National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Joel Robinson

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 52-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 52-storey tower, which has just shy of 250 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Economy

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Property investors who stake their income on the performance of mining towns need to be aware of a variety of factors that might impact their properties, from new mines to the international resource markets. 
Those investing in coal mining towns will no doubt be interested to know that the price of thermal coal has dropped 51% since July 2011, according to Australian Ethical Investment - and the company's international equities trust portfolio manager Nathan Lim thinks the trend is likely to continue. 
According to Lim, the reasons coal is struggling are largely "secular", not cyclical. 
There are nine factors Lim thinks are driving the resource's slowdown:
<ol>
<li>
"Global production isn't coming off-line fast enough" Lim claims that in Australia, around "40% of all seaborne coal is unprofitable". In order to fulfill prior shipping commitments, producers are forced to sell the resource at a loss. However, Lim believes the problem will self-correct, once demand picks up or producers run out of money. 
</li>
<li>
Japan's consumption is up... but it won't continue With many of its nuclear power plants out of action, Japan has increased its consumption of coal, pushing up prices, Lim explains. But the push is only temporary, with nuclear power plants to restart and an increase in the use of solar energy. 
</li>
<li> "Electricity consumption in the developed world has either stopped growing or is in outright decline" According to Lim, the weakened position of the global economy has cut power consumption, but he also believes increased energy efficiency and "behavioural changes" are behind the decrease in demand. 
</li>
<li>
"Domestic coal is not so welcome at home anymore" Lim believes that the United States' increase in coal exports over the past decade is the result of more stringent legislative requirements for power plants, which lead some owners to close their facilities. He predicts another set of closures after new US Environmental Protection Agency (EPA)rules on mercury come into play in March 2015, degrading demand further. "This coal is finding its way into the international coal markets further expanding the gap between supply and demand," explains Lim. 
</li>
<li>
New carbon emission legislation for existing power stations The switch to natural gas from coal is a big feature in new EPA legislation targeting carbon emissions from power stations. Given the low price of natural gas, Lim predicts the legislation will lead to more coal-fired power plant closures, and effectively restrict new coal fired plants from being constructed. He believes even more coal will enter the international markets as a result.  </li>
<li>
EU greenhouse gas emission targets "For its next decadal goal, the EU has targeted a 40% reduction in greenhouse gas emissions from 1990 levels by 2030," explains Lim. "Amongst the highest emitting fossil fuels, coal will continue to be friendless in Europe." 
</li>
<li>
"A more punitive price on carbon will make the EU’s goal more easily achievable" Lim predicts that although carbon prices have been "distorted by unintended policy decisions", eventually policy makers will find the "right" structure. "When this happens, we expect the cost of coal pollution will dramatically increase the cost of coal-fired electricity and allow other, low emission technologies to better compete," Lim claims. 
</li>
<li>
India's new Prime Minister appears to favour renewable energy According to Lim, India's new Prime Minister Narendra Modi is "very much pro-solar", with a history of supporting renewable energy. "Calling for solar power to bring electricity to 400 million people is ambitious without equal," notes Lim. "This goal tacitly recognises that India has failed to bring its people out of energy poverty using conventional methods." 
</li>
<li>
China plans to ban coal-fired power from Beijing by 2020 Though some claim that the move is a token one given China's total coal consumption, Lim suggests that China is continuing its practice of "experimentation" before it comes to a decision. "It is more instructive that China is taking such extraordinary steps to deal with air pollution that high emitters should heed the warnings coming from the government," states Lim. "Ordinary Chinese citizens are fed up with the pollution and coal is an obvious target for their frustrations. Given that China is also experimenting with carbon pricing, are the world’s biggest producers of solar power (and a close second or third in wind) and have made pollution abatement a priority, we might be seeing the beginnings of a major structural shift in China’s generation mix."</li>
</ol>
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jrichardson-uRX5hFdKfN

The nine reasons coal towns will continue to struggle: Australian Ethical Investment

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GUEST OBSERVATION
The major Australian banks have recently cut fixed mortgage rates below 5%. They have done so without any prompting from the Reserve Bank of Australia, which may actually start raising the policy rate within the next six months, especially if inflation continues to run around the top end of its 2-3% target range.
Why, then, did the Australian banks cut their mortgage rates?
One possible reason lies in an obscure old macroeconomic theory of “secular stagnation” that has been gaining credence recently throughout the financial industry worldwide.
Resurrecting an old theory
In a speech at the International Monetary Fund last November, Larry Summers, Harvard economist and former US Treasury Secretary, resurrected this old theory, originally developed by another Harvard economist, Alvin Hansen, in the late 1930s.
