by Alan Thornhill
Tony Abbott says the China-Australia free trade agreement will be as vital to national prosperity as earlier decisions to float the $A and deregulate banking.
Addressing the Boao Financial Services Forum in Sydney today, the Prime Minister also paid tribute to two of his predecessors, Bob Hawke and John Howard, for their roles in promoting Australia’s trade with China.
Mr Abbott said prosperity and jobs are generated by trade.
“Australians today are wealthier and our country is more prosperous and more influential because we have grasped the opportunities of trade,” Mr Abbott said.
“As you all know, Bob Hawke was one of the founders of the Boao Forum.
“Better than many others and sooner than many others, he understood that Australia’s future prosperity rested on our trade with China.
“Australia is now poised to realise the Hawke vision and to complete the work begun by Prime Minister John Howard over a decade ago, when the China-Australia Free Trade Agreement passes through our Parliament in the next few months and enters into force.
“This is a decisive moment for the economic future of Australia.
“It is as vital to our long-term prosperity as floating the dollar and deregulating banking was in the 1980s.
“The FTA with China will change Australia for the better, it will change China for the better and it will change our region and our world for the better.
“It will secure the employment of generations of Australians to come.
“It will provide massive new markets for our entrepreneurs.
“It will provide investment opportunities that will enrich the Australian people and the Chinese people alike,” Mr Abbott said.
by Alan Thornhill
Nick McKim, the former Tasmanian Greens Leader, is to fill a casual vacancy in the Senate, created by the resignation of Christine Milne.
This follows a ballot held to identify a candidate for the position.
The Senator elect welcomed the result.
“I want to thank the Tasmanian Greens members for giving me this honour and I will do everything I can to repay the faith they have put in me,” Mr McKim said.
“Replacing someone of Christine’s calibre will be a huge challenge, but one that I’m really looking forward to,” he added.
He was not so kind, though, in his assessment of the Federal government.
“Australia has rarely seen such a reckless and self-serving government,” he said.
Nick McKim declared that:” The Greens mission is more urgent now than ever and I can’t wait to join my new colleagues in standing up for a cleaner, healthier and smarter Australia. ”
by Alan Thornhill
Bill Shorten cast the Labor party in his own image – over the weekend – as other Labor leaders have done before him.
Gough Whitlam, Bob Hawke and Paul Keating all took this necessary step, in their own way, before assuming national leadership.
Two votes, essentially, sealed it for Mr Shorten.
The first, on Saturday, gave him the right to turn back asylum seeker boats, when safe to do so, in circumstances which would make Australia a much more active player, in refugee affairs.(see earlier story)
The second, on Sunday, rejected a move by the Left to require Labor MPs to vote for marriage equality after the next Federal election.
Instead, they will be able to vote according to their consciences, after the next two elections.
But these decisions have one, important feature, in common.
They would give a Labor Prime Minister – presumably Mr Shorten – much greater control over a contentious – and potentially divisive – process, than would otherwise be possible.
If it comes to that.
Of course Labor would have to win the next Federal election, which is due to be held either late next year, or early in 2017, first.
But those two votes have, at least, removed one obstruction on Bill Shorten’s path to the Lodge.
The Opposition Leader did show, at Labor’s 47th Annual Conference in Melbourne at the weekend that he is guiding the modern Labor party today.
Not those who might once have been called Labor’s “faceless men.”
Summing up the weekend’s events, Mr Shorten said:” We are a modern, democratic and confident political party.
“We take our issues out in the open and we trust Australians to understand and respect the conclusions which we reach.
“It is our substance, though, not just our process which distinguishes us from Mr Abbott’s Liberals,” he added.
So what would be different about a Shorten Labor government?
In his final speech to the conference, Mr Shorten touched briefly on this subject, advocating:” A definition of marriage that respects, values and includes every Australian.
“I say, let us achieve this in the life of this Parliament.”
Through a free vote for all Federal MPs.
Faster, more determined action to tackle climate change?
Mr Shorten said that even after Labor had adopted its “bold new goal on renewable energy and an emissions trading scheme, the Liberal party is still planning to “investigate” this issue.
“I am not making this up,” he added.
“They have voted and I quote “to investigate the scientific evidence underpinning the theory of man-made climate change.”
At this point, Mr Shorten faced his audience and said:” It’s alright…I’ve got a contraband copy of their draft resolution for their next Federal Council.”
He also spoke of the Labor party’s ambition to ensure that – within 10 years – 50 per cent of its MPs would be women.
by Alan Thornhill
Australian motorists might be forgiven for believing they have been mugged at the petrol pump over the past three months.
