Category: Taxation

  • MIL-OSI USA: Bringing 893 New Jobs to Western Colorado: Morgan Mining to Expand Manufacturing Industry in Grand Junction and Mesa County

    Source: US State of Colorado

    GRAND JUNCTION – Today, Governor Polis, the Global Business Development Division of the Colorado Office of Economic Development and International Trade (OEDIT), and the Grand Junction Economic Partnership (GJEP) announced that Morgan Mining, a leading interdisciplinary construction, mining, engineering, and management firm, has selected Grand Junction, Colorado, for expansion. This project will grow the advanced manufacturing industry and create new, good-paying jobs in rural Colorado.

    “I’m thrilled that Morgan Mining is expanding in western Colorado, bringing 893 new good-paying jobs to Grand Junction and Mesa County. Colorado is the best place to live, work, and do business, and this exciting announcement shows that our leadership to lower costs for workers and build a strong workforce continues to attract businesses to our strong economy, strengthening our Colorado for All,” said Governor Polis.

    Morgan Mining provides specialized mining labor, production management, and mining supplies for mining operations and other ancillary services. The company plans to expand its business through additional contracts throughout the United States and has identified the need to purchase a new site and refurbished mining equipment. The new site will serve as a hub for product and material suppliers to consign substantial inventory and equipment that would provide faster delivery to end users.

    “We are excited to move forward with our expansion plans in Mesa County. We decided that creating a mining-focused hub in Mesa County provided the best economic and growth opportunities for Morgan.  From the outset of this expansion project, OEDIT and GJEP were very actively engaged with us and ultimately provided the support needed to tip the scales in favor of Mesa County.  We look forward to continuing our relationship with these entities, as well as other local leaders, as this expansion moves forward,” said Justin Morgan, President of Morgan Mining.  

    In Mesa County, Morgan Mining expects to create 893 net new jobs at an average annual wage of $92,447, or 167% of the average annual wage in Mesa County. The positions will include engineers, electricians, and finance roles.

    “We are thrilled to partner with Grand Junction Economic Partnership and support Morgan Mining’s expansion in Mesa County. When advanced manufacturing companies expand in rural Colorado, they strengthen and diversify regional communities and economies. That’s a win for western Colorado and a win for the state of Colorado,” said OEDIT Executive Director Eve Lieberman.

    “Morgan Mining’s investment into Mesa County represents a significant milestone for the regional economy. With up to 893 new jobs projected over the next eight years, this expansion provides incredible opportunities for local workforce development while reinforcing the region’s reputation for supporting industry growth. We are proud to partner with Project West Co Mining as they invest in our community’s future,” said Curtis Englehart, Executive Director for the Grand Junction Economic Partnership.

    The Colorado Economic Development Commission approved up to $10,890,875 in a performance-based Job Growth Incentive Tax Credit for the company over an eight-year period. These incentives are contingent upon Morgan Mining, referred to as Project WesCo Mining throughout the OEDIT review process, meeting net new job creation and salary requirements.

    In addition to Colorado, Morgan Mining considered Tennessee for expansion. The company currently has 226 employees, 196 of whom are in Colorado.

    About Colorado Office of Economic Development and International Trade

    The Colorado Office of Economic Development and International Trade (OEDIT) works to empower all to thrive in Colorado’s economy. Under the leadership of the Governor and in collaboration with economic development partners across the state, we foster a thriving business environment through funding and financial programs, training, consulting and informational resources across industries and regions. We promote economic growth and long-term job creation by recruiting, retaining, and expanding Colorado businesses and providing programs that support entrepreneurs and businesses of all sizes at every stage of growth. Our goal is to protect what makes our state a great place to live, work, start a business, raise a family, visit and retire—and make it accessible to everyone. Learn more about OEDIT.

    About the Grand Junction Economic Partnership

    The Grand Junction Economic Partnership (GJEP) works to enhance the economic vitality and quality of life in the Grand Junction area by supporting high-impact capital investment and job creation. GJEP is a single stop for businesses looking to relocate or expand in the cities of Grand Junction and Fruita, the Town of Palisade, and surrounding communities in Mesa County. Operating as a 501(c)3, GJEP offers free services that help businesses navigate incentives and opportunity zones and connect with realtors and developers, the workforce, local leadership, and more. Visit www.gjep.org for more information.

    ###

    MIL OSI USA News

  • MIL-OSI United Kingdom: Last minute tinkering does little to ease pressure of Councils – Plaid Cymru Council leaders

    Source: Party of Wales

    Councils are “in an impossible position”, forced to cut services and increase Council tax, as a result of the Labour Welsh Government’s budget, Plaid Cymru Council leaders have warned.

    Responding to the final budget, the Leaders of Carmarthenshire, Gwynedd, Ynys Môn and Ceredigion councils said that “last minute tinkering” will do little to ease pressures on already fragile services.

    After learning of the Labour government’s final plans, Darren Price, Nia Jeffreys, Gary Pritchard and Bryan Davies said:

    “It has been clear for some time that Councils would be put in an impossible position, forced to cut services, and increase Council tax.

    “Regrettably, that remains the case and this last-minute tinkering from the Labour Welsh Government does little to ease the pressure on already fragile services.

    “Plaid Cymru council leaders warned in December of the perilous financial outlook for local services.

    “We cautioned Ministers that the average 4.3% increase for councils announced for next year clearly falls short of meeting the pressure on council budgets.

    “Despite an additional £30m being made available for social care, the fact that it isn’t included in the base line doesn’t afford councils the opportunity to mitigate the upcoming increases in Council Tax.

    “The increase in employers’ National Insurance contributions announced by the UK Government last year is also a huge cause of concern for councils. The Welsh Local Government Association has estimated that the cost to local authorities stands at £109m, and this cost will not be fully met. That represents yet another cost pressure to councils’ already squeezed budgets.

    “If the Labour Welsh Government’s “partnership in power” with their counterparts in Westminster is to mean anything, then the Spring Statement at the end of March will give Wales a cash injection we so desperately need to make up for decades of unfair funding.”

    MIL OSI United Kingdom

  • MIL-OSI Africa: South Africa’s fight over VAT raises a key question: who should bear the burden of taxes?

    Source: The Conversation – Africa – By Fabio Andrés Díaz Pabón, Research Fellow, African Centre of Excellence for Inequality Research (ACEIR), University of Cape Town

    The unprecedented postponement of the tabling of South Africa’s 2025 budget because of disagreement within the coalition government over a two percentage point increase in value added tax (VAT), highlights the country’s dilemma.

    The government needs to raise revenue to deliver on its constitutional obligations. But in a context where the global outlook is uncertain and unpredictable, trade-offs are required.

    South Africa has a deficit of around 4.3% of GDP, accounting for R377 billion (US$20,479 billion). According to the Unpublished budget review public debt stands at 76.1% of its GDP.

    Whereas the public debt as a percentage of GDP is in line with that of similarly sized economies, its debt servicing costs are considerably higher. The country pays around 5% on public debt interest as a share of GDP while developing and upper-middle-income countries pay, on average, 2.2% and 1.8% respectively.

    These figures point to why the finance minister wanted to raise more revenue. Treasury’s estimates in the 2025 unpublished Budget Review were that the increase in Vat and other tax adjustments plus factoring in tax foregone due to expanding the basket of zero-rated goods would have brought in an additional R58 billion (US$3.1 billion) for the 2025/26 financial year.

    To date, debates around previous years’ budgets have mostly been about expenditure, with very little scrutiny of the revenue side. Not since the 2013 Davis Tax Committee has there been public debate about reforming the tax policy.


    Read more: South Africa’s economy needs a shot in the arm, not austerity: 3 key areas where more public spending would get results


    Based on our academic research we believe the crucial question around tax reform is: who will bear the burden of the reform? And how taxes connect to the promise of the South African social compact. The social compact since democracy, expressed in the constitution, promises to uphold the rights of all citizens.

    Evidence shows that increases in the rate of VAT affect poor households more, particularly women-headed households.

    While the government is concerned about financing its budget and being able to raise the resources needed to make the state work, a rethink is needed about who must bear the burden of raising the money.

    The cost of food

    VAT is a flat tax on consumption of goods and services, usually paid by the end consumer. It affects lower income households more because they spend a greater share of their income on goods such as food, electricity and water.

    The uproar over the recent proposed increase is therefore not surprising.

    At least 34% of the yearly income of poor households is spent on food and groceries. Almost 50% of South Africans live under the poverty line. This is where the impact will be felt in a number of ways.

    Firstly, the net effect of an increase in VAT will mean that mean that already financially stretched households will be paying more for food. This comes on top of food inflation was 8% between 2023 and 2024.

    Secondly, meagre increases in social grant payments in the last decade – over 28 million grants are paid out every month – have not kept pace with inflation.

    One of the largest grants is the old age pension grant. There are around 3.9 million beneficiaries. It amounts to R2,190 (US$118) a month for those between 65 and 74 years and is the sole source of income for many families.

    Between 2023 and 2024 this grant increased by R110 (US$5.45) – a 5.2 % increase, while inflation stood at 4.5%. However, after taking into account inflation, the grant amounts to R2,091 (just over US$107), having the net grant increase (after adjusting for inflation) of meagre R11 (the grant was in 2023 R2.080).

    A VAT increase would raise their cost of living for working-class South African households (those earning between R8,000 (US$432) and R22,000 (US$1,188) a month) too. This cohort is already using 67% of their income to cover their debts. Middle class households (earning between R22,000 (US$1,188) and R35,000 (US$1,893) a month) use 69% of their income to cover their debts. A VAT-induced increase in the cost of living may push some to neglect servicing debt to maintain their living standards.

    If middle and working class households defaulted in large numbers on their debt obligations, a vicious cycle might unfold.

    Firstly, banks and financial institutions might face significant losses due to unpaid loans. This could trigger an economic recession as consumption could fall, leading to lower revenue collection. This could increase government debt as the state might need to bail out banks or get loans to cover the revenue shortfall. The result would be a credit downgrade which might make it more expensive to borrow money on international markets.

    In a country with such a limited and vulnerable tax base (in 2024, only 7.4 million people of 63 million paid income tax) these risks should not be taken lightly.

    Poor households spend 34% of their income on food. Per-Anders Pettersson/Getty Images

    Wealthy South Africans

    Wealthy South Africans will not be as badly affected by an increase in VAT. Their consumption as a share of their incomes is less. Yet they remain central to the government’s dilemma about raising money from taxes. That’s because taxing wealthier South Africans will result in a push-back, and in some cases put a strain on struggling companies and industries that are central for job creation.

    However, the most likely reason a VAT increase was chosen as opposed to a higher income tax for high income earners, taxes on capital gains, or taxes on wealth is that the government knows the wealthy elites (including those in government) will oppose increases taxes targeted at them. They are more organised and have more leverage over the government than vulnerable households.

    What next?

    The government needs to spend money properly and meet its constitutional obligations. And corruption must be reduced.

    What the standoff over the VAT increase has highlighted is that, if South Africa aims to be a society where everyone actually counts, it should place the well-being of all its citizens at the forefront. This should be the principle that informs the process of raising the resources needed to drive future.

    – South Africa’s fight over VAT raises a key question: who should bear the burden of taxes?
    – https://theconversation.com/south-africas-fight-over-vat-raises-a-key-question-who-should-bear-the-burden-of-taxes-250412

    MIL OSI Africa

  • MIL-OSI Global: South Africa’s fight over VAT raises a key question: who should bear the burden of taxes?

    Source: The Conversation – Africa – By Fabio Andrés Díaz Pabón, Research Fellow, African Centre of Excellence for Inequality Research (ACEIR), University of Cape Town

    The unprecedented postponement of the tabling of South Africa’s 2025 budget because of disagreement within the coalition government over a two percentage point increase in value added tax (VAT), highlights the country’s dilemma.

    The government needs to raise revenue to deliver on its constitutional obligations. But in a context where the global outlook is uncertain and unpredictable, trade-offs are required.

    South Africa has a deficit of around 4.3% of GDP, accounting for R377 billion (US$20,479 billion). According to the Unpublished budget review public debt stands at 76.1% of its GDP.

    Whereas the public debt as a percentage of GDP is in line with that of similarly sized economies, its debt servicing costs are considerably higher. The country pays around 5% on public debt interest as a share of GDP while developing and upper-middle-income countries pay, on average, 2.2% and 1.8% respectively.

    These figures point to why the finance minister wanted to raise more revenue. Treasury’s estimates in the 2025 unpublished Budget Review were that the increase in Vat and other tax adjustments plus factoring in tax foregone due to expanding the basket of zero-rated goods would have brought in an additional R58 billion (US$3.1 billion) for the 2025/26 financial year.

    To date, debates around previous years’ budgets have mostly been about expenditure, with very little scrutiny of the revenue side. Not since the 2013 Davis Tax Committee has there been public debate about reforming the tax policy.




    Read more:
    South Africa’s economy needs a shot in the arm, not austerity: 3 key areas where more public spending would get results


    Based on our academic research we believe the crucial question around tax reform is: who will bear the burden of the reform? And how taxes connect to the promise of the South African social compact. The social compact since democracy, expressed in the constitution, promises to uphold the rights of all citizens.

    Evidence shows that increases in the rate of VAT affect poor households more, particularly women-headed households.

    While the government is concerned about financing its budget and being able to raise the resources needed to make the state work, a rethink is needed about who must bear the burden of raising the money.

    The cost of food

    VAT is a flat tax on consumption of goods and services, usually paid by the end consumer. It affects lower income households more because they spend a greater share of their income on goods such as food, electricity and water.

    The uproar over the recent proposed increase is therefore not surprising.

    At least 34% of the yearly income of poor households is spent on food and groceries. Almost 50% of South Africans live under the poverty line. This is where the impact will be felt in a number of ways.

    Firstly, the net effect of an increase in VAT will mean that mean that already financially stretched households will be paying more for food. This comes on top of
    food inflation was 8% between 2023 and 2024.

    Secondly, meagre increases in social grant payments in the last decade – over 28 million grants are paid out every month – have not kept pace with inflation.

    One of the largest grants is the old age pension grant. There are around 3.9 million beneficiaries. It amounts to R2,190 (US$118) a month for those between 65 and 74 years and is the sole source of income for many families.

    Between 2023 and 2024 this grant increased by R110 (US$5.45) – a 5.2 % increase, while inflation stood at 4.5%. However, after taking into account inflation, the grant amounts to R2,091 (just over US$107), having the net grant increase (after adjusting for inflation) of meagre R11 (the grant was in 2023 R2.080).

    A VAT increase would raise their cost of living for working-class South African households (those earning between R8,000 (US$432) and R22,000 (US$1,188) a month) too. This cohort is already using 67% of their income to cover their debts. Middle class households (earning between R22,000 (US$1,188) and R35,000 (US$1,893) a month) use 69% of their income to cover their debts. A VAT-induced increase in the cost of living may push some to neglect servicing debt to maintain their living standards.

    If middle and working class households defaulted in large numbers on their debt obligations, a vicious cycle might unfold.

    Firstly, banks and financial institutions might face significant losses due to unpaid loans. This could trigger an economic recession as consumption could fall, leading to lower revenue collection. This could increase government debt as the state might need to bail out banks or get loans to cover the revenue shortfall. The result would be a credit downgrade which might make it more expensive to borrow money on international markets.

    In a country with such a limited and vulnerable tax base (in 2024, only 7.4 million people of 63 million paid income tax) these risks should not be taken lightly.

    Wealthy South Africans

    Wealthy South Africans will not be as badly affected by an increase in VAT. Their consumption as a share of their incomes is less. Yet they remain central to the government’s dilemma about raising money from taxes. That’s because taxing wealthier South Africans will result in a push-back, and in some cases put a strain on struggling companies and industries that are central for job creation.

    However, the most likely reason a VAT increase was chosen as opposed to a higher income tax for high income earners, taxes on capital gains, or taxes on wealth is that the government knows the wealthy elites (including those in government) will oppose increases taxes targeted at them. They are more organised and have more leverage over the government than vulnerable households.

    What next?

    The government needs to spend money properly and meet its constitutional obligations. And corruption must be reduced.

    What the standoff over the VAT increase has highlighted is that, if South Africa aims to be a society where everyone actually counts, it should place the well-being of all its citizens at the forefront. This should be the principle that informs the process of raising the resources needed to drive future.

    The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

    ref. South Africa’s fight over VAT raises a key question: who should bear the burden of taxes? – https://theconversation.com/south-africas-fight-over-vat-raises-a-key-question-who-should-bear-the-burden-of-taxes-250412

    MIL OSI – Global Reports

  • MIL-OSI USA: Armstrong signs first bill of 2025 legislative session, expanding eligibility for primary residence tax credit

    Source: US State of North Dakota

    Gov. Kelly Armstrong today signed his first bill of the 2025 legislative session, expanding eligibility for the state’s $500 property tax credit on primary residences to allow an estimated 3,900 additional residences to qualify for the credit.

    Senate Bill 2201 expands the primary residence tax credit, first approved in 2023, to allow for the inclusion of primary residences held by trust, life estates and property being purchased under a contract for deed.

    “As we continue to work on a broader property tax relief and reform package, signing this bill into law ensures the property tax relief approved last session is available to all primary residence owners as intended,” Armstrong said. “We appreciate the bill sponsors and state Tax Commissioner’s Office for their efforts to fix this issue and expand tax relief for North Dakota homeowners, making our state a more affordable place to live, work and raise a family.”

    The bill was introduced by Sen. Mark Weber of Casselton, who chairs the Senate Finance and Taxation Committee, and co-sponsored by Senate Majority Leader David Hogue, House Majority Leader Mike Lefor, House Finance and Taxation Committee Chairman Craig Headland, and the chairs of the Senate and House appropriations committees, Sen. Brad Bekkedahl and Rep. Don Vigesaa.

    The House and Senate both unanimously approved SB 2201. The bill makes the expanded eligibility retroactive to taxable years 2024 and 2025.

    “This bill corrects an oversight from last session and rightfully allows primary residences held in trust to be eligible for the primary residence credit on their 2024 and 2025 property taxes,” Weber said. “The goal of the primary residence credit was to allow all homeowners – assuming they live in those homes – to receive that relief, and this bill ensures that can happen.”

    The expanded eligibility will save taxpayers up to $1.9 million in both the 2023-25 and 2025-27 biennia. An emergency clause in the bill allows those newly eligible to apply immediately.

    “I’m pleased with the outcome, and we look forward to working with eligible individuals to ensure their application for both the 2024 and 2025 property tax years are processed and credit received,” state Tax Commissioner Brian Kroshus said. “I encourage them to apply online at tax.nd.gov/prc or contact us directly at 877-649-0112 to connect with a property tax credit specialist.”  

    MIL OSI USA News

  • MIL-OSI Security: Jury Convicts Former KC Police Officer of $200,000 Charity Fraud Scheme

    Source: Office of United States Attorneys

    KANSAS CITY, Mo. – A former Kansas City, Mo., police officer who ran an anti-crime charity has been convicted in federal court of a scheme in which he spent more than $200,000 in donations for his own personal expenses.

    Aaron Wayne McKie, 47, was found guilty on Thursday, Feb. 20, of nine counts of wire fraud and one count of money laundering. McKie worked as a police officer for the Kansas City, Mo., Police Department for 24 years, assigned as a police officer to the Crime Free Multi-Housing section from 2002 through 2023.

    McKie served from 2009 to 2023 as president of Mid-America Crime Free, Inc. (MACF), a non-profit organization that claimed to provide training to persons in the rental housing industry and promote anti-crime programs. He was an officer of the charity for three years prior, from 2006 to 2009.

    Evidence produced during the trial indicated that McKie devised a scheme to defraud MACF and its donors that began in July 2009 and lasted until October 2023. Individuals and businesses contributed $387,620 to MACF, not including in-kind donations. McKie spent at least $200,060 for his own personal purposes.

    The biggest source of MACF funds was an annual golf tournament, “Fairways 4 Fuzz Golf Tournament.” Individuals and businesses donated both money and in-kind donations, such as food and beverages, to MACF via the golf tournament. At least 121 donors have been identified.

    From 2009 to 2023, the flyers soliciting donations and players for the tournament claimed the funds raised would enable MACF to provide free seminars to owners of rental properties and train police officers. In reality, those claims were false. The Kansas City Police Department paid the salaries and expenses of Crime Free Multi-Housing unit officers who may have provided training to landlords; McKie used the majority of MACF funds for personal spending; and the IRS had revoked the organization’s tax-exempt status in 2010.

    Under federal statutes, McKie is subject to a sentence of up to 20 years in federal prison without parole on each of the 10 counts on which he was convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

    Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for nine hours before returning guilty verdicts to U.S. Chief District Judge Beth Phillips, ending a trial that began Monday, Feb. 10.

    This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney and Special Assistant U.S. Attorney Amanda Hanson. It was investigated by the FBI and the Kansas City, Mo., Police Department.

    MIL Security OSI

  • MIL-OSI Security: Howey-In-The-Hills Resident Pleads Guilty To Embezzling Employment Taxes

    Source: Office of United States Attorneys

    Ocala, Florida – Acting United States Attorney Sara C. Sweeney announces that Dorian Farmer has pleaded guilty to one count of failure to pay employment trust fund taxes and two counts of willfully failing to file tax returns. Farmer faces a maximum penalty of five years in federal prison for the employment trust fund offense and up to one year of imprisonment for each willful failure to file tax return offenses. A sentencing date has not yet been set.

    According to court documents, Farmer was the owner of several businesses in Howey-In-The-Hills in Lake County. For years, Farmer collected employment trust fund taxes from his employees—such as those that pay for Social Security or Medicare. Rather than turning these taxes over to the Internal Revenue Service (IRS), Farmer embezzled the funds for his own use. He took large cash distributions from one of his businesses which went unreported to the IRS. Farmer also failed to file tax returns for himself and one of his businesses, Titleist Technologies, Inc. (d/b/a Summit Joint Performance) for tax year 2000, as required under federal law. Farmer’s criminal acts resulted in a total tax loss of $806,653.

    This case was investigated by the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorney William S. Hamilton.

    MIL Security OSI

  • MIL-OSI: Navicore Solutions Offers Guidance for Those Struggling to Pay Their Tax Bill

    Source: GlobeNewswire (MIL-OSI)

    MANALAPAN, N.J., Feb. 21, 2025 (GLOBE NEWSWIRE) — As tax season approaches, millions of Americans find themselves overwhelmed with stress—especially those who owe more to the IRS than they can afford to pay. Navicore Solutions provides support, education and personal finance advice to those struggling with looming tax debt.

    The most recent IRS reported tax gap in 2022 is over $125 billion, including underreported, unpaid and unfiled taxes. These taxes are owed by an estimated 11 million Americans. While the government has provided some leniency, for example, during the COVID era the ‘People First Initiative’ delayed the collection of back taxes and the more recent ‘Tax Relief for American Families and Workers Act’ of 2024, tax debt continues to contribute to the overall financial stress of many Americans.

    Navicore Solutions helps families find relief by providing advice for the more immediate problem of what to do if you’re unable to pay your tax bill, including guidance on short term, long term, and partial payment plans. In addition, Navicore provides long term personal finance education and advice to help alleviate the ongoing problems that arise from a lack of financial literacy and poor money management.

    “Navicore understands the financial and emotional strain that comes with tax debt. Fortunately, there are options available, and we’re here to help our clients gain control of and navigate their personal finances to relieve the stress of all kinds of personal debt,” said Diane Gray, Chief Operating Officer with Navicore.

    Ignoring tax debt can lead to serious consequences, including tax liens, wage garnishments, or even legal action. It’s crucial to act quickly to avoid these ramifications. Navicore Solutions provides financial counseling to help individuals understand their options and make informed decisions.

    About Navicore Solutions

    Founded in 1991, Navicore Solutions is a national leader in the field of nonprofit financial counseling with a mission to strengthen the well-being of individuals and families through education, guidance, advocacy, and support.

    Navicore counselors provide a wide range of services including credit counseling to consumers in need; education programs through workshops, courses and written material; debt management plan to provide relief for applicable consumers; student loan counseling for those struggling with student loan debt; and housing counseling services in the areas of rental, pre-purchase, default and reverse mortgage. The agency is an advocate of financial education helping communities achieve and maintain financial stability.

    Contact:
    Lori Stratford
    Digital Marketing Manager
    Navicore Solutions
    lstratford@navicoresolutions.org
    navicoresolutions.org

    The MIL Network

  • MIL-OSI Security: Guilty Verdict in Georgia Tax Fraud Case, Defendant’s Second Federal Fraud Conviction

    Source: Office of United States Attorneys

    ALBANY, Ga. – A Southwest Georgia resident with a prior federal conviction for tax fraud in Florida was found guilty by a federal jury seated in Albany of a fraudulent tax filing scheme.

    Reginald Knight, 52, of Arlington, Georgia, was found guilty of one count of making and subscribing a false tax return on Feb. 19, following a two-day trial that began on Feb. 18. Knight faces a maximum of three years in prison to be followed by three years of supervised release and a $100,000 fine. Chief U.S. District Judge Leslie Abrams Gardner is presiding over the case. A sentencing date will be determined by the Court.

    “The defendant was claiming millions in refunds for a business that never generated income or incurred any losses, fabricating these claims in yet another attempt by the defendant to steal from taxpayers,” said Acting U.S. Attorney C. Shanelle Booker. “We are grateful to the IRS investigators who collaborated with our office to help bring a repeat fraudster to justice.”

    “The guilty verdict serves as a notice to unscrupulous tax preparers that filing fraudulent tax returns will lead them to a criminal court date,” said Assistant Special Agent in Charge Lisa Fontanette, IRS Criminal Investigation, Atlanta Field Office. “IRS Criminal Investigation special agents will continue to investigate and recommend prosecution for those individuals who commit tax crimes.”

    According to court documents and evidence presented at trial, Knight filed a tax return with the IRS on March 13, 2018, falsely claiming $3,211,907 in wages, $2,586,551 in withholdings, $1,848,000 in Schedule C (Form 1040) losses and claimed a refund of $2,165,154. As part of the scheme, Knight fabricated W-2s and Schedule Cs for two separate business entities; however, neither business ever generated the income, paid the withholdings or suffered the losses Knight claimed on his return. The financials Knight submitted on the signed tax form were entirely fabricated. The IRS did not issue a refund. The IRS began investigating Knight in 2021, discovering that Knight filed tax returns with similarly exorbitant financials for the non-operating business for tax years 2014, 2015 and 2016; the IRS did not issue a refund for tax years 2014 and 2015. The IRS did issue a $745,953 refund to Knight for tax year 2016 on June 7, 2017. Knight used the refund from the false claim to pay for the construction of a new home in Albany, made transfers to his investment account, purchased a vehicle and paid for personal living expenses totaling $442,667.30. The IRS recovered $315,466.97.

    Knight has a prior federal conviction in the Southern District of Florida for one count of Conspiracy to Defraud the Government through False Claim for a Tax Refund and False Claim for a Tax Refund on Nov. 22, 2005, and was sentenced to serve five months in prison per charge, to be served concurrently.

    The IRS Criminal Division and IRS Special Enforcement Program are investigating the case.

    Assistant U.S. Attorney Veronica Hansis is prosecuting the case for the Government.

    MIL Security OSI

  • MIL-OSI: Immunefi Launches the Magnus Platform to Protect the Next Trillion Dollars Moving Onchain

    Source: GlobeNewswire (MIL-OSI)

    Singapore, Feb. 21, 2025 (GLOBE NEWSWIRE) —

    • Onchain security today is fragmented, inefficient, and dangerously reliant on manual workflows. As capital flows into a rapidly expanding web of protocols, the complexity of securing the ecosystem grows—exposing projects to immeasurable risk and inevitable large-scale breaches. Without a fundamental shift in how security is managed, the next trillion dollars won’t move onchain.
    • Immunefi is solving this problem by launching Magnus, a unified security platform that integrates all essential tools in the onchain security stack in a single command center, unifying threat intelligence and automating SecOps using AI agents across CI/CD pipeline security, vulnerability scanning, audits, bug bounties, onchain monitoring, and firewalls.
    • Magnus will be powered by Immunefi’s own products and the best providers in each product and service category, a proprietary agentic security workflow automation engine, and threat intelligence built upon the largest onchain vulnerability dataset available today. 

    Immunefi, the leader in onchain crowdsecurity protecting over $190 billion in assets, launches Magnus, an AI-powered security orchestration platform that unifies and automates security operations across a protocol’s security stack for maximum protection.

    Onchain security is fragmented and inefficient, relying on manual workflows that struggle to keep up with the relentless pace of threats the ecosystem faces 24/7. This scenario will only get worse as liquidity spreads across a growing number of protocols and the complexity of securing the ecosystem compounds. This leaves the ecosystem vulnerable to a future where major breaches remain inevitable, hindering the adoption and growth of the onchain economy.

    The lack of trust that digital assets are fully secure remains one of the biggest obstacles to TradFi investment in the onchain economy, even as interest continues to grow. While Decentralized Finance (DeFi) has surpassed $124 billion in total value locked (TVL), the industry is still plagued by catastrophic hacks. If security remains fragmented, the next trillion dollars in finance won’t move onchain. The only way to address this and mitigate threats at scale is by unifying security into a single platform that enables protocols to access, automate, and coordinate best-in-class security tools. 

    Immunefi leverages years of experience securing over $190B in assets across a network of 500+ projects to launch Magnus, an AI-powered security platform that unifies threat intelligence and automates security workflows across the best tools in the onchain security stack. Immunefi has integrated its pioneering bug bounty products and audit competitions into Magnus and is partnering with top-tier security researchers, auditors, service providers, and tooling companies to provide a comprehensive security platform. 

    • Unified Security Toolstack: A seamlessly integrated suite of best-in-class security solutions, including CI/CD pipeline security, vulnerability scanning, audits, bug bounty programs, audit competitions, Safe Harbor, onchain monitoring, and a firewall, ensuring protocols can detect and mitigate threats at every stage.
    • Security Swarm: An automation engine that orchestrates task-specific AI agents, enabling instant threat response and drastically reducing manual workloads. As more tools are added to Magnus, Security Swarm will become more autonomous in managing security and ensuring the safety of funds.
    • CODEX: The industry’s largest and most comprehensive onchain vulnerability dataset, proprietary to Immunefi—built from processing over 90% of all industry reports and additional materials related to onchain bug bounties. CODEX powers AI security models, allowing protocols to train and refine AI agents for onchain security applications, advanced threat detection, and defense.

