by Alan Thornhill
Watch the Chinese consumer closely.
That’s the message John Fraser, the Secretary to the Treasury, gave to a Fixed Income Forum in Tokyo today.
And he wasn’t modest about it.
He said Chinese consumers could boost – or weaken – the Australian economy.
But his message was essentially positive.
“Australia is entering its 26th year of continuous economic growth,” Mr Fraser said.
“We did not fall into recession in the aftermath of the global financial crisis of 2008, unlike many economies.
“ And real GDP is growing by 3.3 per cent per annum, faster than every country in the G7,” he added.
So what does the Chinese consumer have to do with all this?
Well, Mr Fraser has a few words for the sceptics, on that issue.
“ Indeed, 8 out of Australia’s top 10 trade partners are in Asia,” he said.
Mr Fraser also noted that with the mining boom now well past its peak, lower levels of of mining investment have already become “a significant drag” on our economy.
And worse is to come.
“ Mining investment is expected to fall by 25 per cent in 2016-17 and a further 14 per cent in 2017-18,” Mr Fraser said.
But he added: “as this detraction eases it is expected that investment in other areas of the economy will pick up, despite uncertainty over the exact pace and timing of this recovery.”
This is where – hopefully – the Chinese consumer – or tourist – comes in.
Or, as Mr Fraser said: “of particular importance – for Australia and the world – are the implications of the transition of the Chinese economy towards a more consumer-driven growth model from its present reliance on investment.’
“ Sustainable growth in China is in our interest and China’s economic transition will present opportunities for Australia.”
“ However, this process is unlikely to be smooth and there is a tension between policies to support short-term growth and the structural reforms required to re-balance the economy.”
Mr Fraser added: “the potential for this transition to lead to a greater-than-expected slowdown in the Chinese economy remains a key risk to Australia, the region and the global economy.”
“We are leveraged into the Chinese economy through many channels,” Mr Fraser said.
by Alan Thornhill
Federal police raids on the home and office of Labor frontbencher Stephen Conroy – and later on Parliament itself – will go to the Senate Privileges committee.
Senator Conroy, himself, proposed the move today.
The committee will be asked to rule on whether the raids amounted to improper interference with Senator Conroy, in the performance of his parliamentary duties.
The government did not object to his proposal.
The police were searching, both times, for the source of a leak alleging cost over-runs and patchy performance of the Federal government’s national broadband network.
This copper wire network is now said to have become more expensive than the faster fibre to the node alternative that Labor had proposed.
Malcolm Turnbull, who is now Prime Minister, pushed hard for the copper wire network, at the time, largely on the basis of cost.
That has since been described by the first man chosen to operate the NBN as “a colossal mistake.”
Senator Conroy recalled that the police raids on his home and office in Melbourne took place on May 20 this year, and that on Parliament House in Canberra occurred on August 24.
Both times Senator Conroy accused the Federal government of using “police State” tactics to investigate a leak, which he said was a common event in politics.
However Mr Turnbull has denied the charge, saying the police were simply carrying out their usual duties.
by Alan Thornhill
The Federal government says there has been ‘encouraging” progress with its efforts to reduce the gap between the pay of men and women.
The Minister for Employment and Women , Senator Michaelia Cash, said today this is reflected in the latest average weekly earnings figures published by the Bureau of Statistics.
These showed, on average, that men working full-time earned $1,613.60 a week in May this year, while women were earning $1,352.50.
Although Senator Cash admitted that this still represents a difference of $261.10 a week, she said a close look at the Bureau’s figures also suggests that women are starting to catch up.
For example, she said that: “between May 2015 and May 2016, women’s weekly earnings grew by 3.4 per cent while men’s weekly earnings grew by 1.3 per cent.”
She said there is other evidence, too, that the “gender gap” between the pay of men and women is being trimmed.
The ABS data, for example, also showed that the gap,for full time employees has narrowed to 16.2 per cent, a decrease of 1.7 percentage points from a year ago.
However Senator Cash also said that while this is “encouraging,” the Government’s determination to cut this still “stubbornly high gap is unwavering.”
“Given that less than two years ago the gender pay gap was 18.5 per cent, these figures demonstrate significant progress,” Senator Cash said.
She claimed progress, too, in the government’s efforts to employ more women.
“In the month of July, the level of employment for women rose by 8,100 and is now at a record high of over 5.5 million.
“Furthermore, the participation rate for women has also trended upwards over the last 12 months,” she said.
Senator Cash also said: “the Turnbull Government is working to close the gender pay gap by:
* Ensuring women have the skills and support they need to work in growth industries, with $13 million invested through the National Innovation and Science Agenda in
getting more women into science, technology, engineering and maths
* Shining the light on pay equity through the work of the Workplace Gender Equality Agency
* Setting a new target of men and women each holding 50 per cent of Australian Government board positions and strengthening the BoardLinks program and
* Its scholarship and mentoring programs, improving gender diversity in senior leadership roles
*Partnering with UnitingCare on the Springboard Project to give women the opportunity to train and build a career in the UnitingCare network, while also
providing the flexibility to care for their families
* Supporting Australian women to participate in the workforce through our Jobs for Families Child Care package
* Boosting the superannuation of women who have taken time out of work through the Low Income Superannuation Tax Offset.
Senator Cash said it is clear from these latest figures that employers are taking action and this effort is producing results.
“To see these encouraging results continue we all need to maintain our attention on improving gender equality and that applies to Government, employers and individuals – ensuring we achieve true gender equality will require a concerted and lasting commitment from everyone,” she added.
by Alan Thornhill
Many readers will think of Kim Beazley as the former Labor leader, who lost Federal elections in 1998 and 2001. But this story is not about him. It is about his father, also Kim Beazley. It has never been written before.
Kim Senior, as we will call him, was also a Federal politician. Education minister in the Whitlam government, in fact.
He was on the Right, in the Whitlam cabinet.
This was at the height of the Moratorium movement, as the protests against Australian involvement in the Vietnam war were known, back then.
And in those turgid times, Kim Senior was invited to “explain his views,” before a Trades and Labor council meeting in Perth. We all knew what that meant. Big Kim’s job was on the line. Left wing unions had the numbers 80-20 on the council back then.
So Kim Senior was fighting for his political life. Whatever happened, this would be a national story. Not just one for The West Australian, where I worked, as industrial reporter at the time. We knew, also, the result would come, either right on The West’s deadline, that night, or just after it. But the result, itself, was the thing.
Kim Senior looked remarkably relaxed, as he rose to speak at that meeting.
And his speech ran to just one, or two sentences.
“I do not support the Vietnam war,” he said.
“Because getting involved in a land war in Asia is the second worst military decision it is possible to make.”
He then sat down, leaving the assembled union officials turning to each other, to ask: “What’s the worst?”
After an interval of at least two minutes, Big Kim rose again, and said: “Oh. And by the way. The worst is to invade Russia in winter.”
In a long career as a reporter, I never heard a better speech.
by Alan Thornhill
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.
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
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
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.
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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