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Wednesday 8th June 2016 - 2:36 pm
Comments Off on Home lending falls

Home lending falls

by Alan Thornhill

The value of new home loans let in April fell by 1.8 per cent, on seasonally adjusted figures that the Bureau of Statistics published today.

On trend figures, though, the fall was much smaller at 0.3 per cent.

The biggest fall, though, was in fixed loans taken out for investment housing.

These fell by 5 per cent in April.

Differences in the housing tax policies that the major parties are taking to the July 2

elections are the probable cause of this fall.

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Wednesday 8th June 2016 - 2:25 pm
Comments Off on New research casts shadow over Australia’s trade prospects

New research casts shadow over Australia’s trade prospects

by Alan Thornhill


Australia’ s economic growth  appears to have been surprisingly strong in the early months of this year.

Indeed the Statistician put it at 3.1 per cent in the 12 months to the end of  March – and said trade had played a leading role.

The Prime Minister, Malcolm Turnbull, later made that an election issue later when he said this kind of growth does not happen “by accident.”

These developments make new research,  that the National Australia Bank published today, particularly interesting.

For the bank states, quite bluntly, that our iron ore trade has been “riding an unsustainable wave.”

If that is true, the Prime Minister’s carefully crafted, but still merely implied claim, to have produced that growth, takes a hit.

Mr Turnbull conceded later that there are risks associated with both government and opposition forecasts.

The reality is that forecasts – there are always risks with forecasts I think everyone understand that.

“The further out you go, the more speculative those assumptions are.

He was replying to a reporter in Ulladulla.

 “What will the iron ore price be?

“What will the foreign exchange rate be?,” Mr Turnbull asked rhetorically.

The bank, itself, avoided stepping into the current election campaign, contradicting Mr Turnbull directly.

But what the NABt does say is deeply disturbing to people who worry about Australia’s economic future, especially as iron ore has long been a very big item in this nation’s trade accounts.

It says that:” After trending lower across 2015, iron ore prices staged a short-term volatile rally in early 2016 – returning close to US$70 a tonne in late April.

“This coincided with a rapid increase in Chinese futures market trading volumes on the Dalian Commodity Exchange – with may indicate a temporary speculative bull market.

“Subsequent tighter regulation on the DCE brought prices back nearer to US$50 a tonne.”

Then the NAB adds:-


  • This rally occurred against a backdrop of stronger Chinese steel market conditions – with demand recovering thanks to a rebound in construction activity (the sector that accounts for over half of China’s steel demand). Steel prices rose faster than input costs between February and April, driving steel maker profitability to its highest level in almost seven years.


  • We argue that the rebound in construction is not sustainable, with policy changes that have relaxed purchase requirements, looser credit and the poor performance of alternative investment options re-inflating the property bubble that had somewhat deflated across 2014 and 2015.


  • The short-term boost to profitability should not be allowed to overshadow the significant long-term challenges that China’s steel industry needs to address. Excess capacity in China’s steel sector exceeds 300 million tonnes (around three times the 2015 output of Japan, the world’s second largest steel producer).


  • Medium term trends for steel – both in China and globally – appear subdued. Expectations that China’s steel consumption will continue to decline in coming years will be a major constraint on iron ore demand, while sub-trend economic growth elsewhere provides little opportunity for China’s declines to be offset. Over the medium term, we expect prices to settle at around US$40 a tonne.
Sunday 5th June 2016 - 7:44 pm
Comments Off on Labor presents its childcare policy

Labor presents its childcare policy

by Alan Thornhill

More than one million Australian families will benefit from child support changes Labor is proposing, the party claimed today.

The Leader of the Opposition, Bill Shorten, and the Shadow Minister for Early Education, Kate Ellis, made the claim in a joint statement.

The plan is based largely on in increases to the annual cap on the present Child Care Benefit.

Mr Shorten and Ms Ellis declared: “the annual cap on the Child Care Rebate will be increased from $7,500 to $10,000 per child, leaving families up to $2,500 per child per year better off.”

