves.

However, APRA’s superannuation snapshot has revealed that super funds $273 billion in cash at the end of March, which is 27-times the amount of money that has so far been paid out in Early Release claims.

To appreciate the total amount held in liquid assets held by super funds, Dunnin said you should also include the additional $466 billion held in bonds.

“The 14 percent held in cash and the 22 percent held in bonds means super funds have $739 billion or 36 percent of their total investments held in liquid assets," Mr Dunnin said.

“NFP funds have 37 percent of their assets available in cash and bonds, marginally exceeding the 36 percent held by retail super funds. Industry funds hold 31 percent of their assets in these instruments.”

During the March quarter, funds received $29 billion in contributions, taking the value of total contributions for the past 12 months to $121 billion, further adding to these funds’ liquidity.

“This is the highest contributions inflow in more than two years,” Mr Dunnin said.

 “These added contributions are often missed when analysing these ‘vulnerable’ funds.

“Sure they may have a higher than average proportion of younger members, however they receive hundreds of millions in contributions each month.” he said.

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THE Queensland resources sector has continued to deliver more than 80 percent of the State’s exports despite reductions due to market disruptions and price volatility in the wake of the global pandemic COVID-19.

Queensland Resources Council chief executive Ian Macfarlane said today’s release of Queensland Treasury analysis of trade data for the 12 months until the end of April, showed resources was the dominant contributor to the State’s export earnings with coal the most valuable despite a 8.8 percent drop compared with the same period last year.

“Mineral exports were up almost 7 percent or an additional $550 million,” Mr Macfarlane said. “The latest data shows the resource sector has delivered more than $65 billion in exports over the last 12 months or $1.25 billion every week.”

“When the resources industry is working, Queenslanders are earning and Queensland is exporting.”

www.qrc.org.au

Link to Queensland Treasury data:

www.qgso.qld.gov.au/issues/3526/exports-qld-goods-overseas-202004.pdf

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THE peak body for the Residential Land Lease Community industry warmly supports the Federal Government's announcement today of the Homebuilder grant.

With over 100,000 Australians already choosing the lifestyle and security of a land lease community, the Homebuilder grant will allow many more Australians to downsize out of the suburbs through the construction of a new house within a residential community, according to the chair of the Residential Land Lease Alliance, James Kelly.

Mr Kelly said the grant, available on new contracts from June 4, will not only stimulate new housing sales, but will free up equity for older Australians to otherwise spend through the economy, while also assisting housing stocks of established homes in the suburbs for families looking to get into the housing market.

“The benefits of a land lease community are being recognised by more and more Australians as they look to move into their next phase of their life and prepare for an active and connected lifestyle,” Mr Kelly said..

“The market has been somewhat subdued with the uncertainty of the COVID-19 crisis, but today’s announcement, along with the strict hygiene and social distancing procedures of the industry, will provide confidence for Australians to jump into land lease community living.

The land lease community model allows for Australians to purchase a home -- as an asset and able to be re-sold -- on land with a right to tenure, and gain access to community facilities.  This is proving a popular model for older Australians looking to free up capital, lead a social and active life, while having the security of independent living, Mr Kelly said.

www.lifestylecommunities.com.au

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