by Alan Thornhill
Australia’s international trade slipped more deeply into the red in the three months to the end of June, on figures the Bureau of Statistics published today.
The figures – which are both preliminary and seasonally adjusted – showed the nation chalked up a current account deficit of $9,641 million in that time.
That was $4,680 million higher than the revised March quarter deficit of $4,781 million.
The Bureau said the value of the goods Australia’s exports fell by 7 per cent in the June quarter, while the value of our service exports rose 1 per cent.
And service imports fell by 2 per cent.
Our exports of coal, coke and briquettes, fell by 11 per cent, while returns from metal ores and minerals fell by 8 per cent.
And the value of sales of non-monetary gold fell by 28 per cent in the three months to the end of June.
But we gained an extra $33 million from sales to international tourists in that time.
The Bureau also noted that we spent an extra $1,020 million on imported fuels and lubricants in the latest quarter, a rise of 14 per cent.
Our spending on cars and other non-industrial transport equipment also rose – by 13 per cent – while we spent 16 per cent more on industrial transport equipment.
by Alan Thornhill
The Opposition Leader, Bill Shorten, says a Labor government would scrap Tony Abbott’s “direct action” policy which he described as “wasteful.”
The Prime Minister says his policy, which offers subsidies to companies which reduce or stop polluting, is an effective way of tackling climate change.
However, in a statement today, Mr Shorten said:” Tony Abbott is stuck in the past when it comes to climate change, and he wants to keep all of Australia with him.”
Then he added:”Australians know he (Mr Abbott) doesn’t believe climate change is real.
“But we can’t afford to let Tony Abbott’s flat earth views hold our country back.”
The Opposition Leader said:” the Government’s emissions reduction target puts Australia at the back of the pack in the lead up to Paris and yet we have the highest emissions per person in the developed world.
“The truth is that without investing in renewable energy, without an emissions trading scheme, without modernising our overall energy sector – it doesn’t matter what number the government picks – because we won’t get there.”
“To date, Tony Abbott’s only response to climate change has been to give billions of dollars to big polluters under Direct Action, run ridiculous scare campaigns and try to destroy the renewable energy industry,” Mr Shorten said.
“Direct Action is a waste of money built on one counter-productive idea: giving great wads of taxpayer cash to big polluters to keep polluting.”
Mr Shorten also said: “Malcolm Turnbull has said Direct Action is ‘a recipe for fiscal recklessness on a grand scale’. ”
He recalled, too, that an independent firm, Reputex, had reported last week that under Tony Abbott’s policy, emissions will actually rise by 20 per cent over the next decade.
“This is in spite of all the money being paid to polluters, and expected to grow to around $200 million a year according to Greg Hunt,” Mr Shorten said.
“We can’t afford to waste taxpayers’ money on a plan that won’t work,” he added.
“And Australia can’t afford to sit on the sidelines or turn our back on global efforts.”
He said:”A Shorten Labor Government will put a strong commitment to renewable energy at the centre of Australia’s response to climate change.
Renewable energy will deliver new investment, good jobs, lower power bills for homes and small businesses and it will help cut pollution.
“If elected, Labor will scrap the Abbott Government’s expensive and ineffective Emissions Reduction Fund (ERF).
“We will honour contracts that the Government has entered into, but the waste ends there.
“Based on the remaining uncommitted funding allocated in the 2014 Budget, and the additional $2.4 billion announced this week, abolishing the ERF represents savings of up to $4.3 billion,” Mr Shorten said.
“There is a better, cheaper, faster and more efficient way for Australia to tackle climate change and at the centre of this plan, is renewable energy.”
by Alan Thornhill
Anote Tong, the President of Kiribati, knows his country is just a tiny speck in the vast Pacific Ocean.
But he also knows the danger its people – and many other Pacific Islanders – will face if global warming is accompanied by rising sea levels as the Antarctic ice sheet melts.
Loss of homelands.
The passions such risks inspire are squarely behind an appeal President Tong is making to stop an industry our Prime Minister, Tony Abbott, still finds attractive.
The Pacific President wants nothing less than a ban on all new coal mines.
“Kiribati, as a nation faced with a very uncertain future, is calling for a global moratorium on new coal mines,” he says.
“It would be one positive step towards our collective global action against climate change.
“And it is my sincere hope that you and your people would add your positive support in this endeavour,” said President Tong, in an appeal he addressed, primarily, to Mr Abbott.
“Let us join together as a global community and take action now,” he said.
“The construction of each new coal mine undermines the spirit and intent of any agreement we may reach, particularly in the upcoming COP 21 in Paris, whilst stopping new coal mine constructions now will make any agreement reached in Paris truly historical,” the President added.
“As leaders, we have a moral obligation to ensure that the future of our children, our grandchildren and their children is safe and secure.
“For their sake, I urge you to support this call for a moratorium on new coal mines and coal mine expansions.”
In cases like this, it is always useful to have allies.
And – this time – the Australia Institute and Greenpeace have declared their support for President Tong.
Ben Oquist, Executive Director of The Australia Institute, said bluntly:”there is no plausible scenario in which a world that is tackling climate change is a world that needs more coal mines.”
The Executive Director of Greenpeace International, Dr. Kumi Naidoo, endorsed that warning, saying:”I join President Tong in calling on all leaders of similarly threatened islands to stand together and demand climate justice.
“I have now seen first hand what a sea level rise means for the people of Kiribati.
“It is not some scientific modelling or projection – it is real, it is happening now and it will only get worse.”
All are waiting for Mr Abbott’s response.
by Alan Thornhill
The Federal government is being urged to adopt tough new, binding targets to tackle climate change this week, before key international meetings in Paris.
That demand, from the Climate Institute, is backed by fresh research, showing most Australians would welcome such a change.