The Bureau of Statistics reports that automotive fuel prices throughout Australia jumped by 12.2 per cent in that time, the biggest quarterly rise in 25 years.
That rise neatly reversed a 12.2 per cent fall on the same indicator, in the final three months of last year.
The Bureau packs highly volatile fuel prices into a category it calls its transport group.
It reports that transport prices – measured in this way – rose by 3.4 per cent in the three months to the end of June.
Perhaps surprisingly, though, the Bureau also reports that the overall prices Australians pay for their transport fell by 2.4 per cent in the 12 months to the end of June.
So how else have we been hit by price movements?
Overall, Australian prices, measured on the Bureau’s consumer price index, rose by 0.7 per cent in the June quarter and 1.5 per cent over the year.
What, though, of the particulars?
Well, the Bureau reported that our housing prices rose by 0.7 per cent in the quarter and 2.5 per cent over the year.
It said the main contributors to the annual rise were a 4.8 per cent rise in the price of new homes purchased by owner occupiers and a 1.9 per cent rise in rents.
The Bureau also calculated that recreation and culture prices fell by 1.4 per cent in the quarter, but rose by 0.9 per cent over the year.
It said, too, that its health group prices rose by 2.7 per cent in the quarter and 4.3 per cent over the year.
The price of food and non-alcoholic beverages fell by 0.2 per cent in the quarter, on the Bureau’s calculations, but rose by 1.3 per cent over the year.
by Alan Thornhill
Tony Abbott dismissed talk of an early election today, describing it as hyperventilation.
The Prime Minister was replying to a reporter’s question, while visiting a farm near Goulburn in New South Wales, to promote the government’s White Paper on Agriculture.
The reporter had asked Mr Abbott if he is planning an early election.
Mr Abbott replied:” there’s always a lot of hyperventilating, if I may say so, from the media about will there or won’t there be an election any time soon.
“Can I just say that we’ve had the best fortnight in the life of this Parliament.
” We’ve just had a fortnight where a lot of legislation was passed, where some $14 billion worth of much needed savings were realised through sensible decisions at last by the Greens and by the Labor Party to support Government initiatives.
“Why would you want to close the Parliament down just when it’s starting to work?”
Mr Abbott also said his Agriculture Minister, Barnaby Joyce, is “absolutely” safe in that position, even though he is campaigning against a coal mining project, that the Federal government is likely to approve in his electorate.
A reporter had asked if Mr Joyce was safe in his job.
Mr Abbott replied:”Absolutely.
“He is doing an outstanding job.
“He is passionate, he is committed, he is knowledgeable
“And this White Paper is a tribute to his good work,” the Prime Minister said.
by Alan Thornhill
Australia’s carbon heavy financial system could collapse under its own weight, according to a new study.
The warning is contained in a discussion paper, “Australia’s Financial System and Climate Risk”, published by the Climate Institute.
The study warns that Australia’s financial system could be destabilised by both direct climate change impacts and secondary effects, such as a slump in demand for carbon-intensive exports.
It examines general risks posed to all financial systems, and considers which risks could be particularly relevant to the Australian economy and financial system, through our broader economy.
Specifically, it examines risks to superannuation funds, mortgages, and our place in global capital markets.
The study then puts a case for a comprehensive assessment by financial authorities.
To ensure the system is resilient to climate-related shocks.
“We know that climate change is already affecting our economy, and that some companies and financial institutions are already waking up to the implications for their own businesses,” John Connor, CEO of The Climate Institute said.
“Yet many others are still forging ahead as though climate change, and the economic changes needed to deal with it, will have no impact at all on their plans.
“There’s a risk that poor policy signalling, delayed action and mis-reading by markets could lead to a messy transition that threatens the stability of our financial system.
“This risk deserves closer examination by our policy makers and financial regulators.
“The question is whether the entire financial system can adapt in an orderly way to climate change and related shifts in policy, society and technology.”
Mr Connor noted that the past two years have seen unexpected shifts in many markets.
These had included slumping value of pure-play coal companies’ shares; declining resources demand from China and plummeting costs of solar panels.
“It has also seen investors – particularly large, long-term investors – increasingly incorporating climate risk as a material factor in their strategies,” Mr Connor said.
“More than 190 countries have committed to keeping warming to less than 2 degrees,” he added.
“With major economies like the US and China putting forward initial long-term emissions reduction targets and accelerating climate action ahead of the Paris climate talks at the end of this year, the direction of travel is clear.
” Nations and mainstream economic institutions and organisations now recognise that the global economy must be zero carbon before the end of this century.”
