Tabcorp shares slump despite profit result

TABCORP shares slumped yesterday despite a solid full-year result as the market took issue with the company’s earnings outlook.
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Tabcorp reported a net profit of $340 million in the year to June 30, down from $534.8 million in 2010-11, but the prior year included earnings from the casino business, which was demerged in June last year.

Based on continuing operations the net profit was 12.7 per cent higher than the $301.6 million reported last year driven by strong earnings growth and lower interest expenses following the demerger.

But Tabcorp shares slumped as much as 5 per cent during trading yesterday after the company flagged higher costs and lower-than-expected earnings from Victorian wagering business.

The termination of Tabcorp’s poker machine licence in Victoria next week will leave it with $17 million of corporate and IT costs to be allocated across the continuing business and higher racefield product fees. Tabcorp also warned that the terms of its new wagering licence in Victoria are ”significantly different” to the current licence, which expires next week.

If the new licence had applied to the Victorian wagering business this year its earnings before interest and tax (EBIT) would have been $150.2 million not the $229 million reported. ”The company has guided to pro forma wagering earnings of $150 million, which compares to our FY14 forecast of $190 million,” said Deutsche Bank analyst Mark Wilson.

The company was also keeping quiet on its plans to recover the $687 million it is owed in compensation as a result of its poker machine licence being cancelled next week.

Tabcorp chief executive David Attenborough said the company is ”looking at all options” but has not made a decision ahead of August 23 when the payment is due.

Tabcorp will lose its biggest profit engine with the loss of its pokie duopoly in Victoria but is looking to offset the loss with its new Keno licence in Victoria and the poker machine services business TGS.

The latter is on track to record underlying earnings of $55 million per annum based on the 8500 poker machines it has signed up.

In 2011-12, Tabcorp’s online wagering operations generated $2.16 billion in turnover, growing by 14.5 per cent compared to the prior year.

Fixed odds revenues were the highlight, growing by 41.5 per cent to $321.4 million. Totalisator revenues continued to decline as the market shifted to fixed odds betting where the profit margins are lower and Tabcorp faces strong competition from new entrants.

The company declared a final dividend of 11¢ a share full franked and said it targeted a dividend payout ratio of 80 per cent of net profit excluding the expected $47 million write-off of Victorian gaming goodwill in the current half year. Tabcorp shares closed 3.3 per cent lower, down 11¢, at $3.20.

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Not upwardly mobile, Telstra holds the line

THERE are not too many analysts with a buy recommendation on Telstra. Of late, there have been plenty downgrading it to hold or even sell. At the $4 level at which the company has been trading, this is no surprise.
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Telstra needed to pull a rabbit out of a hat yesterday to justify a ”buy” tag. It didn’t.

It produced earnings that were a bit shy of analysts’ expectations given the second half was a bit weaker than the first. The share price dipped 8¢ to $3.89 in response.

It’s not that Telstra has done anything wrong. It is still performing well, churning out cash, and sucking up handouts from the government to compensate it for the building of NBN infrastructure.

But the strong growth in mobiles it has experienced over the past couple of years will start to taper off in 2013. Telstra still expects to increase its subscriber numbers but not at the same rate.

It will look to offset this by increasing prices, but has to manage this process carefully to avoid the previous mistakes of overpricing and losing market share.

The game is not up in mobiles, but having now reached 60 per cent market share there is a limit to the pace of growth.

There are some brighter spots in the pipeline in other Telstra businesses areas, such as Network Application Services, which provides communications solutions to large organisations.

The Hong Kong-based CSL put in a good performance, as did the global connectivity business. But in absolute terms they are small, relative to mobiles.

And then there are the troublesome businesses.

Sensis – better known as the Yellow Pages directories business – continued to go backwards, with print revenue falling 22 per cent and margins slipping by 9 percentage points.

The headwinds from the decline in revenue from the fixed copper network continue.

The latest numbers (although not provided by Telstra) say 14 per cent of households no longer have fixed line connections. The trend will continue and more likely than not it will accelerate.

As is always the case with Telstra, the emerging technologies are required to offset those in decline. In 2012, the company managed to post a modest rise in revenue of 1.1 per cent, and an equally modest improvement in earnings before interest, tax, depreciation and amortisation (EBITDA) of 0.8 per cent – both of which were inside guidance.

The company’s outlook statement paints a fairly similar outcome for 2013 – low single-digit income and EBITDA growth.

One of the reasons these forecasts can be relied on is the stellar job Telstra is doing in managing its cost base, and we should expect to see more of this in 2013.

