Turnbull federal budget could wipeout Townsville property owners

Image: Cartoonist, Dave Pope

The Turnbull-Morrison federal budget could wipe out many property owners who are hanging on to their investment properties in the Townsville district by the skin of their teeth, enduring sustained cash flow and equity declines over the past 5 years.

Not to mention the property owners (investors and owner-occupiers) whose fate has already been determined, falling victim to the steepest economic and property decline in financial terms in local recorded history.

Many are local residents that have lost their jobs or businesses, foreclosing with the banks or filing for bankruptcy. The highest occurrence of bankruptcy across the entire country has been experienced in Townsville.

Significant numbers of property owners are living from hand to mouth constrained by the debt imbalance. They are incurring losses from which negative gearing and a reliance on taxation refunds are their only salvation.

Despite the Property Council of Australia's (PCA) influence on this budget, the threat at the next election of a more extreme left-wing policy of reducing or eliminating negative gearing, has become a haunting possibility as the country strives for more revenues.

Green and left-wing extremism are likely to swing ordinary voters against the rise of Trumpism and Turnbullism. More anti-business and anti-corporate campaigns like Getup's malicious campaign against Adani coal is an ideology with heavy domestic and international support.

Although a seemingly senseless policy to any economist, a change of government, could be the armageddon for property owners if the Townsville economy continues to dance so far out-of-step with national economic trends and federal fiscal policy makers.

Also, Townsville governance organisations threaten the investment pipeline of the City in the short term, as the Turnbull government has a deep thirst for the "City Deal" mega data deposits from the Internet of Things (IoT) system. Under the contract by Mayor Jenny Hill, the "no data, no deal" is setting Townsville Enterprise up for restructuring or imminent redundancy.

The federal budget announcements targeting big-ticket infrastructure and taxation concessions using superannuation and negative gearing for managed funds to address housing affordability in Sydney and other capital cities is a dumb policy. This is really irresponsible on Townsville North Queensland given the recent and ongoing pain and suffering.

Despite Townsville Enterprise foolishly appealing for more new housing development to meet projected population growth, in other words increasing supply, North Queensland and Townsville districts do not need a housing affordability policy at the forefront of the public agenda when business investment and jobs are what is needed the most.

Instead, a more prudent priority for Townsville district is to seek microeconomic solutions such as the Tax Increment Financing (TIF) scheme, as proposed by the PCA. This is backed up by the Northern Australia Development Facility, with strong and robust relationships, with leading boards and executives of large enterprise both domestically and internationally.

Apart from births, migrations, and immigration, the focus on value-add industries securing property for development in Townsville's Council district, is Townsville's only leverage under the "City Deal" contract, to attract significant federal and state government investment.

The New Residential Land Sales and Supply chart clearly shows the surplus land stocks in Townsville districts.

In his address to the media, the Treasurer Scott Morrison said, "it's not a silver bullet – nor is it intended to be", referring to his federal budget and the media anticipating a fix all budget.

Ironically, this is exactly what this budget is. A silver bullet for property owners being put out of their misery if these measures strike to achieve more housing affordability in a market plagued by asset value declines.

Unemployment rates in Townsville are at 11 percent and the broader economy of regional Australia is hurting from the downturn in mining activity and substantial increases in energy prices.

The centre-point of the budget, being that it addresses housing affordability, could move the sentiments of distressed property owners and buyers to protest and disrupt the political will of what is perceived to be a puppet's play.

This federal budget reaffirms the concerns of local representatives that the Federal and State governments are capital city-centric. They are driven by votes instead of delivering "a fair go for all Australians", which Mr. Turnbull promised in his preamble to this budget.

The Turnbull-Morrison federal budget will go down as the most politically safe budget in coalition history. In fact, many commentators are saying it is a labor policy budget with terms like "centralist budget" and "not traditional liberal".

The Liberals are fully funding social programs such as the National Disability Insurance Scheme (NDIS) and increasing taxes on the banks.

The banks, of course, have already said they will pass on the cost increases to every mortgage holder in the country. As the big four banks have done in recent times, they are well within their rights to act independently to raise their interest rates and fees.

Once again for Townsville North Queensland, the people are being asked to pull up the smelly socks of bad government leadership. Meanwhile, a liberal government slips into their fresh uncharacteristically labor-like federal budget cotton socks to attract votes from the capital cities and the left-wing media establishment driven by ratings and polls.

Even financial and taxation professionals are labeling the budget as a "good strong budget" as there are no additional personal or small to medium size enterprise (SME) tax increases announced. Superannuation by and large has been untouched. 

Just as the people have grown to expect smoke and mirrors from a political funding announcement, the Turnbull-Morrison duo is being socially responsible and hitting the big end of town just like the Labor opposition policies were proposed to target.

