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Thursday 28th July 2016 - 5:51 pm
Comments Off on Who are our subs really protecting?

Who are our subs really protecting?

by Alan Thornhill

 

Analysis

 

 

 

A submarine led recovery?

 

That’s not advocated in any respectable economic text book.

 

Yet it is precisely the path the Federal government is taking us down.

 

At a cost of some $800 million over 10 years

 

Money the Productivity Commission says might well have been better spent elsewhere.

 

The government’s decision to build our new subs in Australia is being accompanied by the slow spread of what might well be called a ”barbed wire broadband.”

 

That is one based on copper wire, rather than the then superior fibre to the node system, that Labor was proposing when the two choices were first offered.

 

 

The slower copper wire system, that Malcolm Turnbull pushed, also ended up costing more than the snazzier Labor model.

 

 

Even though the man who is now Prime Minister said it would be substantially cheaper

 

 

And the man appointed to run it, has since described the Turnbull alternative as a “colossal mistake.”

 

 

However, as Mr Turnbull’s lieutenant, Christopher Pyne,  has since explained “Australians don‘t need a faster internet.”

 

So that’s alright, then.

 

The government has its explanations.

 

 

Mr Pyne, for example, also says it will make Australia “a defence hub.”

 

 

But the Productivity Commission won’t have a bar of it.

 

 

It notes that building a sub in Australia means that it will cost 30 per cent more than simply buying one overseas.

 

 

While necessarily based on hypothetical data, because of time differences, its example reveals that the effective rate of assistance provided to Australia’s submarine industry might well exceed that provided to tne nation’s vehicle industry and its textile, clothing and footwear indsustries,  while those payment  were s their respective peaks.

 

The commission also notes that paying more to have the subs built in Australia without getting sufficient value in return  diverts productive resources  such as labour, capital and land away from  more efficient uses that need less assistance. .

 

 

This damages Australia’s capacity to get the best possible benefits from the community’s resources.

 

Its report  leaves no room for its  readers to doubt about the fact that the commission regards the Federal government’s decision to promote with submarine construction in Australia was a dreadfully dud deal.

 

So why did it happen?

 

The commission notes that “iconic” factories were closing and local areas, particularly in South Australia and Victoria, were doing it tough, as a closely fought election, on  July 2, approached.

 

And those who suspect that political, not economic judgements prevailed in this case, won’t get much argument from the Productivity Commission.

 

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Wednesday 27th July 2016 - 1:03 pm
Comments Off on Inflation hits new low

Inflation hits new low

by Alan Thornhill

Australia’s annual inflation rate fell to just 1 pr cent in the June quarter.

 

That was the weakest annual rise since the June quarter of  1999.

 

This is shown in the June quarter Consumer Price Index figures just released by the Australian Bureau of Statistics.

 

The fall in the annual rate – from 1..3  per cent at the end of  the March quarter – occurred even though consumer prices rose by 0.4 per cent in the June quarter.

 

This followed a fall of 0.2 per cent in the March quarter.

 

The Bureau said the most significant price rises this quarter are in medical and hospital services (+4.2 per cent), automotive fuel (+5.9 per cent) and tobacco (+2.1 per cent).

 

But it added:  “These rises are partially offset by falls in domestic holiday travel and accommodation (–3.7 per cent), motor vehicles (–1.3 per cent) and telecommunication equipment and services (–1.5 per cent).

The bureau also said that the increase of 4.2 per cent for medical and hospital services was driven by the annual increase in Private Health Insurance (PHI) premiums.

 

These rise on 1 April every year.

 

It said also that the increase of 5.9 per cent for automotive fuel follows three consecutive quarterly falls.

 

The rise included increases in unleaded, premium and ethanol fuels.

 

The bureau noted that world oil prices increased from a 12-year low last quarter.

Saturday 23rd July 2016 - 6:20 pm
Comments Off on Shorten names his shadows

Shorten names his shadows

by Alan Thornhill

The main appointments Mr Shorten made to his new ministry and cabinet include:-

 

Deputy Opposition Leader and shadow minster for education Tanya Plibersek.

