by Alan Thornhill
Australians adopt new technologies eagerly.
So much so that more than half of us have already signed up for the most significant development in the management and spread of information in modern times.
The Australian Bureau of Statistics confirmed this when it reported that the nation had some 12.946 million internet connections in December last year.
Our population in September last year was 24,037415.
The Bureau also said the number of internet connections grew by 2 per cent in 2015.
It said, too, that that 99.3 per cent of these connections had been broadband.
But made at much slower speeds than would be expected in other advanced Western countries.
No-one did more to persuade Australians to make that choice, on the grounds of economy, than the present Prime Minister, Malcolm Turnbull.
He has raised his own party’s productivity, since then, by introducing a two word slogan to replace the three word zingers the Liberals have favoured in the past.
But “innovation nation” doesn’t sit well with slow internet speeds.
Does it matter?
Well nothing much was achieved in this little word factory last weekend, when our tech launched a recommended upgrade of the popular word processor Word 10.
That took almost 24 hours.
by Alan Thornhill
Hot weather kept shoppers at home – and retail sales flat in February.
| This situation is reflected in figures the Bureau of Statistics published today.
These showed that – overall – the increases that occurred in retail sales in February –were offset by falls, at least on seasonally adjusted figures.
The Bureau reported that sales of clothing, shoes and household goods had all risen during the month.
But we spent less in the nation’s cafes, restaurants, take-away food and other retail outlets.
Our spending also continued t o rise on trend figures, with the Bureau reporting a 0.2 per cent rise on this basis for the month.
FEBRUARY KEY POINTS
CHANGES IN THIS ISSUE
This issue includes updated online retail turnover estimates for the February 2016 reference month.
Revisions have been applied to the original estimates for January 2016 as a result of updates to survey respondent information. Net revisions totalled $24.2 million. Revisions were applied to all publication industries.
Revisions to seasonally adjusted estimates are due to revisions to original estimates as well as the concurrent methodology for deriving seasonal factors.
TIME SERIES DATA
Data available from the Downloads tab of this issue on the ABS website include longer time series of tables in this publication:
by Alan Thornhill
China is already Australia’s best customer.
However new research suggests it could be much better.
It also suggests that your business might well benefit.
The research, published by the Australia China Relations Institute points out that at 109 million in 2015, China’s middle class is already bigger than that in the United States.
Seventeen million bigger in fact.
So we can expect to sell more than iron ore and coal in future.
The Institute also says : “Australia’s ‘China Resources boom’ may have peaked but 57 cents in every dollar increase in Australian exports between 2009-10 and 2014-15 still came from China”
And it adds: “If managed well, Australia’s ‘China dining and services boom’ could run for decades.
There is much more on the Institute’s website at Australia China Relations.Org
Here, though, are some samples:-
In 2014-15 Australia’s agricultural exports to China stood at $9.0 billion
That was up from $3.7 billion in 2009-2010 and 72 percent more than to the US, our second largest customer.
In 2014-2015 Australia’s services exports to China stood at $8.8 billion.
This was up from $5.5 billion in 2009-2010 and 24 percent more than to the US, our second largest customer.
In 2015 more than one million Chinese tourists visited Australia spending $7.7 billion.
That was up from $3.3 billion in 2010 and more than double that of UK visitors in second place.
By 2020 Chinese tourist spending is forecast to reach $13 billion and account for 44 percent of the growth in total tourist spending to 2024-25,the Institute said.
It added:“ China’s middle class is no longer confined to the tier-one metropolises of Beijing, Shanghai, Guangzhou and Shenzhen.
By 2022 84 percent of the middle class is expected to live outside these cities.”
“In 2011 the only direct flights to Australia were from Beijing, Shanghai, Guangzhou and Shenzhen”
“ Now there are direct flights from 11 Chinese cities, including inland centres such as Chengdu, Chongqing, Wuhan and Xian.”
“ In 2015 there were 170,212 enrolments by Chinese students at Australian educational institutions, 2.4 times the number of students from India in second place
In 2013-14 the number of Australian student visa applications lodged from China’s traditionally less wealthy inland provinces was 12,345, up 30 percent from a year earlier.
“Those from coastal provinces stood at 23,805, up 24.6 percent.”
by Alan Thornhill
Malcolm Turnbull declared that his new cabinet “combines youth, new talent, and experience” as he announced its membership at a press conference in Sydney today.
The truth, always, is a little more complicated.
The reshuffle that the Prime Minister had announced, just months before the next Federal election, was not his choice.
It was forced on him by the resignation of a minister, Stuart Robert, who had held the Human Services Portfolio.
Until Labor pursued him relentlessly in Federal parliament.
It alleged Mr Stuart had used his public office to promote the interests of a company that donates generously to the Liberal party.
And that he did so while on a private visit to China.
Meanwhile the Opposition Leader, Bill Shorten, was cheered enthusiastically at a Labor conference, also in Sydney.
That happened as he explained new tax policies meant to make new home purchases more affordable for young Australians.
Beyond that there was a sense, in the conference room, that Labor’s fortunes might have changed.