By design or coincidentally, it is likely Bill Shorten has been taken out of play in this budget. Not only in policy terms. But it is effectively the "Bill Shorten execution budget".

Shorten's electability, not just as an opposition leader but Labor candidate in the seat of Maribynong, has taken a direct hit with 127 hectares of defense land in his own electorate in Victoria being made available for 6000 new affordable homes under this budget.

Is Mr. Shorten's political career finished? Mr. Turnbull would hope so, if the cold shoulder he gave him in front of the media the morning of the budget announcement is any indication.

Putting the political undertones aside, what if Sydney, Melbourne or Brisbane had an unemployment rate of 11 percent with a median house price of $337,000 for houses, and $272,000 for units? Would the federal budget be focused on housing affordability? Absolutely not!

The House and Unit Prices chart below demonstrates the decline of values and stable affordability environment in Townsville districts. 

Economic stimulation with tax breaks, grants, and infrastructure investment spending in the regions would be high on the agenda. But not this politically and socially sensitive government.

Its focus is on self-preservation. Obviously seeking to secure the next election with capital city and regional Victoria and New South Wales voters, who are set to benefit from the new $20 billion rail corridor from Melbourne to Brisbane.

With a consolation prize of relatively minor funding, allocated to repairs and maintenance to the Bruce Highway and disaster relief from cyclone Debbie, nothing positive from a Townsville perspective can be said about this budget.

When we look at the median property price for rentals in Townsville, it makes the federal budget's focus on affordable housing look like a joke.

For example, a three bedroom house in Townsville is currently being rented for $290 per week. This is a decrease in the housing price of 6.5% in the last 12 months, with the housing price already starting from a low base and dropping consistently from nearly $400 per week in 2012.

Considering the massive uncertainty in the superannuation sector over recent budgets, the mobile and rental accommodation being so affordable in regional Australia, the elderly are anticipated to snap up the $300,000 per person superannuation top-up option in this budget.

Once again in a Sydney context, this policy might make sense. But in Townsville, adding more supply to an already distressed housing market is like igniting high octane fuel in a fire of despair.

Unless local governments and marketing experts in Townsville and North Queensland target the elderly in the capital city markets by offering comparable or upsize value strategies such as a clean, affordable and healthy tree-change lifestyle, this budget measure is more likely to be detrimental to Townsville's property market.

The likely result is more housing supply as our elderly residents will seek to cash in. This breeds more unhappy owners because the further downward pressure will be put on median house prices.

In addition this budget also, the federal government will establish the housing finance corporation (HFC). From July 2018, the HFC will offer long-term, low-cost finance to community affordable housing providers. Investors are assured to get rental payments from the government with direct deductions from welfare payments transacted to investors.

It's the $1 billion National Housing Infrastructure Facility (NHIF) that is of particular concern in the hands of an inept local government being charged with developing business cases, to win funding and then administering the funds through community housing contractors.

Desperate for new home developments that attract increased revenues, council rates and economic stimulation, the NHIF program in Townsville will have Mayor Jenny Hill and Townsville Enterprise salivating at the mouth.

However, this social housing initiative will be disastrous for incumbent property owners in Townsville based on the accumulated evidence from the NRAS (National Rental Affordability Scheme). The now abolished Labor government NRAS program was a disaster back in 2013, its legacy is still being felt across the City.

Then, NRAS was the catalyst for the sustained fall in rental prices and subsequent fall in sale prices across the City. This combined with softer global commodity prices and carbon tax policies, Townsville's property economy has been impacted by catastrophic losses ever since.

Furthermore, affordable housing investors are being offered a possible 60% discount on capital gains if they build new housing projects with the condition of pricing the accommodation below market prices to low-income tenants managed by a community housing provider.

This is NRAS rebadged! All be it with a 40% less capital write-off, but with a more favourable incentive to control rental cash flow directly from welfare payments or employer direct contributions.

NRAS created a false economy and drove free market prices down just as the combined housing affordability initiatives are now likely to do.

The NHIF is based on the UK model aiming to assist local governments to develop new homes and apartment blocks. For Townsville North Queensland, the combined measures of NFIC and NFC are unfavorable with property prices already falling substantially over the past 4-5 years. NRAS Mark II is what this federal budget is delivering.

But that is not all, a separate Trust is being established by the federal government to encourage both foreign and domestic investors to invest in affordable housing in Australia. 

On one hand, foreign investors leaving properties vacant are being penalised $5,000 in capital gains in this budget, while on the other hand, the government opens up a larger pie for taxation write offs by directing their attention to public housing infrastructure.

In principle, this is a smart measure if it were applied to foreign investors directing their capital into regional manufacturing and new enterprise initiatives that create "value-add" to Townsville's enterprise infrastructure. 