While these results are not the sort to generally excite the market, there are a series of other factors weighing in to Telstra’s share price performance, which this year alone has risen 16 per cent – more than 2½ times the rest of the market.

Its a combination of a flight to yield and reliability.

And this is scarce commodity at the moment.

There will be other companies reporting bigger improvements in 2012 earnings, but none have quantified a near-guaranteed dividend.

Given the rise in Telstra’s share price, the yield isn’t as attractive as it was a year ago but it certainly not bad at just over 7 per cent.

The other solid bit of information is that the government will drip-feed billions into Telstra’s coffers in upcoming years – $420 million was received in 2012.

While analysts now take the view that on financial fundamentals Telstra is fully priced, the trouble for investors is that there are few solid options out there in the market.

Punters can make a bet and buy plenty of what appear to be cheap stocks trading on low price earnings multiples, but they run the risk that earnings won’t improve or may even slide and dividends will fall.

With commodity prices falling, investors have been bailing out of the big stocks such as BHP Billiton and Rio Tinto.

There are myriad cyclical stocks, but most have risks associated with the broader economic environment.

Telstra is far less sensitive to the vagaries of consumer sentiment, although mobile revenue from the small business segment did suffer in 2012.

But where is the next growth driver?

There is no real suggestion from management that Telstra will spend up big on acquisitions.

Rather, it appears to be placing its bets (and $500 million of capital expenditure this year) on its new 4G mobile network. Right now this reaches only 40 per cent of the market.

But increasing capex is not always as popular with shareholders as it is with management.

While investors were not really expecting any capital management announcements yesterday, nor an increase in dividends, either one would have offset any earnings disappointments and resulted in Telstra’s share price ticking up even further.

The author owns Telstra shares.

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Changes from the waste up hit stumbling block

IT IS shaping up as this year’s most toxic board scrap over the remnants of a listed hazardous waste company.
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Dolomatrix wasted no time yesterday announcing that its 19.9 per cent shareholder of only two weeks, Roger Collison, had been appointed as its new managing director – and announcing plans to transform itself from a toxic waste concern into listed investment company.

Logical, one would think, given the state of financial markets. Dolomatrix cited Collison’s ”skills and experience as a funds manager”. But not all Dolomatrix shareholders appear to agree. The head of Brisbane fund manager Trojan Equity, Troy Harry, has lobbed a requisition of meeting seeking the removal of Collison and his appointment to the board with former Dolomatrix director Greg Soghomonian and Wilson Asset Management director James Chirnside.

Harry, like Collison, snapped up his 13 per cent stake after Dolomatrix paid a 35¢-a-share capital return to its shareholders after offloading its waste management business. Wilson has a 10 per cent stake, and the Soghomonian-chaired Weston Aluminium a 13.5 per cent stake.Banking ranking

RESERVE Bank assistant governor Guy Debelle provided some comfort yesterday to patriotic sports fans unhappy about Australia’s ranking on the Olympic gold medal tally, especially when compared with Team Great Britain. ”Australian banks are also benefiting from the fact that they look good compared with other banks in the world,” Debelle assured a Senate inquiry into the banking sector in Sydney yesterday. ”The risk premium on Australian banks is nowhere near as high as the risk premium on some Spanish banks.” He went further: ”We’ll get some back for the Olympics here … it’s true for UK banks too. The UK banks’ risk premiums are much higher at the moment than Australian banks.”Soft touch?

ASCIANO managing director John Mullen seems to be a softer touch when its comes to negotiating the pay rates of other chief executives, as opposed to the stevedore workers on his company’s docks.

Four months after Asciano ended its 20-month standoff with the maritime union by signing a new enterprise bargaining agreement, Telstra disclosed yesterday that its remuneration committee had approved an 8.7 per cent lift in the annual fixed pay of its chief executive, David Thodey, to $2.65 million from October.

This is on top of the 6 per cent fixed-pay rise Thodey received last October. Telstra, whose remuneration committee is chaired by Mullen, said Thodey’s fixed-pay increase would take him to the ”ASX 20 CEO market median”. Telstra said it would also seek shareholder approval for a lift in its non-executive fee pool from $3 million to $3.5 million. It disclosed that Thodey’s total pay increased from $5.1 million to $7.7 million in the year to

June 30. Telstra also disclosed that its former chief financial officer, John Stanhope, was paid a $745,000 termination benefit and secured a $600,000 12-month consulting deal ”to ensure a seamless transition on NBN-related matters”.Gray area

SIRTEX Medical has joined the list of ”first-strikers” to try to placate its shareholders before this annual meeting season, averting having a ”second strike” recorded against its remuneration report.

