IT price wars: government no white knight

The Asus Transformer Pad Infinity – $999 in Australia, $600 in the US. Lenovo’s ThinkPad X1 Carbon – starts at $1999 in Australia, $1299 in the US.
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A diagram explaining price discrimination.

Tech companies have given the proverbial middle finger to those complaining about high prices in Australia, leading the consumer group Choice to demand strong government action.

But despite firms showing little interest in reducing their prices based on political pressure from the likes of the Labor MP Ed Husic, a new submission to the parliamentary IT pricing inquiry by the federal Treasury warns any direct regulation of prices by government could do more harm than good.

Last week Lenovo launched its ThinkPad X1 Carbon in Australia, which it says is the world’s lightest 14-inch Ultrabook. It will start at $1999 here, compared with $US1299 in the United States.

Earlier this month ASUS released its Transformer Pad Infinity tablet in Australia at a recommended retail price of $999 – much higher than the US price of about $US600.

Lenovo said it priced its products to ensure they were “competitive with local market offerings” and that by buying Lenovo products in Australia consumers were “supporting local Australian jobs” as well as securing local support and warranty.

Asus trotted out the same line frequently used by vendors to justify gouging Australian consumers: smaller market, logistic and shipping costs, exchange rates, promotional costs and training. All of these excuses have been unpersuasive to consumer groups and the Productivity Commission.

Choice’s head of campaigns, Matt Levey, said the IT pricing parliamentary inquiry was a “great start” but wouldn’t amount to much if it did not produce “strong recommendations which prompt equally strong action”.

“Unfortunately aph.gov.au is littered with examples of detailed reports into significant issues which sit around collecting dust,” he said. “It’s not so much the inquiry which is the problem, but how the government responds.”

Huge mark-ups for Australians

Choice studied more than 200 prices for IT products and identified an approximate 50 per cent price differencebetween what Australians and US consumers pay for more or less identical products including music downloads, games and computer hardware. Dell computers were 41 per cent more expensive while Nintendo Wii games were up to 88 per cent more.

Since it conducted its analysis in July consumers have written to Choice with further examples; in some cases they could see the lower price on the US site but the sites blocked them from bypassing the Australian price when ordering:Norton Internet Security two-year subscription: $149 v $US79Roxio Easy VHS to DVD for Mac: $139 v $US79.99Asus laptop (same specs): $1400 v $US680Garmin GPS: $189 v $149

Choice wants the government to investigate whether tools to stop consumers accessing lower prices in overseas markets – such as “geo-blocking” on websites or region-coding – are anti-competitive.

In many cases, the wholesale prices charged to Australian retailers by multinational vendors are significantly higher than those offered to overseas retailers, meaning there is no way they can offer a competitive price. In the case of prices for music downloads, Apple blames the record labels while music industry sources say Apple’s market power gives it the ability to set the price.

The Labor MP Andrew Leigh wrote a submission complaining that Amazon’s range of books for the Kindle in Australia is hundreds of thousands of titles smaller than in the US, and the books that are sold in this market are significantly more expensive than everywhere else.

Monash University’s chief information officer, Dr Ian Tebbett, said high IT prices in Australia diverted resources from research and education, and particularly for students of low socio-economic backgrounds, “the costs of IT in Australia will add to their decision not to take up higher education”.

Price discrimination maximises profits: Treasury

Treasury wrote in its submission dated August 9 that price differentials that aren’t based on differential costs of supply will “generally decline over time, providing there is sufficient competitive pressure or low barriers to entry”.

But while the internet allows consumers to detect when firms are charging higher prices in one country – and buy from cheaper overseas markets – in general there were “incentives for suppliers, in the form of profits, to engage in price discrimination”.

Treasury said the evidence suggested Australian consumers pay higher prices for IT products than consumers in some other markets, but not necessarily the highest globally.

“To that end, improving local competition and increasing access to international markets are ‘no regrets’ measures that can assist in ensuring Australian consumers and business have access to goods and services at internationally competitive prices,” Treasury said.

But it warned against “more interventionist measures” that seek to dictate terms on which consumers and business transactions take place, saying this may stifle innovation and reduce competition further. It said firms should generally be free to set the prices they want

The Competition and Consumer Act (previously the Trade Practices Act) used to prohibit some forms of price discrimination by firms but the prohibition was repealed in 1995 because it reduced price flexibility and was detrimental to competition.

“Treasury considers that the current competition laws are capable of addressing anti-competitive conduct without the need for a specific price discrimination prohibition,” Treasury said.

Vendor excuses don’t hold water: Productivity Commission

The big tech companies, largely through the Australian Information Industry Association (AIIA), blamed retailers, market size, freight costs, warranty differences, rents, taxes, wages, penalty rates and importation and transport costs as some of the reasons why Australian prices are higher.

But the Productivity Commission, politicians and consumer groups have all said these cannot possibly explain the huge 50 per cent and higher mark-ups faced by Australians on some products.