When a consumption-led recovery in the midst of the Great Depression started to falter, Alvin Hansen was inspired by the then nascent Keynesian idea that the economy as a whole could persistently suffer from inadequate demand in the absence of a massive policy intervention.
US population growth had slowed dramatically during the Great Depression and Hansen believed this was a “secular” (that is, long-term, non-policy) source of decline in private investment in new capital infrastructure. According to his very Keynesian theory, this weak investment brought consumption down with it and, like John Maynard Keynes, Hansen did not believe in the ability of wage and price adjustment to restore the economy to full employment in the face of inadequate demand. Instead, he believed that fiscal policy would have to take up the slack, which it did with the onset of World War II.
The baby boom after the war meant that the theory of secular stagnation was largely forgotten. But Larry Summers sees similar forces at work in recent times and he considers secular stagnation as a leading explanation for why the US housing bubble in the 2000s didn’t result in an overheated economy at the time.
One might question the idea that the US economy didn’t overheat prior to the global financial crisis. But real GDP growth and inflation were actually quite moderate by historical standards throughout the 2000s. Summers speculates that this was because economic growth would have been much slower in the absence of a bubble due to secular stagnation.
Global savings glut and the chase for yield
This story is somewhat related to former Federal Reserve Chairman Ben Bernanke’s “global savings glut” hypothesis about why interest rates remained so low throughout the 2000s. In Bernanke’s view, there were too many savers, especially from Asia, chasing too few high-return and often risky investments. This “chase for yield” put downward pressure on interest rates and fuelled the US housing bubble.
So what is the prediction of secular stagnation for the future and why might it explain the Australian banks’ recent cuts in mortgage rates?
The basic prediction of the theory is that economies throughout the world will continue to stumble along with anaemic growth and no inflationary pressures for the foreseeable future. At best, there will be more moderate growth from time to time, but it will occur due to periodic financial bubbles triggered by a chase for yield and low interest rates. Faced with slow economic growth and low inflation, central banks will contribute to these bubbles by lowering their policy rates or making large-scale asset purchases (aka “quantitative easing”) when rates hit the zero lower bound.
In cutting their mortgage rates, the Australian banks appear to have bought into the secular stagnation theory and are clearly betting on continued downward pressure on interest rates driven by a global chase for yield.
Is there hope for a less stagnant future?
Can anything to be done about secular stagnation or, perhaps, is its relevance to the current economic situation overstated?
Similar to Alvin Hansen in the 1930s, Larry Summers argues that public investment in infrastructure provides the best way to address inadequate demand. He notes that current low interest rates also mean that the cost of financing public infrastructure investment is unusually low.
Would this fiscal policy approach work? Japan is an obvious place to look at in terms of what might happen in the face of demographic-led stagnation. And the results are not particularly promising. Japan has undertaken massive debt-financed infrastructure spending and this has not exactly produced a booming economy. Of course, unemployment has remained low and deflation, not inflation, has been the greater problem. So perhaps things would have been even worse in the absence of Japan’s massive fiscal interventions.
Meanwhile, it’s not really clear how relevant secular stagnation is for the rest of the world, including Australia. Indeed, in an odd way, the possibility of secular stagnation means that we should at least briefly celebrate when we see Australian inflation running at the top end of its target range.
This is not to say that the RBA should abandon or revise up its inflation target. But higher inflation is an indication that the secular stagnation hypothesis may be incorrect, while the RBA can always raise its policy rate to bring inflation down again in the future. Of course, the Australian banks currently betting on low interest rates won’t be quite as happy if this scenario were to play out.
James Morley is professor of economics and associate dean (research) at <a href="https://www.asb.unsw.edu.au/Pages/default.aspx" target="_blank" style="line-height: 1.3em;">Australian School of Business</a>. He receives funding from the Australian Research Council.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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jmorley-2PQc6nmtuL

Why did Australian banks cut their mortgage rates?

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<img src="https://counter.theconversation.edu.au/content/29843/count.gif" alt="The Conversation" width="1" height="1">
Charis Palmer is deputy business editor and Emil Jeyaratnam multimedia editor at <a href="https://theconversation.com">The Conversation</a>.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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Australia’s housing debt: The infographic that shows why we should be cautious

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It may be a wide brown land, but 80% of the dollar value of all goods and services in Australia is generated on just 0.2% of the nation’s land mass according to a study released this week.