Knowing the influence of Townsville's infamous property development moguls with land to burn (as shown in the New Residental Land Sales and Supply chart above), and a local council habitually grovelling for new subdivision applications, the depth and intensity of the housing affordability measures in the federal budget are bewildering.

To drive the nail in the coffin even further, property owners who claim travel expenses on their tax returns for inspecting, maintaining or collecting rent on their rental properties will no longer be allowed after July 2017.

Consider the fact that over 40% of Townsville's total housing supply are rental properties owned by investors, many travel to Townsville to check on their properties.

With current property yields declining and debt-to-equity ratios increasing, the federal budget is indirectly targeting the 3rd largest contributor to industry output in Townsville's $30 billion economy, this being the "Rental, Hiring and Real Estate" sector at 9.4% (Source: REMPLAN: Dec 2016). This is an industry contributing $2.8 billion per annum to the Townsville economy.

Under prudent management rationale, this budget would normally bring opposition kicking and screaming. But not a whisper from the incumbent Labor representatives in all local, state and federal seats across the Townsville districts.

Patricia O'Callaghan, Townsville Enterprise (TEL) CEO, confirmed in a statement to the Townsville Bulletin that the budget did not address any of the priority initiatives outlined by TEL in their pre-budget wish list. Yet she praised the Smart City Deal initiative and pledged to work with the federal government. 

The property owners and investors of Townsville North Queensland have been left with more questions than answers from this federal budget. With this fresh analysis undertaken by TREN, the property owners and stakeholders of Townsville North Queensland can forge a conclusive understanding of the impact from the federal budget on local real estate investors and owner-occupiers. 

Do you have an opinion about the federal budget? The TREN community wants to hear your story.

Guide to selling a luxury home

What it takes to sell a luxury home

Sellers want to get things right considering the value of the luxury home. Often worth millions of dollars, these homes are substantial investments. Putting forward a positive vision of the property is the all important aim because there are fewer luxury homes out there.

You have to appeal to the right buyer, know what it takes to create value for money and be able to negotiate masterfully when selling the highest priced homes available. Ensuring you set the right price and a competent real estate professional are a couple of aspects to be mindful of when selling luxury real estate.

Don't stop, and you will learn the fastest way to sell your home for the highest possible price. Selling any home is stressful, this 'guide to selling a luxury home' will maximise both without having to resort a frontal lobotomy for it.

Create a psychological profile of the buyer

Starting off a list of the best luxury home selling tips with creating a psychological profile of the buyer may seem strange but it's not at all. Drawing in a high-end buyer, first and foremost you want to know who you are selling to.

Casting the widest net when selling a luxury home is not going to work very well because we are appealing to a specific audience. Obviously, the buyer needs to be comfortable producing the money. Buyers with low margins are the last people we want to target.

So what are we actually selling? Are you selling into a neighbourhood, close to a city, great schools or the best restaurants, cafes and boutique shops within a short walk? There could be many more examples, but these are just a few.

What separates your home from other luxury homes in the area is the way you market to your strengths. You and your real estate professional must have a firm grasp on what these strengths are. TREN has an excellent guide on "How to think like a luxury real estate professional". Knowing the motivation of the luxury home buyer is critical.

Price it correctly

From day one, it is most important a luxury home is priced correctly. It is challenging to get it right. It takes years to master correct pricing. To sell at the best price and in a timely manner means examining the market, assessing comparable homes, gauging the strengths and weaknesses of the home and knowing what to look for in a luxury home.

Pricing a luxury home compared to ordinary home adds another degree of difficulty. Each luxury home has unique features that some buyers will cherish and there are less of them to compare. Therefore, pricing a luxury home because of these features it then harder to price.

Applying a "widget cutter" approach is what some inexperienced agents do in the "ways of pricing a home by a square metre method". Getting the price wrong is all they will achieve! Luxury homes are much more challenging to price. To get the highest possible price, the price must be spot on.

The luxury home will sit on the market too long and not sell if it is priced too high. It will become stale in the eyes of buyers and they will think something is not right.

When selling luxury homes this is especially true. Buyers and their agents are sure not going to forget about the home that has something wrong with it. It's like a blanket of fear and stigma sitting over the home. The stigma will even linger if you take the home off the market and relaunch in the future at a lower price.

Hiring an expert in selling a luxury home to start with and then set a correct price. Knowing how one neighbourhood is different from another and understanding how location relates to comparable sales information is essential. The value the luxury home is influenced by the neighbourhood. As we always say, location, location, location.

Understanding the "factors that determine home values" is a skilled luxury real estate professional. It's critical to establish the true market price and likely settlement value. Great agents know that comparable sold properties are vital information. Looking at homes sitting on the market a long time and not sold is a waste of time. Selling a home fast and at the highest price starts with accurate analysis and the right decision of the price.

