by Alan Thornhill
The Federal Treasurer, Joe Hockey, has welcomed the Senate’s decision to abolish the present $300 billion limit on Commonwealth debt.
That flowed from an agreement the conservative government of Prime Minister, Tony Abbott, reached with the Greens.
The Opposition Labor party had opposed the government’s initial request to raise the limit to $500 billion, offering a compromise at $400 billion.
However that was superseded by the Greens offer to abolish the ceiling, altogether.
Voting together, Labor and Green Senators would have had the power to keep the debt limit at $300 billion.
But that’s not how events transpired.
The old debt limit would have been reached later this week.
Mr Hockey said scrapping the limit would: “provide certainty to markets about the Government’s capacity to finance the budget, and increase transparency around Commonwealth borrowing.”
He said the limit, which had been increased several times previously, had been “created by the Labor Party”
And on four occasions Labor governments had broken their own self-imposed limits, Mr Hockey said.
by Alan Thornhill
Although many Australians are still retiring early, a substantial number are now planning to stay in the workforce until they are at least 70.
This is shown in new data, that the Bureau of Statistics released today.
The Bureau noted that almost one in five Australians, who intend to retire, now plan to do so when they are 70, or older.
The Bureau’s study follows a controversial report, by the Productivity Commission, saying the pension age may have to be lifted to 70, as Australians are now living longer.
Its survey showed that 50 per cent of the Australian men, who were retired in 2012-13, had left the nation’s workforce, while they were aged between the ages of 55 and 64.
Half of the remainder had left before their 55th birthdays.
And the rest had left on or after their 65th.
Retirement, for women, often comes earlier than it does for men.
The Bureau noted that 55 per cent of the nation’s retired women had left the workforce before they were 55.
It said 36 per cent had retired when they were aged 55-64.
And just 9 per cent had stayed on until they were 65.
The Productivity Commission urged the Federal government to study the increases in health and social security costs, that will come with an ageing population.
It also warned that, if they don’t act now, Australian governments would, collectively, face extra spending on health, aged care and the Age Pension, equivalent to 6 per cent of national GDP by 2060.
However a critic, Dave Roberts, said in a letter to the Canberra Times, that the Commission’s report “is a typical suggestion from a bunch of well-paid white collar public servants in their plush ivory tower.”
“Why don’t they go out and ask brickies, farmers etc how their bodies are holding up at 65 and whether they can work another five years?” he asked.
by Alan Thornhill
Australians are building more homes – and the building industry’s recovery is broadening.
High density housing is also becoming more popular.
However, a study identifying these trends, reports that it is still unclear whether the present shift to high density living will be sustained.
The study was undertaken by the Housing Industry Association and the results released today.
It showed that the trend improvement in building approvals, evident in the second half of this year, has strengthened.
The study notes, too, that there are now brighter prospects for builders outside New South Wales and Western Australia, the States which led the recovery, in its early stages.
It concludes, too, that: “Much of the aggregate growth has been driven by higher density approvals.”
However the report adds: ““Whether this will be sustained remains unclear.
“But recent growth in this category of approvals has been broad-based.”
However detached houses are still popular, with people who can afford them.
“Approvals for lower density dwellings continue to grind higher,” the report says.
by Alan Thornhill
The Prime Minister, Tony Abbott, left a message for the Australian people today, before he flew to South Africa, for the funeral of Nelson Mandela.
After acknowledging, on social media, that Mr Mandela had been “one of the great figures of the last century” Mr Abbott appealed directly to the public for support, in his campaign to abolish the carbon tax.
In his recorded message, the Prime Minister said this is: “… the last sitting week of the year.
“It’s the week when the Senate will consider the legislation to repeal the carbon tax and the mining tax.”
On present indications, Mr Abbott’s bills, to abolish the carbon tax, appear headed for defeat in the Senate, at the hands of Labor and the Greens.
If that happens, the first step towards a double dissolution of Federal parliament – and fresh elections – will have been taken.
But a double dissolution is still far from likely.
Mr Abbott could avoid a fresh election, quite simply.
All he has to do is wait until July 1, when the new Senators, elected on September 7, will take their plush red seats in the upper house of parliament.
Mr Abbott will then have a good chance of getting the numbers he needs in the Senate to abolish both taxes.
Especially with the support of the Palmer United Party.
Will he wait, though?
Patience is not Mr Abbott’s most conspicuous virtue.
But the crash through, or crash alternative, of seeking a double dissolution, won’t be all that attractive, either.
Especially as recent opinion polls suggest that Mr Abbott might well lose an early election.
The prospective gain isn’t that great, either.
After all, Section 57 of the Constitution is blunt about that.
It says a disputed bill has to be blocked twice in the Senate – at intervals at least three months apart – to justify a double dissolution election.
So waiting would be a wise choice.