While it is <a href="https://www.smartcompany.com.au/growth/economy/42737-did-you-know-you-spend-11-000-each-year-while-at-work?utm_source=SmartCompany&amp;utm_campaign=7fc71d8377-Friday_9_July_201409_07_2014&amp;utm_medium=email&amp;utm_term=0_234118efee-7fc71d8377-93033274">notoriously expensive to work in the CBD</a>, the study by the Grattan Institute shows nearly all of the dollar value of Australia’s goods and services is coming out of our central business districts.
The <a href="https://grattan.edu.au/static/files/assets/d9ea2b85/814-mapping-australia-economy.pdf">study</a> shows workers in Perth’s relatively small CBD were the most economically productive employees in the country, generating the highest value of economic activity per working hour in 2011-12, at $124 per hour.
Sydney workers produced $100 in value for every hour they worked there, while workers in the Melbourne CBD (including Docklands and Southbank) produced $87 per hour.
Grattan Institute cities researcher Paul Donegan told SmartCompany Perth’s productivity is tied to the mining boom, with one in three employees of mining companies located within the Perth CBD.
“Jobs such as engineers and software programmers, those jobs play a very important role in generating productivity, just as important as fly in fly out workers,” says Donegan.
If workers employed in the mining industry are excluded form Perth’s figures, the area’s labour productivity drops to below $90 per hour.
The report shows the combined CBDs of Sydney and Melbourne alone – 7.1 square kilometres – generate nearly 10% of Australia’s economic activity, three times that produced by the agricultural sector.
Donegan says there are two major reasons why the CBD produces the greatest wealth – because it has the best access to skilled workers and because it places businesses close to other businesses.
“As the workforce becomes more skilled and specialised, you want to have best choice of possible employees,” says Donegan. He says being in an area well-connected to public transport is particularly important to make it as easy as possible for the best talent to access a company.
“Being close to other businesses makes it easier for businesses to come up with new ideas, get deals done and meet people face to face,” says Donegan.
He says the Australian economy has shifted its reliance from regional agricultural areas, to manufacturing areas dispersed across the country, and now to highly digitised industries found in CBDs. Industries such as professional and financial services now makes up a large percentage of Australia’s wealth generation.
Donegan says the major challenge this concentration will create moving forward is the issue of population growth away from city centres.
“Employment growth is highest in the centre of the city, meanwhile population growth is the highest further away from the city,” he says.  
“These are areas not well serviced by public transport and are a long way from where employment growth is happening.  People in those areas, to some extent, are cut off form opportunities created by concentrated economic growth.”
Donegan says this will in turn harm the economy if business can’t get the best access to the deepest pools of skilled employees.
“If people can’t access those potential employers, that is bad for business because they won’t find the best fit.”
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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Australia’s top money-making hotspots revealed

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Victorian Planning Minister Matthew Guy has approved the rezoning of land outside Mildura, paving the way for a $174 million biomass power plant.
However, it might not mean that property prices will skyrocket in the town, which sits a six hour drive north-west of Melbourne.
Providing a rezoning approval for the multi-million dollar project, it was noted that land at <a href="/news">Carwarp</a> was given approval for the 35-megawatt power station with 18-kilometre electricity transmission line and substation.
“Transforming plant waste into a new source of power has numerous benefits for the region and our environment. Residents are likely to see lower power bills, farmers will have a new income stream and the local economy will be bolstered by new industry and jobs,” Guy said.
  “With an increasing focus on renewable energy, long-term planning for the region has identified this opportunity to expand on traditional regional industries to drive jobs and economic growth.
“As envisaged in the Loddon Mallee North Regional Growth Plan, the region is quickly becoming a centre for investment in sustainable energy production, such as solar and biofuels. This next stage will confirm the region’s reputation as a clean energy centre.”
The plant will create 26 new full time jobs and generate enough electricity to power 20,000 homes, according to Mildura MLA Peter Crisp.
Yet despite this, and a $3 million Regional Growth Fund government grant, it won’t necessarily see prices rise.
Hotspotting’s Terry Ryder told Property Observer that Mildura is classified as a “long shot”.
“Mildura often appears to be on the verge of a boom, but never quite gets there,” he explained.
“The Biomass proposal is just the latest in a long line of alternative energy projects proposed for the Mildura area. A number of solar power stations have been planned. But, like so many alternative power developments planned around Australia, they never seem to happen.”
He also noted that there’s more money being poured in, with a major rail upgrade, but if it goes ahead according to plan then investors shouldn’t expect to see it completed until 2018.
“Mildura has appeal because of its cheap prices and good rental yields, but the missing factor is capital growth. It needs some of these major proposals to happen to push the property market into a growth phase.”