Timing is everything

Luxury homes are often located in neighbourhoods that take advantage of local attractions, geography and topography. A home along Yarrawonga Drive in North Ward will look out over the water to Magnetic Island, offer spectacular views of Castle Hill and probably the city. In a tropical setting of North Queensland, buyers can take all of this in all year round, and get a realistic feel for why the home is so extraordinary.

In the months of summer, the heat and heavy humidity, and the oppressive rain, and constant cloud cover will tend to obscure the many benefits of owning a home. Selling the home in better weather conditions would obviously yield a higher price in the best possible light. Taking advantage of "the best time of year to sell in your location" at a better price is a great tip for a luxury home.

Where I am located here in North Queensland, listing a luxury home in the depths of a sweltering summer heat unless your budget is a factor, would not make any sense. Taking advantage of the optimal weather conditions when more luxury home buyers are active in the market. Selling in spring is without a doubt the best time of the year to sell in North Queensland.

Selling a luxury home in spring gives the buyer complete access to the property to get a thorough understanding of the best selling points. Selling a home in summer can still give you access to the luxury swimming pool, tennis court, beach front gazebo, boat jetty, workshop and the magnificent landscaping. But your buyers won't be able to appreciate these features if the ground is covered in rainwater from the many tropical storms or even cyclones that threaten the region this time of year.

If you are selling a luxury acreage or waterfront home, the time to sell is a very important factor.

Marketing online effectively

Getting the message out about the luxury home for sale requires targeting and finding the right buyer. Just loading the home upon any multi-listing service on the internet is inadequate not only to sell a luxury home but for any home.

A credible real estate professional will suggest a variety of marketing strategies for your home in addition to pricing the home. Although the first option will be to go online, the agents' network with past clients and other real estate professionals involved in high-end real estate, will be the most effective marketing option.

Contact with another real estate professional may yield the best buyers or they could come from the internet. Finding the agent who can reach the buyers who want what you have to offer is your first point of deciding your marketing options.

Taking advantage of the 'best marketing tricks for selling a home' is what the top agents understand. Leaving nothing unturned is the agent's job to get exceptional results when selling a luxury top-end home.

To select the best real estate professional, you should look for one that has a dominant presence online. Use Google or Yahoo to search for a real estate professional that market luxury homes in your area.

For example, you can try searching for "who is the top real estate professional in (insert suburb name)?"  to receive a list of top performing professionals. Agents that appear towards the top of the list should have a great understanding of real estate marketing. Avoid the advertised listings usually located at the very top and bottom of each Google search page.

Knowledgeable real estate professionals in search engine optimisation (SEO) combined with excellent social media and email marketing skills are usually highly visible online. Nearly everyone has their favourite social media network they use, as more people spend an increasing amount of their time on a mobile phone, iPad or Tablet. Taking your online marketing to the next level means having a dedicated 'social media real estate marketing' plan to get the high-end home sold.

People love looking at luxury property whether it be on Facebook, Pinterest, Google +, Linkedin, etc. Every real estate professional especially a luxury agent must be able to 'market to elite clients'.

Video and photography for elite marketing

Most people are going to want to schedule a viewing of the luxury home, whether through contacts of the real estate professional or if the buyer finds the home on online. Quality listings include photos and video tours of the property. A skilled home photographer can make any home look its best just as a landscape photographer can make the sunset appear closer and more iridescent than it looks. Great photographers make the pictures tell a story and attract buyers to the home.

Using a professional photographer on a luxury home is not an option because it is one of the most important aspects of selling a luxury home. With some 'helpful photography tips for real estate', you can respond to anybody knowing it is top of the list on how to sell a luxury home.

Like photography, a video is very important in selling a luxury home. Buyers come long distances to view the home. Conveying what makes your home extraordinary, a video tour can give them an excellent idea of what living in the home would look like. The cost of producing a video tour can cost you extra money, but it is worth the investment. The quality of the way the video looks plays a big role in attracting the right buyer.

If a real estate professional does not offer a video tour service then you should move on to other professionals that do offer the service. There are plenty of video tours of luxury homes in North Queensland. Take a look at this example.

I'm interested to know if you agree this video marketing is an excellent example of the features of a luxury home being captured beautifully? Considering the importance of catching buyers attention at the marketing stage, a video is a way to create a great first impression. Just as important is finding a narrator that can engage and emphases the key features of the luxury home.

Effective offline marketing

Just as important as your online marketing is your print marketing material. Marketing a high-end luxury home comes with the expectation the budget must include additional funds for marketing material. Perception and appeal is everything so high-quality glossy brochures is a must.

Capturing the feeling of what it is like to live in the home on that street, town or city is best achieved with effective story-telling in the marketing material. Selling the neighbourhood is just as much part of the story as selling the home itself.

