Tuesday, December 29, 2015

Way out west where the rain does fall

What's that? Hereford cattle?

This post could also be titled as the rain depression low what never became Stan which is the name of the next cyclone. I apologise to anybody named Stan who may have been offended by previous cynicism on his potency. The Stan which never happened has delivered for western Queensland this week.

Brownsvillle is flirting with avoidance of an historic driest ever year on record. Cairns got lucky again and on track for well above average December rainfall and completely avoided the drought suffered by surrounding regions.

Christmas cricket at Blackall

Friday, December 25, 2015

Direct flights to Toowoomba

Top End airline to link Wellcamp to Melbourne and Cairns with E-170s
It’s a great part of Australia, and its about to get the most comfortable domestic jet type in service to link its new airport to Melbourne and Cairns.
Brisbane West Wellcamp Airport near Toowoomba will get daily Airnorth E-170s to Melbourne, and three times weekly flights to Cairns, from 14 March.
Airnorth chief executive Daniel Bowden said “This initiative provides a much-needed direct link for residents of Toowoomba and surrounding regions to Melbourne and Cairns for business and leisure travellers alike.
“The new flights will also allow passengers from the Toowoomba region to easily connect onto international and other domestic services via Cairns or Melbourne.”

Will be interesting to see how these flights work out.

Wednesday, December 23, 2015

Packer v Fung; Dalton v King

My two fave Cairns journalists appear to have sqaured off over Aquis: Aquis licence decision imminent as part of stadium package deal. This was posted on FB as a PRO TIP: Before you read it in The Cairns Post tomorrow

It was sourced from the sports pages of The Guardian from a local soccer representative.

The Cairns Post responded: Aquis rules out February decision for $8.15bn casino near Cairns

Never mind. The King Parrott followed up with a Q&A: Aquis remains tight-lipped on Cairns plans

Meanwhile. Keen financial wonks may have noted that back in the real world the biggest financial story of the week was rumours of young Jamie Packer taking Crown Resorts private. The public stockmarket was not adequately valuing the business and aggressive expansion plans apparently.

Now this gets interesting because Fung is proposing on current PR spruik to fund similarly ambitious casino development from the public ASX listed Aquis Entertainment. An opposite strategy. Who am I to question the financial strategy of billionaires? However, can they both be right?

Someone is gunna make money tralalalalaslala!

Thursday, December 17, 2015

ABC of tax data

Quite a bit of recent data of local interest to catch up on but was distracted today by the ATO release of corporate tax data in the interests of transparency. Predictably there have been some rather misguided commentary based on reports such as this at the ABC:  Zero Tax: Data reveals how much tax major Australian corporations pay

When I first looked at this I wondered why the Australian Tax Office had presented "tax payable as a proportion of total income" and not as a proportion of "taxable income". The answer is that they didn't but rather the ABC derived this mostly, but not always irrelevant metric from the data themselves. I had thought even the most clueless numpty was aware that Woolworths pay corporate tax on corporate profits and not sales revenue (income). The ABC reporting along with much commentary doesn't seem to have bothered with the ATO commentary and particularly the contextual information: Corporate tax transparency report for the 2013-14 income year

Ranking corporate tax to total income as the ABC has done really mostly ranks differences in profit margins and between different types of businesses. Consequently I'm not sure the data and misguided reporting has really helped much in identifying where problems may lie in the corporate tax system or contributed greatly to transparency. Beyond a few predictable corporations I cant find much in this general data which shows what some outraged people think it does.

Tuesday, December 8, 2015

40 y.o. nickel refinery set to fledge?

Katter calls on Fed Govt to extend lifeline to Nickel Refinery
Federal Member for Kennedy Bob Katter has today called on the Federal Government to extend some of its $5,000 million earmarked for development of North Australia – to save the fledging Yabulu Nickel Refinery in North Townsville.
“The Liberals can find $5,000 million for the development of Northern Australia – well the closure of the Nickel Refinery will be a mortal blow for Northern Australia.
“When it was scheduled for closure last time no one came forward to buy it – but Clive Palmer, whatever else might be said of him, took a great risk and showed great foresight in buying it.
“He made a lot of money out of it, but the mining game is such that you make money and you lose money.
“And the truly worrying thing is that last time there was no other interest in the Nickel Refinery.
“The Government is prepared to spend $5,000 million looking after their rich corporates – that’s seems to be all they’ll ever look after.
“I’m sure they can bring a little bit of that money across to help out the refinery and the people of Townsville,” Mr Katter said.
It has been estimated that anywhere from 800 to 3,000 families could be impacted if the refinery were to close.

I'm flabbergasted.

Thursday, December 3, 2015

Dalton Shameless

Cairns Post, December 3, 2015: FNQ beats Gold Coast to attract most overseas holiday-makers in Queensland
TROPICAL North Queensland has stolen the international holiday-maker crown from the Gold Coast for the first time.
Nearly 700,000 overseas holiday-makers spent nearly $1 billion when visiting the region, the latest International Visitor Survey shows.
The Tropical North recorded 697,000 visitors – 10,000 more than the Gold Coast and 146,000 more than Brisbane (551,000).

