by Alan Thornhill
Australia’s seasonally adjusted unemployment rate rose by 0.1 per centage points in June to 5.8 per cent.
However the Bureau of Statistics reported today that its “more reliable” indicator of unemployment, the trend series, had stayed steady at 5.7 per cent.
Th bureau said our participation rate also remained steady at 64.8 per cent.
As always, the detail of the Bureau’s employment figures were important last month.
And it said employment grew by 0.07 per cent in June, consistent with the average growth rate over the last six months, on trend figures.
The bureau added that, over the past month,, trend employment increased by 8,300 people to 11,933,400.
Trend full-time employment increased by 700 after falling for the previous four months.
Part-time employment increased by 7,600 persons, its weakest monthly growth since August 2014.
The Bureau also said that the hours worked by employed people fell, but not by as much as in previous months.
“This reflects the small increase in trend employment,” bureau said.
The trend unemployment rate remained steady at 5.7 per cent. The participation rate also remained steady at 64.8 per cent.
“Trend series smooth the more volatile seasonally adjusted estimates and provide the best measure of the underlying behaviour of the labour market,” Mr Hockman said.
The seasonally adjusted number of persons employed increased by 7,900 in June 2016.
The seasonally adjusted unemployment rate for June 2016 increased 0.1 percentage points to 5.8 per cent and the seasonally adjusted labour force participation rate increased by less than 0.1 percentage points to 64.9 per cent.
by Alan Thornhill
Australia is making too little progress in tackling climate change, according to the Climate Council.
The council’s CEO Amanda McKenzie said this is confirmed by new data.
She said a new survey, by the Australian Bureau of Statistics shows coal’s market share has barely moved over the past three years., slipping only marginally from 65.3 per cent to 64.9 per cent
Yet burning coal to generate electricity is one one of the major drivers of climate change.
Ms McKenzie noted that renewable power generation has increased from 9.6 per cent to 12 per cent, according to the survey.
However, shr said the true test of a climate change policy is how much emissions are reduced.
And the US is doing much better than Australia in this regard.
“In the U.S, emissions from the electricity sector fell 18 per cent in 2014 and coal-fired power generation fell from 39 per cent in 2014 to 33 per cent in 2015,” Ms McKenzie said.
She said also that the fact that electricity generation from coal has barely moved in Australia, is a sign of two things.
One, the renewable energy industry is not growing at anywhere near the rate we need it to in order to tackle climate change.
“That’s because of the chopping and changing of policy.
“We’ve got enough renewable energy resources to power the country 500 times over – but we are not capitalising on it.
‘And two, it’s a sign that there is our climate policy is not robust enough to reduce emissions at the source.
“We must introduce climate policy which reduces our fossil fuel emissions if we are to effectively tackle climate change and protect the Great Barrier Reef,” Ms McKenzie said .
by Alan Thornhill
Too little credit can present risk to an economy, a Reserve Bank chief warned today.
Luci Ellis,who heads the bank’s financial stability department said this is something policymakers need to keep in mind.
Addressing a seminar in Sydney, Ms Ellis said the dangers of too much credit are well known.
“Over-exuberant lending and borrowing can mean that some people are getting loans that they have little prospect of being able to repay even in good times,” she said.
But she added: “Less well appreciated are the costs of having too little credit available.
“The point here is simply that in recognising that too much credit can be dangerous, we should not instead fall into the trap of thinking of all borrowing as illegitimate or somehow immoral,” Ms Ellis said.
“Less credit isn’t always and everywhere better.
“ The low levels of credit available in economies in the regulated era of past decades are not the benchmark we should be evaluating ourselves against now when we try to assess the risk in the system.”
“ Some activities can and should be financed with at least some debt, even in bad times – even though there are plenty of others that should not.”
Ms Ellis then said: “in their efforts to protect the real economy, policymakers need to ensure that credit is still being supplied to good borrowers even in bad times.
A healthy and resilient banking sector can help achieve that;” Ms Ellis said
“Indeed, it would be difficult to manage it without one,” she added
She said though that Australia is not facing a credit squeeze.
“Let me be clear that Australia is not anywhere near having this problem,” Ms Ellis said.
“Whatever the concerns about concentration and competition in the Australian financial system, there is plenty of finance readily available to lower-risk customers.
“ But some recent examples overseas show the damage that can be done when there isn’t enough credit available
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by Alan Thornhill
What happens now that Malcolm Turnbull has at least the 76 lower house seats that he needs to form majority government?
