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Crown royal commission must investigate $210 million JobKeeper bill: Patten

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Crown’s $210 million JobKeeper bill should be scrutinised in Victoria’s wide-ranging royal commission, independent state senator and Reason Party leader Fiona Patten has said.

Millions of dollars in federal wage subsidies are still flowing into Crown’s Melbourne casino even after the Victorian government called a royal commission into allegations of widespread criminal activity at the gambling giant.

Ms Patten said this should be interrogated by former federal court judge Raymond Finkelstein as he prepares his investigation into Crown Melbourne.

“Given the appalling behaviour that we’ve seen with our own eyes, nothing should be off the table,” she told The New Daily.

“[Crown] has operated with impunity and has been rarely challenged.”

The gambling giant is reeling after a history of alleged criminal activity – from money laundering to organised crime links – was aired by a NSW inquiry in recent months.

The Bergin Inquiry deemed Crown unfit to hold a casino licence in New South Wales after revealing criminal syndicates had infiltrated high roller activities, forcing the Western Australian and Victorian governments to set up their own inquiries after years of turning a blind eye to alleged criminal activity.

But, so far, there’s been little focus on the $210 million in JobKeeper that Crown received over the past year, 64 per cent of which was taken by its casino in Melbourne.

Used to pay wages during coronavirus lockdowns, the subsidies are almost equal to the $203 million interim dividend that Crown’s board paid to shareholders about a month after the first JobKeeper payments started flowing.

Much of that board, which also received a $218,000 pay increase last financial year, has since resigned as the company’s scandals deepen.

Fiona Patten says Crown’s taxpayer-supported moral compass is off the mark. Photo: AAP

Federal independent MP Andrew Wilkie, an anti-pokies advocate, said the Morrison government shouldn’t have handed Crown any money.

“Any company, including gambling companies, should not have been eligible for JobKeeper if it was financially viable enough to pay dividends,” Mr Wilkie told The New Daily via text.

Ms Patten recognised that Crown staff were paid under JobKeeper, but maintained the company’s moral compass was well off the mark.

“This is not a new issue, but governments love the gambling revenue that Crown delivers, and they love the employment,” Ms Patten said.

“What Judge Finkelstein is going to find is exactly what NSW found.”

So serious are the allegations against Crown that it could lose its casino licence later this year when Judge Finkelstein hands down his report.

Independent MP Andrew Wilkie says Crown shouldn’t have got JobKeeper Photo: AAP

Victorian Premier Daniel Andrews said as much on Tuesday, confirming he would tear up the licence if the August 1 report recommended it.

“This is a royal commission to determine whether they’re fit to hold that licence,” Mr Andrews said. “It’s going to be a rigorous process.”

Meanwhile, Crown’s interim executive chair Helen Coonan will be paid $2.5 million to turn around the company.

But the gambling giant is yet to offer taxpayers a single cent in reimbursements.

Crown not the only gambling company on JobKeeper

Crown is not the only gambling business to receive JobKeeper, though.

The New Daily has tracked $390 million in payments to such companies so far, and that’s only counting those that are forced to publish accounts on the ASX.

Star Entertainment Group – owner of casinos in Sydney, Brisbane, and the Gold Coast – has raked in $167.8 million in JobKeeper cheques.

It helped the company fuel normalised profits worth $239.3 million over the past 18 months, although no dividends were paid over that time.

Meanwhile, Betting giant TAB took $12 million in JobKeeper last year and earlier this month announced a whopping $166 million interim dividend.

JobKeeper helped TAB book a $185 million December-half profit and a $220 million profit (excluding impairments) last financial year.

But neither TAB or Star Entertainment have pledged to pay back taxpayers.

These gaming businesses are part of a much larger cohort of more than 50 publicly listed profitable companies that have taken big JobKeeper cheques.

The list grows longer as corporate reporting season wages on, but The New Daily is tracking markets closely and will publish a full rundown soon.

Crown was approached for this story but declined to comment.

The post Crown royal commission must investigate $210 million JobKeeper bill: Patten appeared first on The New Daily.

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‘Mountain of equity’: Millions of home owners could save thousands

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If you’ve become a home owner in the past five years it might be worth getting an appraisal – you’re probably sitting on a “mountain of equity”.

As we’re all aware, house prices have soared lately. And while that’s bad news for rapidly worsening inequality, it also means those that do own a home could save money on their mortgages, upgrade their properties or even borrow to finance that renovation they’ve been wanting to get done.