When marketing the home these aspects should be emphasised. The kitchen is the most important room in the home so don't hesitate to spend extra time on it in the marketing. For example, 'quality appliances' including Sub-Zero fridge, a Wolfe or Viking stove, Thermador oven, a Miele or Bosch dishwasher are features that must be emphasised. Buyers of luxury, elite homes are looking for these appliances in the kitchen.

Avoid open houses

Most sellers assume that open houses are required because they are used so often. There is no data or agreement in the real estate industry about the benefits of selling an ordinary home. When it comes to luxury homes, there is a consensus that open homes are to be avoided. Open homes on a luxury property attract all walks of life into your home.

People that cannot afford the luxury home will show up. Even if they do have the money, they may not be interested as an active buyer anyway. They simply want to compare, kill time to have something to do or to see how you live. These people are 'tire-kickers' as they are commonly described in any selling industry. So the question is asked, 'do open homes sell homes'? In the internet and digital age, open homes have become less important, especially for luxury homes.

Real estate professionals use the open home as a way to meet new clients and promote their own brand and services. In a busy market, they seek to attract unqualified buyers and groom other prospective sellers in the neighbourhood. A luxury home is going to attract a lot of attention. An open home is likely to bring people to your home that don't have any business being there.

But of most concern is the criminal type that is attracted to the values in the home. As it is impossible to supervise everyone that comes through the home, it allows unsavoury people to take things that are not theirs. Worst still, they may set up the home by unlocking doors, windows, disarming security systems with the intention of returning later, when nobody is home, and take anything they choose.

With luxury homes, the motivation of criminals to get a big payday means they are a breeding ground for unwelcome people. Avoid open houses and the risk of losing things is reduced to next to nothing. Be very wary of an agent who pushes for an open home as part of this selling strategy.

Inviting 'qualified conjunction agents' instead of buyers through an open home is a good idea. Encourage your real estate professionals to invite these agents especially the ones who specialise in the luxury home market. A conjunction agent (commonly known as brokers in the USA) open home gives the local agents an opportunity to see all the best luxury features of your home. They can then speak to their buyers with confidence having first-hand knowledge of the home.

Characteristics of elite home real estate professionals

The agent you select to market your home becomes more important because they are the billboard hired to get the word out there about your luxury home and its extraordinary appeal. What characteristics to look for in a luxury real estate professional include:

• Highly effective communicator
• Has an eye for detail
• Has a comprehensive knowledge of the local market, inside and out and all attractions
• Pricing homes or conducting accurate appraisals. Look for a great list price to sale price (low discount %) and lower days on market than average
• Marketing expert in traditional and digital materials
• Is influential in their profession
• Excellent problem-solving and negotiation skills

When selling a luxury home, all of these skill sets are important from start to finish whether it is solving a problem that arises, communicating with you and other agents. The agent you choose must have more than marketing skills. That's why selecting the right characteristics in a real estate professional is the most important tip when selling a luxury home.

What it takes to sell

There are high-end features in a luxury home that are not found in any other property such as appliances, lighting, woodwork, cabinets and fixtures such as:

• Wine cellars
• Home theatres
• Indoor swimming pool and sauna
• Comprehensive secure systems including security cameras
• Central smart control system for everything
• Cooling and heating systems
• Energy monitoring
• Window coverings
• Concealed compartments

In order to get the best price for the home, the real estate professional needs to understand every component and feature of the home. 'Location and neighbourhoods' are important factors also when dealing with luxury homes. Your agent must know how to sell all of these things and not every real estate professional is suitable.

Keep these things in mind when choosing your real estate professional because we are aiming for the best possible sale price. Understanding luxury home buyers and selling the home's features and benefits within the fastest time possible is the job of your luxury home agent.

Keep in mind this Guide to Selling a Luxury Home and the nine tips when selling a luxury home and you will be moving on to your next home soon rather than later.

***Do you have a luxury home to sell in North Queensland or other Australian states and want to work with a real estate professional that fits the luxury home profile? Check in with TREN and will be happy to refer you to an outstanding real estate agent in your neighbourhood who works with elite properties.***  

More helpful reading on selling to the elite buyer:

Millionaires in Australia are not rich anymore
Tips for selling luxury homes
Real estate agents for the ultra rich

You can never have enough awareness. Consider reading these articles to help in your journey on learning how to appeal to luxury home buyers and to get your property sold.

About the Author:
Aaron McLeod is the Owner and Principal of Rapid Realty Australia, Owner/editor of TREN (Townsville Real Estate News), CEO of McLeod Investments and Consultancy and Co-owner of Matching Pear Travel.