At present, <a href="/news">Mildura's median house price sits at $230,000</a>, according to RP Data, offering a median weekly advertised rent of $265.
In 2012, along with Shepparton, it <a href="/expert-insights/investing/mildura-and-shepparton-most-affordable-regional-areas-in-australia-demographia">topped Demographia's list of Victoria's most affordable regional areas</a>.
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A $174 million economic boost for Mildura, but property boom further off

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In recent weeks, data from the Australian Bureau of Statistics (ABS) has revealed that the number of loans taken out for the purposes of construction has increased to the highest level in around four and a half years.
If we smooth the numbers out on a rolling annual basis, we can see that while an upturn is entrenched, the uptrend still remains relatively shallow at this stage, and there is much more lifting to be done here:
<img src="https://3.bp.blogspot.com/-tqj0YZO7Kec/U8oJqJk0eXI/AAAAAAAAOmc/BmOyCPYotp0/s1600/constr1.jpg">
With dwelling prices having risen over time the total value of construction loans on a rolling annual basis is getting set to break new record highs:
<img src="https://4.bp.blogspot.com/-QBdi5yNpAsg/U8oJqNmc-fI/AAAAAAAAOmY/NcXlcmhEXo4/s1600/consrt2.jpg">
Importance of this?
It's worth noting here why this is considered to be important.
Dwelling construction been extensively researched by the ABS in years gone by, and the data uncovered showed the construction industry to have a very strong multiplier effect on the economy.
One of the more depressing things about visiting Britain over the past six or seven years - apart from the ongoing under-performance of the national sporting teams, that is - has been the near total lack of cranes on the horizon. 
That's rarely a sign of a thriving economy.
Things have been picking up strongly for UK construction of late, but it's been a moribund period indeed for the construction industry.
<a href="https://www.abs.gov.au/Ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/ed6220072793785eca256b360003228f!OpenDocument" target="_blank">Here's the ABS</a> on the effect of construction on the multipliers on the wider economy in terms of output and employment in Australia:
"For every $1 million spent on construction output (houses, non-residential buildings, etc.) in 1996-97, a possible $2.9 million in output would be generated in the economy as a whole, giving rise to nine jobs in the construction industry (the initial employment effect), and 37 jobs in the economy as a whole from all effects.
"These flow-on effects are made up as follows. The initial effect of the additional construction is $1 million. The first round effect for this additional construction would be the increased value of activity of around $0.5 million in those businesses manufacturing the materials needed for the additional construction, such as concrete and steel frames.
"The businesses supplying and servicing the concrete and steel frame businesses, such as aggregate quarrying and raw steel production, experience an increased demand for their products and services. This industrial support effect is estimated to be an additional $0.4 million.
"As activity has increased in the construction industry, as well as in the suppliers to that industry and the suppliers to the suppliers, there is an increase in wages and salaries to employees in this chain. The spending of these wages and salaries induces a further round of consumption effects in other areas of the economy totaling an additional $1 million."
Multiplier of three for construction
So, there you have it: construction in Australia has a multiplier effect of close to three. That is, for every $1 million invested, an additional $3 million is generated in the economy as a whole. 
Now let's put this in its wider context.
Below is what has happened in Aussie construction over the long run. Note the gargantuan boom in engineering construction driven by the resources building boom.
This sector is set to tail off quite nastily over the coming few years, although it's not yet entirely clear how quickly that will happen. Note how construction has become overwhelming dominated by mining and resources:
<img src="https://2.bp.blogspot.com/-4H062eDXc9U/U8oKjO5YRII/AAAAAAAAOms/774bYa3YBso/s1600/cons3.jpg">
In terms of other building work done, the split between residential and non-residential building has tracked as follows:
<img src="https://1.bp.blogspot.com/-gtWrJsICYfs/U8oKvGB0FQI/AAAAAAAAOm0/-JrUJyQa-WU/s1600/CONS4.jpg">
We don't need to get bogged down too much in the headline numbers here, other than to note that if mining capital expenditure falls by 20% in the 2015 financial year (which <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5625.0Main%20Features3March%202014?opendocument&amp;tabname=Summary&amp;prodno=5625.0&amp;issue=March%202014&amp;num=&amp;view=" target="_blank">forecasts suggest</a> may well eventuate), and does something similar again in the following financial year too, this leaves a monster hole in the Australian economy to somehow be filled.
Only one shining light exists in the state economies at the moment for infrastructure and dwelling construction, that being New South Wales, which is busily tackling its infrastructure and dwelling deficit:
<img src="https://1.bp.blogspot.com/-GSjRk0aOP2A/U8oPWO50R4I/AAAAAAAAOnI/YQx8kQ8oq0o/s1600/NSW+cwd.jpg">
Article continues on the next page. Please click below. 