 

Shadow foreign affairs minister, and Senate Opposition Leader Penny Wong.

 

Shadow special minister of state and Deputy Senate Opposition Leader, Stephen Conroy

 

Shadow Treasurer Chris Bowen

 

Shadow minister for families and social services Jenny Macklin

 

Shadow minister for the environment and water Tony Burke

 

Shadow minister for climate change and energy Mark Butler

 

Shadow minister for defence Richard Marles

 

Shadow minister for finance Jim Chalmers

 

Shadow minister for employment and workplace relations Brendan O’Connor

 

Shadow Attorney General Mark Dreyfus QC

 

Shadow minister for immigration and border protection Shayne Newman

Saturday 23rd July 2016 - 8:14 pm
Comments Off on Bill Shorten gives Labor women big jobs

Bill Shorten gives Labor women big jobs

by Alan Thornhill

The Opposition leader Bill Shorten spoke of his “education dream team” today, as he announced that Tanya Plibersek is to become shadow minister for education. in a reshuffle   announced today.

 

Penny Wong, who previously held that post, will now become, labor’s shadow minister for foreign affairs,

 

These changes, effectively a swap, were the most important on Mr Shorten’s long list of new responsibilities.

 

Ms Plibersek also remains Deputy Leader of the Opposition.

 

She is one of Labor’s most effective speakers.

 

And her new appointment is being taken as a sign that Labor is planning to make education the spearhead of its next election campaign.

 

She will be supported by ministers with expanded responsibilities.

 

Mr Shorten said:  “Kate Ellis will expand her responsibilities as the Shadow Minister for Early Childhood Education and Development to include TAFE and Vocational Education.

 

And “In addition to being Shadow Cabinet Secretary, Jacinta Collins will also be assisting Kate with Early Childhood.

 

“As a staunch advocate for blue-collar jobs, Doug Cameron will be the Shadow Minister for Skills and Apprenticeships.”

 

Introducing his new  team, Mr Shorten said: “education from the early years to schools, university and of course TAFE and vocational education, is a first-order economic and social priority for Labor in the 45th parliament.

 

” Investing in education is the key to Australia’s future prosperity, and it is one of the sharpest contrasts between us and the Turnbull Government.

 

” So I present to Australia, the education dream team: Tanya and Kate – supported by Doug, Jacinta, Terri and Andrew.”

 

Mr Shorten also said  Penny Wong will continue as Leader of the Opposition in the Senate and she will bring her considerable talents and intellect to the important post of Shadow Foreign Affairs spokesperson.

 

“Claire Moore will work alongside Penny as Shadow Minister for International Development and the Pacific.

 

“Stephen Conroy will remain Deputy Leader in the Senate and take on the new job of Shadow Special Minister of State, putting a new emphasis on scrutiny of government and the accountability of the executive. Stephen will also be the Shadow Minister for Sport

 

“It’s great to have a Collingwood supporter in that role at last.

 

“As I made clear during the campaign, Chris Bowen will continue to lead the economic debate as Shadow Treasurer.

 

“Andrew Leigh will serve as Shadow Assistant Treasurer, with additional responsibilities as Shadow Minister for Competition and Productivity and Shadow Minister for Charities and Not-for-Profits.

 

“Sam Dastyari will join the Shadow Ministry with the portfolio of Consumer Affairs.

 

“And Katy Gallagher will bring her wealth of experience to her new role as Shadow Minister for Small Business and Financial Services.

 

I’m combining these responsibilities to drive improved access to capital for small business and better accountability in our banking sector.

 

“This is a Cabinet position, as it should be.

 

“It deserves a heavy hitter, as Katy is.

 

“Julie Owens, representing the small business heartland of Parramatta, will be the Assistant Minister. Matt Thistlethwaite will be an Assistant Minister in the Treasury Portfolio.

 

“Jim Chalmers will enjoy a well-deserved promotion to join the Shadow Cabinet with responsibilities for Finance.”

