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How this student proved a teacher wrong

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Stacey Duddy has turned her life around.STACEY Duddy carries the words of the vice-principal at her old school within her heart: ”You’ll never amount to anything.”
Nanjing Night Net

It was nine years ago. Ms Duddy was at a crossroads. She was skipping classes and disrupting those she attended, hanging out with a rough crowd, smoking, fighting and rebelling, at every turn not knowing quite why.

She was in year 9 at Frankston High School, hated attending at all and figured if she made it to year 10 without being expelled, she would quit. She had the vague idea she might become a hairdresser or a nail technician.

Three years later, to the astonishment of her teachers, she graduated from year 12.

Now, aged 23, she has only two units to complete for a degree in psychology at the Swinburne University of Technology. She studies by correspondence and works for a transport company to support herself. Her most satisfying job so far has been teaching autistic children to form words. ”My goal is to work in child protection, out in the field, for an organisation like the Department of Human Services,” says Ms Duddy.

But how did she turn around her life so remarkably?

She was, she said, given a gift beyond price by a little-known not-for-profit charity called Hands On Learning, which works to keep at-risk students in school. ”I learnt the value of self-worth,” Ms Duddy says.

In a week when the Prime Minister has declared a multibillion-dollar ”crusade” to improve educational standards, Hands On Learning, whose patron is Governor-General Quentin Bryce, hasn’t got a mention.

The charity doesn’t receive any dedicated government funding, relies on schools to make a couple of teachers available for a day a week and gets most of its income from philanthropic organisations and individuals.

Yet a new study by Deloitte Access Economics has found that in the 13 years Hands On Learning has been operating, it has contributed $1.6 billion in ”workforce outcomes alone” in saving students from dropping out of school and foundering. And that represents only the 3082 students who have taken part in the program.

Of these, 95 per cent finished high school and their post-school unemployment rate was just 2.2 per cent compared with 10.8 per cent for Australians aged 15-24. Last year, Hands On Learning students recorded an 80 per cent reduction in disciplinary detentions compared with their previous year at school.

The Deloitte Access study calculates that 70,000 of the 290,000 15-year-old students in Australia today are likely to drop out before completing high school.

But Hands On Learning operates in only 19 schools, almost all in Victoria, and does not have the money to handle more than 540 students a year. One program started in 2008 at an indigenous college at Bamaga, far north Queensland. By the end of the first term, the college had recorded a 650 per cent increase in attendance, according to the study.

A teacher with 30 years’ experience, Russell Kerr, founded Hands On Learning at Frankston High School in 1999 when he led 12 students all but lost to the school system on an expedition into the Warburton Forest. They collected wood and, with the help of an artisan, set about building chairs. They were, in short, learning how to be useful and to understand they could achieve something worthwhile.

And so evolved a program that spotted students at risk, took them out of normal class for one day a week and set them at the task of building all manner of things – huts, fences, seats, tables, walls, and most of all, their sense of self-worth. Each group of students, no more than 10, learnt to get on and help one another.

Something astonishing occurred. Almost all these students, many of them deeply troubled, began looking forward to attending school and their grades improved markedly.

Ms Duddy recalls her pride at rebuilding for an elderly woman a front fence that was destroyed by vandals and, with two younger girls, creating a mosaic for her school’s fountain. It’s still there.

”I didn’t realise it at the time, but I was mentoring these younger girls, learning responsibility,” she says. ”I re-engaged with school, began attending classes, got new friends, stopped being disruptive and learnt to focus.”

And she will never forget, she says, those words: ”You will never amount to anything.”

She can barely wait to get her hands on the mortarboard and academic gown she will wear to her university graduation ceremony.

The Deloitte Access study was presented to federal Education Minister Peter Garrett this week.

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

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Mass sackings in a horror week for Fortescue ‘family’

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BILLIONAIRE Andrew Forrest’s iron ore empire – branded the ”Fortescue family” for its collective approach to success – has endured what insiders are calling the most horrific week in the company’s history.
Nanjing Night Net

But Fortescue has paid a price for its survival, shedding as many as 1000 ”family members”, including long-standing senior executives hired by Forrest himself, in an aggressive move to wipe $300 million from the company’s operating costs.

As part of its dramatic overhaul the iron ore miner – considered the most aggressive in the market – pulled back on $1.6 billion of expansion plans in the Pilbara as Chinese demand for the steel-making commodity languished driving down the benchmark iron ore price.

Despite Fortescue’s change of pace, ratings agencies continued to move against the company. Fitch Ratings downgraded its outlook from stable to negative on Wednesday due to the increasing pressure on its liquidity and debt.

”The peak debt requirements of the company’s large debt-funded capacity expansion is coinciding with a rapid and continuing decline in iron ore prices,” the agency said.

Fitch believed Fortescue’s deferral of plans to triple production to 155 million tonnes of ore a year would alleviate some of the pressure, but its debt covenants still required iron ore prices to recover above $US110 per tonne – something the market has yet to see.