This would have forced its directors to automatically stand for re-election.

But the cancer treatment company’s issuing of a ”remuneration update” yesterday might struggle to avert another 25 per cent or above vote against its pay report, given the current board’s toxic relations with Sirtex’s former chairman and 17 per cent shareholder, Bruce Gray.

Sirtex provided a lengthy five-page explanation on how it had increased the ”difficulty of achieving the vesting conditions” of the performance rights granted to executives and so on. Sirtex’s remuneration committee chairman, John Eady, argued that his board had ”improved the company’s remuneration structure while enforcing its values and culture”.

But it remains doubtful Sirtex will win over one key shareholder, despite its shares hitting a 30-month high this week and tripling since Gray was dumped as chairman in August 2006.

Gray, at last year’s annual meeting, voted against all the resolutions put before shareholders.

After being dumped as chairman in 2006, Gray failed in his bid to have Eady, Grant Boyce and Sirtex chairman Richard Hill dumped from the board.

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Coalition split over energy price rises

THE Coalition energy spokesman, Ian MacFarlane, has contradicted his leader Tony Abbott’s claim that carbon tax is the only cause of power price rises, saying the Coalition would ”forcefully encourage” the states to privatise their electricity networks and would listen to calls to rein in overinvestment.
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Yesterday Mr Abbott said the Prime Minister, Julia Gillard, had ”fabricated” the entire idea that overinvestment in electricity ”wires and poles” had caused price rises beyond the carbon tax, and refused to commit the Coalition to regulatory reform.

”The problem is not the regulation of power prices. The problem is the carbon tax putting up power prices,” he said.

”This is a fabrication by the Prime Minister. This is an absolute furphy from the Prime Minister. Why would we believe the Prime Minister now about so-called gold-plating of power infrastructure when she’s never talked about it for the last five years?

”The Prime Minister herself in Parliament last year said that there was a need for more investment in power infrastructure. So, if there’s such a terrible problem of overinvestment in infrastructure, why did the Prime Minister say the opposite last year?”

But Mr MacFarlane told the Herald the issue of over-investment in wires and poles was ”absolutely a question for a Coalition government and we wouldn’t take five years to do something about it”.

He said he would ”forcefully encourage state governments to open their electricity distribution networks to competition, whether that is by privatisation or allowing private competitors into the market” to ensure price rises slowed down.

”We couldn’t force them but we could use all the levers available through COAG [Council of Australian Governments] to push them in that direction.”

He said he would ”listen to and take advice from the Australian Energy Regulator” about regulatory rules. The regulator

has been proposing regulatory changes for more than a year and has repeatedly argued that the present regime means power bills are higher than they should be.

Mr MacFarlane agreed and said by his calculation the NSW government was earning $190 a year from every household through its electricity assets.

”The biggest immediate pressure is the carbon tax but I accept electricity prices have risen because of unnecessarily high distribution costs … the government knew these astronomical price rises were coming through the system because of transmission investment and they’ve been asleep at the wheel. We wouldn’t be,” he said.

The federal MP Malcolm Turnbull said it was legitimate to ask ”whether the level of investment has been excessive, whether there has been gold-plating”.

In a speech today, the chairman of the Australian Competition and Consumer Commission, Rod Sims, will push the need for privatisation of networks.

”We still have key networks in government hands in Tasmania, Queensland, NSW and Western Australia … The incentives of government shareholders are unavoidably mixed and complicated … It is difficult to know what the objectives would have been had the businesses been in private hands but perhaps … [it] would have assisted in preventing some of the recent significant price increases,” he will say.

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Accuser in tears after arrest of Hey Dad co-star

Sarah Monahan … and as she appeared in the Hey Dad cast. Arrested … Robert Hughes.
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AFTER a two-year investigation and a three-month global hunt by police, former Hey Dad..! TV star Robert Hughes was last night behind bars in London, accused of molesting five girls more than 25 years ago.

His arrest prompted tears from Mr Hughes’s former co-star Sarah Monahan, who played Jenny on the hit show.

Ms Monahan tweeted: ”I am literally crying with happiness right now.”

Police allege the charges relate to crimes against five girls between 1985 and 1990 in a number of northern Sydney suburbs.

In May this year, police applied for an arrest warrant on 11 alleged offences, including sexual and indecent assault.

But Mr Hughes, who had been living in Singapore when the claims were first aired, could not be located.