Cairns Post, December 5, 2014: North Dumps Gold Coast For Top Spot
The tropical north has beaten the Gold Coast for the first time as the most popular destination in Queensland for international holiday makers.
According to international visitor survey figures for the year ended September 30 this year, 665,000 international holiday-makers visited the region, 23,000 more than the Gold Coast and 155,000 more than Brisbane.
Guess who? Yes it's Nick Dalton again, business editor and plagiarist at the Cairns Post. This year the same story and incorrect claim was even promoted to the front page headline. The numbers above actually appear to indicate that FNQ/TNQ has lost ground to Gold Coast and Brisbane in the past year?

I can't find a link online to last years Cairns Post yarn but it was posted here at Loose Change at the time: A Dalton too far?  Let me also repost the same graph from last year for the benefit of the professionals (sic) at the Cairns Post:


The first time for what? Does anybody at the Compost actually fact check the notorious BS from Dalton before they turn it into a front page splash?

Update: Analysis of the latest international visitor survey at Conus Strong International Visitor Survey results; but TNQ is lagging behind

Tuesday, November 24, 2015

Cyclone misogyny: deja vu journalism

Where have I seen this before?

Yes, it's the same statistically debunked "research" on hurricane names in the USA dredged up and recycled again by an "award winning" ABC journalist in Darwin almost eighteen (18) months after its first run around the media circuit, which had also included the ABC.

This "research" was statistically annihilated by Paul Fritjers from UQ at Club Troppo: How to lie with statistics: the case of female hurricanes. Which I then posted on at Loose Change: How to lie with statistics: the case of female hurricanes.

Never mind. La Canna has sent it off to the BOM and elicited a gotcha response for a headline:
"We will have to get someone onto it," Mr Sharp said.
Probably best not to waste scarce funds on this one Sharpie! Hopefully we will hear nothing further on it from the BOM but there is plenty of scope for another trot around the media circuit.

Probably shouldn't be too tough on La Canna. Must be difficult as an ABC journo in Darwin trying to compete with the now officially PM sanctioned NT News.

Saturday, November 21, 2015

Gold Coast Glitters

Regional labour force data was this week and as usual Conus has posted analysis of the numbers: Not much joy in regional jobs data although Cairns Youth shows some positives
The Trend in Cairns shows us that jobs continue to be lost. For the fifth consecutive month Trend Employment has fallen; this month by 400. Over the course of the past 12 months Trend Employment in Cairns has risen by just 500 with most of the gains made in the first quarter of this year having been wiped out. The Trend Participation Rate has also been falling (now at 59.9) and this has been the main reason the Trend Unemployment Rate has actually moved slightly lower, despite weaker jobs growth.
A few months ago I posted on the regional employment split between SEQ and the rest: Queensland regions skew south east. That split remains and Gold Coast, by far the largest population region outside Greater Brisbane, remains a star performer. The Gold Coast participation rate has now risen to an historical high for the series on the Conus Trend and makes an interesting comparison with Queensland and Cairns.

Source: Conus Trend & ABS
Once upon a time Gold Coast had a reputation as a retirement destination which could have at least partly explained a participation rate below the Queensland average. Meanwhile the participation rate in Cairns has historically trended above the Queensland rate. The significant divergence there in recent years is presumably outside any volatility attributable to sample size and volatility in the regional data?

Wednesday, November 11, 2015

Building approval trend subsides in Cairns

Building approvals data for September was out last week as reported at Conus: Building Approvals pick up in Cairns; dip in Cassowary Coast
In Cairns (incl Port Douglas) the unadjusted data showed 61 approvals (up from 44 in Aug) and as a result the Conus Trend has improved slightly to 54 (with Aug revised up to 53 from 52). However, despite this improvement, Trend Approvals remain 12.1% below their level of a year ago.
The trend decline in Cairns over the past year is a concern given the previous recovery was from a very low base and never reached anything approaching a robust level. Pete has included Douglas in the Cairns LGA data for consistency in the series through the de-amalgamation period. Douglas (16) had a strong month and was mostly responsible for that increased September number.

A look at the SA3 numbers that make up Cairns SA4 shows that Tableland (36) had a standout month. Conus has also noted a trend improvement on the Cassowary Coast over the past year. So when we look at the now completed first quarter of FY2016 we find that the Cairns urban area (Cairns North + Cairns South = 138) has been outperformed by the surrounding regions (Cassowary Coast + Douglas + Tableland = 146). That is despite significantly lower population and projected growth rates.

While the volatile unit sector has been prominent in the national and state numbers there are none posted so far in FY2016 for Cairns. Not sure where the Aspial proposal and others are at but nothing has appeared yet in the ABS data?

Sunday, October 11, 2015

The effiency of real estate markets?

Both diverted and disinterested recently but a post at Conus managed to draw some attention and commentary: Cassowary Coast stars in the regional building approvals race

Interest here was the continuing gap in building approvals between Cairns and Townsville with dwelling approvals in Cairns running around half approvals in Townsville. There is a good comment there on the nature of differences between the two cities regards supply and demand which doesn't have me entirely convinced.