Refinancing could save you thousands in interest repayments a year.

You’ll be in a particularly strong position if you’ve also been able to keep up with your mortgage repayments during COVID, because you now own a larger proportion of a house that has rapidly increased in value lately.

It’s a virtuous cycle that’s making the gap between the haves and have-nots much larger in Australia by pushing up property prices even faster.

Owner occupiers have been the keystone of the latest property boom, with most being existing owners upgrading their homes.

Who could blame them? RateCity research published this week finds an owner occupier in Sydney who bought at the median price in 2019 with a 20 per cent deposit has now seen their wealth increase by $402,000.

Apply the same conditions to Melbourne and wealth has risen $192,000.

This assumes property owners kept up with their mortgage repayments, which the majority of home owners have done while working from home and taking part in a $300 billion government cash splash during COVID.

“Millions of homeowners are sitting on a growing mountain of equity, some without even realising it,” RateCity research director Sally Tindall said.

How to benefit

If you’re in this situation, getting the value of your home appraised could be the first step to a better home loan or moving up the property ladder.

“If you’ve owned your own home for at least a couple of years, and have been diligent about paying down your debt, you could refinance to a lower rate,” Ms Tindall said.

“Lots of lenders offer interest rate discounts to new customers with loan-to-value ratios below 70 per cent, including ‘big four’ banks CBA and Westpac.”

What’s a loan-to-value ratio? Put simply, it’s the difference between the size of your home loan and the value of your property.

So, as an example, if your home is worth $1 million and your mortgage is $100,000 you have a loan-to-value ratio (LVR) of 10 per cent.

The lower your LVR the easier it will be to refinance your loan at a lower interest rate or borrow more to purchase a higher-value property.

First home buyers might also be able to remove the guarantor on their loan sooner than they thought because of rapidly increasing prices.

About 58 per cent of the lowest variable interest rates available are open only to those with deposits of 30 per cent or more, RateCity said.

In other words, rising property prices may have moved you into the club of home owners that can achieve lower interest rates on their mortgages.

A median Sydney property purchased on an 80 per cent LVR in 2019 could now be refinanced on an LVR as low as 55 per cent.

If those conditions are applied in Melbourne, LVR falls to 63 per cent.

 

The post ‘Mountain of equity’: Millions of home owners could save thousands appeared first on The New Daily.

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Here’s why Australians won’t be hit by the soaring gas prices we’re seeing overseas

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Australians have dodged the bullet of skyrocketing gas prices currently hitting consumers in Europe and Asia.

While prices in the major gas hubs of those regions have spiralled up by a factor of five, in Australia a brief spike eased in September.

That means local consumers won’t be facing big jumps in household bills into next year.

Australian gas prices jumped in June and July after outages at coal-fired power plants in Victoria and Queensland boosted demand for gas generation.

That spike was short lived due to warm weather in some states and lockdowns in Victoria and NSW eroding demand, according to research by EnergyQuest.

“You’ve had warmer weather though the major capitals, the effects of the lockdowns and increased renewables, which reduced the demand for gas generation,” EnergyQuest CEO Graeme Bethune said.

Power prices fell

Those factors have also fed into power prices, with electricity costs falling in September in comparison with a year earlier.

What is interesting about the table above is that not only did average power prices drop, but the peak price charged by generators when power is in short supply also dropped.

That was despite the ongoing problems at the Victorian and Queensland power generators.

Part of the explanation is that there is increased output from renewables as rooftop solar grew, and new wind and solar generation came online.

That meant that gas power was called on less often to meet peak demand, which in turn held down power prices.

The inverse was true in Europe, where a 20 per cent fall in wind output over recent months helped run down gas supplies, contributing to the price spike, Mr Bethune said.

The future of power prices in part will depend on renewable output.

“If the wind blows strongly and there is plenty of sunshine across eastern Australia then it will keep pressure off gas prices,” Mr Bethune said.

The influence of renewables across the system in the last year is evident in this chart on power supplies.

Although wind has been stable in terms of its contribution to the power equation, outputs from hydro, solar farms and rooftop solar have risen.

The result is that coal has been pushed down from 65 per cent of power production to a record low of 60 per cent and that should help hold down both gas and electricity costs.

Even if offshore gas prices continue to spike Australian gas producers would not be in a position to push up local prices to match it.

“A lot of the export contracts for LNG [liquified natural gas] out of Queensland are set against the oil price and that has not risen by anywhere near the amount gas had,” Mr Bethune said.