And that it might now have at least some chance of defeating the government in the forthcoming elections, even though it has been trailing the Coalition in the polls for several months.
But who has found a place in Mr Turnbull’s new Cabinet?
The Prime Minister congratulated Barnaby Joyce and Fiona Nash on their respective elections as Leader and Deputy Leader of the National Party, the junior partner in his Coalition government.
And he said:” Barnaby Joyce will consequently be sworn in as the Deputy Prime Minister and he will retain his portfolio of Agriculture and Water Resources.
“His Deputy, Senator Fiona Nash, will be sworn in as the Minister for Regional Development, Regional Communications and Rural Health.”
Mr Turnbull also said:” I’m appointing Andrew Robb as a Special Envoy for Trade between now and the election so that he can support Steven in the transition into the new portfolio and ensure that Andrew’s remarkable range of international contacts will be introduced to his successor.
Darren Chester will take on Warren Truss’s responsibilities for infrastructure and transport. Darren will make a formidable contribution in this portfolio.
He has been one of the younger stars in the Parliament and recognised as such for a long time.
Mathias Cormann will retain his responsibilities that he’s taken on in an acting capacity but he’ll retain them formally as the Special Minister of State in addition to being the Finance Minister.
“As you know, Mal Brough informed me earlier today that he did not wish to be considered for a position in the new executive line up given the fact that the police investigations are continuing and will continue at least for some months, as he understands.”
Senator Scott Ryan will be sworn in as the Minister for Vocational Education and Skills.
Now this ministry was previously, has been held by Luke Hartsuyker and he is not featuring in the National Party’s ministerial line up on this occasion.
‘I want to thank Luke for his contribution in that portfolio.
“He also has made a great contribution to the Coalition in opposition as well and we worked very closely together when I was the Shadow Communications Minister and he was the Shadow Minister for Regional Communications.
“He’s a great parliamentarian, a great coalitionist and he will be missed.”
“Alan Tudge will be sworn in as the Minister for Human Services.
|“Dan Tehan will be sworn in as the Minister for Defence Materiel and the Minister for Veterans’ Services.|
“Senator Concetta Fierravanti-Wells will be appointed and sworn in as Minister for International Development and the Pacific.
“This is a very exciting promotion for Connie and recognises her extremely successful and very important work as the Assistant Minister for Multicultural Affairs.
“Senator Matt Canavan from Queensland will be sworn in as the Minister for Northern Australia.
“He will work closely with the senior minister in that portfolio, Josh Frydenberg and the Cabinet Minister.
“This is a policy area of Northern Australia, of northern development which is absolutely central to Australia’s growth and future prosperity.
Mr Turnbulll said the changes ‘in the Assistant Minister ranks would be:-
Keith Pitt will serve as the Assistant Minister to the Deputy Prime Minister.
Craig Laundy will become the Assistant Minister for Multicultural Affairs.
Jane Prentice will be the Assistant Minister for Disability Services working with Christian Porter.
Angus Taylor will serve as the Assistant Minister to the Prime Minister with special responsibility for Cities and Digital Transformation. These are two key whole of government areas and they will be taken, continued to be driven through my leadership and my department in the future.
Dr Peter Hendy will serve as Assistant Minister in the Finance portfolio supporting Mathias Cormann and also as Assistant Cabinet Secretary.
Senator James McGrath will continue to serve as my assistant minister but will take on additional duties supporting Peter Dutton as Assistant Minister for Immigration.”
The Prime Minister said his new team would be sworn in on Thursday morning.
by Alan Thornhill
Malcolm Turnbull told Parliament today that the government wants Australians to be paid their entitlements as fast and efficiently as possible.
The Prime Minister was replying at question time to the Opposition Leader Bill Shorten who had asked about a report in today’s West Australian that which said the government is planning to privatise both Medicare and the PBS.
Mr Turnbull said the government is always looking for ways of bringing the delivery of its services into the 21st Century.
Australians now commonly use their smart phones to transact their business.
Yet Medicare procedures are still firmly paper based.
So the government has been looking for ways to bring the large number of Medicare and Pharmaceutical Benefits Scheme transactions conducted each day into the 21st Century.
Mr Turnbull also said the only way young Australians could look forward to secure well paid jobs, in the longer term, was if their employers also kept their operations up to date in this way.
”This is about making it simple for patients to transact business with Medicare,” Mr Turnbull said.
by Alan Thornhill
Australia’s exporters have more reason than other Australians to celebrate the New Year according to the Federal government.
In a statement today the Department of Foreign Affairs and Trade said that’s because new tariff cuts, under Free Trade Agreements with both China and Korea kick in from today.
It said:”“ Tariffs on Australian exports to China have now been cut twice in less than a fortnight, following initial reductions when ChAFTA entered into force on 20 December 2015.”
“The tariff reductions on exports to Korea will be the third round of cuts under KAFTA, since its entry into force on 12 December 2014.”
“”The positive results of these agreements are already being seen.”
” RBK Nutraceuticals, based in Sydney, have increased their exports into Korea by a huge 161 per cent since the beginning of the agreement.”