However last week the RTA also updated rental bonds data. Median rent trends remain soft in Townsville particularly noted in 3br houses:


Median rent in the September quarter for a 3br house in Townsville was $55 below Cairns. That is quite a turnaround over four years from the September quarter 2011 when the median Townsville rent was $40 above Cairns. New bonds lodged for the quarter were quite high for this category however the gap trend in 4br houses is similar and now $60 higher in Cairns. Units perhaps not quite so pronounced:

RTA also post total rental bonds lodged at the end of the quarter with data back to 2012. There are some striking differences here also between Cairns and Townsville over that period. Douglas has been amalgamated with Cairns for consistency over the period:


Cairns has had a significantly higher proportion of renters although Townsville appears to have been catching up. Growth in rental bond numbers seem pretty consistent in Townsville while Cairns has stagnated over recent years. We may have to wait until the 2016 census results for a better fix on that.

Rentals in Cairns are also significantly more weighted to units relative to houses compared to Townsville:

An additional complication in any Cairns analysis may be the amount of stock that can move between the permanent rental and tourism accommodation sectors at the margin.

Sunday, September 20, 2015

Ig Nobel 2015

The annual Ig Nobel Awards is always a favourite and this year some Australian scientists have excelled themselves with the chemistry prize for developing a process to un-boil an egg. However I think the overall winner this year should go to the biology prize:
BIOLOGY PRIZE  — Bruno Grossi, Omar Larach, Mauricio Canals, Rodrigo A. Vásquez [CHILE], José Iriarte-Díaz [CHILE, USA], for observing that when you attach a weighted stick to the rear end of a chicken, the chicken then walks in a manner similar to that in which dinosaurs are thought to have walked.

The 2015 Ig Nobel Prize Winners

Wednesday, September 16, 2015

Great moments in real estate spruiking on Twitter

Michael Matusik @MichaelMatusik 18 minutes ago
We estimate that Gladstone’s new housing market is now slightly undersupplied by about 5% >
Michael Matusik @MichaelMatusik 1 hour ago
There are currently 2.2k dwellings for sale in equating to a 22 month supply more >
What more can I say?

Wednesday, September 2, 2015

Positive data on international visitors

The latest International Visitor Survey from Tourism Research Australia provides further support for stronger international tourism in the year to June 2015. Commentary as posted at Conus: Great International Visitor Data for the Far North
In TNQ visitors were up a stellar 9.8% on the year to 759,000; a level not seen since Sept 2008. Average expenditure per visitor was up strongly (+7.6%) to $1,318. Clearly TNQ has benefited from the surge in Chinese visitors which rose by 16.1% over the year and accounted for 21.8% of all international visitors to the region (up from 20.6% a year ago). But it’s not just the Chinese; over the year visitors from the US are up 12.8% and the UK up 13.6%. As is the case for the state as a whole, TNQ has seen a dramatic decline in market share in the past decade but we are starting to see some (slow) recovery. TNQ’s share of the total Australian international market now stands at 11.6%; this is an increase from 11.2% a year ago but is still well down from the heady heights of 17% ten years ago.
The ongoing recovery in international at Cairns Airport was supported in July by a very strong month also at the main gateway through Sydney Airport.
July’s international result was driven by higher average load factors (2.8 percentage points) and capacity increases. Inbound nationalities were 9.1% higher due primarily to growth from Chinese (+13.3%), Indonesian (+34.6%), Indian (15.2%) and US (12.8%) nationals. Australian outbound grew 3.3% as a result of school holidays and increased seat supply, particularly to the USA, UAE, Philippines and Singapore.

Hopefully the current market turmoil and uncertainty around the Chinese economy wont impact these trends much.

Tuesday, September 1, 2015

Aquis: drum beats from the circus tent

Despite no apparent real news the past week has seen further drum beating on Aquis at the Cairns Post:
Developer Tony Fung has listed his Aquis Entertainment company on the Australian Securities Exchange and last week announced a $330 million upgrade of the Canberra casino he paid $6 million for last year.

Old mate Nick Dalton reported this $330 million announcement last week. Actual real Aquis announcement to ASX in full which only came yesterday afternoon:

31 August 2015
Aquis Entertainment Limited (ASX: AQS) is pleased to announce that it has now successfully lodged with Invest Canberra its confidential proposal for a significant redevelopment of the Casino Canberra site. This is part of an ongoing dialogue with the ACT Government in relation to the future growth plans of Canberra Casino.

Curiously, I can't find that this, or the $330 million, has yet been reported anywhere else except Cairns? Not even in Canberra? It wasn't even flagged to ASX as price sensitive. The intention to submit a redevelopment proposal was included in the recent prospectus but with no information on cost or how it would be funded. The balance sheet for the newly listed entity has net assets of just $18 million which is not going to fund a $330 million redevelopment absent further capital.

As part of the backdoor listing a few million in further capital was raised via the prospectus at 20c / share. The offer had to be extended twice. With Fung holding almost 90% of shares market liquidity in AQS is going to be very low and the few trades since listing have been below 20c.

Ordinarily an ASX listed entity should have now posted half yearly results. Presumably this is waived and not feasible for AQS given the circumstances and time constraints? Consequently there doesn't appear to have been any trading update for the casino since the accounts for the year to December 2014 were lodged with ASIC in March?