Fortescue’s external affairs chief, Julian Tapp, and joint company secretary and investor relations head, Rod Campbell, as well as stalwarts Andrew Barclay and Ann Marie Lowry from the company’s legal team, all lost their jobs during the week.

”I am in shock!!! What is happening to FMG?! Can not believe it, so sad! First Eamon leaving and then getting rid of Julian and Rod??? … it doesn’t make sense,” a former FMG geologist wrote on Facebook.

One sacked IT worker reported staff email accounts and phones were being disabled as they were escorted from Fortescue’s Perth headquarters. ”Good Fortescue Values,” he posted on the social networking site.

In an email to staff on Tuesday Fortescue outlined further measures to cut costs for ”at least three to six months”, which included cutting all non-essential travel, all internal catering and encouraging employees to take leave without pay.

Four days before the dramatic turn of events Mr Forrest told Perth reporters Fortescue had $5.6 billion in the bank and was ready to ”weather any storm”.

But as he spoke short sellers were moving aggressively on the company he had built into the fourth-largest iron ore producer in the world.

Shares being shorted spiked almost 50 per cent in less than a month.

Fortescue’s share price closed at $2.97 on Thursday, marking a three-year low for the miner after three days of falls shedding about 60¢.

Unlike the major miners Rio Tinto and BHP Billiton, which can still turn a profit on a significantly depreciated iron ore price, Fortescue’s cash costs were believed to be as high as $US50 per tonne at its Cloudbreak operation.

And unlike junior competitors like Atlas Iron, which did not have extensive borrowings, Fortescue, in its rush to become the next force in iron ore, borrowed heavily to fund its $9 billion expansion plans in the Pilbara.

Fortescue was geared in such a way that it could not balance its books with an iron ore price under $US106 a tonne.

But Forrest was joined by a large chorus of industry leaders and analysts who, as recently as two weeks ago, still believed the iron ore price fall was an aberration that would almost immediately correct itself.

The iron ore price has slowed its descent, said CLSA analyst Hayden Bairstow, even enjoying a slight 20¢ rise Thursday night to below $US88.

Yesterday, as staff and contractors were gathered at the outback Cloudbreak

site to learn who next would be losing their jobs, Fortescue was looking healthier, having recovered 36¢ to $3.33.

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China slowdown turns off Swan’s money tap

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WHAT if the Treasurer threw a party and no one came?
Nanjing Night Net

This week, Wayne Swan implored the nation to celebrate an unbroken 21 years of economic growth – ”21 continuous premierships in the row” – more than every other leading nation combined.

But no one was popping champagne. The Fortescue Metals founder, Andrew Forrest, was losing personal wealth at the rate of $150 million a day. At the start of July, the iron ore spot price was $US127 a tonne. By Friday, it had slipped below $US87. Importantly, all of that 30 per cent slide in the spot price of Australia’s biggest single export happened after the turn of the new financial year – it happened after the period covered by the June quarter national accounts of which the Treasurer was so proud.

Rarely has an economic report card been so obsolete the moment it was released.

The near-vertical slide in the iron ore price has gouged 40 per cent from Fortescue’s share price since the start of July, ripped $1 billion from the worth of its chairman, put it on Fitch Ratings negative credit watch and forced it to shed 1000 staff and wind back expansion programs already under way.

Macquarie Equities says if the price stays that low, BHP Billiton’s earnings will fall by a third and Rio Tinto’s will halve. It might have to borrow to pay its dividend.

Gina Rinehart was said to be the world’s richest woman back in May, when the iron ore price was $US145. Unless it recovers from its present level, south of $US90, next year she will cede the title to someone else – most probably the US Walmart heiress Christy Walton.

It’s easy to be beguiled by the drama of a collapse that might always be reversed. The Swiss investor Marc Faber (known as Dr Doom) identifies four mega bubbles in the last four decades, the biggest of which is the tenfold increase in the price of iron ore. He is able to produce a frightening graph making this year’s collapse in the iron ore price look like the earlier collapses in the price of gold, the Nikkei and the Nasdaq.

The accepted wisdom had been that an extraordinary 18 million Chinese – the entire adult population of Australia – were pouring from the countryside into cities each year. Housing them had required steel, which could only be made from iron ore. The wisdom is being questioned because China’s growth is slowing, it has unsold homes and it is closing steel mills.

The Australian Prime Minister’s adviser on Asia, Ken Henry, affects an air of unconcern. Asked this week whether the mining boom was over, he reframed the question. ”There are people who would call the boom that is presently under way boom No.2, so maybe the question should be: ‘Is boom No.2 over?”’ he told a seminar at the Australian National University. ”I would suggest to you that if this really is the end of boom No.2, we will see boom No.3 and we will see boom No.4 and we will see boom No.5 and so on.

”My view is the minerals development projects under way in Australia have a very long way to run. There will be periods of relative weakness but I wouldn’t be writing off the minerals development story just yet.”

But in the here and now, the collapse in resource prices is a serious problem. The Reserve Bank governor, Glenn Stevens, drew attention to it in the statement released on Tuesday after the board meeting that decided to shift the bank’s interest rate stance from neutral to an ”easing bias”.