    “Security must evolve as fast as the onchain economy itself, or the industry will remain trapped in a cycle of catastrophic breaches,” said Mitchell Amador, Founder and CEO of Immunefi. “Magnus marks the first time security in web3 is being addressed as a cohesive, integrated, and efficient system rather than a patchwork of tools. We’re transforming the way the security industry works altogether and equipping protocol teams with the ability to anticipate, prevent, and respond to threats at unprecedented speed and scale. All from a single platform, with technology that will continue to evolve alongside the industry and its projects.”

    Due to its foundational position in the web3 security industry, Immunefi has established partnerships with top-tier security providers such as Nexus Mutual, Halborn, Sigma Prime, and Asymmetric Research, amongst others. Immunefi has already secured interest from a number of top tier security service and tooling providers to integrate with Magnus that will be announced soon.

    About Immunefi
    Immunefi is the leading crowdsourced security platform for Web3. It guards over $190 billion in user funds and is trusted by 370+ projects, including Ethereum Foundation, Lido, Sky, Polymarket, Optimism, LayerZero, Hyperlane, and Stacks. The company has paid out the most significant bug bounties in the software industry, amounting to over $112 million, and has pioneered the scaling Web3 bug bounties standard. For more information, please visit https://immunefi.com

    The MIL Network

  • MIL-OSI: STEALTHGAS INC. Reports Fourth Quarter and Twelve Months 2024 Financial and Operating Results

    Source: GlobeNewswire (MIL-OSI)

    ATHENS, Greece, Feb. 21, 2025 (GLOBE NEWSWIRE) — STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today its unaudited financial and operating results for the fourth quarter and twelve months ended December 31, 2024.

    OPERATIONAL AND FINANCIAL HIGHLIGHTS

    • All-time record Net Income of $69.9 million for the twelve month period of 2024, a 34.7% increase compared to the same period last year. Strong profitability continued for the fourth quarter, with Net income of $14.2 million corresponding to a basic EPS of $0.38.
    • Revenues increased by 27.3% compared to the same period of last year to $43.5 million for the fourth quarter of 2024.
    • Further increased period coverage. About 70% of fleet days for 2025 are secured on period charters, with total fleet employment days for all subsequent periods generating over $200 million (excl. JV vessels) in contracted revenues.
    • Continued reducing leverage, making $108.2 million in debt repayments during the twelve month period of 2024 and $34.4 million in the current quarter of 2025. Currently, 26 out of 28 vessels in the fully owned fleet are unencumbered.
    • Maintaining ample cash and cash equivalents (incl. restricted cash) of $84.5 million as of December 31, 2024 enabling the Company to further reduce debt.

    Fourth Quarter 2024 Results1:

    • Revenues for the three months ended December 31, 2024 amounted to $43.5 million compared to revenues of $34.1 million for the three months ended December 31, 2023, based on an average of 27.6 vessels and 27.0 vessels owned by the Company, respectively, as the vessels remaining in the fleet earned higher revenues due to better market conditions.
    • Voyage expenses and vessels’ operating expenses for the three months ended December 31, 2024 were $3.2 million and $13.6 million, respectively, compared to $3.3 million and $12.9 million, respectively, for the three months ended December 31, 2023. The $0.7 million increase in vessels’ operating expenses was mainly due to increase in crew costs and maintenance expenses, while the voyage expenses remained stable between 2024 and 2023.
    • Drydocking costs for the three months ended December 31, 2024 and 2023 were $1.9 million and $0.03 million, respectively. Drydocking expenses during the fourth quarter of 2024 mainly relate to the completed drydocking of three vessels, compared to no drydocking of vessels in the same period of last year.
    • General and administrative expenses for the three months ended December 31, 2024 and 2023 were $3.0 million and $1.7 million, respectively. The change is mainly attributed to the increase in stock-based compensation expense.
    • Depreciation for the three months ended December 31, 2024 and 2023 was $6.6 million and $5.6 million, respectively, a $1.0 million increase is mainly related to the increase in average number of vessels owned by the Company and to the partial replacement of some of the older vessels with newer and larger ones which have a higher cost.
    • Interest and finance costs for the three months ended December 31, 2024 and 2023, were $1.4 million and $2.3 million, respectively. The $0.9 million decrease from the same period of last year is primarily due to continued debt prepayments.
    • Interest income for the three months ended December 31, 2024 and 2023, were $1.1 million and $1.0 million, respectively.
    • Equity earnings in joint ventures for the three months ended December 31, 2024 and 2023 was a gain of $0.5 million and $0.9 million, respectively. The $0.4 million decrease was primarily due to decrease in number of vessels in joint ventures.
    • As a result of the above, for the three months ended December 31, 2024, the Company reported net income of $14.2 million, compared to net income of $8.9 million for the three months ended December 31, 2023. The weighted average number of shares outstanding, basic, for the three months ended December 31, 2024 and 2023 was 35.3 million and 35.3 million, respectively.
    • Earnings per share, basic, for the three months ended December 31, 2024 amounted to $0.38 compared to earnings per share, basic, of $0.25 for the same period of last year.
    • Adjusted net income was $16.4 million corresponding to an Adjusted EPS, basic, of $0.44 for the three months ended December 31, 2024 compared to Adjusted net income of $10.3 million corresponding to an Adjusted EPS, basic, of $0.29 for the same period of last year.
    • EBITDA for the three months ended December 31, 2024 amounted to $21.2 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
    • An average of 27.6 vessels were owned by the Company during the three months ended December 31, 2024 compared to 27.0 vessels for the same period of 2023.

    Twelve months 2024 Results:

    • Revenues for the twelve months ended December 31, 2024, amounted to $167.3 million, an increase of $23.8 million, or 16.6%, compared to revenues of $143.5 million for the twelve months ended December 31, 2023, as the vessels remaining in the fleet earned higher revenues due to better market conditions.
    • Voyage expenses and vessels’ operating expenses for the twelve months ended December 31, 2024 were $11.7 million and $49.8 million, respectively, compared to $13.2 million and $53.1 million for the twelve months ended December 31, 2023. The $1.5 million decrease in voyage expenses was mainly due to the decrease in spot days, while the $3.3 million decrease in vessels’ operating expenses was mainly due to the decrease in the average number of owned vessels in our fleet.
    • Drydocking costs for the twelve months ended December 31, 2024 and 2023 were $5.3 million and $2.6 million, respectively. The costs for the twelve months ended December 31, 2024 mainly related to the completed drydocking of seven vessels, while the costs for the same period of last year mainly related to the completed drydocking of three of the larger handysize vessels.
    • General and administrative expenses for the twelve months ended December 31, 2024 and 2023 were $10.3 million and $5.3 million, respectively. The change is mainly attributed to the increase in stock-based compensation expense.
    • Depreciation for the twelve months ended December 31, 2024, was $26.1 million, a $2.4 million increase from $23.7 million for the same period of last year, as the Company partly replaced some of the older vessels with newer and larger vessels which have a higher cost.
    • Impairment loss for the twelve months ended December 31, 2024 and 2023 was nil and $2.8 million, respectively. The impairment loss for the year ended December 31, 2023, related to two vessels for which the Company had entered into separate agreements to sell to third parties.
    • Gain on sale of vessels for the twelve months ended December 31, 2024 was $0.05 million compared to $7.6 million for the same period last year. The decrease is attributed to the sale of four of the Company’s vessels during the twelve months ended December 31, 2023 compared to the sale of two vessels during the twelve months ended December 31, 2024, which had been classified as held for sale as of December 31, 2023.
    • Interest and finance costs for the twelve months ended December 31, 2024 and 2023 were $9.1 million and $10.0 million, respectively. The $0.9 million decrease from last year is primarily due to continued debt prepayments.
    • Interest income for the twelve months ended December 31, 2024 and 2023 was $3.4 million and $3.7 million, respectively. The $0.3 million decrease is mainly attributed to decrease in interest rates and over the corresponding period.
    • Equity earnings in joint ventures for the twelve months ended December 31, 2024 and 2023 was a gain of $15.6 million and a gain of $12.3 million, respectively. The $3.3 million increase from the same period of last year is mainly due to a profitable sale of one of the Medium Gas carriers owned by one of our joint ventures.
    • As a result of the above, the Company reported a net income for the twelve months ended December 31, 2024 of $69.9 million, compared to a net income of $51.9 million for the twelve months ended December 31, 2023. The weighted average number of shares outstanding, basic, for the twelve months ended December 31, 2024 and 2023 was 35.2 million and 37.2 million, respectively.
    • Earnings per share, basic, for the twelve months ended December 31, 2024 amounted to $1.91 compared to earnings per share, basic, of $1.38 for the same period of last year.
    • Adjusted net income was $77.3 million, corresponding to an Adjusted EPS, basic, of $2.11 per share, for the twelve months ended December 31, 2024 compared to adjusted net income of $50.5 million, or $1.34 per share, for the same period of last year.
    • EBITDA for the twelve months ended December 31, 2024 amounted to $101.6 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
    • An average of 27.2 vessels were owned by the Company during the twelve months ended December 31, 2024, compared to 29.3 vessels for the same period of 2023.

      As of December 31, 2024, cash and cash equivalents (including restricted cash) amounted to $84.5 million and total debt amounted to $84.9 million.

      1  EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are non-GAAP measures. Refer to the reconciliation of these measures to the most directly comparable financial measure in accordance with GAAP set forth later in this release.

    Fleet Update Since Previous Announcement

    The Company announced the conclusion of the following chartering arrangements (of three or more months duration):  

    • A twelve months time charter for its 2024 built LPG carrier Eco Wizard, until Dec 2025.
    • A twelve months time charter for its 2020 built LPG carrier Eco Alice, until Feb 2026.
    • A twelve months time charter for the JV-owned 2007 built LPG carrier Gas Haralambos, until Dec 2025.
    • A three months time charter for the 2012 built LPG carrier Gas Husky, until April 2025.

    As of February 2025, the Company has total contracted revenues of approximately $200 million.

    As of February 2025, the Company has circa 70% of fleet days secured under period contracts and contracted revenues of approximately $107 million for the remainder of the year.

    On January 21, 2025, the previously announced sale of the Gas Shuriken was concluded and the vessel was delivered to its new owners.

    Share Repurchase Program Increase

    Today the Board of Directors authorized a $5 million increase to the existing $25 million common stock repurchase program for a total aggregate amount of $30 million. Shares of common stock may be purchased, from time to time, in open market or privately negotiated transactions, at times and prices that are considered to be appropriate by the Company, and the program may be suspended or discontinued at any time. As of the date hereof, the Company has repurchased an aggregate of approximately $19.4 million.

    CEO Harry Vafias Commented

    It is with great pride that we announce today for the third consecutive year record annual profits. After a successful fourth quarter we concluded 2024 reporting net income of $70 million for the year, a 35% increase, far outpacing the underlying market improvement for our vessels. We are delivering on our strategic priorities, modernizing the fleet, securing revenues and de-risking the business, aiming to bring strong value to StealthGas shareholders. We can now say we are net debt free, after having further reduced our debt in the current quarter. We are close to completing our deleverage that will bring a long term advantage to the fleet and the Company is in a solid footing. As successful as we have been we are established in the shipping markets long enough not to forget that we operate in a volatile sector where fortunes can be made and lost quite rapidly. We are optimistic for the future albeit evermore cautiously not least because the current global geopolitics that can have a strong influence on shipping markets are for the time being quite opaque with too many developing situations. Finally, in order to give further value back to our shareholders, we are renewing our share repurchases and increasing up to $10.5 million the amount available to us for this task.

     Conference Call details:

    On February 21, 2025 at 10:00 am ET, the company’s management will host a conference call to discuss the results and the company’s operations and outlook.

    Conference call participants should pre-register using the below link to receive the dial-in numbers and a personal PIN, which are required to access the conference call.

    https://register.vevent.com/register/BIa607c71e1abf4ac08816dfc43bd8d733

    Slides and audio webcast:
    There will also be a live and then archived webcast of the conference call, through the STEALTHGAS INC. website (www.stealthgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

    About STEALTHGAS INC.

    StealthGas Inc. is a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry. StealthGas Inc. has a fleet of 31 LPG carriers, including three Joint Venture vessels in the water. These LPG vessels have a total capacity of 349,170 cubic meters (cbm). StealthGas Inc.’s shares are listed on the Nasdaq Global Select Market and trade under the symbol “GASS.”

    Visit our website at www.stealthgas.com

    Forward-Looking Statements

    Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although STEALTHGAS INC. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, STEALTHGAS INC. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydockings, shipyard performance, changes in STEALTHGAS INC’s operating expenses, including bunker prices, drydocking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, the conflict in Ukraine and related sanctions, the conflict in Israel and Gaza, potential disruption of shipping routes due to ongoing attacks by Houthis in the Red Sea and Gulf of Aden or  accidents and political events or acts by terrorists.

    Risks and uncertainties are further described in reports filed by STEALTHGAS INC. with the U.S. Securities and Exchange Commission.

    Fleet List        
    For information on our fleet and further information:
    Visit our website at www.stealthgas.com

    Fleet Data:
    The following key indicators highlight the Company’s operating performance during the periods ended December 31, 2023 and 2024.

    FLEET DATA Q4 2023   Q4 2024   12M 2023   12M 2024  
    Average number of vessels (1) 27.0   27.6   29.3   27.2  
    Period end number of owned vessels in fleet 27   28   27   28  
    Total calendar days for fleet (2) 2,484   2,542   10,698   9,944  
    Total voyage days for fleet (3) 2,441   2,446   10,566   9,677  
    Fleet utilization (4) 98.3 % 96.2 % 98.8 % 97.3 %
    Total charter days for fleet (5) 2,207   2,265   9,544   8,930  
    Total spot market days for fleet (6) 234   181   1,022   747  
    Fleet operational utilization (7) 96.8 % 95.0 % 96.6 % 95.4 %
                     

    1) Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
    2) Total calendar days for fleet are the total days the vessels we operated were in our possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys.
    3) Total voyage days for fleet reflect the total days the vessels we operated were in our possession for the relevant period net of off-hire days associated with major repairs, drydockings or special or intermediate surveys.
    4) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
    5) Total charter days for fleet are the number of voyage days the vessels operated on time or bareboat charters for the relevant period.
    6) Total spot market charter days for fleet are the number of voyage days the vessels operated on spot market charters for the relevant period.
    7) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days excluding commercially idle days by fleet calendar days for the relevant period.

    Reconciliation of Adjusted Net Income, EBITDA, adjusted EBITDA and adjusted EPS:

    Adjusted net income represents net income before loss/gain on derivatives excluding swap interest paid/received, impairment loss, net gain/loss on sale of vessels and share based compensation. EBITDA represents net income before interest and finance costs, interest income and depreciation. Adjusted EBITDA represents net income before interest and finance costs, interest income, depreciation, impairment loss, net gain/loss on sale of vessels, share based compensation and loss/gain on derivatives.

    Adjusted EPS represents Adjusted net income divided by the weighted average number of shares.

    EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS are included herein because they are a basis, upon which we and our investors assess our financial performance. They allow us to present our performance from period to period on a comparable basis and provide investors with a means of better evaluating and understanding our operating performance.

    EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS are not recognized measurements under U.S. GAAP. Our calculation of EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS may not be comparable to that reported by other companies in the shipping or other industries. In evaluating Adjusted EBITDA, Adjusted net income and Adjusted EPS, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.

    (Expressed in United States Dollars,
    except number of shares)
    Fourth Quarter Ended
    December 31st,
    Twelve months Periods
    Ended December 31st,
      2023 2024 2023 2024
    Net Income – Adjusted Net Income        
    Net income 8,889,046   14,198,527   51,936,829   69,862,177  
    Plus/(Less) loss/(gain) on derivatives 255,736     (237,618 ) (99,286 )
    (Less)/Plus swap interest (paid)/received 216,432     1,027,127   208,127  
    (Less)/Plus (gain)/loss on sale of vessels, net     (7,645,781 ) (46,384 )
    Plus impairment loss     2,816,873    
    Plus share based compensation 940,216   2,206,295   2,589,405   7,326,807  
    Adjusted Net Income 10,301,430   16,404,822   50,486,835   77,251,441  
             
    Net income – EBITDA        
    Net income 8,889,046   14,198,527   51,936,829   69,862,177  
    Plus interest and finance costs 2,344,430   1,425,886   9,956,712   9,062,562  
    Less interest income (952,287 ) (1,052,786 ) (3,712,239 ) (3,416,221 )
    Plus depreciation 5,565,955   6,598,549   23,707,797   26,076,687  
    EBITDA 15,847,144   21,170,176   81,889,099   101,585,205  
             
    Net income – Adjusted EBITDA        
    Net income 8,889,046   14,198,527   51,936,829   69,862,177  
    Plus/(Less) loss/(gain) on derivatives 255,736     (237,618 ) (99,286 )
    (Less)/Plus (gain)/loss on sale of vessels, net     (7,645,781 ) (46,384 )
    Plus impairment loss     2,816,873    
    Plus share based compensation 940,216   2,206,295   2,589,405   7,326,807  
    Plus interest and finance costs 2,344,430   1,425,886   9,956,712   9,062,562  
    Less interest income (952,287 ) (1,052,786 ) (3,712,239 ) (3,416,221 )
    Plus depreciation 5,565,955   6,598,549   23,707,797   26,076,687  
    Adjusted EBITDA 17,043,096   23,376,471   79,411,978   108,766,342  
             
    EPS – Adjusted EPS        
    Net income 8,889,046   14,198,527   51,936,829   69,862,177  
    Adjusted net income 10,301,430   16,404,822   50,486,835   77,251,441  
    Weighted average number of shares, basic 35,300,965   35,345,251   37,166,449   35,237,059  
    EPS – Basic 0.25   0.38   1.38   1.91  
    Adjusted EPS – Basic 0.29   0.44   1.34   2.11  
     
    StealthGas Inc.
    Unaudited Condensed Consolidated Statements of Income
    (Expressed in United States Dollars, except for number of shares)
      Quarters Ended
    December 31,
      Twelve month Periods Ended
    December 31,
      2023   2024   2023   2024
               
    Revenues              
    Revenues 34,139,248     43,467,117     143,527,769     167,262,185  
                   
    Expenses              
    Voyage expenses 2,878,732     2,679,927     11,429,716     9,594,880  
    Voyage expenses – related party 426,108     535,991     1,779,488     2,063,228  
    Vessels’ operating expenses 12,690,873     13,404,725     52,206,248     48,961,137  
    Vessels’ operating expenses – related party 207,500     212,500     911,250     875,002  
    Drydocking costs 27,696     1,855,672     2,641,706     5,312,614  
    Management fees – related party 1,048,800     1,089,040     4,531,920     4,258,240  
    General and administrative expenses 1,657,671     3,010,733     5,331,029     10,309,693  
    Depreciation 5,565,955     6,598,549     23,707,797     26,076,687  
    Impairment loss         2,816,873      
    Net gain on sale of vessels         (7,645,781 )   (46,384 )
    Total expenses 24,503,335     29,387,137     97,710,246     107,405,097  
                   
    Income from operations 9,635,913     14,079,980     45,817,523     59,857,088  
                   
    Other (expenses)/income              
    Interest and finance costs (2,344,430 )   (1,425,886 )   (9,956,712 )   (9,062,562 )
    (Loss)/gain on derivatives (255,736 )       237,618     99,286  
    Interest income 952,287     1,052,786     3,712,239     3,416,221  
    Foreign exchange (loss)/gain (27,829 )   25,598     (190,722 )   (70,692 )
    Other expenses, net (1,675,708 )   (347,502 )   (6,197,577 )   (5,617,747 )
                   
    Income before equity in earnings of investees 7,960,205     13,732,478     39,619,946     54,239,341  
    Equity earnings in joint ventures 928,841     466,049     12,316,883     15,622,836  
    Net Income 8,889,046     14,198,527     51,936,829     69,862,177  
                   
    Earnings per share              
    – Basic 0.25     0.38     1.38     1.91  
    – Diluted 0.25     0.38     1.37     1.90  
                   
    Weighted average number of shares              
    – Basic 35,300,965     35,345,251     37,166,449     35,237,059  
    – Diluted 35,430,883     35,409,350     37,236,951     35,333,160  
     
    StealthGas Inc.
    Unaudited Condensed Consolidated Balance Sheets
    (Expressed in United States Dollars)
      December 31,   December 31,  
      2023   2024  
             
    Assets        
    Current assets        
    Cash and cash equivalents 77,202,843     80,653,398  
    Trade and other receivables 4,506,741     6,156,300  
    Other current assets 130,589     193,265  
    Claims receivable 55,475     55,475  
    Inventories 1,979,683     3,891,147  
    Advances and prepayments 1,409,418     733,190  
    Restricted cash 659,137      
    Assets held for sale 34,879,925      
    Fair value of derivatives     387,630  
    Total current assets 120,823,811     92,070,405  
             
    Non current assets        
    Advances for vessel acquisitions 23,414,570      
    Operating lease right-of-use assets 99,379      
    Vessels, net 504,295,083     608,214,416  
    Other receivables 48,040     370,053  
    Restricted cash 5,893,721     3,867,752  
    Investments in joint ventures 39,671,603     27,717,238  
    Deferred finance charges 1,105,790      
    Fair value of derivatives 1,858,677      
    Total non current assets 576,386,863     640,169,459  
    Total assets 697,210,674     732,239,864  
             
    Liabilities and Stockholders’ Equity        
    Current liabilities        
    Payable to related parties 955,567     388,130  
    Trade accounts payable 9,953,137     10,994,434  
    Accrued liabilities 5,681,144     4,922,587  
    Operating lease liabilities 71,173      
    Deferred income 5,386,126     4,304,667  
    Current portion of long-term debt 16,624,473     23,333,814  
    Total current liabilities 38,671,620     43,943,632  
             
    Non current liabilities        
    Operating lease liabilities 28,206      
    Deferred income 1,928,712     213,563  
    Long-term debt 106,918,176     61,555,855  
    Total non current liabilities 108,875,094     61,769,418  
    Total liabilities 147,546,713     105,713,050  
             
    Commitments and contingencies        
             
    Stockholders’ equity        
    Capital stock 453,434     370,414  
    Treasury stock (44,453,836 )    
    Additional paid-in capital 446,938,868     409,912,934  
    Retained earnings 145,993,681     215,855,858  
    Accumulated other comprehensive income 731,814     387,608  
    Total stockholders’ equity 549,663,961     626,526,814  
    Total liabilities and stockholders’ equity 697,210,674     732,239,864  
     
    StealthGas Inc.
    Unaudited Condensed Consolidated Statements of Cash Flows
    (Expressed in United States Dollars)
     
      Twelve month Periods Ended
    December 31,
      2023   2024
       
    Cash flows from operating activities      
    Net income for the year 51,936,829     69,862,177  
           
    Adjustments to reconcile net income to net cash      
    provided by operating activities:      
    Depreciation 23,707,797     26,076,687  
    Amortization of deferred finance charges 1,345,941     711,378  
    Amortization of operating lease right-of-use assets 99,379     99,379  
    Share based compensation 2,589,405     7,326,807  
    Change in fair value of derivatives 789,509     108,841  
    Proceeds from disposal of interest rate swaps     1,018,000  
    Equity earnings in joint ventures (12,316,883 )   (15,622,836 )
    Dividends received from joint ventures 14,589,215     20,570,036  
    Impairment loss 2,816,873      
    Gain on sale of vessels (7,645,781 )   (46,384 )
    Changes in operating assets and liabilities:      
    (Increase)/decrease in      
    Trade and other receivables 238,627     (1,971,610 )
    Other current assets 139,925     (62,676 )
    Inventories 1,365,189     (1,664,736 )
    Changes in operating lease liabilities (99,379 )   (99,379 )
    Advances and prepayments (728,005 )   676,228  
    Increase/(decrease) in      
    Balances with related parties (1,532,943 )   (555,589 )
    Trade accounts payable (1,813,377 )   628,898  
    Accrued liabilities (100,515 )   (758,558 )
    Deferred income 2,058,409     (2,796,608 )
    Net cash provided by operating activities 77,440,215     103,500,055  
           
    Cash flows from investing activities      
    Insurance proceeds 126,666      
    Proceeds from sale of vessels, net 80,109,781     34,679,584  
    Acquisition and improvements of vessels (85,201 )   (106,169,013 )
    Maturity of short term investments 26,500,000      
    Return of investments from joint ventures 4,688,785     7,007,164  
    Net cash provided by/(used in) investing activities 111,340,031     (64,482,265 )
           
    Cash flows from financing activities      
    Proceeds from exercise of stock options 747,500     356,250  
    Stock repurchase (19,080,455 )   (338,176 )
    Deferred finance charges paid (988,166 )   (22,167 )
    Advances from joint ventures 11,847      
    Advances to joint ventures     (11,847 )
    Loan repayments (154,870,215 )   (108,236,401 )
    Proceeds from long-term debt     70,000,000  
    Net cash used in financing activities (174,179,489 )   (38,252,341 )
           
    Net increase in cash, cash equivalents and restricted cash 14,600,757     765,449  
    Cash, cash equivalents and restricted cash at beginning of period 69,154,944     83,755,701  
    Cash, cash equivalents and restricted cash at end of year 83,755,701     84,521,150  
    Cash breakdown      
    Cash and cash equivalents 77,202,843     80,653,398  
    Restricted cash, current 659,137      
    Restricted cash, non current 5,893,721     3,867,752  
    Total cash, cash equivalents and restricted cash shown in the statements of cash flows 83,755,701     84,521,150  

    The MIL Network

  • MIL-OSI Asia-Pac: In its drive against facilities engaged in printing of Fake Indian Currency Notes (FICN), DRI busts seven more modules in Maharashtra (4), Haryana (1), Bihar (1) and Andhra Pradesh (1); nine arrested

    Source: Government of India

    Posted On: 21 FEB 2025 3:11PM by PIB Delhi

    Continuing the drive against modules involved in the import of security paper and printing Fake Indian Currency Notes (FICN), on 20th February 2025, DRI conducted simultaneous searches at 11 different places across Maharashtra, Haryana, Telangana, Tamil Nadu and Bihar yesterday and busted seven (7) additional modules involved in printing of FICN.

    Earlier on 8th Feb, 2025, the Directorate of Revenue Intelligence (DRI) had arrested two persons found to be the actual importers of high-quality paper with embedded security thread having inscriptions of RBI’ and Bharat (security paper) in Ghazipur District, Uttar Pradesh and Bengaluru, Karnataka and in the follow-up next day on 9th Feb, DRI had busted two facilities (Thane, Maharashtra & Bhiwani District Haryana) printing FICN using imported security papers, where three persons were arrested by jurisdictional police authorities based on complaint made by DRI.

    In the present case, in Vikhroli West, Mumbai, DRI identified and located the importer. After thorough search in a densely populated locality, a sophisticated facility for printing and finishing the Fake Indian Currency Notes was unearthed and fake currency of denomination of Rs. 50 & Rs. 100, several machinery/tools were seized. Seized items includes laptops, printers, pen drives, security paper, A-4 sized papers & butter paper with watermark of Mahatma Gandhi etc. On the basis of the complaint filed by DRI officers, the person was arrested and all the apparatus and tools were seized by the jurisdictional police authorities under Bhartiya Nyaya Sanhita (BNS) for further investigation.

    In Sangamner district and in Kolhapur district, the DRI unearthed similar set up with computers and printers, which were being used to print fake Indian Currency Notes. At both the places, on the basis of the complaint filed by DRI officers, the two accused were arrested and the contraband was seized by the jurisdictional police authorities under BNS for further investigation.

    The questioning of the accused in the Kolhapur module led to the busting of another module with printing set up in Belgaum, by Kolhapur police, who arrested three more persons in the case.

    In three other locations, (West Godavari district in Andhra Pradesh; Khagaria District in Bihar and Rohtak in Haryana) the importers of the security paper were traced. Incriminating evidence such as restricted security paper and printer at West Godavari; laptops, printer and restricted security paper at Khagaria district were also recovered. The three accused have been arrested by jurisdictional police based on complaint by DRI officials and the matter has been handed over for further investigation under BNS.

    ****

    NB/KMN

    (Release ID: 2105246) Visitor Counter : 256

    MIL OSI Asia Pacific News

  • MIL-OSI Asia-Pac: In its crusade against facilities engaged in printing of Fake Indian Currency Notes (FICN), DRI busts seven more modules in Maharashtra (4), Haryana (1), Bihar (1) and Andhra Pradesh (1); nine arrested

    Source: Government of India (2)

    Posted On: 21 FEB 2025 3:11PM by PIB Delhi

    Earlier on 8th Feb, 2025, the Directorate of Revenue Intelligence (DRI) had arrested two persons found to be the actual importers of high-quality paper with embedded security thread having inscriptions of RBI’ and Bharat (security paper) in Ghazipur District, Uttar Pradesh and Bengaluru, Karnataka and in the follow-up next day on 9th Feb, DRI had busted two facilities (Thane, Maharashtra & Bhiwani District Haryana) printing FICN using imported security papers, where three persons were arrested by jurisdictional police authorities based on complaint made by DRI.

    Continuing the drive against modules involved in the import of security paper and printing Fake Indian Currency Notes (FICN), on 20th February 2025, DRI conducted simultaneous searches at 11 different places across Maharashtra, Haryana, Telangana, Tamil Nadu and Bihar yesterday and busted seven (7) additional modules involved in printing of FICN.

    In Vikhroli West, Mumbai, DRI sleuths identified and located the importer. After thorough search in a densely populated locality, a sophisticated facility for printing and finishing the Fake Indian Currency Notes was unearthed and fake currency of denomination of Rs. 50 & Rs. 100, several machinery/tools were seized. Seized items includes laptops, printers, pen drives, security paper, A-4 sized papers & butter paper with watermark of Mahatma Gandhi etc. On the basis of the complaint filed by DRI officers, the person was arrested and all the apparatus and tools were seized by the jurisdictional police authorities under Bhartiya Nyaya Sanhita (BNS) for further investigation.

    In Sangamner district and in Kolhapur district, the DRI unearthed similar set up with computers and printers, which were being used to print fake Indian Currency Notes. At both the places, on the basis of the complaint filed by DRI officers, the two accused were arrested and the contraband was seized by the jurisdictional police authorities under BNS for further investigation.

    The questioning of the accused in the Kolhapur module led to the busting of another module with printing set up in Belgaum, by Kolhapur police, who arrested three more persons in the case.

    In three other locations, (West Godavari district in Andhra Pradesh; Khagaria District in Bihar and Rohtak in Haryana) the importers of the security paper were traced. Incriminating evidence such as restricted security paper and printer at West Godavari; laptops, printer and restricted security paper at Khagaria district were also recovered. The three accused have been arrested by jurisdictional police based on complaint by DRI officials and the matter has been handed over for further investigation under BNS.