So far, though, there has been no response from the government.
The CEO of the Institute, John Connor, said both Cabinet and the Coalition party room are expected to consider Australia’s initial post 2020 pollution reduction commitment this week.
That commitment is expected be made ahead of international climate negotiations in Paris later this year.
They would meet this week for that purpose.
Mr Connor said the expected announcement this week on Australia’s post-2020 carbon pollution reduction target is a critical opportunity for the Abbott government to better reflect public sentiment on climate action, renewables and pollution regulation, .
He was releasing the Institute’s annual review of public attitudes on climate change and its solutions.
“This week’s decision on Australia’s initial post-2020 climate commitment comes as nearly two thirds of Australians believe that the Abbott government should take climate change more seriously,” Mr Connor said.
He said the Institute’s research showed that 71 per cent of Australians agree that it is inevitable that Australia’s current coal fired generation will need to be replaced.
A similarly large majority – 72 per cent – agree that governments need a plan to ensure the orderly closure of old coal plants and their replacement with clean energy.
Only 7 per cent disagree, Mr Connor said.
The Labor party is strongly backing the Institute.
The Shadow Minister for the Environment, Mark Butler said:”This means dropping the polluters’ slush fund, putting a legal cap on pollution and stopping the attacks on renewable energy.
“Tony Abbott has desperately tried a smoke and mirrors approach to tackling climate change with his woeful policy, but Australians know it’s nothing but an ineffective waste of their money,” he added.
“As the rest of the world’s leaders are taking major steps towards meaningful action, Tony Abbott should stop trying to force Australia backwards,” Mr Butler said.
The research also shows overwhelming support for renewable energy amongst Australians.
“Tony Abbott is so out of touch on this issue, it beggars belief that any world leader could defy the global momentum and the calls for action from his electorate,” Mr Butler added.
by Alan Thornhill
Labor is supporting the Federal Court’s approval for Adani’s Carmichael Coal Mine and Rail Infrastructure project in Queensland’s Galilee Basin.
The Shadow Minister for Resources, Gary Gray described the decision as “appropriate.”
“The Carmichael coal and rail project is of great importance to Queensland and to Australia,” Mr Gray said in a statement early today.
“Australia’s coal exports are important to our customers and our mining communities.
“Reconsidering the environmental approval is appropriate.”
Mr Gray said: “The decision to set aside the approval was done with the consent of all parties, and it is the right thing to do given the importance of this project.
“The Department of the Environment has noted that reconsidering the decision will not require revisiting the entire approval process.
The Environment Minister will need to re-assess one aspect of the approval process under the Environment Protection and Biodiversity Conservation Act regarding the potential impact on two threatened species—the yakka skink and the ornamental snake.
“The Department says that it will take six to eight weeks to provide updated advice to the Minister.
“It is disappointing that the Government did not better manage the environmental approval process and that it has now caused delay, additional cost and uncertainty, Mr Gray added.
“Nevertheless, an approval process that is certain, sustainable, transparent, and gives confidence to all, is important.
“This is a significant project for Queensland and for Australia.
We need to always make sure that environmental approval processes are properly followed so as not to create project delays or confusion,” Mr Gray 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
No-one should know better than Angela Merkel just what good debt forgiveness can do.
After all the German Chancellor’s own country has seen – and enjoyed – it twice – once after each of the World Wars.
The most recent case, in February 1953, was a major factor behind Germany’s own rise as the industrial powerhouse of Europe.
Over recent times, though, Ms Merkel has led European creditors in their strident demands for Greece to pay its crushing debts in full, regardless of the consequences.
But now, as The Nation magazine reports, five leading economists have sent her an open letter, urging the German leader to reconsider.
The five, led by Thomas Piketty, Professor of Economics at the Paris School of Economics, remind Ms Merkel that history will be watching what she – and other European creditors, do over the next few days.
They have reminded her, too, that most of the world knew that Europe’s financial demands crushed the Greek economy.
That, in turn, had led to mass unemployment, a collapse of the Greek banking system and made that country’s external debt crisis far worse, with the debt problem escalating to an unpayable 175 percent of GDP.
The economists also warned that:”The (Greek) economy now lies broken with tax receipts nose-diving, output and employment depressed, and businesses starved of capital.”
They say:” The humanitarian impact has been colossal — 40 percent of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50 percent.
“Corruption, tax evasion and bad accounting by previous Greek governments helped create the debt problem.”
The economists note that the Greeks have already complied with much of their creditors’ calls for austerity — cutting salaries, government spending, slashing pensions, privatising, deregulating and raising taxes.
“But,” they say,”in recent years the series of so-called adjustment programs inflicted on the likes of Greece has served only to make a Great Depression the likes of which have been unseen in Europe since 1929-1933.
“The medicine prescribed by the German Finance Ministry and Brussels has bled the patient, not cured the disease.
“Together we urge Chancellor Merkel and the Troika to consider a course correction, to avoid further disaster and enable Greece to remain in the eurozone.
Right now, the Greek government is being asked to put a gun to its head and pull the trigger.
“Sadly, the bullet will not only kill off Greece’s future in Europe,” they warn.
“The collateral damage will kill the Eurozone as a beacon of hope, democracy and prosperity, and could lead to far-reaching economic consequences across the world.
“Right now, the Greek government is being asked to put a gun to its head and pull the trigger.”— Piketty, et al.”
The four other economists, who joined Piketyy in the appeal, were:-
* Heiner Flassbeck, former State Secretary in the German Federal Ministry of Finance
* Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University
* Dani Rodrik, Ford Foundation Professor of International Political Economy, Harvard Kennedy School and
* Simon Wren-Lewis, Professor of Economic Policy, Blavatnik School of Government, University of Oxford.
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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