An interesting aspect of the 2014 accounts is an apparent turnaround to profit for the Canberra Casino. However it turns out this is due to debt forgiveness by Casinos Austria of a $6.7 million loan which was booked to revenue. So having been paid only $6 million and then writing off a $6.7 million loan Casinos Austria have virtually paid Fung to take it away. Revenue for the 2014 year was down 10% on the previous year.

Tuesday, August 25, 2015

That airport data again

Cairns Airport has updated for July. International turnaround was the story with a good month. Domestic growth if anything a bit soft in the seasonal peak month at 2.8%.

The international turnaround still needs to be regarded from the context of a low base. However curious on this comment from the airport:
July 2015 set a new record for monthly passenger and July is traditionally the busiest month of the year. Passengers are now up to 55,000 (12%) higher than the pre GFC peaks.
The numbers here seem to be understating growth. There were also some apparent flaws in the airport data around the GFC period where their numbers re domestic and international didn't add up to the extent of deriving a negative domestic number through he international terminal.

Fung supports ASX: market crash stopped (sarcasm warning)

The Canberra Casino finally backdoor listed on the ASX today via Aquis Entertainmen (AQS).

The absence of any trades can only support the ASX on a bloody day as Minsky moment China concerns sweep the world. After "backdooring" the casino into the former Discovery Resources a few million in additional funds was raised at 20 cents. Some interesting names on the pre-listing disclosure ........

Monday, August 24, 2015

Aquis: Waiting for Godot?

Chances of Aquis mega-resort casino project in Cairns starting next year are unlikely

“The government continues to seek an acceptable outcome with Aquis for the provision of an integrated resort development in Cairns,” Dr Lyneham said.
“In May 2015 the government agreed to re-enter negotiation with Aquis to continue the process, subject to both parties agreeing to a process deed that established the basis on which the procurement process could progress.
“A process deed was issued to Aquis in May 2015 and is the subject of further discussions between the parties. Until the process deed is signed, agreed and returned to the government by Aquis, we have no formal agreement to restart the procurement process.
“Due processes will not be bypassed for issuing a casino licence to Aquis. We are continuing to have very positive discussions with Aquis.”
Integrated Resort Development projects chief executive David Edwards said the government was hoping Aquis would “sign and execute the agreement shortly so we can recommence the negotiations in earnest”.

Waiting for Godot

Friday, August 21, 2015

Insurance Taskforce Report

The interim report from the Northern Australian Insurance Premiums Taskforce was released on Monday. This doesn't seem to have generated too much noise or perhaps I haven't been looking?

I haven't had a detailed look but this appears to be getting closer to the sort of report we should have had a few years ago instead of the misguided parliamentary inquiry. There are a number of themes there which have been the subject of comment in previous blog posts. Among those is the false perception of equivalent cyclone risk between Cairns and Darwin.

Submissions in response to the interim report close September 14th.

Wednesday, August 19, 2015

North v South: population by age and sex

ABS has released updated regional population estimates at June 30 2014 down to SA2 level. A quick comparison here of the Cairns-North and Cairns-South SA3 areas by age group shows some different trends for the two:

Cairns-South SA3 has a significantly larger population in total and includes the central city area. Will have to wait for more time to dig down further into some of the detail here.

Saturday, August 15, 2015

Employment: Queensland regions skew south east

Regional labour force data for July was released last week and as always Conus has our regional trends covered: Cairns unemployment rate up; but the headline hides a slightly stronger story

There have been a few posts and comments around that this latest data may be starting to show a stronger story generally for the regions compared to the capitals. That may be so but there can be some big differences between regions. This is employment growth over the last year for the Queensland SA4 regions from the Conus Trend data:

Despite the advantages of the trend data we need to be a bit cautious here about some of these numbers at the outliers. Outback stretches all the way from Torres Strait to Birdsville with not much to connect the economies of those regions. It also has the smallest regional population so a smaller sample size spread across a huge geography. Have no idea how the ABS could possibly get a reasonable representative sample. Having said that the outcome seems to fit with the prevailing narrative re the resources sector and drought in this area.
Despite the surprising performance of Wide Bay it remains if anything the employment and demographic basket case of Queensland with an unemployment rate at 9.1%. Although at last thankfully the participation rate has recovered somewhat from some poor numbers below 50%.
In between those two what stands out is that the regional growth has been skewed by some very strong numbers in the largest population regions of the Gold and Sunshine Coasts. Cairns also is not doing too badly here in a relative sense although perhaps should be doing much better.
The ABS numbers includes the Gold and Sunshine Coasts with Rest of Qld outside Greater Brisbane. To repeat a previous exercise let's strip out the Gold and Sunshine Coasts to combine with Greater Brisbane to form SEQ compared to the remaining Regions with numbers from the Conus Trend:

That last graph should also show why the previous LNP government Queensland Plan for regional population parity with SEQ was stupid bordering on innumerate with regional Queensland failing to make ground even in an historic resources boom. Also note from the top graph that the other regions to post strong employment growth over the past year, Toowoomba and Wide Bay, are contiguous with SEQ: Queensland SA4 Regions Map 
Gene Tunny has also taken this up at Queensland Economy Watch: Big divide between SEQ and rest of Qld in jobs growth

Infrastructure idiots?