Iron ore has accounted for 22 per cent of our exports, coal another 16 per cent. The price slump means the nation is earning less from exporting these commodities. Figures yesterday showed exports of metal ores and minerals fell by $181 million in July and this helped widen the trade deficit.

Mining tax and royalties from iron ore and coal have been factored into budgets. Western Australia was expecting to raise 17 per cent of its revenue from iron ore royalties this year. The Commonwealth was planning to raise $3 billion a year from a new minerals resource rent tax applying only to iron ore and coal.

The chief Australian economist at the Bank of America Merrill Lynch, Saul Eslake, says coal and iron ore matter because they have been major drivers of the economy. ”Households have been cautious about their spending, most parts of the economy have been shrinking,” he says.

What’s galling to someone concerned about economic management is that they are coming off the boil at exactly the time the government has switched from pumping money into the economy to taking money out.

In the two months before the end of the financial year, it showered households with $2.85 billion in carbon tax and school child bonus payments, insulating people from the downturn in national income. Councils received their government payments early. Department store spending climbed 1.2 per cent and 3.7 per cent in May and June, then dived 10.2 per cent in July – its biggest slide in seven years.

The new financial year has begun with the resources downturn worsening and the government turning the money tap off. Everything has to be cut back in order to achieve the promised 2012-13 surplus.

And it will probably have to be cut back more in the budget review due in November. Asked on Wednesday what he would do if the iron ore price didn’t recover, Swan said it would make his budget task harder and that he would cut harder.

”We are absolutely committed to delivering a surplus in 2012-13,” he said. ”The government has a proven track record of delivering savings and we remain able and willing to do it again.”

A former Reserve Bank board member, Warwick McKibbin, says cutting harder when economic activity is turning down is almost a definition of economic stupidity.

”It’s going to actually mean a much bigger slowdown in the economy. Any unit fall in the terms of trade is going to have a much bigger impact because of the feedback from fiscal policy,” he says. ”What puzzles me is that Swan understood this. He was a Keynesian in 2008-09. In fact, he claims he saved all those jobs by doing what he did. Why wouldn’t he be arguing the thing same now, when the terms of trade are falling again?”

He says Swan should have abandoned his commitment to a 2012-13 surplus as soon as it became clear the global financial crisis hadn’t ended.

”He had a perfect opportunity after the European crisis emerged to scale back his promise on the surplus and say ‘circumstances have changed, this is how we are going to deal with them’. Instead, he has held on and held on to the point where he is so locked in to a surplus that his credibility will be damaged unless he can deliver one,” he says.

The Treasurer’s determination to return the budget to surplus no matter what will be made more painful by his earlier decisions to fund permanent increases in spending from vulnerable and uncertain mining and carbon tax proceeds.

The centrepiece of the budget, the ”spreading the benefits of the boom” family payments, will cost about $1 billion a year, each and every year in perpetuity. The boom might end but the payments will continue forever. The permanent cost to government of the superannuation increases was ”funded” the same way. Pensions and other benefits have also been increased permanently to compensate for a carbon tax under which revenue will be uncertain and looks like undershooting earlier estimates.

Then there’s the National Disability Insurance Scheme and the dental scheme and the Gonski schools reforms. If the government knows how it will fund these on a continuing basis, it hasn’t yet told us.

The Treasury Secretary, Martin Parkinson, told a business audience last month that Australia would soon be unable to meet demands for new government spending from the taxes it had.

”As Australian incomes have continued to rise over past decades, so too has community demand for the government provision of what economists call ‘superior goods’, including aged care, health, disability, education and social welfare. These pressures will only be exacerbated in coming decades as the population ages,” he said. ”At the same time, the taxation base is weaker than we had imagined in the mid-2000s. With hindsight, it is apparent that part of revenue collections then reflected a temporary bubble in the economy. The take-out message is that the days of large surpluses being delivered by buoyant tax receipts are behind us.”

McKibbin, an internationally-recognised economic modeller, thinks a public recognition of the problem is one of the reasons the public is reluctant to spend.

”In our models, this effect is quite big. In the United States, I think it’s one of the reasons no one is spending – particularly corporations, even though they’ve got money on their balance sheets. They don’t know what taxes are going to have to rise to fix the fiscal position. They know someone is going to have to pay, so they save a bit more,” he says.

”You talk to a taxi driver in Australia, or go to a pub. You’ll find people asking who’s going to pay for all this stuff now the boom is over. It is weighing on consumption and it is weighing on investment.”

Eslake agrees Swan has placed himself in an awful budget position. But he says it could give him the steel to make important savings.

”You know the saying ‘never waste a crisis’? Well there is all sorts of middle-class welfare the government should be cutting – superannuation concessions, negative gearing, family trusts and so on. Quite often, desirable reforms take place only when a government is prepared to use a crisis to seize the day,” he says.

And Eslake says unless the resources downturn is really severe, the RBA might be able to handle it without support from the budget.