    ****

    NB/KMN

    (Release ID: 2105246) Visitor Counter : 59

    MIL OSI Asia Pacific News

  • MIL-OSI Global: South Africa’s finance minister wanted to raise VAT: the pros and cons of a tricky tax

    Source: The Conversation – Africa – By Andrew Robert Donaldson, Senior Research Associate, Southern Africa Labour and Development Research Unit, University of Cape Town

    South Africa’s finance minister, Enoch Godongwana, cancelled the unveiling of the country’s 2025 budget as it was due to be released. The move is unprecedented in the country’s history.

    The reason for the abrupt cancellation was the failure of the minister to get cabinet approval for the proposal to raise value added tax (VAT) from 15% to 17%. VAT is the second biggest contributor to tax collection after personal income tax, followed by corporate taxes.

    The strongest opposition to the idea came from parties that have joined the African National Congress in a government of national unity which was formed after the ruling party lost its majority in polls in June 2024.

    To understand the finance minister’s efforts to raise VAT it’s helpful to revisit the revenue proposals of a year ago.

    In the 2024 budget, all the additional revenue was to come from a “stealth tax” on personal income. Because personal income tax is levied at increasing rates as income rises, the tax burden rises as wages go up if tax thresholds are not adjusted for inflation.

    In the Treasury’s estimates, R16.3 billion (US$889 million) was raised in 2024/25 by not making inflation-related adjustments to the personal income tax brackets and rebates. This meant that another 200,000 income-earners became taxpayers, and everyone’s effective tax rate was raised.

    This has been a long-standing trend. Over the past decade, the tax threshold (for individuals under the age of 65) has declined from R115,000 (in today’s prices) to R95,750, bringing about 850,000 more people into the tax net.

    Above the threshold, tax rates were raised by one percentage point in 2015 and the 45% rate was introduced in 2017.

    As a strategy for raising personal income tax, the results have been impressive. Personal income tax has increased from 8% of GDP in 2014 to nearly 10%. In the nine months to December 2024, personal income tax increased by over 13% compared with the same period in 2023. Even after taking account of the revenue windfall from retirement fund withdrawals following recent reforms, this signals a substantial erosion of households’ disposable income.

    But that is precisely the problem. Taxes collected on goods and services (mainly VAT and excise duties) increased by just 0.4% last year by comparison with 2023. Revenue from corporate income tax declined. The implication is clear: higher taxes on personal income are at least partially offset by reduced consumption and declines in revenue from other sources.

    So the Treasury has taken the view, this year, that there should be relief given in the personal income tax and that additional revenue will have to come from taxes on consumption.

    There are good reasons for this: personal income tax has contributed a rising share of the overall tax burden over the past decade, while households also face rising costs of electricity, housing and services. However, raising VAT also has its downsides: it generates revenue by raising prices relative to the costs of production, and effectively also reduces households’ spending power.

    The Treasury’s estimate is that an increase in VAT from 15% to 17% would raise an additional R60 billion (US$3.3 billion) in revenue. To offset the impact on low-income households, the schedule of basic foods that don’t attract VAT will be extended beyond the present list of 21 items to include various specified meat cuts and tinned and bottled vegetables. In addition, above-inflation adjustments to social grants are proposed.

    The main argument against increasing the VAT rate is that it is regressive – it has a greater impact on lower-income households than on the rich. But a two percentage point VAT increase would also be a substantial shock to overall consumption spending. It would temporarily raise inflation and it would have a negative impact on business income and profitability.

    The arguments for a higher VAT rate, rather than other tax increases, are in part about its broad base and comparative ease of collection.

    There are nonetheless valid concerns from an administrative perspective. The Treasury argues that other countries have higher VAT rates than South Africa (Morocco, Turkey, Brazil and India, for example). But this is not in itself protection against the potential impact of a higher tax rate on non-compliance and tax fraud.

    The upsides

    There may be deeper economic considerations behind the Treasury’s tax proposal.

    The most compelling arguments for VAT as a revenue source are in its basic design structure: what is taxed and what is not. There are two key features. The first is that it taxes imports and zero-rates exports. The second is that the VAT base excludes investment.

    The import VAT is sometimes seen as an unfair form of trade protection. But it simply levels the consumption tax across foreign and domestic-produced goods. And it’s simpler than excise and sales taxes.

    The important consideration for domestic production is that by comparison with alternative taxes on income, the VAT encourages exports.

    The exclusion of investment from the VAT base caused some controversy when the tax was introduced in 1990. Some argued that this would bias economic development in favour of capital and against labour. But investment and employment are complements. To achieve higher rates of employment, South Africa needs far greater levels of investment. Since 2013, investment has fallen as a percentage of GDP from 19% to less than 15%: nowhere enough to generate growth sufficient to bring down South Africa’s unemployment rate.

    Because the VAT base is consumption, not investment, it supports expansion of the economy’s productive capacity.

    Managing the fallout

    But this doesn’t change the short-term impact on the cost of living that would result from a VAT rise. A higher tax burden will reduce demand and inhibit growth at first, before potentially contributing to fiscal stability and lower interest rates.

    If the tax increase is to be avoided, then the spotlight will have to fall on the expenditure side of the budget. This is a far harder discussion than tax policy – there are a thousand options to consider, and there are vested interests wherever you look.

    If Godongwana’s VAT rate increase is to be rejected, tough choices on the alternatives will have to be confronted.

    Andrew Robert Donaldson is a former National Treasury official.

    ref. South Africa’s finance minister wanted to raise VAT: the pros and cons of a tricky tax – https://theconversation.com/south-africas-finance-minister-wanted-to-raise-vat-the-pros-and-cons-of-a-tricky-tax-250460

    MIL OSI – Global Reports

  • MIL-OSI Africa: South Africa’s finance minister wanted to raise VAT: the pros and cons of a tricky tax

    Source: The Conversation – Africa – By Andrew Robert Donaldson, Senior Research Associate, Southern Africa Labour and Development Research Unit, University of Cape Town

    South Africa’s finance minister, Enoch Godongwana, cancelled the unveiling of the country’s 2025 budget as it was due to be released. The move is unprecedented in the country’s history.

    The reason for the abrupt cancellation was the failure of the minister to get cabinet approval for the proposal to raise value added tax (VAT) from 15% to 17%. VAT is the second biggest contributor to tax collection after personal income tax, followed by corporate taxes.

    The strongest opposition to the idea came from parties that have joined the African National Congress in a government of national unity which was formed after the ruling party lost its majority in polls in June 2024.

    To understand the finance minister’s efforts to raise VAT it’s helpful to revisit the revenue proposals of a year ago.

    In the 2024 budget, all the additional revenue was to come from a “stealth tax” on personal income. Because personal income tax is levied at increasing rates as income rises, the tax burden rises as wages go up if tax thresholds are not adjusted for inflation.

    In the Treasury’s estimates, R16.3 billion (US$889 million) was raised in 2024/25 by not making inflation-related adjustments to the personal income tax brackets and rebates. This meant that another 200,000 income-earners became taxpayers, and everyone’s effective tax rate was raised.

    This has been a long-standing trend. Over the past decade, the tax threshold (for individuals under the age of 65) has declined from R115,000 (in today’s prices) to R95,750, bringing about 850,000 more people into the tax net.

    Above the threshold, tax rates were raised by one percentage point in 2015 and the 45% rate was introduced in 2017.

    As a strategy for raising personal income tax, the results have been impressive. Personal income tax has increased from 8% of GDP in 2014 to nearly 10%. In the nine months to December 2024, personal income tax increased by over 13% compared with the same period in 2023. Even after taking account of the revenue windfall from retirement fund withdrawals following recent reforms, this signals a substantial erosion of households’ disposable income.

    But that is precisely the problem. Taxes collected on goods and services (mainly VAT and excise duties) increased by just 0.4% last year by comparison with 2023. Revenue from corporate income tax declined. The implication is clear: higher taxes on personal income are at least partially offset by reduced consumption and declines in revenue from other sources.

    So the Treasury has taken the view, this year, that there should be relief given in the personal income tax and that additional revenue will have to come from taxes on consumption.

    There are good reasons for this: personal income tax has contributed a rising share of the overall tax burden over the past decade, while households also face rising costs of electricity, housing and services. However, raising VAT also has its downsides: it generates revenue by raising prices relative to the costs of production, and effectively also reduces households’ spending power.

    The Treasury’s estimate is that an increase in VAT from 15% to 17% would raise an additional R60 billion (US$3.3 billion) in revenue. To offset the impact on low-income households, the schedule of basic foods that don’t attract VAT will be extended beyond the present list of 21 items to include various specified meat cuts and tinned and bottled vegetables. In addition, above-inflation adjustments to social grants are proposed.

    The main argument against increasing the VAT rate is that it is regressive – it has a greater impact on lower-income households than on the rich. But a two percentage point VAT increase would also be a substantial shock to overall consumption spending. It would temporarily raise inflation and it would have a negative impact on business income and profitability.

    The arguments for a higher VAT rate, rather than other tax increases, are in part about its broad base and comparative ease of collection.

    There are nonetheless valid concerns from an administrative perspective. The Treasury argues that other countries have higher VAT rates than South Africa (Morocco, Turkey, Brazil and India, for example). But this is not in itself protection against the potential impact of a higher tax rate on non-compliance and tax fraud.

    The upsides

    There may be deeper economic considerations behind the Treasury’s tax proposal.

    The most compelling arguments for VAT as a revenue source are in its basic design structure: what is taxed and what is not. There are two key features. The first is that it taxes imports and zero-rates exports. The second is that the VAT base excludes investment.

    The import VAT is sometimes seen as an unfair form of trade protection. But it simply levels the consumption tax across foreign and domestic-produced goods. And it’s simpler than excise and sales taxes.

    The important consideration for domestic production is that by comparison with alternative taxes on income, the VAT encourages exports.

    The exclusion of investment from the VAT base caused some controversy when the tax was introduced in 1990. Some argued that this would bias economic development in favour of capital and against labour. But investment and employment are complements. To achieve higher rates of employment, South Africa needs far greater levels of investment. Since 2013, investment has fallen as a percentage of GDP from 19% to less than 15%: nowhere enough to generate growth sufficient to bring down South Africa’s unemployment rate.

    Because the VAT base is consumption, not investment, it supports expansion of the economy’s productive capacity.

    Managing the fallout

    But this doesn’t change the short-term impact on the cost of living that would result from a VAT rise. A higher tax burden will reduce demand and inhibit growth at first, before potentially contributing to fiscal stability and lower interest rates.

    If the tax increase is to be avoided, then the spotlight will have to fall on the expenditure side of the budget. This is a far harder discussion than tax policy – there are a thousand options to consider, and there are vested interests wherever you look.

    If Godongwana’s VAT rate increase is to be rejected, tough choices on the alternatives will have to be confronted.

    – South Africa’s finance minister wanted to raise VAT: the pros and cons of a tricky tax
    – https://theconversation.com/south-africas-finance-minister-wanted-to-raise-vat-the-pros-and-cons-of-a-tricky-tax-250460

    MIL OSI Africa

  • MIL-OSI China: Alibaba sees record revenue of 38.4 bln USD

    Source: China State Council Information Office

    Chinese tech giant Alibaba Group Holding Ltd reported on Thursday night that its revenue stood at 280.15 billion yuan ($38.4 billion) during the October-December period, an increase of 8 percent year-on-year, while its net income reached 46.43 billion yuan, surging 333 percent year-on-year.

    For the quarter ending on Dec 31, revenue from its cloud business rose 13 percent year-on-year to 31.7 billion yuan, with artificial intelligence-related product revenue achieving triple-digit growth for the sixth consecutive quarter.

    The company said it will continue to invest in technological innovation, particularly in AI infrastructure, to increase cloud adoption for AI. “This quarter’s results demonstrated substantial progress in our ‘user first, AI-driven’ strategies and the reaccelerated growth of our core businesses,” said Wu Yongming, CEO of Alibaba Group.

    Looking ahead, Wu said revenue growth at Cloud Intelligence Group driven by AI will continue to improve. “We will continue to execute against our strategic priorities in e-commerce and cloud computing, including further investment to drive long-term growth,” he added.

    Revenue from Alibaba’s core e-commerce business, which refers to its Taobao and Tmall platforms, rose 5 percent year-on-year to 136.1 billion yuan during this period.

    MIL OSI China News

  • MIL-OSI New Zealand: Tax Issues – Keeping ability to gather tax information essential says tax reform group

    Source: Tax Justice Aotearoa

    21 February 2025 – Tax Justice Aotearoa is calling on the Minister of Revenue to retain the ability for Inland Revenue to collect vital information that supports effective tax policy making.

    “We are concerned that the Minister initiated a review of this important provision within the Tax Administration Act just over a year after IR produced its report on High Net Worth Individuals,” said Glenn Barclay, Chairperson of Tax Justice Aotearoa.

    “That piece of work provided us with the first in depth information on the scale of the inequities of our tax system and the review has the air of an exercise to close down or restrict similar research in the future. We are calling on the Minister to stick with this provision, which is essential to good tax policy making.”

    S.17GB of the Tax Administration Act is the provision that enabled Inland Revenue to carry out that ground breaking Report on High Net Worth Individuals in 2023.

    The report revealed that the wealthiest 311 families in the country had an effective tax rate of around 9%, while the average taxpayer had an effective tax rate of over 20%.
     
    “The lack of balance in our tax system is now well understood, but without the information gathered under s.17GB we would not have had the research on High Net Worth Individuals and would be guessing about the extent of the problem,” said Glenn Barclay.

    S.17GB goes beyond the general information collecting power in the Act, which is not sufficient to provide access to information that could potentially lead to policy change – it is mainly about enforcement.
     
    “The need for this provision is also a symptom of our badly out of balance tax system. If we were already taxing capital in any meaningful way, then it is reasonable to assume that IR would have much better information about what high net worth individuals are worth.

    “In the absence of those taxes and that information, this provision becomes even more essential.”
     
    Glenn Barclay also drew attention to the relevance of s.17GB to other recently announced policies.
     
    “Government policies such as the possibility of reducing corporate taxes and encouraging wealthy individuals to come to New Zealand, mean that understanding their contribution to revenue is going to become more important, not less,” he said.
     
    “There is no good reason to reduce or eliminate this power to gather information other than to protect vested interests and we ask the Minister to put the public interest first.”

    MIL OSI New Zealand News

  • MIL-OSI USA: Senator Murray on Senate Republicans’ Pro-Billionaire Budget Resolution, Trump and Musk’s Devastating Funding Freeze and Mass Firings

    US Senate News:

    Source: United States Senator for Washington State Patty Murray

    Murray: “Republicans are going down this partisan path because they know Democrats are not going to join them in throwing Medicaid, nutrition assistance, and veterans’ benefits into the wood chipper so they can throw more tax cuts at billionaires and the biggest corporations.”

    Murray: “We should not be taking kids out of child care to give billionaires a tax break. We should not be taking food off the family table to put more fuel in private jets.”

    ICYMI: Senator Murray speaks at Budget Committee markup of resolution, offers common sense amendments rejected by Republicans

    ***VIDEO HERE***

    Washington, D.C. — Today, U.S. Senator Patty Murray (D-WA), Vice Chair of the Senate Appropriations Committee and a senior member and former chair of the Senate Budget Committee, took to the Senate floor to forcefully speak out against Senate Republicans’ budget resolution that will help billionaires at working families’ expense—as well as the Trump administration’s lawless mass firings and ongoing funding freeze that is hurting people and jeopardizing critical services they need in every part of the country. She also underscored how a clean full-year CR is not an acceptable solution to government funding.

    Senator Murray’s remarks, as delivered, are below:

    “Thank you M. President. We need to be focused on solving problems—and I think most of us here get that.

    “No matter who the President is, our constituents expect us to work for them. They expect us to fight for them. And they expect us to do the hard work of passing laws to make their lives better.

    [TRUMP LEAVING FARMILIES IN THE DUST]

    “People don’t send us here to make their lives worse. But that’s exactly what Trump and Musk are doing. They are looking at our most pressing problems—and making them so much worse. And this budget proposal will only add fuel to the fire.

    “Right now—even as egg prices hit an all time high—Trump and Musk have done nothing to lower prices.

    “They’ve done nothing to address the housing crisis, or help families get quality, affordable child care—or address other issues I hear about from folks all the time.

    “Instead, they are slashing programs that help our families make ends meet, they are gutting an agency that saves working people money and protects them from scams, and starting trade wars that will impose what is effectively a Trump sales tax entirely on the backs of American workers.

    “As China works to strengthen its global leadership, Trump and Musk have ceded the ground almost entirely—illegally cutting off investments we make to continue our country’s leadership and help allies.

    “At the most precarious moment for the Middle East in decades—Trump is casually proposing to ethnically cleanse Gaza so that Trump and his family can build waterfront property there.

    “When it comes to helping our allies in Ukraine secure a just peace—Trump is giving away countless concessions to Putin out of the gate, calling our ally a dictator and meeting with Russia without inviting Ukraine.

    “When it comes to the Bird Flu—Trump and Musk are firing the very workers who are responsible for tracking the disease and keeping it from spreading further. And now, suddenly, they are desperately trying to hire them back.

    “And as Texas deals with a serious measles outbreak, Trump’s Health Secretary can’t even confirm the obvious, and tell parents the vaccine doesn’t cause autism—which, to be clear, it does not!


    “And, almost unbelievably, just weeks after the deadliest commercial plane crash in the U.S. in over two decades—Trump and Musk are firing FAA workers who make sure flying is safe. Who does that help?

    “And now Trump is letting Musk run wild by inappropriately accessing and rifling through sensitive SSA and Treasury files, with IRS being next—your data! How does that make sense?

    “But while President Trump is busy making problems worse, and trampling our laws, and quoting dictators—what are we doing here in the Senate?

    “Are we holding President Trump accountable? Are we holding his co-President, Elon Musk—the richest man in the world, who has billions of dollars in conflicts of interest—accountable? 

    “Are we putting a stop to the catastrophic cuts and reckless firings that are hurting people and our communities, and setting our country back decades?

    “Seems to me that would be a good use of our time—after all, I’ve even heard some Republicans admit that cutting things like medical research, and firing people like VA workers are bad ideas. So you would think—maybe—we could work together from that common ground.

    “But instead—Republicans are throwing all their effort behind a partisan plan to slash and burn programs that help our families, and raise costs for everyday Americans, and shovel billions of dollars to help people who already have billions of dollars.

    “Meanwhile, I would like to remind my colleagues we are less than a month away from a deadline to pass bills to fund our government. And as we approach that deadline, the entire world is watching as President Trump and Elon Musk shut the government down bit-by-bit—whatever parts Elon doesn’t like.

    [TRUMP AND MUSK’S RECKLESS, HEARTLESS MASS FIRINGS]

    “Trump and Musk are already showing thousands of essential workers the door—despite the fact that they have no clue what these workers do, or why their jobs matter. They’re just turning off the lights and hoping for the best! 

    “I am hearing so much alarm about this back home—from fired workers and from the people who depend on them.

    “Trump and his co-president are shuttering entire agencies, they are locking workers out of their devices and out of their buildings, and demanding the work of the American people come to a screeching halt—again, for no good reason.

    “And let me really drive home just how damaging and extreme these firings are—because we are not talking about some routine changing of the guard or some thoughtful or strategic plan to make government more efficient.

    “Trump and Musk are just taking a wrecking ball through the U.S. government. They don’t care what they smash up. They don’t care who they hurt. And they don’t seem to have any idea just how painful this is for American families.

    “We are talking about tens of thousands of people—and counting—being pushed out the door without any plan, and without any justification beyond Trump and Elon want to slash and cut with reckless abandon.

    “This has nothing to do with making government more efficient—it is about breaking it beyond repair.

    “Fundamentally, this is not about cutting waste or curbing fraud. Instead, this is about putting the federal workforce into ‘trauma’—that’s how OMB Director Russ Vought callously put it. 

    “So, they are mass firing hardworking women and men—many of them veterans—whose only mistake was serving our country, serving our communities, and believing they wouldn’t get stabbed in the back by a wannabe dictator and the richest man in the world.

    “And, setting aside the fact that many were illegally fired and without real cause, it’s not just the workers who are suffering because of this.

    “These cuts undermine essential services for the American people—right down to some of the most basic functions of government.

    “Trump and Musk are firing people who help Americans find quality, affordable health insurance, people who help small businesses get a loan, people who help communities and families get back on their feet after a disaster, and people who help Americans get their tax refunds.

    “They are firing people who help our economy stay competitive—from firings that undermine energy projects and thousands of good, new jobs, to firings that undermine innovation and technology, to firings that are hurting our farmers and undermining agricultural research.

    “They are laying off National Park Rangers—which will mean longer wait times, dirtier bathrooms, delayed emergency responses, and closed parks.

    “They fired Forest Service workers who are crucial to preventing wildfires.

    “Again, I have to emphasize, they are firing FAA workers for crying out loud—including personnel who work on radar, landing, and other critical infrastructure that help our aircraft navigate safely.

    “They are firing these people, and pretending it is no big deal, all just weeks after the deadliest crash our nation has seen in decades.

    “Trump and Elon might not fly commercial—but the rest of us do.

    “In the Pacific Northwest, the Bonneville Power Administration is losing hundreds of highly skilled workers. This includes everyone from electricians and engineers, to dispatchers, to lineworkers, to cybersecurity experts, and so many others.

    “These are literally the people who help keep the lights on—and now they’re being fired on a whim because Trump and Elon Musk don’t have a clue about what they do and why it’s important, and you know what? They don’t care to learn.

    “They don’t even seem to understand that these are positions funded by ratepayers—by all of us who live in the Northwest—they are not from federal funding.

    “Trump and Musk have even fired over a thousand VA workers, including people who are doing lifesaving research for our veterans—research to prevent veteran suicide, build life changing prosthetics, address opioid addiction, and more.

    “These layoffs could mean longer wait times for veterans to see their health care providers. It could mean ongoing clinical trials coming to a sudden stop. It could mean delays getting your disability claims approved.

    “Because Trump and Musk went ahead and fired clinicians and claims raters—even while the current back log of disability claims is over 250,000!

    “That is not just a betrayal of these public workers—it is a betrayal of our women and men who have served us in uniform.

    “And it is also worth noting—many of the workers being fired are veterans themselves. Trump is firing veterans.

    “And let’s not forget the thousands of NIH researchers who are having their research thrown into jeopardy, and the patients who are watching President Trump carelessly toss their best hope for a cure into the shredder.

    “Or CMS experts, who were working on improving maternal health outcomes so fewer pregnant women die in this country.

    “And medical research layoffs aren’t the only ones putting American lives at risk because Trump and Musk are firing public health workers who respond to disease outbreaks, cybersecurity experts who protect our critical infrastructure, sensitive systems, and our data, scientists who make sure our water and air are clean, and that we are ready for extreme weather, workers that help communities prepare for, respond to, and recover from disasters—not to mention, members of law enforcement who help stop violent criminals—and of course, our nuclear engineers!

    “Seriously—people who manage our nuclear weapons stockpile were being fired by the hundreds, with no real strategy. 

    “And we know there isn’t a strategy—because then Trump and Musk frantically turned around and rehired many of them.

    “And we also know they haven’t learned their lesson—because they just did the exact same thing to workers responding to bird flu.

    “Reckless layoffs—followed by ‘Wait, no! Come back!’ That is not a plan.

    “To callously fire people who help us stay ahead of deadly diseases, or who maintain a safe, secure, and reliable nuclear weapons stockpile—that is the height of dangerous incompetence.

    “And nuclear clean-up work has been hit as well. I’ve been fighting to get more resources for the Hanford clean-up in Washington state for years—it is already understaffed, and now Trump is actively making things worse.

    “I have heard directly from workers at Hanford who have been laid off—even after some were recognized just this past year for their outstanding work. And by the way: that underscores another reality of these firings—they have absolutely nothing to do with merit.

    “In fact, the way they are targeting new employees includes people who were recently promoted—so now these workers are getting fired from their newly earned jobs. Literally pushing out some of our best performers and our most committed workers.

    “Oh, and one more thing—they are even illegally firing the government watchdogs who provide accountability and prevent fraud.

    “If Trump and Musk were really committed to tackling waste, fraud, and abuse, would they fire the very people serving in nonpartisan roles whose very job is to uncover and reduce waste, fraud, and abuse?

    “If they were really interested in transparency, would they have torn down websites where the public can find information about agencies’ spending and policy?

    “The list of pointless, actively dangerous firings goes on, and on, and on. It grows by the day—as does the fallout and alarm being caused by it. My phones have been ringing off the hook—and I know I am not the only one.

    “Again, these sweeping layoffs do not address fraud or waste. These firings are totally arbitrary—pushing out high performers and the promising next generation of our federal workforce who won’t be easily replaced. Not to mention—the hiring freeze prevents them from even trying!

    “And here’s the thing that is so important to remember: these are people who have families, who work hard, who love their country. They are not being sent packing because they’ve done anything wrong or because their work is not important.

    “They are being pushed out simply because Trump and Musk are trying to break the government—trying to make it not work for the people who need it. It is wrong, and if this doesn’t stop now, it will be catastrophic.

    “The scale and scope of Trump and Elon’s purge will set our country back decades. It is not like you can fire everyone, say ‘oh wait, my bad,’ and rehire everyone with the snap of a finger.

    If you are a VA medical researcher working for less than you could make in the private sector, and you’re fired by a billionaire who decides your research on cancer and burn pit exposure isn’t worth the investment, would you want to come back? Especially with the chaos and sheer incompetence of this administration?

    “The federal government is not Twitter. You can’t just fire everyone and break things and hope for the best—people’s lives are at stake.

    “Elon Musk has no clue what nuclear safety engineers do at Hanford. He doesn’t care that the Social Security Administration is already understaffed, and that pushing more of those federal workers out the door will make life harder for seniors.

    “This effort to push out and arbitrarily fire federal workers is going to break something, worse than it already has—and it’s going to break it irreparably.

    “When that happens, the blame will fall squarely on Trump, Musk, and Republicans.

    [TRUMP AND MUSK’S ILLEGAL FUNDING FREEZE]

    “And it is not just people being fired that is a serious problem—there are also funds still being frozen without rhyme, or reason, or any legal authority for Trump to do that.

    “So I’m not only worried about the fast-approaching funding deadline in March—I’m worried about the de facto government shutdown happening right now.

    “As we speak, Trump and Musk are still illegally blocking hundreds of billions of dollars in funding we all secured for the people we represent back home, putting good-paying jobs on the chopping block, creating incredible uncertainty for businesses, stalling funds for infrastructure and energy projects, and so much else.

    “As another week of Trump’s illegal funding blockade has come and gone, still, reports are coming in from across my state, and across the country—of the chaos and cuts this is causing.

    “And yet, little to nothing has been done by this administration to restore investments people in red and blue states are counting on. And Republicans here in Congress continue to sit by idly while our communities are robbed of hundreds of billions of dollars in bipartisan spending.

    “Meanwhile, it’s our workers, it’s our families, it’s our businesses that are feeling this consequence.

    “With each day that passes, the uncertain fate of these investments takes a toll of its own: ever-growing anxiety for workers whose jobs are in jeopardy, for farmers who are eyeing the calendar and waiting on resources that they are owed, and for business owners worried a ripped-up contract might put them under.

    “I’ve heard USDA grants have been cut off to rural businesses and farmers in my home state of Washington—and it is putting those hard-working Americans in dire straits.

    “A small laundromat ordered new machines—but Trump is now stiffing them on funds they need to make the payment.

    “A wheat farmer installed solar panels under a federal program—but Trump is going to leave them holding the bag.

    “A greenhouse has completed its end of the bargain to install upgrades—but Trump has stopped the federal government from doing the part it promises.

    “And there are so many other federal investments on hold as well: Forest Service funding to reduce wildfire risks and restore ecosystems. EPA funding for clean water infrastructure and clean-up work at superfund sites. HUD and Department of Energy investments to bring down folks’ energy costs and create new, good-paying jobs. Funding for our roads, bridges, transit, flood mapping, fisheries—and so many other things.

    “Medical research has also been completely upended at research institutions across the country—throwing lifesaving research, clinical trials, and patients into uncertainty.

    “Meanwhile they have not only illegally blocked our foreign assistance and shuttered USAID programs that bolster our global leadership and make the world safer for Americans—they are now illegally dismantling the Department of Education.

    “They have already bulldozed the independent research arm of the Department of Education—taking a wrecking ball to ongoing evidence-based research and basic collection data we need for accountability to improve student outcomes at our K-12 schools and colleges.

    “And, among the many contracts Trump cancelled with his executive orders was funding for a program that helps students with disabilities transition from high school to work and work to improve adoption of evidence-based literacy practices in Washington state. These billionaires have no idea what programs they are cutting.

    “Given the chaos of all these efforts—from Trump’s sweeping, radical, and illegal Executive Orders, to Elon Musk jumping from agency to agency and doing seemingly whatever he pleases and whatever is good for his businesses—it’s getting hard to even keep track of all the funding that is being illegally blocked.

    “Even stuff they say is not blocked, or say has been unblocked—is still frequently frozen.

    “But one thing that is clear? This is hurting our families. It is hurting our communities. And it needs to stop.

    “Remember, Musk is the richest man on earth—with deep business ties to China and a direct line to Putin.

    “Republicans have chosen to stand by and twiddle their thumbs, as he unilaterally, clandestinely, and illegally cuts our constituents off from the federal investments they are owed and badly need.

    “We have zero insight or oversight of what conflicts of interest Musk has as he chokes off government funding left and right, and as he hands over our sensitive financial data and systems to patently unqualified individuals with no accountability.

    “This multi-billionaire is operating completely in the dark, hoping his lies are loud enough to drown out any calls for truth or for transparency.


    “You can agree or disagree about federal spending—goodness knows we have debates on it here—but it is a complete lie to try and say this is all fraud, or waste, or a conspiracy.

    “As a long-time Appropriator—I can tell you—we debate these bills publicly, we post the details out in the open. We pass them in a bipartisan way.

    “Republicans overwhelmingly supported the individual bills we put together in Committee last year—many unanimously.


    “Spending is not a ‘conspiracy’ just because Elon Musk doesn’t know how to read USA-Spending.gov.

    “A program is not waste just because it doesn’t help the richest man in the world. It is not fraud just because he doesn’t like it.

