by Alan Thornhill
Australia’s exporters have more reason than other Australians to celebrate the New Year according to the Federal government.
In a statement today the Department of Foreign Affairs and Trade said that’s because new tariff cuts, under Free Trade Agreements with both China and Korea kick in from today.
It said:”“ Tariffs on Australian exports to China have now been cut twice in less than a fortnight, following initial reductions when ChAFTA entered into force on 20 December 2015.”
“The tariff reductions on exports to Korea will be the third round of cuts under KAFTA, since its entry into force on 12 December 2014.”
“”The positive results of these agreements are already being seen.”
” RBK Nutraceuticals, based in Sydney, have increased their exports into Korea by a huge 161 per cent since the beginning of the agreement.”
“Tasmanian cherry growers have also enjoyed huge increases in demand due to the commencement of KAFTA with the state exporting 185 tonnes of cherries into Korea over last summer compared with just five tonnes the previous year.”
“Our beef exports increased more than 30 per cent to be worth over $550 million after the 2015 tariff reduction.”
“The conditions are right for this year’s tariff cut to strengthen the tailwinds for this valuable trade even further.”
Each year KAFTA puts up to $40m back into the Australian beef industry instead of into paying tariffs.”
“Importantly, these recent cuts also bring us closer to our competitors.”
“Never again will the differential between Australia and USA beef exports be greater than 5.4 per cent.”
The Departmennt also said:” Remaining tariffs on Australian resources and energy exports will also be further reduced.
It said the three agreements have made Australia vastly more competitive in a market of more than 1.5 billion people.
The Department said:” Detailed information on each agreement can be found at the Department of Foreign Affairs and Trade and Austrade websites, or www.openforbusiness.gov.au.
by Alan Thornhill
Many Australians will miss Friday’s festivities
They – and their families – are facing an austere Christmas
I speak, of course, of the nation’s unemployed.
And the fact that Christmas will occur on Friday this week.
The Statistician tells us that on the latest available – seasonally adjusted – figures 739,100 Australians
were unemployed in November.
But they are not the only ones affected by unemployment.
Their families are as well.
Even the local shopkeepers, if they don’t buy as much as they usually would.
A graph that the Bureau of Statistics produced in August shows the total number of job vacancies available in Australia falling sharply as the 21st Century entered its teenage years.
Then they rose steadily over the following years.
These patterns suggest that the unemployed are taking advantage of job vacancies, as they appear.
That is confirmed by other figures the Bureau has produced.
These showed that 800,700 Australians were unemployed in July this year.
The nation’s unemployment rate back then was 6.3 per cent.
By November, it had fallen to 5.8 per cent.
by Alan Thornhill
The Federal Treasurer, Scott Morrison, insisted that he is taking Australians on “the safe road” to a balanced budget when he published his Mid Year Economic and Financial Outlook document today.
However he admitted that the nation will still face deficits of $37. 4billion in 2015-16, $33.7 billion in 2016-17, $23 billion in 2017-18, and $14.2b in 2018-19.
Mr Morrison said the journey to budget balance needed to be “safe and careful” with the expected date of a return to surplus pushed back another year to 2020-21.
Using the metaphor of the Christmas car trip, he said he expected a lot of Australians to ask “are we there yet?”.
“We need to take a safe and careful route and one (that) does not put at risk our jobs and growth,” he said.
The government has announced extra spending on its humanitarian program since its May budget.
Its decision to permanently accept an extra12,000 refugees from Syria and Iraq , in particular, will cost $158 million in 2015-16, and $909 million over four years to 2018-19.
Offsetting savings were announced in today’s mini budget.
These will include removing bulk-billing for pathology services and reducing bulk-billing for diagnostic imaging services and MRI services.
This will reduce spending by $197 million in 2016-17 and by $639 million over four years to 2018-19.
There will also be cuts to childcare.
These will include reducing the childcare subsidy for families earning more than $250,000 a year.
by Alan Thornhill
Welcome to “the silly season.”
At the risk of revealing one of the news industry’s deeper secrets, we can confirm that’s the name often given to times like the present, when so many solid newsmakers are on leave, or travelling, that traditional news sources tend to dry up.
Those with less compelling stories to tell can then step in to plug the gap.
Sometimes it works.
Indeed the growing national debt stories that Joe Hockey and Tony Abbott told, before the last Federal election, became so powerful that the then Labor government fell, in their wake.
And Joe Hockey, who became Treasurer, after that election, went right on telling his highly alliterative stories of Labor’s looming ”debt and deficit disasters.”
Most notably, perhaps, in his budget speech last May.
He said then:-
“We inherited $123 billion of deficits when we came to office.
“We have now brought that down to $82 billion over the next 4 years.
