THE Queensland Resources Council (QRC) has raised concerns that proposed industrial manslaughter laws will have the reverse outcome of decreasing the safety culture in the mining industry. 

QRC chief executive Ian Macfarlane today told a Parliamentary Committee examining the proposed legislation that safety remains the sector’s top priority, but changes were needed to ensure the Bill met its purpose. 

“The resources industry has been a willing participant and partner in reforms to enhance mining safety, including through the safety roundtable last year, the subsequent safety reset and the Sean Brady safety review,” Mr Macfarlane said. 

“Safety is fundamental to the operation of resources sites, and a fundamental value that operators share with the regulator, workers and their representatives.   We are all working towards the same goal, an industry where every worker goes home unharmed at the end of every shift. 

“However, QRC believes the Bill as drafted could have the perverse outcome of decreasing safety culture and risking unintended consequences," Mr Macfarlane said.

“The current Coal Mining Health and Safety Act has been in operation for two decades and it was drafted in the wake of the Moura No. 2 Mine disaster that claimed 11 lives on the 7th of August 1994. 

“This legislation made landmark changes to safety laws for the resources industry.  These changes were not reflected in safety laws for other industries. 

“These safety laws governing the coal mining industry and protecting coal mining workers established the unique role, duties, responsibilities and obligations of statutory positions such as the site senior executive (SSE). The onus and the obligation for safety onsite rests upon those statutory office holders, including SSEs.

 “Under our current legislation SSEs who do not meet their obligations face the prospect of a fine or a custodial sentence," Mr Macfarlane said. “The Government’s stated intent to amend Work Health and Safety legislation by adding industrial manslaughter offences was to enable executive officers to be charged in the event of criminally negligent behaviour which had led to the fatality of a worker.  

“As the resource acts include statutory positions, it is not simply a matter of translating the industrial manslaughter provisions in the Work Health and Safety Act into the existing resources acts.  

“To do so causes a number of unintended consequences and risks reducing the likelihood that executive officers will ever be able to be charged as the industrial manslaughter offence is likely to disproportionately target the SSEs and other statutory positions.

“Rather than extending the prospect of a fine or jail time to those decision-makers beyond the mine site, the industry expects this Bill to load a heavier burden on site-based SSEs and the positions reporting to them, making their fundamental role untenable," he said.

“Recognising the onerous personal statutory duties that these positions already hold with associated penalties including the potential to be imprisoned for criminal manslaughter, QRC seeks the exclusion of statutory positions from the definition of Senior Officers.  

“The purpose in seeking this change is not to weaken the provisions, rather it is to enable the intent of the legislation to be achieved, that is, to ensure that corporate decision makers can be held personally liable for criminal acts of negligence causing death," Mr Macfarlane said.

“QRC believes that without these changes the Bill also runs the risk of diminishing safety by undermining the culture necessary to prioritise safety. The Brady report made it clear that the most important element of an effective safety culture is timely, comprehensive and honest incident reporting.

“The Bill as proposed creates a disincentive for workers to report these details.  While any mine death is tragic, the industry as a whole works together to learn quickly from any onsite incidents.

“This real-time safety sharing culture will be diminished by legislation that discourages anyone from openly sharing information for fear of prosecution," he said.

“The Bill also includes a late addition for which there has been no consultation or evidence provided. That issue is the proposal that all statutory officials in coal mining must be employed by the coal mine operator. 

“There is no evidence to suggest this requirement would have any impact on improving safety outcomes.  The Brady report made no findings that the reporting culture of contractor statutory position holders was inferior to the reporting culture of employees in those positions. 

“QRC and the resources industry remain committed to making improvements to mine safety and this requires full collaboration with other stakeholders on meaningful reforms.”

QRC’s submission.

www.qrc.org.au

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“BANKS and other lenders need to pass today’s rate cut on in full without delay,” Master Builders chief economist Shane Garrett said today.

The Reserve Bank has announced that its key official cash rate is to be reduced by 25 basis points in order to support the economy through the coronavirus challenge.

“Economic growth had already been too low before the coronavirus issue took hold, with confidence and domestic demand struggling," Mr Garrett said. 

“New home building is one of the activities to have been adversely affected by the economic slowdown. The reduction in new dwelling starts over the past few years has been very sizeable," he said. 

“There had been signs of a recovery in high-density home building during the second half of 2019.

“However, figures out earlier today show that apartment/unit approvals plunged during January having dropped by 35 percent during the month," he said. 

“The unprecedented headwinds faced by the economy and our building industry mean that the onus is on banks and lenders to fully pass on today’s interest rate cut to mortgage borrowers and small businesses without delay,” Mr Garrett said. 

www.masterbuilders.com.au

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ALMOST 40 percent of recent retirees are struggling financially, a new survey reveals.

A news survey commissioned by Industry Super Australia also shows that instead of kicking their feet up more than a quarter of the recently retired had to go back to work - many to keep the lights on.

It also reveals that retirement was thrust upon almost 45 percent of workers, meaning the more they can put towards their savings during their working life the better prepared they’ll be when it ends.