The commission found that arguments made by international suppliers to defend regional price discrimination are “not persuasive, especially in the case, for example, of downloaded music, software and video where the costs of delivery to the customer are practically zero and uniform around the world”.

Adobe, one of the worst offenders when it comes to price discrimination on software products, has yet to contribute a proper justification for its pricing to the IT pricing inquiry, instead using its submission to state it had already provided feedback to the AIIA.

Other big tech firms like Apple and Microsoft refused to appear at the first public hearings for the inquiry late last month. Apple’s written submission to the inquiry was confidential and therefore cannot be published.

The Productivity Commission acknowledged that there were extra costs of doing business in Australia and the size of the market meant retailers in countries like the US – which buy larger volumes – were able to obtain goods for less.

“While Australia may be relatively close to manufacturing centres in Asia, costs can depend on trade volumes rather than distances travelled, meaning that Australia’s trade routes can be more expensive than those for other countries,” Treasury said in its submission.

Treasury also noted that the recent strength of the Australian dollar has meant the prices of goods in overseas markets are now cheaper in Australian dollar terms. And while exchange rate fluctuations occur instantly, prices of goods aren’t as easily or as quickly changed to reflect this.

This can cut both ways. In 2008, following the depreciation of the Australian dollar, Australia was the cheapest place in the world to purchase an iPod, the Commonwealth Bank has said.

Mr Husic said there would be another public hearing for the inquiry in the coming weeks.

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US masterclass: how to grow as a retailer

High-end homewares store Williams-Sonoma is a remarkable story of growth.ANALYSIS
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The launch or rumoured launch in Australia by an international fashion apparel retailer has become a numbingly regular event. Speculation about how badly the bully boys of global retail, like Zara and Topshop, will beat up the local retailers has become a favourite sport of the retail experts.

Now, Williams-Sonoma’s impending arrival switches the focus to a different kind of fashion – upscale home furnishings.

Williams-Sonoma, a retailer that has become ubiquitous in American shopping centres since its founding by Chuck Williams in Sonoma, California in 1956, is to move into a 2000 square metre space on a pedestrian mall adjacent to Sydney’s Bondi Junction early next year.

But rest assured that it has not come to Australia to set up just one store.

Anyone associated with the retail industry – especially a small retailer with growth aspirations – should make Williams-Sonoma one of their first case studies. It is a remarkable example of how a specialty retailer can grow from one humble store into a multi-concept, multi-channel international powerhouse.

It has accomplished this using a step-by-step process of market segmentation, concept incubation, brand launch via catalogue/e-commerce and then finally, a measured store rollout. By opening stores at a slow tempo rather than helter-skelter, it has ensured limited damage in a couple of instances where a concept has underperformed and needed to be shuttered.

Laura Alber, the CEO, reportedly gushed about the company’s prospects in Australia, observing, among other things, that there was only limited competition in the Australian market. This is a truly remarkable finding considering Australia’s affluence and high rate of home ownership.

It’s also an astute and correct one.

Alber doesn’t mean there aren’t a lot of home furnishings stores in Australia. She means that none are anywhere near as targeted to specific population segments and lifestyles as Williams-Sonoma is.

Williams-Sonoma has shown expertly over the years how to use catalogues and e-commerce for market research, and how this information can in turn be used to reduce real estate risk for retailers across the world. E-commerce is not just a sales channel but a way of understanding where the response to your product is strong enough to lob a chain of physical stores.

In this instance, Australia is Williams-Sonoma’s strongest e-commerce market outside North America. (The company has e-commerce in approximately 75 countries and 44 per cent of its $US3.7 billion revenues in 2011 were derived from e-commerce and catalogues.)

This knowledge doesn’t guarantee success for the company’s Australian stores but it does lower the probability of it having to exit with its tail between its legs.

But what makes Williams-Sonoma such a masterclass in growth for ambitious retailers is its ability to segment consumer markets and develop individual retail concepts and products for each.

Williams-Sonoma currently operates 579 stores under five different banners and a further in North America. Four of these concepts – the namesake Williams Sonoma, Pottery Barn, Pottery Barn Kids and West Elm – are to open cheek-by-jowl in the forthcoming Bondi Junction space.

While Williams-Sonoma itself sells upscale kitchenware, the other three sell furnishings to customers in different life phases. West Elm is the smallest of the four with only 40 stores, but possibly the most interesting and instructive from the standpoint of a retailer case study.

Initially launched as a catalogue in 2002, the first West Elm store opened two years later in the d.u.m.b.o (‘down under the Manhattan Bridge’) neighbourhood of Brooklyn, New York, where the local population included many aspirational, design-conscious, but not-quite-yet-affluent young professionals living in small walk-up apartments. The furniture was perfectly adapted to this lifestyle group – well designed, edgy, urban, compactly sized for small living spaces and priced accessibly for a professional household on the cusp of “making it” in New York without actually being there yet.