    “A law is not illegal just because he disagrees with it. This guy just does not know what he is talking about—and it is frankly embarrassing, he doesn’t know how to count!

    [MUSK, DOGE LIES AND CORRUPTION]

    “The ‘DOGE’ website says it is slashing $55 billion—but it only lists $16.6 billion, and half of that is a typo.

    “They took $8 million with an M—as in ‘Musk can’t count’—and counted it as $8 billion with a B—as in ‘BS.’ That is not saving money—it is poor reading comprehension.

    “Speaking of reading comprehension—I don’t think Elon fully grasps what the concepts of ‘transparency’ and ‘accountability’ mean.

    When he tweeted out the names of government employees months ago—and again this month even—that was ‘accountability,’ but when reporters name people gaining illegal access to Treasury’s payment system, that is a crime?

    “Elon Musk gets to look at all of our most sensitive data but no one gets to look at what he is actually doing? That cannot be the standard.

    “It’s not ‘maximally transparent’ for Elon Musk to decide for himself what he shares publicly about his actions.

    “It is maximally concerning—especially given there are many obvious conflicts of interest—but Elon has not recused himself from a single decision.

    “How is it not a conflict—when the owner of Space X is gutting NASA while taxpayer funds to his company keep flowing?

    “How is it not blatant corruption—when the owner of Tesla is freezing grants and loans that benefit his competitors?

    “How are we supposed to just trust him, when he is probing agencies that have done—or are doing right now—investigations into his businesses?

    “Trump fired the Ag Inspector General who was investigating Elon’s company, Neuralink—and then fired the FDA officials who were reviewing it.


    “He fired the EPA Inspector General and Transportation Inspector General as they were looking at Tesla.


    “He fired the Labor Inspector General—as the Department has several investigations into Musk’s companies.

    “And Trump fired the Defense Inspector General who was looking at Space X—and notably, Musk’s connections to Putin.

    “And it’s not just Musk who is concerning—he’s brought on an army of walking red flags to pry into our government’s most sensitive data.

    “How are Americans supposed to feel, knowing someone who was previously fired for leaking sensitive information from their employer is digging through your most private financial data?

    “How are Americans supposed to feel, knowing someone who engaged with prominent white supremacists and misogynists online is helping to shutdown USAID?

    “How are they supposed to feel, knowing someone who tweeted explicitly racist statements, someone who said they were, quote, ‘racist before it was cool,’ was given control over incredibly important Treasury payment systems?

    “What sort of vetting—if any—is going on here? Are they trying to pick the least qualified, most concerning people? Hey Elon—you are supposed to filter out red flags—not select for them!

    “The American people deserve transparency—if Elon Musk really has nothing to hide, then he should leave his safe place on X and at Trump rallies and come before us at a Congressional hearing to be held accountable to the public.

    [TRUMP HURTING PEOPLE IN RED AND BLUE STATES]

    “What they are doing here is not just illegal—it is devastating for working people in every single zip code in America, red and blue states alike.

    “Right now, we need to be speaking out with a unified voice to ensure that when Congress passes a bill, the law is followed.

    [DANGERS OF A FULL-YEAR CR]

    “And we need to focus on negotiating serious funding bills on a bipartisan basis ahead of the fast-approaching March 14th deadline. That is exactly what I am trying to do right now. And, a long term CR should not be acceptable for anyone here.

    “As I have reminded my colleagues many times now: there is a world of difference between a short term CR that gives us additional time for good faith negotiations on our full-year funding bills, and a long term CR that would not only create major shortfalls for critical programs, but would also hand vast power over spending decisions to an administration that absolutely cannot and should not be trusted.

    “Passing a clean full year CR would, first of all, create major shortfalls and fail to adjust for new realities on the ground.

    “It could mean that instead of babies getting fed through WIC, moms are getting put on a waitlist for the first time in that program’s history. And instead of families getting rental assistance, they get cut off.

    “A clean full year CR means veterans are not able to get the care they need and benefits they have earned in a timely way.

    “And it means our military falling behind—from forcing cuts across DoD, to pausing promotions, station changes, and other really essential functions.

    “It also means losing opportunities to provide new resources for new challenges, and to provide a check on Trump policies—including ones it is clear members on both sides have issues with.

    “And on that note, I want to emphasize this—because this is really critical—unlike a short-term CR, a clean, full-year CR means hundreds of specific funding directives from Congress fall away, effectively creating slush funds for this administration to adjust spending priorities and potentially eliminate longstanding programs as they see fit. That is a nonstarter.


    “With a full-year CR, Congress would be turning over our power of the purse to a President who has already shown he couldn’t care less about the separation of powers.

    “A yearlong CR could be a green light for President Trump, Elon Musk, and Russell Vought to redirect funding to their own pet projects—and slash, burn, and zero out programs we have supported from Congress, that our families count on.

    “Maybe they siphon money away from public schools. Maybe they slash federal work study grants and other financial aid. Maybe they zero out money for national parks or monuments they think are too ‘Woke…’ or what would that even mean!

    “Maybe they scrap all our oversight of immigration courts, or end family reunification efforts, or dismantle the guardrails for detaining immigrants—something we are already seeing, by the way, with the use of Guantanamo Bay.

    “They could cut funding to eliminate HIV, address maternal mortality, or increase vaccination rates.

    “They could turn our constituents’ priorities into slush funds. Clean energy investments could become a payday for fossil fuels. Money meant to stop fentanyl and opioids could fuel private prison operations and mass deportations.

    [THE COMMON SENSE, BIPARTISAN PATH FORWARD]

    “Congress must detail its spending priorities—and direct President Trump to implement these programs faithfully by passing appropriations bills just as it does every year.

    “There is truly no telling just how far they will go in bending our federal budget from what our constituents need into whatever Trump and Musk want.

    “If you don’t think things could get worse—you’re wrong. A clean, yearlong CR is frankly an unacceptable outcome.


    “We cannot tell our constituents, that instead of using our authority to check a President, we give him the keys to the kingdom.

    “We cannot say, instead of fighting to get you the resources you need, we’ll let a billionaire have more say in where your tax dollars go instead.

    “So we need Republicans to get serious about bipartisan funding bills. And we have got to know that once those bills become law, Trump will actually follow them.

    “We cannot just reach an agreement, pass a bill, and then stand by while President Trump rips our laws in half.

    “There is a serious, bipartisan path forward for our country—but it is one where Congress works together to avoid a shutdown, stops the de facto shutdown that is already happening, and reasserts its authority to protect the funding our communities need.

    [REPUBLICANS’ PRO-BILLIONAIRE BUDGET RESOLUTION]

    “But unfortunately, that’s a far cry from the path Republicans are going down with this pro-billionaire, anti-middle-class budget resolution.

    “Let’s be very clear: Republicans’ budget resolution doesn’t just accept, it actually doubles down on what Trump and Musk are doing.

    “And it is not about balancing the budget—we all know that, because they don’t plan to reverse one of the biggest drivers of the debt: Republican tax cuts.

    “Despite all of the boogeymen that Republicans like to point to as driving the national debt—the reality is that the single biggest driver of our national debt since 2001 has been Republican tax cuts.

    “The Trump and Bush tax cuts have cost our nation over $10 trillion dollars and counting. And you’ll never guess what our colleagues on the other side of the aisle are focused on right now—nothing to lower the cost of eggs—it’s actually more Republican tax cuts!

    “And, no, they will not be paid-for. And, yes, they will blow up the national debt.

    “While Elon Musk hacks and chops his way through the government in the name of meager ‘savings’ and Republicans are cheering him on, they are all hoping we will ignore the elephant they brought into the room.

    “Even as this budget is a roadmap for painful cuts to programs families count on each and every day—all so they can give billionaires more tax cuts.

    “Republicans are going down this partisan path because they know Democrats are not going to join them in throwing Medicaid, nutrition assistance, and veterans’ benefits into the wood chipper, so they can throw more tax cuts at billionaires and the biggest corporations.

    “Make no mistake—this budget resolution is the DOGE resolution, as it assumes the staggering amount of $1 trillion in unspecified cuts in 2025 alone and $9 trillion over 10 years.

    “Where do we think those sort of dramatic cuts are going to come from? It’s going to come out of SNAP benefits that keep our kids from going hungry. It is going to come out of public schools and community health centers. It is going to come out of life-saving medical research.

    “It will mean costs going up for everyday Americans. 

    “It means child care costs going up when families lose access to Head Start and other quality, affordable options.

    “It means heating and cooling costs going up when families get cut off from LIHEAP.

    “It means rent going up as assistance programs get slashed.

    “It means your health care costs go up as community health centers and family planning providers are forced to close their doors.

    “It means grocery costs going up as programs like SNAP and WIC are gutted—not to mention what happens when you cut support for farmers, and for ag-research.

    “And make no mistake, if you are cutting that deeply, that painfully, you are going to start cutting things like veterans’ disability and education benefits, you are going to start cutting Medicare and Medicaid—which, for the information of all Senators, 30 million children rely on.

    There is just no other way to make their numbers work. Especially when we know that this is just step one in their plan—and step two: tax breaks for billionaires and massive corporations.

    “So, first they are handing Elon Musk a chainsaw to cut programs families rely on with no accountability—then they are rewarding him with enormous tax breaks. And that is completely unacceptable.

    “We should not be taking kids out of child care to give billionaires a tax break.


    “We should not be taking food off the family table to put more fuel into private jets.

    “I grew up in a family that knew what it was like to fall on hard times. My dad— who was a veteran—got too sick to work. He had multiple sclerosis.

    “My mom, kept us afloat with Dad’s VA benefits, food stamps, and the new job she got thanks to a federal workforce program.

    “It wasn’t easy. Mom always said they crawled—crawled—to Social Security and Medicare. But she worked hard, and our government was there for them when those hard times came.

    “I know there are families struggling now, just like my family struggled then. I hear from them every day—in the letters we get here in Washington D.C., and in the conversations I have back home in Washington state.

    “They work hard. They play by the rules. They deserve—at the very least—the same opportunity my parents had when I was growing up.

    “And I am not going to stand by silently while Republicans try to sell that opportunity away, to pay for even more tax breaks for billionaires.

    “I get why that sounds like a good idea to billionaires like Donald Trump. I get why it’s a sweet deal for Elon Musk—the richest man in the world. It’s great for them—because they are not the ones footing the bill!

    “The bill for these tax breaks, the cost of these cuts, is going to be paid by folks like my mom and dad.

    “Everyday Americans will pay for billionaire tax breaks with their health care. They will pay for billionaire tax breaks with abandoned medical research. They will pay for billionaire tax breaks with shuttered family farms and small businesses

    “Republicans can try and spin a fairy tale about how this will pay for itself, how this will work out for everyone and nobody cares about what will be affected—but the reality is going to show through pretty darn quick, and pretty darn painfully.

    “Because spin is not going to put food on the table. It will not pay the rent. It won’t fix the roads. It won’t lower prices. It won’t lower interest rates. And it won’t put money in families’ dwindling bank accounts.

    “When it comes to the job we were all sent here to do helping people, and solving problems—families need real solutions, not tax breaks for billionaires and talking points for everyone who loses out.

    “So, M. President, I would urge all of my colleagues: hit the breaks, and not just on this devastating, partisan budget resolution. Hit the brakes on what President Trump and Elon Musk are doing right now.

    “Let’s instead come together, and work on serious, bipartisan bills to fund the government. Let’s get investments that are sorely needed out to the folks we represent. Let’s pass legislation to give folks a hand—instead of this Republican plan that gives billionaires a handout.”

    MIL OSI USA News

  • MIL-OSI USA: King to Senate Colleagues: “We’ve Got to Wake Up [and] Protect this Institution”

    US Senate News:

    Source: United States Senator for Maine Angus King
    To watch the floor speech click here
    WASHINGTON, D.C.— U.S. Senator Angus King (I-ME) today spoke on the Senate floor to share his growing concerns over the Trump Administration’s largely unconstitutional and unprecedented overreach – sharing the usurpation of Congressional Authority that has now reached the constitutionally-directed ‘power of the purse.’  In the speech, King also shared the detrimental impacts of reckless, indiscriminate government cuts on critical federal functions like management of the national parks and care for our veterans:
    The news is coming so hard and fast these days, that it’s hard to sort it all out. Every day seems to be something new that captures our attention, our concern, our interest. And what I’d like to do today is try to put some of it in perspective and what’s going on in our governing of this country. I don’t believe what I’m going to be talking about today is partisan. It should not be partisan because what I’m really talking about is competent government and constitutional government.  Really two categories — competent government and constitutional government. That should not be a controversial issue. Neither of those are something that we should be arguing about. It’s what we have a responsibility to carry through in terms of our jobs here in the U.S. Senate. So the two categories I want to talk about — my headings are thoughtless and dangerous. 
    First I want to talk about thoughtless. The hiring freeze. A hiring freeze can be an effective tool if it’s used thoughtfully and systematically. But to do it across the board without a process for exceptions that’s built into it, you end up with all kinds of unintended and negative consequences. Firefighters, parks, losses elsewhere by attrition. There should be a systematic exemption process. Now it’s haphazard and random. Park seasonal employees first were under the hiring freeze, now they’re not. It’s sort of like, oh, oh, or, we’re going to be okay without park seasonal employees. VA frontline health workers were at first subject to the hiring freeze then people said, oh, no, we didn’t mean doctors and nurses, so that’s okay. You can hire them. My point is it’s not a rational process. It’s ready, fire, aim. Literally, ready, fire, aim is what we’re talking about and people aren’t doing this in a thoughtful and systematic way. And, by the way, the difference between frontline deliverers of care at the V.A. and the people who answer the phone who are categorized as bureaucrats, I don’t think there’s a stark difference there. If you’re a veteran and are seeking care and an appointment at a V.A. health facility and nobody answers the phone, that’s a denial of benefits. That’s a denial of benefits, just as if they close the door in your face. That’s what we’re talking about, is weakening the systems that are serving our public. 
    The hiring freeze, it’s possible to do a hiring freeze. When I was governor of Maine, I instituted a hiring freeze, but we did it in a systematic and thoughtful way. We had a process for dealing with exemptions and without destroying the morale and throwing the entire operation of government into chaos. And, by the way, why do we have the government? To serve the people. To serve the people. 
    So let’s talk about the next step: the firings. The famous fork in the road letter is a perfect example of a thoughtless way to approach a problem. The letter went to everybody. The letter wasn’t selective. It went to everybody — all civilians in the CIA, in the National Security Agency, in the Defense Department. Also, of course, all the other civilian agencies. But it wasn’t targeted in a way. If you want to leave federal service, we’ll pay you through September, but it hit everybody. Again, it’s not a rational or thoughtful way to trim the federal workforce. You should be talking about where are we do we have too many people, do we have overstock in terms of public servants and where do we need more, for example. But instead it went to everybody. By definition, that’s not a rational process. Firing — let me just put this in perspective, by the way. On the fork in the road letter, the estimate is as of today 75,000 people have taken that option and left. And I suppose the people who are behind this think that’s a great victory. The dollars saved from those 75,000 people represent one tenth of one percent of the federal budget. So people out who are seeing, we’re cutting the budget, we’re cutting, we’re saving, we’re saving the taxpayers money. One tenth of one percent. Given the chaos and the uncertainty and the deletion of services to our American people, I would argue that’s not worth it. One tenth of one percent. Everyone got these letters. People are being fired now in the CIA, FBI, the V.A., and on this letter, what if only the best people take the option to leave? Then you’ve really shot yourself in the foot. You’ve encouraged people who were going to retire anyway or who could get a better job in the private sector. So it’s an anti-intelligent way to handle this. 
    And then you got situations like at the Department of Energy, the first weekend they fired 350 people in the National Nuclear Security Administration, the people who handle nuclear materials and are responsible for our nuclear stockpile. They fired I think it was something like 20% of the personnel. Three or four days later, they realized, uh oh that was a mistake. A good, solid, thoughtful process wouldn’t have made a mistake like that. They would have realized from the outset that these are jobs that we aren’t going to be firing, we aren’t going to be eliminating. It seemed to be based on some kind of quota. I don’t know what it is. And then — okay, now we’re seeing everybody being fired who’s on probation. Probationary people, people who work for the government for less than a year or two. Okay, again that’s arbitrary — that’s arbitrary. Being on probation doesn’t mean you’re an effective or not an effective employee. You could be one of the best employees in the whole federal government and you just came on and yet you’re going to be fired. It has nothing to do with the productivity or skill of the worker. It has nothing to do with the importance of the position. It has nothing to do with the effectiveness of the agency in question, serving the people of Maine. If you’re probationary, you’re gone. Here’s another thing about probation. It turns out in the federal government, if you’re promoted, you’re on probation in the new position. You may have worked in the department for five or ten years. You’re on probation. You’re fired. Even though you have five or ten years of experience. And people did get these ridiculous letters saying your performance has not been adequate. There was no basis for those letters. It was arbitrary. And that’s remember I said my categories are thoughtless and dangerous. This is thoughtless — probation. 
    Oh, by the way, about 30% of the federal workforce are veterans. Now, we don’t know the exact figures. That’s one of the problems. We have no transparency about what’s going on here and who’s actually being let go and who isn’t, but a reasonable extrapolation is, 30% of the people being fired are veterans. People who put their lives on the line for this country. And then they went into public service and they’re being fired. That’s outrageous. Again, was no one thinking about this? A thousand people were fired at the V.A. Just a couple of days ago. We learned that people supporting the V.A. crisis line were fired. What genius thought that was a good idea? Last Friday, immigration judges were fired. We’re talking about immigration and border and control of immigration, and we’re firing immigration judges? What possible sense does that make? Here’s one. We’ve had — I think three curious aircraft incidents in the last month, and they just fired I think 300 people at the FAA. Great, including people who are in the business of maintaining the systems that keep our airplanes safe. In the wake of three serious airplane crashes, including one here in Washington that killed 67 people, we’re firing people at the FAA? Give me a break! What kind of sense does that make? What kind of service is that to the people of the United States? Here’s one that’s not life or death, but the National Park Service. 1,000 people were fired last weekend at the National Park Service. I suspect they were probationary, that means okay they’d only been there a year or to. But that doesn’t mean they weren’t in jobs that were important. The headline in this morning’s paper, chaos at the national parks. The lines are twice as long. If there’s chaos at the national parks in February, lord knows what it’s going to be in June or July. In Yosemite, in Acadia in my state of Maine. And here’s a beauty, some of these people that are be fired are people who collect fees at the park. So to save a buck, we’re going to lose $5 from fees not being collected. Genius. Come on. Five percent of the workforce at the national park service are being fired, and I can tell you, I’m the co-chair of the National Park Subcommittee, the Energy & Natural Resources Committee, we need more people at the national parks, not less. We’ve had a staffing shortage going back half a dozen or ten years where visitation is way up and staff is flat or declining. Now it’s really declining. And this is a direct hands-on experience for the American people. Gettysburg — they’ve been laying off people at the battlefield. Last night apparently something called the Presidential Management Fellowship Program, a training program that’s decades’ old that brings talented people into the federal government, eliminated. No explanation, no rational. Eliminated. 
    Okay, that’s the thoughtless part. Let me give you a little personal experience. When I was elected governor of Maine, we had a serious deficit. We were in the middle of a recession. We went through a process very similar to the impetus for what’s going on now. We looked at the entire workforce of the state of Maine. But we did it in a thoughtful and transparent way. We developed a task force that included private citizens, legislators, and members of the administration, and we took eight months, Mr. President, eight months, not eight weeks, and we looked at the entire structure of the state of Maine government and reduced our workforce by about 10%, a significant reduction. But we did it in a thoughtful way and in a way that made sense in terms of the ongoing service to the people of Maine. 
    So it can be done, and I’m not unsympathetic with the idea of making things more efficient. And even possibly downsizing the government where it’s called for and where additional people aren’t necessary. So, I’m not here to say we shouldn’t be looking for efficiency and saying everything in the federal government is perfect. I don’t believe that for a minute. But I think if we’re going to take on this exercise, it ought to be done in a sensible way by people who know what they’re doing. 
    And that brings me to DOGE. I don’t know what they’re doing. Nobody does. I don’t know who these 25-year-olds in the IRS, rummaging around in the IRS I.T. System. We learned the last couple days Social Security. What are they doing? Who are they? What are their qualifications? Do they have security clearances? Do they have conflicts of interest? All of the rules designed to protect us from people making arbitrary decisions that aren’t accountable, you talk about bureaucrats being unaccountable, these are the ultimate unaccountable people. We don’t know what their relationship is to the federal government, what authority they have, up what law they’re operating. It’s clear from mistakes like firing 350 people at the Nuclear Security Agency, they don’t know what they’re doing. They’re firing people who we need. Okay, that’s the thoughtless part. It’s inexcusable. That’s just pure efficiency of government of doing the right thing, and it can be done, but these people aren’t doing it. 
    The second part of what’s going on is the dangerous part, and this is where I call on my colleagues on the other side of the aisle who are standing by and watching our government be attacked with no response. Elimination of entire congressionally created agencies. USAID was established by statute and over a weekend these people fired everybody, closed the agency, took the name off the door, and threw the rest of the world into chaos, where these people were working on important projects all over the world, that were part of our outreach to the world. You know what? As soon as we went out of business at A.I.D., China is right in the market. It’s like walking away from engagement with the world. It couldn’t be a more self-defeating piece of work. By the way, it’s a tiny part of the federal budget. And James Mattis famously said, when he was a general, if you cut the foreign aid budget, you’re going to have to buy me more bullets. Foreign aid is part of the national security of this country, and to demolish this agency without any input from congress, without any relationship to the Foreign Affairs Committee or anybody else up here in the congress, is grossly unconstitutional. It’s grossly unconstitutional. 
    Here’s the problem, Mr. President, this isn’t just a battle between the Senate and the House and the President and they’re fighting about powers. No, the reason the framers designed our Constitution the way they did was that they were afraid of concentrated power. They had just fought a brutal eight-year war with a king. They didn’t want a king. They wanted a constitutional republic, where power was divided between the Congress and the President and the courts, and we are collapsing that structure. And the structure wasn’t there for fun. It wasn’t, hey, we’ll design this complicated system. It was there to protect our freedom. Because the people that wrote our Constitution understood human nature, and they understood a very important thousand-year-old principle — power corrupts, and absolute power corrupts absolutely.
    The whole idea was to divide power, and to the extent we allow this assault on our Constitution, this collapsing and excessive power being granted to the executive to ignore the laws passed by congress, and by the way, appropriations bills are laws passed by congress, which the administration is also ignoring by freezing funding for programs authorized and funded by congress, to the extent we do that, we’re not only making a mistake now, but we’re altering the essential structure of our Constitution that’s there for a reason, that’s there to protect our freedom. And the people cheering this on I fear, in a reasonably short period of time, are going to say where did this go? How did this happen? How did we make our president into a monarch? How did this happen? How it happened is we gave it up! James Madison thought we would fight for our power, but no. Right now, we’re just sitting back and watching it happen. Article 2 of the Constitution, the President said, oh, article 2 gives me a lot of power. No, it doesn’t. It makes the president commander in chief. That’s true. Here’s the key sentence in Article 2 of the constitution, which defines the president’s power, the key sentence is not the power of the president, the responsibility of the president is to take care that the laws being faithfully executed. Not write the laws. Not deny the laws. Not ignore the laws. Not pick which laws he or she To take care that the laws are faithfully executed. That’s the responsibility of the President. 
    Right now, those laws are being ignored. Impoundment. Impoundment. The President trying to say Congress appropriated this money through appropriation bill signed by president, but I’m not going to spend it because I don’t like it, I don’t like that purpose, whatever it is. I’m sorry. It’s absolutely straight up unconstitutional, and it’s illegal. President Nixon tried to do that in 1973, and the Congress, virtually unanimously, passed the impoundment control act which said no, presidents can’t do that. They can’t ignore the will of congress because Article 1 of the Constitution gives the congress the power of the purse. We’re giving it away this week. We’re standing by and watching it, watching the essential power of this body evaporate. Not evaporate, migrate down the street to 1600 Pennsylvania Avenue. 
    The power was divided for a reason. There’s criticism in the press saying people are talking about a constitutional crisis, they’re crying wolf. This is a constitutional crisis. It’s the most serious assault on our Constitution in the history of this country. It’s the most serious assault on the very structure of our Constitution, which is designed to protect our freedoms and liberty, in the history of this country. It is a constitutional crisis, and I’ll tell you what makes it worse, the President and the Vice President are already hinting that they’re not going to obey decisions of the courts. Many of my friends in this body say it will be hard, we don’t want to buck the President, we’ll let the courts take care of it. Number one, that’s a copout. It’s our responsibility to protect the Constitution. That’s what we swear to when we enter this body. To stand back and say we’re going to watch all this happen, and the courts will take care of it, that’s an abdication of our responsibility. 
    If you look at history, yes, it’s true, presidents have gained power. In my reading of history usually it wasn’t because presidents usurped power, but the congress abdicated it. We haven’t declared war, for example, since 1942, yet that’s a clear responsibility of congress and we sure have been in some scrapes since 1942. We’ve abdicated that power, and we’re now in the process of abdicating the power to control the appropriations process. I mention about DOGE, no authority, no accountability, no transparency, we literally don’t know what they’re doing, we can’t find out what they’re doing. Just this week, the destruction of the independent agencies, created by congress. They were created as independent agencies for a reason, because they didn’t want them to be dominated by the vicissitudes of politics. The president gets to appoint members of the board, and they’re very carefully balanced, not firing someone at the National Labor Relations Board so there’s no quorum so they can’t act. That’s a direct violation of congressionally established policy. These independent agencies were created for a reason. Again, oh, I forgot to mention, illegal firing of inspector generals. The Senator from Iowa is a champion of inspector generals. In the first few days, something like 18 inspector generals were fired, completely contrary to the law. The law is the congress must be given 30 days’ notice of the firing of an inspector general, and reasons therefore. Not done! Not a peep. 
    What’s it going to take for us to wake up, when I say us, I mean this entire body, to wake up to what’s going on here? Is it going to be too late? Is it going to be when the President has secreted all this power and the congress is an afterthought? What’s it going to take? The offenses keep piling up. As I said, leaving it to the courts, number one, is a copout, and number two, when the Vice President said something, I can’t remember exactly what he said, but ‘the courts should not have the power to do this.’ Of course, the President over the weekend famously quoted Napoleon, ‘when you’re saving your country, you don’t have to obey any law.’ Wow, a President of the United States quoting Napoleon about not having to obey the law. 
    So, I intended to talk about Ukraine, but Senator Tillis and Senator Shaheen did it so articulately, I think I’ll let that pass, except to say it’s shameful we’ve suddenly pivoted from the support of a democracy that was grossly and illegally invaded, from the support of that country to the support of a murderous dictator. I heard something about Zelenskyy is a dictator. The only dictator in this game, Mr. President, is Vladimir Putin. He’s the dictator. To argue that somehow Ukraine started the war? What universe is that — is somebody in that would say something like that? Again, I won’t pursue, but I can tell you Putin’s happy, XI Jinping is happy, Iran is happy, North Korea is happy. They love what’s going on, to see us retreating from the world, whether it’s A.I.D. or Ukraine. They love to see us retreating from the world, looking weak and looking unreliable. 
    Finally, on this point, we seem to be systematically alienating our allies. I’ve been on Armed Services for 12 years and have learned that the key asymmetric advantage this country has in the world is allies. China has customers. We have allies. Well, we’re giving that away. If I wasn’t on the floor of the U.S. Senate, I’d use a slightly different term, but we’re giving away our asymmetric advantage in the world by what looks like systematically alienating allies, whether it’s threats of tariffs or speeches in Europe telling them what their problems are, basically saying we’re going to abandon Europe. What a great idea, abandon Europe at a time there’s a murderous dictator with his eyes on the Baltics, Poland, and said he would like to reestablish the Soviet Empire. The worst possible geopolitical thing we could do would be to abandon Ukraine.
    So, Mr. President, this is a constitutional crisis, and we’ve got to respond to it. I’m just waiting for this whole body to stand up and say no, no, we don’t do it this way. We don’t do it this way. We do things constitutionally. Yes, it’s more cumbersome, it’s slower, that’s what the framers intended. They didn’t intend to have an efficient dictatorship, and that’s what we’re headed for. Mr. President, this is a very dangerous moment. We’ve got to wake up, protect this institution, but much more importantly protect the people of the United States of America. Thank you, Mr. President. 

    MIL OSI USA News

  • MIL-Evening Report: The promise of green iron, steel and ammonia is keeping the green hydrogen dream alive

    Source: The Conversation (Au and NZ) – By Changlong Wang, Research fellow in Civil and Environmental Engineering, Monash University

    D.Alimkin, Shutterstock

    Hydrogen was once sold as a universal climate fix — a clean, green wonder fuel for cars, homes, power grids and even global export. But reality has cooled that buzz.

    This week, the South Australian government shelved plans for a A$593 million hydrogen power plant, in favour of injecting that money into the $2.4 billion Whyalla steelworks rescue package. Premier Peter Malinauskas said there was “no point in producing hydrogen” without a customer: the steelworks.

    It’s the latest in a series of setbacks for hydrogen. Last year, Australian mining and energy giant Fortescue pared back its green hydrogen projects as a result of increasing costs and changing financial circumstances in the United States.

    Then, gas and oil heavyweight Woodside withdrew plans for two large-scale green hydrogen projects and Origin Energy dropped out of the Hunter Valley Hydrogen Hub.

    Meanwhile, the Hydrogen Energy Supply Chain project in Victoria, meant to ship hydrogen to Japan, has met with delays and overruns. Earlier this month, the new Queensland government chose to halt further investment in the Central Queensland Hydrogen Project, putting plans to export hydrogen in doubt.

    These setbacks show hydrogen isn’t the ultimate solution to all our energy needs, especially if we want to export it. But they don’t spell doom. Instead, they nudge us toward where hydrogen really shines: in heavy industry, right where it’s made.

    Heavy industry: where hydrogen makes sense

    Heavy industries such as steel manufacturing and ammonia production are where hydrogen proves its worth. These sectors are significant contributors to climate change — steel accounts for about 8% of global greenhouse gas emissions, ammonia a further 2%.

    Most emissions from steelmaking come from burning coal in blast furnaces to convert ore into iron and carbon dioxide.

    In a cleaner alternative, hydrogen (when produced using renewable energy) can be used to strip oxygen from the ore and make iron, with water as a byproduct. The result is green iron, ready to be turned into steel in an electric arc furnace – with a fraction of the emissions.