Townsville's clean energy war; $400 million solar energy investment set to divide interests

Image: Thanks to Townsville Bulletin

What feels like a drop of water on ancient stone carving out the future geometry of the earth's rivers and streams, the mass sum of Townsville's solar energy projects is making less than a drop in the national energy market even with the launch of the $155 million Sun Metals Solar Farm project, 15 km south of Townsville.

The Korean-owned Sun Metals project comes on the back of the $250 million solar farm announced for construction on a disused mango farm in the Upper Ross last year, about 20 km south-west of Townsville. A facility of this capacity is expected to add 450,000 photovoltaic modules, which will deliver clean energy to 50,000 households.

Over half a dozen clean energy power stations have been built across North Queensland in the past two years. Yet these power stations add less than 1% to the national energy market.

Combined with the existing small-scale 1350 residential and commercial installations (although not supplying wholesale spot prices) across the City, solar energy is boosting Townsville's electricity capacity steadily enough that the perceptions of victory by non-fossil fuel proponents could have inspired right-wing politics to parade a fist full of raw coal through federal parliament this week.

The additional solar capacity at Sun Metals will be connected to their existing 33/132 kV substation to supply power to their refinery, offering incidental net inflow capacity to the power network. However, their reliance on wholesale power will be reduced by up to 116 MWac as the extra one million solar panels being used will cover 130 hectares. This type of project is what is slowly reducing demand for consumption on the 540 trillion watts feed into the national energy market. 

Image: Thanks to Inhabitat

The real estate investors in Townsville have to be wondering what the impact of these larger scales energy projects will have on the economics of accommodation and the cost of power supply in the broader community. After all, households and small business that are impacted by energy prices are also critical players in the recovery of the property market more broadly.

The truth is these installations will have a negligible impact on retail power capacity and minuscule effect on prices. History might suggest that where a large investment in solar power equipment occurs, the retail price of electricity increases to make up for downward pressure on supplier cash flows. But while the demand for existing infrastructure maintenance overheads and replacement costs continues, prices have continued to rise in excessive of the annual Consumer Price Index (CPI).

The Queensland Energy Minister, the Hon. Mark Bailey has made his pitch for more renewable energy projects flying in the face of federal conservative politics and local Townsville business leaders calling for urgent action on building a coal-fired power station in the region.

Premier Hon. Annastacia Palaszczuk with Queensland Energy Minister, Hon. Mark Bailey
Image: Thanks CourierMail.com.au

Grandstanding on surpassing his election promise of supporting 40mW of renewable energy by announcing the fact that 300mW was delivered as part of his Solar150 policy, Mr Bailey is banking on competition and more solar production, the cost of which has reduced by as much as 80% since 2009 the State Minister claims.

Independent customer satisfaction researcher and rating business, Canstar Blue, said that location is a major factor in electricity pricing. "The amount (price) energy companies charge for power is dependant on a number of factors, the location being one of them."

The independent rating company also identified that the "Queensland Productivity Commission found that deregulation would boost competition and potentially lower electricity prices - and it's easy to see why when you compare average costs in Brisbane with those in Victoria, the most mature energy market in Australia. But so far overall prices show no sign of coming down, so it's important to find the best deal of the bunch currently on offer."

Queensland has the highest concentration of electricity suppliers in Australia, and over 50% of the capacity and demand is serviced by government-owned black coal-fired power stations. What's more, Queensland has a surplus of supply making the State a net exporter of electricity to other states.

Energy prices are set by the retailers and the free market. Energy is still regulated across the board in regional and rural Queensland. However, only if use is below 100mW. This stops in June this year and the $500 million Community Service Obligation (CSO) paid by the State government to subsidise distributors like Ergon and limit energy pricing will be passed on to consumers. South-east Queensland has had deregulated pricing since July 2016.

Although a federal labour's carbon price was to blame, the Newman government realised at the LNP election loss, increased electricity prices on households are political suicide, especially aggressive increases which putting a price on carbon caused.

The sensitivity of price increases in a recession-ridden economy like Townsville, quite possible under a utopian clean energy agenda, means catastrophe at the ballot box is inevitable for pro-futurist politicians like Mr Bailey. Unless the $500 million SCO subsidy is renewed, prices are indirectly regulated for the benefit of regional Queensland in addition to the regulations that end in this June.

However, Mr Bailey would find it difficult to justify politically why the $500 million CSO subsidy is renewed come July 2017. Because you would assume the government will be serving the people to keep retail prices down so Ergon need not increase their costs in regional Queensland.

Trusting deregulation and the influx of retailers in regional Queensland would reduce prices to offset the CSO cuts and increased competition to the majority government-owned power generators, is inconsistent and unlikely with location constraints reported by the independent rating company, Canstar Blue. Townsville is hotter than Brisbane and power leakage, being great distances from base-load generators, is costing the State $130 million dollars per year in lost energy.