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States which need to rebalance?
The implication of the mining and resources construction boom detailed on the previous page is that the Aussie economy has gotten itself quite dramatically out of balance.
In the March 2014 quarter the total value of engineering construction seasonally adjusted at around $31,850 million was way, way bigger than the total value of building at closer to $21,750 million.
This means that some states are going to face very significant challenges when the mining construction drops away.
The quarterly engineering construction figures by state clarify which which states - Queensland and Western Australia in particular - are going to face an uphill struggle in the coming years.
Those two states have benefited greatly from the boom, so they face more of a challenge from the forthcoming downturn:
<img src="https://2.bp.blogspot.com/-o2yTIzIBqpE/U8ouGvfyJNI/AAAAAAAAOnc/-GshYS_mTcY/s1600/BWDa.jpg" style="line-height: 1.3em;">
This is especially so because when you look at the uplift in building work done in this cycle only New South Wales to date has shown any real sign of thriving. These figures are not seasonally adjusted so the next seasonal uplift will be key, but it's clear that Western Australia has hit a plateau, Victoria's house building boom was last decade's news and something is not working as it should be in Queensland in terms of building work. South Australia and the minnow states are floundering, and in any case they aren't going to add much value in chain volume measures terms:
<img src="https://2.bp.blogspot.com/-maZf5-kXmds/U8ouGnGYKhI/AAAAAAAAOnY/q4Z8QSzDQ-w/s1600/BWD1.jpg">
This something to be wary of when commentators start talking up the Brisbane property market with the usual hyperbole this year, stating that it is "due for a boom".
Look, maybe, yes, and the general consensus is that Brisbane offers relatively good bang for the buck and the outlook for the property markets over the the next few years appears bright. But equally it always pays to be careful of the shallow property market commentary which takes little (or more typically zero) account of what is actually happening in relation to these huge structural shifts in the Aussie economy. Yes, there is an argument for dwelling prices to rise strongly in response to low interest rates, but as a general rule people don't buy property when they don't have jobs, and there is a major rebalancing challenge lying right ahead in the Aussie economy, especially in the mining states. You'd need rocks in your head to call a sustainable property boom while taking no account whatsoever of what the wider economy and labour markets are up to. It's one to watch carefully. Rates to fall lower still 
The charts detailed above show quite clearly that the hole left by mining construction can't readily be filled only by building more houses and a moderate level of infrastructure.
Net exports need to increase, which they indeed have been doing, albeit in the face of lower commodity prices. Household consumption needs to increase, which it was doing quite nicely, but then appears to have stalled again post-budget.
With the economy looking likely to tread water in Q2 (the unpredictable effect of inventories left aside), futures markets are quickly getting around to realising that the next move in interest rates must be down. To me another rate cut is looking more and more likely by the week. Pencil in a likely interest rate cut before Xmas, for my money.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His latest book is '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' .
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Why residential construction is so important to the Australian economy

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A textile manufacturing company that has been operating in the Victorian regional city of Wangaratta for more than sixty years has collapsed into liquidation due to the offshoring of government contracts and an increasingly competitive market.
Bruck Textile Technologies <a href="https://www.smartcompany.com.au/growth/42794-popular-cake-business-with-reality-tv-show-collapses-for-a-second-time" target="_blank">went into liquidation</a> on 11 July, with Barry Taylor and Andrew Needham from HLB Mann Judd appointed as liquidators.
Speaking to SmartCompany, Taylor said in prior years the manufacturer had a turnover of around $56 million.
“More recently to June 2013 it had dropped to about $38 million,” he said.
Taylor said creditors are owed around $7-8 million, with employees’ entitlements estimated to be worth an additional $4 million.
In recent days the textile manufacturer has been <a href="https://www.theage.com.au/victoria/wangaratta-textile-maker-shreds-company-sheds-worker-entitlements-20140713-zt65q" target="_blank">accused of deliberately entering into a questionable business arrangement</a> with another company, Australian Textile Mills, to avoid paying 60 redundant workers their entitlements – including annual leave, long service leave and redundancy pay entitlements.
This has caused Federal Employment Minister Eric Abetz to refer the matter to ASIC, and Taylor said as joint liquidator he is instructing solicitors to review the transaction.
“ASIC have been in touch with us and we are assisting them with their enquiries,” he said.
In a statement, Australian Textile Mills chief executive Geoff Parker told SmartCompany Bruck Textile Technologies was a company losing money despite its best efforts.