”If Wayne Swan’s need for a surplus prompts the Reserve Bank to ease monetary policy by more than it otherwise would, then there is probably no harm done,” he says. ”The serious harm would be if they insisted on keeping [the] budget in surplus in the face of an earthquake like 2008.

”Bear in mind one of Australia’s strengths is that we are one of only a handful of countries with a triple-A rating and, given that these days the costs of not having a triple-A rating are higher than they used to be, that’s not something to be lightly thrown aside. So it depends on the circumstance. If we’ve got a Lehman’s-style shock, a hard landing in China, then my view would be that not only should we let the budget go into deficit but that we should do some stimulus as well – and if that costs us the triple-A rating, so be it.

”But in other circumstances that fall well short of that, which is where I think we are at the moment, if you can cobble together a mix of policy changes that includes cutting government spending that is clearly wasteful or misdirected in order to preserve a surplus while also having bigger cuts in interest rates than you otherwise might, and ideally if that also led to a bigger fall in the dollar than otherwise would have occurred, then that’s probably a sensible compromise to make.”

The high dollar is bedevilling economic management.

Normally when resource prices climb, the dollar climbs to spread some of the benefits (via lower import prices) and move labour and capital away from competing trade-exposed industries (by making them less competitive).

When resource prices slide, the opposite is supposed to happen. The lower dollar is supposed to spread the pain via higher import prices and make previously uncompetitive trade-exposed industries competitive again.

That’s the theory. This time, the Aussie has stayed resolutely high in defiance of convention. Since July 1, the iron ore price has slid from $US127 a tonne to less than $US87. The Aussie remains about where it was on July 1, at a touch about US102¢ (although, in the meantime, it had climbed as high as US105¢). Not only is Australia being denied the government spending shock absorber, it is also being denied the exchange rate shock absorber.

It’s been happening because foreigners love our high interest rates and our triple-A credit rating. McKibbin is among those urging the RBA to buy foreign assets with Australian dollars in order to nudge the Aussie down, although there were signs emerging this week that it might not need to bother.

Foreign buying of Australian government bonds fell to its lowest point in three years in the June quarter. The proportion held by foreigners slipped from 79 per cent to 77.5 per cent. Although the iron ore slide itself hasn’t hurt the dollar, if foreigners start to believe it will, they could desert it en masse, leaving little holding it up.

Brian Redican of Macquarie Group says it could be the Aussie’s ”Wile E. Coyote moment”.

”What we are referring to here is the well-known cartoon character who, when he’s chasing the Road Runner, frequently runs off the edge of a cliff,” he wrote to clients.

”Initially, at least, he doesn’t fall. His legs are still running as if he is on land and he remains suspended in midair. But then he looks down and realises that there is nothing supporting him and it is only then that he succumbs to the forces of gravity and plunges towards the valley floor.”

On Thursday, the chief economist at AMP Capital, Shane Oliver, spoke of an US80¢ dollar. He said, if needed, it would fall to US60¢.

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Selloffs coming from the top

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SELLING by managing directors helped swamp buyers, with the scorecard reading $70 million to $5 million at the close of proceedings.
Nanjing Night Net

Taking a big hand on the selling side was Anthony Podesta, the founder and now a non-executive director of salary packager McMillan Shakespeare.

Podesta cut his stake from 15 per cent to about 10 per cent, collected about $46 million and retains $88 million of stock.

McMillan, presided over by Michael Kay, has been a wonderful conveyance for the small army of small-cap fund managers on the register and is now a few per cent below its all-time $12.62 high.

Elsewhere, a collection of managing directors took money off the table.

Ken MacKenzie of Amcor, Louis Gries of James Hardie, Michael Fraser of AGL and Greg Ellis of REA were in that category and some sold following the exercise of options.

MacKenzie recently exercised options, got some free shares and very profitably sold scrip, with the result that he has about 1.4 million more shares than he owned a couple of weeks ago.

Elsewhere, Christopher Morris – the man behind Computershare – put some small change into some of his technology plays, including Webfirm.

He joined the board two years ago and shortly thereafter the shares excitedly ran from 17.5¢ to 26.5¢.

But Webfirm, which provides advertising sales automation services, had a tough time in the latest June year with an operating cash flow deficiency of $4.7 million – up from $4 million previously.

Morris in recent days bought shares at 4.3¢ apiece.

Directors of a clutch of companies associated with the battered mining services sector also surfaced as buyers.

Christopher Ellison, an executive director of Mineral Resources, bought less than $300,000 worth of stock, paying $7.29 a share.

He was last sighted in the market in March when he sold scrip at $12 and collected $41 million.

Wal King, the former Leighton chief executive, bought some Ausdrill shares after the scrip was hit for six following its record earnings report ,which foreshadowed lower growth in the current year.

Others in the mining services sector that were supported included Ausenco, Emeco, Boart Longyear and Brierty.

