Retail trade up, but building approvals still weak

Heavy discounting helped Australia’s retailers post another trend rise – of 0.3 per cent – in their sales during June.

The Australian Bureau of Statistics said this followed rises of 0.2 per cent in both April and May, on a similar basis.

Food stores, cafes restaurants  and take away food stores led the way, with clothing and shoe shops also chalking up trend gains.

On seasonally adjusted figures, total sales rose by 0.2 per cent in June.

Australia’s builders are facing slow business though.

The Bureau also reported that home building approvals fell by a seasonally adjusted 3.3 per cent in June, although they were still 13.2 per cent higher than those of June last year.

The industry blames the six rapid rate rises, ordered by the Reserve Bank, for much of that slow demand, along with the phasing out of Federal government stimulus measures, which brought forward some orders for new homes, over the past year.

The bank will announce later today whether it will increase interest rates, yet again.

The  previously slow pace of home building approvals had already been causing some concern, as the nation  needs at least 150,000 more homes, to cope with population trends.

Related stories:

1. Retail trade up – but so is our import bill
2. Retail sales – and building approvals – fall in February

PM offers to extend youth support payments

Families  with older teenagers would get extra family support payments, under a plan the Prime Minister has just announced.

Julia Gillard said that if she is re-elected on August 21, that could be worth up to $4,000 a year for each teenager.

Addressing senior students at the McCarthy Catholic College at Emu Plains near Penrith, Ms Gillard said the plan would help families give their children better educations, either at school or in vocational training.

She described the proposed changes as “an investment.”

“…there’s no better investment we can be making as a nation than investing in you and your future,” Ms Gillard told her young audience.

She said the present Youth Support arrangements are based on an assumption that children leave school and enter the work force at 16.

The proposed changes follow recommendations made in the Henry Review of Australia’s Future Tax System.

Ms Gillard said that from January1,  2012, a re-elected  Labor government would increase the maximum payment rate of Family Tax Benefit Part A by more than $150 per fortnight for teenagers aged 16 to 18 years who are in school or an equivalent vocational qualification.

She said the families of  about 650,000 teenagers who will be turning 16 over the next five years will benefit.

Under the plan the new maximum rate of Family Tax Benefit Part A for families with teenagers aged 16 to 18 years would be $208 per fortnight.

That would lead to total assistance of $6,161 per year.

Ms Gillard said that at present the maximum rate of Family Tax Benefit Part A drops from $208 per fortnight to $51 per fortnight when a child turns 16.

Rent Assistance also stops when a child turns 16.

Ms Gillard said this often means that  teenagers have to leave school early, because  their families are not able to support them in full-time study or training.

Related stories:

1. Stimulus payments in the mail
2. Government splashes cash to support jobs

Reserve bank to review rates tomorrow

The old rule for reporters goes like this:the closer the event the more cautious the prediction.

Even so, a rate rise, from the Reserve Bank board’s meeting tomorrow would be a major surprise.

As the recent Consumer Price Index figures showed, heavy discounting has generally kept price rises in check over recent months.

With Australia’s underlying inflation rate now running at 2.7 per cent. another rate rise this month does seem quite unlikely.

The Reserve Bank makes no secret of the fact that it tries to keep Australia’s underlying inflation rate between 2 and 3 per cent, over the course of a business cycle.

Even property prices seem to be softening.

A recent survey showed that most Australians expect capital city home price movements to be relatively subdued over the coming year.

With Wall Street share prices flat, late last week, Australians might well be looking for some signs of likely reward in other places.

This week’s figures, from the Australian Bureau of Statistics, migh be a good place to start that search.

The Bureau will be releasing both its Retail Trade and Building Approval figures for June tomorrow.

These figures should tell us a great deal, both about the recent health of Australia’s retail sector and how strong the nation’s home building industry is likely to be over the months ahead.

On Wednesday, the bureau will publish is international trade figures for June.

It also plans to release new data both on retail prices in Australia’s capital cities and its house price indexes for the nation’s State and Territory capitals.

Both will be for June.

The Reserve Bank has already raised interest rates no less than six times, in its current round of rate rises.

Although the bank now concedes that the nation’s interests are, once again, close to normal levels, most economists believe there will be at least one – and possibly two – more rises in the current round.

However, most concede that the next rate rise is likely to be either later this year, or early next year.

Related stories:

1. Room for “flexibility” in raising rates:Reserve Bank
2. Why the Reserve Bank didn’t raise rates

A bizarre poll

The Federal election campaign, now entering its middle week, is the most bizarre your correspondent has covered, in  four decades of reporting politics.

For a start, the Labor party is asking voters back Julia Gillard – its second choice as Prime Minister – against Tony Abbott -  the Liberal party’s third choice.

Even though Ms Gillard failed to learn from Kevin Rudd’s biggest mistake.

Mr Rudd underestimated public support for an emissions trading scheme.

That cost him is job.

Julia Gillard, too, said she would not introduce an emissions trading scheme before 2013.

And her support plummeted, too.

If you think that is overstating the case, take a look at this.

A series of polls conducted by the  Centre for the Study of Choice, at Sydney’s University of Technology, showed that 80 per cent of Australians want an emissions trading scheme, that starts as soon as possible.

Jordan Louviere, who heads the, Centre, told the ABC, just last week, that “One hundred per cent of the 10 most popular plans (for an ETS) make large reductions in emissions now.”

No-one should be too surprised at that strong public support for an emissions trading scheme.

After  all Mr Rudd, himself, identified reducing carbon emissions as the greatest “moral challenge” the world now faces.

Kevin Rudd lost credibility, when he said he would not proceed with an ETS in the government’s next term, if re-elected.

Ms Gillard  said, essentially, the same thing.

Her popularity  fell far enough to put Labor in a losing position in the polls.

In fact, a Neilsen poll, published in Fairfax newspapers, at the weekend gave  the Liberals  52-48  lead.

It was the first to put the opposition in a winning position.

Tony Abbott responded oddly,  insisting that he is still the “underdog” in the campaign, although he had been telling reporters, a week or so back, when he was behind in the polls, that “I think I will win.”

The charming, but erratic, Opposition Leader is a man of unresolved contradictions.

The latest, perhaps, is his promise to give business “a period of stability” if he wins the August 21 elections, even though this virtual guarantee of inaction doesn’t square, at all, with his basic campaign slogan offering “real action.”

Mr Abbott is also promising to oppose all “great big new taxes” except, perhaps, the one he plans to impose on Australian companies, to fund a paid parental leave scheme.

But to top it all, in this campaign, Kevin Rudd has created a diversion, by having himself admitted to hospital, to have his gall bladder removed.  Although Mr Rudd could be bad tempered, no one has ever called him malignant.

That’s a pity, because it might have reminded us of what a colleague said, after a British politician, Randolph Churchill, after he had a lung removed, although it later turned out not to be malignant.

“What a triumph of modern medicine,”  this colleague said,”to find the only part of Randolph that isn’t malignant – and remove it.”

Related stories:

1. Some good news, at last
2. Get the kids to school or lose benefits:Rudd