But, to misquote Shakespeare: “Some men are born wise; some achieve wisdom and some have wisdom thrust upon them.”
by Alan Thornhill
As the old song says: “There’s nothing sur-er, the rich get rich and the poor get poorer.< (Ain’t we got fun)
The Australian dream of a fair go is being silently tested by rising inequalities in income.
Even economists in that gilded tower, the Federal Treasury, admit that in a study just published.
Yet the World Economic Forum has declared income inequality “a top economic risk.”
So far, though, it hasn’t had anything like the amount of attention it deserves in this country.
Those old harlots, debt and deficit, have been crowding our minds.
But the Treasury report, called Income Inequality in Australia, is still disturbing, on several fronts.
It confirms, for example, that “income distribution in Australia has become more unequal over the last 30 years.”
The mining boom has been a factor, and no-where – in this country – have those differences risen more sharply, over recent years, than they have in Western Australia.
Economists measure inequality in incomes against the Gini coefficient, in which zero represents perfect equality and one is perfect inequality.
The Treasury economists, wisely, resisted the temptation to call that the Gina coefficient, when they identified the widening income gaps in Western Australia.
So what does their study show?
Well, income inequality has been rising faster in Australia than in other OECD countries.
We were line ball with those other wealthy countries back in 1995.
By 2010, though, our income inequalities, put us in the OECD’s top ten, behind the leaders, including Mexico, the United States and Turkey.
We may have found this less painful, though, as it occurred against a background of broadly rising incomes.
“A key driver of real household disposable income growth (in Australia) in recent years has been the income effect arising from our terms of trade,” the Treasury says.
“Strong world demand for Australia’s mineral exports has resulted in increased profits and real wages in the resources and related sectors…” it adds.
“…and increased revenues for governments, with flow on effects across the economy.
“This has contributed to higher real disposable incomes overall than would otherwise have been the case.”
You might doubt the trickle down effect.
But the Treasury doesn’t.
In fact, it points out that: “The only other countries which experienced similar levels of income growth over this period (from 1995 until recently) are Ireland and Spain.”
This comparison is disturbing.
But Treasury offers the comforting thought that both of those countries started out from positions well behind ours.
So who did best, in Australia, apart from our mining billionaires?
Perhaps surprisingly, the Treasury reports that: “While all household categories have experienced significant real income growth, the biggest gains have gone to singles between the age of 55 and 64 and couples without children, where both members are 55 or above and at least one member is below 65.”
But it’s not all good news for these folks, either.
They also experienced the “biggest increases in income inequality.”
But what of our biggest group, wage earners?
The Treasury reports that “labour earnings inequality has been falling in Australia at a household level, since 1998-99.”
Against all those stratospheric executive salaries?
Well, yes, Treasury says, for a perhaps surprising reason.
“This is because a greater access to – and participation in – the work force at the low end of the income distribution has more than offset the disproportionate increase in wages at the top.”
But the fact remains.
Inequalities in income have been rising.
So why haven’t Australians been protesting in the streets?
Aren’t we going down the American road, with sharp and very painful differences between the living standards of the rich and the poor?
While the Treasury economists don’t answer those questions directly, they do say that Australia has a very good tax and transfer system, which does a better job than most, in looking after the poor.
Well, Treasury economists would say that, wouldn’t they?
But they are unrepentant.
“…it does appear that Australian households towards the bottom end of the income distribution fared better than equivalent households in other OECD countries..” they conclude.
The report notes, too, that inequality in incomes isn’t all that matters.
It quotes research suggesting that “around 640,000 Australians, aged 18 to 64, have “multiple disadvantages.”
Although the report doesn’t say so, it’s a fair bet that a shamefully high proportion of these people are Aborigines.
But the Treasury economists do say, quite bluntly, that this group demands more “understanding.”
by Alan Thornhill
A trade reform package – that is expected to create more than 21 million jobs worldwide – has been approved in Bali.
Australia’s Trade and Investment Minister, Andrew Robb, said he “warmly welcomed this outcome, reached through the World Trade Organisation.”
Mr Robb said Trade Ministers from 159 countries have reached this “historic trade agreement.”
“The trade reform package will make it easier and cheaper for goods to flow through the ports and customs processes of 159 countries,” he added.
“The agreements adopted today reaffirm the global commitment to eliminate agricultural export subsidies, address genuine food security needs through non-trade distorting policies, and to maximise export opportunities under tariff rate quotas,” Mr Robb said.
“Despite some suggestions, the Ministerial meeting was not about North-South differences.
“The overwhelming majority of WTO Members wanted a result, and we got there,” Mr Robb said.
“After 13 years of talks, the Bali outcome offers us a real opportunity to re-energise the WTO and get back to its core business of delivering trade liberalisation,” he said.
“This result is a testament to the tireless efforts of WTO Director-General Azevedo and to Indonesia as the host of the Bali meeting,” Mr Robb added.
by Alan Thornhill
“We think there is enough money on the table.
“There is no more.”
These are the tough words with which the Prime Minister, Tony Abbott, greeted this week’s fresh round of speculation about Holden’s future in Australia.