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Nurses’ union flexes muscle in CBD move

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Something to cheer about for the nurses union.THE Victorian branch of the Australian Nursing Federation – a financial winner from the scandal that recently ruined the Health Services Union – has outmuscled developers for a supersized block at the northern tip of the CBD, between Queen Victoria Market and the Haymarket roundabout.
Nanjing Night Net

The adjoining properties, low-rise buildings including a two-level retail premises at 529-533 Elizabeth Street and a four-level office at 535-541 Elizabeth Street occupy a substantial 1519-square-metre block and were expected to sell to a builder when they were listed for sale in July.

Both Coalition and Labor state governments have declared this precinct, often defined by agents as Elizabeth Street North and to date filled with older, low-rise commercial buildings, as appropriate for higher-density redevelopment.

It is expected the ANF will build a new headquarters on part of the site. The ANF owner-occupies a property across the road at 540 Elizabeth Street, which is speculated will eventually be sold for about $20 million.

CBRE director Mark Wizel and colleague Josh Rutman marketed the Elizabeth Street properties. Neither agent would comment on buyer details but said of the campaign that most buyer interest was from local and offshore developers.

“The sale adds to a very strong month of Melbourne CBD and immediate CBD fringe development site sales,” Mr Wizel said, adding that six August transactions sold for close to $81 million, in 70 per cent of cases to developers from mainland China.

The Elizabeth Street sale is the latest in a string by cashed-up unions outmuscling developers for prime sites.

Last June, the Australian Education Union paid $16 million for a riverside office in Trenerry Crescent, Abbotsford – next door to its headquarters. Worth about $30 million, the sites can accommodate more than 500 apartments, according to sources, but are retained by the AEU as investments.

In late 2010, the Electrical Trades Union purchased 200 Arden Street in North Melbourne, later selling its Carlton headquarters for $5 million to local developer Piccolo.

BIC signs office deal

FRENCH multinational BIC – maker of the popular pens – will move its operations from Melbourne’s outer-eastern suburbs, committing to naming rights and 916 square metres of office space in St Kilda Road.

BIC Australia has leased the fourth level of the 7693-square-metre building at 574 St Kilda Road, opposite the Wesley College oval, in a deal that fully occupies the building owned by local private investors the Juilliard Group. BIC will leave its long-time home in Keysborough, 27 kilometres from the CBD, in mid October.

It is believed BIC is paying annual rent of about $260 a square metre for the office space and naming rights. The initial lease term is for 10 years. Colliers International and Thorburn Commercial leased the space for Juilliard, which owns and manages a large portfolio of CBD and suburban assets.

Southbank offering

MELBOURNE private investment house Henkell Brothers has listed for sale a Southbank office building – a site that once served as the Gas & Fuel Corporation’s super fund headquarters.

More recently occupied by the International Design School, the 102 Dodds Street office, being offered with vacant possession, is expected to sell for about $8.5 million to an investor.

On a 1576-square-metre block, and zoned mixed-use within the Southbank Structure Plan, the site is also expected to arouse developer interest.

CBRE’s Justin Clarkson, Alex Zent and Mark Granter are representing Henkell Brothers.

‘New York’ skyscraper

CONSTRUCTION of what will be a prominent and sleek 68-level residential tower – marketed to Asia-based investors as Melbourne’s first New York skyscraper – has started.

The 568 Collins Street building will include 562 flats and rise from a site next door to the strata-titled McPhersons Building, which rises just three levels and was in 2003 refitted as a retail and restaurant emporium.

Until airspace at the McPherson building is sold to developers – something at this stage considered a long-term prospect but was an option not long ago – occupants of apartments within 568 Collins Street will enjoy view security to the east.

The Collins Street site, formerly a four-level office known as the Transcomm Centre, was bought by late local investor Spiros Stamoulis for $5 million in 2000. The new tower, set to rise about 220 metres and include about 227 car spaces, is being developed by his son Harry.

Other major residential apartment towers proposed for Melbourne’s skyline are mostly based around Southbank and include the 226-metre 70 Southbank Boulevard proposal, the 236-metre The Falls proposal and the 255-metre Prima Pearl project, currently under construction.

The Rudd-Gillard government relaxed foreign ownership laws in 2008, allowing offshore investors to buy all units within new apartment complexes. The move resulted in some developers marketing Melbourne apartment complexes exclusively to foreign investors. The former Howard government restricted foreign ownership of apartments to 50 per cent.

Doncaster site for sale

SYDNEY-BASED retail giant Westfield is selling a 5457-square-metre block of land behind its massive Doncaster shopping centre.

The 1 Grosvenor Street site, currently an open-air car park, is expected to sell to a developer for about $8 million.

Before offering the site, Westfield obtained a permit for a five-building, 185-unit apartment village that would take advantage of Doncaster Hill’s position and views of the city skyline and the Dandenong ranges. The tallest tower within the complex Westfield designed will rise nine levels.

Last year, Bunnings paid about $25 million for a collection of buildings adjoining an entrance of the Westfield shopping complex on Doncaster Road. Bunnings plans to build a new outlet beneath an apartment tower. Not far away, Sydney-based developer Mirvac plans to replace the Eastern Golf Course with a $1 billion mixed-use village.

