Have you ever wondered what kind of income it takes to live in an upmarket, leafy suburb like, say Woollahra?

Or just what people in struggle city, like Wollondilly, on Sydney’s fringes have to get by on?

Well, with a little help from the Australian Bureau of Statistics, we can help you there.

Take Walter, of Woollahra, for example.

He’s the average wage earner, in that very refined Sydney harbourside suburb.

And his wage, back in 2005-06, was $1,419 a week, or $73,811.

But what about his distant cousin, Wally, who also happens to be an average wage earner, in Wollondilly.

His pay packet, back then, recorded a total weekly wage of $802, or roughly $41,733 a year,

The picture is broadly similar for small business operators in the two suburbs.

The average annual income, for the unincorporated business owner in Woollahra, at that time, was $64,932.

In Wollondilly, the comparable figure was $17,615.

What, though, about those with investment income?

In Woollahra, the average investment income, for those who have investments, was $49,169 a year.

In Wollondilli, though, the comparable figure was $4,737.

And what about superannuants and those living on annuities?

In Woollahra, their average income at that time was $61,421.

In Wollondilli, it was $24,282.

As you’ve probably guessed by now, Woollahra and Wollondilli weren’t the only suburbs, towns or regions that the Statistician studied.

The Bureau has done all of them, right throughout Australia, for all financial years, from 2001-02 to 2005-06.

In Statistician’s talk, this information is contained in 10 “data cubes.”

That is, really big computer files. You can see them at www.abs.gov.au.

The data we have used was contained in the Bureau’s Estimates of Personal Income for Small Areas 2001-02 to 2005-06.
Nothing like this has been produced in Australia before – and this publication is a mammoth achievement.

The Australia Tax Office helped with the data.

But it came at a personal price.

So if you see a cross-eyed person on your bus or train tomorrow, please treat him – or her – kindly.

They will probably be from the  Bureau.

You can expect to be paying more consumption tax in future.

That’s the clear message that is emerging from the overhaul of Australia’s ramshackle tax system, led by the Treasury Secretary, Ken Henry.

But it won’t be extra GST.

The Prime Minister ruled the unpopular goods and services tax, which raised $44.2 billion for the Federal government last financial year, off limits, so far as the inquiry is concerned.

Too controversial.

Don’t want to be raising that one again.

But what is a consumption tax?

By definition, it is one you pay on something, as you consume it.

The GST, which is levied on just about everything, except food, is a consumption tax.

So is the excise you pay on the fuel you use.

Remember Paul Keating’s famous declaration?

“They are making every service station a branch of the tax office.”

Consumption taxes have never been popular.

But they have always been favoured in Treasury circles, where the phrase, “user pays,” is seen as a true sign of fiscal virtue.

That is showing up again, in a Consultation Paper, that Ken Henry’s review committee has just released.

It says, on page 14, that there are three bases for taxation, labour, capital and consumption.

The committee also notes that the Federal government has big expenses coming up, as Australia’s population ages.

It admits, in effect, that increasing tax on labour and capital is not easy.

So what will that mean, to you?

All that, according to the committee’s paper, is:- “suggesting an increased reliance on consumption taxes.”

That won’t be popular.
But it will happen.
The committee will make its final report to the government late next year.

The Australian economy is still slowing.

This is reflected in the Westpac-Melbourne Institute leading indicator, which has just been released.

The annualised growth in this indicator, which points the way the economy is likely move in the coming three to nine months, was just 0.6 per cent in October.

That is way below its long term average of 3.5 per cent.

The bank’s chief economist, Bill Evans, said today’s result shows further cooling, after the sharp fall registered on the same index  in September.

“It is likely that growth in 2009 will, at best, show little improvement on the anemic 1.6 per cent growth we expect through 2008,” Evans said.

So what are the chances of a recession, which most economists define as two consecutive quarters of negative growth?

Westpac rejects that definition..

“Our preferred definition of a recession is if the economy actually contracts over the year,” Evans said.

On that criterion, Australia has experienced three recessions since 1965.  They came in the mid 1970s, the early 1980s and in the early 1990s.