Strike Force Ruskin police said detectives had ”conducted extensive inquiries internationally to locate the man”, eventually finding Mr Hughes in London. At about 4pm Sydney time yesterday, officers from the London Metropolitan Police arrested Mr Hughes, whose age was given as 63, in an upmarket area of central London.

He was taken to Belgravia Police Station and was last night expected to be charged by virtue of the arrest warrant. A Westminster local court hearing was expected to be held late last night.

Australian authorities would apply for the man’s extradition to NSW, with investigators from Strike Force Ruskin planning to travel to Britain to secure his return to Sydney.

The strike force was set up after Ms Monahan, the actress who played one of Mr Hughes’s on-screen daughters in the hit situation comedy, first raised the allegations via the media.

Ms Monahan alleged Mr Hughes, who played architect Martin Kelly on the sitcom, touched her inappropriately while on the set of the show, which aired on Channel Seven from 1987 to 1994.

Ms Monahan, who now lives in the US, last night thanked detectives for ”lots of hard work by all. You guys rock.”

”I got the call at 2am my time, promised I wouldn’t leak it out till they made their official announcement, but by 3am it’s all over the news! How awesome is today?”

The Herald last night contacted the talent management company run by Mr Hughes’s wife, Robyn Gardiner, but it did not respond to questions.

When the allegations were first publicly raised, Mr Hughes denied claims he had molested his young co-star.

”I’m absolutely, totally shocked at the allegations and I deny, absolutely deny, everything,” Mr Hughes told Channel Nine’s A Current Affair.

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Joyce spots chink of light in bid for lower house

BARNABY JOYCE’S path to the House of Representatives – and possibly the deputy prime ministership – appears smoother after the Nationals MP he is seeking to replace refused to commit to recontest his seat.
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Senator Joyce has been keen to move to the lower house at the next election. For months he has has been eyeing the Queensland seat of Maranoa, held by Nationals MP Bruce Scott since 1990.

Previously Mr Scott, who held a junior ministry in the Howard government, has resisted pressure to move aside for Senator Joyce, and frequently insisted he would recontest. But with the preselection to be decided for the first time by a postal ballot beginning next month, Mr Scott would only say yesterday he would do what was best for the Coalition.

”I’m a team player of a strong Coalition team and I will be spending my time and energy talking about how we can defeat this dreadful Labor government at the next election,” he said. ”I’m absolutely committed to getting the best for the electorate and do everything I can for a change of government in Canberra.”

He said he was ”fit and healthy” and enjoyed his job but declined to say in the statement, and through a spokeswoman later, whether he would renominate.

Senator Joyce said if Mr Scott did not renominate, he would run. If Mr Scott did nominate, he would consult local Nationals first, but it is believed he would challenge regardless. He said he had no immediate designs on the Nationals leadership, held by Warren Truss, a position he would need to fill if he were to become deputy prime minister in an Abbott government.

The Opposition Leader, Tony Abbott, declined yesterday to comment, saying it was a matter for the party.

Preselection squabbles are rife in the Coalition. The Nationals and the Liberals in NSW are at loggerheads over who should run for seats including Hume, Lyne and Gilmore.

NSW Liberal and National officials are trying to finalise an agreement to determine which party runs in which seats.

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Silent journeys

Desh Balasubramaniam is a former asylum seeker and founder of arts movement Ondru.THE political debate in Australia about asylum seekers has focused on those arriving by boat. They have been demonised, rather than described as what they truly are – some of the most desperate and vulnerable people on the planet, usually fleeing persecution, violence and even torture.
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It is disappointing that senior politicians fan the dog-whistle notion of ”queue jumpers”. In the overwhelming majority of cases, there is no queue or processing system accessible to asylum seekers in their home nations; indeed, only 0.5 per cent of the world’s more than 15 million asylum seekers have access to a queue.

Most asylum seekers are not ”boat people”, another dog-whistle term that sells Australians short; most Australians are kind and generous, and many celebrate that a key strength of our nation is a cultural diversity partly generated by refugees.

Of those who do arrive by sea, about 90 per cent are found to be genuine refugees. In the past 30 years, only about 30,000 asylum seekers have arrived in Australia by boat. The vast majority of people who ask for asylum here arrive by plane and seek refugee status while living in community housing.

Another disingenuous tactic to generate or inflame some voters’ antipathy is the use of the term ”illegal immigrants”. Asylum seekers are neither immigrants nor illegal. Immigrants leave their country by choice and can return at any time. There is no Australian law against arriving here without a valid visa to seek asylum. Further, as a signatory to the UN Convention on Refugees, Australia is obliged to protect people escaping persecution.