And they added: “Low and middle income families will benefit from an increase to the Child Care Benefit of 15 per cent.

“Every one of the 813,000 families that rely on the Child Care Benefit will be better off – an increase up to $31 per child per week, or up to $1,627 per year, will provide much needed relief for the family budget.

“Right now, too many Australian women have their pay packet eaten up by the costs of child care,” they added.

“Labor’s plan will take pressure off the family budget and help grow the economy by keeping more parents in work.

“Better child care is essential to a growing economy,” they said.

“It’s central to Labor’s plan for fairer growth, real jobs and greater opportunities.”

“Families who rely on child care need a better deal now – and that’s what Labor will deliver,” they said.

“By boosting the current system Labor will ensure that all children continue to have access to two days of vital early education,” they said.

Labor’s plan will also include:-

– Cracking down on unjustified price increases

– New transparency and accountability standards

– Extra powers to investigate unjustified price increases and stop price gouging.

– Supporting flexible Family Day Care – Investing an additional $50 million to support improvements to the Family Day Care system, including flexible options for families and enhancing the education, investigation and compliance programs.

– Better services for Indigenous children and children in remote areas –
– Increasing support for children in Budget Base Funded Services by 15 per cent, in line with the increase to the Child Care Benefit.

– Valuing our early education workforce – $150 million investment towards developing the early education workforce – developing a new Early Years’ Workforce Strategy

-And establishing a national Educator Professional Development Program,”

” Labor will also make submissions to the Fair Work Commission proceedings in support of professional wages for early childhood educators,” they said.

They also claimed that Labor’s plan compares more than favorably with the Liberal alternative.

“And it is affordable,” they added.

Sunday 5th June 2016 - 7:13 pm
Comments Off on Labor “a risk” PM

Labor “a risk” PM

by Alan Thornhill

The Prime Minister, Malcolm Turnbull, says the election of a Labor government is now the only risk to the creation of new jobs in South Australia.

Campaigning on Adelaide Sunday, Mr Turnbull spoke of the new jobs he said would appear in that state, as the Federal government’s submarine building program gets under way.

“The only risk to these jobs starting immediately this year is Labor,” the Prime Minister said.

“Labor failed to commission a single naval ship from an Australian yard in six years of government.

“Labor cut more than $18 billion from defence funding and delayed more than 100 projects.

“Risking critical gaps in capability, Labor’s neglect plunged naval shipbuilding in South Australia into the notorious valley of death.

The Prime Minister said:“ South Australians should think very carefully about whether we can afford more Labor delays and cancellations.”

He said: “Now, our GDP, our economy grew 3.1 per cent in the year to March, faster than any of the G7 economies and well above the OECD average.

“That doesn’t happen by accident.

“You need a clear plan.

“You need strong economic leadership.

’You need a pro-growth, pro-business agenda that drives investment and jobs.

“In the last calendar year, 300,000 new jobs were created and two thirds of these were women.

Mr Turnbull said: “450,000 jobs have been created since the last election.

“But we can and must do more.

We are strongly positioned to gain from growth in the large, dynamic economies of Asia.

“Our export trade deals with China, Korea and Japan are giving farmers a competitive edge and opening doors for our service industries into those expanding markets, Mr Turnbull said.

Thursday 2nd June 2016 - 10:22 pm
Comments Off on PM rebuked over war talk

PM rebuked over war talk

by Alan Thornhill

Chris Bowen said today that “the Australian people had a right to be disappointed” at the language Malcolm Turnbull and Scott Morrison chose to attack Labor over proposed company tax cuts.

Stepping up their attacks, over the past few days, the Prime Minister and his Treasurer have repeatedly resorted to talk of war.

They did so as the bodies of Australian soldiers, killed in the Vietnam war, were flown back to their homeland.

Mr Bowen is Labor’s shadow treasurer.