Colliers International’s Shane Dargue and Peter Bremner are representing Westfield. Last week it was reported Places Victoria and the City of Manningham council would redevelop apartments in Montgomery Street, Doncaster East, near a collection of shops on Doncaster Road.

$11m for Port parcel

THE Bob Jane business is believed to have paid $11 million for a massive parcel of land within a Port Melbourne pocket recently gazetted by Planning Minister Matthew Guy for intense residential redevelopment.

The site at 138 Buckhurst Street covers 5400 square metres, and includes about 6600 square metres of office and warehouse space over two levels. Bob Jane is expected to owner-occupy the premises, possibly obtaining a permit to redevelop airspace as apartments in the longer term. The site is only a few hundred metres from the Melbourne Convention Centre.

Mr Guy recently announced the Baillieu government’s ”Grand CBD” plan, which would see industrial properties redeveloped as major towers, within new villages. The planning strategy would see 100-level-plus towers developed between Port Melbourne beaches and the CBD.

Raoul Salter of Gross Waddell declined to comment on any part of the Buckhurst Street deal, which he negotiated off-market.

Twitter: @marcpallisco

[email protected]南京夜网

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News Ltd seeks to boost online subscription with Foxtel offer

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AS NEWS Ltd inches closer to a 50 per cent stake in Foxtel, it has already started using the pay TV company to boost its newspaper business and online subscription numbers.
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From Thursday Foxtel will offer free installation and a year’s half-price subscription to people who purchase one of News Ltd’s Digital Passes.

Foxtel expects about 450 people will take up the offer, according to a notification recently lodged with the Australian Competition and Consumer Commission.

News started charging readers for full access to its online content in October last year.

It has been reluctant to release subscriber numbers since March, when it published its own figures showing it had 40,000 digital subscribers, of which a quarter were complimentary 12-month digital passes to new subscribers of the paper edition.

The Foxtel offer will run for one month.

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It’s about time, and it will be the death of me – count on it

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I WAS taken with a story (hopelessly embellished for effect) that Warren Buffett’s ”people” had once been so pestered by a wealthy Pom wanting an audience for “just one hour” that they eventually had to appeal to Buffett himself to get rid of the man. His reply was simple enough: “I have worked out that I have 42,515 hours left to live. If you don’t mind, I don’t want to waste any of them.”
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Someone please send me the real story, but since we heard this in the office we started what we call “The Death Sheet”. It is an Excel Spreadsheet that works off the actuarial life expectancy tables. The average life expectancy of an Australian female is now 84 years.

The average Australian male gets 79.5 years, and if you make it to 65, that extends to 86.8 years for the girls and 83.9 for the boys.

Enter your birth date into the “Death Sheet” and it instantly tells you how many years, months, weeks, days, hours, minutes and weekends you have left to live.

I am particularly impressed with one colleague in the office who should already be dead, but more relevant to my predicament, according to the “Death Sheet”, is that as of today I have 28.59 years, 343 months, 1487 weekends, 10,443 hours, and about 15 million minutes left to live, terribly useful information when it comes to budgeting for your retirement.

No longer do I have to rely on just the income from my super, because armed with the date of my death I can now plan on spending the capital as well, and with a bit of luck both my life and my bank account will expire on the same day, leaving nothing to those undeserving children. It is a humbling thought that my life is now over halfway through, is 64.1 per cent over, and assuming nothing gets me first, in 10,443 more hours, it’s curtains.

But it’s not all bad. Having so finite an existence sharpens the mind for the better.

There is clearly no time to waste. I need a red Mustang convertible by the end of the day, a Harley by Monday and a pad and paper to plan that bucket list. With only so much time before oblivion, I need to extract as much value as possible. So how do I do that?

First up, I have to get off my backside. If I’m going to make the most of it, I have to get up and start moving those arms and legs, making an effort to make it worthwhile. There’s no joy in idleness.

Next, I have to start being realistic about a lot of things. That miraculous financial transformation, for instance. With only 1487 more Saturday Lottos left, the chances of my boat coming in have all but evaporated.

In fact, I’d probably better not bank on it at all, not any more; and at $14 x 1487 Saturdays, it turns out that if I give it away today I can afford that Harley after all.

And as for winning an Olympic gold medal or becoming prime minister … come on. Far better I concentrate on the likely now rather than the unlikely.

Like having a weekend away with the kids that they will remember well after I am gone.

I also need to plan. To prioritise. After all, it’s going to be hard to do Route 66 on a Triumph Rocket when I can’t stray more than 20 yards from a toilet.

Best I leave now and leave the golf and cribbage until later.

And I have to start focusing on being happy. On identifying the few things that help me achieve that and hug them to me.

And I need to promote the chances of happiness. To control which people I am with, the places I go and the things that I do.

But the main game perhaps is not to waste time. It’s a bit like any investment.

Half the battle is not about winning, it’s about not losing. So excuse me if I don’t take your cold call, reply to that email, fill in that service questionnaire or argue about the carbon tax.

I am now duty-bound to judge every activity on its value contribution to my dwindling life span.

Damn. Only 250,624 hours left now. What on earth am I doing? Bye.

