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
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
Australian lawyers are leading a campaign to protect people held in detention centres like Nauru from abuse.
This follows the leaking, earlier this week, of documents apparently detailing more than 2,000 cases of abuse on Nauru.
The lawyers are being supported, in their campaign, by social service workers and international human rights activists.
They launched their latest action by issuing a two page statement calling for Independent oversight of immigration detention and border protection laws.
In its statement, the Law Council of Australia said it had consistently stated that Australia retains responsibility for the health and safety of asylum seekers transferred to other countries for offshore processing and assessment under the Convention relating to the Status of Refugees.
The council is calling for the appointment of an Independent Inspector of Immigration Detention and an Independent Monitor for Migration Laws.
The Council’s President, Stuart Clark, said both Offices are necessary to monitor the integrity of Australia’s national security framework and ensure confidence in the safety and integrity of its border protection.
He added that: “making these key appointments could limit the risk of future harm to asylum seekers held in detention without undermining Australia’s border protection policies.”
Meanwhile the Australian Council of Social Service, the Human Rights Law Centre and the Australian Council for International Development added their voices to calls for better treatment of detainees.
I a joint statement they said: “the Royal Commission into Institutional Responses to Child Sexual Abuse has the power to examine the response of the Australian Government and its contractors to child sexual abuse on Nauru.”
They said this had been confirmed today by legal advice received from the Australian Council for International Development (ACFID), the Australian Council of Social Services (ACOSS) and the Human Rights Law Centre (HRLC).
by Alan Thornhill
Social isolation rates are high in Australia, according to new research that the National Australia Bank published today.
The bank said less than two thirds (58 per cent) of Australians now feel connected to their local communities.
It said, too, that young women and labourers were among Australia’s most isolated people.
But older people, including widowed people and over 50s, were among those feeling the most connected.
These results showed up in a special report on Wellbeing and Importance of Community Connections.
The bank said networks play an important role in overall community wellbeing.
It also said that while there is little difference between the sense of community connection between men and women overall, there are “notable differences by age, education, work, and relationship status.”
“Just as our personal wellbeing appears to increase with age so too does our feeling of community connection,” the bank said.
“Widows, closely followed by over 50s (particularly women), married couples, Australians with a higher education and professional workers, not only report the highest level of personal wellbeing but they are also the most connected,” it added
“Similarly, there appears to be a relationship between low levels of personal wellbeing and weak community connections, with young women (18 to 29) and labourers the least connected groups.” ??The NAB Group’s Chief Economist, Alan Oster, said .
“The message is clear.
Those who feel more connected within their local communities typically have higher levels of personal wellbeing,” ??Mr Oster said.
He conceded that some of the isolation felt by younger people and labourers might due to age.
“But some may also be a by-product of modern living with a lesser degree of community connection due to frequency of job changes, increased globalisation and the associated rise in relocations and the rise of online rather than physical communities and networks” Mr Oster added.
He said too that both men and women believe that addressing safety and law and order issues would have the greatest impact on improving wellbeing, followed by housing affordability, local jobs and health services.
“While there is much that individuals can do themselves such as volunteering and getting to know their neighbours, there is also a clear role for government, community groups and business, particularly regarding issues such as safety, housing employment and health in order to improve the wellbeing of Australians,” he added.
by Alan Thornhill
With returns on interest investments at historic lows – and fresh doubts appearing about the future of residential investment, this might be worth some thought.
Especially in view of the results of the National Australia Bank’s latest Commercial Property Survey,which is for Q2 2016
It shows that: “sentiment in the retail commercial property market has risen to its highest level in over six years.”
However, the bank adds: “strong retail market confidence was not enough to offset the lower sentiment recorded across the office, industrial and CBD hotels sectors.
“ Overall, the NAB Commercial Property Index fell 7 points to +5 in the second quarter of this year,” it said.
“This was a strong quarter for capital growth in the retail property sector, with respondents expecting retail to grow 1.5 per cent in the next year.
