The valuation of long life mines : current issues and methodologies

The past decade has seen an increasing focus on the mining and extractive industries in Australia. The significant increases in both new mines, commodity prices and employment opportunities has lead to considerable discussion on the value of this industry and the contribution that the industry makes to exports, GDP and the public in general. This debate has resulted in the introduction of the Mineral Resources Rent Tax being introduced in 2012. An issue that follows from the introduction of these taxes is the current exposure of property valuers to mine and extractive industry valuations and the most appropriate method that should be employed for valuing long life mines for rating and taxing purposes, finance and accounting purposes. This paper will provide a detailed review of past and current valuation methods for long life mines and will highlight the current issues and problem facing valuers who are currently working in or intend to carry out valuation work in this industry.

Assessing the suitability of market approach valuation methods for mine and quarry valuations

An area of property valuation that has attracted less attention than other property markets over the past 20 years has been the mining and extractive industries. These operations can range from small operators on leased or private land to multinational companies. Although there are a number of national mining standards that indicate the type of valuation methods that can be adopted for this asset class, these standards do not specify how or when these methods are best suited to particular mine operations. The RICS guidance notes and the draft IVSC guidance notes also advise the various valuations methods that can be used to value mining properties; but, again they do not specify what methods should be applied where and when. One of the methods supported by these standards and guidelines is the market approach. This paper will carry out an analysis of all mine, extractive industry and waste disposal sites sale transactions in Queensland Australia, a major world mining centre, to determine if a market valuation approach such as direct comparison is actually suitable for the valuation of a mine or extractive industry. The analysis will cover the period 1984 to 2011 and covers sale transactions for minerals, petroleum and gas, waste disposal sites, clay, sand and stone. Based on this analysis, the suitability of direct comparison for valuation purposes in this property sector will be tested.

A Guide to Applying Road Safety within a Workplace : A Bilateral Approach to Organisational Road Safety in Australia and New Zealand

Corporate and organisational fleet and road safety is of strong interest to government and government agencies in Australia and New Zealand. It has been identified that there is great opportunity to engage and assist organisations and corporations in the delivery of road safety and road safety measures to achieve nationally significant road related trauma reductions. This guide has therefore been developed through public sector funding for use by any workplace within Australia and New Zealand. Significant road safety benefits can be achieved by road safety government agencies (Australia and New Zealand) that engage with private and public sectors at their workplaces to address work related road safety issues. It has also been noted that organisational road safety advancement creates effective and sustainable outcomes, safer places of employment, and safer communities. This can be achieved without totally relying upon traditional and often lengthy processes such as further public legislation and/ or community attitudinal and behavioural change programs. Currently, there is little in the way of robust guides or support for those organisations that are wishing to adopt road safety within their places of employment, supply chain and/ or community. Due to this identified gap in available resource and support, it has been recommended that a practical organisational road safety guide be produced; hence the development of this guide. A guide, or supporting documentation, that bridges the gap between government and road safety research knowledge, internationally endorsed road safety methodology, and assists industry as the end user. To achieve this, the guide is designed to be non-specific to any industry sector and usable for small or large organisations, public or private, and engaging for senior executives and the personnel on the ground responsible for its implementation. Therefore, this guide is based on methodology and principles so that it can be applicable in a scalable way to the greatest number of public and private organisations while providing enough detail and ‘how to’ advice to enable organisations to generate their own solutions to road safety issues.

‘Our’ community : corporate social responsibility, neoliberalisation, and mining industry community engagement in rural Australia

This paper addresses contemporary neoliberal mobilisations of community undertaken by private corporations. It does so by examining the ways in which the mining industry, empowered through the legitimising framework of corporate social responsibility, is increasingly and profoundly involved in shaping the meaning, practice, and experience of ‘local community’. We draw on a substantial Australian case study, consisting of interviews and document analysis, as a means to examine ‘community-engagement’ practices undertaken by BHP Billiton’s Ravensthorpe Nickel Operation in the Shire of Ravensthorpe in rural Australia. This engagement, we argue, as a process of deepening neoliberalisation simultaneously defines and transforms local community according to the logic of global capital. As such, this study has implications for critical understandings of the intersections among corporate social responsibility, neoliberalisation, community, and capital.

A toothless chihuahua? : the Australian Competition and Consumer Commission, neoliberalism and supermarket power in Australia

During the Senate Inquiry into 'milk price wars' in 2011, Senator Nick Xenophon accused the Australian Competition and Consumer Commission (ACCC) of being 'less effective than a toothless Chihuahua'. This follows the ACCC's lack of action regarding the reported abuse of market power of Australia's supermarket duopoly, where an extensive inquiry into the competitiveness of retail prices in 2008 found grocery retailing to be 'workably competitive' despite numerous claims to the contrary. How can farmers' submissions to the inquiry that cite market abuse be reconciled with the ACCC's finding that all is well in the food supply chain? Following an in-depth examination of 53 farmer submissions to the inquiry, we conclude that the findings of the ACCC are commensurate with the neoliberal economisation of the political sphere, where commercial entities 'legitimately' govern beyond their corporate boundaries, often using disciplinary measures that were once exclusive to governments. We argue that such clear structural inequalities between farmers and major corporations is reason to re-regulate markets and reinsert a stronger role for government to 'level the playing field'.