They came the day after his Deputy, Warren Truss, had made it clear that Australia’s troubled airline, Qantas, will also be expected to stand on its own feet, without any extra help from the Commonwealth.
If these bold statements sound, to you, like the attitudes to be expected of a newly elected government, that doesn’t have to face the voters again for almost three years, congratulations!
You’ve just passed Politics I.
Speculation about Holden’s future has been running hot, ever since Ford announced that it would stop making Falcons and related vehicles from 2016.
Even the Prime Minister admits that.
“I think people have been speculating for quite some time; ever since Ford announced their pull-out a year or so back,” Mr Abbott said in a radio interview today.
“ I want Holden to stay,” he added.
“I want the motor industry to survive and flourish in this country.
“ I do wish that Holden would clarify their intentions because at the moment, they’ve got everyone on tenterhooks,” he said.
So far, though, Holden itself has remained silent on this subject.
The Prime Minister made it clear that he would welcome some clarification.
“I do wish that Holden would clarify their intentions because at the moment, they’ve got everyone on tenterhooks,” he said.
So, too, would Holden’s own workers – and thousands of others in related industries like those making parts for Australia’s car makers.
The Australian Metal Workers Union spoke up for them.
“Unconfirmed reports today that Holden will leave Australia in 2016 are deeply troubling for 50,0000 auto workers and their union,” it said in a statement.
“Workers at Holden are waking up with more uncertainty and stress.
Paul Bastian, the unions’ national secretary, said that currently the Industry Minister and Holden have denied these reports, but he said they are still concerning.
The Federal Opposition, too, is worried.
It’s Industry Spokesman, Kim Carr, said the matter is “on a knife’s edge.
“Senior Ministers in the Coalition government are trying to claim that – no matter what they do – the
die is cast.
“And therefore they are justified in doing nothing.”
It’s an unhappy situation.
by Alan Thornhill
The Prime Minister, Tony Abbott, announced today that Australia has reached agreement on a free trade negotiations with the Republic of Korea.
He told Parliament that this is good news for Australia’s exporters and farmers and that new agreement will boost jobs and the economy.
The Opposition Leader, Bill Shorten, welcomed the announcement.
In a statement later, Mr Abbott said independent modelling had shown that the Agreement would be worth $5 billion between 2015 and 2030 and boost the economy by around $650 million annually after 15 years.
“As a result of the Agreement, tariffs will be eliminated on Australia’s major exports to Korea and there will be significant new market openings in services and investment,” the Prime Minister said.
“The FTA translates to higher economic growth and more jobs for Australians,” he added.
“As part of the FTA, tariffs of up to 300 per cent will be eliminated on key Australian agricultural exports such as beef, wheat, sugar, dairy, wine, horticulture and seafood, as well as resources, energy and manufactured goods,” Mr Abbott said.
“The FTA will also provide new market opportunities in Korea for Australian services in education, telecommunications and a range of professional services including financial, accounting and legal services,” he added.
Australian farmers welcomed the announcement.
The National Farmers’ Federation said the agreement would provide millions of dollars in export value to Australian farmers, including those in the red meat, grains, dairy, sugar, pork and horticulture sectors.
NFF President Brent Finlay said the deal recognises agriculture as one of the nation’s export strengths and will open opportunities for the sector in Korea.
Business also welcomed the new deal.
Director of Trade and International Affairs at the Australian Chamber of Commerce and Industry, Bryan Clark, said: “The announcement will provide a substantial boost to the two way trade and investment opportunity between Australia and Korea.
“The deal is comprehensive in its coverage with very few exclusions and a substantial benefit to Australia’s important sectors, particularly manufacturing, agriculture, food and service sectors like professional services. We particularly welcome and support the government’s flexibility in investor state dispute settlement and a pragmatic approach to foreign investment review board thresholds,” Mr Clark added.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Monday December 9
Thai Prime Minister Yingluck Shinawatra says she will dissolve parliament and call an election, after sustained protests in the capital, Bangkok.
Parliament has passed laws to abolish the debt ceiling just three days before the Government said the nation’s books would hit the cap of $300 billion.
The Dow Jones index rose 198.69 points (Friday, New York time) to 16,020.20
Tony Abbott’s bills to repeal the carbon tax face defeat in the Senate this week, raising the spectre of a double dissolution
|Aud To Usd||0.9079||N/A||N/A|
|Bhp Blt Fpo||36.770||+0.020||+0.05%|
|Nat. Bank Fpo||33.170||-0.300||-0.90%|
|Rio Tinto Fpo||66.530||+0.120||+0.18%|
|Macq Group Fpo||51.550||-0.300||-0.58%|
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- The PM’s final appeal
- Mining boom widens the gaps
- Hockey stopping cheques
- Robb hails trade breakthrough
- PM to visit South Africa to honour Nelson Mandela
- Big fuel discounts to end
- Holden:What now?
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- PM announces free trade agreement with the Republic of Korea
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