Browsing articles in "Financial advice"
Wednesday 3rd August 2016 - 9:47 pm
Comments Off on PM confronts banks

PM confronts banks

by Alan Thornhill

Malcolm Turnbull directly challenged Australia’s big banks today, saying they should pass on the rate cut the Reserve Bank announced earlier this week in full, or explain why.

 

So far the banks have been passing on about half of the 0.25 per centage point cut.

 

That has left families with $300,000 mortgages some $20 a month out of pocket.

 

The Prime Minister said Australia had needed a period of economic transition after its huge mining construction boom.

 

“That’s why we have the big trade export deals, the big deals, the big free trade deals,” he said.

 

However the shadow Treasurer, Chris Bowen disagreed.

 

He said the government was simply “chest beating” on the rate cut.

 

So, this is a Government which is being exposed for a lack of economic leadership, for a lack of economic plan,” Mr Bowen said.

 

He said the government had no plan to increase investment in the non-mining sector, to ensure that we have jobs for the future. “

 

Malcolm Turnbull and Scott Morrison are simply not up to the job,” Mr Bowen said.

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Wednesday 3rd August 2016 - 1:59 pm
Comments Off on How we spend our time – and money

How we spend our time – and money

by Alan Thornhill

Hard working Australians, who leave themselves little time to shop, are buying more of their food and groceries online.

 

The National Australia Bank, which watches these trends, says we spent more than $20 billion, making online purchases over the past year.

 

And the strongest growth, seen in that time, was among those aged 35 to 44.

 

That is people of prime working age.

 

Their spending on groceries and liquor rose by 20,5 per cent over the past year.

 

They also spent 19.2 per cent more on homewares and appliances.

 

Meanwhile 18-24 year olds spent 22 per cent more on fashion and 19.9 per cent more on media.

 

The bank said that while overall growth in online spending was still quite strong, it had flattened from that seen back in 2011 when the index was first established.

 

The bank’s Chief Econmomist, Alan Oster, said  “the $20.1 billion spent online by Australians in the last year is equivalent to 6.8 per per cent of spending in the bricks and mortar’ retail sector.

 

“And growth by online businesses is far outpacing these traditional retailers,” he added.s

Tuesday 2nd August 2016 - 6:04 pm
Comments Off on Glenn Stevens’ risks

Glenn Stevens’ risks

by Alan Thornhill

Analysis

 

By Alan Thornhill

 

Twice this year, Glenn Stevens has done something that central bankers don’t like doing.

 

That is cutting interest rates to previously unprecedented levels

 

That happened first in May.

 

Then – again – from Wednesday.

 

Both time rates were cut by 25 basis points

 

The reason Reserve bank chiefs, like Glenn Steven, don’t like taking this step is  simple.

 

But not, necessarily, obvious.

 

After all,  young home buyers will generally welcome the relief they will get in their home loan repayments, when their banks pass, at least some of the benefit they receive on to them.

 

If that’s all there was to it, Mr Stevens would, undoubtedly be among the most popular men in the country right now.

 

But although he is, by all accounts, is a fine fellow, things aren’t as simple as that.

 

What  about those probably somewhat older people, we might call the Savers, who have been relying on a little interest income, perhaps through their superannuation accounts, to help them pay their grocery bills  in retirement.

 

There is another thing, too, that can keep central bankers awake at night, when interest  rates fall to unprecedented levels, on their watch.

 

That’s walking down a dark path, on a moonless night.

 

Who knows what might go wrong?

Tuesday 2nd August 2016 - 4:17 pm
Comments Off on Rates hit new low

Rates hit new low

by Alan Thornhill

The Reserve Bank today cut its cash rate by 25 basis points, to its lowest level ever, just 1.5 cent.

 

Explaining the decision, the bank’s Governor, Glenn Stevens said: “the global economy is continuing to grow, at a lower than average pace.

 

“Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies.

 

“Actions by Chinese policymakers are supporting the near-term growth outlook, but the underlying pace of China’s growth appears to be moderating, “ Mr Stevens said.

 

He noted that: “commodity prices are above recent lows.”

 

However he added: “…this follows very substantial declines over the past couple of years.

 

“Australia’s terms of trade remain much lower than they had been in recent years.

 

“Financial markets have continued to function effectively.

 

Mr Stevens said: ” Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.

 

“In Australia, recent data suggests that overall growth is continuing at a moderate pace, despite a very large decline in business investment,” he added.

 

“Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend.

 

“Labour market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term.

 

“Recent data confirm that inflation remains quite low.

 

“Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.

 

 

“Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time,” Mr Stevens said.

 

 

The Bureau of Statistics reported that Australia’s inflation rate, on the Consumer Price Index, stood at just 1 per cent in the 12 months to the end of June.

