by Alan Thornhill
The Reserve Bank now believes that economic activity and inflation over the months ahead will both be a little below previous expectations.
This assessment, just published in the minutes of the bank’s board meeting, earlier this month, leaves the door open for further rate cuts later this year.
However the bank cautioned that the effects of earlier rate cuts are still working their way through the Australian economy.
It said demand for high density housing had increased, but noted that approvals for detached homes had not.
The bank also sought to explain its decision, earlier this month, to cut Australia’s marker interest rate by 25 basis points to 2.75 per cent.
It said: “With inflation contained and domestic economic activity forecast to be below trend over the period ahead, the Board had maintained the cash rate at a level consistent with borrowing rates being close to previous lows.”
But it added: “Increasingly, the household sector had shown signs of responding to these low rates.
“Wealth had been bolstered by higher equity and dwelling prices.
“Measures of consumer confidence were above average.
“Housing and personal loan approvals had been rising, although credit growth remained subdued to date.
“And dwelling construction activity was growing.
“ At the same time, however, conditions in the business sector, as assessed in surveys, generally had remained below average, possibly in part because the exchange rate had remained high despite lower export prices and interest rates,” the bank said.
by Alan Thornhill
Tonight this Labor Government makes the choice to keep our economy strong and invest in our future.
To support jobs and growth in an uncertain world.
To chart a pathway to surplus through responsible savings.
And to ensure no Australian is left behind because of the circumstances of their birth or misfortune in their life.
Speaker, no government gets to choose the global economic circumstances in which the budget is framed.
But you do get to choose the priorities for the nation.
Labor chooses a stronger, smarter and fairer Australia.
An Australia where our school children get the opportunity to reach their full potential with $9.8 billion invested in new school funding.
An Australia which gives dignity to people with severe and permanent disability through the historic $14.3 billion investment in DisabilityCare Australia. This is a proud moment for our country.
An Australia with the critical infrastructure we need to drive our economy forward, with $24 billion new investment in road and rail.
An Australia where our prosperity spreads opportunity to every postcode in our nation.
Speaker, tonight, we put in place the savings to fully fund these priority investments for 10 years and beyond, an achievement unprecedented in our nation’s history.
We make these historic investments in the Labor tradition from a position of economic strength.
The facts are, under Labor’s economic leadership:
Our economy is 13 per cent bigger than before the GFC.
More than 950,000 jobs have been created with more Australians in work than ever before — there is no fact we are more proud of.
For the first time ever we have a Triple-A credit rating from all three global agencies with a stable outlook — one of only eight countries to do so.
And all this with contained inflation and new record low interest rates.
That is because we got the big calls right on the economy.
Now we enter a period where new choices must be made.
Challenging global conditions and the high Australian dollar have put huge pressure on the Budget and led to a significant reduction in expected tax receipts totalling over $60 billion over the four years to 2015-16.
Speaker, we face a clear choice.
Radical cuts to the bone that would risk jobs and our economy.
Or a sensible, calm and responsible approach that puts jobs first.
We have always put the interests of working Australians first.
In this Budget, we do so again.
Just because the global economy took an axe to our budget, does not mean we should take an axe to our economy.
Just as we shielded Australia from the worst during the GFC, we will continue to follow the responsible middle course.
Two simple but powerful words are at the heart of our approach and they mean an awful lot to every Australian watching tonight — jobs and growth.
Speaker, because of our deep commitment to jobs and growth we have taken the responsible course to delay the return to surplus, and due to a savage hit to tax receipts there will be a deficit of $18 billion in 2013-14.
The alternative, cutting to the bone, puts Australian jobs and our economy at risk, something this Labor government will never accept.
Speaker, this is our choice.
To those who would take us down the European road of savage austerity I say the social destruction that comes from cutting too much, too hard, too fast is not the Australian way.
Instead, we’re making targeted, sustainable savings of $43 billion over the forward estimates.
To deliver a measured and balanced consolidation of around ½ a per cent of GDP a year on average from 2013-14.
Since mid-2009 we have fully offset all new spending with savings measures and that continues tonight.
This discipline gives Australia a responsible pathway back to balance in 2015-16 and surplus by 2016-17.