There’s a market for that in Australia’s biggest cities.

Williams-Sonoma will not open stores willy-nilly in Australia and it should not cause tremors among the existing home goods retailers in the market. But it will add design flair and choice for some underserved segments of Australian consumers.

And for entrepreneurs who want to understand how to grow a world-class specialty retail business – this is a great case study.

Michael Baker is principal of Baker Consulting and can be reached at [email protected]南京夜网 and www.mbaker-retail南京夜网.

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Gillard’s $4 billion dental fix

The $4 billion dental health package will begin in 2014.The federal government will pour $4 billion into a dental package to provide millions of children and millions of adults on low incomes or in rural areas access to government-subsidised dental care.
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Health Minister Tanya Plibersek this morning announced that more than three million children would be eligible for the scheme, which will begin in 2014.

For adults on low incomes, $1.3 billion to fund an additional 1.4 million services will be available in the six-year package.

The changes have been made possible with the support of the Greens, who have insisted on big expansion as grounds for axing the current Medicare chronic disease dental scheme costing about $1 billion a year.

The funding comes on top of the $515 million announced in the 2012-13 budget.

”Labor believes we have a responsibility to ensure Australians who are least able to afford to go the dentist, and particularly children, should be given access to government-subsidised oral health care,” Ms Plibersek said.

Greens health spokesman Richard Di Natale flanked Ms Plibersek when she made the announcement in Sydney.

Ms Plibersek said the ‘‘unprecedented’’ package would tackle increasingly poor dental health among low-income people.

Eligible children would be able to get basic dental treatment capped at $1000 a child over two years to address dental decay, which, she said, had been increasing since the 1990s in Australia.

The package includes $2.7 billion for the treatment of children.

“While Medicare and free hospital care have been a basic right for Australians for decades, millions of people in this country still go without adequate dental care,” Ms Plibersek said.

“Labor believes we have a responsibility to ensure Australians who are least able to afford to go the dentist, and particularly children, should be given access to government-subsidised oral health care.”

The government would also provide $1.3 billion to states and territories for expanded dental services for low-income adults but the funding would depend on them at least maintaining current levels of dental services.

There would also be $225 million for dental infrastructure and workforce expansion in outer metropolitan and regional and rural areas.

Ms Plibersek said the public dental scheme would now be able to focus on prevention measures.

‘‘Many more low-income Australians will be able to get not just crisis treatment, when their teeth are falling out or gums abscessing, but actually moving back to a period … of prevention and early intervention,’’ she said.

‘‘The investment today will bear rewards in 10, 20, 30 years’ time.’’

Senator Di Natale said for a wealthy country, Australians had poor oral health. ‘‘Poor oral health leads to a range of complications … one in 10 visits to the GP are because people can’t afford to see a dentist,’’ he said.

Ms Plibersek confirmed the government would close the Chronic Disease Dental Scheme, set up by Opposition Leader Tony Abbott when he was health minister under the Howard government.

‘‘It’s been one of the most widely misused schemes ever designed in our public health system,’’ she said. ‘‘I’m very pleased to see the back of it.’’

The scheme was initially estimated by the Howard government to cost $90 million a year, but massive over-servicing and rorting had led to it costing $80 million a month, Ms Plibersek said.

The Medicare teen dental scheme would also be closed and replaced by the broader scheme for children aged up to 18.

Ms Plibersek said the 2012/13 budget allocation of just more than $500 million would be spent first, before the children’s scheme started from January 1, 2014 and the adult scheme from July 2014.

Ms Plibersek said the changes would need new legislation but would be brought to parliament as a change of regulation, which had the backing of the Australian Greens.

Asked where the funding would come from, she said the government would find savings in the budget which would be outlined in the mid-year economic and fiscal outlook later this year.

‘‘We have a very good record of finding savings in the budget,’’ she said. ‘‘We found $30 billion of savings in the last one.’’

The government remained committed to delivering a surplus budget in 2012/13, she said.

Ms Plibersek predicted Mr Abbott would say no to Labor’s dental reform ‘‘like he says no to everything’’.

She said there were capacity restraints in the current system and that was why the reforms would come into effect in 2014.

‘‘There’s some parts of the country where you can’t find a chair and there’s some parts of the country where you can find a chair but not a dentist,’’ she said, adding it would take time to improve access to services.

‘‘This is a bedrock scheme. It can be built up over time.’’

with AAP

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Europe carbon links potentially a boon for local traders

The government’s decision to link Australia’s future carbon price with Europe’s could be a boon for carbon-trading services in Australia, particularly as the market for the nascent commodity expands in the Asia-Pacific region.
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The connection to Europe’s established emissions pricing market will break down barriers between the two regions. Australian businesses competing in such a market will have an advantage as more Asian nations begin pricing greenhouse-gas emissions, industry representatives said.