    Ammonia is used to make fertiliser and industrial chemicals, and hydrogen is one of the main ingredients in its production. Hydrogen bonds with nitrogen from the air to form ammonia. No hydrogen, no ammonia — it’s that simple. Conventional ammonia plants get hydrogen from methane, producing CO₂ in the process. Green ammonia uses renewable energy to produce hydrogen by splitting water via electrolysis.

    Our recent research crunched the numbers on producing these new green commodities. We found making green iron in Australia with hydrogen and shipping it to Europe for steel production could be 21% cheaper than exporting raw iron ore and hydrogen separately. Plus, it could cut emissions by up to 95% compared to traditional methods.

    There are huge economic opportunities for Australia too. Instead of shipping low-value raw materials, Australia could export ready-to-use green iron or green steel, reshaping global supply chains while cutting costs and carbon. That’s the kind of rethink hydrogen enables.

    Industry hubs: a practical fix

    Transporting hydrogen long distances is costly and inefficient. The fix? Industry hubs that produce hydrogen right where it’s needed — next to steel mills, ammonia plants, desalination plants, water treatment plants or even aluminium smelters. Putting producers and consumers together slashes transport costs and unlocks efficiencies.

    We’ve built tools to pinpoint places with the greatest potential to produce these new green commodities.

    The Hydrogen Economic Fairways Tool maps where renewable energy, infrastructure and industrial sites align for cost-effective hydrogen production.

    The Green Steel Economic Fairways Mapper zooms in on prime locations for green steel, spotlighting places such as Eyre Peninsula in SA and the Pilbara in Western Australia, among others (see below). These locations have abundant wind and solar resources alongside an existing industrial base.

    The Green Steel Economic Fairways Mapper compares the levelised cost of steel, including production and transport to the port. a) Regional changes across Australia b) Example of how to optimise the system to minimise the levelised cost of producing 1 million tonnes per annum c) Breakdown of costs d) Hourly system performance, in terms of energy flows.
    Green Steel Economic Fairways Mapper, Geoscience Australia

    Challenges remain

    Green hydrogen promises to revolutionise heavy industries, but significant hurdles stand in the way of widespread domestic adoption. The biggest challenge comes from the unpredictable nature of renewable energy, which makes it hard to maintain the steady hydrogen supply industries need.

    The costs remain steep, too. Splitting water into hydrogen using renewable electricity isn’t cheap, particularly when you need backup storage systems to keep production going during cloudy or windless periods.

    Getting hydrogen where it needs to go poses another major challenge. As hydrogen is both bulky to transport and highly flammable, it requires special handling and infrastructure, driving up costs, especially for facilities far from production sites.

    Many companies also hesitate to invest in hydrogen-compatible equipment, as retrofitting existing plants or building new ones requires substantial upfront costs without guaranteed returns.

    The $2.4 billion rescue package for the Whyalla Steelworks (ABC News)

    Government backing: a push in the right direction

    Thursday’s announcement of A$2.4 billion investment in the Whyalla steelworks along with plans for a $1 billion green iron investment fund are a bold bet on green steel. Furthermore, the landmark Future Made in Australia legislation introduces a $6.7 billion Hydrogen Production Tax Incentive, offering $2 per kilogram of renewable hydrogen produced between 2027–28 and 2039–40, alongside a 10% tax credit for critical minerals processing.

    Meanwhile tax credits for green aluminium and alumina should help another heavy industry to navigate the energy transition using clean hydrogen.

    These measures aim to unlock tens of billions in private investment, boost regional economies, and position Australia as a leader in clean energy manufacturing. This isn’t just about one-off projects. It’s laying the groundwork for hubs that link renewable energy and hydrogen production to industrial demand.

    There’s more in the pipeline. The Hydrogen Headstart program pumps funds into hydrogen innovation, and the Future Made in Australia initiative backs clean industry with billions more. Add in policies like carbon pricing or low-interest loans, and the economics tilt even further toward green steel and ammonia. Government buying power — in the form of procurement targets for low-carbon materials — could seal the deal by guaranteeing demand.

    These policies aren’t just wishful thinking — they’re practical steps that are already working elsewhere. Sweden’s HYBRIT project, which paired green steel with government-backed demand, has already led to construction starting on new industrial-scale green steel facilities. At the same time, the European Union’s hydrogen strategy leans on carbon pricing and subsidies to guide industries and suppliers through the energy transition, while Japan offers incentives for the use of green steel in their automotive industry.

    Australia has the renewable energy and the industrial base to take advantage of these opportunities. With the right leadership, we can turn hydrogen’s stumbles into a global triumph for heavy industry.

    Changlong receives funding from the South Australian Department for Energy and Mining to conduct the SA Green Iron Study, and from Geoscience Australia under the Exploring for the Future program to develop the Hydrogen and Green Steel Economic Fairways tool. Changlong is affiliated with Melbourne Climate Futures, University of Melbourne, and is a visiting fellow at Engineering Science, Oxford University, UK.

    Stuart Walsh receives funding from Geoscience Australia supporting the development of the Bluecap software suite, which highlights opportunities for new renewable energy and critical mineral projects in Australia. Stuart received funding from the South Australian Department for Energy and Mining to conduct the SA Green Iron Study and from Geoscience Australia under the Exploring for the Future program to develop the Hydrogen and Green Steel Economic Fairways tool.

    ref. The promise of green iron, steel and ammonia is keeping the green hydrogen dream alive – https://theconversation.com/the-promise-of-green-iron-steel-and-ammonia-is-keeping-the-green-hydrogen-dream-alive-250410

    MIL OSI AnalysisEveningReport.nz

  • MIL-OSI USA: As Republicans Propose Budget, Warren Fights Back With 10 Amendments to Block Cost Hikes for Families, Stop Billionaire Tax Cuts, and Hold Elon Musk, DOGE Accountable

    US Senate News:

    Source: United States Senator for Massachusetts – Elizabeth Warren

    February 20, 2025

    Washington, D.C. – During the Senate’s consideration of the Republican budget resolution, U.S. Senator Elizabeth Warren (D-Mass.) fought back against Republicans’ proposed budget with amendments to block cost increases for families, prevent tax cuts for the rich, and hold Elon Musk and the Department of Government Efficiency (DOGE) accountable for reckless cuts to government agencies. 

    “While Republicans charge ahead with a budget that will increase costs on families, I have plans to fight back,” said Senator Warren. “Every Republican Senator will have to answer for votes putting billionaires over families.”  

    Senator Warren led the following amendments: 

    Stopping Cost Hikes for Families 

    • Amendment that opposes any final budget legislation that increases grocery costs for American families, including through proposals to cut food assistance programs; 
    • Amendment that opposes any final budget legislation that increases health insurance premiums or out-of-pocket costs through proposals to cut Medicaid and the Affordable Care Act; 
    • Amendment that opposes final budget legislation raising costs for middle-class families while an unelected billionaire illegally directs cuts to key programs like air travel safety, services for veterans, and the integrity of Social Security, Medicare, and Medicaid payments;
    • Amendment against final budget legislation while Americans’ Social Security, Medicare, and Medicaid benefits are threatened by DOGE infiltrating the Social Security Agency and the Center for Medicare and Medicaid Services; 
    • An amendment opposing final budget legislation until funding for the National Institutes of Health for research and clinical trials on rare diseases, pediatric diseases, cancer, or other serious diseases or conditions is restored. 
    • Amendment supporting investments in child care for military families, calling out that Republican plans to increase Pentagon funding are not focused on helping military families. 

    No Tax Cuts for the Rich

    • An amendment opposing tax cuts for the rich, specifically no tax cuts for people making over $10 million annually. 

    DOGE Accountability 

    • Amendment on public financial disclosures for Special Government Employees, pushing to hold Elon Musk accountable while he pursues policies that will benefit himself but hurt hardworking Americans; 
    • Amendment on investigation or criminal prosecution of unlawful misuse of private personal and tax information by DOGE; and 
    • Amendment requiring the Congressional Budget Office to produce a cost estimate for replacing probationary national security employees, fired as a result of Elon Musk and DOGE, with contractors – calling out how Republican plans to remove skilled civil servants will be a big payday to boost defense contractor profits. 

    MIL OSI USA News

  • MIL-OSI China: China’s tax deferral policy boosts foreign reinvestment in 2024

    Source: China State Council Information Office 3

    A drone photo taken on Jan. 15, 2025 shows the cruise ship Adora Flora City under construction at Shanghai Waigaoqiao Shipbuilding Co., Ltd. in Shanghai, east China. [Photo/Xinhua]

    Foreign reinvestment in China benefiting from a preferential policy to temporarily exempt certain profits obtained by overseas investors from withholding income tax have seen rapid growth in 2024, data from the State Taxation Administration revealed on Thursday.

    The total value of reinvestment reached 162.28 billion yuan (about 22.63 billion U.S. dollars) in 2024, a 15 percent increase from the previous year, hitting a record high.

    China has previously deferred withholding income tax on profits that were distributed to overseas investors by resident enterprises in the country and directly reinvested in domestic projects and sectors. 

    MIL OSI China News

  • MIL-OSI: Peyto Delivers Record Reserves Results in 2024

    Source: GlobeNewswire (MIL-OSI)

    CALGARY, Alberta, Feb. 20, 2025 (GLOBE NEWSWIRE) — Peyto Exploration & Development Corp. (TSX: PEY) (“Peyto” or the “Company”) is pleased to present the results and in-depth analysis of its independent reserve report effective December 31, 2024. The evaluation encompassed 100% of Peyto’s reserves and was conducted by GLJ Ltd. (“GLJ”). The year 2024 marks the Company’s 26th year of successful reserves development.

    Peyto’s 2024 capital program marks the first full year of drilling high-quality inventory acquired in the Repsol Canada Limited Partnership transaction. Combined with drilling of high-graded locations on Peyto’s legacy assets, the Company delivered several new reserves records in 2024.

    2024 HIGHLIGHTS

    • The Company’s 2024 drilling program developed a record 457 BCFe1 (76.2 MMboe2) of new Proved Developed Producing (“PDP”) reserves at a Finding, Development and Acquisition (“FD&A”3) cost of $1.00/Mcfe ($6.01/boe). The Company’s continuous focus on finding and developing reserves at low costs has generated a five-year average PDP FD&A of $1.13/Mcfe.
    • The Peyto team delivered record production in December of 2024 of 136 Mboe/d (721 MMcf/d gas, 15,708 bbl/d NGLs), generating an exit rate capital efficiency4 of $9,700/boe/d, one of the best in Company history.
    • The Company’s systematic hedging program and market diversification strategy, along with Peyto’s low operating cost structure, were able to deliver an average field netback5 of $3.26/Mcfe ($19.59/boe). This resulted in a 3.3 times recycle ratio6 (2.1 times on an unhedged basis), the highest on record over the last 20 years, despite the lowest annual AECO natural gas price during the same period.     
    • The 2024 drilling program produced a record average PDP reserves-per-well booking in the Company’s history at 6.0 Bcfe, up from 4.3 Bcfe in 2023.
    • Peyto invested $458 million in capital7 in 2024, using 64% of funds from operations8 (“FFO”), while returning a record $258 million in dividends to shareholders.
    • In 2024, the Company drilled 58 wells previously booked as proved and probable undeveloped reserves. Peyto converted these locations to developed reserves at a record low finding cost of $0.66/Mcfe, 26% lower than the 2023 reserve report assignments. Peyto’s history of converting reserves at or below booked values provides confidence in the remaining future undeveloped reserves and the associated capital requirements.
    • The before tax, 10% discounted, net present value9 (“BT NPV10“) of the Company’s reserves are $4.9 billion, $7.1 billion, and $9.6 billion on a PDP, Total Proved (“TP”), and Total Proved plus Probable (“P+P”) basis, respectively. The Peyto capital program generated a 16% increase in PDP reserves value over last year, despite the decrease in forecasted prices used by GLJ in this year’s report.  
    • Peyto replaced 166%, 199% and 239% of annual production with new PDP, TP, and P+P reserves, respectively.
    • Peyto delivered reserves growth across all categories in 2024 from its successful drilling program. PDP reserves increased 7% to 474 MMboe, TP reserves increased 5% to 876 MMboe, and P+P reserves increased 5% to 1,367 MMboe. On a per share basis, reserves increased 5%, 3%, and 3% for PDP, TP, and P+P, respectively. Since inception, the Company has generated a 20% compound annual growth rate (“CAGR”10) on a PDP reserves per share basis.
    • FD&A costs, including the change in Future Development Capital (“FDC”), for TP and P+P reserve categories were $0.90/Mcfe ($5.38/boe) and $0.61/Mcfe ($3.67/boe), which represents a 37% and a 50% reduction from 2023, respectively.
    • The Reserve Life Index11 (“RLI”) for the PDP remains unchanged at 10 years despite an 11% increase in year-over-year fourth quarter production. TP and P+P reserves RLI remain strong at 18 and 28 years, respectively, supported by the Company’s industry leading cash costs. Peyto’s PDP reserve life is one of the longest in the industry.
    • Total Company reserve values (BT NPV10) for PDP, TP, and P+P reserves on a debt adjusted basis implies $17.81/share, $28.79/share, and $41.52/share, respectively, using the 3 Consultant Average (“3CA”) price forecast (GLJ, McDaniel, and Sproule).

    2025 CAPITAL BUDGET

    The Board of Directors of Peyto has approved a 2025 capital budget of $450–$500 million. The capital program is projected to add between 43,000 and 48,000 boe/d of new production by year end and more than offset the Company’s estimated 27% decline in base production. The Company expects to utilize four drilling rigs to drill 70–80 net horizontal wells, representing approximately 80% of the 2025 budget. The remaining capital is planned for optimization and maintenance projects for Peyto’s 15 operating gas plants and extensive gathering system infrastructure.  

    Peyto’s active hedging program has secured prices for approximately 473 MMcf/d of natural gas for 2025 at an average price over $4/Mcf, and when combined with the Company’s liquids hedges, provides revenue certainty of over $800 million, reflecting one of the highest levels of price protection in the industry. This revenue more than covers the expected capital program and dividends to shareholders for the year. Peyto’s strong hedge book, market diversification and industry leading cash costs supports the continued development of high-quality inventory despite current low AECO natural gas prices.

    While the threat of U.S. tariffs continues to weigh on the industry and the country, management believes Peyto’s commodity hedges and natural gas diversification contracts will not be directly impacted. The majority of Peyto’s market diversification arrangements that have US hub pricing exposure are physically delivered in Canada and not the US.   Additionally, most of the supplies used in the Company’s operations are sourced domestically, which should also limit any effects from counter tariffs that might be imposed by the Government of Canada. As always, Peyto will remain flexible and responsive to the business environment as it unfolds through 2025.

    HISTORICAL PERSPECTIVE

    Over the past 26 years, Peyto has acquired, explored and discovered 11.2 TCFe of Alberta Deep Basin natural gas and associated liquids, of which 59% has now been developed12.

    Peyto 26-year cumulative production*: 2.97 TCFe
    Total Proved + Probable Developed reserves* 3.61 TCFe
    Total Developed natural gas and liquids*: 6.57 TCFe
    Total Proved + Probable Undeveloped reserves*: 4.60 TCFe
    Total acquired, explored for and discovered*:
    * As at December 31, 2024
    11.17 TCFe

    Each year the Company invests in the discovery of new reserves and the efficient and profitable development of existing reserves into high netback natural gas and NGL production for the purpose of generating the maximum possible return on capital for its shareholders.

    In those 26 years, a total of $8.9 billion was invested in the Canadian economy in the acquisition and development of 6.6 TCFe of total developed natural gas and associated liquids at an average cost of $1.34/Mcfe, while a weighted average field netback3 of $3.45/Mcfe delivered $9.2 billion in FFO, $3.1 billion in dividends and distributions to shareholders, and resulted in a cumulative recycle ratio4 of 2.6 times. Royalty payments made to Alberta during this time have totaled over $1.3 billion.

    Based on the December 31, 2024 evaluation, the debt adjusted, Net Present Value of the Company’s remaining Total Proved plus Probable reserves (“P+P NPV”, 10% discount, less debt) was $42/share, comprised of $24/share of developed reserves and $18/share of undeveloped reserves. This includes a provision for all abandonment liability for wells, well sites, pipelines, and facilities for which Peyto has ownership and responsibility.

    2024 RESERVES REPORT AND ANALYSIS

    The following table summarizes Peyto’s reserves and the discounted Net Present Value of future cash flows, before income tax, using the 3 Consultant Average price forecast (GLJ, McDaniel, and Sproule), at January 1, 2025.

              Before Tax Net Present Value ($millions)
              Discounted at
    Reserve Category Gas
    (BCF)
    Oil &
    NGL
    (mstb)
    BCFe
    (6:1)
    MMboe
    (6:1)
    0% 5% 8% 10%
    Proved Developed Producing 2,435 67,968 2,843 474 $10,183 $6,693 $5,471 $4,879
    Proved Non-producing 49 1,049 55 9 $183 $110 $85 $73
    Proved Undeveloped 2,029 54,594 2,357 393 $6,814 $3,548 $2,560 $2,099
    Total Proved 4,513 123,611 5,255 876 $17,179 $10,351 $8,116 $7,051
    Probable 2,552 65,826 2,947 491 $11,705 $4,793 $3,185 $2,519
    Total Proved + Probable 7,065 189,437 8,202 1,367 $28,885 $15,143 $11,302 $9,569

    Note: Based on the GLJ report effective December 31, 2024. Tables may not add due to rounding.

    ANALYSIS FOR PEYTO SHAREHOLDERS

    One of the guiding principles at Peyto is “to tell you the business facts that we would want to know if our positions were reversed”. Therefore, each year Peyto provides an extensive analysis of the independent reserve evaluation that goes far beyond industry norms to answer the most important questions for shareholders:

    1. Base Reserves – How did the “base reserves” that were on production at the time of the last reserve report perform during the year, and how did any change in commodity price forecast affect their value?
    2. Value Creation – How much value did the 2024 capital investments create, both in current producing reserves and in undeveloped potential? Has the Peyto team earned the right to continue investing shareholders’ capital?
    3. Growth and Income – Are the projected cash flows capable of funding the growing number of undeveloped opportunities and a sustainable dividend stream to shareholders, without sacrificing Peyto’s financial flexibility or allowing for the timely repayment of any debt used?
    4. Risk Assessment – What are the risks associated with the assessment of Peyto’s reserves and the risk of recovering future cashflows from the forecast production streams?

    1.   Base Reserves

    Peyto’s existing PDP reserves at the start of 2024 (the base reserves) were evaluated and adjusted for 2024 production as well as any technical or economic revisions resulting from the additional twelve months of production and commodity price data. As part of GLJ’s independent engineering analysis, all base 2,968 producing reserve entities (zones/wells) were evaluated. These base producing wells and zones represent a total gross Estimated Ultimate Recoverable (“EUR”) volume of 9.1TCF (remaining PDP+PA reserves plus all cumulative production to date), which is 2% higher than the prior year estimate. As a result, Peyto is pleased to report that its total base reserves continue to meet expectations, which provides confidence in the prediction of future recoveries.

    The commodity price forecast used by GLJ in this year’s evaluation is lower than last year for both natural gas and natural gas liquids, which has had the effect of decreasing the Net Present Value of all reserve categories. For example, 2023’s PDP reserves decreased $268 million (10% of the debt adjusted 2023 NPV10) due to the difference in commodity price forecasts. Despite the decrease in value due to lower prices, record PDP additions from Peyto’s 2024 drilling program resulted in a 16% increase in the PDP BT NPV10 over 2023. The 3CA price forecast used in the evaluation is available on GLJ’s website at www.gljpc.com

    For 2025, Peyto estimates a total base decline rate of approximately 27% from the monthly average production in December 2024 of 136 Mboe/d. The historical base decline rates and capital programs are shown in the following table:

        2016   2017   2018   2019   2020   2021   2022   2023   2024 2025F
    Base Decline (%/yr)*   40%   37%   35%   29%   23%   27%   30%   29%   27%** 27%
    Capital Expenditures ($MM)   $469   $521   $232   $206   $236   $365   $529   $413   $458 $475

    *The base decline represents the aggregate annual decline of all wells on production at the end of the previous year.
    **2024 base decline adjusted to account for voluntarily shut-in volumes associated with uneconomic ethane production as well as the shut-down of sour gas production as Edson Gas Plant.

    2.   Value Creation/Reconciliation

    During 2024, Peyto invested a total of $458 million in organic activity to evaluate exploration lands, expand its pipeline gathering network, and drill, complete and tie-in 77 gross (75.3 net) wells. In keeping with Peyto’s strategy of maximizing shareholder returns, an evaluation of the economic outcome of this investment activity is necessary to determine, on a go-forward basis, the best use of shareholders’ capital. Not only does this look back analysis give shareholders a detailed report card on the capital that was invested, but it also helps illustrate the potential returns that can be generated from similar undeveloped future opportunities.

    Exploration, Development, and Acquisition Activity

    Of the total capital invested in exploration and development activities (excluding acquisitions) in 2024, approximately 1% was spent acquiring lands and seismic, 16% on pipeline and facility projects, and the remaining 83% was spent on drilling, completing, and connecting existing and new reserves. This capital program delivered an incremental 47,300 boe/d, after adjustments for base production backout and voluntary shut-ins, generating a capital efficiency of $9,700/boe/d. Of the 77 gross wells drilled, 58 or 75%, were previously identified as undeveloped reserves in last year’s reserve report (47 Proved, 11 Probable locations). The remaining 19 wells were new locations developed in the year, on both existing and acquired lands, and were not recognized in last year’s report.

    The undeveloped reserves at year-end 2023 originally booked to the 58 drilled locations, referred to above, totaled 305 BCFe (5.3 BCFe/well) of Proved plus Probable Undeveloped reserves for a forecast capital investment of $270 million ($0.89/Mcfe). In actuality, 441 BCFe (7.6 BCFe/well) were developed for $289 million of capital on these wells during 2024, resulting in a conversion cost of $0.66/Mcfe or a 26% improvement over what was previously forecast. Peyto continued to increase average horizonal lengths through 2024 which had the result of increasing total capital spent but also significantly improving year-over-year finding costs with greater reserve recoveries. Additionally, the results generated from both Peyto legacy lands and Repsol acquired lands have outperformed expectations throughout the year.

    The following table illustrates the Company’s historical performance in converting predicted future undeveloped locations into producing wells and demonstrates that, other than the rapid inflation experienced in 2022, Peyto has typically converted more reserves at a lower cost than was forecast.

    Reserve
    Year
    Total
    Drills
    Booked
    Locations
    Converted
    Booked/
    Total
    Forecast Outcome Forecast
    Cost per
    Unit
    Actual Outcome Actual
    Cost per
    Unit
    Actual/
    Forecast
    Cost per
    Unit
      gross wells gross wells   BCFe Capex* $MM $/Mcfe BCFe Capex* $MM $/Mcfe  
    2015 140 103 74 % 307 $ 456 $ 1.49 348 $ 385 $ 1.11 -26 %
    2016 128 82 64 % 254 $ 297 $ 1.17 254 $ 246 $ 0.97 -17 %
    2017 142 97 68 % 298 $ 295 $ 0.99 321 $ 305 $ 0.95 -4 %
    2018 70 37 53 % 104 $ 115 $ 1.10 120 $ 118 $ 0.98 -11 %
    2019 61 39 64 % 129 $ 111 $ 0.86 123 $ 109 $ 0.88 +2 %
    2020 64 52 81 % 172 $ 158 $ 0.92 165 $ 135 $ 0.82 -11 %
    2021 95 61 64 % 221 $ 193 $ 0.87 227 $ 192 $ 0.84 -3 %
    2022 95 79 83 % 331 $ 268 $ 0.81 333 $ 320 $ 0.96 +19 %
    2023 72 44 61 % 171 $ 159 $ 0.93 236 $ 196 $ 0.83 -11 %
    2024 77 58 75 % 305 $ 270 $ 0.89 441 $ 289 $ 0.66 -26 %
    Total 944 652 69 % 2,292 $ 2,322 $ 1.01 2,568 $ 2,295 $ 0.89 -12 %

    *Capex represents only well related capital for drilling, completion, equipping and tie-in

    This annual analysis of reserves that are converted from undeveloped to developed provides confidence in the validity of the remaining future undeveloped reserves and the associated capital requirements. This helps Peyto predict future reserve recoveries and capital requirements and reduces the risk associated with valuing future undeveloped locations.

    Value Reconciliation

    In order to measure the success of all capital invested in 2024, it is necessary to quantify the total amount of value created during the year and compare that to the total amount of capital invested. Each year, Peyto runs last year’s reserve evaluation with this year’s price forecast to remove the change in value attributable to commodity prices. This approach isolates the value created by the Peyto team from the value created (or lost) by those changes outside of their control (ie. Commodity prices). Since capital investments can be funded from a combination of cash flow, debt and equity, it is necessary to know the change in debt and the change in shares outstanding to see if the change in value is truly accretive to shareholders.

    At year-end 2024, Peyto’s estimated net debt13 decreased by approximately 0.7% or $10 million from December 31, 2023, while the number of shares outstanding increased by 2%, due to the Company’s stock option program, to 197.8 million shares. In calculating the change in debt, the Company included all capital expenditures, and the total fixed and performance-based compensation paid out for the year. Although these estimates are believed to be accurate, they remain unaudited at this time and may be subject to change.

    Based on this reconciliation of changes in BT NPV0, the Peyto team was able to create $1.9 billion of PDP, $2.4 billion of TP, and $3.6 billion of P+P undiscounted reserve value, with $458 million of capital investment. The ratio of capital expenditures to value creation is what Peyto refers to as the NPV0 recycle ratio4, which is simply the undiscounted value addition, resulting from the capital program and acquisition, divided by the capital and acquisition investment. For 2024, the PDP NPV0 recycle ratio is 4.1, which means for each dollar invested, the Peyto team was able to create 4.1 new dollars of undiscounted PDP reserve value.

    The historic NPV0 recycle ratios are presented in the following table.

        2015   2016   2017   2018   2019   2020   2021   2022   2023  2024 10 yr
    Wt.
    Avg.
    Capital Investment ($MM)   $594   $469   $521   $232   206   $236   $365   $529   $1,112 $458
    NPV0Recycle Ratio                      
    Proved Developed Producing   2.3   2.9   2.3   4.6   1.8   3.5   5.2   3.6   2.0 4.1 3.0
    Total Proved   3.3   4.2   3.2   11.7   5.5   6.9   5.5   4.0   4.4 5.3 4.8
    Total Proved + Probable   5.0   7.3   4.0   15.1   9.2   6.5   11.5   3.8   7.8 7.9 7.2

    *NPV0(net present value) recycle ratio is calculated by dividing the undiscounted NPV of reserves added in the year by the total capital cost for the period (eg. 2024 Proved Developed Producing $1,857/$458) =4.1).

    3.   Growth and Income

    Over the past 22 years, Peyto has paid a total of $22.63/share to shareholders in the form of distributions and dividends. Peyto’s objective, as a dividend paying, growth-oriented corporation, is to profitably grow the resources which generate sustainable income (dividends) for shareholders. For income to be sustainable and grow, Peyto must profitably find and develop more reserves. Simply increasing production from the existing reserves will not make that income more sustainable. RLI, or a reserve to production ratio, provides a measure of this long-term sustainability.

    During 2024, the Company’s capital program was successful in replacing 166% of annual production with new PDP reserves, resulting in 7% growth. Fourth quarter production increased 11%, from 120 Mboe/d (623 MMcf/d gas, 16,175 bbl/d NGLs) to 133 Mboe/d (708 MMcf/d gas, 15,409 bbl/d NGLs). The change in both PDP reserves and fourth quarter production held the PDP RLI (ratio of the two) flat at 10 years. For comparative purposes, the TP and P+P RLI were 18 and 28 years, respectively. Management believes that the most meaningful method to evaluate the current reserve life is by dividing the PDP reserves by the actual fourth quarter annualized production. This way production is being compared to producing reserves as opposed to producing plus non-producing reserves.

    The following table highlights the Company’s historical RLI.

      2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
    Proved Developed Producing 7 7 7 9 9 9 9 9 10 10
    Total Proved 11 11 11 16 19 18 16 15 19 18
    Total Proved + Probable 17 18 18 25 29 27 25 24 30 28

    Future Undeveloped Opportunities

    Every year Peyto finds and develops new drilling inventory that GLJ reviews to create a forecast of future development activity. Their forecast is by no means a complete assessment of Peyto’s current opportunities, nor is Peyto content to just sit back and harvest these current opportunities. Each year the results from the drilling and acquisition activity spawn additional offsetting locations both on currently owned lands and lands Peyto does not yet own but attempts to acquire.

    As of December 31, 2024, the future drilling locations recognized in the reserve report totaled 1,604 gross (1,293 net). This is down slightly from the previous year of 1,616 (1,292 net) as a result of optimization of future locations. Of these future locations, 1,056 (66%) are categorized as Proven Undeveloped by the independent reserve evaluators, while 548 (34%) are Probable Undeveloped locations. The net reserves associated with the undeveloped locations (not including existing uphole zones) totals 4.6 TCFe (3.6 BCFe/well) consisting of 3.96 TCF of natural gas and 106 MMbbls of NGLs, while the capital required to develop them is estimated at $5.7 billion or $1.23/Mcfe. This development is forecast to create Before Tax Net Present Value of $4.0 billion (at 10% discount rate, inclusive of profit after capital recovery and future abandonment liability) or $18 per share (debt adjusted) of incremental value at the 3CA commodity price forecast.

    The undiscounted forecast for Net Operating Income for the TP and P+P reserves over the future development capital schedule, as contained in the evaluator’s report, totals $8.9 billion and $15.8 billion, respectively, more than sufficient to fund the future development capital shown in the table below, ensuring those reserve additions are accretive to shareholders.

      Future Development Capital
      TP Reserves P+P Reserves
    Year Undisc., ($Millions) Undisc., ($Millions)
    2025 493 496
    2026 483 498
    2027 423 559
    2028 533 602
    2029 575 603
    2030 542 598
    2031 338 597
    2032 601
    Thereafter 1,154
    Total 3,386 5,707

    4.   Risk Assessment

    Effectively 100% of Peyto’s natural gas and natural gas liquid reserves exist in low permeability (tight), sandstone reservoirs in the Alberta Deep Basin. In almost all cases, the volumetric capacity of these sandstone reservoirs can be determined using traditional geological and reservoir engineering methods, which, when complimented by production performance data, increases the certainty of the reserve estimates. In the majority of Peyto’s core areas, continuous drilling activity has further refined the geologic and geometric definition of these reservoirs to a higher level of certainty.