“With the demise of the local automotive industry and the offshoring of key government contracts, it was not a sustainable business and was incurring ongoing, significant losses,” said Parker.
“Under this strain, in the last six months alone, significant funds were invested by the shareholder to fund day to day activities, which was simply not sustainable,” he said.
Parker said the manufacturer’s board took professional financial and legal advice and decided it either had to liquidate the company – which would have affected more than 200 jobs – or sell the business to Australian Textile Mills in order to retain two-thirds of its staff.
Parker said all creditors will be paid and Australian Textile Mills will take on liabilities of approximately $20 million.
“The Directors of Australian Textile Mills are confident that they have made the correct decision,” said Parker.
“The only other option would have been far more devastating to the local Wangaratta community, creditors and employees.”
Bruck Textile Technologies has a long history in northeast Victoria and Cathy McGowan, the local federal MP, told SmartCompany there has been a huge amount of support shown for the workers both in Parliament and Wangaratta itself.
“The footwear clothing and textile industry is a very tough industry and it’s extraordinarily competitive,” says McGowan.
“This is a wake-up call for this sector in rural and regional areas.”
McGowan says it’s crucial for government to work with business in order to create an environment where manufacturing can reach its long-term potential.
“When businesses get into trouble they have to seek advice early,” says McGowan.
“There is absolutely no point in waiting until the death knoll. In a much bigger context, we need to look at how we can plan for the future of manufacturing.”
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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60-year-old Wangaratta manufacturing giant collapses

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GUEST OBSERVATION
At the current frequency of financial system inquiries (Campbell 1982, Wallis 1997, Murray 2014) there will not be another until 2030. That makes this week’s interim report from David Murray all the more critical.
By far the biggest problem with Australia’s financial system is the retirement savings system. Its fundamentally flawed structure is damaging the welfare of millions of Australian households.
There are three closely related problems. First, Australia’s retirement system forces households to make complex decisions that most households are not well placed to make.
Households in Australia have more freedom in managing their retirement savings than in any other developed country. That freedom would be terrific if it was matched by a world-leading level of financial literacy, but it is not. So the putative freedom is really more a burden to the majority of households who cannot navigate a complicated system without help from advisers.
The second problem is the poor quality of financial advice provided to households. The certification required to be employed as a financial adviser is an RG146. A person of average ability takes a few weeks to meet the RG146 requirements. That is, with a few weeks' training almost anyone can be employed in a financial advisory group and advise households on their lifetime savings.
The knowledge hurdle for financial adviser certification is not low because the requisite knowledge is small. It is low because of political pressure not to make it too high. In the 1980s and 1990s the life insurance sales sector morphed into the financial advice sector. Financial advice deals with much more complicated questions than insurance but the sector was able to resist regulation that would force its members to be properly trained.
Lobbyists have won
To this day the financial advisory firms have successfully resisted attempts to raise the bar on the expertise required by their employees to provide financial advice. Because most financial advisers are so poorly trained they cannot provide quality advice solutions to the problems of their clients. Most financial advisory firms simply have a set of cookie-cutter solutions for clients and the financial adviser’s job is to decide which cookie cutter goes with which client.
The third problem is by the far the most important. Most financial advisers have a substantial conflict of interest – the interests of their employer are at odds with the interests of their clients.
To make the point imagine the following situation. Your doctor is an employee of the Acme Drug Company. Acme has a suite of drugs covering many but not all medical conditions. For some conditions the Acme drug is the best, but for many conditions there are better drugs.
You pay for medical advice by the hour, but your doctor is paid by Acme. Your doctor can prescribe whichever drug she chooses, but her compensation depends on the volume of Acme drugs she prescribes, not other drugs.
Even though the medical profession has a well-deserved reputation for putting patients first, drug companies are not allowed to own medical practices. It is obvious that vertical integration in the medical system, where drug companies employed doctors, would corrupt the system. Sadly, this is exactly the situation we have in the retirement savings sector in Australia.
Conflicts remain
Over 80% of financial advisers work for firms that are either directly owned by, or very closely affiliated with, firms that provide a suite of financial management products. When a household goes to a financial advisory firm they will most likely be talking to a financial adviser who works for a firm that is vertically integrated with a provider of financial products. The financial adviser may or may not be free to select whichever financial products he chooses for the client’s solution, but he will only be compensated for recommending his own product provider (investment management firm).