An interesting post at MacroBusiness which quotes comments by Peter Harris from the Productivity Commission: Grattan joins PC in slamming Oz infrastructure waste

Mr Harris challenged politicians to justify expensive but low-return projects over hundreds of smaller but more effective options.
“Make the case for why the mega project must be preferred apparently to the higher-return local project,” he said. “All of this is most obvious in roads investment; the last redoubt of the unreformed investment planning process”…
With many big-ticket road projects delivering little more than $1 for every $1 invested, there were usually many more-modest but productivity-enhancing options that could generate returns of as much as $10, such as electronic traffic management systems, he said…
If politicians made their decisions based on hard analysis, they would opt for hundreds of smaller investments over one or two big bang projects, he said.
“We treat consumers like idiots if we don’t publish [cost-benefit studies]” he said…

Thursday, August 13, 2015

Burnt sugar

Falling commodity prices have been the focus of much commentary this year as supply overtakes demand. The trend for sugar has also been among the weaker agricultural commodities:

The weaker $AUD will provide at least some protection for FNQ growers. However, the Brazillian Real, the worlds largest producer, has fallen significantly further.
QSL provide a Daily Market Report. Recent commentary also at ABC Rural. 

Sunday, August 9, 2015

Overseas arrivals: don't stand in front of a trend

The updated ABS Arrivals and Departures data this week featured additional commentary for the year. This time last year Arrivals older and more feminine as female arrivals for the year drew equal with male.

This year for the first time the majority of short term arrivals to Australia were female International Movements 2014 - 2015.
A higher proportion of women than men arrived in Australia for short-term stays in the year ended June 2015. Previously, more males than females arrived for short-term stays. The short-term visitor arrival sex ratio (the number of male arrivals per 100 female arrivals) was 103 males in 2004-05 and 98 males in 2014-15.

The most outstanding cohort remains the 20-24 age group with just 79 male arrivals for every 100 females.

Also recently posted Victoria threatens to overtake Qld in international visitors has now happened.

Only just and while Queensland is in a seasonal upswing at this time of year Victoria recently has moved past Queensland for the first time on the 12 month rolling average for the state where most time was spent by visitors.

Gene Tunny has also recently posted on issues around this at Queensland Economy Watch:
QCA finds multiple policy failures associated with billions in industry assistance in Qld.

Further commentary on the latest numbers at Conus: Arrivals & Departures data shows impact of weaker A$ on foreign travel

Saturday, August 8, 2015

FY2015 Building Approvals

Building approvals data this week was perhaps not as strong as it could have been to end FY2015: Regional Building Approvals a mixed bag
What the Conus Trend data is telling us is that the slide in Townsville continues while Cairns’ recovery remains at a very modest pace (and has slowed sharply in recent months). The Cassowary Coast, coming from a very low base, is also seeing only modest growth.
A look at the regional overview throws up a few points of interest related to Pete's comment on recent softer growth in Cairns:

That softness has shown up mostly on the north side and particularly Trinity Beach - Smithfield with the most recent months well below their average for the year. Trinity Beach - Smithfield still finished the year with by far the highest number of approvals of any SA2 area at 241.
The other point of note is that the stronger data for the last few months on the south side was actually because of a re-emergence of smaller unit developments rather than houses. There were 9 units for Cairns City in June following 14 in May at White Rock. As Rick Carr alluded in the most recent CairnsWatch despite much talk on larger unit developments there is still not much happening on the ground, or in final approvals it would seem.
Another way to look at the data is in the value of building approvals. I have no idea how reliable these estimates from ABS are for values but anyway this graph also includes alterations, additions and conversions for the residential component:
Non-residential will always be lumpy as will the unit component of residential. So I thought I would stick to the house sector and look at the average building value per house of approvals in recent years:

That doesn't appear to indicate any significant inflation trend in building costs. However this is derived from an average based on aggregates and a median would be preferable as with anything property relate as averages can be skewed by a small number of high value houses. Breaking that down further the average for Cairns North is only a bit over $5k above Cairns South for FY 2015.
A suburban breakdown by SA2 for the year shows a far larger spread but again this is where we have to be careful with skewed averages especially in areas with a low number of approvals in established suburbs near the hills and beaches. For what it's worth perhaps we can call this the Snob Scale:
New houses Average value
Earlville - Bayview Heights 4 $496,200
Whitfield - Edge Hill 7 $472,500
Brinsmead 7 $444,571
Kanimbla - Mooroobool 26 $429,146
Yorkeys Knob - Machans Beach 6 $421,550
Port Douglas 38 $420,608
Freshwater - Stratford 9 $384,044
Clifton Beach - Kewarra Beach 52 $370,588
Westcourt - Bungalow 1 $363,600
Woree 9 $351,644
Mount Sheridan 13 $348,808
Redlynch 69 $309,281
Manoora 2 $280,000
Bentley Park 31 $276,494
Trinity Beach - Smithfield 241 $274,979
Gordonvale - Trinity 47 $260,755
White Rock 17 $246,894
Edmonton 68 $244,449

For anyone interested in building costs BMT Quantity Surveyors have an online calculator for different types of buildings and also includes a cost adjustment for Cairns: Construction Cost Calculator

Saturday, August 1, 2015

CairnsWatch: Domestic passengers land safely! Building approvals set for take off?