One way to help stop these people from risking their lives at sea is to seek a regional solution; only a handful of countries in our region are signatories to the Refugee Convention. Another part of the solution is to significantly increase the number of asylum seekers officially permitted to come here. Australia takes a mere 13,500 asylum seekers a year, or about 0.2 per cent of the world’s refugees. We rank 69th in the world in terms of the number we take relative to our population. As many as eight in ten asylum seekers are in developing nations; the biggest numbers are in Pakistan, Iran, Syria, Germany and Jordan.

The issue of asylum seekers is a humanitarian one, not political. Today’s guest in The Zone is here to help put a human face on the debate. Not only is Desh Balasubramaniam a former Sri Lankan refugee, he is also the founder of a Melbourne-based arts and literature movement, Ondru, set up to help broaden minds and deepen understanding about people who are forced to flee their home nations. Ondru’s mission is to ”evoke, challenge and inspire positive social change through honest expressions of arts and literature”.

His personal story exemplifies the contribution asylum seekers can make to our economy and society, and Ondru’s existence shows the way creativity can be used to help promote a positive public conversation, rather than the often-toxic one that has sullied Australia.

”What we want to do is broaden people’s perspectives, to create dialogue, to question. Nobody leaves their country without actually considering the options, and they leave as a last resort. We don’t talk sufficiently about the journey they go through, all that uncertainty.

”And then they arrive here and there’s another struggle – whether you’re accepted to stay here. And then there is another struggle, and that is to adapt. So those are the matters that we should question and reflect upon, not just make uninformed statements that too many people are coming.”

Balasubramaniam was born and raised until the age of 13 in the war-ravaged northern and eastern provinces of Sri Lanka. His parents fled with their four children and accepted on humanitarian grounds by New Zealand, where they settled in a country town.

Balasubramaniam spoke little English, and says the hardest thing he has ever done is get through his schooling. One of his abiding memories is being told by his father to do his homework by looking up every single word in the dictionary. The struggling student declared this an impossible task. His father threw the dictionary across the room to him and retorted that ”impossible” was a term found only in a fool’s dictionary. Balasubramaniam subsequently crossed out the word in every dictionary in the household.

He completed secondary school and went to university, where he took degrees in law and business.

He then found himself struggling to find his identity, so he travelled on a limited budget though a number of countries, usually hitchhiking, and worked in a series of jobs as he sought to reconcile being Sri Lankan, a Tamil and a New Zealander. His voyage took him to Melbourne, and something clicked.

”I felt Melbourne had this beautiful essence where I was able to meet people from all walks of life. Initially I was washing dishes, I was driving forklifts.

”I felt that whatever I wanted to do could be done here in Melbourne. I didn’t feel that in other places before. There was this beautiful essence and I felt this is where I want to be.”

He’s still here. Having worked in law firms, he moved to his current employer, the Victorian Department of Education. His work has contributed to engaging various disadvantaged communities through education and jobs as well as supporting industry to fill skills gaps.

That’s his day job. He spends another 40 hours a week alongside the other volunteers who have created Ondru.

Ondru means ”one” in Tamil and was an idea that came to him during his travels. Ondru seeks to inspire and generate community dialogue through a range of projects.

Balasubramaniam and his partners, who come from various nations including Spain, Sudan, France and Australia, are also planning to create workshops for schools, and would be happy to hear from teachers or principals, who can contact them through the website ondru南京夜网.

”It’s not just about living beside the other person, it is about being able to understand each other. If we’re saying we are to inspire social change or evoke and challenge, that is the context that we must understand – the intentions and why people act in a certain manner. That’s what we’re trying to bring about through our expressions.”

Their projects and events are all detailed on the website. They include dance, poetry, other literature, a magazine, film and photography.

Projects under development include Tales of Exotic Stress, a photographic study of indigenous themes, and Carriage of the Unspoken Letters, which combines photography and dance to compare Eastern identity with Western modernity.

In coming weeks, Melburnians will witness one of the biggest and most ambitious things Ondru has attempted. In a project called Voiceless Journeys, the group has photographed and interviewed 101 people from diverse backgrounds who are making their lives here after leaving their countries as a result of internal problems or conflicts. The plan is to enlarge the images, in some cases to the size of a wall, and display them throughout the city.

”We focused on telling the silent stories of people who have left their countries as a result of conflict or internal problems to make their lives here. What we wanted to do was not only celebrate the cultural diversity of Melbourne and wider Australia, but also raise awareness about their journey, their struggle, their survival, and their achievements.”