The government’s move to hitch Australia’s future carbon price to the world’s biggest emissions trading market came as it decided to ditch its previous plan to set a minimum $15 price per tonne of carbon dioxide emitted once the fixed rate – currently at $23 a tonne – ends in 2015. The carbon tax kicked in on July 1 with the aim of prodding the biggest emitters to reduce emissions of the gas which is contributing to warming global temperatures.

Andrew Grant, managing director of CO2 Group, said the effort to connect emission trading links between Australia and Europe by 2018 “the most profound” aspect of yesterday’s announcement.

“If schemes aren’t linked, we can’t trade internationally so this is so much more beneficial,” Mr Graham said.

Regional push

The change will also give an edge to Australian clean energy firms in Southeast Asia, a region where Europe had dominated until the financial crisis had forced them to scale back their efforts, he said.

Australia had been “a Johnny-come-lately” into that region, but now that it was effectively in the same market, more business could flow, said Mr Grant.

CO2 Group, which provides carbon advisory and other related services, already has business in Singapore and New Zealand. Additional international links give the group an “ability to optimise our assets,” said Mr Grant.

Clean Energy Council deputy chief executive Kane Thornton said short-term price fluctuation around carbon pricing will give way to longer term consistency as Europe’s market is opened up.

“Even though removing the carbon price floor potentially opens us to greater volatility in the market, the link to a larger market covering some 530 million people will help to protect our emissions trading scheme from sudden changes in the price of carbon,” said Mr Thornton.

He sees a potential inflow of $20 billion in investment in low- or carbon-free energy projects that could generate 30,000 jobs over the next decade as a result of the Renewable Energy Target (RET).

Political risk

The chief risk for the renewable energy sector, he believes, is any watering down of the 20 per cent cut in carbon emissions to be achieved by 2020 through the government’s RET review.

“Any perceived benefits from tinkering with the scheme would be undermined by the signals that it sends to investors,” said Mr Thornton. The review concludes at the end of the year.

“We still have the political risk around government and a drastic change of policy,” he said.

Many large companies in Australia want an established market for their carbon exposure said Rob Fowler, who represents the International Emissions Trading Association in Australia and New Zealand.

Links with Europe will expand options for Australian companies to hedge their carbon pricing positions, Mr Fowler said. Further, it will expand opportunities for Australian carbon trading and carbon-offset businesses.

“If Australia can establish and maintain a European link and start to create relationships around carbon that reflect our trade relationships in Asia Pacific, we act as a real interesting pivot in the international carbon environment,” he said.

“Australia as a service provider in these sorts of professional areas has a good history,” said Mr Fowler. “It’s likely we’re going to create a useful financial services industry around that.”

Mr Fowler said Australia also benefited from having a well-regulated financial sector in the eyes of the global investors.

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Buckley overjoyed by Krakouer’s return

COLLINGWOOD coach Nathan Buckley says Andrew Krakouer’s return to the AFL this Saturday night will give his side a “massive fillip’.
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The Pies will be fighting to stay in the top four when they take on Essendon at the MCG after having lost their past two matches.

Buckley said Krakouer’s return from a knee reconstruction he underwent six months ago was remarkable.

“It’s a fantastic story,” Buckley said this morning. “Krak’s application to his recovery has been excellent and he has been through a fairly rollercoaster football career. Very public, the ups and downs of him coming in the best part of 10 years ago to where he is at this point.

“His form in the VFL has been excellent and really, despite anything that has happened during the year, he has just demanded selection. It’s a great position to be in as a match committee because there’s a bloke there through his own merits and performance needs to play. And he should come in confident from what he has been able to do.

“This club, this group, as every team has, has been through a fair few ups and downs through the course of the year and you’ve got to celebrate your mini-wins and successes. And seeing Krak back is a massive fillip for the boys.”

Krakouer served 16 months in prison for assault before his release in late 2009. He had a breakout year last season, playing 23 of 25 games for the Pies and kicking 35 goals, including three in the grand final. He also won the AFL Mark of the Year award.

But in February this year the club announced it had given Krakouer at least a month off, reportedly to deal with some personal issues.

He returned two weeks later to play in a VFL practice match, where he hurt his knee and afterwards had a full reconstruction.

“It’s a huge story,” Buckley said. “Even for him to come back and do what he did last year after his personal trials, it’s just any absolute credit to him with the adversity that he has faced and his ability to handle that, not perfectly.

“You’re not human if you can just handle it without emotion, without feeling, and just plough on. He has had his ups and downs and it has probably been more documented than a normal person should have to endure or handle.

“But that’s the strength of a football environment. We believe we’ve given fantastic support to Krak since he walked in the doors of the footy club at the beginning of last year and we’ve had fantastic service from him in return. And we’re really excited what the next period of time is for him and us.”

Buckley said Krakouer would most likely return to the forward line with time in the midfield.

Midfielder Sharrod Wellingham is in doubt to play after he left training early this morning. He didn’t try to handle the ball during the session, wearing bandages on his left hand after he split webbing.