But a $1 billion federal Northern Australia low-interest loan to a consortium of private and Chinese investors, who are now otherwise paying 6-10% interest on borrowings, would reduce the demand on taxpayers for government subsidies, practically eliminate wastage by power leakage, reduce the spot price of wholesale power by adding healthy spot price competition in the generator market, and serve the economic interests of North Queensland.

With a combined clean coal/carbon offset revegetation program to achieve carbon reduction targets, an additional 100-200 mW capacity could put downward pressure on electricity prices with a new base-load power station. But most importantly, it would deliver North Queensland the necessary industrial muscle needed to secure its economic prosperity and lessen the need for subsidies from taxpayers.

As the Upper Ross and Sun Metals investments and future clean energy investments like them continue, the clean energy sector will inevitably seek to protect not just their ideology but their growing investor cohort seeking to secure and protect their ROI in the energy markets. Demand for energy has been steadily reducing as residential and commercial solar projects like Sun Metals come online and the Australian manufacturing sector has dwindled.

The battleground between old money and new money (green certificates) is set to evolve into all-out warfare in the boardrooms and dare it to be said, in the unemployment centres of Townsville unless a sensible decision can be made by a rebellious climate industry to pragmatically serve the wellbeing of the entire community desperate for short-term mining and industrial jobs.

"The Sun Metal project is set to commence in April 2017 and create 250 jobs in the construction phase as one of the largest solar farms in Australia", winning contractor Dr Paul Dalgleish, Managing Director and CEO of RCR Tomlinson said. Sun Metals reports that an extra 100 jobs ongoing will be employed but this is due to the investment of another $150 million increasing zinc production capacity by 20 percent. Sun Metals currently employees a total of 300 locals. To put this into perspective, Townsville is seeking to create 20,000 new jobs in the next 5 years.

So Townsville is in a serious quandary on solar investment just as it is in big data, artificial intelligence and robotics, technologies that are likely to eliminate demand for processing labour despite the political headliners of job creation during construction.

It's like the people are constantly being sold a cute puppy; cuddly and soft at first but we never stop looking for the stolen shoes in the yard. And it has been recurring like a bad nightmare or the American "groundhog day" for the past 6 years. Some would argue longer as politicians have become experts at breaking promises and pulling the wool of over voter's eyes.

Further reading:
Turnbull trio caught with smoking gun

There is a growing sense with the rise of One Nation and Trump that the extreme left has deposited so much social progress in Melbourne, Sydney and Brisbane post the Howard-era, that the entire green movement in Queensland backed by Mr Bailey is selling Townsville a cuddly pup and the drip of small broadly dispersed solar farms as industrial power stations.

Employment for the construction of new technologies is temporary while skills and expertise in facilities maintenance, fossil fuel processing, business administration and technology programming are recurring and more sustainable. Not to mention however new skilled jobs that will be created in the digital economy offsetting industrial job losses. But these jobs are what is driving capital city growth and tearing the heart out of regional towns, where time and time again, talented trainees or graduate students move to the capital cities.

Townsville needs industry and business that creates sustained employment for existing residents and sufficient employment for population growth, but the clean energy campaigners and smart technology campaigners by their nature are ardent in their beliefs of saving the planet and rescuing ignorant climate change-denying people from themselves.

What the jealous and emotional teenager thinks and what the parents think are by nature two very different values, at least the circumstances are perceived differently, and the argument about right and wrong can become destructive and even threaten relationships.

Instead of finding common ground, the arguments are based on who has the higher moral ground. One being to feed and secure the entire family and the other resist and fight for the freedom of ideology, which less than a decade ago, had control of the balance of power in federal parliament with the independents.

And it all comes down to power and control of everything. With such utopian and extreme mindsets playing the game, the wellbeing of the people is being defined around electoral affluence and the movement of the lobbyist elite, as Mr Bailey felt the need to deny his association with "latte sippers" and "champagne drinkers" in a recent statement. This is not the identity of solar users as he defended. But the reality of green campaigners and protesters hanging out on Brunswick Street in Fortitude Valley, or trendy boutique villages around Yeerongpilly in their cycling paints to plot their next alliance is happening.

The opposition to these movements is bearing fruit in the United States where left-wing aggression is headline news. District and federal judicial officers are blocking the highest traditional authority in the system, the President of the United States. While in Australia the right-wing One Nation Party and Pauline Hansen may become a serious contender as the third major party in Australia the way things are going.

Moreover, Townsville has been blessed with both clean energy and cleaner fossil fuel resources on our doorstep yet the ideologies and political leveraging of fail-safe governance and political extremism are crippling the opportunities of the Townsville economy and the prosperity of this region's people.