    In addition, these Deep Basin sandstone reservoirs do not contain mobile water, nor are they supported by active aquifers. Mobile water traditionally increases the risk associated with reservoir recovery by impeding the flow of hydrocarbons through the reservoir and up the wellbore. Water production, separation and disposal processes also increase operating costs which shortens the economic life of producing wells, further contributing to reduced recovery. As many of these traditional reserves determination and recovery risks are not present in Peyto’s Deep Basin reservoirs, Management has a higher level of confidence in its reserves and their ultimate recovery.

    Peyto’s high operating margins have meant that forecasts of net operating income are less affected by commodity price volatility than in most traditional reserve evaluations. As a result, the predicted economic life of Peyto’s producing wells is less sensitive to changes in commodity prices. These high operating margins are achieved through the Company’s high level of ownership and control of all levels of production operations, through a concentrated geographic asset base, and by striving to be the lowest cost producer in the industry.

    Peyto attempts to further reduce the risk of predicted operating incomes with an active market diversification and hedging program that is designed, over time, to smooth out the volatility in both Alberta and US natural gas markets through a series of frequent transactions which is like “dollar cost averaging” the future gas price.

    Finally, Peyto is the operator of over 96% of its producing wells, which fits with the Company’s own and control strategy. As of December 31, 2024, Peyto owned a total of 2,819 net wells of which over 90% are on production today and most are expected to produce for decades to come. Despite the Company’s very low non-producing well count, Peyto has an active well retirement program where 14 net wells were abandoned in 2024.   For perspective, the current existing developed reserves have a forecast value of $5.6 billion (NPV10 of the PDP + PA and PDNP + PA), while the cost to abandon and reclaim all wells, well sites, pipelines, and facilities is estimated at $80 million using the same 10% discount rate for future costs. Peyto’s future abandonment and reclamation costs are substantially within the province of Alberta and are estimated in a manner that is consistent with Alberta Energy Regulator (“AER”) Directive 11 and other Alberta-based exploration and production companies. Peyto plans to spend approximately $10 million on abandonment and reclamation activities in 2025 which exceeds the mandatory spending requirements as set out by the AER for the period.  

    PERFORMANCE RATIOS

    The following table highlights annual performance ratios for the last decade. These can be used for comparative purposes, but it is cautioned that on their own they do not measure investment success.

        2024     2023     2022     2021     2020     2019     2018     2017     2016     2015  
    Proved Developed Producing                    
    FD&A ($/Mcfe)   $1.00     $1.21     $1.41     $0.97     $1.06     $1.55     $1.18     $1.36     $1.44     $1.64  
    RLI (yrs)   10     10     9     9     9     9     9     7     7     7  
    Recycle Ratio   3.3     2.9     2.8     2.8     1.5     1.4     2.3     2.1     1.8     2.0  
    Reserve Replacement   166 %   400 %   165 %   188 %   127 %   75 %   98 %   171 %   153 %   193 %
    Total Proved                    
    FD&A including the change in FDC ($/Mcfe)   $0.90     $1.43     $1.75     $1.10     $0.20     $1.41     $1.21     $1.39     $1.01     $0.72  
    RLI (yrs)   18     19     15     16     18     19     16     11     11     11  
    Recycle Ratio   3.6     2.5     2.3     2.4     8.0     1.5     2.2     2.0     2.6     4.5  
    Reserve Replacement   199 %   727 %   159 %   194 %   132 %   137 %   294 %   225 %   183 %   188 %
    Future Development Capital ($ millions)   $3,386     $3,352     $2,081     $1,979     $1,917     $2,107     $1,971     $1,488     $1,305     $1,381  
    Total Proved + Probable                    
    FD&A including the change in FDC ($/Mcfe)   $0.61     $1.22     $2.03     $1.09     ($0.01 )   $1.25     1.02     $1.49     $0.62     $0.54  
    RLI (yrs)   28     30     24     25     27     29     25     18     18     17  
    Recycle Ratio   5.3     2.9     1.9     2.5     N/A     1.7     2.6     1.9     4.2     6.1  
    Reserve Replacement   239 %   1077 %   167 %   308 %   167 %   140 %   342 %   279 %   283 %   287 %
    Future Development Capital ($millions)   $5,707     $5,764     $3,855     $3,612     $3,308     $3,547     $3,445     $2,978     $2,563     $2,657  

    See Non-GAAP Financial Ratios in the Advisories section of this news release for details on the calculation of the above metrics.

    RESERVES COMMITTEE

    Peyto has a reserves committee, comprised of a majority of independent board members, that reviews the qualifications and appointment of the independent reserve evaluators. The committee also reviews the procedures for providing information to the evaluators. All booked reserves are based upon annual evaluations by the independent qualified reserve evaluators conducted in accordance with the COGE (Canadian Oil and Gas Evaluation) Handbook and National Instrument 51-101. The evaluations are conducted using all available geological and engineering data. The reserves committee has reviewed the reserves information and approved the reserve report.

    GENERAL

    A complete filing of the Statement of Reserves (form 51-101F1), Report on Reserves (form 51-101F2), and Report of Management and Directors on Oil and Gas Disclosure (form 51-101F3) will be available in the Annual Information Form to be filed by the end of March 2025. Shareholders are encouraged to actively visit Peyto’s website located at www.peyto.com. For further information, please contact Jean-Paul Lachance, President and Chief Executive Officer of Peyto at (403) 261-6081.

    ADVISORIES

    Unaudited Financial Information

    Certain financial and operating information included in this news release including, without limitation, exploration and development expenditures, acquisitions, field netbacks, funds from operations, net debt, FD&A costs, Finding & Development costs excluding acquisitions, acquisition costs, and recycle ratio, are based on estimated unaudited financial results for the year ended December 31, 2024, and are subject to the same limitations as discussed under Forward Looking Information set out below. These estimated amounts may change upon the completion of audited financial statements for the year ended December 31, 2024 and changes could be material.

    Information Regarding Disclosure on Oil and Gas Reserves

    Some values set forth in the tables above may not add due to rounding. It should not be assumed that the estimates of future net revenues presented in the tables above represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained, and variances could be material. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.

    Forward-Looking Information

    This news release contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: management’s assessment of Peyto’s future plans and operations, including the 2025 capital expenditure program, the volumes and estimated value of Peyto’s reserves, the life of Peyto’s reserves, production estimates, project economics including NPV, netback and recycle ratio, the ability to enhance value of reserves for shareholders and ensure the reserves generate the maximum possible return; management’s belief that Peyto’s commodity hedges and the majority of the Company’s natural gas diversification contracts will not be impacted directly by potential tariffs imposed by the U.S.; and management’s assessment of limited impact from counter tariffs that might be imposed by Canada on U.S. imports.   Forward-looking statements or information are based on a number of material factors, expectations or assumptions of Peyto which have been used to develop such statements and information, but which may prove to be incorrect. Although Peyto believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking information and statements because Peyto can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, the impact of increasing competition, the timely receipt of any required regulatory approvals, the ability of Peyto to obtain qualified staff, equipment and services in a timely and cost efficient manner, drilling results, field production rates and decline rates, the ability to replace and expand reserves through development and exploration, future commodity prices, currency, exchange and interest rates, regulatory framework regarding royalties, taxes, tariffs and environmental matters and the ability of Peyto to successfully market its oil and natural gas products. By their nature, forward-looking information and statements are subject to numerous risks and uncertainties, some of which are beyond these parties’ control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Peyto’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information and statements will transpire or occur, or if any of them do so, what benefits that Peyto will derive therefrom. The forward-looking information and statements contained in this news release speak only as of the date of this news release, and Peyto does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

    This news release contains information, including in respect of Peyto’s 2025 capital program, which may constitute future oriented financial information or a financial outlook. Such information was approved by the Board of Directors of Peyto on February 20, 2025, and such information is included herein to provide readers with an understanding of the Company’s anticipated capital expenditures for 2025. Readers are cautioned that the information may not be appropriate for other purposes.

    Barrels of Oil Equivalent
    Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

    Drilling Locations
    This news release discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Proved locations and probable locations are derived from the independent engineering evaluation of Peyto’s oil, NGLs and natural gas interests prepared by GLJ dated February 20, 2025 and effective December 31, 2024 (the “Peyto Report”). Unbooked locations are internal estimates based on prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves.   Unbooked locations have been identified by management as an estimation of Peyto’s multi‐year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that Peyto will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves or production. The drilling locations on which Peyto actually drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, some of the other unbooked drilling locations are further away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations, and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves or production.

    Non-GAAP and Other Financial Measures

    Throughout this news release, Peyto employs certain specified financial measures to analyze financial and operating performance, financial position, and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other entities. Such metrics have been included by Peyto to give readers additional measures to evaluate the Peyto’s performance; however, such measures are not reliable indicators of the future performance of Peyto and future performance may not compare to the performance in previous periods and therefore such metrics should not be unduly relied upon.

    Non-GAAP Financial Measures

    Funds from Operations
    “Funds from operations” is a non-GAAP measure which represents cash flows from operating activities before changes in non-cash operating working capital and provision for future performance-based compensation. Management considers funds from operations and per share calculations of funds from operations to be key measures as they demonstrate the Company’s ability to generate the cash necessary to pay dividends, repay debt and make capital investments. Management believes that by excluding the temporary impact of changes in non-cash operating working capital, funds from operations provides a useful measure of Peyto’s ability to generate cash that is not subject to short-term movements in operating working capital. The most directly comparable GAAP measure is cash flows from operating activities.

    Capital Expenditures
    Peyto uses the term capital expenditures as a measure of capital investment in exploration and production activity, as well as property acquisitions and divestitures, and such spending is compared to the Company’s annual budgeted capital expenditures. The most directly comparable GAAP measure for total capital expenditures is cash flow used in investing activities.

    Net Debt
    “Net debt” is a non-GAAP financial measure that is the sum of long-term debt and working capital excluding the current financial derivative instruments and current portion of lease obligations. It is used by management to analyze the financial position and leverage of the Company. Net debt is reconciled to long-term debt which is the most directly comparable GAAP measure.

    Non-GAAP Financial Ratios

    Netback per MCFE
    “Netback” is a non-GAAP measure that represents the profit margin associated with the production and sale of petroleum and natural gas. Peyto computes “field netback per Mcfe” as commodity sales from production, plus net third party sales, if any, plus other income, less royalties, operating, and transportation expense divided by production.

    Finding, Development and Acquisition Costs
    FD&A (finding, development and acquisition) costs are used as a measure of capital efficiency and are calculated by dividing the capital costs for the period, plus acquisition costs and including the change in undiscounted FDC, by the change in the reserves, incorporating revisions and production, for the same period (eg. 2024 Total Proved ($458MM+$0MM+$33MM)/( 875.9Mboe-830.5Mboe+45.8Mboe) = $5.38/boe or $0.90/Mcfe).

    Finding and Development Costs
    F&D (finding and development) costs are used as a measure of capital efficiency and are calculated by dividing the capital costs for the period, including the change in undiscounted FDC, by the change in the reserves, incorporating revisions and production, for the same period.

    Reserve Life Index
    The RLI is calculated by dividing the reserves (in boes) in each category by the annualized Q4 average production rate in boe/year (eg. 2024 Proved Developed Producing 473,834Mboe/(133Mboe/d x366) =9.7). Peyto believes that the most accurate way to evaluate the current reserve life is by dividing the proved developed producing reserves by the annualized actual fourth quarter average production. In Peyto’s opinion, for comparative purposes, the proved developed producing reserve life provides the best measure of sustainability.

    NPV0Recycle Ratio
    The NPV0Recycle Ratio is the ratio of capital expenditures to value creation, which is simply the undiscounted value addition, resulting from the capital program and acquisition, divided by the capital and acquisition investment.

    Recycle Ratio
    The Recycle Ratio is calculated by dividing the field netback per boe, by the FD&A costs for the period (eg. 2024 Proved Developed Producing $19.59/boe/$6.01/boe=3.3). The recycle ratio compares the netback from existing reserves to the cost of finding new reserves and may not accurately indicate investment success unless the replacement reserves are of equivalent quality as the produced reserves.

    Reserve Replacement Ratio
    The reserve replacement ratio is determined by dividing the yearly change in reserves before production by the actual annual production for the year (eg. 2024 Total Proved (875.9Mboe-830.5Mboe+45.8Mboe )/45.8Mboe =199%).

    Compound Annual Growth Rate
    The compound annual growth rate (CAGR) is the annualized average rate of PDP reserves growth from 1998 to 2024, assuming growth takes place at an exponentially compounded rate. 

    Capital Efficiency
    Capital Efficiency refers to how efficiently the Company utilizes its capital investment to generate production. It is calculated by dividing the capital costs for the period, plus acquisition costs, by December production volumes added from the 2024 capital program (eg. 2024 capital efficiency ($458MM)/( 47,300 boe/d) = $9,700 per boe/d).

    The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
    ___________________________________

    1BCF and TCF refers to billions and trillions of cubic feet, respectively
    2 MMboe refers to million barrels of oil equivalent
    3F&D and FD&A are non-GAAP financial ratios. See “non-GAAP and Other Financial Measures” in this news release
    4Capital efficiency is a non-GAAP financial ratio. See “non-GAAP and Other Financial Measures” in this news release
    5Field netback operations is a non-GAAP financial ratio. See “non-GAAP and Other Financial Measures” in this news release
    6Recycle ratio and NPV Recycle Ratio are non-GAAP financial ratios. See “non-GAAP and Other Financial Measures” in this news release
    7Capital expenditures is a non-GAAP financial measure. See “non-GAAP and Other Financial Measures” in this news release
    8Funds from operations is a non-GAAP financial measure. See “non-GAAP and Other Financial Measures” in this news release
    9It should not be assumed that the estimates of future net revenues (NPVs) represent the fair market value of the reserves
    10Compound annual growth rate (CAGR) is a non-GAAP financial ratio. See “non-GAAP and Other Financial Measures” in this news release
    11RLI is a non-GAAP financial ratio. See “non-GAAP and Other Financial Measures” in this news release
    12Developed Reserves is Total Proved + Probable Developed Reserves and includes Proved + Probable Developed Producing reserves and Proved + Probable Developed Non-Producing reserves
    13Net debt is a non-GAAP financial measure. See “non-GAAP and Other Financial Measures” in this news release

    The MIL Network

  • MIL-OSI USA News: Press Briefing by Press Secretary Karoline Leavitt, Deputy Chief of Staff Stephen Miller, National Economic Council Director Kevin Hassett, and National Security Advisor Mike Waltz

    Source: The White House

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    1:05 P.M. EST
     
         MS. LEAVITT:  Hello.  Good afternoon, everybody.  I brought some heavy hitters in here with me today. 
     
    Today marks one month of President Trump’s return to the Oval Office, and there is no denying this administration is off to a historic start.  The President has already signed 73 executive orders.  That is more than double the number signed by Joe Biden and more than quadruple the number signed by Barack Obama over the same period.
     
    These executive orders have ended burdensome regulations; sealed the border; unleashed our domestic energy sector; eliminated divisive DEI from our federal government; stopped the weaponization of government; cut waste, fraud, and abuse; reinstituted “America First” trade and foreign policies; and ultimately restored common sense. 
     
    The President also signed the Laken Riley Act into law, which ensures ICE will detain illegal aliens arrested or charged with theft or violence. 
     
    As of today, the Senate has already confirmed 18 Cabinet-level nominees, which is more than at this point under the Obama administration in 2009 and more than double the pace of the Biden administration in 2021. 
     
    And today, we expect Kash Patel to be confirmed as the next director of the FBI. 
     
    We are proud to announce that the president will host his first official Cabinet meeting here at the White House next Wednesday, February 26th. 
     
    In just four weeks, President Trump has already hosted the leaders of Israel, Japan, Jordan, and India.  And next Monday, the President will host France’s President, Emmanuel Macron, and on Thursday, the UK Prime Minister, Keir Starmer, will visit the White House as well. 
     
    As you all know, over the past month, the President has taken questions from the press — all of you — nearly every single day, sometimes on multiple different occasions in the same day, on any topic any of you wish to talk about. 
     
    President Trump set the tone on this approach immediately when he took more than 12 times the questions in his first few hours in office as Joe Biden did in his entire first week. 
     
    Yesterday, we hosted a local media row here at the White House with television and radio stations from across the country that reached up to 60 million viewers and listeners. 
     
    In our ongoing pursuit of transparency, on this one-month celebration, I am thrilled to bring three of my colleagues and our policy experts here at the White House to further recap this incredible first month of accomplishments in greater detail.
     
    We have Deputy Chief of Staff for Policy and Homeland Security Advisor Stephen Miller; the Director of the National Economic Council, Kevin Hassett; and our National Security Advisor, Mike Waltz. 
     
    I will hand it over to them.  They will deliver brief remarks on the accomplishments of this administration in the first month, and then we will open it up to Q and A.  When we open up the Q and A portion, I do ask, for the sake of efficiency in this room, that you direct your question to the principal you seek an answer from.  And I will call on you in this room.
     
    But first I will let them roll through their remarks.  And first up, I’ll turn it over to Stephen Miller.
     
    MR. MILLER:  Thank you.  It’s great to be back.
     
    And I want to just thank you all for joining today our one-month celebration of the most historic opening to a presidency in American history.  No president comes close to what Donald Trump has achieved over just the last 30 days.
     
    He has packed eight years of transformative action restoring this nation, restoring our laws, restoring fairness, restoring economic opportunity, restoring national security in just one month.  No one in this country has ever seen anything like it. 
     
    And when you look at the consequentiality and the significance and the transformative nature of the actions he’s taking, it truly defies description.  For example, in just one area, this nation has been plagued and crippled by illegal discrimination: diversity, equity, and inclusion policies.  It strangled our economy.  It has undermined public safety.  It has made every aspect of life more difficult, more painful, and less safe. 
     
    He has ended all DEI across the federal government.  He has terminated all federal workers involved in promulgating these unlawful policies.  He has ended diversity, equity, and inclusion in all federal contracting.  He has restored merit as the cornerstone of all federal policy; restored the full, fair, impartial enforcement of our federal civil rights laws for the first time in generations; and he has cracked down on individuals across this government and nonprofits who have engaged in illegal racial discrimination against the American people. 
     
    This includes making clear to every educational institution in this country that ending diversity, equity, and inclusion, ending unlawful race discrimination is a precondition of receiving federal funds. 
     
    He has also saved women’s sports by ending the participation of men in women’s sports.  He has ended radical gender ideology across the entire federal government, and he’s pressured the private sector to also end and combat radical gender ideology.  He’s reestablished the scientific and biological truth that there are only two sexes in this country — male and female — that those are biologically based determinations.  They are not based and can never be based on gender identity. 
     
    That includes rooting out of the Department of Defense all DEI policies, all critical race theory, all gender madness, and once again having a military that is focused solely and exclusively on readiness, preparedness, and lethality.
     
    As I’m sure Kevin will talk about more, of course, he has undertaken a historic cost-cutting effort across the federal government, launching the first-ever Department of Government Efficiency, uncovering corruption on a scale that we never thought imaginable, terminating every single federal worker that we — that we have found to be engaged in the corruption and theft and the waste of taxpayer dollars, and already saving $50 billion in a single year, which over a 10-year period would be $500 billion.  Just think about how vast and enormous that sum is. 
     
    Of course, as you all know, he has renamed the Gulf of Mexico to its correct and proper name: the Gulf of America.  He has renamed Mount Denali into Mount McKinley, part of a historic effort to restore patriotism and national pride all across this land. 
     
    He has ended the weaponization of the federal government, restored the Department of Justice to its true mission of combating threats to this nation and keeping the American people safe. 
     
    He has ended all federal censorship of free speech.  This has been one of the greatest crises that has plagued this nation.  Years and years and years, the federal government violating the First Amendment to take away Americans’ right of free speech — President Trump has ended that.  And he has demanded that all federal workers, all law enforcement cease any effort to intimidate the rights of Americans or to police their speech. 
     
    He has also restored the death penalty at the Department of Justice, including for illegal aliens who commit murder, including for those who murder cops, and including for all of those who threaten Americans with heinous acts of violence.  The death penalty is back.  Law and order is back.  The streets are being made safe once again. 
     
    On the public health front, he has launched the nation’s first-ever commission — the MAHA Commission — Make America Healthy Again, following the historic confirmation of RFK Jr., to finally uncover the true root causes of the public health crisis in this country, the childhood disease epidemic in this country, the spiraling rates of pediatric cancer and devastating childhood sickness. 
     
    He has finally created a situation where the federal heal- — health agencies in this country will be focused on preventing disease, on keeping children from getting sick in the first place, not sentencing them to a lifetime in and out of hospitals, suffering needlessly, when we can find ways to prevent this epidemic of illness. 
     
    Then, of course, on homeland security.  Today, it is officially the law of the land at the conclusion of the congressional notification process that six Mexican cartels and two transnational gangs — Tren de Aragua, or TDA, and MS-13 — so eight organizations in total — are now formally designated as foreign terrorist organizations, which means that every single member of those organizations who operates on U.S. soil is now, as a legal matter, a terrorist, and they will be treated as terrorists. 
     
    This is a sea change in U.S. policy.  And this means the Department of Justice and the Department of Homeland Security, along with the rest of U.S. law enforcement and the Department of Defense, are now operating in a legal reality where these cartels are recognized as terrorists, and there will be a whole-of-government effort to remove these terrorists from our soil and to degrade their ability to threaten or undermine any American security or sovereignty interests.
     
    Border crossings since the day he took office are down 95 percent.  I think it’s almost impossible to even describe the scale and scope of that achievement.  President Trump, within days of taking office, cut border crossings 95 percent. 
     
    And those few who have dared to cross are being either prosecuted or deported.  They’re either facing significant jail time for trafficking, smuggling, harboring, aiding, impeding, or they’re being immediately removed from our soil.  Either way, at the end of the process, they are going home. 
     
    He has reimplemented Remain in Mexico, and he has obtained historic cooperation from foreign countries all around the world in accepting their deportees back. 
     
    And he has used the United States military to fully seal the southern border with a historic deployment of both active duty and National Guard troops, resumed the building of infrastructure.  He has opened up Guantanamo Bay, and he’s using military aircraft to carry out deportations all across this country. 
     
    And ICE is joining with ATF, DEA, and FBI to carry out the largest deportation operation in American history.  The criminals are going home.  The border is sealed shut.  America is safe, sovereign, proud, and free.  We are a nation that everyone in the world understands all across this planet: You do not come here illegally.  You will not get in.  You will go to jail.  You will go home.  You will not succeed. 
     
    This is the biggest and most successful change in any area of law enforcement that this nation has ever seen, and he did it in under one month. 
     
    Thank you.
     
    MR. HASSETT:  Should I go?
     
    MS. LEAVITT:  Yes, yes.
     
    MR. HASSETT:  Well, thank you, Karoline.  Thank you, Stephen. 
     
    You know, one of the things that President Trump cares most about is job creation.  And it was about seven years ago I had the honor of joining you in this room for the first time, and it looks like we’ve created a lot more jobs in the last month.  Look at how many people are here.  I — my estimate is about 180 but — but I didn’t count. 
     
    So, thank you.  It’s really an honor to be back here.  I think that I just want to go over a few things and then hand it off to Mike. 
     
    The first thing is that the President has told us to prioritize fighting inflation, and he had to do that because, as you know, President Biden let inflation get completely out of control.  And he did it with policies that made no sense.  They made no sense. 
     
    You know, a lot of times, you people say to us — our friends, the journalists — you know, “Why are you doing that?”  But — but, you know, I like to think, “Why did they do that?  Why did they spend so much money and then — why did the Fed print so much money so that we had inflation as high as we’ve ever seen since Jimmy Carter?  So, why did they do that?”
     
    So, we’re addressing inflation.  We didn’t have to address it in the first term, because it was always in the 1s, almost always.  But we’re going to get it back there. 
     
    And how are we doing it?  Well, we’re doing it with a plan that President Trump and I and others have talked about in the Oval that involves, like, every level of fighting inflation. 
     
    First, the macroeconomic level.  We’re cutting spending.  We’re cutting spending in negotiations with people on the Hill.  We’re cutting spending with the advice of our IT consultant, Elon Musk.  And then we’re also looking into supply-side things, like restoring Trump’s tax cuts, maybe even expensing new factories so that there is an explosion of supply.  If you have an explosion of supply and a reduction in government demand, then inflation goes way down. 
     
    And then, one of the things that you want to say is “Well, when are you going to see it?”  Well, the first thing that you’ll see when the markets believe that we’re going to get inflation under control is that the 10-year Treasury rate goes down, because that’s how they think about future expected inflation. 
     
    And so, we’re still going to see some memory of Biden’s inflation.  It’s not going to go away in a month.  But the 10-year Treasury before the last Consumer Price Index had dropped about 40 basis points.  Forty basis points because markets were optimistic about our ability to fight inflation. 
     
    Forty basis points is kind of not a fun thing to say.  I — economists talk that way.  I apologize.  But the way to think about it is, for a typical mortgage, if that affects the mortgage rate, then it’s going to save a typical family buying a house about a thousand bucks a year, and that’s just in our first month. 
     
    Okay.  The second thing we’ve done is we’ve had a lot of trade talks.  In fact, I was just meeting a minister from Mexico with Howard Lutnick just a couple of hours ago.  And we’re talking about reciprocal trade, and we’re also talking about the fentanyl crisis. 
     
    And so, reciprocal trade is about our government treating other governments the way they treat us.  We want trade to be fair.  It turns out that Americans have been disadvantaged by foreign governments over and over, and President Trump wants it to stop.  And the fact that struck me as most noticeable, when I started to look at what President Trump was asking us to do, is that last year — last year — we have data — U.S. companies paid $370 billion in taxes to foreign governments — $370 billion.  Last year, foreign multinationals paid us $57 billion in taxes. 
     
    We have one quarter of world GDP.  They have three quarters of world GDP.  And we’re paying $370.  They’re paying $57.  This is not reciprocal.  We’re going to try — or we’re going to fix it. 
     
    The other thing that we’ve done is we’ve had an all-of-the-above energy approach that’s led by Doug Burgum and Chris and a really large team — EPA — and we’ve already made so many actions that are going to affect the price of energy and lower inflation. 
     
    We’ve opened up 625 million acres to energy exploration.  We’ve cut 50 years of red tape that makes it so you can’t have permits.  And we’ve even made it so that when you go home, if you get a new one, then you can take a shower or flush a toilet or read under a light bulb.  We’re doing that too. 
     
    So — so, finally, let’s just think about, like, the facts that we can see right now that we think are awesome.  So, guess what?  Small-business optimism is — has go- — gone up by the most ever since President Trump came in.  ISM, which is the measure of what’s going on in manufacturing, it’s expanding again for the first time in years.  CEO confidence is the highest it’s been in years.  And the reason — the reason people are thinking this is that our policies give people cause for optimism. 
     
    And then I want to reiterate what Stephen Miller said, because it’s so important — and it’s so important for financial markets to start to digest this — that if, say, the Treasury secretary or the — any Cabinet secretary, with Elon Musk, is able to find some savings — say, $100 billion — well, in CBO land, that’s actually, like, about 10 times that or maybe 12 times that over a 10-year window. 
     
    And so, when you’re thinking about the negotiations right now over reconciliation and thinking about, well, $4 trillion, $5 trillion, well, those numbers, in terms of the savings, are going to end up being small because of all the waste that we’re finding. 
     
    And so, we’re incredibly optimistic about the future of inflation and the future of our economy.  And we’re optimistic because we’re making so much progress so far, and we already see it in market prices. 
     
    And, with that, I’ll hand it off to Mike. 
     
    MR. WALTZ:  All right.  Thanks, Kevin. 
     
    Well, good afternoon.  What a month and what a sea change in our — in our foreign policy.  In addition to what we’re doing on the border and restoring American sovereignty, in addition to what we’re doing in our economy and the job creation and the inflation reduction, we are bringing the world back to where it was at the end of President Trump’s first term, which is a world of peace, prosperity, and — and looking forward and getting us out of the chaos that we’ve just seen over the last four years. 
     
    So, over the last month, just to name a few, I had the honor of sitting in the Oval Office as President Trump spoke with President Putin and then immediately spoke with President Zelenskyy, and both of them said only President Trump could bring both sides to the table, and only President Trump could stop the horrific fighting that has been going on now for the better part of four years and that only President Trump could drive the world back to peace.  Both of those leaders said that in back-to-back calls.
     
    And, of course, we just had our historic talks mediated by our — our good friends and partners, Saudi Arabia — we give great thanks to Crown Prince Mohammed bin Salman for hosting — and sat down for the first time in years with the Russians and talked about a path forward with peace.
     
    On top of that and one of the things that led to that was a tremendous co- — confidence-building measure that we had with the release of Marc Fogel.  I’ll remind everyone, the last time that we had an American released from the Russians, either we gave up a deadly spy; pressured our allies to give up a lethal killer; or we released, under the Biden administration, the world’s most notorious arms dealer, Viktor Bout, who, by the way, had one of his main clients for arms the cartels in — in Mexico and Central America. 
     
    We gave up none of that.  This was released as a confidence-building measure, working with our great Middle East Envoy, Steve Witkoff, and our secretary of State as a first step towards opening these talks and then moving forward towards peace. 
     
    On top of that, we’ve secured, just in a month, the return of a dozen — 12 — American hostages from Russia, from Bulgaria, from Venezuela, the Taliban, and Hamas.  Excuse me, that’s from Belarus, not Bulgaria. 
     
    We also had — for the first time in quite some time, we took out a senior leader of ISIS, an international financier and recruiter that the military had been trying to take out for quite some time and — and wasn’t able to do so, frankly, because of a bureaucratic approval process.  President Trump said, “Take him out.”  And that ISIS financier and leader is no longer on this Earth. 
     
    We’ve also taken action to eliminate other terrorist organizations in the Middle East.  We drove — before the President was even in office, he started talking consequences for people that would hold Americans. 
     
    Heretofore, there’s been nothing but upside.  You take an American, you get some better deal.  You take another one, maybe you get a better deal.  No more.  There is now nothing but downside for taking Americans illegally, either as hostages or illegal detainees. 
     
    And when President Trump sent a very clear message across the Middle East, but particularly to Hamas, that there would be all hell to pay, we suddenly saw a breakthrough.  And now we just saw the release of yet another group of hostages.  There have been dozens now, including two Americans that we’ve seen once again reunited with their families. 
     
