by Alan Thornhill
Qantas is now expected to start lifting passengers again from 3pm today, but authorities believe it won’t be able to restore full services until Wednesday.
Meanwhile its rival, Virgin, will be providing 3,000 extra seats today, to help clear passenger backlogs.
The Prime Minister, Julia Gillard, described the action of Qantas chief, Alan Joyce, who grounded the airline on Saturday as “extreme” and said her government had acted as quickly as it could to restore the airline’s services.
The government won an order from Fair Work Australia, which Ms Gillard described as “the independent umpire” for a cessation of all industrial action, including the lockout.
The Opposition Leader, Tony Abbott, has accused the government of failing to intervene early enough, in the dispute.
Qantas has said earlier that it would resume services as soon as possible, but there were no passenger flights this morning.
The airline had to wait for clearances from the Civil Aviation Safety Authority.
The lockout left thousands of passengers stranded – and many Federal members wondering if they could get to Canberra, for vital Spring sittings this week.
It also disrupted the travel plans of thousands of Australians, including many who wanted tickets to Melbourne, for the Melbourne Cup tomorrow.
The Qantas lockout followed the airline’s announcement, back in August, that it would cut at least 1,000 jobs.
Efforts to get Qantas planes back into the air resumed, before Fair Work Australia, at 2pm Sunday.
FWA issued its cessation order twelve hours later.
The dispute has further damaged business confidence, particularly in the small to medium enterprise sector, which depends heavily on air transport.
by Alan Thornhill
Twice in two days, Wayne Swan has warned Australia’s banks about their behaviour.
He did so, most recently, when a reporter asked him what the National Australia Bank’s record profit of $5.21 billion meant.
“What it means is that there is absolutely no excuse for any bank not to pass on any Reserve Bank rate cut,” Mr Swan said.
He had made a similar remark on Wednesday, when the Australian Bureau of Statistics reported that the nation’s underlying inflation rate had risen by a mere 0.3 per cent, in the September quarter.
That dramatically reduced the odds on a possible rate cut, on Melbourne Cup day next Tuesday, when the Reserve Bank board next meets, to review interest rate settings.
Why, though, is the Treasurer prepared to risk being seen as heavy handed, with these repeated warnings?
The banks, essentially, have themselves to blame for that.
When the Reserve Bank last raised interest rates, late last year, one big bank led others, by doubling the rate rise, from the official 25 basis points, to 50.
That action, which doubled that bank’s bite on its clients, effectively loaded almost $100 a month, to the repayments of thousands of its home loan customers.
That bank declared, back then, that rising costs had made its unpopular action necessary.
But its action damaged consumer confidence.
That action was also badly timed, as several key sectors including retail trade and the building industry, were weak.
The government was not amused.
It is still far from clear, though, what the government could do, if the banks defied Mr Swan and and refused to pass on any rate cut, that the Reserve Bank might deliver.
There could be more “jawboning,” perhaps.
It would take a brave banker, though, to risk offending the government in that way.
Although they have worked hard on their images, over recent years,Australia’s banks are still not well liked institutions.
They are not trusted, either, to behave well in bad or difficult times.
Public suspicions of the banks in Australia go back a long way.
Right back to the 1890s Depression, in fact.
Two lines, from a popular poem of the time, reflect those hard feelings.
“There isn’t much to choose,
“Tween the bankers and the screws.”
by Alan Thornhill
The odds on a rate cut next Tuesday – Melbourne Cup day – shortened dramatically today.
That happened when the Australian Bureau of Statistics reported that the nation’s underlying inflation rate rose by just 0.3 per cent in the September quarter to 2.3 per cent.
The Reserve Bank, whose board meets next Tuesday to review rates, aims to keep Australia’s inflation rate – on this measure – between 2 and 3 per cent over the course of a business cycle.
Economists have predicted that any quarterly rise, at or below 0.5 per cent, might well lead to an early rate cut.
The Reserve Bank, itself, has also been hinting that there could be a rate cut soon.
However, it is warning, too, that the vast amount of money, now earmarked for mining investment, must be watched closely.