It is a fairer way forward, by helping modern families with targeted assistance for the everyday pressures, by delivering the Schoolkids Bonus and through the Low Income Super Contributions.
A smarter way forward providing businesses with a skilled workforce, boosting incentives to innovate and adapt, to reap the benefits of the Asian Century.
And a stronger way forward, investing in education and training, boosting productivity, protecting and creating jobs, growing the economy, and keeping inflation and interest rates low.
Economic and fiscal strength
Speaker, tonight we build on Australia’s resilience during the global financial crisis and its fallout.
Our nation’s outlook is bright and our economy is set to grow faster than most of the developed world.
Real GDP growth of 2¾ per cent in 2013-14 and 3 per cent in 2014-15.
By mid 2015, our economy will be 22 per cent bigger than before the global financial crisis, outstripping every major advanced economy.
An economy in transition
From this position of strength, our economy is undergoing an important transition.
Our nation’s largest resource investment boom is shifting to a boom in production and exports.
As the resources boom enters its new phase, the economy is also transitioning towards broader sources of economic growth.
And while our opportunities are great and our future bright, this transition will not be seamless.
Unemployment is forecast at 5¾ per cent in 2013-14, up slightly, but still among the lowest in the developed world.
This transition comes against the backdrop of a profound shift in the global economy.
The weight of economic activity is shifting towards our region.
As the Asian century unfolds, there are many new opportunities.
Not just in mining, also for our farmers, manufacturers, and service providers, but only if we make the choice to invest.
Because you don’t want to find yourself in the fastest growing region in the world, with yesterday’s economy.
You can’t be a first-world economy in the 21st century if you haven’t laid the groundwork to seize the opportunities.
Training a highly skilled, educated and productive workforce.
Supporting business to be innovative and competitive.
Investing in high quality infrastructure.
Ensuring a strong, fair and sustainable tax system.
All achievements of this Budget.
And you can’t be a first-world economy in the 21st century if you’re not on the path to a clean energy future.
As is widely accepted, putting a price on carbon pollution is the lowest cost and most efficient way to tackle dangerous climate change.
This Budget recognises as we move to an emissions trading scheme the carbon price is likely to be lower as is associated spending, reflecting lower costs to the economy, households and business.
We will continue to deliver existing household assistance, including increases in pensions, allowances, family payments and other benefits, and ensure future assistance remains adequate.
Weaker tax revenue
While our economy remains resilient, powerful global forces and the stubbornly high Australian dollar have savaged budget revenues.
Not since Hawke and Keating floated the dollar has it remained so high.
This has put acute pressure on prices and company profits, weighing more heavily than expected on tax receipts.
Speaker, let’s be clear about the magnitude of the hit to revenue.
This year we face the second largest revenue writedown since the Great Depression.
Since last year’s Budget, expected tax receipts for 2012-13 have been written down by $17 billion.
And since our mid year update in October, there has been a total revenue write down of over $60 billion over the next four years.
Company taxes, capital gains tax, resource rent taxes have all been hit.
We’ve seen almost $170 billion wiped off our tax receipts since the GFC.
The tax-to-GDP ratio in 2013-14 is estimated to be 22.2 per cent, 1.8 percentage points lower than the average of the 5 years prior to the GFC.
It’s as simple as this — if we were taxing Australian families and Australian businesses like our predecessors did, we’d have an extra $24 billion in taxes in 2013-14 and be comfortably in surplus every year of the forwards.
The hit to our tax collections will see our very low level of net debt peak at 11.4 per cent of GDP, still less than 1/8th the level of major advanced economies.
This Budget sets a sensible pathway to surplus, while making room for the big investments in our nation’s future.
We’ve put in place over $180 billion in responsible savings over six budgets since 2008-09.
And we have been putting structural savings in place since day one.
The long-term savings we’ve made over the last five years add up to over $300 billion by 2020-21.
Of course, these savings involve some very difficult decisions.
But Labor has always tackled the reforms our nation needs.
We take the difficult decisions knowing they allow us to fully fund better schools for our children, the historic creation of DisabilityCare Australia, and of course the next wave of nation building.
Building a smarter nation
Speaker, we know that a smarter Australia means a stronger Australia.
An Australia able to grasp the opportunities of the Asian century.
A skilled workforce and a strong, productive and resilient economy.