Mr Evans said his bank’s leading indicator had turned negative before all three recessions.

That hasn’t happened yet, this time.

Kevin Rudd believes his own survival takes precedence over the survival of the planet.

The emission reduction targets that he announced yesterday are certainly modest.

The 2020 target is 5-15 per cent below 2000 levels, by 2020.

Five per cent if other countries don’t match our efforts.

Up to 15 per cent if they do.

The government’s White Paper draws comparisons with the targets announced by other countries.

It said this target would leave Australia’s emissions up to 41 per cent below 1990 levels, on a per capita basis, by 2020.

Britain’s target would produce only a 39 per cent reduction, the White Paper says.
Politically, the government’s plan is clever.

It is a declaration that it wants some progress on reducing global emissions.

But the government, clearly, isn’t prepared to die in a ditch over the issue.
Cynics, who expected that Rudd’s plan would be crafted, on political, rather than environmental criteria, are probably the only people who were not disappointed, by what they saw.

Mitch Hooke, the voice of Australia’s mining industry, wanted no emissions targets, at all.

And why would he? The Minerals Council chief speaks for the coal industry, which is a major contributor to nasty global emissions.

On the other side, Greens Senator Christine Milne, says her office has been swamped with calls from protesters, furious at the government’s 5-15 per cent targets, which they regard as a Labor sell-out.

And the Greens are planning a national day of action, to protest at the plan.

The “millionaire factory” the Macquarie group is seeking a new partner in China, according to Bloomberg.

The financial wire service names Hengtai Securities as the likely partner.

So far, there has been no announcement of this reported move.

And Bloomberg, itself, is quoting only anonymous sources.

But if true – and successful – the venture would give Macquarie access to China’s $106 billion equity and bond underwriting market, at a critical time.

Finance from other international sources has virtually dried up, as a result of the global economic crisis.

Macquarie is said to have signed a memorandum of understanding with Hengtai last week.

Shares in Maquarie rose by 5.1 per cent yesterday as rumours of the new link spread.

The planned venture follows Chinese approval of a 20 per cent investment Macquarie made in that country’s Kunming International  Trust company last month.

It is set to negotiate final terms on its new venture over the next few months.

The Federal government is issuing up to another $5 billion worth of Commonwealth Securities.

The Treasurer Wayne Swan says it is doing this to “ensure the effective operation of Australia’s financial markets.”

These markets, of course, are under great pressure at present, as a result of the global economic crisis.

And Swan says his latest decision is a response to market demand.

“There has been strong demand for Australian Government Treasury Bonds in the wake of the global financial crisis,” he says.

That’s understandable.

These securities are, essentially, risk free.

And very little else is, at present.

Mr Swan admitted, though, that even the latest $5 billion worth of securities is not likely to satisfy the market for long.

“There continues to be strong demand for Treasury Bonds,” he says.

“And further issuance is likely to be necessary over coming months…,” he adds.

Swan says the government will continue to watch the market closely.

The Prime Minister, Kevin Rudd will announce the Federal government’s long awaited emission reduction targets, in an address to the National Press Club today.

The announcement was to have been made by  his Climate Change and Water minister, Senator Wong, but she was bumped from the job at the last minute.

In a circular to its members, the Press Club described that change as “a surprise.”

Mr Rudd had been criticised over his earlier plan to leave the announcement to Senator Wong.

Sydney Morning Herald columnist Alan Ramsey, for example,  said that, as usual, the unpleasant work was to be left to a woman.

Ramsey saw that, as a sign that the announcement, itself, wouid be weak.

If if it was to be a good one, the Prime Minister, Kevin Rudd, would make it himself, he said.

Rudd, himself, has already signalled, indirectly, that he is looking for a soft compromise.

He warned, recently, that the government’s announcement would not please either industry, or extreme environmentalists.

There is no doubt though that , Rudd, himself will have an unenviable task today.

The issue is critical, both for the government and the world.

Some scares do disappear quietly.

The Y2K bug comes to mind.

Climate change isn’t one of them.

There is solid science behind this one.

But the politics are important, too.

The Rudd government’s survival depends on it getting it’s climate change policies right.