Mr Connor said governments of the world’s biggest countries, including Australia, had already acknowledged that this risk deserves formal scrutiny.
In April the G20 had asked the global Financial Stability Board to consider stranded asset risks and the “carbon bubble”.
” This is recognition that climate change has unique characteristics which can pose a threat to financial stability,” Mr Connor said.
“However the FSB work will not take account of every country’s particular characteristics,” he warned.
Financial authorities at a national level in many countries, such as the Bank of England, are taking concrete steps towards determining how they should guard against climate risk in their respective jurisdictions.
“The sub-prime bubble which led to the global financial crisis may offer insights, but there is no precedent for climate change in financial history which we can draw upon,” Mr Connor said.
“However we do know climate impacts are already costing us, and those costs will continue to grow.
“These are complex issues; it will take time and effort to work through them.
“This is why it’s essential to begin looking at them now.”
by Alan Thornhill
Tony Abbott and Joe Hockey are jeopardising both jobs and investment in Australia’s wind power industry, according to Labor.
The Opposition’s Environment spokesman, Mark Butler, leveled this charge at the Prime Minister and Treasurer, after Fairfax newspapers reported that Mr Abbott had ordered environmental authorities to with-hold approval for new wind farm projects.
In a statement today, Mr Butler described this as a “dramatic escalation” of the government’s “war on wind farms.”
He said Tony Abbott’s and Joe Hockey’s: “dramatic escalation in its war on Australia’s wind industry is astoundingly reckless and is putting jobs and investment at serious risk.
“Reports today that the Clean Energy Finance Corporation has been ordered by the Government to stop investing in wind energy projects is the latest step in its(the government’s) relentless attack on the renewable energy industry,” Mr Butler said.
“How a Prime Minister and Treasurer can so blatantly undermine thousands of Australian jobs and billions of dollars in investment is beyond comprehension,” he added.
“Tony Abbott is abusing his office and the Cabinet process by pursuing his own anti-wind ideology, enlisting fellow wind haters Joe Hockey to help bring down a whole industry.
“Greg Hunt must stand up today and be clear about whether he supports this attack from Tony Abbott and Joe Hockey, or does he support Australia’s wind industry.
“Will Mr Hunt stand up for jobs, investment and the environment – or will he cower in the corner in the face of his climate sceptic colleagues?” Mr Butler asked.
“The wind industry employs thousands of Australians, attracts billions in investment and reduces pollution,” he added.
” Tony Abbott’s own RET (Renewable Enegry Target) Review Panel found renewable energy drives down household power prices,” Mr Butler said.
“Unlike Tony Abbott and Joe Hockey, Labor believes Climate change is a serious problem with a simple solution: cheap, clean, renewable energy to secure a healthy environment for the future generations,” he added.
” “Australia’s wind industry employs thousands of people,” he said.
by Alan Thornhill
Treasury Chief, John Fraser, admitted today that he is worried that Australians are too complacent about their nation’s long term prospects.
Addressing economists in Brisbane, Mr Fraser said:” My message today is rather basic, possibly boring and it is not novel.
“Put simply, I worry that we are overly complacent about our longer-term outlook.”
Mr Fraser said this is especially so as Australians live in a region that’s pushing ahead at a remarkable rate of knots and may leave us behind.
“Some of this complacency can be explained by the fact that the Australian economy is now entering its 25th consecutive year of growth,” the Treasury Secretary said.
“This is the second longest continuous period of growth of any advanced economy in the world.
“And the growth continues.
“There will always be doubters but the recent Budget economic forecasts still describe one of the better shorter-term economic outlooks in the world.
“And data since the Budget have not given Treasury a reason to rethink the thrust of these forecasts.
“The March quarter National Accounts confirm there is increasingly broad-based momentum in the Australian economy – the real economy grew by 0.9 per cent in the quarter, to be 2.3 per cent higher over the past year.
“And labour market outcomes have been a little better than expected,” Mr Fraser said.
“There will always be risks to the economic outlook but, for this year, there is little reason to be a doomsayer,” he added.
“But we are, of course, keeping a keen eye on international developments, particularly in China and Europe, “Mr Fraser said.
These might affect the global outlook and global confidence, which could have flow-on effects to Australia.
“Having said this, our current and recent record should not distract us from recognising and addressing the deep challenges that lie before us,” Mr Fraser said.
“Laying the foundations for future growth is of great strategic importance if we are going to take our full place in the fastest growing region in the world,” he added.
Mr Fraser said sustained, long-term growth would clearly require structural reform.
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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