Three of Australia’s richest entrepreneurs are scouring the country for suitable locations for a nuclear power plant.
Ron Walker, Robert Champion de Crespigny and Hugh Morgan have been working on the plans for a plant for the past 12 months, according to a source close to the deal. “We have been holding informal discussions but nothing is concrete.”
The trio are the key shareholders of a private company called Australian Nuclear Energy.
Walker and de Crespigny each have 40% and Morgan, the former head of uranium producer Western Mining has 20%.
The plans are long-term, the source stresses. “You can’t buy a nuclear plant for eight years,” the source says. Countries like France and the UK want plants. “And the US can’t get enough of them so this is a 10-year program.”
The trio have been looking at locations near the coast, where there is salt water for cooling, notably in Victoria and South Australia.
Little money has been spent. “It’s just been research so far,” the source says. “It’s a commercial proposition so it must yield a return on investment.”
Labor attacked the plans this morning, with Peter Garrett, shadow minister for the environment, saying Australians have made it clear that they don’t want nuclear energy and power.
Other shadow ministers expressed fury at the close relations that Ron Walker, former federal treasurer of the Liberal Party, has with Prime Minister John Howard. Howard recently announced he is looking at nuclear power as a clean form of energy.
But the source dismissed any claims of preferential treatment from a “friendly” government. “It doesn’t bother us which government says what. We are investigating new forms of low-cost energy and clean energy.”
Ron Walker and mate Robert de Crespigny have been in business together for the past four years. In 2004, they set up a $300 million fund in 2004 and have been looking for deals in the resources sector.
They took a large stakes in Buka Minerals and also in retirement homes company Primelife and while the pair enjoyed rising share prices for a while, the stocks plummeted in 2004, wiping millions off their wealth.
While Portland has been mooted as a possible location for the power plant, the good folk of Portsea, where Walker has a holiday house, and Victor Harbour, where no doubt de Crespigny owns property, can be sure their towns will not be on the drawing board.
– Amanda Gome
The Australian dollar is likely to sink to around US75¢ over the next six months, economists say, giving hope to Australian exporters and manufacturers coping with the current high level.
The dollar continued its climb towards US80¢ this morning, pushing up to US79.37¢ by 10.30am, but economists say declining commodity prices and the relatively strong US economy should reverse that trend.
ANZ senior currency strategist Tony Morriss says there’s a lot of good news priced into the dollar that cannot be sustained.
“Over the next year we expect both global and domestic growth to slow, that shouldn’t be an environment for strong Australian dollar,” he says. “It should come back to US75¢ by August and US72–73¢ by the end of the year … although over the next few weeks it will probably continue to get stronger.”
St George Bank’s head of economic research, Steven Milch, says the dollar could go as low as US71¢ by the end of 2007. “We think commodity prices have peaked and are very much of the view that there will be no further interest rate moves in 2007, so if you accept that then there is probably a downside for the dollar.”
BT Financial Group chief economist Chris Caton says the surprising resiliency of the US economy will also help keep the Australian dollar down. “The US dollar is looking a bit cheap at the moment; the general view is that it is experiencing a soft landing and that looks right so the Australian dollar should come closer to US75¢ off that,” he says.
Australian Industry Group chief economist Tony Pensabene shares a similar outlook and says it is likely there “will be a bit of a better story for exports. Although companies have made a lot of changes to improve competitiveness to cope with the higher dollar they will welcome its decline.”
“The weakness of manufacturing in parts of Australia is more to do with global competitiveness than anything else, but the dollar has certainly made it tougher,” Pensabene says.
But several economists also reported growing signs of upside risk, with last weeks pro-tightening remarks by Reserve Bank governor Glenn Stevens and uncertainty about the US economy the key factors.
But one analyst, TD securities’ global strategist Stephen Koukoulas, was prepared to predict a higher Australian dollar in six months, driven primarily by a buoyant global economy and stronger commodity prices. “Over the next three to six months US80-84¢ is certainly possible, especially if we get further talk about interest rates and the world economy stays strong,” he says.
– Mike Preston
The skills shortage is hurting small and medium businesses like never before, according to the latest Sensis Business Index, with a record 16% of businesses reporting that attracting and keeping staff is their prime concern.
And a report by international business coaching company Shirlaws found that 76% of Australian SMEs consider recruiting and retaining staff is their biggest challenge, well above the United Kingdom (50%) and the United States (64%).
The news comes as the Federal Government announces a stop-gap measure to tackle skills shortages in the trades by funding short skills education programs and severing links between the award system and apprenticeships.
The Minister for Vocational and Further Education, Andrew Robb, told Parliament yesterday that 60% of jobs in the years ahead would require vocational training, but only 30% of people had trade qualifications.
Robb lambasted Labor for the shortage, saying that if apprenticeship completion rates had been the same in the 1980s and early 1990s as they were last year, Australia “would have over one million more people able to deal with the skills challenge that this country faces”.
The president of the Australian Association of Career Counsellors, Dr Peter Carey, says that although there has been a decline in people choosing trades in the past, that is changing quickly.
“In some areas it is still true, but there’s been a lot of work over the last 10 years and people are being counselled to value everything, not just university, so that’s changing the mindset of students.”
But while the stop-gap initiative in the trades is a good short-term solution, the skills shortage is a major driver of inflationary pressures. And the coalition is yet to detail how it will get the large number of underemployed to take up the opportunity. Worse, there are still few solutions for SMEs struggling to recruit and retain their best people.
– Mike Preston
Franchise chain Retail Food Group, the owner of BBs Café and Donut King, had good news for investors yesterday. The company, which floated in mid-2006, reported sales growth of 16.7% to $2.8 million and net profit growth of 40% to 3.9 million for the December half.
Cash Converters, the franchisor of second-hand stores, also saw strong sales and profit growth. Sales were up 70% to $18.8 million thanks to acquisitions of Safrock Group and MON-E.
Electrical goods retailer Clive Peeters posted sales growth of 57% to reach $230.7 in the December half, and net profit was up 52.5% to $9 million. But the company has warned of tough trading conditions ahead, putting pressure on sales and margins.
The Australian dollar continues to trend upwards to US79.38¢ this morning on the back of predictions of an interest rate cut in the US, while the ASX/S&P 200 declined 0.32% to 6,024.80 points.
In New Zealand, strong business confidence and booming exports and imports figures for January point to a possible interest rate rise their in the near future.
And managed funds institutions increased their consolidated asset holdings by $48.4 billion (4.6%) between the September and December quarters last year to a whopping $1095.9 billion, Australian Bureau of Statistics figures released today reveal.
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