The Opposition is showing all the foresight of a crack addict, in this debate.

The Deputy Opposition Leader Julie Bishop is declaring that the coalition will do nothing, in this area, that would damage business or send jobs overseas. while the global economic crisis continues.

The Climate Institute is pressing for a 25 per cent emissions reduction target.

The Greens would like to see 40 per cent.

The Minerals Council, though, wants no more than a 5 per cent target, with compensation for heavy industry.

Business also believes the proposed 2010 start, for an emissions trading scheme, would be premature.

There are very few wins, in this situation, for politicians.

Melbourne’s Bourke Street mall was packed with Christmas shoppers yesterday.

That’s hardly surprising, as Australia’s pensioners have just received a $4 billion bonus from the Federal government.

But retailers have not had a good year.

With interest rates – and petrol prices – both high earlier this year – Australian shoppers simply went on strike.

That, at least, is the assessment of one of the nation’s leading forecasters, Access Economics.

And in predictions, released today, Access warns that there is worse to come.

“There is already a long-lived retail downturn,” Access says, “but it is intensifying.

“Lost confidence means that shoppers are on strike.”
Access warns, too, that retailers who specialise in discretionary items will suffer most.

Its economists note that there will be more tax cuts next year.

“But job growth will slow,” they add.

“And so will wage growth.”

“The outlook will depend considerably on developments in housing prices and unemployment,” they say.

“The first dominates consumers’ wealth.

“And the second dominates their fears,” the economists warn.

The US President George W Bush ducked two shoes that were thrown at him, at a press conference in Bagdhad, Bloomberg reports.

One of the shoes sailed over the President’s head.

They were accompanied by an insult, in Arabic, which, in translation, said “this is a farewell kiss, dog.”

In Arab culture, throwing shoes is a sign of serious disrespect.

The man who threw the shoes was wrestled to the ground.

He was among a group of journalists.

President Bush, whose term now has barely a month to run, declared that he was not hurt in the incident.

“I’m OK,” Bush said.

“All I can report is it is a size 10,” he added.

The President also described the incident as an expression of free speech, in Iraq’s democracy.

He was making a farewell visit to Iraq.

President Bush said American troops there still have more work to do.

“The war is not over,” he said.

But he said it is “decisively on its way to being won.”

$4.7 BILLION NATION BUILDING PACKAGE

The Rudd Government today announced a $4.7 billion nation building package to strengthen the Australian economy and create Australian jobs.

Today’s package is a timely investment in road, rail, and education infrastructure, as well as vital tax changes to help Australian businesses during a global recession.

These national infrastructure projects and the assistance to business will boost the level of GDP and help create up to 32,000 Australian jobs.

There are three key infrastructure elements in today’s package:

• Inject $1.2 billion in new funds into the Australian Rail Track Corporation
• Bring forward $711 million in road spending to this financial year and next and more than double funding for the Black Spots program
• Invest $1.6 billion in critical university and TAFE infrastructure

Today’s package also includes two vital tax changes:

• A 10 per cent temporary investment allowance to encourage capital investment by Australian businesses
• A 20 per cent cut in the next quarterly pay-as-you-go (PAYG) tax instalment for 1.3 million small businesses

Today’s package builds on the Rudd Government’s $10.4 billion Economic Security Strategy, the $6.2 billion New Car Plan, the $300 million local infrastructure funding boost, and the $15.1 billion COAG package.

The Government will make further announcements about nation building projects, funded from the Building Australia Fund, and subject to the Infrastructure Australia priority list, early next year.

 

$1.2 BILLION INVESTMENT IN RAIL INFRASTRUCTURE

Over the next two years, the Rudd Government will inject $1.2 billion into the Australian Rail Track Corporation (ARTC) in 17 projects to improve the reliability and competitiveness of the nation’s rail freight network.

$580 million of today’s investment will be used to expand capacity along the rail corridors connecting Hunter Valley coal mines to the Port of Newcastle.  This $1 billion project will more than double the amount of coal being transported to export markets from 97 to 200 million tonnes a year.

