by Alan Thornhill
The British Prime Minister, David Cameron, is thinking of stepping down in the wake of his defeat in a campaign to keep his country in the European Union.
Although the count in the referendum on this issue is not yet complete, experts at the BBC were predicting, early this afternoon Australian time, that Britain would see a 52-48 per cent vote in favour of Britain leaving the EU, which it joined 43 years ago.
The vote in favour of leaving was unexpectedly high, particularly in Britain’s north.
The BBC said 15,580,755 Britons had voted to leave the EU at that point, while just 14,439,820 had voted to stay.
The knock-on effects were immediate.
Australian shares were 3.57 per cent down at 2.15 PM AEST, while the $A was then hovering at 73.44US cents, a 3.84 per cent fall on the day.
And confusion reigned on global financial markets.
Mr Cameron had campaigned hard to keep Britain in the European Union.
So his apparent failure to do so is both a big personal and political set back for him.
The British pound dropped to levels not seen in 25 years, as news of the referendum result spread.
Austerity measures, adopted by his government, are believed to have made a big contribution to the result of the referendum.
It has lessons, too, for Australia which is to hold a Federal election on July 2.
Perhaps, though, the main one is that there is, in the end, only one poll that really counts.
For opinion polls, published just one day before the referendum in Britain, suggested
that Mr Cameron’s forces would prevail.
by Alan Thornhill
The $A tumbled today, as the vote to leave the EU came in higher than expected.
However, a short time ago, the BBC still had the vote to stay higher than the vote to leave.
At that point, 2,933,388 Britons had voted to stay in the EU.
But 2,841,709 had voted to leave.
The $A fell by 1.35 per cent, to 75.35 US cents in the confusion that followed the unexpectedly high vote to leave.
That vote is seen, in large part, as a product of British impatience with calls for austerity.
But British Conservatives are being urged today to maintain their faith in the British Prime Minister, David Cameron, who campaigned hard for the no vote, that would keep Britain in the EU.
by Alan Thornhill
Labor says it is planning to ensure that temporary workers are not exploited and that local workers get priority.
In a statement early today, the opposition leader, Bill Shorten, said: “Australians have rightly been appalled by the systematic exploitation of workers on temporary work visas.”
He said thousands of employees at 7-Eleven stores had been exploited through the underpayment of more than $100 million in wages.”
The issue of temporary work visas has already become controversial in the current election campaign, with the National Party urging the government to clarify issues with 457 visas.
These allow farmers to employ visiting students, on pay rates they consider affordable.
Mr Shorten said: “Labor believes the temporary work visa system must have robust safeguards in place to protect all workers.”
It must not be used as a back door avenue to source cheap labour.
“This means that we need policies and systems in place that support a growing economy, prioritise Australian workers, allow industry to access the skills they need, and importantly, ensure and importantly, ensure workers are not disadvantaged or exploited,” Mr Shorten said.
He said Labor’s policies would meet these tests.
by Alan Thornhill
The Australian economy is likely to see brighter times in the months ahead.
This is suggested by a Leading Index that was published today.
Senior Westpac economist, Matthew Hassan said that between December and May there had been a stabilisation in both equity markets and dwelling approvals.
He said the bank’s Leading Index rose by 0.2 points in May to 97.
However Mr Hassan said those improvements had been offset by both falls in both consumer expectations between December and May and aggregate hours worked.
“The Reserve Bank Board next meets on July 5,” Mr Hassan said.
The key considerations are still around the outlook for inflation, with the June quarter inflation report due on July 27.
“We expect no change in the cash rate and no substantive changes in the Governor’s statement accompanying the decision.
“However, it remains our assessment that the June quarter inflation read will reconfirm to the Board that, on a ‘no policy change’ basis, inflation is unlikely to return to the Bank’s 2-3 per cent target over the forecast horizon.
“And… another 25 basis point cut is necessary with that cut being delivered at the Board’s meeting on August 2”, Mr Hassan said.
by Alan Thornhill
There has been a sceptical response to the Federal government’s offer to spend $1 billion to save the Great Barrier Reef.
The Prime Minister, Malcolm Turnbull, and his Environment Minister, Greg Hunt, made the offer official today, with a joint announcement in Queensland.
Mr Turnbull said the reef had long been “…a great passion for both Greg Hunt and myself.
“As one of his predecessors as Environment Minister I took a great interest in the Great Barrier Reef years ago and always have done,” the Prime Minister said.
“Now what we are announcing today is the largest single investment in protecting the reef in particular in addressing these land side problems of run off,” he added.
“This is to allocate a $1 billion fund from the Clean Energy Finance Corporation which will be available for projects that will both reduce emissions, use clean energy and, of course, protect the ree,” Mr Turnbull said.
But Labor’s environment spokesman, Mark Butler, was not convinced.