Speaking of the Opposition Leader, Bill Shorten Mr Turnbull had said: “Bill Shorten has declared war on business.

And he added ” the first casualties of Shorten’s war on business are Australian jobs.”

Asked today, if he would continue to use such provocative words, Mr Turnbull replied: “You have just heard me use them.”

Mr Morrison also accused Mr Shorten of declaring “war on business” and added:-
” “…and using “tax as their bullets.”

These comments were made as the first two RAAF planes carrying the remains of the Australian soldiers touched down on home soil.

Vietnam veterans were not impressed.

The national president of the Vietnam Veterans Association, Ken Foster, said war metaphors shouldn’t be used and “certainly not on a day like today”.

Mr Bowen responded carefully, when a reporter asked him to comment on Mr Turnbull and Mr Morrison’s words.

He said: “I think the Prime Minister and Treasurer might want to reflect on the use of that language today.

“ Especially today.

“They might want to reflect on that.

“ I think the Australian people have a right to be disappointed in the Prime Minister’s language.

“ I don’t intend to add anything further to that. I think they might want to just reflect about the use of that language on a day when we are considering war in another context.”

Tuesday 31st May 2016 - 12:34 pm
Comments Off on Super:Who’s missing out?

Super:Who’s missing out?

by Alan Thornhill


So you are young and self-employed, but you’ve remembered retirement, right?

Well, perhaps.

But there is a special reason for asking that, apparently intrusive, question.

Recent research, by the Association of Superannuation Funds of Australia (ASFA) found that almost one young, self employed Australian in four has no super.

The Association’s Chief Executive Officer Pauline Vamos also says it is “extremely concerning” that older Australians, who have been self employed, often have much less money in their superannuation accounts than others, as they approach retirement.

She is urging young self-employed Australians to do a little retirement planning.

Ms Vamos admits that she is also disturbed by another finding that emerged from ASFA’s research.

Nearly 10 per cent of the workforce is self-employed and it is currently not compulsory for them to make superannuation contributions.

In the run up to retirement, those who are self-employed and are aged 60-64, have around half the superannuation of employees.

Only 27 per cent of those in their 60s who are self-employed, and soon to reach retirement, have more than $100,000 in superannuation, compared to 50 per cent of employees under the Superannuation Guarantee (SG).

Ms Vamos said that is “extremely concerning.”

The research also found that said people with lower-value business assets were also found to be more likely to have lower superannuation balances, or no super at all.

Those with lower-value business assets were also found to be more likely to have lower superannuation balances, or no super at all.

Ms Vamos said many sald many self-employed Austtralians would not have enough money fpr a comfortable retirement

““We encourage all Australians to think about the lifestyle they want in retirement and to setup, and make regular contributions to superannuation,”
she said .

“Business assets such as financial, shares or investment properties are often believed to serve as de-facto superannuation. However many of those who are self-employed do not have significant business or financial assets, and may struggle sustaining the standard of living they are used to when they reach retirement age.

“Business assets such as financial, shares or investment properties are often believed to serve as de-facto superannuation. However many of those who are self-employed do not have significant business or financial assets, and may struggle sustaining the standard of living they are used to when they reach retirement age.

“Superannuation is a purpose built system for the building of retirement savings. Because it is a long-term investment, the earlier you start putting more into super, the more you benefit from the effects of compounding interest. Contributing to super makes for a sound business decision.”

Because it is a long-term investment, the earlier you start putting more into super, the more you benefit from the effects of compounding interest. Contributing to super makes for a sound business decision,” Ms Vamos said.

While making contributions to super is currently not compulsory for the self-employed, if they do, there are a number of benefits they can potentially claim from the Government, such as bonus co-contributions, she added.

“Now is an opportune time for all, particularly those who are self-employed, to assess where they are in terms of their retirement planning, where they want to get to and how to save enough money to get there,” Ms Vamos concluded.