Air navigation services in Australia and the United States : a comparative case study

The central document governing the global organization of Air Navigation Services (ANS) is the Convention on International Civil Aviation, commonly referred to as the “Chicago Convention,” whose original version was signed in that city in 1944. In the Convention, Contracting States agreed to ensure the minimum standards of ANS established by ICAO, a specialized United Nations agency created by the Convention. Emanating from obligations under the Chicago Convention, ANS has traditionally provided by departments of national governments. However, there is a widespread trend toward transferring delivery of ANS services outside of line departments of national governments to independent agencies or corporations. The Civil Air Navigation Services Organisation (CANSO), which is the trade association for independent ANS providers, currently counts approximately 60 members, and is steadily growing. However, whatever delivery mechanisms are chosen, national governments remain ultimately responsible for ensuring that adequate ANS services are available. The provision by governments of ANS reflects the responsibility of the state for safety, international relations, and indirectly, the macroeconomic benefits of ensuring a sound infrastructure for aviation. ANS is a “public good” and an “essential good” provided to all aircraft using a country’s airfields and airspace. However, ANS also represents a service that directly benefits only a limited number of users, notably aircraft owners and operators. The idea that the users of the system, rather than the taxpaying public, should incur the costs associated with ANS provision is inherent in the commercialization process. However, ICAO sets out broad principles for the establishment of user charges, which member states are expected to comply with. ICAO states that only distance flown and aircraft weights are acceptable parameters for use in a charging system. These two factors are considered to be easy to measure, bear a reasonable relationship to the value of service received, and do not discriminate due to factors such as where the flight originated or the nation of aircraft registration.

Quantifying economic values of coastal and marine ecosystem services and assessing their use in decision-making : applications in New Caledonia and Australia

This thesis deals with the issues of quantifying economic values of coastal and marine ecosystem services and assessing their use in decision-making. The first analytical part of the thesis focuses on estimating non-market use and non-use values, with an application in New-Caledonia using Discrete Choice Experiment. The second part examines how and to what extent the economic valuation of ecosystem services is used in coastal management decision-making with an application in Australia. Using a multi-criteria analysis, the relative importance of ecological, social and economic evaluation criteria is also assessed in the context of coastal development.

Work health and safety and the criminal law in Australia

This paper analyses recent Australian debates about the use of the criminal law in work health and safety regulation. It argues that these debates have to be seen in the context of the historical development of work health and safety regulation in the United Kingdom and Australia. The first part of the paper shows that, since the late 19th century, contraventions against the Australian work health and safety statutes have not been regarded as 'really criminal', and have largely been addressed by informal measures and, since the 1980s, by administrative sanctions. When prosecutions have taken place, work health and safety issues have been individualised and decontextualised, so that defendants have been able to reduce their culpability in the eyes of the court. Significant legal barriers have undermined the use of the crime of gross negligence manslaughter against corporations and individuals. The second part of the paper analyses recent debates about restructuring gross negligence manslaughter and bolstering the 'criminality' of offences under the work health and safety statutes. It argues that the latter debate has been constrained by the historical forces examined in the first part of the paper, and that the current position, embodied in the recently harmonised Work Health and Safety Acts, favours attempting to recriminalise the work health and safety legislation. The debate about reforming gross negligence manslaughter has stalled.

The impact of infrastructure charges on house prices in Australia

Developer paid fees or charges are a commonly used mechanism for local governments to pay for new infrastructure. However, property developers claim that these costs are merely passed on to home buyers, with adverse effects to housing affordability. Despite numerous government reports and many years of industry advocacy, there remains no empirical evidence in Australia to confirm or quantify this passing on effect to home buyers. Hence there remains no data from which governments can base policy decision on, and the debate continues. This paper examines the question of the impact of infrastructure charges on housing affordability in Australia. It presents the findings of a hedonic house price model that provides the first empirical evidence that infrastructure charges do increase house prices in Australia. This research is consistent with international findings, that support the proposition that developer paid infrastructure charges are passed on to home buyers and are a significant contributor to increasing house prices and reduced housing affordability.

The use of ecosystem services valuation in Australian coastal zone management

The use and influence of ecosystem services valuation in management decision-making, particularly as it relates to coastal zone management, remains largely unexplored in the academic literature. A recent Australia-wide survey of decision-makers involved in coastal zone management examined if, how and to what extent economic valuation of coastal and marine ecosystem services is used in, and influences, decision-making in Australia. The survey also identified a set of cases where economic valuation of ecosystem services was used for decision-making, and reasons why economic values may or may not be considered in the decision-making process. This paper details the method and results from this survey. Overall, there is strong empirical evidence that economic valuation of ecosystem services is used, but with important variation across coastal and marine management contexts. However, the impact of ecosystem services valuation on policy appears to be globally weak.