A total of 734 industry fund members aged 47 years and older participated in either an online survey or a telephone interview overseen by Susan Bell Research between December 2019 and January 2020.

The survey revealed 38 percent of recent retirees reported either living on a very tight budget with only enough for essentials, or that they were not making ends meet. A spike from a similar 2010 research report, when 30 percent of reported they were either living on a very tight budget or not making ends meet.

In 2019, 20 percent of retirees said their golden years were not as comfortable as they expected.

And the gender pay gap persists in super – with the average pre-retiree woman ($190,000) having just more than half the balance of men ($340,000), this gender inequality can partly be attributed to women spending on average 12 years less in full-time work than men. 

And with almost half of pre-retirees anxious about how they will fund their retirement, the only way to deliver them some certainty is for the super rate to be lifted to 12 per cent by 2025 – as legislated. Delays to lifting the super rate has already cost the average Australian worker $100,000. 

The promised super rate increase is the best way to give Australians control on when they finish work and the financial independence to live the retirement of their choice. 

Industry Super Australia chief executive Bernie Dean said, “With almost 40 percent of retirees struggling to make ends meet Australian workers can not afford any delay to the promised increases in the super guarantee rate.

“Only by lifting the super rate will workers be able to have the retirement of their choosing and the best chance to control when they end their working life.

“With an ageing population and many retirees doing it tough, the only way for the government to defuse this ticking time bomb is to lift the super rate.”

www.industrysuper.com

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WHILE PROPERTY markets across Australia, particularly in Sydney and Melbourne, are recovering well, the recent bushfires have had a material impact on a large number of areas and the likelihood of the reintroduction of macroprudential measures is increasing, according to RiskWise Property Research.

In addition, the implications of the fires and the coronavirus on the economy are yet to be fully determined.

RiskWise Property Research CEO Doron Peleg said unemployment, under-employment and spare capacity in the labour market also noticeably increased in January 2020 and was unlikely to substantially improve in the near future, leading to further speculation the RBA will undertake another interest rate cut before July.

“The recent bushfires will have a major short-term impact on property prices in affected areas and this will increase the risk in many regional areas given the possibility of future occurrences,” Mr Peleg said.

“This impact will depend on the actual effect of the fires as well as the normal projected demand for residential property before they occurred and their location in relation to employment hubs.

“It must also be noted that economic growth has been poor, and this is further compounded by the recent bushfires and the coronavirus disease (COVID-19) although their significant impact is still to be fully determined.

“So, while the market is improving, especially in Sydney and Melbourne, material growth in asset prices and the amplified risk to the financial system increase the likelihood APRA will reintroduce macroprudential measures.”

Mr Peleg said improved buyer sentiment and auction clearance rates well above 70 percent in those two cities would have a negative impact on housing affordability especially given the undersupply of family-suitable properties relative to demand driven by population increases - the biggest (recurrent) issue in the Australian property market since mid-last decade.

On the other hand, he said there was still a high level of supply of rental properties in some areas and these imbalances had "a very material impact" on changes to dwelling prices of family-suitable properties versus properties unsuitable for families, particularly in high supply areas.

“Obviously, low out-of-pocket expenses for property investors are well connected with a noticeable increase in their activity. Consequently, it is expected that investor activity will further increase with a direct impact on auction clearance rates and dwelling prices,” Mr Peleg said. 

“The recovery of the Sydney and Melbourne markets will also mitigate the risk of negative equity for properties purchased during the downturn, as dwelling prices will reach a new peak. However, properties that were settled following an off-the-plan contract with LVR of 90 percent or more, still carry a high level of risk of negative equity. Increased levels of unemployment and under-employment increase the default risk in some markets.

“Units, particularly off-the-plan, still carry a high level of risk of significant price reductions. Areas with high unit oversupply carry a very high risk and this is still a major issue in some property markets. In addition, the reputational damage and impact of the recent construction defects of high rises increases the risk that demand for both new and existing high-rise properties will fall as their main buyers, investors, look elsewhere e.g. low-rise buildings or freestanding houses.”

STATE-BY-STATE

NSW:

Strong recovery, low interest rates and an improved job market are driving dwelling prices. However, bushfire-impacted areas carry higher risk depending on the strength of their property markets prior to the fires. The Sydney market has completely shifted from a buyers’ market to a sellers’ one. Consequently, at this stage it is likely that it will deliver double digit price increases and is likely to reach a new peak within the next six months. Housing affordability is, therefore, further deteriorating as wage growth is far lower than the expected price increases. Further, systematic undersupply of family-suitable properties is again the biggest (recurrent) issue in the Sydney property market, particularly in high-demand areas. In addition, housing finance has further improved in NSW, as expected, with increased demand from both owner-occupiers and investors. On the other hand, there is still a high level of supply of rental properties in many areas of Sydney with a noticeable impact on the demand for high-rise buildings due to the reputational damage associated with the high-profile construction defects.