The latest HTW CairnsWatch for July is out and most noted was that their reported airport domestic trend passenger growth has landed safely from a previously hyperbolic altitude back to a more reasonable 3.7%.  Now uncertain on their trend building approvals for Cairns though which seem somewhat elevated above the Conus Trend: Building Approvals show some improvement in FNQ

Never mind there is otherwise some interesting property analysis in there and also in Rick's recent Cairns Chamber Presentation. Anecdotal feedback has been a busy July around Cairns and Port Douglas with tourism accommodation scarce. However the opening paragraph at CairnsWatch probably remains a good summary of the current state of play:
Cairns is starting 2015-16 in much better economic shape than it started 2014-15. Even so, the economy has not yet become buoyant. Future business indicators such as tourism arrivals and housing construction are good, but they are not filtering through as rapidly into improved job creation and reduced unemployment

Last year I attempted to provide some context to a recovery in Cairns building approvals with a graph of approvals relative to population for the large regional and metropolitan council areas. It looked like this for FY2014:

With a month to go and June data out next week the comparison for 2015YTD to May looks like this:

The dramatic shift there is the move by Gladstone and Mackay from one end of the scale to the other. Relative building approvals above the Queensland average have been entirely in SEQ. Cairns has improved its position but not by much and again it is the volatile unit sector missing so far. If the comparison was just houses Cairns would be close to the Queensland average.

The building approvals trend in Townsville has been lower but appears to have maintained momentum relatively well compared to other coastal regional cities. The median house price comparison in the HTW reports show a stronger trend in Cairns relative to both Townsville and Mackay similar to my recent post on rental comparisons. Townsville median has been trending lower for some time and is now at a multi-year low again indicating a well supplied market on this measure.

Note: Populations are from ABS at June 30 2014. Douglas, Noosa and Livingstone have been re-amalgamated to enable relevant comparison.

Wednesday, July 29, 2015

Quote of the Day

A Nick Dalton classic:

Chamber chief executive Deb Hancock said expansion of the port over time would provide for “sustainable development to growth and prosperity of the region, in pace with the market’s growth”.

Who even among those who claim to understand what she has said  could possibly disagree?

Monday, July 27, 2015

Aquis: the timeline titans

Have been quiet recently on the Friendly Fung Family (FFF) and Aquis. So after some recent distractions updated today developments re the backdoor listing on ASX of the Aquis empire and amazing investment opportunity offered by this investment.

My previous post noted that Aquis seemed to have a problem with timelines: Aquis Entertainment lost in Canberra fog?

I must update this in detail. Aquis have since splurged on a high profile sponsorship of the NRL Gold Coast Titans. Thousands of billionaires have been queueing up to back this sponsorship but were seriously disappointed when they were beaten to it by the FFF.

Never minds the chart looks fantastic:

However. DIS (aka Aquis Entertainment) remains suspended today. A replacement prospectus for the capital raising was lodged last week. This expired Friday. DIS lodged notice of extension only today. There were reasons which will be referred to the video referee at Loose Change.
Given that DIS last closed at 19c after languishing well below that and the capital raising is at 20c one can only presume that Aquis Entertainment has not been knocked over in the rush or it would have been quickly closed? 
Who knows? When it comes to repetitive underperformance on their own timelines, Aquis make their Gold Coast Titans look like premiers!

NT - The Joke State

Predictably, the Northern Australia white paper hype has seen another push for the NT to become a state by 2018. Bob Gosford nails this on his Northern Myth blog at Crikey: Joe Hockey was right – Adam Giles’ push for NT Statehood is a joke
Just in case you might believe this tosh the NT will NOT be getting Statehood by 2018 or anytime soon after. 

Gosford has previously noted:
As [Nicolas] Rothwell notes, the tax-payers of the Australian south-east fork out around $4 billion a year to keep the NT running. Divide that number by the 220,000 people in the NT—-about the population of your local shire council but without the productivity and contribution to GDP—-and the figure is around $18,000 per head.

At least they will have a catchy vehicle number plate slogan all ready to go.

Thursday, July 23, 2015

Adventure Festival boosts Airport

Passenger numbers grew strongly in June with domestic up 6.3% and international up 16% on the previous year. The airport attributed this to a later date for the Adventure Festival with participants arriving in June whereas arrivals the previous year started in May.

School holidays also started a few days earlier and the domestic growth figure also comes off the back of a rare negative growth month in June 2014. The big international growth number while encouraging also needs to be kept in perspective following the slump throughout 1H 2014.

The good domestic growth doesn't reverse my cynicism about the most recent HTW domestic trend growth of 8.2% with only a single monthly number above that or even close since January 2014, although this trend hasn't been updated since their April report.
Elsewhere both Sydney and Auckland airports reported positive international trends in June. Auckland was particularly impressive with international growth in June of 7.2% driven by China and the USA. Their Queenstown Airport numbers are also growing very strongly.