“Tasmanian cherry growers have also enjoyed huge increases in demand due to the commencement of KAFTA with the state exporting 185 tonnes of cherries into Korea over last summer compared with just five tonnes the previous year.”
“Our beef exports increased more than 30 per cent to be worth over $550 million after the 2015 tariff reduction.”
“The conditions are right for this year’s tariff cut to strengthen the tailwinds for this valuable trade even further.”
Each year KAFTA puts up to $40m back into the Australian beef industry instead of into paying tariffs.”
“Importantly, these recent cuts also bring us closer to our competitors.”
“Never again will the differential between Australia and USA beef exports be greater than 5.4 per cent.”
The Departmennt also said:” Remaining tariffs on Australian resources and energy exports will also be further reduced.
It said the three agreements have made Australia vastly more competitive in a market of more than 1.5 billion people.
The Department said:” Detailed information on each agreement can be found at the Department of Foreign Affairs and Trade and Austrade websites, or www.openforbusiness.gov.au.
by Alan Thornhill
Consensus on tax reform proved elusive when the Prime Minister, Malcolm Turnbull met State premiers and Territory leaders in Sydney today.
The State and Territory leaders went into the meeting of the Council of Australian governments seeking reversal of the $80 billion cuts to their health and education spending that flowed, ultimately, from the unpopular 2014 Federal budget.
Mr Turnbull, for his part, was seeking more stable revenue flows, as the mining boom subsided.
That led to the Federal Treasurer, Scott Morrison, ordering the Federal Treasury to model the likely impact of possible changes, including several that would include a higher Goods and Services Tax.
Although the Opposition has been warning that Mr Turnbull wants to impose a 15 per cent GST on “everything” in place of the present 10 per cent, a 12.5 per cent rate is now starting to look more likely.
But the Coalition remains determined to curb the big Federal deficits it inherited from its Labor predecessor,
Mr Turnbull opened today’s meeting by thanking the Premiers and Territory leaders for what he called “very collaborative discussion we had last night.”
He said:“We all understand that Australia’s economy is transitioning from an enormous mining construction boom.”
And added:”We recognise that we’ve seen a high rise in our terms of trade and as was always going to happen that has now subsided.
I think we all recognise that to ensure our continued prosperity we do need to be more competitive, more productive and more innovative.
However the COAG leaders did agree to keep on examining options for tax reform.
They also accepted a March deadline on their discussions.
”Mr Turnbull said after today’s meeting “there are many different options.”
“There are many different approaches and… ultimately what we need is a tax system for the 21st century.”
The Tasmanian Premier, Will Hodgman, said he was looking forward to putting some concrete proposals on the table by the proposed deadline of March next year.
Mr Hodgman said his focus was not to increase the tax burden.
“We believe that the better and more appropriate approach is to ensure that we use this discussion, which also has a very important element of understanding the inefficiencies in our systems,” he said.
ACT Chief Minister Andrew Barr said there are still some fundamental issues in the tax system that need to be addressed ahead of the looming deadline.
“Importantly, out of today was recognition from states and territories as well as the Commonwealth that this is a shared challenge,” Mr Barr said.
“But it’s one that the clock is ticking on and we can’t have another meeting like today in March.
“We have to start making decisions.”
by Alan Thornhill
The Australian economy has stirred over recent months.
Manufacturing sales rose 0.8 per cent – on seasonally adjusted figures – in the September quarter – after six quarters of falls.
However this small rise – on a volume basis – seen in figures published by the Bureau of Statistics – was dwarfed by a 5.1 per cent fall over the year.
A survey, also published today showed business confidence fading in recent months as results failed to meet expectations.
The fall in business optimism was reflected in the results of the latest Dun & Bradstreet’s Business Expectations Survey.
These suggest a fairly subdued outlook for the first quarter of 2016.
However Westpac Economist, Andrew Hanlan, said the tone of the bureau’s business indicators’ survey had been more positive than anticipated.
Adam Siddique, the Head of Group Development at Dun & Bradstreet, broadly concurred.
He said business confidence remains historically strong,.
However he warned that cooling in housing market activity might present challenges in the year ahead.
“There can be no doubt the Sydney and Melbourne housing markets are now slowing down, which is to be expected after a period of spectacular growth,” Mr Siddique said.
The firm also reported that, as the new year approaches, business are reporting lowered expectations for activity across sales, profits, employees and capital investment.
It said that in the September quarter, the percentage of businesses reporting an actual increase in activity minus percentage of businesses reporting an actual decrease fell short of expectations a across all components, except selling prices,
That exceeded expectations by a marginal 0.33 points.
Meanwhile, the actual increase in both selling prices and employment exceeded expectations for the September quarter:
Twenty five point 2 per cent of businesses reported an increase in selling prices for Q3, compared to the 24.2 per cent that had expected an increase, while 23.0 per cent of businesses reported an increase in employees for the quarter, compared to the 21.1 per cent that had expected an increase.
D&B said the muted outlook came despite an improvement in actual indices for profit, capital investment and selling prices in the September quarter over the June quarter.
Only the actual sales index decreased; while the actual employees Index remained unchanged since the previous quarter.
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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