Developer charges and housing affordabilty in Brisbane, Australia

Purpose - This paper empirically examines the effect of developer charges on housing affordability in Brisbane, Australia. Developer paid fees or charges are a commonly used mechanism for local governments to pay for new urban infrastructure. Despite numerous government reports and many years of industry advocacy, there remains no empirical evidence in Australia to confirm or quantify passing on of these charges to home buyers. Design/methodology/approach - This research applies a hedonic house price model to 4,699 new and 25,053 existing house sales in Brisbane from 2005 to 2011. Findings – The findings of is research are consistent with international studies that support the proposition that developer charges are over passed. This study has provided evidence that suggest developer charges are over passed to both new and existing homes in the order of around 400%. Research limitations/implications - These findings suggest that developer charges are thus a significant contributor to increasing house prices and reduced housing affordability. Practical/Social Implications: By testing this effect on both new and existing homes, this research provides evidence in support of the proposition that not only are developer charges over passed to new home buyers but also to buyers of existing homes. Thus the price inflationary effect of these developer charges are being felt by all home buyers across the community, resulting in increased mortgage repayments of close to $1000 per month. Originality/value - This is the first study to empirically examine the impact of developer charges on house prices in Australia. These results are important as they will inform governments on the outcomes of growth management strategies on housing affordability, providing the first evidence of its kind in Australia.

Litigiousness in Australia: Lessons from comparative law

How litigious are Australians? Although quantitative studies have comprehensively debunked the fear of an Australian civil justice system in crisis, the literature has yet to address the qualitative public policy question of whether Australians are under- or over-using the legal system to resolve their disputes. On one view, expressed by the insurance industry, the mass media and prominent members of the judiciary, Australia is moving towards an American-style hyper-litigiousness. By contrast, Australian popular culture paints the typical Australian as culturally averse to formal rights assertion. This article explores the comparative law literature on litigiousness in two jurisdictions that have attracted significant scholarly attention — the United States and Japan. More specifically, it seeks to draw lessons from this literature for both understanding litigiousness in modern Australia and framing future research projects on the issue.

The conundrum of phoenix activity in Australia: Is further reform necessary?

Corporate phoenixing activity is estimated to cost the Australian economy $1-3 billion dollars annually. Significant questions arise as to whether existing legal frameworks are adequate to deal with phoenix activity, and whether further reform is necessary. Bills proposing reform appear to be languishing amid doubts as to their potential effectiveness. This paper will examine the conundrum presented by phoenix activity, the importance of further reform and the impact of the lack of a statutory definition of ‘phoenix activity’ on a regulatory environment that not only uses the term, but punishes offenders accused of it.

Identifying the financial barriers to deliberative, affordable apartment development in Australia

Purpose The purpose of this paper is to identify the financial barriers to the supply of affordable apartments in Australia and examine whether demand aggregation and ‘deliberative development’ (self-build) can form a new affordable housing ‘structure of provision’. Design/methodology/approach Market design, an offshoot of game theory, is used to analyse the existing apartment development model, with ‘deliberative development’ proposed as an innovative alternative. Semi-structured interviews with residential development financiers are used to evaluate whether deliberative development could obtain the requisite development finance. Findings Our investigation into the financial barriers of a deliberative development model suggest that while there are hurdles, these can be addressed if key risks in the exchange process can be mitigated. Hence, affordability can be enhanced by ‘deliberative development’ replacing the existing speculative development model. Research implications Market design is a new innovative theoretical approach to understanding the supply of housing, offering practical solutions to affordable apartment supply in Australia. Originality/value This research identifies financial barriers to the supply of affordable apartments; introduces theoretical understandings gained from market design as an innovative solution; provides evidence that a new structure of building provision based on ‘deliberative development’ could become a key means of achieving more affordable and better designed apartments.

Infrastructure charges and residential land prices in Brisbane, Australia

This paper examines the question of whether the imposition of developer infrastructure charges on housing developers affects the price of residential land. Developer paid fees or charges are a commonly used mechanism for local governments to fund new infrastructure as a “user pays” method of funding new urban infrastructure. Some argue these costs are passed back to the original land owner by way of lower land prices. However, property developers claim these charges are added on to new land prices, with flow on negative impact to housing affordability. This paper presents the findings of a hedonic land price model that provides the first empirical evidence that infrastructure charges do increase residential land prices in Brisbane, Australia. This research is consistent with international findings and supports the proposition that developer paid infrastructure charges are over-passed to home buyers and are a significant contributor to reduced housing affordability.