Marcus Padley is a stockbroker with Patersons Securities and the author of stockmarket newsletter Marcus Today. For a free trial go to marcustoday南京夜网.au. His views do not necessarily reflect the views of Patersons.

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

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Chinese investors dominating land sales in the CBD

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Total House fetched $39.5 million.CHINESE and other Asian buyers are now dominating land sales in and around Melbourne’s CBD, accounting for 85 per cent of recent large sales of sites intended for redevelopment, a leading estate agent says.
Nanjing Night Net

Mark Wizel, senior associate director of CBRE City Sales, said the influx of Chinese buyers was helping to keep Melbourne’s construction services sector working amid the decline in building approvals. ”At a time when we really need it, Asian developers have bought in, and that’s providing jobs for local architects, builders, town planners, engineers and estate agents,” Mr Wizel told the Property Council of Australia’s growth summit in Melbourne.

”I feel we are only at the beginning of investment from mainland Chinese groups, for both development and passive commercial properties in Melbourne. Melbourne has led the way: there’s less of it in Sydney, and the Chinese are not buying in Perth.”

Mr Wizel said three Chinese banks were setting up in Collins Street, ”following their clients”, and would play a key role in financing the developments, because Australia’s big four banks would not accept Chinese properties as security. Melbourne appealed to Chinese buyers in part because of its long history of Chinese influence, starting when Chinatown, the oldest in Australia, was established in Little Bourke Street during the gold rush of the 1850s. Chinese investors are now settling in Melbourne, buying houses and sending their children to the top local schools.

Mr Wizel, whose firm specialises in sales to Asian buyers, listed 24 big purchases in and around the CBD by buyers from China, Malaysia, Singapore and Hong Kong, in the past two years. The land sales totalled $457 million, but he said the developments would involve investment of at least $4 billion. They include:

■Shanghai developer Richard Gu of the AXF group paying $39.5 million for a site on the corner of Russell and Little Bourke streets, in the heart of Chinatown, to develop a 60-storey tower.

■Another Shanghai developer, Jeff Xu of the Golden Age group building a 32-storey hotel and apartment block on the old Naval and Military Club site in Little Collins Street.

■Beijing-based Everbright Group developing its controversial townhouse and apartment project on the Stonington mansion site in Malvern.

■Malaysian developers SP Setia planning to build 800 apartments at 151 Franklin Street.

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Qantas alliance strategy staunches its bleeding

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THE Qantas alliance with Emirates will unambiguously improve its bottom line compared with a world without it, as is reflected in the 13 per cent lift in the share price over the past 24 hours or so.
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The ”if you can’t beat ’em, join ’em” strategy is an admission that the airline can’t compete with Emirates on price (or costs), product and network footprint in Europe. It’s also a realisation that Qantas had to do something radical to stop the bleeding of its international business.

The other seemingly forgotten benefit of the Emirates alliance – and it is material – is that Qantas and its passengers will pay lower departure taxes to British and German government authorities.

The UK departure tax, called the air passenger duty (APD), is higher for UK flights departing for Australia that hub through Singapore, Hong Kong and Bangkok than for flights that hub through Dubai when passengers stay at the hub point for 24 hours or more, which is the case for a high percentage of passengers.

This difference is because the APD rate, quite unfairly for Qantas, is based on the distance travelled between Britain and the port where the aircraft lands. The longer the distance, the higher the rate that is paid.

Qantas was paying an APD of £92 ($A142) for economy class passengers and £184 for premium economy, business and first-class passengers using the Singapore hub. By hubbing through Dubai, the rate paid by Qantas passengers falls to £65 and £130 respectively.

The variance between these rates of tax can be the difference between a profit and a loss on some international routes.

The German authorities impose an air travel tax of €45 ($A55) for travel to Australia via Singapore and €25 for travel to Australia via the Middle East. Qantas will save €20 per passenger for a large percentage of passengers immediately by hubbing through Dubai rather than Singapore.

While the alliance with Emirates will no doubt provide a profit boost for Qantas, the most pressing question is whether it will lead to the airline more consistently achieving its return on invested aircraft capital.

Time will tell, but it is doubtful. It will certainly contribute to solving the primary underlying problem with the international business. The carrier is dogged by persistent excess supply or capacity, resulting in yield and margin compression in an environment of growing unit costs.

While the pact will contribute to solving the problem, it won’t eliminate it because the mentality of expanding supply too quickly is ingrained in the aviation system.

The supply of seats on international routes should be growing at a long-run average of 2 to 3 per cent rather than its present 5 per cent rate. The latter is suitable for a $US20 a barrel oil price, not a $US110 one. Emirates is growing at a long-run average rate of more than 20 per cent.

International airlines are preoccupied with market share. They err on the side of expanding capacity too quickly rather than too slowly, despite the fact that the incremental costs of doing so these days are considerably higher.

Aviation competes in a way that is similar to what economists call a prisoner’s dilemma – in short, two prisoners are better off if they both plead innocent than if they both plead guilty.

