by Alan Thornhill
Australia’s department and clothing stores were hit hard by a downturn in their trade during February.
The Bureau of Statistics said both saw their turnover fall by 3.9 per cent during the month, on seasonally adjusted figures.
That was more than twice the overall fall – of 1.4 per cent – in Australia’s overall retail trade in February.
However this followed a rise of 1.1 per cent in January.
That result was boosted by the traditional post Christmas sales.
Cafes, restaurants and take away food stores fared better in February, increasing their sales by an average of 1.8 per cent.
These figures, too, are seasonally adjusted.
On raw figures, the sales of chain stores and other large retailers plunged by 15.1 per cent in February.
Smaller retailers saw their sales sink by 6.2 per cent during the month, on the same basis
The gradual withdrawal of the Federal government’s stimulus measures contributed to the set back many Australian retailers experienced in February.
The Bureau also reported that home building approvals fell by 3.3 per cent in February, on seasonally adjusted estimates.
However they remained 34.2 per cent above those of February 2009.
by Alan Thornhill
The “urban congestion” that Kevin Rudd says is “clogging up” Australia’s cities is unlikely to ease in the immediate future.
In fact, new figures suggest that it is likely to get worse.
The Australian Bureau of Statistics is reporting, for example, that the population of Australia’s capital cities grew faster, in 2008-09, than they had on average over the previous five years.
Perth’s recorded the highest population growth of any capital, at 3.2 per cent.
And Brisbane saw its population pass the 2 million mark, during the year.
The average, for all Australian capitals, was 2.3 per cent.
Facilities in Perth’s inner suburbs were particularly stretched.
Their population exploded by 12.8 per cent over the year.
This was the highest growth recorded anywhere in Australia.
The difference between city and country growth rates is also at a 10 year high.
The population growth rate, outside Australia’s capitals, was just 1.9 per cent.
Western Australia, though, also recorded the highest population growth rates outside the nation’s capital cities.
The seaside town of Mandurah, for example, chalked up a 5.1 per cent rise in its population, over the year.
And Capel, in the State’s south west, saw a 6 per cent rise.
The Treasurer, Wayne Swan, told a growth management summit in Brisbane, that the population of that city is expected to double, over the next 40 years.
He said, too, that the ageing of Australia’s population would complicate population growth issues, over that time.
However, Mr Swan is still optimistic.
“Personally, I have no doubt that a nation which has defied the worst global recession since the Great Depression is capabable of harnessing the benefit of a growing population, while intelligently managing the stresses that it brings,” he said.
Australia’s builders, though, warned that the nation is not building nearly enough housing to accommodate its rapidly growing population.
by Alan Thornhill
Australia’s birth rate is likely to rise under a Coalition government, Tony Abbott says.
The Opposition Leader made the claim today, in the first of three major speeches, setting out the “values and approaches” that he intends to take to the Federal election due later this year.
“There’s considerable evidence that decent parental leave can encourage women to have more children and raise Australia’s birthrate above the current 1.9,” Mr Abbott said.
“ A 2009 study in The Quarterly Journal of Economics suggested women might be 15 per cent more likely to have a second child when maternity leave provisions were strengthened,” he added.
Mr Abbott said, too, that the controversial maternity leave scheme, that he proposed recently, would meet this need.
He also reminded his audience, at a Leaders” Forum in Sydney, that it was the founder of the Liberal Party, Sir Robert Menzies, who had introduced child endowment in Australia.
Mr Abbott said the paid maternity leave scheme, that he is proposing, would be fully funded.
“Because all benefits have to be paid for, this will be funded by a tax levy of up to 1.7 per cent on companies’ taxable income over $5 million a year,” he said.
He also promised that a Coalition government government would curb spending and restore the Federal budget to surplus,
Mr Abbott said the Rudd government had spent recklessly and needlessly in the wake of the global economic crisis.
He also promised tax cuts.
“Once Labor’s debt has been repaid and personal income taxes have been reduced, it should be possible to reduce company tax,” Mr Abbott said.
So even the levy, to fund his paid maternity leave scheme, might not be permanent.