 

That is well below the bank’s target range – of 2 to 3 per cent inflation – over the course  of a business cycle.

Wednesday 27th July 2016 - 1:03 pm
Comments Off on Inflation hits new low

Inflation hits new low

by Alan Thornhill

Australia’s annual inflation rate fell to just 1 pr cent in the June quarter.

 

That was the weakest annual rise since the June quarter of  1999.

 

This is shown in the June quarter Consumer Price Index figures just released by the Australian Bureau of Statistics.

 

The fall in the annual rate – from 1..3  per cent at the end of  the March quarter – occurred even though consumer prices rose by 0.4 per cent in the June quarter.

 

This followed a fall of 0.2 per cent in the March quarter.

 

The Bureau said the most significant price rises this quarter are in medical and hospital services (+4.2 per cent), automotive fuel (+5.9 per cent) and tobacco (+2.1 per cent).

 

But it added:  “These rises are partially offset by falls in domestic holiday travel and accommodation (–3.7 per cent), motor vehicles (–1.3 per cent) and telecommunication equipment and services (–1.5 per cent).

The bureau also said that the increase of 4.2 per cent for medical and hospital services was driven by the annual increase in Private Health Insurance (PHI) premiums.

 

These rise on 1 April every year.

 

It said also that the increase of 5.9 per cent for automotive fuel follows three consecutive quarterly falls.

 

The rise included increases in unleaded, premium and ethanol fuels.

 

The bureau noted that world oil prices increased from a 12-year low last quarter.

Saturday 23rd July 2016 - 6:20 pm
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Shorten names his shadows

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

Friday 22nd July 2016 - 6:38 pm
Comments Off on Federal government acts on steel jobs

Federal government acts on steel jobs

by Alan Thornhill

The Federal government says it has “struck a deal” to secure the jobs of South Australian steel workers.

 

In a joint statement late today, the Prime Minster, Malcolm Turnbull, said  his government “is delivering” on its its “election commitment to support South Australia’s steel sector and workers at Arrium .“

 

He said the Export Finance and Insurance Corporation would provide a loan of $49.2 million for new machinery at the Iron Knob and Iron Baron mines.

 

This would be done under the National Interest Account.

 

Mr Turnbull said this would enable Arrium’s OneWhyalla business to process iron ore to export quality and is expected to boost Arrium’s cash flow by more than $200 million over the next five years.

 

The Prime Minister said this investment would build on his government’s ongoing commitment to support Australia’s steel industry.

 

He said the measurers already announced included:-

  • Using Australian steel across our naval shipbuilding program
  • Upgrading 1200 kilometres of rail line between Adelaide and Tarcoola, a project worth approximately $80 million to Arrium
  • Strengthening Australia’s anti-dumping system.

 

 

Mr Turnbull  said his government would continue to work closely with the administrators as they prepare Arrium’s businesses for sale.

Friday 22nd July 2016 - 1:34 pm
Comments Off on Our banks:what’s bugging us

Our banks:what’s bugging us

by Alan Thornhill

 

Bank customers, worried about high fees and poor service have left Australia’s big four banks facing their lowest satisfaction ratings in three years.

 

A new survey, by Roy Morgan Research, found that although only some 5 per cent of bank customers are classed as “dissatisfied,” their complaints may well need to be addressed, to produce wider levels of satisfaction.

 

So what were they?

 

Predictably, fees and charges took top spot.

 

The researchers said: problems in this area were the most frequently mentioned.

 

They said customers generally felt that many fees were not justified and a backward step.

 

Their comments had included: “It used to be free and now they charge me a monthly account keeping fee”; “they charge for silly things”; “fees exorbitant”; “…they’re at uni studying and if balance is low they charge fees” and “…extreme overcharging of fees”.

 

The researchers also said:  “the second most frequently mentioned problem,(was) poor service.

 

This had spanned a wide range of issues including: “not enough service, prefer you to be out the door”; “poor service and too much focus on profits and shareholders”; ”no follow-up service”; ”very inflexible”; and “poor service and listening skills”.

 

 

The researchers said poor service, spanned a wide range of issues including: “not enough service, prefer you to be out the door”; “poor service and too much focus on profits and shareholders”; ”no follow-up service”; ”very inflexible”; and “poor service and listening skills”.

 

 

Then there were branch issues, the Roy Morgan organisation said.

 

A major branch-related problem was to do with branch closures such as: “they keep closing their branches, very difficult to go to branch”; “removal of branches”;”…closing branches and this results in diminishing service”; “…the branch moved…no close local branch”. Other branch issues related to poor service in the branch: “reduced over-counter service…push to electronic banking”;  ”waiting time in branches”; ”not enough tellers”.

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Alan Thornhill is a parliamentary press gallery journalist.
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