We know we’ll only win the economic race in the Asian Century if we win the education race.
Our current school funding system is broken, it’s failing our children.
That’s why we are transforming our nation’s schools by investing $9.8 billion in new school funding.
Delivering more teacher training, extra resources for school libraries, specialist language assistance, and literacy assessments in the early years.
We are also ensuring funding will grow for every school.
The Budget fully funds this investment over the next decade, meaning we can return the Budget to surplus without leaving our children an education deficit.
Building on our unprecedented investments in early childhood education and care with $660 million to continue the National Partnership that will achieve universal access to preschool.
And establishing a $300 million Early Years Quality Fund to support childcare workers.
Speaker, this Labor Government has delivered a 75 per cent funding increase for university places, supporting around 189,000 more university students.
And in this Budget we ensure this funding continues to grow sustainably.
Tonight we announce an additional $97 million investment to boost the number of Commonwealth-supported university places, and an extra $186 million for research infrastructure.
Speaker, the investments we make tonight will ensure our children are equipped to take up the high-skill, high-wage jobs of the future.
On this side of the House, we believe every Australian child deserves the same opportunities in life, and a child’s postcode should not determine their future.
Building a fairer Australia
Speaker, the fair go is at the heart of everything Labor stands for.
That’s why we’re so proud to establish DisabilityCare Australia, the National Disability Insurance Scheme.
Supporting Australians with significant and permanent disability has long been in our nation’s heart.
In March we put it in our nation’s laws, and tonight we put it in our nation’s Budget.
Following in the huge footsteps of Medicare and Labor’s record of historic social policy reforms.
In 2018-19 around 460,000 Australians with significant and permanent disability will get the support they deserve.
Our current disability system is underfunded, unfair and fragmented.
For too long, people with disability have been denied the opportunity to live a life many of us take for granted.
For too long, Australia has failed to reform this broken system.
Speaker, tonight we right this wrong.
We provide choice, control and dignity to people with disability.
This could mean the difference between getting the right wheelchair now or waiting three long painful years using a wheelchair that doesn’t fit.
It could mean the difference between a shower every day, or only once a week.
This Budget will fully fund our share of DisabilityCare Australia, beyond the next decade.
From 1 July 2014 the Medicare levy will increase by ½ a percentage point.
The money raised will be placed in a special Fund for 10 years and only used for the additional costs of DisabilityCare Australia.
Tonight, we end the cruel lottery of the current system.
Speaker, the Government is investing $64.6 billion in health funding, up 40 per cent since we came to office.
This includes National Health Reform funding for state and territory Governments who will receive unprecedented growth of 35 per cent for public hospital services over the next four years.
This includes $14 billion in 2013-14 which grows to $19 billion in 2016-17.
This means that health funding to every state and every territory will grow over the forward estimates.
As a cancer survivor myself, I’ve experienced the high quality treatment provided by our health system but I know more needs to be done to prevent, detect and treat this disease.
Tonight’s Budget builds on the $3.5 billion we’ve already invested in cancer prevention, detection, treatment and research.
We continue the fight against cancer, investing over $226 million in world-leading cancer care.
Investing over $100 million in screening for breast, cervical and bowel cancer.
Supporting critical chemotherapy medicines, and investing $23.8 million for life-saving bone-marrow transplants.
Funding a third Prostate Cancer Research Centre and continuing support for the two existing Centres.
Supporting CanTeen’s work with young people living with cancer, and supporting those affected by lung cancer.
Speaker, Labor also has a strong record of supporting older Australians.
We introduced the largest single increase in the Age Pension in 100 years, and we introduced the Superannuation Guarantee which we’re raising gradually to 12 per cent starting from 1 July this year.
We’re improving aged care services through our $3.7 billion Living Longer. Living Better package.
Tonight marks another step in the Gillard Government’s plan to turn Grey into Gold and harness the wisdom of our senior Australians.
We will invest another $127 million to help senior Australians continue their active engagement in society and introduce a pilot program to help downsize their home without affecting their pension.
We’re also tackling entrenched disadvantage.
Committing $777 million to renew the National Partnership on Closing the Gap on Indigenous Health Outcomes.
And funding a new transitional National Partnership to continue vital homelessness services.