The Bureau also reported today that its Consumer Price Index rose by 0.6 per cent in the September quarter, to 3.5 per cent.
Even these figures, though, represent an easing trend.
The same index rose by 0.9 per cent in the June quarter, to 3.6 per cent.
Some easing had been expected, as the impact of the Queensland floods, early this year, slowly washed out of the system.
Ominously, though, the Bureau also reported that electricity prices had risen by 7.8 per cent in the latest quarter, while the cost of overseas travel jumped by 5.1 per cent.
by Alan Thornhill
Strange as it may seem, Australians often leave quite a lot of money lying idle in unclaimed accounts.
Indeed, the authorities tell us that the pool of unclaimed money has now risen to a record of $636 million.
That is more than $28 million above the comparable figure for than 2010.
In fact, the Australian Securities and Investments Commission (ASIC) tells us that an additional 157,431 parcels of money have turned up this year.
The good news is that this money has been added to the ASIC database.
So, if any of it is yours, you can get it back.
That will be hard, though, won’t it?
A senior ASIC official, Delia Rickard, assures us that the process is “quick and easy.”
“So even if you’ve already searched, you should look again,” Ms Rickard says.
“You can search for yourself and for family and friends,” she adds.
“The average parcel of money is $652.
“And there are some huge amounts of money waiting to be claimed.
“Last year, Australians recovered $62 million,” Ms Rickard said.
So who can claim?
ASIC says you may have unclaimed money if you:-
• haven’t made a transaction on your cheque or savings account for over seven years
• stopped making payments on a life insurance policy
• moved without leaving a forwarding address
• have noticed that regular dividend or interest cheques have stopped coming, or
• were executor of a deceased estate.
So what do you do?
Log into ASIC’s free online database at www.moneysmart.gov.au and follow the link to unclaimed money, and type in your name.
If you find some money that you think might be yours, you’ll need to prove the money belongs to you or that you are the beneficiary.
Information on how to make a claim is also available on the MoneySmart website.
by Alan Thornhill
And old rivalry has appeared again, as European leaders met, to hammer out a resolution to Europe’s debt crisis.
The French President, Nicolas Sarkozy, declared that a crucial meeting, to be held in Brussels on Wednesday, should be restricted to nations which use the Euro.
He sharply criticised the British Prime Minister, David Cameron, whose country has persisted with its own currency, instead.
Mr Sarkozy was quoted as telling Mr Cameron: “We are sick of you criticising us and telling us what to do.”
But the French had no more success with Mr Sarkozy’s argument, than their rugby team had in its World Cup clash with the All Blacks in New Zealand, at the weekend.
Mr Cameron had said all EU leaders should be present to debate issues which could affect them in one way or another.
On Sunday morning the leaders of all the European Union’s 27 members held talks about the Greek debt crisis, recapitalising banks, and bolstering the bailout fund.
This was followed in the afternoon by a separate meeting of the 17 nations that use the euro.
But all EU leaders are now set to attend the final meeting on Wednesday, which was originally meant to be attended by only the 17 countries that use the euro.
Investors – and governments – throughout the world will be watching Wednesday’s meeting very closely.
Australia’s Treasurer, Wayne Swan, said:”…it is true that they have been mucking around for 18 months.”
But he added: “The time for half measures is over.”
Mr Swan warned of “global” consequences, if Wednesday‘s talks fail.
“…we do need to see a comprehensive set of plans,” he said.
Mr Swan said he did fear the fallout, if that did not happen.
“…We will see a protracted recession in Europe,” he warned.
Mr Swan said the implications that would have for the rest of the global economy are “obvious.”
by Alan Thornhill
The price of bananas is down.
And interest rates might well follow.
Fresh inflation figures – to be published on Wednesday – could be the key.
At 3.6 per cent, Australia’s headline inflation rate is already above the Reserve Bank’s target range of 2-3 per cent, over the course of a business cycle.
But one off factors – like high banana prices after the Queensland floods – inflated that figure.
Besides, it’s the underlying inflation rate – not the headline result – that the bank’s board looks at, when it sets interest rates.