“This is despite the fact that we have lost $90 billion in expected tax revenue over the same period.
And added:-“We have now brought that down to $82 billion over the next 4 years.
But we have moved on since then.
So Mr Hockey’s successor, Scott Morrison, the new Treasurer, will need to do more than simply adopt Mr Hockey’s arguments, when he delivers his Mid Year Economic and Fiscal Outlook, or MYEFO, document on Tuesday (this week).
The Turnbull government has already tried to do that with its recently published Innovation Statement.
There is more work to be done in that area, too.
But how is it all looking, on an interim basis, now?
Westpac economist, Andrew Hanlan, isn’t exactly bubbling with enthusiasm,.
He is predicting “a modest further slippage”in the government’s budget position, with the revelation of a further $4 billion deterioration in the Turnbull government’s likely deficit for 2015-16.
Not good, but not necessarily disastrous either.
In fact, a development of that kind could draw attention to a serious weakness, in the debate so far.
It has been based on the unspoken assumption that debt – particularly big debt – is always a bad thing?
But is it?
Young couples, who take on a big mortgage to acquire their first home, often find later in life that it turns out later to be an excellent investment, as property prices rise.
The same kind of thing can happen with government investments, too.
And they, too, face risks.
Malcolm Turnbull’s pre-election decision to go for a national internet system that will be slower than the best available – simply because it was cheaper – is now looking highly questionable in that regard.
It will give our better equipped rivals, like France, a permanent advantage in a highly competitive world.
Regardless of who is, technically right or wrong, in this argument, we should be looking for a better perspective on it all.
That can be hard to find.
But it is essential in this highly competitive world.
by Alan Thornhill
Consensus on tax reform proved elusive when the Prime Minister, Malcolm Turnbull met State premiers and Territory leaders in Sydney today.
The State and Territory leaders went into the meeting of the Council of Australian governments seeking reversal of the $80 billion cuts to their health and education spending that flowed, ultimately, from the unpopular 2014 Federal budget.
Mr Turnbull, for his part, was seeking more stable revenue flows, as the mining boom subsided.
That led to the Federal Treasurer, Scott Morrison, ordering the Federal Treasury to model the likely impact of possible changes, including several that would include a higher Goods and Services Tax.
Although the Opposition has been warning that Mr Turnbull wants to impose a 15 per cent GST on “everything” in place of the present 10 per cent, a 12.5 per cent rate is now starting to look more likely.
But the Coalition remains determined to curb the big Federal deficits it inherited from its Labor predecessor,
Mr Turnbull opened today’s meeting by thanking the Premiers and Territory leaders for what he called “very collaborative discussion we had last night.”
He said:“We all understand that Australia’s economy is transitioning from an enormous mining construction boom.”
And added:”We recognise that we’ve seen a high rise in our terms of trade and as was always going to happen that has now subsided.
I think we all recognise that to ensure our continued prosperity we do need to be more competitive, more productive and more innovative.
However the COAG leaders did agree to keep on examining options for tax reform.
They also accepted a March deadline on their discussions.
”Mr Turnbull said after today’s meeting “there are many different options.”
“There are many different approaches and… ultimately what we need is a tax system for the 21st century.”
The Tasmanian Premier, Will Hodgman, said he was looking forward to putting some concrete proposals on the table by the proposed deadline of March next year.
Mr Hodgman said his focus was not to increase the tax burden.
“We believe that the better and more appropriate approach is to ensure that we use this discussion, which also has a very important element of understanding the inefficiencies in our systems,” he said.
ACT Chief Minister Andrew Barr said there are still some fundamental issues in the tax system that need to be addressed ahead of the looming deadline.
“Importantly, out of today was recognition from states and territories as well as the Commonwealth that this is a shared challenge,” Mr Barr said.
“But it’s one that the clock is ticking on and we can’t have another meeting like today in March.
“We have to start making decisions.”
by Alan Thornhill
Why is s that person at the back of the bus yawning?
After all, it’s only 8.15.
And he is clearly on his way to work.
Well, the Statistician might have provided at least part of the answer to that question today.
In new, experimental, information published today the Bureau of Statistics reported that no less than 1.9 million Australians were holding down at least two jobs, simultaneously, back in 2011-12.
That’s almost one in five.
Perhaps that fellow is one or them.
The Bureau said it had just released new experimental information on employee earnings and jobs, including data on multiple job holders.
“This is the first time that the ABS has integrated the Australian Taxation Office’s Personal Income Tax data and the
ABS’ s Expanded Analytical Business Longitudinal Database (integrated business data) ,” it said in a statement.
This had allowed it to produce linked employer-employee data.
The Bureau said this is an important first step towards a future ABS Linked Employer-Employee Database (LEED) which will contain data linked across the years.