Balasubramaniam’s journey, struggle, survival and achievements enrich our community. He and the many others who have been sufficiently resilient and resourceful to escape terrible circumstances and rebuild their lives, are, surely, the sort of people employers should fight to employ and neighbours and communities hasten to embrace.

As we head towards another election, we can only hope our political leaders cease seeking political mileage out of the plight of such people, and encourage acceptance and understanding of potentially outstanding contributors to the growth and continuing prosperity of one of the world’s richest and most diverse nations.

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Attempt to wind up Islamic school over debts

Dianne and her son Mustafa, 6, moved from Queensland so Mustafa could attend the school.A CLOTHING company which supplies school uniforms has made a court application to wind up Malek Fahd Islamic School in Sydney because of its alleged failure to pay debts of $286,303.
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In its application lodged with the Federal Court, Duboke Pty Ltd, trading as Oz Fashions, alleges Malek Fahd has failed to pay 11 invoices dating from January 18 to February 14, this year.

The Federal Court of Australia will hear the matter next Friday.

Documents filed with the Australian Securities and Investments Commission show that Duboke and Malek Fahd’s parent company, the Australian Federation of Islamic Councils, share the same business address at 932 Bourke St, Waterloo.

Duboke made its application on July 19, 11 days before the NSW Minister for Education, Adrian Piccoli, wrote to the school asking it to repay $9 million in state-government funding.

Mr Piccoli said the school had breached funding requirements which prevent it from operating for profit. He said the school was transferring money to the Australian Federation of Islamic Councils without receiving any services.

The Association of Independent Schools of NSW was also asked to terminate more than $1 million the school receives in National Partnership funding for disadvantaged students, as part of a five-year agreement between state and federal governments.

For its state government funding to be reinstated, Mr Piccoli said the school would need to provide credible evidence that services were being provided in return for the money it transferred to the federation.

Mr Piccoli wrote to the federal Minister for Education, Peter Garrett, saying he had referred the matter to police and the Australian Securities and Investment Commission.

The federal Department of Education commissioned an independent audit of the school in December to find whether it was spending public funding on the education of students.

The Herald was unable to contact the school principal, Dr Intaj Ali, for comment yesterday.

In a statement on July 31, he disputed Mr Piccoli’s findings that the school was operating for profit and said he would challenge his decision.

”The school will take the appropriate steps to have this decision reviewed and is confident that ultimately the correct outcome will be achieved,” he said. ”Malek Fahd wishes to reassure all parents, students, staff and the wider community that its focus remains on the delivery of quality education for our students and it will continue to work with both the NSW and the federal education departments.”

The Herald also sought comment yesterday from the federation, which declined to comment and from Duboke’s solicitor, Marc Ryckmans, who did not return calls.

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Switched-on iPad infants put to the test

A TODDLER sits with a magazine in front of her, sliding her fingers across the pages then waiting expectantly for them to transform at her touch. It is clear from the video that she believes the magazine is an iPad.
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The next part of the YouTube clip shows the girl comfortably playing with an actual iPad. It ends with a message from the girl’s mother: ”For my one-year-old daughter a magazine is an iPad that does not work.”

For infant and child development psychologist Dr Jordy Kaufman, the YouTube video’s message is not surprising. But what he did find interesting was the strong reaction people had to it.

”The comments were very telling in terms of the feelings people have towards kids using touchscreen devices,” he says. ”Lots of people think it’s really funny, really cool. And there’s a lot of people who get the heebie-jeebies from it and think, ‘What are we doing to our kids?’.”

Dr Kaufman says the effects on children’s brain development from iPads are still largely unknown.

At a time when the popularity of touchscreen apps targeting infants and toddlers is exploding, Dr Kaufman, founder and director of the Swinburne Baby Lab, decided it was time that specific research was done.

So far, most research and warnings concerning children’s use of iPads has been based on research involving TV viewing. ”There is enough research showing television, especially some types of television, can have a detrimental effect on children,” Dr Kaufman says. ”But to assume it’s bad for all sorts of vices seems to be painting with an overly broad stroke.”

Dr Kaufman says the research, which has so far tested 46 children aged four to six, involves examining their attention and problem-solving capabilities after using an iPad compared with using real toys. For example, as part of the study, children are being asked to solve a problem using a wooden model. They are also asked to solve the same problem using an iPad app. After they have played, they are given a test to assess their attention.