Friday 22nd July 2016 - 6:38 pm
Comments Off on Federal government acts on steel jobs

Federal government acts on steel jobs

by Alan Thornhill

The Federal government says it has “struck a deal” to secure the jobs of South Australian steel workers.

 

In a joint statement late today, the Prime Minster, Malcolm Turnbull, said  his government “is delivering” on its its “election commitment to support South Australia’s steel sector and workers at Arrium .“

 

He said the Export Finance and Insurance Corporation would provide a loan of $49.2 million for new machinery at the Iron Knob and Iron Baron mines.

 

This would be done under the National Interest Account.

 

Mr Turnbull said this would enable Arrium’s OneWhyalla business to process iron ore to export quality and is expected to boost Arrium’s cash flow by more than $200 million over the next five years.

 

The Prime Minister said this investment would build on his government’s ongoing commitment to support Australia’s steel industry.

 

He said the measurers already announced included:-

  • Using Australian steel across our naval shipbuilding program
  • Upgrading 1200 kilometres of rail line between Adelaide and Tarcoola, a project worth approximately $80 million to Arrium
  • Strengthening Australia’s anti-dumping system.

 

 

Mr Turnbull  said his government would continue to work closely with the administrators as they prepare Arrium’s businesses for sale.

Friday 22nd July 2016 - 1:34 pm
Comments Off on Our banks:what’s bugging us

Our banks:what’s bugging us

by Alan Thornhill

 

Bank customers, worried about high fees and poor service have left Australia’s big four banks facing their lowest satisfaction ratings in three years.

 

A new survey, by Roy Morgan Research, found that although only some 5 per cent of bank customers are classed as “dissatisfied,” their complaints may well need to be addressed, to produce wider levels of satisfaction.

 

So what were they?

 

Predictably, fees and charges took top spot.

 

The researchers said: problems in this area were the most frequently mentioned.

 

They said customers generally felt that many fees were not justified and a backward step.

 

Their comments had included: “It used to be free and now they charge me a monthly account keeping fee”; “they charge for silly things”; “fees exorbitant”; “…they’re at uni studying and if balance is low they charge fees” and “…extreme overcharging of fees”.

 

The researchers also said:  “the second most frequently mentioned problem,(was) poor service.

 

This had spanned a wide range of issues including: “not enough service, prefer you to be out the door”; “poor service and too much focus on profits and shareholders”; ”no follow-up service”; ”very inflexible”; and “poor service and listening skills”.

 

 

The researchers said poor service, spanned a wide range of issues including: “not enough service, prefer you to be out the door”; “poor service and too much focus on profits and shareholders”; ”no follow-up service”; ”very inflexible”; and “poor service and listening skills”.

 

 

Then there were branch issues, the Roy Morgan organisation said.

 

A major branch-related problem was to do with branch closures such as: “they keep closing their branches, very difficult to go to branch”; “removal of branches”;”…closing branches and this results in diminishing service”; “…the branch moved…no close local branch”. Other branch issues related to poor service in the branch: “reduced over-counter service…push to electronic banking”;  ”waiting time in branches”; ”not enough tellers”.

Thursday 21st July 2016 - 1:38 pm
Comments Off on Malcolm Turnbull’s gamble

Malcolm Turnbull’s gamble

by Alan Thornhill

Analysis

 

 

 

 

Placating dissidents is risky.

 

But Malcolm Turnbull was not deterred, a few days ago, when he sent Liberal dissidents a message, from a news conference.

 

The Prime Minister said “: I am listening very keenly and carefully to concerns that have been raised by my colleagues and of course by other people in the community as well.”

 

He was, of course, was speaking to a small, but very active group, of Liberal dissidents, who want bigger tax breaks, on superannuation, for their wealthy voters.

 

The South Australian, Cory Bernardi, who was among the first to speak out on this issue, welcomed the assurance.

 

The ABC reported that he said Mr Turnbull had been  “unbelievably receptive and respectful of differences of opinion on policy issues, including in superannuation.”