“Now is an opportune time for all, particularly those who are self-employed, to assess where they are in terms of their retirement planning, where they want to get to and how to save enough money to get there,” Ms Vamos concluded.

Monday 30th May 2016 - 11:03 am
Comments Off on How we will protect the reef:Labor

How we will protect the reef:Labor

by Alan Thornhill

Labor has revealed its plan to save the Great Barrier Reef and protect the 70,000 jobs it supports

The Opposition Leader Bill Shorten did so in a joint statement he issued today with his environment and climate change spokesman, Mark Butler.

They described the reef as “Australia’s greatest natural asset.”

And they said: “The Great Barrier Reef is the largest coral reef ecosystem on earth and one of the best known marine areas in the world.

The reef attracts more than two million visitors each year, contributes $5.7 billion to the economy, and supports approximately 70,000 jobs, they added.

“All of this is at risk if serious action is not taken to protect it,” they added.

“The Great Barrier Reef is an environmental treasure Australia holds on trust for the world.

A Labor Government will make protecting the Reef one of our highest priorities,” they said. 

Mr Shorten said the government has no credible plan to protect the reef.

“Only last week, it was revealed that the Turnbull Government intervened to censor Australia being mentioned in the report on the impact of global warming on World Heritage Areas,” Mr Shorten said.

“The best way to help the Reef and to boost tourism and economic growth is to take serious action on climate change, to face the challenge and show leadership,” he added.

Mr Shorten said a Labor government would work with the Queensland Government and stakeholders to implement the recommendations of the Great Barrier Reef Water Science Taskforce report.

He said our plan “will be implemented in close consultation with the Queensland Government and all other stakeholders, with the Environment Minister taking a direct leadership role in its implementation.

“Our plan to protect this delicate ecosystem has three pillars covering research, management, investment and preservation,” Mr Shorten said.

Elaborating on various aspects of Labor’s plan, Mr Shorten said of science and research.

“We will improve science and research and monitoring of Reef issues to ensure the protection and sustainability of the Reef is based on the latest, specialised science.

“This includes directing the CSIRO Marine to conduct Reef-specific science, including climate research, supported by a $50 million targeted funding boost.

“Direct Environmental Investment: Integrated direct investment to improve, water quality, land management, agricultural and environmental impacts.

Reef Management: Improve Reef management architecture and incentives to fix the fragmented and uncoordinated approach that has for too long characterised Reef management and conservation.

Sunday 29th May 2016 - 1:45 pm
Comments Off on Labor attacks PM’s company tax cuts

Labor attacks PM’s company tax cuts

by Alan Thornhill

Malcolm Turnbull cant’ fund schools or Medicare because he is giving $50 billion worth of tax cuts to big business, a senior Labor figure said today.

Speaking on ABC television, the shadow finance minister, Tony Burke also hinted that the opposition might be able to announce some changes, that would leave
Australian families better off, before the election on July 2.

“….and we’ll have more to say about that later in the campaign,” Mr Burke added.

However he kept the strongest words, in the interview, for an attack on the Prime Minister.

“His tax cut is effectively the biggest single give away of the election campaign,” Mr Burke said

“We’re talking about $50 billion to some of the biggest businesses in the country,” he added.

” Now, the impact of that, in the first instance, means that is why Malcolm Turnbull is making the decision he can’t fund Medicare and he can’t fund schools.”Mr Burke said.

“What does it mean for Australian shareholders? Australian shareholders,” he asked.

Mr Burke said local shareholders – including anyone with a superannuation account – would “receive a fraction of the benefit that goes to foreign shareholders.”

He said the changes Labor is proposing, to tax and other laws, would in make sure that “we have proper investment in education.”

“That’s not only school education, that’s university as well.

” It’s in higher education.

“It’s in making sure you have a better skilled work force.

” Now – bizarrely – in this election campaign, the Liberal Party have wanted to argue somehow there’s no productivity improvement for having a better trained and skilled work force,” Mr Burke said.

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Alan Thornhill

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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