Dr Kaufman also gets children to participate in drawing, colouring and block building, both physically and on iPads. Preliminary findings have shown that for some children, touchscreens appear to motivate and enhance learning rather than hinder it.

Dr Kaufman also said results were indicating that calm, creative activities on the touchscreen, such as painting, were similar to their ”real world” counterparts in that they ”do not seem to adversely affect children’s behaviour or attention in the short term”.

He hopes the study will help parents make more informed choices. ”Technology is changing so quickly, and what we really have to try to do from a science and societal perspective is try to have the research not lag too far behind that.”

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Banks’ $2 fee has big effect

Australians have banking economists stumped.AUSTRALIANS have banking economists stumped.
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They thought they knew what we would do when in 2009 the Reserve Bank outlawed largely hidden payments between financial institutions that were usually passed on to us as account-keeping fees whenever we used a so-called ”foreign” teller machine owned by another bank.

They thought we would do nothing.

In place of the indirect fees were direct fees in which the owner of each foreign ATM took the money directly from our accounts each time we made a foreign withdrawal.

But the size of the charge, typically two dollars, didn’t change. All of the economic models – including the Reserve Bank’s own model – suggested we would use ATMs pretty much as we had before. The incentives were much as they had been.

Instead withdrawals from foreign machines dived from around half of all ATM withdrawals to just 40 per cent. Among senior citizens the proportion fell to less than 10 per cent. The group the Reserve Bank had thought would be the least able to shop around turned out to be the keenest to drive across entire suburbs to avoid the two-dollar charge.

A Reserve Bank study released yesterday says it’s behaviour that ”cannot be accounted for by the model of ATM fees presented in this or any other existing paper”.

To work out why, it has turned to research on retailing and a finding that point-of-sale displays can change purchasing decisions even when they convey no new information.

It says one of the reforms it introduced in 2009 was effectively a ”point-of-sale prompt”. Since then every foreign user attempting to complete a transaction has been presented with a message reminding them of the fee and asking them to press a button to either continue or cancel. An astonishing 10 per cent of us confess to cancelling at least once in the past month.

The RBA’s tentative conclusion is that it is not the fee that is frightening us, it is being continually told about it.

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Bully campaign brings film to younger viewers

Lee Hirsch’s film Bully does not make for easy viewing.LEE Hirsch knows the subject matter of his documentary Bully all too well. “I was bullied as a kid,” says the 40-year-old New Yorker, in town for the film festival. “It was gangs of guys who’d make it their sport to get at me every day before I got home from school.”
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In a sense there is nothing special about that; this year, 13 million kids in the US will be bullied in one way or another. And for many of them, as for him, the worst thing about it will be the inability of the victim to let the people around them understand what’s going on.

“I remember so well not being able to get across what happens, and eventually you start to internalise it and shut down and not talk about it,” he says. “My dad is not a bad father but he’s 93 and fought in World War 2 and his attitude was just, like, ‘Man up’, you know. He wouldn’t come and fight with me, which I think is what I wanted.”

Hirsch unashamedly sees his film as a piece of agit prop, a much-needed weapon in the war on bullying. The film has extended outwards into a broad-ranging campaign under the umbrella of thebullyproject南京夜网. More than 125,000 kids have seen it in the States, a figure he hopes to triple in the next few months.

But Bully has been the subject of a campaign too. Earlier this year, the Motion Picture Association of America gave it an R rating on account of its language; kids under 18 could only see it in the company of a parent or guardian. After an online campaign that gathered more than 500,000 signatures and the support of Ellen de Generes and Meryl Streep, and after Hirsch cut a few curse words, the MPAA reclassified it as PG13.

“On one level it was because people felt the film, the story, was important, but also I think they were really sick and tired of that hypocritical guidance from the MPAA that said violence is fine, treating women badly is fine too,” Hirsch says. “You know The Hunger Games, which is about teenagers getting murdered, got a PG13. It just kind of rallied everybody.”

Not that Bully makes for easy viewing. The treatment meted out to young Alex Libby in particular is appalling — so much so that Hirsch eventually showed footage of what was happening to Alex to his parents and his school because he feared for his life.

There’s a happy ending to this story, though. “Alex is the greatest miracle to me in the world,” Hirsch says. “He’s really had a shine since the movie came out. He’s become so confident and outgoing and funny. He’s an activist and he speaks to thousands of kids. He makes you feel that change is possible.”

Bully screens at the Melbourne International Film Festival tonight and on Sunday and Tuesday, and is on general release from August 23.

■ The Age is a festival sponsor.