 

But not all are convinced.

 

Another conservative Senator, George Christiansen, is threatening to cross the floor – and vote against – what he calls a Labor style policy if the government does not drop its proposed $500,000 cap, on tax free superannuation reforms.

 

The budget contained two main  superannution reforms,   a $500,000 contributions cap and a $1.6 million pension fund limit.

 

The Financial Planning Association chief executive Dante De Gori  has described these as good measures, but warned confidence in the super system could be eroded by the retrospective effects of the $500,000 contributions cap.

 

The dissidents do not agree.

 

One West Australian MP, among their number, says the Liberals would not have lost votes, as they did, in the July 2 elections, if well heeled voters could have been enticed out  to polling stations, to hand out how to vote cards.

 

Ian Yates the Chief Executive of the Council on the Ageing, said  “the fact that the Prime Minister and Treasurer are under pressure to reverse sound policy to make super fairer, based on a weak narrative about selected poor election results and fewer well-heeled supporters manning polling booths, would be laughable if it wasn’t so serious.”
He said:  ““…superannuation tax breaks cost over $25 billion in foregone revenue.

 

 

“Middle and lower earners, the majority of whom are women, have to pay more in taxes – both now and in the future – to pay for super tax breaks that largely benefit high-income men,”Mr Yates said.

 

Several other bodies also vowed to fight the dissidents’ campaign when Mr Turnbull softened his stance on the matter last Sunday, after declaring in the recent election campaign that the government’s position on the matter was “ironclad.”

 

Perhaps the most significant of those declarations, for the government, was that from GetUp, which said it is ready to fight on this matter.

 

Especially as it showed, before the election that it has some skills, in this area.

Wednesday 20th July 2016 - 9:09 am
Comments Off on Australia:the entepreneurial

Australia:the entepreneurial

by Alan Thornhill

Thinking of starting a new small business?

 

You are not alone.

 

A new survey, that the National Australia Bank published today, shows that one Australian in three shares your ambition.

 

The bank says this shows that the start-up culture is alive and well, in this country.

 

So what did the survey find?

 

The key conclusions, according to the bank, were:-

 

  • Around 1 in 3 Australians would like to own their own business with young Australians clearly the most aspirational (nearly 1 in 2)
  • Over 1 in 2 men and 41 per cent of women say they have “good” to “excellent” levels of entrepreneurship
  • The most popular new businesses are cafés and retail, followed by IT and personal services
  • Most budding entrepreneurs would go it alone or with their spouse or partner
  • Around 40 per cent of budding entrepreneurs and 75 per cent of existing business owners need or needed less than $50,000 to get their business off the ground
  • Over 1 in 3 aspirational and existing business owners would be keen to be part of “community” of other entrepreneurs

 

The NAB’s Executive General Manager for Micro and Small Business Leigh O’Neill said a healthy start-up sector is critical to fostering a new wave of growth for the Australian economy.

 

“Small businesses are so important to creating future jobs and economic growth, and understanding their motivations and needs means we can help support the right ecosystems for growth,” Ms O’Neill said.

 

“We’ve got a huge community of budding entrepreneurs eager to get their ideas off the ground, and it’s clear that they need more than money.”

 

The release of the research coincides with the launch of NAB Startup, a service that allows aspiring small business owners to become operational quickly, with guidance on setting up an ABN, ACN, business and domain name registrations, as well as website creation and invoicing functionality.

 

“We see plenty of small business owners juggling full time jobs while setting up their new ventures.

 

 

“They have huge amounts of excitement and energy, but very little time, so they need things to be simple, quick and connected,” said Ms O’Neill.

 

“Services like NAB Startup, our new unsecured $50,000 QuickBiz Loan and digital marketplace for small business Proquo, help entrepreneurs get their business ideas off the ground more quickly and connect with other small businesses.”

 

The full survey ‘The Lure of Entrepreneurship – Australia’s Start-up Culture’  in available at www.news.nab.com.au.

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Alan Thornhill

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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