We can expect to see tight government, as the Prime Minister takes up the reins, to start his fresh three year term.
Not quite as tight, though, as the independent Bob Katter has suggested.
Mr Katter warned, not altogether seriously, that a government with a majority of one, might lose a critical vote, if he left Parliament to attend his mother’s funeral, or to respond to a call of nature.
That’s not a worry
Australian parliaments, thankfully, have civilised arrangements called “pairing” to deal with exigencies like these.
The Opposition Leader, Bill Shorten, though, did raise as serious matter, when he warned of divisions in the Liberal party, particularly those involving the hard right, which supported Tony Abbott against Malcolm Turnbull, last September.
They have not forgotten or forgiven.
That became clear this week, when one member, Cory Bernardi, sent e-mails to supporters, urging them not to “… allow the political left to keep eroding our values, undermining our culture and diminishing our important institutions.”
The ratings agency, Standard and Poors, delivered the biggest challenge Mr Turnbull will face late last week, though, when it put Australia’s triple A credit rating on “negative watch.”
It cited both uncertainties which then existed about the July 2 election results and high levels of both domestic and international debt.
This means that the agency might well downgrade Australia’s presently excellent credit rating, if we don’t get those issues under control, over the next two years.
An astute Prime Minister might see it as more than that, too.
A “get out of jail free card” in fact.
Even governments which want to keep their pre-election promises often find it very difficult to do so.
So what could Mr Turnbull do, if he finds himself in that all-too-likely position?
Mr Shorten warned, during that eight week election campaign, that this is no time to be giving big companies $50 billion worth of tax cuts, over 5 years, even if they are to be phased in slowly.
And a report funded by Getup and published just days before the election said big miners and cigarette companies would be among the main winners, from that policy, which Mr Turnbull repeatedly said would create more “jobs and growth.
The miners, perhaps.
The cigarette companies.
So some adjustments can be expected there.
Nick Xenophon might also be in for some disappointment when he comes to Canberra, seeking more money, to protect the jobs of steel workers, in his home State of South Australia.
Mr Turnbull might even be able to convince voters that some restraint in these areas is virtuous, as well as necessary, to avoid extra interest rate pain, for home buyers and others.
If he is astute enough.
by Alan Thornhill
The Prime Minister, Malcolm Turnbull, claimed victory today in the Federal elections that were held on July 2.
He said the Labor Leader, Bill Shorten, had telephoned him earlier today and congratulated him on being re-elected as Prime Minister.
Then he added: “Mr Shorten said earlier today that he looked forward to seeking to reach common ground.
“And I welcome that remark, I welcome that.
“Because it is vital that this Parliament works.
“It is vital that we work together and as far as we can, find ways upon which we can all agree, consistent with our policies that we have taken to the election, consistent with our political principles, that we meet the great challenges Australia faces.
“We need to ensure that we have a strong economy in the years ahead,” Mr Turnbull said.
The newly re-elected Prime Minister then set out broad objectives, for his second term.
He said: “We need to ensure that we maintain a successful transition from the economy fuelled up by the mining construction boom, to one that is more diverse.
“We need to ensure that Medicare and education, our health services, and all those vital government services are provided for and Australians feel secure that they are provided for and guaranteed.
“And at the same time, we have to ensure that we bring our Budget back into balance.
“These challenges are not easy, there’s no simple solution to them.
“But that’s why they need our best brains, our best minds and above all, our best goodwill in this new Parliament to deliver that.,” he said.
He also dismissed a reporter’s suggestion that he might have more trouble with the new Senate than he had with the old, saying there were always cross benchers in the Senate and there would only be one more in the new Senate.
Mr Turnbull also signalled, very clearly, that he would not be taking his predecessor, Tony Abbott, back into Cabinet.
He said: “I have obviously given consideration to the Ministry both before and after the election and as you know I have said that the Ministry I lead – I led to the election, will be the Ministry I lead after the election.
“Regrettably several ministers have not been returned and so there will be some changes.
” but you shouldn’t anticipate large scale changes. ”
by Alan Thornhill
The financial services giant IOOF will be required to accept a measure of external surveillance, under arrangements announced today by the industry watchdog, the Australian Securities and Investments Commission.
However ASIC stopped short of taking further action against IOOF, which offers superannuation products, financial advice and many other similar products.
It noted that, in July last year, it had commenced inquiries into allegations made against I.O.O.F. Holdings Limited and its subsidiaries (IOOF), including issues raised by a former employee of IOOF.