Nearly 5.70-kilowatt hours per square metre of solar irradiation exists under the skies of Townsville producing practically zero CO2 into the environment. A massive asset to the local economy and the most abundant levels anywhere in the world. The sunshine state is alive and well. Of course a smart inclusion in any energy strategy for a nation and city over the next millennium.

The Galilee Basin is blessed with the best quality coal in the world and over fifteen mining companies actively seeking to bring it to the global market, including Adani's new Carmichael mine, whom by some accounts may be in receivership any day now due to excessive company debt through its Indian operations.

The CO2 emissions of the Galilee Basin coal are the best product compared to domestic and international standards, producing 1.1 tonnes of CO2 per megawatt hour of electricity generated, some 30% fewer emissions than Indonesian coal.

Image: Thanks to ABC

The fossil fuel industry, right-wing politics and Townsville's own News Ltd press, is lobbying for the $16.5 billion Adani coal mine project to proceed urgently along with a new coal-fired power station to be built in Northern Australia.

Meanwhile, the chief executive of the Clean Energy Finance Corporation (CEFC), Oliver Yates, says coal-fired power would be "an inappropriate investment in exposing taxpayers to". Even the rules governing the eligibility of clean coal as an investment for the CEFC makes coal an unacceptable risk to taxpayers. Yet the Australian Energy Regular confirms Queensland's fossil fuel power stations are keeping the lights and cooling systems going across the nation during peak hours and excessive heat waves.

While federal and local politicians are seeking to manage affordability and their appeal to the electorate, the increasing power of the anti-carbon emissions movement and clean energy capital raising bodies like the CEFC is overwhelmingly unfavourable to a politically dispensable economy like North Queensland.

Most credible scientists and commentators are saying the cost of building coal-fired power stations, even carbon capture plants, compared to solar and renewables far outweigh the economic benefit to the community.

But saying that to a jobs-hungry community like Townsville still getting used to being weaned off projects stimulation and a government funded economy, is nearly impossible. Just as the people of the rust belt of middle America gleefully elected the most unelectable President in Donald Trump, because they were sick and tired of becoming irrelevant to centralised control during an era of globalisation.

Lacking vision in energy policy, meaning supporting any form of coal production, is tantamount to threatening the entire nation's future. This is the rhetoric of southern splinter journalists, incensed with utopian climate protection ideology and a dogged determination to prove sympathetic scientists right.

And the reality of this point of view is that Townsville's economy, unfortunately, could reflect the experiences of the people of South Australia where "blackouts" and industrial scarcity is a way of life, while Townsville is promised jobs only to find out they are mostly casual, part-time or fixed-term contracts and perpetually being sold a cute puppy.

Further reading:
Industrial space critical to Townsville smart city future

Get used to the fact the attitude of the left and the environmental movement is here to stay. Just as the attitudes of the politically correct advocating on behalf of racism, feminism, socialism, capitalism, etc. are here to stay. Ideas and what we think is a god-given right. Anyone with a twitter account has political influence and there are plenty of authoritarian voices with scientific profiles in their resumes actively claiming an ology, ism, doctorate, ist to their name.

Perhaps a poor attempt at humour, but given a platform, conscientious people will continue to influence and disrupt politicians, courts, corporations and people seeking to derive their living from an industrial system built on fossils. For an ordinary family in Townsville seeking a good life, the fossil industry is their only prospect of income, which will continue to be the case for many decades to come despite technology advances.

A new global order is fighting for supremacy and Townsville is in the heartland of the battle for power and control over resources, even self-determination, futurist ideology and utopian safety and security, neither of which are disconnected from the immediate pain and suffering of the community.

Meanwhile, the paralysis of governments, institutions and agencies incapable of agility is likely to continue in the immediate future, impacting the certainty of jobs and economic opportunities for a bright City seeking to advance its claim as the largest economy in northern Australia.

With the prospect of further delays in all industrial fossil extraction projects - dam building ventures included, and any industry business dependent on fossil fuel energy, further protests, court action and political grandstanding will remain important tactics by highly organised and sufficiently funded clean energy campaigners.

Editorial attention by News Ltd supporting a coal-fired power station in the local Townsville Bulletin is a real measure of the frustration being experienced by a community with massive economic promise in what has become a perpetual "go and no-go" zone in the climate change and clean energy fight across the world.

With the question still open as to the future viability of all coal and fossil power energy solutions in North Queensland, Townsville's aspirations to develop industry and jobs will be plagued with further uncertainty unless the citizens rise up and get behind pragmatic political and business leadership seeking to secure the funding promise of the $5 billion Northern Australia development fund.

If recent history and events are anything to go by, it is difficult to see a strong, proud and caring regional community like Townsville lay down and let jobs and opportunities pass them over because of left-extremism has gained momentum with a green army under the stewardship of capital city elites dictating "it's the way things are around here."