Victoria:

While the labour market is deteriorating with a sharp increase in the unemployment rate in January 2020, population growth and strong sentiment continue to drive the property market. As with NSW, the property market in Melbourne is recovering well. Buyer confidence and auction clearance rates have increased significantly (77.1 percent as at 29 February) and are well correlated with strong price increases making it a strong sellers' market. Consequently, Melbourne is one of the top two performing markets in Australia, well ahead of any others, and is likely to reach a new peak within the next six months. However, the flow-on effect is that housing affordability is highly likely to materially deteriorate given the low wage growth. This also means the undersupply of family-suitable properties will continue to be a major issue, relative to demand driven by population increases. This is exacerbated by Melbourne’s population growth which is the highest in the country at 2.1 percent. Such population growth is a major driver for demand of dwellings. It should be noted that while investor activity is only 26.7 percent, well below its peak, it is highly likely this will materially increase. Melbourne faces the same major imbalances, between undersupply of family-suitable properties and high level of supply of investment properties, as Sydney. The recent bushfires also had a major material impact on the demand for residential properties in Victoria's affected areas. The short-term impact on property prices will depend on the actual effect of the bushfires as well as the demand for residential property in the area before the bushfires. Repeatable events might also have a long-term effect on prices.

Queensland:

Southeast Queensland and regional areas present completely different pictures due to a two-speed economy. While buyer confidence has increased in Southeast Queensland, particularly Brisbane, regional areas carry a higher level of risk. The Queensland market greatly varies between its high and low-performing areas, and special attention should be given to the different job markets across the state, particularly since the unemployment rate has gone up from 5.7 percent in December 2019 to 6.3 percent in January 2020. Regional areas with a weak labour market carry a higher level of risk. The risk associated with the Queensland market should be monitored closely at the SA4 level, as deteriorating employment conditions are likely to have a significant negative impact on dwelling prices.

South Australia:

A soft labour market, with a reduction in actual employment, has meant slow growth for dwelling prices. Buyer confidence has increased, particularly in Adelaide, and this has seen an improvement in auction clearance rates and, consequently, it appears dwelling prices have reached the bottom. Popular areas continue to show evidence of recovery, particularly those with steady recent price growth rates. The labour market is a key factor in South Australia’s price growth projections and while it has improved in the past couple of years, it is still weak. The recent reduction (in January 2020) in the unemployment rate is attributed to fewer people seeking work in the state. Overall, the number of total jobs in the state has actually reduced. While serviceability measures have improved due to the RBA’s interest rate cuts, the soft labour market and the relatively high unemployment rate increases the risk of credit defaults. In addition, the demand for units among owner-occupiers in South Australia is, generally, low and some suburbs are subject to voluntary lending restrictions by the major lenders. The recent bushfires also had a major material impact on the demand for residential properties in some of South Australia's affected areas. The short-term impact on property prices will depend on the actual effect of the bushfires as well as the demand for residential property in the area before the bushfires. Repeatable events might also have a long-term effect on prices.

Western Australia:

A weak labour market and a sharp increase in the unemployment rate in January present a recurring problem for price growth. While buyer confidence has improved, particularly in Perth and housing finance has been showing signs of improvement, overall, economic activity remains well below the 10-year average and the effective unemployment is still significantly above the 10-year benchmark. Due to the weakness of the labour market, Western Australia’s annual population growth of 1 per cent is the third lowest nationally. As a result, the housing market, particularly units, has experienced continued weakness in recent years. The state government tax on overseas investors further decreases the demand for new units as investment properties. The relatively weak employment market also increases the risk of credit defaults. High-risk borrowers, combined with properties that suffer from low demand, require special attention in relation to credit provisioning.

Tasmania:

Affordability issues and a material increase in unemployment during January, with preferred alternative investments in Melbourne, have made the Apple Isle less resilient and the property market continues to experience decelerated price growth despite low supply of dwellings, low median prices, a tighter rental market and strong rental returns. A key reason for this is that the state remains less affordable than five of the states and territories (in price-to-income ratio) and the labour market is relatively weak. The attractiveness of the Melbourne market provides a preferred investment alternative in comparison to the relatively expensive properties in the popular areas of Hobart. Units carry a higher level of risk due to the relatively high number in the pipeline compared to population growth.

Northern Territory:

Continued weakness and poor population growth are having a sustained impact on dwelling prices. The poor economy continues to play a part in its subdued property market with 19.8 percent price reductions for houses in the past five years and 35.4 percent for units. Much of this negative capital growth in recent years is due to population issues. It was the only state/territory in Australia that experienced population loss in 2017-18. While dwelling supply in relation to population growth is low and dwellings are very affordable, the low demand for housing makes the Northern Territory a risky area especially given the low level of private investment that is significantly below the growth levels during the mining boom. Combined with a relatively large supply of units, the end of the mining boom signalled significant price reductions for units and, to a lesser extent, houses.

Australian Capital Territory:

An extremely strong job market, with only 3 percent unemployment rate, has ensured demand for dwelling is solid. Houses in the ACT are solid performers, but new units present higher risk. The ACT market has benefited from recent developments in relation to the housing market and showed moderate price increases and a good medium to long-term outlook. The ACT has consistently delivered strong economic growth at 4 per cent which eclipses the rest of the country and provides a strong indication of its future. This is supported by healthy levels of both private capital expenditure and government expenditure.

www.riskwiseproperty.com.au

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