In aviation, pleading guilty is analogous to raising capacity too quickly (above about 5 per cent, especially in a weak demand environment) and pleading innocent is analogous to growing capacity more slowly. Airlines are generally guilty as sin.

The Emirates pact with Qantas will do nothing to counteract the effect on the international flying business of an elevated fuel price.

As seen when Qantas announced its annual results recently, higher fuel prices can devastate an airline business – and it doesn’t discriminate between carriers.

While the Emirates alliance will help with competition on the European route, it will have no effect on the Pacific (US) route, and will have little impact on competition intensity and the supply of seats on most of Qantas’ Asian routes, its South African route and smaller routes in the neighbourhood of Australia, such as Port Moresby and the Pacific islands.

The US and Asian routes are likely to represent a big chunk (in excess of 50 per cent) of Qantas’ available seat kilometres or seat supply. These routes are still likely to experience considerable yield and competitive pressure, exerted by growing Chinese carriers, and the likes of excellent carriers such as Singapore Airlines and Cathay Pacific.

While Qantas will put a bandage on its international wound, the blood is still likely to seep through. But at least it has made a start in the right direction.

Tony Webber was Qantas Group chief economist between 2004 and 2011. He is now managing director of Webber Quantitative Consulting and associate professor at the University of Sydney Business School.

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

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Like it or lump it, Facebook chief’s no sucker-berg for investors

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WHO is to blame for Facebook’s initial public offering? Is it Mark Zuckerberg, Facebook’s founder and chief executive? Someone else at the social- networking website? Morgan Stanley, the bank that led the deal? Nasdaq, which botched the stock’s early trading?
Nanjing Night Net

If you lost money on Facebook shares, which have given up about half their value since the company’s IPO, the answer is: none of these.

Ever since Facebook debuted in May, only to begin plunging in value within a few days, I hoped somebody of note would speak out publicly to take personal responsibility for losing money on this stock, rather than pointing fingers at others. A few days ago, it happened.

Mark Cuban, owner of the Dallas Mavericks basketball team, wrote a post on his blog in response to a column in which Andrew Ross Sorkin of The New York Times pinned the blame on David Ebersman, Facebook’s chief financial officer. Cuban said: ”I bought and sold FB shares as a TRADE, not an investment. I lost money. When the stock didn’t bounce as I thought/hoped it would, I realised I was wrong and got out. It wasn’t the fault of the FB CFO that I lost money. It was my fault. I know that no one sells me shares of stock because they expect the price of the stock to go up. So someone saw me coming and they sold me the stock. That is the way the stock market works. When you sit at the trading terminal you look for the sucker. When you don’t see one, it’s you. In this case it was me.”

Cuban may be a sophisticated fellow, in the sense that he’s very wealthy and knows the Wall Street game, having once run and sold a public company. But his comments ring even more true for individuals of much lesser means.

As the financial journalist John Brooks wrote in his epic 1973 book The Go-Go Years, about Wall Street during the 1960s: ”In the nature of things, the amateur investor remains and probably will remain at a certain disadvantage in relation to the professional. Perhaps his best protection lies in knowledge of that fact itself.” In spite of the shareholder lawsuits filed against Facebook, I have seen no indication that the company’s executives lied to the public about its performance or prospects. Facebook’s prospectus warned of the risks. The decline in Facebook’s rate of revenue growth shouldn’t have surprised anyone. In 2010, sales grew 154 per cent. In 2011, they rose 88 per cent. By the first quarter of this year, the year- over-year rate was 45 per cent. Last quarter, Facebook’s first as a public company, it was down to 32 per cent.

So where might be the bottom for Facebook’s shares? The stock recently was selling for about $US19, giving the company a $US46 billion market value. Facebook isn’t going broke, or at least not any time soon. Thanks to the money it raised through its IPO, the company had $US10.2 billion, or about $US4 a share, of cash and marketable securities as of June 30. Even in a worst-case scenario, the stock shouldn’t drop that low, assuming Facebook doesn’t blow all the money. The company’s $US13.3 billion of shareholder equity, or assets minus liabilities, works out to a little more than $US5 a share.

Last year, Facebook reported $US1 billion of net income. Let’s say, for argument’s sake, that Facebook deserves to trade for 14 times that much, or $US14 billion, using the earnings multiple for a typical stock in the Standard & Poor’s 500 Index as a guide. That’s less than one-third of the market capitalisation now. And that may be generous, considering Facebook reported a net loss last quarter.

While these are simplistic gauges, they do illustrate that the stock could still have a long way to fall. My guess is a price in the single digits might be worth a flyer, and that there is still a huge amount of risk in the shares. But what do I know? Trying to predict Facebook’s stock price is like trying to guess from a distance what a helium balloon might do next after it’s already way up in the air.

In an email, Cuban said he wrote his blog post because: ”I just get annoyed by talking heads in media throwing punches without any real substance.” Asked why he bought the stock, he said: ”I thought that there would be traders who would trade the psychology and hype of the stock. Turns out I was the only one trading that way.”

Pointing fingers at others, he said, is ”the easy way out.” This isn’t a game for crybabies.

BLOOMBERG

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