Building a stronger economy
So we are investing in Australia’s human capital, at the same time as we invest in our economic capital.
We have already invested a massive $36 billion in roads, rail and ports.
Tonight we continue our ambitious program with a new $24 billion investment in the next wave of nation building infrastructure.
It’s critical to invest in both urban road and rail infrastructure.
Traffic congestion costs commuters time with their families and is estimated to cost our economy up to $20 billion a year by 2020 if not addressed.
That’s why we have committed more to urban public transport infrastructure than all our predecessors since Federation combined.
But there is more to be done.
So tonight we’re investing in transformational public transport projects like Brisbane’s Cross River Rail and Melbourne Metro.
These projects will change the way these cities work and allow them to grow into the future.
We’re also putting funds towards productivity-enhancing infrastructure in Sydney — the M4 extension and M5 duplication — and funds that will see the Missing Link between the F3-M2 constructed.
We will partner with the private sector and State Governments to deliver these critical projects as efficiently as possible.
We are also investing in the Gateway North Upgrade in Brisbane, Melbourne’s M80 Ring Road, and the South Road Upgrade in Adelaide.
And in our regions we are investing in the Swan Valley Bypass in WA, the Bruce Highway in Queensland, the Pacific Highway in NSW, the Midlands Highway in Tasmania and the Tiger Brennan Drive in the Northern Territory.
These investments will boost productivity, build capacity, improve safety, and relieve congestion, as well as improving the quality of life in our communities across the nation.
The National Broadband Network is putting Australia at the cutting edge of broadband technology and turbocharging productivity for decades to come.
Tonight we announce $12.9 million to connect more local councils to the NBN and provide training for small business and not-for-profits in 20 regional NBN rollout sites.
Supporting business to innovate
Speaker, the strength of our economy also depends on the ability of Australian businesses to win work at home and abroad.
We’re boosting innovation, productivity and competitiveness through our $1 billion Plan for Australian Jobs.
Investing over $500 million to create Industry Innovation Precincts around Australia.
And providing $378 million to stimulate private sector investment in entrepreneurial small to medium-sized enterprises.
Part of our plan to support and create jobs, building on our loss carry-back and instant asset write-off reforms for three million small businesses.
Meeting industry’s skills needs
Speaker, as well as having the infrastructure for the future, we must also ensure our economy has the skilled workers it needs.
Labor has increased annual funding for skills and training by almost 50 per cent.
Tonight we build on that record, with a $69 million Alternative Pathways to the Trades program, providing more flexible pathways for 4,000 Australians undertaking trade and technical qualifications.
We have created a $45 million Skills Connect Fund to deliver more effective workplace training for Australian businesses.
Speaker, this Labor Government will do everything in its power to boost workforce participation and support transitions to employment.
Tonight we continue our support by allowing Newstart recipients to earn around $1,000 more a year before their payments are affected, the first increase in more than a decade.
We are also supporting parents in their efforts to balance work and family with around 280,000 parents already reaping the benefits of the nation’s first Paid Parental Leave scheme.
Our scheme has been in place for two years, is fully funded, affordable, sustainable, equitable, and supported by every member on this side of the House.
Stronger regions, resilient rural communities
Speaker, tonight we announce new reforms to build stronger regions and more resilient rural communities.
Over $330 million to support the historic Tasmanian forests agreement, and continuing our investment in Tasmanian economic growth and jobs.
Nearly $100 million for a new Farm Household Allowance to support farmers in hardship, part of the National Drought Program Reform.
And a new Farm Finance package to help farmers struggling with debt, providing concessional loans, more rural financial counsellors, and a better approach to debt mediation.
This comes on top of the almost $1 billion of investment in the Regional Development Australia Fund supporting the infrastructure needs and sustaining economic growth in Australia’s regions.
We also commit another $200 million for Reef Rescue to help farmers improve the quality of water entering the Great Barrier Reef.
Recovering from natural disasters
Speaker, Australians well know the devastation nature can unleash on our country, our communities, and our people — from floods, cyclones to bushfires.
Since 2010-11, Labor has paid $5.7 billion to the states to support disaster relief.
We expect to pay a further $6.2 billion over the five years from 2012-13, including $1.9 billion to help Queensland through the January floods.