“Malcolm Turnbull claims he has made the biggest ever investment in the Great Barrier Reef,” Mr Butler said.
“But it is really just the biggest ever con job.
“It provides no new investment.
“It is just a redirection of existing resources.
“This is spin and political desperation on a grand scale.
“For three years we have seen the Abbott-Turnbull Government duck, weave and avoid doing anything meaningful to address climate change,” Mr Butler said.
The Greens and a citizens’ organisation shared that view.
The Deputy Leader of the Greens, Queensland Senator Larissa Waters, said: “this is a sneaky attempt by the Turnbull Government to try to distract from the damage it is doing to the Reef by approving coal mines to export out through the Reef and cook its corals.
“All of this money is taken from the Clean Energy Finance Corporation and the government hasn’t specified how much will go to clean energy and how much will go to water quality,” Senator Waters added.
The Solar Citizen’s organisation was also unimpresse3d.
“No matter what they try and tell the Australian public, this government has no coherent plan for the shift to clean renewable power beyond 2020.
“These sort of politically driven, piecemeal policies will end up with us responding to emergencies rather t saidhan building a decent plan for our future energy needs,” Claire O’Rourke, National Director of Solar Citizens.
by Alan Thornhill
Labor has targeted tax breaks enjoyed by Australians on high incomes, in the Federal budget revisions that it announced today.
The Opposition Leader, Bill Shorten, the Shadow Treasurer, Chris Bowen and Shadow Finance Minister, Tony Burke, said these would include negative gearing and capital gains tax concessions on property purchases.
They said they were advancing a budgdet repair plan “which is fair.”
But many will not agree.
In a joint statement the three Labor leaders said: “Labor has been announcing budget repair measures over the last two years to improve the budget and support our investments in schools and Medicare.
“Today we are announcing a $10.1 billion improvement to previously-announced budget measures, as a result of 2016-17 Budget update.
“This includes boosts to our negative gearing and capital gains reforms, and VET-FEE HELP loan caps.
“Labor’s announced savings from these measures now total $122 billion over the medium term,” they added.
Then they said: “Labor is today announcing a further $6.1 billion in budget improvements through measures that better target the Private Health Insurance (PHI) rebate, reduce wasteful spending and better target family payments.
These measures have been designed to limit the impact on the household budgets of low and middle income families.
They saiid the savings would include:-
*$3.0 billion from better targeting the PHI rebate over the medium term, by continuing the Government’s 2016-17 threshold freeze and removing the rebate from natural therapies.
*Reforming Industry Growth Centres, saving $0.5 billion over the medium term.
*Re-directing DFAT spending to other budget priorities, including the abolition of the Innovation Xchange which focussed on purchasing bean bags. This saves $0.4 billion over the medium term.
by Alan Thornhill
Australian shoppers sharply increased their credit card debt, as cold weather approached this year.
The Bureau of Statistics reported today that revolving personal credit commitments rose by 14.2 per cent in April, a traditional time for buying new clothes and shoes.
The bureau also noted that, overall, personal finance commitments rose by 5 per cent in the month.
But housing finance, for owner occupation, rose by just 0.1 per cent in April.
All of these figures are seasonally adjusted
There were some signs of pre-election caution, though, in the bureau’s lending finance figures for April.
Commercial finance, for example, fell by 3.3 per cent in the month.
And lease finance rose by just 0.4 per cent.
by Alan Thornhill
The Prime Minister, Malcolm Turnbull, says the election of a Labor government is now the only risk to the creation of new jobs in South Australia.
Campaigning on Adelaide Sunday, Mr Turnbull spoke of the new jobs he said would appear in that state, as the Federal government’s submarine building program gets under way.
“The only risk to these jobs starting immediately this year is Labor,” the Prime Minister said.
“Labor failed to commission a single naval ship from an Australian yard in six years of government.
“Labor cut more than $18 billion from defence funding and delayed more than 100 projects.
“Risking critical gaps in capability, Labor’s neglect plunged naval shipbuilding in South Australia into the notorious valley of death.
The Prime Minister said:“ South Australians should think very carefully about whether we can afford more Labor delays and cancellations.”
He said: “Now, our GDP, our economy grew 3.1 per cent in the year to March, faster than any of the G7 economies and well above the OECD average.
“That doesn’t happen by accident.
“You need a clear plan.
“You need strong economic leadership.
’You need a pro-growth, pro-business agenda that drives investment and jobs.
“In the last calendar year, 300,000 new jobs were created and two thirds of these were women.
Mr Turnbull said: “450,000 jobs have been created since the last election.
“But we can and must do more.
We are strongly positioned to gain from growth in the large, dynamic economies of Asia.
“Our export trade deals with China, Korea and Japan are giving farmers a competitive edge and opening doors for our service industries into those expanding markets, Mr Turnbull said.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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