This obvious conflict of interest is leading to dreadful outcomes in Australia. Households are being put into retail funds when they would be better off in industry funds. They are being put into very high-fee investment products when low-fee products would deliver the same expected returns before fees. They are being encouraged to borrow money to invest, to be underdiversified, to make the wrong decisions all around.
The financial system inquiry should address each of these three problems. First, it should recommend the federal government implement a long-term program of public education about fundamental ideas in retirement savings: save while you are young, don’t put all your eggs in one basket, and get a second opinion from an adviser who is certified as independent.
Second, it should insist on a proper level of training for all financial advisers.
Third, it should insist that financial advisers cannot be affiliated with financial product providers in any way – using the medical sector as its template.
The missing institution
There is another retirement savings problem that is of first order importance but unrelated to financial advice. Elderly households need a way of releasing the equity in their homes without the uncertainty that they will lose control of their residence.
The largest form of saving that most Australian households undertake over their lifetimes is that they buy homes that appreciate in value. The equity that Australian households have in residential real estate (value minus debt) is about A$2.8 trillion. That is nearly twice the A$1.6 trillion that Australian households have in retirement savings. Yet, there is no direct connection between these great pools of value.
There is a missing institution in the Australian financial system. What is needed is a financial organisation that will allow Australian households to borrow against their homes without any fear of losing control of the home and at an interest rate close to government treasury rates.
There are reverse mortgage products in the market. But those products are too expensive and poorly structured for most households. Releasing the equity in the homes of retirees is essential for solving the fiscal problems of the ageing of the Australian population.
Sam Wylie is principal fellow at <a href="https://mbs.edu/Pages/Default.aspx" target="_blank" style="line-height: 1.3em;">Melbourne Business School</a><img src="https://counter.theconversation.edu.au/content/28725/count.gif" alt="The Conversation" width="1" height="1" style="font-size: 12px; line-height: 1.3em;">.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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Three financial system flaws David Murray can’t ignore

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Governments and regulators need to keep their noses out of the future of the sugar industry, the newly elected NSW Liberal Democrats senator David Leyonhjelm claims.
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The sugar industry was notorious for attaching itself to the public teat, said David Leyonhjelm, who has worked in agribusiness for over three decades. 
His commentary came as a controversy erupted over the decision by the sugar processing company Wilmar to sell all its sugar direct to international customers rather than via the grower-owned marketing organisation, Queensland Sugar Limited (QSL), beginning in 2017. 
It has prompted another processor, Thai-owned MSF Sugar, to suggest it may follow suit. 
"True to form, there are numerous calls for regulators and governments to intervene," <a href="https://www.theland.com.au/blogs/agribuzz-with-david-leyonhjelm/agrarian-socialisms-sticky-end/2704390.aspx?storypage=0" target="_blank">David Leyonhjelm wrote in an editorial piece on The Land</a>. 
"A horde of politicians, including the Queensland Minister for Agriculture, is taking a close interest."
Wilmar is a Singapore-based agribusiness firm now among the top ten global raw sugar producers as well as the largest raw sugar producer and refiner.
"Fear of foreigners, particularly big multinationals, is never far from the surface in rural Australia. 
"In conjunction with the ever present assumption that everyone is out to rip farmers off, it is a formula for conspiracy theories and high anxiety.
"Such concerns are being stoked by QSL, which is probably fighting for its very existence, with its arguments stoking lingering agrarian socialist sentiments surrounding the fate of profits.
"In the end, this is a matter for the market to sort out.
"If Wilmar turns out to offer inferior service or prices to QSL, the market will deal with it by attracting new competitors.
"If growers think they need greater control over their marketing, they will either compel Wilmar to cooperate or find a way to avoid using it.
"If it turns out Wilmar is pointing the way of the future, QSL will be gone within five years and the industry will have finally restructured.
"Whatever the outcome, governments and regulators need to keep their noses out of it," he said.
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David Leyonhjelm says government should steer clear of sugar industry regulation

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A recent poll of 6,000 folk in WA said they could experience mortgage stress if interest rates are ratcheted back up, with housing stress defined as spending more than one third of disposable income on a mortgage.
Usually one might treat such surveys with caution, but a look at data for WA over recent years does seem to back the point up to a certain extent.
Retail turnover, for example, went on a blazing run for half a decade from early 2008, but perhaps consumers are now 'tapped out', with WA retail sales growth having tapered off since late 2012 on a seasonally adjusted basis:
<img src="https://1.bp.blogspot.com/-WPy4jftppA0/U6lXKZYJyTI/AAAAAAAAODI/U_y1qb-Na1Y/s1600/WA.jpg">
Perth's property markets have been on a very strong  run over the past dozen years, and after a prolonged lull which broadly ran from 2009 to 2012, dwelling prices in many areas saw another 10% price uplift in 2013:
<img src="https://4.bp.blogspot.com/-leRz10fqeBU/U6lkfevZ3XI/AAAAAAAAOEQ/DPoVp8eOeSk/s1600/11+year+prices.jpg">
Western Australia is now in transition mode as the mining construction boom passes its peak and the less labour intensive production phase of the mining boom kicks in.