“ The ultimate long-term goal is to enhance analysis on productivity, changes in employment by industry, the ability for people displaced from work to regain employment and other important Australian labour market issues,” the Bureau added.
However the Bureau admitted this would take time and require further investment.
“This release demonstrates the ABS’ commitment to innovate and deliver new information on the Australian labour market using administrative data,” Jennifer Humphrys, Director of Labour Market Statistics, at the ABS aid.
“Through integrating employer and employee data, we are able to measure for the first time that 1.9 million employees were multiple job holders (individuals with two or more concurrent jobs) in 2011-12,” it said.
The data also presents additional statistics on employees and earnings including that there were 10.3 million employees in 2011-12.
The median (1) earnings of these employees were $45,869 and the mean(2) earnings were $55,678. the Bureau added
by Alan Thornhill
Australia’s seasonally adjusted unemployment rate fell to 5.8 per cent in November, as an extra 71,400 people found work.
The Bureau of Statistics also reported that the number of Australians unemployed fell by 2,800 during the month.
However the number of hours worked fell slightly, on seasonally adjusted estimates, by 0.8 per cent, to 1,645.9 million hours.
In trend terms, which the Bureau regards as the preferable measure, strong employment growth continued in November.
Bruce Hockman, General Manager of the Bureau’s Macroeconomics Division said about 293,000 more Australians were employed in November this year than in the same month last year.
by Alan Thornhill
Speculation on tax reform has peaked ahead of a meeting between the Treasurer, Scott Morrison, and State premiers on Friday.
The Federal government has insisted, in the lead up to this meeting, that “everything will be on the table” as these talks progress.
Labor has responded by alleging that Malcolm Turnbull is secretly planning to increase the GST.
Opposition strategists know that an effective campaign on the GST will be their best chance of defeating the still popular Prime Minister, at the Federal elections expected next year.
Lingering divisions in the Liberal party – mostly flowing from the September coup in which Mr Turnbull replaced Tony Abbott as Prime Minister, might help.
Especially as Mr Abbott is finding it difficult to remain heroically silent, about his loss.
But Mr Turnbull knows, deep in his political heart, that his own scare campaign, on the carbon tax, is also the best card he has in his hand.
And – perhaps for that reason – he has been reluctant to say – flatly – that his government won’t increase the GST if it is re-elected next year.
There are several good reasons for not doing so.
After all, coalition governments don’t have a particularly good record, when it comes to keeping pre-election promises, particularly on tax.
Why draw attention to that?
Then there would be recalcitrant premiers to convince, if a Prime Minister did want to increase the GST.
Why give them time to organise, too?
Much better to keep mumbling about “everything being on the table” when it comes to tax reform.
There are risks, of course.
That was illustrated – all too well – today when Fairfax newspapers claimed to have a secret document showing not only that massive increases to the GST are likely, but that the Medicare Levy could rise as well.
There is an old game, in politics, called “frightening the horses.”
And our politicians – on all sides – are quite good at it.
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.
|Bhp Blt Fpo||23.97||+0.07||+0.29%|
|Bramb Ltd Fpo||9.48||+0.08||+0.85%|
|Nat. Bank Fpo||33.24||+0.40||+1.22%|
The News This Week
- Postscript 2
- Postscript 1 – Australia in the age of Trump
- Thank you
- The news: Friday January 20
- Scrap debt reduction plan:Greens
- How prices are moving:ABS
- Trade:Trump warned
- The News: Wednesday January 14
- It’s one rule for them…and
- The news:Wednesday January 11
- Retail growth flattens
- The news:Tuesday January 10
- The news:Monday January 9
- The news: Sunday January 8
- Don’t come the raw prawn with us:Barnaby
- agriculture (203)
- Airlines (329)
- Banking (3,951)
- Business (4,227)
- climate (107)
- Communications (127)
- corruption (33)
- crime (84)
- defence (105)
- Diplomacy (106)
- disability (19)
- Disaster (180)
- Economics (4,246)
- education (177)
- employment (435)
- Environment (214)
- farms (135)
- Financial advice (3,783)
- Health (266)
- Housing (1,094)
- Inflation (662)
- Insurance (155)
- Investment (3,169)
- Law (34)
- manufacturing (203)
- Markets (3,121)
- Media (157)
- medical (152)
- mining (577)
- pay (348)
- pensions (121)
- Politics (4,585)
- population (1,228)
- property (138)
- Regulation (1,460)
- retail (113)
- retirement (207)
- rural (68)
- Rural australia (185)
- Security (66)
- Social security (497)
- Superannuation (324)
- Tax (672)
- terrorism (29)
- The latest (1,519)
- Trade (1,572)
- transport (112)
- Uncategorized (1,006)
- welfare (219)