Tonight we invest $40 million to rebuild local council infrastructure to a better and more resilient standard.
And Speaker, as we build a stronger Australia for the future, we continue to honour those who laid the foundations of our country’s strength.
As the Centenary of ANZAC draws near, we honour the hard work and sacrifices of Australian service personnel and their families.
We build on our previous commitment to commemorating the Centenary of ANZAC investing a further $25 million and expanding veterans mental health services.
And this Budget funds the core defence capabilities required to protect Australia’s national security interests.
We have also provided the Royal Commission into Institutional Responses to Child Sexual Abuse with the resources required to go about its important work and ensure survivors have the support they need.
Speaker, this Budget makes historic investments in our children’s education, in care for our most vulnerable citizens, and in building our nation.
But you only get to make the big investments if you are willing to make the savings to fund them.
To fund the critical investments over the next decade and to return the Budget to surplus, this Government has made $43 billion in savings over the forward estimates.
In addition to the savings already mentioned we are:
* improving the sustainability of the family payments system by extending indexation pauses; not proceeding with increases to FTB-A announced in the 2012-13 Budget and abolishing the Baby Bonus; while providing new support for families of newborns through FTB-A
* closing loopholes and protecting the corporate tax base to ensure multinationals and big businesses are not being given an unfair advantage
* better targeting superannuation tax concessions to improve the system’s fairness, sustainability and efficiency;
improving the sustainability of the health budget through phasing out the poorly-targeted Net Medical Expenses Tax Offset and making changes to the timing of Medicare Benefits Schedule indexation
* changing tobacco indexation to make it more consistent with consumers’ purchasing power
* continuing to grow overseas development assistance to 0.5 per cent of gross national income, but deferring the target date by one year from 2016-17 to 2017-18 and
* continuing to improve the responsiveness of income tax instalments for all large entities.
Choosing our future
Speaker, tonight this Labor Government has made the choice — a clear choice — to keep our economy strong and invest in our future.
We’ve chosen to give every child a world class education, and to make sure no Australian is left behind.
We’ve chosen a responsible path to surplus while supporting jobs and growth.
To make our economy stronger, our nation smarter and our society fairer.
Labor has a proud record of making visionary choices that strengthen this great nation.
The Age Pension…Medicare…Universal Superannuation…Paid Parental Leave…The National Broadband Network…Pricing Carbon.
And with the ground-breaking investments I have announced tonight, we build upon that proud Labor tradition.
This is the Australia that Labor Governments choose.
Because creating prosperity and spreading opportunity are the values that drive this Labor Government every single day.
I commend the Bill to the House.
by Alan Thornhill
Wayne Swan predicted today that Labor will win the Federal elections on September 14.
“There will be a clear choice and we will win,” the Treasurer told reporters, as he arrived at Parliament House in Canberra, where he is to deliver his sixth budget tonight.
The polls, including one today, are still predicting a Coalition win in the September elections.
The latest Morgan Poll, for example, puts the Coalition at 56 per cent, on a two party preferred basis, to Labor’s 44 per cent.
Speaking of the budget, Mr Swan said: “What tonight is about is keeping our economy strong.
“So tonight is very much about some very big investments which will deliver for our country for decades to come.
“It’s about investing in the education of our young people and making sure that they get the best possible start in life.
“And of course, the other long-term investment to deliver a fairer society is delivering DisabilityCare.
“If you’ve got a permanent or severe disability you don’t have it for four years over the forward estimates.
“You have it for life.
“And what’s required is certainty, support and the knowledge that that will be there for you as you grow old,” Mr Swan said.
by Alan Thornhill
Pleasant surprises will be scarce in Tuesday’s Federal budget.
But there will be opportunities and choices.
The government is offering better schools, through the Gonski reforms.
And urgently needed help, through DisabilityCare.
Tony Abbott says he is offering something the government can’t.
A government, facing an election within months, can usually find something attractive to offer, in its budget bag.
The Gillard government can’t.
That’s because the brightest and the best of our public servants, those in the Federal Treasury, underestimated this financial year’s revenue collections, by something like $17 billion.
So despite the Treasurer’s promise of a surplus, that happy event is still some four years off, at best.
That’s the outlook, whether Wayne Swan or Joe Hockey is Treasurer, after the September 14 elections.