“Then you have the federal government which has made clear to LNG exporters that they need to make enough gas available to the local market.

“They’re doing that regardless of the fact that they could make more money in the export market.”

Domestic users are supplied from long term contracts that cannot be easily changed when gas prices rise, so that would be another brake on prices.

However, while it is comforting to know local gas prices won’t spike to offshore levels, Australian consumers are still not getting as good a deal on prices as they should be, according to Bruce Mountain, Director of Victoria Energy Policy Centre at Victoria University.

“For small customers the gas price is not the big deal. The biggest things are the operation of the retail market and the costs levied by the owners of the gas-distribution pipes,” Professor Mountain said.

“Gas supply has been very profitable for the big gas companies.”

That was in part because consumers don’t bargain-hunt for retailers, and the charges levied to use the pipes and wires of the energy distributors are too high.

Regulators set these charges and could crack down on them but don’t, Professor Mountain said.

Since privatisation margins earned in energy distribution have increased dramatically.

Power distributor AusNet Services, under takeover offers from two groups, “is currently making a margin of 19 per cent – they’re far too profitable,” Professor Mountain said.

When power was distributed by [the state-owned] SECV there was a margin of 3 per cent on sales, Professor Mountain said.

Household power bills could be 15 per cent cheaper if the distribution businesses were less profitable, he said, with the situation similar for the gas sector.

But the move away from gas as a household fuel, necessary to reduce greenhouse emissions, will help deliver cheaper energy.

“Devices that use gas [for household tasks] are much less efficient that those using electricity,” Professor Mountain said.

The post Here’s why Australians won’t be hit by the soaring gas prices we’re seeing overseas appeared first on The New Daily.

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Scott Morrison talked Glasgow, China with News Corp boss over ‘after-dinner drinks’

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Prime Minister Scott Morrison discussed the Glasgow climate summit, China and the Biden administration with News Corp executives in New York last month, the company’s global boss has told a Senate inquiry.

Appearing before a Senate probe into media diversity via video link on Friday, News Corp’s global chief executive Robert Thomson revealed he spoke with the PM about international affairs over “after-dinner drinks”.

Mr Morrison was in New York to represent Australia at United Nations’ talks.

Mr Thomson told the inquiry on Friday he presumed the PM wanted to meet because he knew “many” world leaders attending the UN summit.

“I had presumed he wanted some insight about some foreign policy matters,” Mr Thomson said.

Mr Thomson confirmed Mr Morrison didn’t meet News chairman Rupert Murdoch while in New York. He also claimed there was no discussion of the looming federal election.

Mr Thomson said the Glasgow summit came up “in passing” between the pair, but they didn’t talk about News Corp’s planned 16-page net-zero spread across its Australian publications, which has ignited a firestorm of criticism Down Under.

The main topics of discussion were Japan, China, Afghanistan and the “contours” of the Biden administration, Mr Thomson told the inquiry.

“The Prime Minister and I don’t necessarily agree on China,” he said.

Mr Thomson (on TV) said he presumed the PM wanted foreign policy insights. Photo: AAP

Mr Thomson was also asked by Labor senator Kim Carr about whether News Corp directed local editors to take positions on political issues.

Mr Thomson said News Corp’s New York executives had no involvement in recent features on net-zero carbon emissions and that its Australian editors weren’t told from the US what to write.

But he said the company did expect editors to operate within a certain philosophical framework.

“As a company, we have a philosophy about certain issues,” he said.

“We have a philosophy about individual freedom, about the role of the market, about the size of government.”

Mr Thomson said that – as a former editor – he had “discussions” with News Corp’s editors, but that they had a “large amount of local autonomy”.

Senator Carr and the inquiry’s chair, Greens senator Sarah Hanson-Young, grilled the News Corp executive on the publisher’s track record on climate, accusing its Australian papers of platforming climate deniers for more than a decade.

But Mr Thomson said News Corp has been consistent on climate dating as far back as 2004, citing Mr Murdoch’s 2006 statement that the “planet deserves the benefit of the doubt”.

News Corp Australia has just finished a two-week campaign of climate coverage that included its major Australian mastheads running 16-page spreads about net-zero emissions.

The series had many critics, who argued News Corp had a long-held editorial hostility on climate action, including attacks on past Labor government policies targeting emission reduction efforts.

The post Scott Morrison talked Glasgow, China with News Corp boss over ‘after-dinner drinks’ appeared first on The New Daily.

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