“ If so, the levy would be only a temporary increase in tax for the 3200 companies with taxable incomes over $5 million a year,” Mr Abbott said.
by Alan Thornhill
Rising living standards in Australia are threatened by the country’s relatively poor productivity performance, according to the Prime Minister Kevin Rudd.
“Between 1994 and 1999, Australia’s productivity growth rate was second among OECD countries,” Mr Rudd told economists in Melbourne.
But it had since slowed since then and Australia now occupies 14th place.
“If we do not act now to lift Australia’s productivity growth rate, the nation’s average living standards will decline,” Mr Rudd warned.
He said poor productivity is reflected in Australia’s slow and expensive access to the internet, clogged cities, inefficient ports, poor roads and outdated railways.
The Prime Minister said his government would always pursue the twin goals of economic stability and long term growth.
That’s why 65 per cent of its stimulus spending, in the wake of the global economic crisis, had been allocated to investment in national infrastructure.
But there were still real challenges ahead.
With Australia’s population ageing rapidly, workforce participation rates would fall in the years ahead.
In 1970, there were 7.5 people of working age to support every person over the age of 65, Mr Rudd said.
“Today there are five.
‘By 2050 there will be just 2.7 people of working age to pay taxes for every person over the age of 65.”
“These are dramatic changes,” Mr Rudd said.
He warned, too, that health reform is not just a policy imperative, in these circumstances.
“Health reform, equally, is an economic policy imperative.”
Mr Rudd said his government is working to produce both an economic and a skills revolution, to help meet these challenges.
“Without productivity growth, we do not have sustainable,long term economic growth,” Mr Rudd warned.
And Australia would then have no long term basis for improvements in its living standards.
by Alan Thornhill
Australia’s job market still a little too slow for you?
There may be some good news, if that is so.
Senior officials in Papua New Guinea estimate that their country will need 10,000 new workers in the near future.
That’s right. Papua New Guinea.
Our northern neighbnur is about to become a Pacific powerhouse.
A $US15 billion deal, that the country’s Prime Minister, Michael Somare, has just signed with the energy giant Exxon Mobil is expected to double, perhaps even quadruple this still young nation’s gross domestic product.
The project is expected to produce more than 6 million tonnes of liquefied natural gas from the PNG Highlands for export, mostly to Asia, each year.
This would should transform PNG from a least developed country to that of a middle income nation.
PNG officials, though, concede that they will need help to achieve that.
Old colonials, though, need not apply. The officials sai they will be looking for people with the sensitivity and good sense to respect local cultures.
There are risks, of course.
The long closed Bougainville mine, once the biggest gold and copper mine in the world, still serves as a salutary lesson.
However PNG’s veteran’s Prime Minister, Michael Somare, is determined to ensure that his government will not ignore the wishes of local villagers, in the new project area now, as it did in Bougainville in the 1980s
That, ultimately, is what led to the trouble on Bougainville, back then.
Mr Somare knows the dangers, only too well.
“Our people can be excitable,” he once said.
The arrival of the new project could not have been better timed, for PNG.
The giant Ok Tedi copper mine, in PNG’s Western Province, is approaching the later stages of its life.
One estimate says it might close as early as 2013.
Ok Tedi, of course, has been a mainstay of the PNG economy for many years not only by providing valuable jobs to its 2,000 strong, mostly Melanesian, workforce, but also through the taxes it pays to the national government.
Taking one of those 10,000 jobs, or one of the business opportunities associated with Papua New Guinea’s new mineral boom, would, of course, be a radical step.
It would require careful thought. Your correspondent, though, once spent two years working in the PNG capital, Port Moresby and another 20 months, much later, training young workers in the Solomon Islands capital of Honiara.
Those were great times.
by Alan Thornhill
It is still too early to say whether recent indications suggest that Australia’s residential property market is cooling.
That’s the conclusion the Reserve Bank’s Assistant Governor (Economic) Philip Lowe presented to a conference in Sydney yesterday.
Mr Lowe said Australia’s economic recovery generally presented a strong picture.
However, there were “a few contrary signs.” he added.
“Total housing loan approvals declined in October, November, December and January,” he said.