The government, now well behind in the polls, faces one, possibly overwhelming problem, in the coming elections.
That is crisis fatigue.
The global financial crisis – and its aftershocks – have been with us for some five years now.
And they are still rocking the economy.
With a persistently high dollar – and weak demand – many Australian companies are finding it hard to survive, let alone make a profit.
So employment, particularly in the manufacturing, retail and building sectors, is still shaky.
Yet more than 50,000 Australians found jobs last month and the nation’s unemployment rate even fell slightly.
Mr Swan says he has “accepted responsibility” for the political issues, that deferring the surplus has produced.
And he says protecting maintaining jobs will be his “priority” in this year’s budget.
But what, really, has gone wrong?
And what can we expect, now?
Two factors, overwhelmingly, combined to produce that revenue shortfall.
These were a sudden end to the mining boom and aftershocks from the global economic crisis.
Forecasting, in this climate, particularly with the $A at record heights, is little short of a nightmare.
However the $A has eased against the $US, since the Reserve Bank, cut interest rates, yet again, last week with that objective in sight.
And things can turn upwards, just as suddenly, in an economically restless times like ours, as they have fallen, over the past year.
It is easy to forget, too, that we are developing new strengths and creating new jobs, in unexpected places, like our service sector.
A new industry, educating university students, from neighboring countries, is just one example.
Let’s not forget either, that the debt carrying capacity of governments, in times like these, is much greater than the deficit scolds would have us believe.
If, of course, if they also start producing surpluses, when the good times roll again.
And they will.
by Alan Thornhill
As it cut official interest rates – by 25 basis points to a record low – of 2.75 per cent – the Reserve Bank signalled that there may be more cuts.
The bank’s Governor, Glenn Stevens, made that clear in his announcement yesterday.
He noted that the present mild outlook for inflation: “…would afford scope to ease further, should that be necessary to support demand.”
Then he added: “At today’s meeting the Board decided to use some of that scope.”
Some, but not all.
Three of Australia’s big four banks decided quickly, this time, to pass the cut on to their home loan customers in full.
And the last,the ANZ, is expected to follow suit tomorrow.
They are being urged to do the same for farmers and small business borrowers.
The housing industry welcomed the decision, saying it would help to revive building activity.
But political leaders differed sharply, in their assessments of the latest rate cut.
The Shadow Treasurer, Joe Hockey, said the Reserve Bank had to step in because the Government and the budget are “in chaos”.
But the Treasurer, Wayne Swan, said: “these rates are possible because the Government has had in place a responsible fiscal policy over the past five-and-a-half to six years.”
Business welcomed the rate cut.
“The further reduction in interest rates by the RBA boosts the prospects of the residential construction industry mounting a sustainable recovery,” the Chief Economist of the Housing Industry Association, Dr Harley Dale, said.
The chief executive of the Australian National Retailers Association, Margy Osmond, said the lower rate was “just what the doctor ordered”.
Despite these upbeat assessments, the Australian public is still quite worried about the economy.
This was evident in the latest weekly study of consumer confidence by the Roy Morgan organisation.
It showed that consumer confidence falling by 5.3 points.
by Alan Thornhill
Tony Abbott is sticking to his plan for an enhanced paid parental leave scheme, even though critics say it is “unaffordable” and carries a “monster tax.”
A Liberal MP, Alex Hawke, has broken ranks on the plan, declaring that it is too expensive and should be scrapped before the September 14 elections.
This was a major embarrassment for Mr Abbott, who regards his plan will be a “signature policy” in the upcoming election campaign.
Senior Liberals, including the Coalition’s Treasury spokesman, Joe Hockey, sprang quickly to Mr Abbott’s defence.
Mr Hockey said the Coalition is “absolutely committed” to the policy which would deliver a “massive benefit” to small business.
It would allow new mothers to take 26 weeks of leave at full replacement wage, up to a maximum of $150,000 a year.
These benefits would be funded by a 1.5 per cent levy on about 3,200 of Australia’s biggest companies.
That levy would be offset, to some extent, by a cut in company tax.
The Gillard government’s more modest policy, introduced in 2011, offers just 18 weeks of leave at the minimum wage.
The Greens stepped quickly into the debate, when Senator Hanson-Young promised a scheme that is both “fair and affordable.”
