by Alan Thornhill
The Federal government is expecting no more than moderate economic growth in the short to medium term.
But its economists, like those in the private sector, have been looking – with some interest – at the higher than expected prices Australian miners have beeen receiving for their coal, over recent times.
As well they might.
For if the higher prices last, government revenues will increase, and the job of getting the Federal budget back into order will become much easier.
However, no-one is singing in the basement of the Federal Treasury, just yet.
Economists, working for the National Australia Bank, have also been studying this situation very closely.
And, in an an assessment published last week, they concluded that Australians can still look forward to moderate economic growth – and possibly some further rate cuts.
However there are also some risks in sight.
They said their real forecasts for economic growth ( GDP) “are largely unchanged’.
They have been left at 3.0 per cent in 2016, easing to 2.8 per cent in 2017 and 2.6 per cent in 2018.
But they added: “the unexpectedly high settlement for Q4 coking coal prices however will provide a boost to Australia’s terms of trade, nominal GDP and government revenues.
They were not overwhelmed by those higher prices just yet, though.
“…this is unlikely to be sustained,” they said.
“And we retain our view that the recent surge in coal prices reflects short-term supply constraints and government initiatives offshore which will not continue,” they added.
So the real question now is just how long these higher prices will last.
How long will the surge be sustained?
Well, at least, we might say that Australia’s chances are looking better than they have for some time.
by Alan Thornhill
A leading motoring body has welcomed the consumer watchdog’s move to take Volkswagen to court over allegations of misleading conduct, in dealing with emissions from its diesel engines.
The Australian Competition and Consumer Commission said it would challenge the German car maker in the Federal Court.
The Australian Automobile Association said this is an important step in delivering clarity to affected owners.
Its Chief Executive Michael Bradley said: “The Volkswagen Group has been shown to have misled millions of consumers globally and is being pursued for alleged breach of laws in other countries.
“It’s fitting the legality of the company’s actions be tested against Australian law.”
US authorities found that Volkswagen had intentionally programmed turbocharged direct injection diesel engines to activate certain emission controls only during laboratory tests.
They ordered VW to pay each of its customers an average of $5,000 each in compensation.
The company has said it won’t be making similar offers in Australia.
“But irrespective of whether or not the Federal Court finds the company guilty of a breach of law, Volkswagen Group is clearly guilty of breaching the trust of the Australian owners of tens of thousands of vehicles,” Mr Bradley said.
He said, too, that Australian authorities need to do more to protect motorists and the environment.
“More broadly, the actions of Volkswagen Group have called into question Australia’s emissions compliance regime and highlighted the fact that no independent vehicle compliance testing is performed in Australia to protect consumers, or the environment,” he said.
Mr Bradley said the AAA itself would be undertaking critical work in this area.
“Amid growing concerns that laboratory emissions testing is susceptible to manipulation and does not reflect the true emissions or fuel usage profiles of vehicles on Australian roads, the AAA is investing $500,000 to conduct an on-road emissions pilot test program of 30 vehicles on the Australian market,” he said.
Initial test results are due next month.
by Alan Thornhill
The world’s most important Southern Right whale nursery will threatened if BP is allowed to drill for oil in the Great Australian Bight, environmentalists say.
The Wilderness Society said the South Australian government had “finally admitted” that this risk is real.
The society’s South Australian Director Peter Owen this was confirmed when the State’s Transport Department had updated its South Australian Marine Spill Contingency Action Plan.
This had been done to match an increased risk of spills resulting from from oil exploration in the Bight.
Mr Owen said the department had finally admitted that:-
* oil drilling “will significantly increase the risk to South Australia
* The spill could affect all of southern Australia’s coast, from WA across to Victoria and Tasmania and
*BP plans to drill in Commonwealth marine park’s benthic (sea floor) protection zone
Mr Owen also said: “The Bight’s pristine waters are home to 36 species of whales and dolphins, including the world’s most important southern right whale nursery.
The Bight is also home to ”…many humpback, sperm, blue and beak whales,” Mr Owen said.
“The Bight also supports sea lions, seals, great white sharks, giant cuttlefish, some of Australia’s most important fisheries and migratory seabirds that Australia has international obligations to protect,” he added.