Visit the MIFF website for session details or to purchase tickets

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Eating for two during pregnancy a recipe for obesity, reveals study

ABOUT 50 per cent of women in Australia are overweight or obese when they fall pregnant, and researchers have found the diet of those women gets progressively worse during pregnancy and is especially poor after giving birth.
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The University of Adelaide study of nearly 300 overweight or obese women – defined as those with a body mass index of more than 25 – is the first to examine the diets of pregnant and overweight women until after birth.

The lead author, Lisa Moran, said, while some women suffered from morning sickness and food aversion, more than three quarters of the women entered the study in their second trimester, by which time those ailments usually had passed.

”It may be that for some women morning sickness doesn’t resolve as quickly,” said Dr Moran, from the university’s medical research centre, the Robinson Institute. ”But some women may still feel that pregnancy is the one time where they can relax some of their previous eating habits, and the idea of eating for two does seem to still resonate.”

Diet might also depend on family, friends and culture.

Participants completed a food frequency survey at four points throughout the study, published in the International Journal of Obesity, the last four months after birth. Thirty per cent had a poor diet at the start, but this jumped to nearly half after birth, with fruit, vegetable and dairy intake all poor. Energy intake from added sugars increased after birth, as did alcohol consumption.

More than 40 per cent did not consume enough iron or calcium while pregnant. Diet was also poorer as social disadvantage increased, and some women may have deliberately avoided meat and seafood because of bacteria fears.

Dr Moran said some health professionals may be reluctant to provide dietary advice that was too restrictive because they feared some might take it ”to the extreme of dieting – something we don’t want”.

But Kyra Sim, from the Boden Institute of Obesity, Nutrition, Exercise and Eating at Sydney University, said it was most important that women ensured they were healthy before attempting to get pregnant.

”While women may make changes when first getting pregnant to improve their health, we know maintaining those changes is the hardest,” Dr Kim said.

”We also know women tend to gain weight as they get older and are falling pregnant later, which could also be a factor.”

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Teachers suspicious of quota for skills checks

FORCING more than 2500 public school teachers a year to attend performance improvement programs would ”result in better teachers”, a state government review says.
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The NSW Commission of Audit final report recommends the education department improve its management of poor performing teachers and specifically endorses reviewing the performance of ”something closer to 5 per cent”, a huge increase on the current level.

Currently, 100 teachers a year are directed into 10-week Teacher Improvement Programs each year. Half of them return to work and half leave their jobs.

The proposal was rejected by the NSW Teachers Federation president, Maurie Mulheron, as part of ”the great distraction of teacher bashing”. He said a quota made no sense.

”If there is a teacher who is under-performing there should be a fair and rigorous process to support them and if they don’t meet the standards they shouldn’t remain in teaching,” Mr Mulheron said.

Lila Mularczyk, the president of the NSW Secondary Principals’ Council, said principals were also opposed to something that sounded like a quota for low-performing teachers.

”I can’t imagine that would have a positive outcome for anyone in the education system, or for the system itself,” she said.

But the Education Minister, Adrian Piccoli, who released a discussion paper last week designed to lift the quality of teaching, said that ”nothing is off the table” and the report should be considered.

The audit report also offers strong endorsement of the school autonomy reforms initiated by Mr Piccoli and advocates placing even more responsibility on principals to achieve the government’s goals.

For instance, it says sick pay has been ”poorly managed” and says the system is being abused, with costs increasing because principals are not replacing sick teachers with other teachers or deputy principals, as they are entitled to do under industrial agreements. Principals should be given responsibility to manage the problem – backed by the incentive of being able to keep ”at least some of the savings”.

The report recommends principals be alerted to staff with ”atypical” sick-leave patterns. ”Principals should then undertake an investigation of sick leave in their school, to determine whether some individuals may be abusing their entitlement,” the report states.

They should then force their own staff to cover ”short term absences”.

But Ms Mularczyk rejected the proposal. ”We don’t believe it is the principal’s job to be managing salaries or leave conditions,” she said.

”It has always been a priority for us to make sure there is a quality teacher in front of every class every day. But that does not mean increasing the workload of someone who already has a role in the school.”

The NSW opposition education spokeswoman, Carmel Tebbutt, said students would suffer.

”We don’t want to go back to the day where classes are combined because schools can’t afford to employ casual staff to cover for sick teachers,” she said.

Mr Mulheron said principals would be forced to pick up the work that had been done by public servants. ”This report confirms our worst fears, that education policy in NSW is being driven by Treasury,” he said.

The report also recommends the government consider buying out the long service leave entitlements of teachers.

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