Buckley said it was too early to rule Wellingham out. “It’s still mid-week and he has plenty of time to get over it.

“Clearly, ball handling is very important and he has stitches in at the moment and he’ll carry them into the game and it’s something he’s going to have to get used to.”

Buckley said captain Nick Maxwell and ruckman Darren Jolly were likely to play, having recovered from respective hip and elbow injuries.

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Wells, Grima unlikely for Giants clash

IT IS looking increasingly unlikely that Daniel Wells and Nathan Grima will play in North Melbourne’s final home-and-away game against bottom-placed Greater Western Sydney on Saturday.
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Roos coach Brad Scott said the Roos will take a strict “no-risk” policy with the key duo, and neither would play unless they can convince the coaching and medical staff they are “absolutely 100 per cent”.

Considering Wells was only scheduled to do “little bits and pieces” of today’s main training session at Aegis Park, it seems he would have to improve significantly to risk his injured calf on an interstate trip to Skoda Stadium.

“He is one that we would bring in if he is fit. He will train little bits and pieces today and then train fully with us on Friday and then we’ll probably make a decision later in the week,” Scott said of his reigning joint best-and-fairest winner.

“But there will be an absolute no-risk policy with him. He is either absolutely 100 per cent and ready to train or he won’t play.”

Important key defender Grima is in a similar situation, recovering from hamstring tendonitis.

“They have both made rapid improvement over the past three days. Ideally, we would like to play them so we won’t be holding them back if they are 100 per cent right to go,” he said.

“But we would be silly to take a risk if we weren’t convinced they didn’t have enough training under their belt.”

Scott said Wells and Grima would be the only potential changes, with the club’s match committee believing the players who lost to Fremantle last weekend deserved a chance to redeem themselves and build confidence ahead of next week’s first final.

“I doubt we will make any changes and if we do, there will only be minimal changes to the side this week,” the coach said.

“We’ll give the side another chance to go out and fix a few things that we need to fix and get some real momentum going into the finals series.”

Scott said the Roos could potentially attempt to manage the game time of some players with a view to finals.

“But you can’t plan that,” he said. “The only time we have ever contemplated using our sub to manage game time we got an injury in the first part of the game and it backfired straight away.”

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Australia ready to strike a deal with Nauru and PNG: Gillard

Prime Minister Julia Gillard has declared herself “on the same page” as Nauru and Papua New Guinea, despite concerns Labor’s new Pacific solution could see asylum seekers held indefinitely.
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Ms Gillard arrived this afternoon for the Pacific Island Forum in the Cook Islands.

She told reporters soon after landing she will meet the leaders of Nauru and PNG to hammer out agreements on reopening processing centres.

But she denied any difference had emerged with either country over the length of time people might be held.

“Our policy push here is to make sure people do not get any advantage from having got in a boat,” Ms Gillard said.

But she did not say how long people would typically wait for resettlement without attempting a voyage to Australia.

Nauru’s Foreign Minister Keiran Keke said he did not want to see people held indefinitely on Nauru, and joined PNG’s Prime Minister in saying Australia would be expected to settle people found to have genuine asylum claims.

Asylum seekers are far from the only issue on the agenda.

Ms Gillard said the forum would be discussing protecting the Pacific Ocean and building skills for people in the region — and she will also bring a personal focus on gender issues.

“As the only woman attending the forum – the only female leader – I will be focusing on gender equality,” Ms Gillard said.

The Pacific ranks worst in the world on representation of women in politics. When Australia and New Zealand are excluded, only 3.5 per cent of roles in the region are held by women.

Ms Gillard said gender issues mattered not just because men and women should be equal but the participation of women helped development.

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Grocon and unionists to meet on construction dispute

Union leaders and Grocon are set to meet tomorrow, as construction workers continue to block workers’ access to the Emporium construction site in Melbourne.
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Members of the Construction, Foresty, Mining and Energy Union have been at the Grocon site for a week, with violent scenes erupting yesterday in the city’s CBD between protesters – who have workplace safety concerns – and police.

Today, Workplace Relations Minister Bill Shorten announced he has ”brokered” private discussions between the warring parties.

He said Grocon head Daniel Grollo and the CFMEU Construction Division’s Dave Noonan had agreed to ”make themselves available” to meet on Thursday.

”The government is concerned about the dispute between Grocon and the CFMEU and the ugly scenes witnessed in recent days,” the Workplace Relations Minister said.

Yesterday, the Victorian Supreme Court extended an injunction restraining the CFMEU from blocking access to Grocon sites – which it has ignored. Mr Shorten has refused to pick a side in the debate, but has strongly condemned any violent activity.

”There can be no excuse for intimidation, violence and thuggery,” he said.

”I would expect the CFMEU to respect and comply with orders of the Victorian Supreme Court.”

Mr Shorten said that he believed the workplace safety matters underlying the Grocon and CFMEU dispute would be best resolved by conciliation.

”That is why I brokered private discussions between the parties on Monday this week,” Mr Shorten said.