“Not only does BP’s oil drilling threaten these amazing creatures.
” BP wants to drill in Australia’s most biologically significant sea floor, the Great Australian Bight’s benthic protection zone,” he warned.
“The original Commonwealth marine park’s benthic protection zone was designed to protect the huge variety of creatures that live on the Bight’s sea floor, including sea urchins, sea squirts, starfish, shellfish, sponges and lace coral. The Bight has the highest levels of benthic biodiversity and endemism anywhere in Australia, more than in the Great Barrier Reef,” he added.
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
by Alan Thornhill
Malcolm Turnbull’s big new ministry and cabinet to be sworn in today
Pauline Hanson has made a controversial appearance on ABC’s Q&A as police clashed with a handful of protesters who demonstrated for and against her on the street outside, arresting up to six people theage
Donald Trump’s camp calls Republican’s staying away from their party’s convention in Cleveland “childish” BBC
The black former Marine and Iraq war veteran who shot dead three police officers in the southern US city of Baton Rouge at the weekend planned his attack for days and then “assassinated” the men, officials say. ABC
by Alan Thornhill
Tony Abbott has missed out on a place in Malcolm Turnbull’s new ministry and Christopher Pyne is to become Australia’s new minister for defence industry.
The Prime Minister has also named Josh Frydenberg Australia’s new environment minister.
This has angered environmentalists who say Mr Frydenberg has always favoured the coal industry over the Great Barrier Reef.
Mr Turnbull’s new ministry and cabinet are to be sworn in next week.
The Prime Minister’s decision to leave his predecessor, Mr Abbott, off his front bench comes as no surprise, even though hard right MPs, within the Liberal Party, would have welcomed such a move.
As he promised do before the election, Mr Turnbull generally avoided unecssary changes changes when he announced his new team today.
But Mr Frydenberg will become minister for the environment and energy.
Mr Turnbull said all his previous cabinet ministers had been reappointed although there had been some changes and expansions in their duties.
He said: “Senator Fiona Nash will add Local Government and Territories to her Regional Development and Regional Communications roles.
“Christopher Pyne will be appointed to the new role of Minister for Defence Industry, within the Defence portfolio.
“Mr Pyne will be responsible for overseeing our new Defence Industry Plan that came out of the Defence White Paper.
“This includes the most significant naval shipbuilding program since the Second World War.
“This is a key national economic development role. This program is vitally important for the future of Australian industry and especially advanced manufacturing.
“The Minister for Defence Industry will oversee the Naval Shipbuilding Plan which will itself create 3,600 new direct jobs and thousands more across the supply chain across Australia.
“Beyond shipbuilding, there is a massive Defence Industry Investment and Acquisition Program on land, in the air and inside cyberspace.
“This is a massive step change set out in the Defence White Paper. This investment in Defence Industry, as you know, is a key part of our economic plan.
“It will drive the jobs and the growth in advanced manufacturing, in technology, right across the country. And I’m appointing Christopher to be the Minister to oversee that and ensure that those projects are delivered.
“As I said at the outset, this is a term of government for delivery.
“We will be judged in 2019 by the Australian people as to whether we have delivered on the plans and the programs and the investments that we have promised and set out and described in the lead-up to the election.
Greg Hunt will move from Environment to become the Minister for Industry, Innovation and Science, where he will drive the National Innovation and Science Agenda.
“Can I say that Mr Hunt has been an outstanding Environment Minister and he served in that portfolio in Government and indeed, in opposition.
“He has a keen understanding of innovation, he has a keen understanding of science and technology and he will give new leadership to that important portfolio and those important agendas so central to our economic plan.
“Josh Frydenberg will move to the expanded Environment and Energy portfolio combining all the key energy policy areas.
“These include energy security and domestic energy markets for which he has been previously responsible in the current portfolio. Renewable energy targets, clean energy development and financing and emission reduction mechanisms which are part of Environment.
“Senator Matt Canavan will be promoted to Cabinet as the Minister for Resources and Northern Australia and I welcome Senator Canavan to the Cabinet in this key economic development role,” Mr Turnbull said.
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 .
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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.
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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