Other Rail projects funded today include:

• $55.8 million for Queensland border to Acacia Ridge track upgrade
• $45.1 million for Sydney to Brisbane line – new, extended and upgraded loops
• $29.7 million for Melbourne to Junee line – passing lanes
• $45 million for Seymour to Wodonga track upgrade
• $91.5 million for Cootamundra to Parkes track upgrade
• $105.7 million for Western Victoria track upgrade
• $50 million for Wodonga Bypass duplication
• $42 million for Cootamundra to Crystal Brook  line – new and extended loops
• $76 million for Melbourne to Adelaide line – extended loops
• $23 million Adelaide to Kalgoorlie line – new and extended loops
• $45 million towards the $90 million Advanced Train Management System (ATMS) trial set to bring train management into the digital age

$711 MILLION INVESTMENT TO BUILD BETTER ROADS

 

The Rudd Government will bring forward $711 million in spending in this year financial year and next to accelerate the commencement of 14 road projects.

Today’s package will also more than double our investment this financial year in the highly successful Black Spots program from $50 million to $110 million.

Other road construction projects bought forward by this package include:

• The NSW Hume Highway – Woomargama Bypass
• The NSW Hume Highway – Tarcutta Bypass
• NSW Pacific Highway – Bulahdelah Bypass
• NSW Pacific Highway – Sexton’s Hill, Banora Point
• QLD Ipswich Motorway – Dinmore to Goodna
• QLD Pacific Motorway – Springwood South to Daisy Hill
• QLD Bruce Highway – Douglas Arterial
• VIC Western Ring Road Upgrade
• VIC Goulburn Valley Highway – Nagambie Bypass
• VIC Western Highway – Anthony’s Cutting
• VIC Princes Highway – Traralgon to Sale
• WA Mandurah Entrance Road
• SA Northern Expressway
• TAS Midland Highway – Brighton Bypass

On top of this road funding the Government will also set aside $195 million for investment in agricultural and social infrastructure to develop irrigated agricultural land around Kununurra following assessment of the projects by the State and Federal Government.

 

$1.6 BILLION TO BUILD BETTER UNIVERSITIES AND TAFES

 

Today’s $1.6 billion investment in building better universities and TAFES will include fast tracking the spending of $580 million into 11 projects focussed on strengthening the research facilities at Australian universities, funded through the Education Investment Fund.

The Government will also fund a one-off $500 million investment to target capital expenditure towards the development of teaching and learning spaces in Australia’s universities. This funding will be delivered through the Teaching and Learning Capital Fund for Higher Education.

Today’s package also delivers a $500 million injection into public skills and training infrastructure through The Teaching and Learning Capital Fund for Vocational Education and Training.

TWO VITAL TAX CHANGES

The Government will invest $1.6 billion in a 10 per cent temporary investment allowance – provided as an additional tax deduction – which will encourage capital investment by Australian businesses. The allowance will be equal to 10 per cent of the cost of an eligible asset.

Today’s package will also help small business by cutting the next quarterly pay-as-you-go (PAYG) instalment for 1.3 million small businesses by 20 per cent. This reduction in the February instalment will provide immediate and much-needed cash flow relief to small businesses over the summer.

The Budget will remain in surplus once this and other packages announced this year are taken into account. This nation building package is another step in the Rudd Government’s long term nation building agenda.

Buses and trains throughout Australia were full of pensioners with parcels late yesterday.

They had been out spending the $4 billion  bonus that Kevin Rudd had given them, to stave off the recession.

But not all were grateful.

“He’ll be spending it on bills, that’s for sure,” one pensioner told another, about the spending plans of a third.

The pre-Christmas bonus, though unexpected, was, however, generally welcomed.

And the Prime Minister declared yesterday that he is prepared to spend more, if necessary.

His mood, in Bendigo, Rudd was sombre.

“The global financial crisis is becoming a crisis for the real economy across the world, which in turn becomes a global employment crisis as well,” he said.

But he said the $10.4 stimulus package, which Australia’s pensioners have been enjoying this week, is just the start.

“This is stage one of the government’s response ot the impact of the global financial crisis on the real economy and jobs,” Rudd said.