Tuesday, July 21, 2015

The regional rental gap

A few media reports lately on rental trends from property research houses but can't see why the quarterly data from the RTA based on actual new bonds lodged isn't the best data. The June quarterly data for the NQ cities shows a very different story for each over recent years:

In the three largest rental categories Cairns has opened up a significant gap over its southern neighbours in all as a relatively expensive place for rental housing.

Meanwhile, the real estate perma-bears at Macrobusiness have an interesting analysis and warning on the previously high flying Darwin market as the $34 billion Ichthys LNG Project approaches completion: Sell Darwin housing now! ($)
Look out below!

Sunday, July 12, 2015

Queensland's debt: financial engineering or transparent financial reporting?

If you hadn't noticed local Treasurer Curtiss Pitt has been leaking like a dunny with a faulty faucet ahead of his first budget. The big debate there is now the transfer of debt from the general gummint sector to the GOC's (government owned corporations).

Gene Tunny has been highly critical of this: Accounting trick wouldn’t improve Qld Government’s real financial position

Gene is absolutely correct on that. It does nothing for the overall financial position or interest payments. This has been wrongly reported by some media. It has though also been a 'source of funds' for previous administrations of both colours.

We could go back to basic Miller Modigliani economic theory. The value of a firm doesn't depend on how it is sliced. I recall an interview with Merton Miller. I cant find a link but it went like this:

Q: Can you explain your theory simply.
A: Yogi Berra was asked how he wanted his pizza cut, in quarters or eighths. He said cut it in eighths he was hungry today.
Q: You won a Nobel Prize for that?
A: We proved it rigorously.

There is some value IMHO in distinguishing between different types of government debt. Curtis has said that these GOC's would run with that level of debt in the private sector. Maybe so but is that appropriate? Should the public sector be taking the same risk as a private choice in the private sector?

There is a political issue beyond either the private or economic. During the last election I queried the local Greens candidate on why they were opposed to asset sales of coal power stations when they didn't actually see these as assets anyway. I think the response was that they were opposed because that would make the "assets" easier to shut down ..... in which case they are not "assets" at all.

Sunday, July 5, 2015

Pledging allegiance to Team Rupert

Opinion contributions this week from our newsroom elite:

"Green groups are also citing ocean acidification caused by carbon emissions as a threat to the Reef, but some scientists say just one volcano can spew out more CO2 in a day than mankind has in 250 years." - Cairns Post deputy editor Julian Tomlinson

"This week's unfolding Greek financial tragedy should be a cautionary tale for Queenslanders that relying on growth to fix government debt is a reckless response" - Courier Mail state political editor Steven Wardill

Would any further comment or discussion to refute either of these misguided (or even just arse-about wrong) statements be superfluous? Why bother to waste time poring through such as science or economic journals, or even recent IMF reports, to provide informed discussion and links to creditable sources when one can just go straight to the knowledge bank at Team Rupert?

A deeper understanding of the Euro crisis as Greece v Germany is provided from Monty Python:

Sunday, June 21, 2015

Employment cycles and exchange rates

A post at Conus on the most recent regional employment data: Cairns employment growth slows; unemployment rate up on back of female jobless

In response to some comments there I thought I would repost this graph of the unemployment rate differential between Cairns and Queensland with a TWI exchange rate overlay.

The early years of the series where the cairns unemployment rate was below Queensland (blue) was also a period of significantly weaker exchange rate (red) and weak commodity prices particularly coal. However I think I would probably be wary of drawing strong conclusions from any apparent correlations here.

Saturday, June 20, 2015

Bullshit. Nonsense. And Cairns Airport traffic numbers.

Well, the Cairns Airport have updated their traffic numbers for May and am sticking by my scepticism of the HTW CairnsWatch trend on domestic traffic. However the story was a big jump in International passengers for May up 27.4% on the previous year. The Airport even called this a record. It isn't. Yes, I am using the airports own numbers. Never mind sure the Cairns Post will be able to turn it into a headline.

The real record was that May 2014 had been a record low for currently available data going back to July 2004 and probably for a long long time before that. However the recovery in International trend is looking sustainable with the Silk connection to Singapore also commencing at the end of the month. In context best to look at traffic rather than volatile monthly growth:

A turnaround in the very early stages from a low base but still a way to go. Monthly growth with 12 month moving average for domestic and total (ex transits). International now a contributor rather than a drag on growth at least:

I await the next CairnsWatch with interest and can only presume any domestic "record" trend well above 5% should be easily identifiable as nonsense.

Source: Cairns Airport

Monday, June 8, 2015

Say What?

The latest CairnsWatch from Rick Carr at HTW popped into the inbox on Friday afternoon. Rick reckons the trend rate of growth for domestic passengers at Cairns Airport is:
Over the period from April 2014 to April 2015 domestic passenger numbers have shown an 8.2% trend increase.  
You can see my previous posts on Airport traffic in recent months:

 Airport growth continues in March; International recovery continues at airport

In my comments on the February numbers I quietly questioned the CairnsWatch trend numbers on this with reference to Chinese New Year. With late release of the March airport numbers this latest CairnsWatch provides a further trend percentage boost after another two months which I just can't stack up with any underlying data from the Airport.