Prime Minister Julia Gillard has also weighed in on the dispute, warning violence should never be tolerated.

“Violence is always wrong in whatever setting,” Ms Gillard told reporters shortly after touching down in Cook Islands for a meeting of Pacific leaders.

But she warned Opposition Leader Tony Abbott’s promise to bring back the building commission would be a backwards step.

“As a result of that people would see penalty rates end,” she said, also warning about the re-introduction of individual contracts.

with AAP, Daniel Flitton

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Teen a victim of targeted shooting: police

A bullet hole in the window of a family home in Auburn across the road from where the boy was shot. Heavily fortified … the home of the boy who was shot and his father, who was shot two weeks ago, in Auburn.
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Chalk graffiti on the Auburn apartment block where the boy was shot yesterday. Brothers 4 Life is the gang founded by Bassam Hamzy.

A teenage boy is fighting for his life after being gunned down in the driveway of an apartment block in Sydney’s west.

The 16 year-old boy was the victim of a targeted shooting in Auburn Road, Auburn, last night and police say his family, who are known to police, are refusing to co-operate with them.

The Herald understands the boy’s father, Hakan Goktas, was shot in his car in Auburn two weeks ago, one of more than 100 drive-by shootings in Sydney this year.

He was injured but had only a short stay in hospital.

Detective Superintendent Philip Rogerson said police were investigating whether the boy was shot as part of an ongoing dispute involving his father.

Mr Goktas took his son to hospital yesterday evening but dropped him at the door and then left.

The boy was moved to Westmead Hospital and underwent emergency surgery. He is in an induced coma and is listed as critical but stable.

Superintendent Rogerson said “anyone could have been injured or killed” by the shooting, which occurred in front of a large group of children.

A car with bullet holes was later found outside the Park Road home of the boy, two streets away from where he was shot.

The boy’s home is heavily fortified with concrete walls.

The apartment block where the shooting occurred backs on to Civic Park, a popular hang-out spot for teenagers.

Superintendent Rogerson said his team of detectives were “working around the clock” to solve a string of public-place shootings in Auburn in recent months.

Mr Goktas is with detectives but is giving away little information, he said.

Assistant Commissioner Frank Menilli said this month that shooting victims were continually refusing to co-operate with police because they wanted to protect their own criminality.

A stray bullet hit a resident’s balcony across the road. “It’s a disgraceful act,” Superintendent Rogerson said.

The newly built home is that of a mother and her two children.

She said the bullet hit the balcony just outside the bedroom of her 21-year-old son.

He had to leave the home because he was scared, she said.

“I’m shaking, I’m very scared,” she said.

The apartment block where the boy was shot is covered in chalk messages about gangs and the police.

Several messages say “Brothers 4 Life B4L”, referring to the gang founded by Bassam Hamzy, the convicted murderer, drug dealer and kidnapper serving a life sentence in Goulburn Supermax.

Other scrawled messages say “criminal mind” and “down for brothers, f— da cops”.

One resident said groups of teenagers often hang out in the driveway where there is a couch and a basketball ring.

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Footy betting tipped to soar to $3.3b

Sports betting is booming. DIGITAL IMAGE: JUDY GREENBetting on Australia’s two largest football codes is set to double over the next five years to $3.3 billion, driven by strong growth in online gambling on sports, a Deloitte report says.
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The report, commissioned by online bookmaker Sportsbet南京夜网.au, found annual betting on the AFL had reached $900 million, with $750 million wagered on the NRL. This is forecast to rise to $1.8 billion (AFL) and $1.5 billion (NRL) in five years.

Deloitte found total turnover on sports betting has grown more than 13 per cent a year, driven by strong growth in online sports wagering of 28 per cent.

But overall sports betting remained significantly smaller than racing; $3.3 billion at present compared to $20 billion.

Australia’s two favourite football codes accounted for about half of all sports betting and 7 per cent of all betting in Australia.

Australian bookmakers generated an estimated $81.5 million in revenue from NRL and AFL wagering in 2011, with bookies also contributing about $45 million a year to football-related products through sponsorship and advertising expenditure.

Individual bookies have product-fee agreements with sporting bodies, but most are based on a gross-win model in which a percentage of profit is paid to the code.

There are reports the NRL is considering changing its model to a 1.5 per cent take of overall turnover, which Deloitte says will drive down the value of bookies’ profits and revenue to the code.

The report says that if this model is adopted, it would significantly reduce the profitability of NRL wagering products.

This would force betting agencies to take action to preserve profitability, including significantly reducing or reallocating marketing expenditure, and reducing odds offered to consumers, it says.

Sportsbet chief executive Cormac Barry said the report showed “the importance of our industry as a financial contributor to sport and racing”.

Mr Barry said if the NRL did change its model, punters would turn off local sites in search of better odds on “unregulated” overseas sites.