“And the government will have further announcements to make in hte future about what needs to be done to further reduce the impact of this global crisis on the Australian economy,” he added.

Unemployment claims hit a 26 year high in the United States overnight.

But the impact of the global economic crisis on Australian jobs has, so far, been relatively light.

The Australian Bureau of Statistics reported yesterday that the nation’s unemployment rate rose to 4.4 per cent in November, from 4.3 per cent in October.

Total employment fell by  15,600 during the month, but the losses were overwhelmingly part time.

In fact, the bureau reported, full time employment rose by 8,800 during the month, while part time employment fell by 24,400.

Overall, the number of Australians looking for full time work rose by 5,900 during the month, while the number looking for part time work rose by 2,000.

The work force participation rate is always worth watching, particularly when the economy is in transition, as it is now.

And that fell by 0.2 percentage points last month, to 65.1 per cent.

Even so, a participation rate, at that level, still suggests a reasonably strong economy.

So it should not be too much of a surprise to find that another study, this time from the Roy Morgan organisation, has confirmed that consumer confidence is still holding up reasonably well in Australia, despite the global economic crisis.

Indeed, that study found that a surprising 40 per cent of Australians believe it is a good time now to buy a major household item.

A Queensland property developer has been sentenced to eight years’ jail on fraud charges.

Darryl John Loane of the Gold Coast will serve a minimum of 15 months.

The charges against him were brought by the Australian Securities and Investment Commission.

Loane, who is 41, pleaded guilty in September to a charge of dishonestly obtaining a $4.7 million loan from Lawloan Mortgages in 1999.

This loan had been taken out to finance the development of the Cove Resort Pty. Ltd. in the Whitsundays.

Loane was director of the company at the time.

Loane originally agreed to purchase the property for $15 million in cash.  But he later signed a supplementary agreement reducing the purchase price to $7.5 million.  Under the agreement, 10 per cent of that was to be paid in cash and the balance in trade dollars.

To secured the finance, Loane sought a valuation from Stanton Hillier Parker.  ASIC alleged that he incorrectly advised that firm that he had paid $15 million in cash for the property.

“This consequently caused the valuers to provide an inflated valuation, ASIC said.

Loane had then used that valuation to obtain a $4.7 million loan.

So what is really happening on the world’s share markets?

Well, the Dow Jones index was up 13.7 points, shortly before 3pm in New York today.

But, hey, that’s not really an answer, is it?

Well, HBOS economist, Alan Langford, has tried for a better one.

“Equity markets are bravely searching for a floor,” he says.

“At least a temporary one.”

But the markets are still, clearly, shaky.

Once again, Mr Langford has an explanation.

He says that’s because world markets are still just “one high profile bankruptcy away from the next steep slide in prices.”
And there has certainly been no shortage of high profile bankruptcies, lately.

Mr Langford says that has produced intra-day volatility, as well as roller coaster rides over time.

“The All Ords have retreated from their recent peaks,” he says.

But they “remain elevated.”

Perhaps we should all just be grateful for that, for a while at least.

Australia’s ludicrously complicated tax system also:-

• Relies so heavily on corporate tax that it hinders capital mobility and international competitiveness
• Taxes savings too heavily and
• Gives capital unfair concessions.

Perhaps all of this can’t be true.

And there may be contradictions in there, somewhere.

But these views have all been put, quite forcefully, to the review of Australia’s taxation system that Australia’s Treasury chief, Ken Henry is conducting.

They were exposed in an interim paper that the inquiry has just released.

The Tax Act, itself, runs to 6,000 pages.

And your local milkman – and pizza chef – are expected to understand it.

Or, at least, to hire some-one who does.

So far, some 440 organisations and individuals have made submissions.

But Mr Henry wants to be sure that he gets his recommendations right.

After all, chances to overhaul the whole, shaky and nasty tax system don’t come every day.

And Ken wants your help.

So click on http://www.taxreview.treasury.gov.au  and do a little homework.

Then, tell Ken and his friends what you think.

Don’t be afraid.

They actually want you to do so.

And you would be doing yourself a favour.