I have checked the CairnsWatch archive but just can't make sense of the reported monthly variation in the trend numbers which did a massive jump in a month between January and February. I don't want to be critical of Rick who is a lovely guy but some of his trend numbers just don't work for me. I'm sticking with my numbers which are also not dissimilar to reported numbers from Cairns Airport and stakeholder Auckland Airport.

Reported in the Cairns Post: Airport and building approvals give rise to Cairns’ economic turnaround

Monday, June 1, 2015

A China fade for arrivals

It has been a while since I've had a look at the overseas arrivals data. After some changes last year there have been problems compiling the data and the ABS has only now caught up to January. Pete Faulkner at Conus has been diligently following the progress: Arrivals up but the China boom is waning

The trend for Chinese arrivals looks to have weakened quite significantly in recent months ahead of the lunar new year period. ABS do a seasonal adjustment for the lunar new year so what I have done is overlay all three series.

This shows just how significant the Chinese new year season is for tourism and the seasonal adjustment from the ABS can be huge. The faint dotted line there is a 3 month moving average thrown in to smooth out the seasonal variation in the original data a bit where the new year period overlaps months. Worth watching whether recent trend weakness is sustained or just a flat period before the new year and how it progresses after that period. The previous weak period in 2013 which shows up mostly in the seasonal data was the regulatory changes around package tours.
Meanwhile the latest data has allowed me update a favourite graph of the state where most time spent for visitors. This is all short term visitors which would also include such as business and education.


Oh no! Surely Victoria can't really be about to overtake Queensland?

Tuesday, May 26, 2015

Aquis Entertainment lost in Canberra fog?

Last month I posted on the manoeuvre by the Friendly Fung Family (FFF) to backdoor list the Canberra Casino on the ASX via Discovery Resources: Fung listing through the backdoor for Aquis

Having acquired a minimal holding in Discovery (ASX:DIS) of 5,000 shares with a current market value of $525, which should be adequate to imminently turn me into a billionaire casino mogul, I thought I should check on how things were progressing. There has been no further news at all from Discovery since the April 17 trading halt and announcement except for their standard quarterly cash flow report. This doesn't seem consistent with the indicative timeline in the announcement:

Particularly noted here is the indication that after this April 17 announcement they could provide an independent expert's report as soon as late April. Perhaps they had Pat Flanagan pencilled in for that?

My calendar says it is now late May 2015 with no sign of any prospectus, meeting, or even notice thereof. Well they did say it was indicative! Oh no, don't tell me it's the conditions again?

Monday, May 25, 2015

Reef Casino AGM

Reef Casino AGM was today. Somewhat disorganised after belatedly downloading the appropriate documentation for my small super fund holding, and with rainy weather, I drove the few blocks down Abbott St to the Casino.

I approached the lift with an elderly gentleman reliant on a walking stick also carrying his AGM documentation. However the lift would not accept L2 which was the meeting venue. Thankfully the open doors function was operational and spared me from being stuck in a lift with an elderly gentleman reliant on a pacemaker. Casino staff to the rescue. Just go to L1 and walk up the stairs. This took some time for the elderly gentleman who made it just in time for the meeting.

The meeting. Corporate AGM's have a reputation and this was no exception. A nearby gentleman started snoring very early in the Chairman's address. A gentleman unitholder asked if RCT had any debt (it's in the accounts dickhead) and stated that he was confused by changes in his tax statements.

Director's election and Gary Mauric standing against Queensland heroes DeLacy and Haire failed to even show up. Haire was wise and said not much. DeLacy chose to delve into the definition of an independent director which I may come back to with some disagreement. Keith insisted that independence was a state of mind and pointed to his head thereby demonstrating all required skills. Anyway, both independent directors were re-elected on the vote of 70% majority shareholders Accor and Casinos Austria so that's all good.

In such circumstances it is best to avoid direct confrontation and engage over tea and bickies. DeLacy was overheard engaging a couple from Noosa defending the viability of Reef regardless of Aquis. The Noosa couple were insistent to Keith that they wouldn't want anything like Aquis near them.

Meanwhile I had an excellent engagement over coffee with Reef CEO Allan Tan. In confidence all I will say is that this conversation did nothing to change any opinions previously expressed here at Loose Change related to Aquis and probity.

Leaving the meeting I encountered a Wildlife Dome worker attempting to access her workplace on the upper level. I explained to her the lift problem. AGM attendees were also given a free car park exit ticket. The ticket didn't work.

Monday, May 18, 2015

International recovery continues at airport

There were further positive signs for international traffic through the Airport in April which was up 21.8% on April 2014. This was attributed to the new Jetstar Bali service and 14% growth on flights operating in both April 2014 and 2015 (Auckland, Guam, Hong Kong, Osaka, Tokyo). While that growth number sounds impressive and is positive we do need to consider that it comes from similar double digit declines in the early months of 2014 so really only recovers the 2013 position. Consequently we should expect some good international growth numbers to continue and hopefully become also become less volatile.

Domestic continued consistent growth at levels below the recovery a few years ago but still generally in line with or above average growth at the major airports.


International is only around 12.5% of domestic, which remains the dominant driver, but is starting finally to show signs of a positive contribution to total performance.

Source: Cairns Airport