“This increases the risk to the integrity of sport and is likely to result in reduced returns to sport from product fees over the long-term. Unregulated foreign sites do not pay product fees, while in the past five years, Sportsbet alone has paid more than $50 million in product fees,” he said.

This story Administrator ready to work first appeared on Nanjing Night Net.

Iron ore’s fall threatens Australian incomes

In the land of commodity research, various research houses are scrambling to catch up to the reality of a falling iron ore price.
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Until this recent price collapse (down 30% in a couple of months to $US95) iron ore prices were widely considered to have a “price floor at $US120”.

The price-floor notion was based upon the idea that Chinese iron ore producers have a marginal cost of $US120 and so would close down if the price fell below that level, removing supply and supporting prices.

However, the “price floor” argument had a fatal flaw.

It assumed seamless growth of demand in China and what has caught everyone by surprise is that is no longer the case.

Indeed, Chinese steel prices are still falling after a year-long correction:

And thus, so are iron ore prices:

It is very difficult to know where the bottom is for the iron ore price. We have clearly entered some kind of capitulation phase in the correction and the technical retracement chart that suggested a $US75 target is no longer looking at all fanciful:

Terms of trade shock

But what we can say for sure is that every time iron ore and coking coal falls 1%, the terms of trade – the ratio of export prices to import prices – falls about one third of that.

If we add in the recent thermal coal price correction then we are looking a terms of trade shock approaching 13% in the last couple of months alone.

With a high dollar, the real shock is worse still.

It is widely known that Australia’s income growth has become dependent upon high terms of trade, instead of other sources, such as productivity growth. In effect over the past decade we’ve enjoyed a huge pay rise owing to the high price of commodities.

Now we’re taking the equivalent of a big pay cut as a national income recession looms.

The last two occasions we experienced significant income falls as a nation were both difficult economic periods:

This time around we have some insurance in an ongoing and wider boom in liquefied natural gas investment that is not so far affected by the commodity price falls.

But we’ve already seen big mining projects getting shelved. There will be more.

Income recessions usually involve rising unemployment and some hit to consumption.

Whether this buffeting becomes something worse will depend upon the response to the official interest rate cuts that will come if these price falls continue or do not reverse.

David Llewellyn-Smith is the editor of Macro Investor, Australia’s independent newsletter covering stocks, trades, property and fixed interest. Macro Investor is running series of specials on how to profit from the end of the mining boom. A free 21-day trial is available at the site.

This story Administrator ready to work first appeared on Nanjing Night Net.

Wanderers the sum of their parts, not the past

Western Sydney Wanderers coach Tony Popovic directs traffic at training.Western Sydney Wanderers fingered as Sydney United in disguise? You have to be kidding. Sadly, people who should know better, among them former Socceroo Ray Richards, seem all too ready to peddle the myth. Normally it wouldn’t matter too much. This, after all, is a game built on conspiracy theories. And there have been no more enduring conspiracy theories than those mired in Balkan politics. For more than three decades, this has been the hotspot for the game.
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So here’s the rub. The Wanderers are taking their first tentative steps as the A-League’s newest team. Their selling point is to become the sum of the parts of the entire Western Sydney region. That includes all sides of the Balkan divide. Being put only in the Croatian corner isn’t just wrong, it hurts. Hurts the Wanderers, hurts the A-League. Those pushing that barrow need to take a long, hard, look in the mirror. In this case, the idle gossip is doing far more damage than it’s worth.

So what’s brought it about? The coaching appointments, fundamentally. Head coach Tony Popovic and his assistant, brother-in-law Ante Milicic, played for Sydney United, and have Croatian heritage. Does it matter they were born here, and played for the Socceroos? It does, and it should. The same goes for goalkeeper Ante Covic – another fall guy for the Chinese whisperers.

True enough, the first two imports signed by the Wanderers (Dino Kresinger and Mateo Poljak) came from Croatia. So what? Does the fact that John van’t Schip once signed Rutger Worm make Melbourne Heart a Dutch club? Was Rini Coolen guilty of the same charge because he signed Andy Slory for Adelaide United? Are Perth Glory a Scottish club because Ian Ferguson signed countrymen Steve McGarry and Liam Miller? What about Sydney FC, when former Czech coach Vitezslav Lavicka signed Karol Kisel not once, but on two occasions? Popovic went to Croatia for his first two foreigners because he knows the league, and the players were available at the right price. His judgment should stand or fall on their performance, not their passport.

Sadly, just as the steam was going out of the rumour mill, the Wanderers turned up to play at Sydney United, and there was trouble. Not the level of trouble portrayed by the usual couple of media outlets, but enough to put some heat back into the discussion. Starting off the back foot, Wanderers boss Lyall Gorman has since been telling everyone that by the time his operation is bedded down, there will be just five employees from about 80 who have a Croatian background. It’s a telling fact, but the hard part is to get people to listen.

