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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.”
by Alan Thornhill
Malcolm Turnbull’s belief that he would win the July 2 election was understandable.
His chief rival, Bill Shorten, had to win 21 seats to claim both victory – and Australia’s top job – a difficult task, at the best of times.
And with 81 per cent of the vote now counted, Mr Turnbull’s Coalition seems to be “edging towards victory” – tonight.
The ABC was giving the Coalition 72 seats, at that point, Labor 67 and others five.
That left 6 seats in doubt.
The Coalition could still win the 76 seats it would need, to govern alone.
So a hung Parliament – and minority government – are still possible, even likely.
And both Malcolm Turnbull and Bill Shorten still have a real chance of emerging from this political confusion as Australia’s Prime Minister.
Who, though, could provide the nation with stable government, over the next three years?
That’s a very interesting question.
Mr Shorten alluded to it, indirectly, today when he told reporters that if Mr Turnbull “scrapes home” his problems would have “just begun.”
There would be a price.
Senator Nick Xenophon, for example, is already talking about extra assistance for the steel industry, to save more than 6,000 jobs in South Australia.
It is also an open secret in Canberra that Mr Turnbull had to agree, before the election to specific demands made by the Nationals, the junior partner in his Coalition, to get their support.
Then there is the hard right, in his own loosely named Liberal party, led by men like Cori Bernadi.
So what some call “the real Malcolm Turnbull,” who attends Mardi Gras marches in his own electorate, probably won’t be putting up his hand, anytime soon.
There are, of course, a few things that might also be said about Bill Shorten.
However as Mr Turnbull, at present, looks to have the better chance of leading the nation after this cliff-hanger election, perhaps his prospects that should be examined first.
Then, of course, there is the little matter of a new Senate, peppered with independents, that either man would have to face, as Prime Minister.
However, our electoral officials say they might not have a clear result, in that house, until August.
by Alan Thornhill
Australia has had great success in attracting visitors over the past year, particularly from South Korea and Japan.
The Bureau of Statistics reported today that, in trend terms, the number of visitors arriving from South Korea increased by 30.8 per cent, in the 12 months to the end of May, while arrivals from Japan rose by 30.6 per cent.
Overall, too, the number of arrivals also rose strongly in this time, chalking up a 10.9 per cent increase.
Visitor numbers from the United States rose by 18.4 per cent.
Relatively new markets are also rapidly gaining strength, too, in Australia.
On trend figures, for example, 99,400 visitors arrived in this country from China, during May this year.
That number was 18.6 per cent higher than that seen 12 months earlier.
The Statistician also reported that the number of Australians travelling overseas, as short term visitors rose by 3.4 per cent, over the 12 months to the end of May this year.
by Alan Thornhill
The Reserve bank left interest rates on hold today, but hinted that there could be another rate cut soon.
After a meeting of the bank’s board today, its Governor Glenn Stevens noted that Australia’s inflation is low – at 1.3 per cent – and likely to remain so.
Then he added: “Over the period ahead, further information should allow the Board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate.”
Mr Stevens also said: “Several advanced economies have recorded improved conditions over the past year.”
However he added: “but conditions have become more difficult for a number of emerging market economies.
He said: “China’s growth rate has moderated further, though recent actions by Chinese policymakers are supporting the near-term outlook.”
The bank last cut its marker interest rate from 2 per cent, to a new record low of 1.75 per cent, in May.
Mr Stevens said: “Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years.”
“Australia’s terms of trade remain much lower than they had been in recent years.”
He also noted the impact of Britain’s Brexit decision to leave the European Union but said nothing about Australia’s cliffhanger election, last Saturday.
Mr Stevens said global financial markets had been “volatile recently as investors have re-priced assets after the UK referendum.
“But most markets have continued to function effectively,” Mr Stevens added.
“Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.
“Any effects of the referendum outcome on global economic activity remain to be seen and, outside the effects on the UK economy itself, may be hard to discern,” he concluded.
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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