“As a result, sentiment in the retail commercial property sector rose to its highest level since early 2010,” NAB Group Chief Economist Alan Oster said.
“However, sentiment from respondents was lower across all other sectors, particularly in CBD hotels which was the weakest sector overall .”
“Looking towards the future, confidence levels remain broadly unchanged over the next one to two years across all markets.”
Market sentiment remained strongest in NSW (+37) and Victoria (+28), likely driven by the continued non-mining recovery whilst sentiment fell heavily in SA/NT (-27
to -51) and, although still subdued, improved slightly in WA (up +4 to -48).
The Q2 Survey showed that one in two developers plan to start new works within the next six months.
“But developers have also reported further deterioration in their debt and equity funding situations.”
That is expected to continue over the next six months.
“This is coupled with respondents reporting the average pre-commitment percentage required for developments increased for the fifth straight quarter,” Mr Oster said.
The Bank said About 230 property professionals had participated in the Q2 Survey.
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 Opposition leader Bill Shorten spoke of his “education dream team” today, as he announced that Tanya Plibersek is to become shadow minister for education. in a reshuffle announced today.
Penny Wong, who previously held that post, will now become, labor’s shadow minister for foreign affairs,
These changes, effectively a swap, were the most important on Mr Shorten’s long list of new responsibilities.
Ms Plibersek also remains Deputy Leader of the Opposition.
She is one of Labor’s most effective speakers.
And her new appointment is being taken as a sign that Labor is planning to make education the spearhead of its next election campaign.
She will be supported by ministers with expanded responsibilities.
Mr Shorten said: “Kate Ellis will expand her responsibilities as the Shadow Minister for Early Childhood Education and Development to include TAFE and Vocational Education.
And “In addition to being Shadow Cabinet Secretary, Jacinta Collins will also be assisting Kate with Early Childhood.
“As a staunch advocate for blue-collar jobs, Doug Cameron will be the Shadow Minister for Skills and Apprenticeships.”
Introducing his new team, Mr Shorten said: “education from the early years to schools, university and of course TAFE and vocational education, is a first-order economic and social priority for Labor in the 45th parliament.
” Investing in education is the key to Australia’s future prosperity, and it is one of the sharpest contrasts between us and the Turnbull Government.
” So I present to Australia, the education dream team: Tanya and Kate – supported by Doug, Jacinta, Terri and Andrew.”
Mr Shorten also said Penny Wong will continue as Leader of the Opposition in the Senate and she will bring her considerable talents and intellect to the important post of Shadow Foreign Affairs spokesperson.
“Claire Moore will work alongside Penny as Shadow Minister for International Development and the Pacific.
“Stephen Conroy will remain Deputy Leader in the Senate and take on the new job of Shadow Special Minister of State, putting a new emphasis on scrutiny of government and the accountability of the executive. Stephen will also be the Shadow Minister for Sport
“It’s great to have a Collingwood supporter in that role at last.
“As I made clear during the campaign, Chris Bowen will continue to lead the economic debate as Shadow Treasurer.
“Andrew Leigh will serve as Shadow Assistant Treasurer, with additional responsibilities as Shadow Minister for Competition and Productivity and Shadow Minister for Charities and Not-for-Profits.
“Sam Dastyari will join the Shadow Ministry with the portfolio of Consumer Affairs.
“And Katy Gallagher will bring her wealth of experience to her new role as Shadow Minister for Small Business and Financial Services.
I’m combining these responsibilities to drive improved access to capital for small business and better accountability in our banking sector.
“This is a Cabinet position, as it should be.
“It deserves a heavy hitter, as Katy is.
“Julie Owens, representing the small business heartland of Parramatta, will be the Assistant Minister. Matt Thistlethwaite will be an Assistant Minister in the Treasury Portfolio.
“Jim Chalmers will enjoy a well-deserved promotion to join the Shadow Cabinet with responsibilities for Finance.”
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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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