And the declines had been broader than than just first home buyers retreating after the scaling back of the Federal government’s stimulatory grants.
“Some lenders have also tightened terms and conditions,” Mr Lowe said.
They had done that by further reducing maximum loan to value ratios.
“…in the lower priced suburbs of capital cities, housing prices have broadly moved sideways since October,” Mr Lowe said.
But this had followed “earlier significant rises.”
“Looking forward, it is too early to tell whether these contrary signs indicate that some cooling in the property market is in prospect,” Mr Lowe said.
“It is, however, important to avoid significant imbalances developing in the property market,” he added.
Mr Lowe said that applied to the supply-demand situation, pricing and “financing dynamics.”
“The pick up in dwelling construction that is occurring will be helpful here,” Mr Lowe said.
But he warned that “further increases are likely to be needed over the medium term.”
More at www.rba.gov.au
by Alan Thornhill
Australian families have had wild rides – financially – in the wake of the global economic crisis.
This is clearly illustrated in figures that the Reserve Bank has just released, as part of its Financial Stability Review.
Mostly, though, we have emerged from the turmoil surprisingly well.
The bank notes, for example, that the net worth of a typical Australian family at the end of last year, was $610,000.
That, it adds, is “only a little below the 2007 peak.”
This relatively good performance was, undoubtedly, due to the Australian habit of investing in the family home, rather than the stock market.
Share market investors, of course, were hit hard by the stock market crash.
However school leavers and recent retirees have been hit very hard, too.
Even the general unemployment rate, for recent school leavers, is currently 19 per cent.
That’s almost four times the rate for other Australians.
There are also many places, like the up-market Perth suburb of Wembley, where the unemployment rate for school leavers is above 30 per cent.
Recent retirees were shocked, too, when they learnt that their superannuation payments would be much smaller than they had confidently expected.
The bank said, though, that on balance real net worth per household rose by 11 per cent last year.
The price of dwellings had risen by 10 per cent last year, despite the crisis.
It said this made up about 60 per cent of Australian household assets.
The Reserve Bank noted, though, that real wages had fallen by 2.6 per cent last year.
That happened as thousands of full time jobs were converted to part time positions, as a result of the crisis.
However that fall was more than offset by lower interest rates and the Federal government’s stimulatory packages.
“As a result, total disposable income per household increased by 3.5 per cent, in real terms,” the Reserve Bank said.
by Alan Thornhill
Australia has never been short of financial scams, some of them very sophisticated.
Whether it be doubtful offers from Nigeria, or plausible local Ponzi schemes, the nation’s investors have very good reason to be cautious.
They will, however, soon have a new high tech friend, called IMSS.
That’s short for the Integrated Market Surveillance System,which should be operating by July 1.
The Australian Securities and Investment Commission, ASIC, has bought the new system, which it says will analyse activities and trends in market data.
Operating in that way, the new system is said to be capable of identifying suspicious trading activity and raising alerts.
This follows the Federal government’s decision last year to transfer surveillance of Australia’s financial markets from the Australian Securities Exchange to ASIC.
“ASIC is well advanced in our planning for the transfer of market supervision powers,” ASIC Commissioner Belinda Gibson said.
“The procurement of lthe IMSS is an important milestone in the transition,” Ms Gibson added.
Your new, high tech friend won’t be working alone, though.
It will support a new surveillance team that ASIC has built up from its own staff, old hands from the ASX and “talent from the market,” Ms Gibson said.
“ASIC’s objective is to ensure a seamless transition of the supervision responsibilities with minimal disruption to participants,” she added.
ASIC bought the IMSS system from SMARTS Market Surveillance Pty. Ltd.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Wednesday June 19
The Dow Jones index rose 138.38 points to 15,318.20
Rudd supporter Joel Fitzgibbon says Labor “Leadership is no longer an issue, it’s all behind us.”
Former Tasmanian Federal MP, Michael Hodgman, affectionately known as “the mouth from the south” dies at 74
US and the Taliban plan peace talks
Holden chief asks his Adelaide workforce to take a pay cut to help its assembly plant remain viable.
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