It's important to note that in the short term this is likely to result in an uptick in unemployment and a slowing of the economy, which is one of the reasons why our 2014 forecasts were only for a far more moderate 0% to 3% growth, which essentially looks to be about on track at this juncture:
<img src="https://4.bp.blogspot.com/-Yx1uPLpOLEo/U6lXRLmlWXI/AAAAAAAAODQ/mlPbLaVk2zo/s1600/Perth.jpg">
It's worth noting that some of the data reported to date needs putting in perspective.
While the state population growth of +71,300 in 2013 represented a significant slowdown from an romping annualised pace of 3.7% to 2.9% in Q4, this is still by far and away the strongest population growth rate of any state, even though the larger states recorded higher absolute population growth numbers:
<img src="https://2.bp.blogspot.com/-vABYA1a-56M/U6laOIp5jJI/AAAAAAAAODk/L-M9YAl-LYU/s1600/Population.jpg">
Similarly, while the unemployment rate has ticked up from its pre-crisis lows, the unemployment rate is still only 5%, which is comfortably the lowest rate of any state, and a world apart from the southern states of Tasmania and South Australia where unemployment rates are flirting with a 7% level or higher:
<img src="https://4.bp.blogspot.com/-qakZ_6v1Occ/U6lkD8xMonI/AAAAAAAAOEA/8baFNVl-0iY/s1600/UEby+state.jpg">
Jobs growth in WA has tapered off too of late, but the past decade has been an undeniably strong one in WA:
<img src="https://3.bp.blogspot.com/-yEuaK3IhBnc/U6lkEGbqLoI/AAAAAAAAOEE/I5Xq5W7RvJg/s1600/WAjobs.jpg">
Mining boom over or changing?
When commentators saw that the "mining boom is over", what they are really referring to is that the mining construction boom of the past decade has now passed its peak and will start to decline, representing a drag on economic growth.
Refer to the national figures for engineering construction below:
<img src="https://3.bp.blogspot.com/-ZQDm9Ohq790/U6n_cBNmdhI/AAAAAAAAOEw/hPGAhgm3XRo/s1600/CWD.jpg">
Mining boom over or changing?
When commentators saw that the "mining boom is over", what they are really referring to is that the mining construction boom of the past decade has now passed its peak and will start to decline, representing a drag on economic growth.
Refer to the natClearly, however, the whole point of constructing resources projects is to bring reserves to production, and in this sense, the mining commodity exports boom is only in its infancy, with exports to China in particular accelerating by the month.onal figures for engineering construction below:
<img src="https://www.rba.gov.au/chart-pack/images/16-17-balance-payments/16tr-bcomx-small.gif?accessed=2014-06-24-20-45-07" alt="Bulk Commodity Exports graph">
Take a look at what's happening in WA's Pilbara region for example.
Iron ore cargo shipped out by the Port Hedland Port Authority (PHPA) in the month of May totaled an extraordinary 36.05 Mt (million tonnes), a whopping 30% increase in volumes on the May 2013 figure, with some 85% of that cargo bound for China or Taiwan, and Korea and Japan mopping up the rest:
<img src="https://4.bp.blogspot.com/-IngIN3j-joE/U6lhHYbvm1I/AAAAAAAAOD0/EXb798ksuYk/s1600/PHPA.jpg">
It was announced recently that on Saturday 7 June 2014 the PHPA shipped out an extraordinary 1,270,271 tonnes of iron ore on only a single tide, crunching the previous record set in April by a whopping 160,000 tonnes.
The last time I checked there are two tides in day, you can see how this could potentially comfortably equate to new monthly and annual throughput records in June when the data are reported in a week's time.
Summary
Western Australia will continue to be Australia's exporting powerhouse in the decade to come.
Clearly, however, there will be a very strong level of interest in how the Chinese economy continues to fare, since it is China's demand for iron ore in particular which is driving the boom (although Port Hedland, for example, also exports salt, copper concentrate and manganese ore to China and Taiwan).
The key data to watch for WA will be the presently low unemployment rate and where that peaks, and the all-important Labour Force figures which are released monthly by the Australian Bureau of Statistics.
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