    As part of the talks with King Abdullah, he offered — and — and I think the entire world has graciously accepted — to take 2,000 sick children, cancer patients, and others out of Gaza.  As a humanitarian — as a humanitarian gesture, 2,000 Gazans will come out of that hellhole that it is, that wasteland that Gaza is right now, with unexploded ordnance, with debris everywhere, with no sewage, with no water.  And — and President Trump has — has put forward a plan to deal with the practical reality that is 1.8 million Gazans now — now truly suffering.
     
    And then, you know, just to bring it back to our own hemisphere, we’ve seen literally, in the last month — after years of national security experts, the generals in charge, and others testifying and ringing the alarm bells about — about the Chinese Communist Party’s presence in our own hemisphere, particularly in the Panama Canal, we’re seeing the leadership of Panama step away from the Belt and Road program, move away from China and back towards the United States, and even enter into talks and — and other negotiations about addressing the ports on either side of the canal. 
     
    And then, finally, last but not least, we’ve had four world leaders in the White House, in the Oval Office.  We’ve had the prime minister of Japan, the prime minister of India, the king of — of Jordan, and, of course, the prime minister of Israel just in the last four weeks.  And next week, we’ll have the Prime Minister of the United Kingdom and we’ll have the president of France, Macron. 
     
    So, President Trump is on what we call Trump warp speed.  We are all — we are all honored to be really serving under — under his leadership and his vision.  And truly, you know, when we all say — and the President himself say — says, he is a president of peace.  He is a president focused on restoring stability.  I think the entire world saw what the world would look like without strong American leadership in the last four years.
     
    And it’s truly been an honor to get us back to where we were and back on track under President Trump’s leadership. 
     
    MS. LEAVITT:  Thank you, Mike. 
     
    MR. WALTZ:  Mm-hmm.
     
    MS. LEAVITT:  Thank you.  Thank you, everybody.  I’m sure you’re very eager to ask questions of these very smart people working very hard on behalf of the president. 
     
    We do have somebody in our new media seat today.  We have John Stoll, who is the head of news at X.  As you all know — you’re all on X — it’s home to hundreds of millions of users, a large contingent of independent journalists and news organizations across geographies and political spectrums.  And at the same time, X remains the go-to platform for many legacy news outlets.  And I know, as I mentioned, many of the reporters in this room use X to attract eyeballs to your work. 
     
    Prior to joining X, John spent two decades in journalism, including several years as an editor at The Wall Street Journal.  We are excited to have him in the briefing room today.
     
    John, we’ll let you kick it off.  And as I said at the top, please direct your question to the individual up here who you’d like an answer from. 
     
    John, why don’t you begin.
     
    Q    All right.  Thank you very much.  I am sitting in for a thriving ecosystem of journalists, independent and — and emerging news organizations who do depend on X for publicity, for a business model.  And so, I look forward to seeing many of them in this seat in months and years to come. 
     
    I also thank you, Karoline, for opening this seat up to new media.  It — it really is a testament not only to your open-mindedness but also to innovation that you’d actually think about, you know, folks that are not traditionally credentialed to be in this room to be in this room and to not only have a question but also to witness — you know, this is at a very important intersection of power and the free press.
     
    And so, just the ability to witness this and — and be part of it, it brings everybody’s game up.  So, thank you for that. 
     
    I think this is for Mike Waltz.  My question is about Ukraine.
     
    MR. WALTZ:  Sure.
     
    Q    For about more than 10 years, I’ve been fascinated, like all — like many, with what’s going on.  I was in Northern Europe working out of the Baltics when Crimea was annexed and was — a lot — a lot of this came on Twitter.  The platform used to be known as Twitter.  Was — a lot of European leaders would — would talk about their disappointment and — and solidarity with Ukraine, but when it came to actually doing something, it felt like they were passing a hot potato and sent it over the Atlantic. 
     
    I wonder how much of what we’re seeing right now out of the administration and President Trump is a call to Europe and the European leaders and allies that we’ve traditionally had to pick up that hot potato and — and start doing something a little bit more concrete to win and preserve the peace in Ukraine. 
     
    The second question I have is — it — it’s related — is there’s been some — a lot of speculation that President Trump and the administration might be manipulated by Pre- — by Vladimir Putin.  I wonder if you can just talk a little bit about the administration’s posture —
     
    MR. WALTZ:  Yeah.
     
    Q    — and your confidence in the competence of this administration to d- — go toe to toe with Vladimir Putin. 
     
    MR. WALTZ:  Well, if there’s an- — I’ll take the l- — second question first.  If there’s anybody in this world that can go toe to toe with Putin, that could go toe to toe with Xi, that could go toe to toe with Kim Jong Un — and we could keep going down the list — it’s Donald J. Trump.  He is the dealmaker in chief.  There is no question that he is the commander in chief. 
     
    And I, for one — and I think all Americans and around the world should have no doubt about his ability to not only handle Putin but to handle the complexity of driving this war to an end. 
     
    And then on your first piece on Europe, I’ll take you back to 2014.  You’re right.  There was a lot of hand-wringing in Europe and not a lot of action.  There was also a lot of hand-wringing here in Washington under the Obama administration and not a lot of action.  They literally threw blankets at the problem. 
     
    And so, I’ll remind everyone that Putin had, you know, some type of conflict, invasion, or issue with their neighbor under President Bush, with Georgia; under President Obama, with Ukraine in 2014; not under President Trump, 45; and again with President Biden in 2022.  The war should have been deterred.  The war should have never happened, and I have no doubt it would not have happened under President Trump and will stop under President — President Trump again. 
     
    But I just want to push back on this notion of our European allies not being consulted as we’ve entered into this process.  I already mentioned the immediate phone call President Trump made to President Zelenskyy.  He has talked to President Macron of France repeatedly last week.  President Macron convened European leaders and then is coming here on Monday.  Prime Minister Starmer is coming next Thursday. 
     
    We’ve also — I’ve talked to every one of my national security — national security advisor counterparts across — across the spectrum in Europe.  I’ve talked to Secretary-General Rutte, the — the leader of NATO, the secretary-general of NATO.  We have repeatedly — oh, by the way, we had half our Cabinet — seven Cabinet officials, including the vice president, at the Munich Security Conference, all engaging, all listening, and all making sure our allies were heard. 
     
    However, we’ve also made it clear for years — decades, even — that it is unacceptable that the United States and the United States taxpayer continues to bear the burden not only of the cost of the war in Ukraine but of the defense of — of Europe.  We fully support our NATO Allies.  We fully support the Article 5 commitment.  But it’s time for our European allies to step up. 
     
    And one of the things that Secretary-General Rutte said on our call was this last couple of weeks have been a real wake-up call.  And I asked him, “What have you been missing the last couple of years?” 
     
    The fact that we are going to enter into a NATO summit this June with a third of our NATO Allies still not meeting the 2 percent minimum, a commitment they made a decade ago — literally a decade ago — with a war on their doorstep — the largest war that they’re all extremely concerned about — but yet it’s “Well, somebody else needs to pay.  We’ve got other domestic priorities.”  It’s unacceptable.  President Trump has made that clear. 
     
    And the minimum needs to be met.  We need to be at 100 percent in — this June at the NATO summit.  And then let’s talk about exceeding it, which what — is what President Trump has been talking about, with 5 percent of GDP. 
     
    Europe needs to step up for their own defense as a partner.  And we can be friends and allies and have those tough conversations. 
     
    MS. LEAVITT:  Great.  Peter.
     
    Q    Thank you, Karoline.  I have a Ukraine one and a DOGE one.  Who can talk DOGE?
     
    MS. LEAVITT:  Stephen, go ahead.
     
    Q    Well, so — so, Stephen, we’re hearing about these DOGE dividend checks that would be 20 percent back to taxpayers, 20 percent to pay down the debt.  Sixty percent is left.  Who gets that?
     
    MR. MILLER:  Well, the way that it works is when you achieve savings, you can either return it to taxpayers, you can return it to our debtors, or it can be cycled into next year’s budget, and then it just lowers the overall baseline for next year.  So, in other words, you can just transfer it into the next fiscal window and then lower the overall spending level.  And that means that you can achieve a permanent savings that way, and that reduces the deficit. 
     
    Q    And when is it that people might see those checks?
     
    MR. MILLER:  Well, this is all going to be worked on through the reconciliation process with Congress that’s going underway right now, as you’ve seen.  The Senate is moving a bill.  The House is moving a bill.  The president has great confidence in both chambers to deliver on his priorities. 
     
    I would just take this opportunity to note that President Trump has made a historic commitment to the working class of this country to fight for a major tax relief and major price relief.  And cutting spending, as DOGE is doing, and cutting taxes is the key to delivering on both of those promises.  And President Trump is resolutely committed to doing both. 
     
    Q    Thank you.  And on Ukraine.  I guess, this is for Mike.
     
    MR. WALTZ:  Sure. 
     
    Q    After the president’s post on Truth Social yesterday, need to know: Who does he think is more responsible for the Russian invasion of Ukraine, Putin or Zelenskyy?
     
    MR. WALTZ:  Well, look, his — his goal, Peter, is to bring this war to an end, period.  And there has been ongoing fighting on both sides.  It is World War I-style trench warfare. 
     
    His frustration with President Zelenskyy is — that you’ve heard — is multifold.  One, there needs to be a deep appreciation for what the American people, what the American taxpayer, what President Trump did in — in his first term, and what we’ve done since.  So, some of the rhetoric coming out of Kyiv, frankly, and — and insults to President Trump were unacceptable.  Number one. 
     
    Number two, our own secretary of Treasury personally made the trip to offer the Ukrainians what is — can only be described as a historic opportunity — that is for America to coinvest with Ukraine in their minerals, in their resources, to truly grow the pie. 
     
    So, case in point, there’s a foundry that processes aluminum in Ukraine.  It’s — it’s been damaged.  It’s not at its current capacity.  If that is restored, it would account for America’s entire imports of aluminum for an entire year — that one foundry.
     
    There are tremendous resources there.  Not only is that long-term security for Ukraine, not only do we help them grow the pie with investments, but, you know, we do have an obligation to the American taxpayer in helping them recoup the hundreds of billions that ha- — that have occurred. 
     
    So, you know, rather than enter — enter into some constructive conversations about what that deal should be going forward, we got a lot of rhetoric in the media that was — that was incredibly unfortunate. 
     
    And I could just tell you, Peter, you know, as a veteran, as somebody who’s been in combat, this war is horrific.  And I think we’ve lost sight of that, of the literally thousands of people that are dying a day, families that are going without the next generation. 
     
    And I find it kind of, you know, frankly, ridiculous.  So many people in Washington that were just demanding, pounding the table for a ceasefire in Gaza are suddenly aghast that the president would demand one and both sides come to the table when it talks to — when it comes to Ukraine, a war that has been arguably far greater in — in scope and scale and far more dangerous in terms of global escalation to U.S. security.
     
    Q    And I do have one for Karoline.
     
    MS. LEAVITT:  Sure.
     
    Q    Does President Trump have a bet with Trudeau about this USA-Canada hockey game tonight?  (Laughter.)  And when there is a big hockey game on, is the president watching for the goals or for the fights?
     
    MS. LEAVITT:  (Laughs.)  Probably both.  I think he’s watching for the United States to win tonight.  I know he talked to the USA hockey team this morning.  He talked to the players after their morning practice, around 10 o’clock.  And I also spoke to some folks from that team after.  They were jubilant over President Trump’s comments to the team.  I believe they’re going to put out a video of that call. 
     
    So, he looks forward to watching the game tonight, and we look forward to the United States beating our soon-to-be 51st state, Canada.  (Laughter.)
     
    Bloomberg, go ahead. 
     
    Q    My question is for Mike Waltz.  Can you give us a readout of Kellogg’s meeting with Zelenskyy that just wrapped up?  And, in particular, Zelenskyy publicly rejected this deal about the rare earth minerals.  Where — where does that stand?
     
    MR. WALTZ:  Well, we’re going to continue to have — he needs to come back to the table, and we’re going to continue to have discussions about where that deal is going. 
     
    Again, we have an obligation to the taxpayer.  I think this is an opportunity.  The president thinks this is an opportunity for Ukraine going forward.  There can be, in my view, nothing better for Ukraine’s future and for their security than — than to have the United States invested in their prosperity long-term.  And then a key piece of this has also been security guarantees. 
     
    Look, the — the reality that we’re talking about here is: Is it in Ukraine’s interest?  Is it in Europe’s interest?  It certainly isn’t in Russia’s interest or in the American people’s interest for this war to grind on forever and ever and ever. 
     
    So, a key part of his conversation was helping President Zelenskyy understand this war needs to come to an end.  This kind of open-ended mantra that we’ve had under the Biden administration, that’s over.  And I think a lot of people are having a hard time accepting that.
     
    And then the other piece is there’s been discussions from Prime Minister Starmer and also President Macron about European-led security guarantees.  We welcome that.  We’ve been asking Europe to step up and secure its own prosperity, safety, and security.  So, we certainly welcome that. 
     
    And we certainly welcome more European assistance.  As I told my counterparts, “Come to the table with more, if — if you want a bigger seat at the table.”  And we’ve been asking for that for quite some time. 
     
    Q    And has Russia pushed for sanctions in your talks with them?  And have you consulted with international partners and allies about potentially rolling back sanctions in these negotiations to end the war?
     
    MR. WALTZ:  Those — the talks with — with our Russian counterparts — both with my counterpart, the national security advisor; Secretary Rubio’s counterpart, the Foreign Minister, Foreign Minister Lavrov — you know, it — it really were — was quite broad, focused on what is the goals for our broader relationship, but very clear that the fighting has to stop to get to any of those brighter goals. 
     
    And as a first step, we’re just going to do some commonsense things, like restore the — the ability of both of our embassies to function. 
     
    And, again, you know, this is — this was common sense.  In — in foreign policy world, they call it “shuttle diplomacy.”  We have to talk to both sides in order to get to both sides to the table, and both sides have said only President Trump could do that. 
     
    MS. LEAVITT:  Diana.
     
    Q    Thank you.  And my question is for Mike Waltz.  (Laughter.)
     
    MR. WALTZ:  All right.
     
    Q    The president has called Zelenskyy a dictator.  Does he view Putin as a dictator? 
     
    And does he want Zelenskyy out of power?  I know he’s called for elections. 
     
    And then, thirdly, the head of the Defense Committee in Ukraine’s parliament just has claimed that the U.S. has stopped selling weapons to Ukraine.  Is that true?
     
    MR. WALTZ:  Well, most of our weapons that have gone to Ukraine have been part of a drawdown authority, where we’ve literally taken them out of our stocks and then, eventually, through appropriations, started buying them again to refill our stocks. 
     
    I’ll, you know, just state that there has been a lag in a lot of that process.  So, many of our stocks, as we look at our operations around the world, are becoming more depleted.  That’s one of the reasons many people have had a lot of concern about: When does this end?  How much is it going to take?  How many lives will be lost?  How much will we be — how much will we spend? 
     
    As a member of Congress, we repeatedly asked the Biden administration those questions, and we never got a satisfactory answer. 
     
    Look, President Trump is obviously very frustrated right now with President Zelenskyy — the fact that — that he hasn’t come to the table, that he hasn’t been willing to take this opportunity that we have offered.  I think he eventually will get to that point, and I hope so very quickly.
     
    But President Trump is — as we made clear to our Russian counterparts, and I want to make clear today — he’s focused on stopping the fighting and moving forward.  And we could argue all day long about what’s happened in the past. 
     
    MS. LEAVITT:  Reagan.
     
    Q    Thanks.  I have a question for Stephen —
     
    (Cross-talk.)
     
    Q    — and a question for Mike.
     
    MS. LEAVITT:  Excuse me, I just called on Reagan.  Reagan, go ahead. 
     
    Q    I have a question for Stephen and a question for Mike. 
     
    MS. LEAVITT:  Sure.
     
    Q    Stephen, I can start with you.  There have been reports —
     
    MR. MILLER:  Thank you.
     
    Q    — that Trump is unhappy with the rate of deportations and he wants them to be higher.  Is the president happy with the rate of deportations, and are there any plans to speed up the process?
     
    MR. MILLER:  Well, first of all, we all appreciate the encouragement from the media to deport as many illegal aliens as humanly possible.  So, thank you. 
     
    And I will promise you that the full might of the Department of Homeland Security, the Department of Justice, the Department of Defense, and every element and instrument of national power will be used to remove, with speed, all criminal illegals from the soil of the United States of America, to enforce final removal orders, and to ensure that this country is for American citizens and those who legally belong in this country.
     
    We inherited an ICE that was completely shuttered.  We inherited a Department of Homeland Security whose sole mission was to resettle illegal aliens within the United States of America. 
     
    In 30 days, the president sealed the border shut, declared the cartels to be terrorist organizations, has increased ICE deportations to levels not seen in decades, and we are shortly on the verge of achieving a pace and speed of deportations this country has never before seen. 
     
    Thank you. 
     
    Q    And Mike.
     
    MR. WALTZ:  Mm-hmm.
     
    Q    There have been reports that there’s some underground opposition to Trump’s pick for Undersecretary of Defense for Policy, Elbridge Colby.  Have you or anyone from the administration been personally lobbying senators to support Elbridge Colby? 
     
    MR. WALTZ:  Look, I’ve worked with Bridge Co- — Colby in the past.  He has the president’s full support to be the Undersecretary of policy, which will be a critical policy arm for Secretary Hegseth going forward that will implement a lot of these policies. 
     
    And — and really, that’s — that’s been the extent of it.  I think there’s been a lot of kind of, you know, breathless — I don’t know — back-and-forth in the — in the press, but we’re full speed ahead to get the president’s team in place so we can implement his America First policy. 
     
    MS. LEAVITT:  Thank you.  Mike has spoken pretty extensively.  Does anybody have questions for Stephen or for Mr. Hassett?
     
    Q    I do.
     
    MS. LEAVITT:  Nobody wants to talk about the economy?  (Laughter.)
     
    (Cross-talk.)
     
    MS. LEAVITT:  Sure. 
     
    Q    IRS.
     
    MS. LEAVITT:  IRS.  Okay.  Go ahead.
     
    Q    And this would be for either one of you.  So, we have reported, several other outlets have reported that about 3,500 people are due to be — lose their jobs at the IRS by the end of the week.  If the goal of these spending cuts across the federal government has been to reduce the debt, why impose some of the deepest cuts we’ve seen so far at the agency responsible for raising revenue for the federal government?
     
    MR. HASSETT:  Well, I think our objective is to make sure that the employees that we pay are being productive and effective.  And there are many, many — more than 100,000 people working to collect taxes, and not all of them are fully occupied.  And the Treasury secretary is studying the matter and feels like 3,500 is a small number and probably can get bigger, especially as we improve the IT at the IRS.
     
    And so — so, I think that it’s absolutely something that is on the table for good reasons.  And the point is that — don’t just talk about the IRS.  Talk about all of government, that there are so many places — I live in D.C.; you maybe live in D.C. — where you never — there — nobody — nobody is going into the buildings.  People aren’t commuting because nobody is doing their job.  We look back and we see that there are all these people doing two jobs while they’re getting a government payroll — on the payroll. 
     
    So, the point is, we’re fixing that, and the IRS is a small part of that picture. 
     
    Q    So, you’re saying that everybody who’s being let go was doing a bad job?
    MR. HASSETT:  I’m saying that we’re studying every agency and deciding who to let go and why, and we’re doing so very rationally with a lot of support from analysis. 
     
    Q    Because we’re being told by a lot of people who have been let go at other agencies that they were told they were being dismissed because of poor performance, when, in some cases, they haven’t even had a performance review yet because they’ve only been on the job a couple of months. 
     
    MR. HASSETT:  Yeah, I’ve never seen a person who was laid off for poor performance say that they were performing poorly.  (Laughter.)  Okay?
    Q    Karoline.
     
    MS. LEAVITT:  Good point.  Sure, Kaitlan.
     
    Q    I have a question.  I’ll start with you, Kevin Hassett.  Thank you for being here.  And then I’ve got a question for Mr. Waltz.
     
    On these potential checks that you might send out from DOGE, is there a concern, as you’re thinking through this, that they could be inflationary?
     
    MR. HASSETT:  Oh, absolutely not, because imagine if we don’t spend government money and we give it back to people, then the — you know, if they spend it all, then you’re even.  But they’re probably going to save a lot of it, in which case, you’re reducing inflation. 
     
    Q    Okay.  So, you’re not —
     
    MR. HASSETT:  And also, when the government spends a lot, that’s what creates inflation.  We learned that from Joe Biden.  And so, if we reduce government spending, then that’s — you know, reduces inflation.  And if you give people money, then they’re going to save a bunch of it.  And — and when they save it, then that also reduces demand and reduces inflation. 
     
    Q    Okay.  So, you’re not worried about it. 
     
    MR. HASSETT:  No, I’m not.
     
    Q    And, Mr. Waltz, to follow up on Peter’s question, you wrote in an op-ed in the fall of 2023 that, quote, “Putin is to blame, certainly, like al Qaeda was to blame for 9/11.”
     
    MR. WALTZ:  Mm-hmm.
     
    Q    Do you still feel that way now, or do you share the president’s assessment, as he says Ukraine is to blame for the start of this war?
     
    MR. WALTZ:  Well, it shouldn’t surprise you that I share the president’s assessment on all kinds of issues.  What I wrote as a Member of Congress is — was as a former Member of Congress. 
     
    Look, what I share the president’s assessment on is that the war has to end.  And what comes with that?  What comes with that should be, at some point, elections.  What comes with that should be peace.  What comes with that is prosperity that we’ve just offered in this natural resources and economic partnership arrangement: an end to the killing and European security and security for the world.  The President is not only determined to do that in Europe, he’s determined to do it in the Middle East. 
     
    And just a few months ago, we had an administration that had tried for 15 months, week after week, sitting with you here, and couldn’t get us to a ceasefire, couldn’t get our hostages out.  Now we’re at that point.  We’re back to the maximum pressure on Iran.
     
    And we will — we have just begun, and we will drive towards a ceasefire and all of those other steps.  I’m not going to pre-negotiate or get ahead of the sequencing of all of that.  It’s a very delicate situation. 
     
    But this is a president of peace.  And who here would argue against peace?
     
    Q    Okay.  So, you do share that assessment. 
     
    And can I follow up.  In 2017 —
     
    MS. LEAVITT:  No.  Go ahead, Jordan.
     
    Q    — then-President Trump —
     
    MS. LEAVITT:  Go ahead, Jordan. 
     
    Q    Can I just follow up really quickly?
     
    Q    Thank you.  So —
     
    MS. LEAVITT:  You just had two questions, Kaitlan.
     
    Q    May I — can I just —
     
    MS. LEAVITT:  Jordan, go ahead. 
     
    Q    Mr. — Mr. Hassett —
     
    MS. LEAVITT:  Thank you.
     
    Q    I have an important follow-up for Mike Waltz.
     
    MS. LEAVITT:  Jordan, go ahead.  Go ahead.
     
    Q    So, Mr. Hassett, you were speaking about tariff revenue, and you also addressed a question about the R- — IRS.  President Trump has spoken about replacing income tax with tariff revenue, especially with all this waste, fraud, and abuse that we’re seeing cut.  Is that a possibility?
     
    MR. HASSETT:  Absolutely.  And, in fact, if you think about the China tariff revenue that we’re estimating is coming in from the 10 percent that we just added, plus the de minimis thing, that it’s between $500 billion and a trillion dollars over 10 years, is our estimate.  And that’s something that is outside of the reductions that markets are seeing through the negotiations up on the Hill.
     
    And so, we expect that the tariff revenue is actually going to make it much easier for Republicans to pass a bill, and that was the President’s plan all along. 
     
    Thank you.
     
    Q    And I — I have a question for Stephen Miller about DOGE.  So, you — you spoke about DOGE.  You said roughly $50 billion is set to be cut in a year of waste, fraud, and abuse by unelected bureaucrats.  We’re hearing this ironic narrative from the President’s critics and the left-wing media that Elon Musk is an unelected bureaucrat, and he’s doing all this terrible stuff.  Isn’t one of DOGE’s objectives to get — get rid of the federal bureaucracy, the — the deep state?  And also, who was running the White House when Joe Biden was in office —
     
    MR. MILLER:  (Laughs.)
     
    Q    — because I don’t know a single person who believes it was Joe Biden? 
     
    MR. MILLER:  Yes.  You’re — you’re tempting me to say — (laughs) — some very harsh things about some of our media friends.  The — yes, it is true that many of the people in this room, for four years, failed to cover the fact that Joe Biden was mentally incompetent and was not running the country. 
     
    It is also true that many people in this room who have used this talking point that Elon is not elected fail to understand how government works.  So, I’m glad for the opportunity for a brief civics lesson. 
     
    A president is elected by the whole American people.  He’s the only official in the entire government that is elected by the entire nation.  Right?  Judges are appointed.  Members of Congress are elected at the district or state level.  Just one man. 
     
    And the Constitution, Article Two, has a clause, known as the vesting clause, and it says, “The executive power shall be vested in a president,” singular.  The whole will of democracy is imbued into the elected president.  That president then appoints staff to then impose that democratic will onto the government. 
     
    The threat to democracy — indeed, the existential threat to democracy — is the unelected bureaucracy of lifetime, tenured civil servants who believe they answer to no one, who believe they can do whatever they want without consequence, who believe they can set their own agenda no matter what Americans vote for. 
     
    So, Americans vote for radical FBI reform, and FBI agents say they don’t want to change.  Or Americans vote for radical reform in our energy policies, but EPA bureaucrats say they don’t want to change.  Or Americans vote to end DEI — racist DEI policies, and lawyers in the Department of Justice say they don’t want to change. 
     
    What President Trump is doing is he is removing federal bureaucrats who are defying democracy by failing to implement his lawful orders, which are the will of the whole American people. 
     
    Thank you. 
     
    Q    Thanks, Stephen.  Can I follow up?
     
    Q    Karoline.
     
    MS. LEAVITT:  Thank you very much, everybody.  I’m looking at the clock.  We’ve almost had an hour of time. 
     
    (Cross-talk.)

    LEAVITT:  I know a couple of these individuals have a meeting to get to at 2:00 p.m.  So, you’re welcome to follow up with my team for further questions.  We’re going to let these guys get back to running the United States government.
     
    And we will see you all later.  President Trump will be speaking at 3 o’clock at the Black History Month reception.
     
    So, thank you.  It’s good to see you.  We’ll see you in a bit.  Thanks.
     
    Q    Are you going to the Black History Month reception, Mr. Miller?
     
    Q    Stephen, on the fraud.  Should we expect indictments?
     
    Q    What is your reaction to Mitch McConnell’s retirement?
     
    Q    Are there indictments coming for all the fraud we’ve found?
     
         MR. MILLER:  I’d love to follow up with you.  Just set up a time with Karoline.
     
         Q    Okay.  Thank you. 
     
    END                   1:56 P.M. EST

    MIL OSI USA News

  • MIL-OSI Australia: (WIP) Big batteries in 2025: the market evolution continues

    Source: Allens Insights

    Another big year for BESS 12 min read

    Utility-scale batteries reached new heights in 2024, achieving several industry firsts. Milestones include the first project-financed virtual offtake agreement and long-term energy service agreement (LTESA), coupled with inventive approaches to revenue stack structuring. As investor interest intensifies, the future of battery storage looks promising.

    This latest Insight on the Australian big battery market delves into the recent trends, the potential opportunities and hurdles for this rapidly evolving industry.

    Key takeaways

    • Project financing of battery energy storage system (BESS) projects is on the rise, with an increasingly sophisticated market, a widening pool of sponsors and diverse range of investment structures.
    • Virtual offtake agreements are dominating the offtake market, giving developers greater flexibility in their revenue stack and opportunities for equity upside through market arbitrage.
    • Interest in the Capacity Investment Scheme and LTESAs is increasing and contributing to projects reaching financial close.
    • Equity investors continue to be attracted to standalone and co-located BESS projects, as well as investment in the hardware and software of a battery.

    What we are seeing in the market

    A growing number of battery projects achieved financial close across the past year and project finance has continued to be the dominant approach. We have seen significant greenfield and operational battery projects financed on a standalone basis and as part of hybrid projects, as well as portfolio-based financings. 

    Key examples of this trend are the renewables portfolio financings for Global Power Generation, FRV and Neoen, all of which included battery projects as part of the technology mix. Akaysha Energy’s standalone financing of its Orana Battery Energy Storage System marked a financing for the largest four-hour BESS in Australia’s National Energy Market (NEM), and one of the largest in the world. 

    The continued support in the project finance market for battery storage projects has been driven by a range of factors, including:

    • a widening pool of sponsors—and, in some cases, extremely strong sponsors—who are investing in the technology;
    • a diverse range of investment structures and rationales, which have seen developers and sponsors raise debt financing for batteries on a standalone and portfolio basis, or as part of co-located or hybrid projects. In some cases, this has been motivated by a business pivot or expansion in response to an increasing need to couple projects with intermittent generation sources with a firming energy source or, more generally, net zero and decarbonisation objectives; and
    • increasing sophistication and experience of developers, contractors and other stakeholders in relation to procurement and contracting strategy, trading strategy, management of interface and gap risk in the context of split contracting, and innovation in revenue structures.

    These trends have been accompanied by—and, in some ways, conducive to—an expanding range of financiers (including mainstream commercial banks, government lenders and other non-bank lenders) participating in financings for battery projects; a greater understanding from lenders of technology and degradation risk; and a greater market acceptance of split contracting structures and non-traditional revenue structures as bankable.

    Throughout 2024 we observed a marked increase in the development and adoption of virtual offtake agreements as a preferred offtake structure. Notable examples are Neoen’s Western Downs BESS and Victorian Big Battery, and, as mentioned earlier, Akaysha’s Orana BESS. 

    A virtual offtake agreement decouples the financial offtake from the physical project. The project company may therefore choose not to follow the instructions of the offtaker and instead operate the BESS according to its own internal trading strategy, but it must still settle the financial swap on pre-agreed terms, regardless of battery capacity and how much the battery is charged or discharged. 

    From the project company’s perspective, unlike a traditional physical toll, it retains control of the physical battery. This increases the opportunities for equity upside through trading arbitrage. The structure also facilitates greater flexibility for a single project to procure offtake agreements with multiple offtakers. It may also be compatible with hybrid or co-located projects in need of multiple offtakers for different components of the project.

    Virtual offtakes are not, however, for everyone. Both the owner and the offtaker need sophisticated trading teams to allow them to make the most of the virtual arrangements and to reduce the risk of making losses. Similarly, developers who want to sell out of a project prior to financial close may want to consider whether a virtual offtake agreement could limit the potential buyer pool to those that have the technical capability to trade the asset.