That’s just 2.2 per cent, now.
With big sectors of the economy – like the retail trade and building – still depressed, the Reserve Bank has already been hinting that interest rates could fall soon.
And with its Board meeting to review rates on Melbourne Cup day – that is Tuesday next week – a rate cut is a fair bet, if this week’s inflation figures are good.
There are offsetting factors, though.
The biggest is the huge amount of resource investment, sitting in the pipeline.
A survey, by the Australian Industry Group, reflects this.
It shows that engineering construction is expected to rise by 13 per cent this financial year and by 14 per cent, in the following 12 months.
Sudden boosts, like that, could have an inflationary impact.
The Federal Treasurer, Wayne Swan, also recognises difficulties, as well as strengths.
He says” business investment is surging, but not every region is growing strongly.”
Mr Swan notes too that while incomes are rising, many Australian families struggle to balance their budgets.
“Unemployment is low, but some families have never had a breadwinner,” Mr Swan adds.
Economists agree that the last rate rise, late last year, did much to damage consumer confidence in Australia.
Continuing instability in global markets and rampant debt problems in Europe haven’t helped on that front, either.
A rate cut, on Cup day, could help restore that confidence.
by Alan Thornhill
Social security payments – like Newstart – must be raised urgently to prevent more Australians sliding into poverty, a new report says.
The report, prepared by the Australian Council of Social Services, notes that this was recommended, also, in a report the Federal government asked the former Treasury Secretary, Ken Henry, to do.
The Council said the Australian Bureau of Statistics, too, had recognised that the gap between the rich and the poor in Australia is growing.
“The evidence is mounting of a growing divide with more people hitting hard times and falling into poverty,” ACOSS CEO, Dr Cassandra Goldie said.
“There is widespread consensus that the paltry payment levels for allowances such as Newstart, Parenting Payment Single, and Youth Allowance is one of the principal reasons for increasing hardship and poverty in our rich country,” she said.
” This was highlighted at the recent Tax Forum in Canberra where participants almost unanimously agreed that the Newstart Allowance of $35 a day is simply not enough to live on,” Dr Goldie added.
But the evidence did not end there.
” Perhaps the most stark is recent Australian Bureau of Statistics data showing that the wealthiest 20 per cent of households in Australia increased their average net worth by 15 per cent in the past 5 years compared to just 4 per cent by the poorest 20 per cent,” Dr Goldie said.
“We know that approximately 2.2 million people or 11 per cenrt of Australians lived in poverty in 2006,” she added.
Dr Goldie said this is the latest date for which statistics are available.
That was up from 10 per cent in 2004 and 8 per cent in 1994.
Dr Goldie said community groups working with the most disadvantaged – and people struggling on low incomes – have been consistently reporting a worsening situation.
by Alan Thornhill
Australians are increasingly leaving their cars at home and catching a bus or train to work.
That way they avoid high fuel costs, traffic snarls and parking headaches.
This trend is confirmed in a new report called the State of Australian Cities 2011.
The report, just published by the Federal government, also shows that Australians are walking and cycling more.
Indeed, we are now buying more bikes than cars.
We bought more than 11.5 million bicycles in the ten years to 2010, but only 9.5 million cars.
The report also confirms that Australian cities need more homes.
“The gap between housing supply and demand is general across Australia – a short fall of 200,000 new homes.
“But is particularly severe in Sydney,” it says.
The senior Federal Minister who released the report, Anthony Albanese, said it gives Australians a better understanding of how their cities work.
Mr Albanese said the Federal government had committed $7.3 billion to modernise and extend Australia’s capital city rail networks.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Friday December 13
The Dow Jones index falls 105 points to 15,739.
The $A drops to US 89.39US cents shortly after 8am, Sydney time
The Senate rises for the year, without passing government bills to abolish the carbon tax
Car industry workers’ plight to be high on the agenda, when the Prime Minister meets State premiers today
Australia’s unemployment rate rises slightly to 5.8 per cent in November 2013 (seasonally adjusted):ABS
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