Why all this matters is because sooner rather than later, the game needs to leave this baggage behind. There was a time when nationalists used clubs like Sydney United, like Footscray, like Preston, like Sydney Olympic, as a forum for their grievances. It is a part of the game’s history, and can’t, and shouldn’t, be whitewashed. But where it counts – on the ground in the old Yugoslavia – things have moved on.

Just recently, I was in Montenegro. Every second car had a Croatian number plate. The owner of my hotel in Kotor, a Serb, crosses the border to have lunch in Dubrovnik at least once a week. You can have adult conversations about culture, religion and politics, and nobody pulls a knife, or a gun. You can even talk about the war if you want to, but everyone would rather leave that at the door. I’ve also been to Slovenia, and to Croatia, and I’ve seen this level of maturity evolve as the conflict becomes more distant. And yet in a corner of south-western Sydney, there are still some morons – and I only use that term because this is a family newspaper – who prefer to hold a grudge, and ambush football matches to make their point.

That is manna from heaven for hair-trigger police and flash-happy photographers, as we’ve seen, once again. True enough, Sydney United should have got rid of their hooligan fringe a long time ago. That apathy has come at an enormous cost. And it is a sad fact that even in the NSW Premier League, games between Sydney United and Serbian-backed Bonnyrigg White Eagles still have to be held behind closed doors. Not that long ago, Mark Rudan, a former Sydney United player, was abused by supporters when he ventured to Bonnyrigg as coach of the visiting team. It wasn’t Sydney United, but Rockdale City. Some people just don’t want to let go.

Eventually they will, given time, and space. Which is why resurrecting old prejudices by pointing the finger at the Wanderers needs to stop. The club doesn’t need it, or deserve it. In the meantime, I’ll give the final word to Alex Kennedy, who sent me this email in the wake of the so-called “riot” at Edensor Park. It makes more sense than I ever could.

“Dear Michael,

I read with great interest your article on Sydney United mainly because I have had the honour to be associated over the last year with many of the real members of this club. Prior to this year I have been pretty much a rugby union supporter and had not taken much interest in the round ball game…there is a good deal of very talented, well-behaved young men coming through the ranks of Sydney soccer and in particular Sydney United. The players from under 13 and up clearly demonstrate high respect for their coaches, managers, the patrons and the club itself. Therefore it is such a shame to see the ill disciplined, non-membered rabble attend games for the sole purpose of creating upset. The behaviour of the rabble is so divorced from that of the true membership. I have come to know many of the Croatian and other nationality members of this club and can attest to their wonderful character and behaviour. Many residents of greater Sydney could learn a lot from them. Every code has or has had this problem so the soccer officials could learn from the experiences of the other codes. The ball is now at the feet of the clubs and the association to fix this problem, so I wish them the very best to ensure the world game is as appreciated in Australia as it is in the rest of the world.”

Hear, hear.

This story Administrator ready to work first appeared on Nanjing Night Net.

Dudley shark attack victim recovering in WA

THE Dudley surfer attacked by a shark at a remote Western Australian beach has undergone surgery.
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Jon Hines, 34, was bitten on the torso and right arm by the unidentified species of shark at Red Bluff, a renowned surfing spot about 150 kilometres north of Carnarvon, yesterday afternoon.

Newcastle man treated after shark attack

A Royal Perth hospital spokeswoman said the man was undergoing surgery this morning for his injuries.

The WA Today website is reporting that Margaret River-based surfing legend Jeff Goulden, who goes by the name of “Camel”, was being hailed a hero after pulling Mr Hines out of the water after the attack.

Margaret River Surfrider Foundation president, Gene Hardy said it sounded like something Camel would do.

“He’s a big-wave surfer, he has no fear, for sure he’d put him on his big board and take him in,” Mr Hardy said.

Mr Hardy said Camel was an eccentric character who had been part of the Margaret River surf scene for years.

Mr Hines was initially bitten around the abdomen but suffered a savage arm injury as he attempted to fight off a second attack.

He was pulled from the water, conscious and in good spirits, and driven in a private car to Carnarvon Hospital, a two-hour drive on unsealed roads, from the remote beach.

He was flown to Perth overnight for emergency surgery.

His wife, Bridget, has flown from Newcastle to be by his side.

Witnesses told of bloodied water and Mr Hines who was in ‘‘good spirits’’ as he was pulled to safety.

Rebecca Caldwell said her children, who were in the water at the time of the attack, noticed an injured surfer but did not see the shark.

‘‘The water was full of blood,’’ she said.

‘‘He was conscious the whole way back, though he was OK, he was good.

‘‘He’s in good spirits, as well as he could be.’’

Mr Hines had been staying with former Novocastrians at popular beachside camping location Three Mile Camp in Gnaraloo after arriving in the area six days ago.

He had flown into Exmouth via Perth from Newcastle last week.

The attack comes after reports that a four-metre shark had been seen in the same area last week by a recreational fisherman.

VICTIM: Dudley’s Jon Hines is flown to hospital for surgery.

Beaches in the area were closed for 24 hours following the attack.