    In considering this type of structure from a financing perspective, lenders will be focused on mitigating the potential downside exposure in circumstances where physical trading by the project company underperforms against the virtual nominations, eroding actual base case revenue against revenue assumptions against which debt is sized.  

    Providing lenders with appropriate oversight and protections (including, if required, agreed trading protocols), while providing sufficient room for equity to seek upside opportunities, will be the key to building broader market acceptance of the bankability of non-traditional revenue structures such as virtual offtake agreements.

    Last year saw the Federal Government launch the first five tenders in its Capacity Investment Scheme, which wrapped in a tender for the NSW Government’s LTESAs.

    Each tender round has been oversubscribed, indicating a strong appetite from project developers to secure a government underwriting contract such as a Capacity Investment Scheme Agreement (CISA) or an LTESA

    While these underwriting contracts have typically been viewed by project financiers as welcome enhancements, they have traditionally been seen as a ‘nice-to-have’ feature, with the primary focus of lenders being on whether the project has the benefit of a traditional tolling or offtake agreement. At most, we saw sponsors and borrowers proposing to recognise CISAs and LTESAs acting as a floor against any potential market risk (either due to the residual life of the BESS past the offtake tenor or for partially contracted assets). 

    More recently, we are seeing lenders develop a greater understanding of how such agreements can underpin forecast project cashflows in a way that enables higher weighting to be placed on them as a certain and bankable revenue line in the base case financial model. This approach is often supported by tailored protections that are agreed in the debt documents, such as:

    • undertakings around how the project activates and manages its rights to receive support payments;
    • information undertakings, to provide lenders with appropriate visibility over the operation of the underwriting agreement during the facility term; and
    • cash reserving requirements, to facilitate the project maximising the benefit of underwriting agreements, while providing for a buffer should there be a need to meet any payment obligations back to the counterparty (eg reconciliation payments or rebates).

    As more government underwriting agreements are awarded under the LTESA and CISA schemes, there will be an increasing number of projects in the market where such agreements are a feature of the revenue profile. We expect that market acceptance of this approach will continue to broaden over time.

    Split contracting has established itself as the market standard for BESS projects, with sponsors and financiers becoming significantly more comfortable with managing and banking the interface risks between battery supply and balance of plant (BOP) scope.

    Commissioning, handover, defects, security, liability caps and liquidated damages coverage continue to be key areas of focus in negotiations, gaps analysis and bankability assessments. However, the issues, and the related mitigation strategies and contingencies, are now well understood.

    As the BESS split contracting structure has matured, we have also begun to see sponsors with a portfolio of upcoming BESS and other renewables projects seek to partner informally with preferred battery suppliers and/or BOP contractors across that pipeline—the goal being to expedite procurement timeframes, secure production slots and standardise terms across their portfolio.

    With BESS projects increasingly being co-developed with related solar/wind projects (either greenfield or expansions), we also expect to see an increase in a common BOP contractor delivering both the battery and solar/wind BOP scope. At this stage, the BOP scope usually remains ringfenced between assets (eg there is a BESS BOP contract and a solar BOP contract). However, we expect to see sponsors push towards a single hybrid project BOP contract covering both assets, to seek to streamline contracting terms and construction programs on hybrid projects.

    In order to ensure that the structure is bankable, project financiers require a rigorous gaps analysis process underpinning the contract negotiations, along with confidence in the capability and experience of the contractors themselves. The need for a robust gaps analysis does mean more substantial engagement with financiers, and sponsors and developers have had to factor this into the overall transaction timetable. However, the continued rise in standard terms contracts from certain contractors in the market may facilitate efficiencies in the due diligence process, especially on portfolio-based financings.

    Investors continue to be attracted to BESS assets. Unsurprisingly, the reasons for their increasing investment appeal are similar to why we are seeing more and more BESS projects reach financial close.

    These factors enable BESS owners to diversify and maximise revenue output from their renewable energy portfolios. Coupled with favourable investment characteristics for BESS assets, such as lower capex costs and shorter development timelines (particularly when compared with other renewable asset types), we expect to see investment appetite for BESS assets continue to grow.

    In the Australian M&A market, this investor appetite has manifested primarily in the form of co-location ‘add-ons’—where vendors looking to sell a solar or wind project have added a BESS development opportunity to the project. If the BESS can be developed on the project’s existing land footprint, the ‘add-on’ process is relatively simple (other than for the connection process, which continues to cause headaches for developers), and the project up for sale can be rebranded as a co-located wind/solar and BESS project, unlocking for the buyer the various new revenue streams. For the vendor, those additional revenue streams mean a higher purchase price.

    What’s on the horizon

    Recognition of sub-investment grade offtakers?

    The offtaker’s credit quality will continue to be a focus for lenders when assessing BESS projects. However, as a greater range of offtakers enter the market, we can expect more frequent proposals for financiers to consider counterparties that may not have the credit ratings that would typically be required for a bankable project.

    We are seeing this area incrementally develop. This is particularly so in renewables portfolio financings, where certain sub-investment grade offtakers may be recognised and given greater weighting (and, in some cases, equivalent to an investment grade offtaker) as part of debt sizing cashflows, subject to appropriate percentage caps and other criteria being met.

    Opportunities for fully merchant BESS projects

    A further example of the evolving market for BESS financings may be found in the recent Amp Energy project financing of a fully merchant BESS project by commercial bank lenders and Export Development Canada. While we have certainly seen project financings for BESS projects with merchant exposure, those projects have typically included at least some contracted revenue component (whether through a tolling agreement, virtual power purchase agreement, LTESA or revenue risk-sharing agreement). 

    This makes the Amp transaction an interesting market development. Depending on the project and the sponsor, the debt model on the Amp transaction may not be feasible for all sponsors and developers, given that a fully merchant BESS compared with a contracted BESS would necessarily mean more conservative debt sizing, at least in the short term. However, for certain sponsors with strong equity backing, where a high percentage of equity is available to be contributed to individual projects, and where there are challenges or other commercial reasons for not procuring an offtake, a fully merchant-based project financing may still be attractive. 

    Whether this means we will see a growing number of merchant BESS project financings is unclear. The Australian Energy Market Operator (AEMO) forecasts energy storage capacity in the NEM will increase from approximately 2GW at the end of 2024 to nearly 7GW by the end of 2025.1 As more BESS projects come online over time, there may be fewer arbitrage and other similar revenue opportunities. 

    At least in the short term, we expect this may lead to certain sponsors and developers more closely exploring opportunities to raise debt against BESS projects that are fully merchant or that have substantial merchant exposure.

    Investment in BESS platforms and core components

    A growing trend is the investment in BESS-specific investment platforms. While only a limited number have come to market in Australia so far (including the recent ZEBRE BESS platform announced by ZEN Energy and HDRE), we have worked with a number of investors who are looking at opportunities in this space. Investors are drawn to the benefits of BESS projects described above and the potential to accelerate the growth of those benefits when they are aggregated on a portfolio basis.

    We have also seen increased investment interest in core BESS components, including:

    • the hardware—as rival technologies, focused on cost efficiency and safety, are emerging to challenge lithium-based batteries; and
    • the software—focusing in particular on storage and discharge optimisation.

    While the current focus from investors in these core BESS components appears to be on systems designed for the residential and commercial and industrial markets, the ambition for a number of these technologies is to scale up to the utility-scale BESS market.

    Commencement of the GO Scheme

    The Guarantee of Origin Scheme (the GO Scheme) is set to commence in 2025, bringing with it new tradeable certificates in the form of Renewable Energy Guarantee of Origin (REGO) certificates. Unlike large-scale generation certificates, REGOs will be able to be created by energy storage systems (such as batteries) where there is a ‘direct supply relationship’ with an eligible renewable energy facility.

    In addition, REGOs will be time-stamped, meaning they will record the hour of the day in which they were generated. This will allow temporal matching of electricity generation and consumption, and will likely drive a price differentiation between eg REGO certificates generated at 1pm when there is excess solar generation and 1am when renewable energy supply is scarce.

    The introduction of REGO certificates presents an interesting opportunity, and a potential new revenue source, for BESS projects.

    More information on the GO Scheme can be found in our previous Insight.

    Revenue implications from AEMO’s market interventions

    Under the National Electricity Rules, AEMO has powers to issue mandatory ‘directions’ to registered participants in the NEM in relation to the operation of their facilities. This is not uncommon, and is primarily used by the market operator to manage periods of volatility in the market and maintain the reliability standard. Participants are subsequently reimbursed for their compliance via a well-established compensation framework administered by AEMO.

    AEMO has indicated that it intends to use its directions power on battery operators to address the increasingly commonplace minimum system load issues— eg by directing an operator to fully discharge batteries early in the morning and to hold the batteries at minimum charge during the morning, with the direction lifted in the early afternoon.

    However, there are growing concerns that this directions compensation model is not fit for purpose for standalone batteries and other energy storage technologies. The financial model for a standalone BESS is particularly reliant on taking advantage of exactly these periods of financial volatility in the market, and AEMO’s directions compensation framework may not be appropriate in providing adequate financial redress for the opportunity cost that is lost by virtue of being required to comply with an AEMO direction.

    Following the AEMC’s ‘Review into electricity compensation frameworks’, the final report for which was published in December 2024 and can be found here, we expect there to be continued discussions on this issue, to ensure that BESS operators are fairly compensated for AEMO’s market interventions.

    Vanadium flow as an emerging alternative to lithium-ion?

    As the BESS market expands, we expect to see competing technologies emerge as alternatives to lithium-ion batteries. The WA Government recently announced $150 million of funding to develop a 50MW / 500MWh vanadium flow battery (VFB) in Kalgoorlie, which would be Australia’s largest VFB. While VFBs have been mooted for a number of years as a potential utility-scale alternative to lithium-ion batteries, the first (and largest) ‘commercial’ VFB in Australia (a 2MW / 8MWh battery) was only commissioned in mid-2023, as part of the Spencer Energy Project.

    The key roadblocks to the widespread adoption of utility-scale VFBs seem to be higher upfront costs compared with lithium-ion batteries (vanadium is heavily used in steel refining, which creates price and supply chain volatility), and lower roundtrip efficiency of around 70–85% (compared with 90–95% for lithium-ion batteries).

    Despite this, VFBs seemingly provide a number of commercial benefits compared with lithium-ion batteries. In particular, VFBs offer longer storage duration (between 8–12 hours), and the theoretical ability to discharge completely and for an unlimited number of times without significant degradation (providing a much longer and consistent asset life). Further, VFBs are said to be safer (and fire resistant), and storage capacity can be easily increased by adding more electrolyte. At scale and over time, these benefits could help drive a significantly lower LCOE. The WA Government’s funding may be the catalyst to cut upfront costs and kickstart VFBs as a leading alternative to lithium-ion batteries.

    The continuing evolution

    As we look ahead, it is clear that 2025 promises to be another exciting year for the BESS sector. We expect to see more diverse, and growing, opportunities for battery projects, including across construction contracting, revenue structures, project and portfolio-based financing, and M&A. 

    If you would like to hear more about what we’re seeing in the market, please contact any of the team members below.

    MIL OSI News

  • MIL-OSI USA: Tuberville, Schmitt Reintroduce the ENABLE Act, Empower Americans with Disabilities

    US Senate News:

    Source: United States Senator Tommy Tuberville (Alabama)
    WASHINGTON – U.S. Senator Tommy Tuberville (R-AL) joined U.S. Senator Eric Schmitt (R-MO) in reintroducing the bipartisan, bicameral Ensuring Nationwide Access to Better Life Experience (ENABLE) Act. The ENABLE Act preserves the ability of people with disabilities and their families to save and invest through tax-free savings accounts while protecting eligibility to federal programs by making permanent key provisions related to Achieving a Better Life Experience (ABLE) accounts. 
    Sen. Tuberville also cosponsored the legislation last Congress.
    “Every human being is created by God and has inherent dignity, including those with disabilities. After 40 years in the education sector, I have seen firsthand how important it is for teachers, parents, community members, and Congress to work together to ENABLE these people for success. This legislation provides crucial safeguards for people with disabilities to help them invest, save, and achieve independence. I appreciate Senator Schmitt’s leadership on this issue that I know is close to his heart and look forward to working with him to get this legislation across the finish line,” said Sen. Tuberville.
    “I was proud to lead the introduction of the ENABLE Act in the 118th Congress, where this critical legislation passed the Senate. I entered public service to fight for people like my son Stephen. Stephen was born with a rare genetic disease, is on the autism spectrum, has epilepsy, and is non-verbal. I know firsthand how critical ABLE accounts are to individuals with disabilities and their families. ABLE accounts allow individuals with disabilities to save for their future and ease burdens on their families. It’s a common-sense solution that provides an easy fix for those who depend on ABLE Accounts, and I’m proud to have bipartisan, bicameral support for this important piece of legislation,” said Sen. Schmitt.
    U.S. Senators Tuberville and Schmitt are joined by U.S. Senators John Boozman (R-AR), Katie Britt (R-AL), Chris Coons (D-DE), John Fetterman (D-PA), Tim Kaine (D-VA), Mark Kelly (D-AZ), Amy Klobuchar (D-MN), Jerry Moran (R-KS), Dan Sullivan (R-AK), Thom Tillis (R-NC), Chris Van Hollen (D-MD), and Raphael Warnock (D-GA) in cosponsoring the legislation.
    U.S. Representative Lloyd Smucker (R-PA-11) led the effort in the House of Representatives.
    Read full text of the legislation here.
    BACKGROUND: 
    ABLE accounts—529A accounts—allow people with disabilities and their families to save and invest through tax-free savings accounts without losing eligibility for federal programs like Medicaid and Supplemental Security Income (SSI). There are three provisions related to these accounts in the Tax Cuts and Jobs Act (TCJA):
    ABLE to Work: an individual with a disability who is employed can contribute an additional amount to his or her ABLE account. This additional contribution cannot be greater than either:
    the prior year’s federal poverty level for a one-person household ($15,060 in 2024), or
    the beneficiary’s yearly compensation.

    ABLE Saver’s Credit: an individual with a disability who make qualified contributions to their ABLE account can qualify for a nonrefundable saver’s credit of up to $1,000.
    529 to ABLE rollover: an individual with a disability may rollover from a 529 education savings account to an ABLE account that are less than or equal to the annual ABLE contribution limit tax and penalty free.
    The ENABLE Act would make permanent the above provisions that are set to expire.
    Senator Tommy Tuberville represents Alabama in the United States Senate and is a member of the Senate Armed Services, Agriculture, Veterans’ Affairs, HELP, and Aging Committees.

    MIL OSI USA News

  • MIL-OSI USA: Florida Businessman Sentenced in Connection with Migrant Labor Employment Scheme, Payroll Tax Evasion, and Worker Death

    Source: US State of California

    A Florida man was sentenced yesterday to 48 months in prison and ordered to forfeit more than $5.5 million to the United States as well as forfeit numerous real properties and cash, and to pay over $55 million in restitution for conspiracy to commit wire fraud, conspiracy to defraud the United States and willful violation of a workplace standard that resulted in the death of his employee. Manual Domingos Pita, of Wesley Chapel, previously pleaded guilty to those charges on July 9, 2024.

    According to court documents, Pita owned and operated Domingos 54 Construction, a subcontracting business for the wood framing of new construction homes. Domingos 54 was a shell construction company that Pita used to provide workers, including undocumented aliens, with construction jobs. However, Pita failed to secure the required workers compensation insurance coverage for these employees by falsifying in worker’s compensation insurance applications the number of workers for which he sought coverage. In addition, Pita failed to pay any federal employment taxes on the wages that these workers earned during the course of the scheme between 2018 and 2022. As a result, Pita caused several worker’s compensation insurance companies to sustain a loss of over $22.7 million in premiums that they could have charged had they been aware of the number of workers which they had been manipulated into covering with their policies. In addition, Pita failed to pay to the IRS over $33.7 million in federal employment taxes on those workers’ wages.

    Between February and July 2019, investigators with the Occupational Safety and Health Administration (OSHA) issued six citations to Domingos 54 for failure to provide fall protection to workers. Even after being cited for these violations, Pita continued to ignore OSHA requirements. In March 2020, Pita assigned a worker and three other carpenters to install sheeting on the roof of a residential home in windy conditions without providing the required fall-protection gear or ensuring its use. As a result, one of the workers was blown off the roof and died from his injuries.

    “Pita’s history of OSHA violations and deception tragically led to a worker’s death,” said Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department’s Environment and Natural Resources Division. “We are committed to upholding the rule of law by prosecuting fraud and enforcing worker safety standards.”

    “The defendant in this case engaged in a deliberate scheme to defraud insurance companies, the government and evade taxes, resulting in huge losses to the U.S. Treasury, and to personally enrich himself,” said Acting U.S. Attorney for the Middle District of Florida Sara C. Sweeney. “In addition, flagrant violations of OSHA safety standards put workers at unacceptable risk, ultimately resulting in the death of an employee. My office is committed to federally prosecuting and holding accountable anyone who violates these laws and regulations.”

    “Mr. Pita repeatedly violated the longstanding policies designed to protect the workforce which resulted in a tragic death,” said Special Agent in Charge Matthew Fodor of the FBI’s Tampa Field Office. “The FBI and its partners will aggressively pursue those who selfishly ignore the laws and policies in place to protect America’s workforce.”

    “Not only does this type of scheme give an illegal advantage over honest competitors, it intends to allow the use of illegal, undocumented labor to achieve that advantage,” said Special Agent in Charge Ron Loecker of IRS Criminal Investigation’s Tampa Field Office. “It’s a blatant form of cheating that undercuts fair competition, costs the government millions of dollars in tax revenue, and skirts our nation’s immigration laws. This case reaffirms our unwavering commitment to prosecuting those who engage in fraud at the expense of workers, taxpayers, and law-abiding businesses.”

    The FBI, IRS Criminal Investigation, Homeland Security Investigations, Florida Department of Financial Services’ Bureau of Insurance Fraud-Criminal Investigations and the Department of Labor’s Office of Inspector General investigated the case.

    Assistant U.S. Attorney Jay L. Hoffer for the Middle District of Florida and Senior Trial Attorney Banumathi Rangarajan of the Environment and Natural Resources Division’s Environmental Crimes Section prosecuted the case.

    MIL OSI USA News

  • MIL-OSI USA: Senators Coons, Cassidy reintroduce the Retirement Security for American Hostages Act

    US Senate News:

    Source: United States Senator for Delaware Christopher Coons
    WASHINGTON – Today, U.S. Senators Chris Coons (D-Del.) and Bill Cassidy, M.D. (R-La.) reintroduced the Retirement Security for American Hostages Act to ensure American hostages and wrongful detainees don’t see reduced Social Security earnings as a result of being unlawfully held abroad. In addition to Senators Coons and Cassidy, this legislation is co-sponsored by Senators Tim Kaine (D-Va.), Susan Collins (R-Maine), and Ron Wyden (D-Ore.). This legislation was previously introduced in the 118th Congress.
    “The financial impact of wrongful detention doesn’t end when Americans come home – the damage can last into their years of retirement,” said Senator Coons. “Americans like Paul Whelan – unjustly held in a Russian prison for six years until the Biden Administration secured his release – see severely reduced Social Security benefits for the rest of their lives and have precious little time to make those earnings back. The Retirement Security for American Hostages Act provides a straightforward and practical solution so that years spent in foreign detention don’t translate into permanently reduced retirement benefits for these Americans who have already suffered so much.”
    “Losing one’s freedom is enough to endure. Americans held hostage should not also lose their Social Security benefits,” said Senator Cassidy. “Ensuring their benefits are protected makes a difference in someone’s life.” 
    “Hostage US strongly supports the Retirement Security for American Hostages Act. As the leading organization providing reintegration support, guidance, and resources to Americans held hostage or wrongfully detained abroad, we see firsthand the long-term impact captivity has on individuals and their loved ones. This critical piece of legislation prevents reduced retirement security when hostages return home and means former captives can rebuild their lives without additional hardship. Americans who have endured captivity should have financial protections and this commonsense legislation will provide much-needed relief to those who have already suffered so much,” said Liz Cathcart, Executive Director of Hostage US.
    “The lives of Americans held hostage or wrongfully detained are forever altered in damaging ways that can continue upon their release and return home,” said Diane Foley, President, the James W. Foley Legacy Foundation. “This bill provides an important measure of relief to reduce the burdens faced by those who are lucky enough to be freed.” 
    Last summer, several Americans were released from wrongful detention in Russia as part of a historic prisoner exchange, and additional Americans have been released from hostage situations since then. These individuals now face financial obstacles resulting from their captivity, including diminished Social Security benefits when they reach retirement. Because they may not have received a paycheck or paid payroll taxes while in captivity, their Average Indexed Monthly Earnings (AIME), which determines their Social Security benefit upon retirement, may have diminished by a meaningful amount.
    The Retirement Security for American Hostages Act would amend the Social Security Administration’s (SSA) calculation of benefits for individuals identified as wrongful detainees by the federal government. The bill ensures that when calculating Social Security benefits, the SSA would assume “deemed wages” equal to the national average for each month a former hostage or detainee was held, preventing unjust reductions in their retirement benefits.
    Senator Coons has led numerous bills supporting American hostages and wrongful detainees and addressing financial hardships they often face upon their return. He reintroduced the Retirement Security for American Hostages Act alongside two other hostage bills today–– the Fair Credit for American Hostages Act and the Stop Tax Penalties on American Hostages Act. The first is a bill with Senator Thom Tillis (R-N.C.) that would empower former hostages and detainees to restore credit scores that may have been negatively impacted during their detention. The latter is with Senator Mike Rounds (R-S.D.) and would stop the IRS from imposing fines and penalties on American hostages and wrongful detainees for late tax payments while they are held abroad. Both of those bills unanimously cleared the Senate last year.
    A one-pager is available here.
    The full text of the legislation can be found here. 

    MIL OSI USA News

  • MIL-OSI USA: Senators Coons, Tillis reintroduce the Fair Credit for American Hostages Act

    US Senate News:

    Source: United States Senator for Delaware Christopher Coons
    WASHINGTON – U.S. Senators Chris Coons (D-Del.) and Thom Tillis (R-N.C.) reintroduced the Fair Credit for American Hostages Act today to protect the credit scores of Americans who have been held hostage or wrongfully detained abroad. In addition to Senators Coons and Tillis, this legislation is co-sponsored by Senators Ron Wyden (D-Ore.), Cynthia Lummis (R-Wyo.), Chris Van Hollen (D-Md.), and Mike Rounds (R-S.D.). This legislation was originally introduced in the 118th Congress, and passed the Senate unanimously in December.
    “When you’re held hostage or wrongfully detained in a foreign prison for months or years on end, you’re not thinking about whether there’s enough money coming into your bank account to pay your utility bill—but right now, financial institutions just see someone who’s not paying their bills. Americans who’ve already endured the trauma of wrongful detention abroad shouldn’t come home to find their credit score ruined,” said Senator Coons. “The Fair Credit for American Hostages Act addresses this injustice, providing crucial protection for these heroic Americans and their families who have already endured far too much, so that time spent in foreign detention doesn’t harm their financial futures long after they’re home.”
    “No one should ever have to fear returning home to financial ruin and a damaged credit history due to their inability to make timely payments while being held hostage in a foreign country,” said Senator Tillis. “This commonsense legislation ensures that Americans held captive abroad won’t have to grapple with the financial distress of a ruined credit score, so they can focus on rebuilding their lives.”
    “Hostage US strongly supports the Fair Credit for American Hostages Act. As the leading organization providing reintegration support, guidance, and resources to Americans held hostage or wrongfully detained abroad, we see firsthand the long-term impact captivity has on individuals and their loved ones. This critical piece of legislation prevents damaged credit when hostages return home and means former captives can rebuild their lives without additional hardship. Americans who have endured captivity should have financial protections and this commonsense legislation will provide much-needed relief to those who have already suffered so much,” said Liz Cathcart, Executive Director of Hostage US.
    “The Foley Foundation appreciates Senator Coons’ consistent, bipartisan leadership to address the often profound challenges faced by Americans who survive unjust captivity abroad. These bills offer common sense solutions to the financial issues former hostages face as they seek to restore their lives and livelihoods,” said Benjamin Gray, Executive Director of the Foley Foundation.
    Americans who are held hostage or wrongfully detained abroad often cannot pay their bills while in detention. Upon their release and return to the United States, many find that their credit scores have suffered due to missed payments. This bipartisan legislation would prevent credit rating agencies from considering payments missed during the detention of Americans who have been held hostage or wrongfully detained abroad.
    Senator Coons has led numerous bills supporting American hostages and wrongful detainees and addressing financial hardships they often face upon their return. He reintroduced the Fair Credit for American Hostages Act alongside two other hostage bills today––the Stop Tax Penalties on American Hostages Act and Retirement Security for American Hostages Act. The first is a bill with Senator Mike Rounds (R-S.D.) that would stop the IRS from imposing fines and penalties on American hostages and wrongful detainees for late tax payments while they are held abroad. This bill unanimously cleared the Senate last year. The latter is a bill with Senator Bill Cassidy, M.D. (R-La.) that would ensure that hostages and wrongful detainees are not penalized in calculating their Social Security benefits. 
    A one-pager is available here.
    The full text of the legislation can be found here.

    MIL OSI USA News

  • MIL-OSI USA: Crapo on Extension of Trump Tax Cuts: Failure is Not an Option

    US Senate News:

    Source: United States Senator for Idaho Mike Crapo
    Washington, D.C.–Ahead of debate on the Senate FY2025 Budget Resolution, U.S. Finance Committee Chairman Mike Crapo (R-Idaho) set the record straight on the pro-growth Trump tax cuts, which lowered rates for Americans across the board and benefitted middle-income Americans the most.  He warned that, if the tax cuts are allowed to lapse at the end of the year, American families and businesses will face the largest tax hike in U.S. history.

    Full remarks as delivered:
    “Today, we are debating the narrow Senate FY2025 Budget Resolution that fulfills promises to secure America’s borders, increase our national defense, unleash our energy potential and finally start to get our fiscal house in order. 
    “In the near future, I expect us to move forward with a Budget Resolution that allows us to prevent a more than $4 trillion tax hike on American households–the largest tax hike in history of America–that will be felt by virtually every American if the tax cuts expire at the end of this year.
    “Because the other side has filed a litany of tax amendments that rehash various false narratives and each side will only have one minute to debate, I’m going to spend some time right now explaining why we can’t afford a $4 trillion-plus tax increase; the positive impact the Trump tax cuts had on the economy; and some of the key provisions that expire at the end of year. 
    “At the end of this year, many key provisions of President Trump’s 2017 Tax Cuts and Jobs Act are set to expire, triggering an over-$4 trillion tax hike on American families and businesses.
    “While taxes will increase on Americans of all income levels, the majority of this tax hike, about $2.6 trillion, will fall on those making less than $400,000 per year.
    “An average family of four making about $80,000 per year would see a $1,700 tax hike in 2026.
    “Another $600 billion plus will hit millions of small business owners, who could see federal tax rates skyrocket up to 43.4 percent.
    “Tens of millions of families will see their child tax credit cut in half from $2,000 to $1,000.
    “The list goes on, but first I’ll talk about what the Trump tax cuts actually did, and why failing to extend key provisions would be economically devastating for millions of hardworking taxpayers.
    “So, what did the Trump tax cuts do?
    “There’s been a lot of talk recently about how extending these expiring tax cuts are all for billionaires and corporations, but the facts show otherwise.
    “The 2017 tax bill increased take-home pay and powered a growing economy. 
    “Individuals across all income brackets received a tax cut, not just–as opponents suggest–for the uber wealthy.
    “In fact, the Trump tax cuts made the tax code more progressive, meaning the highest income earners now pay a greater share of all income taxes than they did before 2017.
    “The majority of benefits accrued to working middle-class families.
    “Between the bill’s passage in 2017 and 2021, the bottom 50 percent of earners received the largest reduction in average tax rates at 17.3 percent. 
    “In addition to lowering tax rates across the board, the Trump tax cuts doubled the standard deduction and the child tax credit and provided tax relief to America’s entrepreneurs and small businesses.
    “The effects of pro-growth tax reform were almost immediate. 
    “Not only did taxpayers get to keep more of their hard-earned money, but a growing economy helped median household income reach an all-time high.
    “The labor market improved, workers saw wage growth and the unemployment rate fell dramatically to 3.5 percent–the lowest in 50 years. 
    “And the lowest-income workers experienced the largest wage growth.
    “Corporate inversions became a thing of the past, and America became the place to do business. 
    “All Americans reaped the benefits of a booming economy. 
    “Extending this current, proven tax policy–and building on it–is the best way to restore economic prosperity and opportunity for working families, many of whom are still struggling to recover from the historic inflation of the last four years.
    “As American families contend with increased costs of everyday living, the last thing they need is another massive tax hike on top of that inflation.
    “Failure is simply not an option.
    “So, what happens if the Trump tax cuts expire?
    “As I’ve said, if we do not extend these tax policies, Americans will be hit with an over-$4 trillion tax increase.
    “More than $2.6 trillion will fall on households earning less than $400,000 per year.
    “An average family of four making $80,000 will be saddled with a $1,700 tax increase.  This is the equivalent of six to eight weeks’ worth of groceries for a family of four.
    “Tens of millions of families will see their child tax credit cut in half to $1,000, and
    90 percent of taxpayers would see their standard deduction cut in half.
    “Owners of over 20 million small businesses will face a massive tax hike, with tax rates up to 43.4 percent.
    “7 million taxpayers will be impacted by the Alternative Minimum Tax, up from just 200,000 taxpayers currently.
    “Many more small businesses and farms will have their death tax exemption cut in half.
    “The National Association of Manufacturers recently highlighted that if we allow the Trump tax cuts to expire, 6 million jobs would be at risk; $540 billion in employee compensation will be lost, and U.S. GDP will be reduced by $1.1 trillion.
    “So, while we aren’t considering tax policy as part of this reconciliation package, it is important to set the record straight on what’s at stake in the upcoming tax debate. 
    “And the stakes couldn’t be higher.
    “Tonight, you’re going to hear dozens and dozens of tax amendments, and we’re going to respond to each of those by explaining that that debate is not this budget.
    “The budget that we’re debating today is on the border, national defense, and increasing our oil and gas production to strengthen our economy.
    “And Senate and House Republicans are working together to act as quickly as possible to make the Trump tax cuts permanent, but that will be in the next step. 
    “We must prevent a massive tax hike and provide relief and certainty to families and businesses across America.”

    MIL OSI USA News