It said the allegations have been the subject of several media articles and an inquiry by the Parliamentary Joint Committee on Corporations and Financial Services.
And it added: “ASIC has now finalised its inquiries.”
It had investigated several issues, including allegations of insider trading,raised by a former employee of IOOF.
ASIC said the allegations had also been the subject of several media articles and an inquiry by the Parliamentary Joint Committee on Corporations and Financial Services.
“ASIC has now finalised its inquiries,” the commission said.
It said the allegations of insider trading concerned an IOOF staff member’s involvement in insider trading before research reports became public.
The commission found that although this did occur it failed to move the share price enough to warrant action.
ASIC’s inquiries also included a review into allegations relating to corporate governance and licensee breaches by IOOF.
It said: “This review identified a number of concerns relating to IOOF’s compliance arrangements, breach reporting, management of conflicts of interest, staff trading policy, disclosure, whistleblower management and protection and cyber security.
And added:” We have raised these concerns with IOOF.
“We have also advised IOOF that in our view the corporate culture at that time within IOOF contributed to these issues occurring.”
Then the commission said: “Concurrent with ASIC’s inquiries, IOOF appointed Price Waterhouse Coopers to conduct an independent review of its regulatory breach reporting policy and procedures and the control environment within its research team.
And it added: “IOOF has made significant changes to their policies and procedures as a result.
The commission said: “While ASIC welcomes such initiatives and steps taken by IOOF to rectify these issues, ASIC has also reached an agreement with IOOF to engage an external compliance consultant to conduct an expanded, broader and more comprehensive review of compliance arrangements within all IOOF business units.”
“ASIC will continue to monitor and work cooperatively with IOOF and its board to ensure the necessary changes are properly effected,it added.
by Alan Thornhill
The Federal government and opposition differed sharply today, after a major ratings agency, Standard and Poors, put Australia’s prized triple A status on negative watch.
It did so citing both the still unresolved Federal election result and high levels of both household and external debt.
The Treasurer, Scott Morrison, said the agency’s move, “reaffirmed the government’s fiscal direction and the need to “stick to the plan” the Coalition set out in its last budget.”
However the shadow treasurer, Chris Bowen, said it underlined the government’s “fiscal failure” and cast further doubt on its budget projections.
The agency’s warning means that Australia’s AAA credit rating might be slashed in future if there is no improvement in its budgetary performance.
This could increase government borrowing costs and weaken international investment.
Mr Bowen said S&P statement is “sombre reading.”
He said the agency “…calls out the Government on three years of fiscal failure, based on unrealistic Budget revenue forecasts and savings measures that will never pass the Parliament.
“S&P makes it clear that it doesn’t have much faith in the Government’s Budget revenue forecasts – a point Labor has consistently made since the Budget in May,” Mr Bowen added.
However Mr Morrison took a different view.
He said the agency’s warning reinforces the government’s message that Australia must “live within its means”.
He said S&P were clearly concerned about the outcome of the election and that “the pace of fiscal consolidation may be postponed”.
Mr Morrison said it would be irresponsible to increase the deficit over the next few years, because “that increases the debt and you can’t get that money back”.
by Alan Thornhill
Middle aged women shoppers typically experience much higher anxiety levels than men.
This is confirmed in a study that the National Australia Bank published today.
Overwhelmingly though its results were positive.
The study found, for example, that anxiety levels among Australian consumers have now fallen for the fourth straight quarter.
The bank said this had happened as Australians responded to sustained improvements in the labour market and recovery in the non-mining economy.
Its chief economist, Alan Oster, said: “…this is the fourth Survey in a row where overall consumer anxiety has trended downwards.
“Consumer anxiety is now at its lowest level since half-way through 2013 and well below its long-term average,”Mr Oster said
And he added: “while we continue to expect moderate growth in consumer spending throughout 2016, this is contingent upon further pick-up in labour market conditions and risks associated with further declines in the household savings rate.”
The bank said its Consumer Anxiety Index had eased slightly to 60.2 points in Q2 2016, from 60.4 points in the previous quarter.
“Lower overall consumer anxiety was driven by decreasing anxiety associated with the cost of living, government policy (post the 2016-17 Federal Budget) and health expenditure,” it added.
However the bank also said: “overall women reported much higher anxiety than men.
And it added that: “… women aged 30-49 now the most stressed group overall.
“In contrast, men over 50 are among the least stressed,” it added.
The study did find, though, that some worries are persistent.
It concluded: “financing retirement, providing for their family’s future and healthcare were identified by Australians as the biggest drivers of financial stress.”
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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