“…so far we haven’t seen that from either of the old parties,” she said.
The Assistant Treasurer, David Bradbury, said Mr Abbott’s plan is based on a “$12 billion monster company tax hike.”
The government had known for months that many Liberal MPs have been deeply worried by this prospect.
“… we’ve been calling it a Rolls Royce, “ Mr Bradbury said.
“Mr Hawke thinks it’s a lemon and he’s told Mr Abbott to leave this lemon in the showroom.”
Even Mr Abbott, himself, had conceded that a tax on business would mean higher prices for consumers, at the petrol bowser and at the grocery store.
Not only was the plan “excessively generous” but “its benefits are targeted to those at the higher income end of the schedule,” Mr Bradbury said.
by Alan Thornhill
Falling sales, a sagging job market and weak business confidence have left the Reserve Bank board facing intense pressure to cut interest rates, when it meets tomorrow.
Especially as new data confirms that inflationary pressures in Australia are still subdued.
The Bureau of Statistics reported today that retail sales fell by 0.4 per cent in March, after rising over the previous two months.
The ANZ job vacancy series confirmed that Australia’s job market is getting tighter.
And two separate studies showed that business is still far from confident.
The first, by the Australian Chamber of Commerce and Industry, showed that business conditions either remained flat, or drifted further into negative territory, in the first three months of this year.
The chamber’s selling index, which measures market conditions, hit its lowest level in the survey’s 18 year history.
Its Chief Economist, Greg Evans, was blunt in his assessment both of what needs to happen and what must not.
“The strongly held view of Australian business is that the ongoing weakness in business trading conditions and retreating inflationary pressure justify the Reserve Bank delivering a further cut in the cash rate, he said.
“Businesses are also worried that any further increases in taxation burden announced in next week’s Federal Budget will undermine some early signs of recovery in business sentiment,” Mr Evans added.
The second survey, by Dun and Bradstreet, also produced grim warnings.
It concluded:” Australian businesses will keep cutting their spending this year, with expectations for capital investment, employment and new credit set to fall further.”
D&B also warned that: “The deteriorating outlook for the September quarter suggests that despite pockets of optimism, including low interest rates and recovering consumer confidence, a tough trading environment and tight cash flow are restricting business spending.”
The firm said, too,, that that the outlook for capital investment, reflected in its survey, had fallen to its lowest point in more than three years.
by Alan Thornhill
Australia’s manufacturing industry slumped last month, amid worsening economic conditions.
An index of manufacturing performance, produced by the Australian Industry Group, fell 7.7 points in April, to just 36.7.
The group said there had been significant contractions in several sectors.
These included food, beverage and tobacco products; printing and recorded media; non-metallic mineral products; metal products; and machinery & equipment.
“Sharp declines in production, new orders and employment were recorded in April, while finished stocks and deliveries declined as well, albeit at a more moderate pace,” the group added in a statement.
Innes Willox, its Chief Executive, said the index is now at its lowest level since May 2009.
“The sharp drop in manufacturing production, employment and new orders in April, along with the continued erosion of exports, is deeply concerning,” Mr Willox said.
“The strength of the Australian dollar is a major burden on domestic producers and our rising unit labour costs and high energy prices are adding to pressures,” he added.
Mr Willox said Australia now ranks among the world’s highest cost manufacturing countries.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Friday May 24
The Dow Jones Index fell 12.44 points to 15,294.70
Ford Australia says it will close its Australian manufacturing plants in October 2016. Some 1,200 jobs to go.
Hazel Hawke dies at 83
A British soldier is hacked to death in the London suburb of Woolwich, in an apparent terrorist attack
- Sharon Coulton on Proposed family tax benefit scrapped
- Pete on Rudd government had entered “paralysis:” Gillard
- Liam Knuj on The Prime Minister, Julia Gillard’s, New Year’s Message
- Change is for the better,change is where your heart grows stronger on Family Assistance boost
- Harry on The Prime Minister, Julia Gillard’s, New Year’s Message
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|Bhp Blt Fpo||34.360||-0.520||-1.49%|
|Anz Bank Fpo||27.680||-0.450||-1.60%|
The News This Week
- Shares – and the $A – tumble
- Farmers meet to map out a future
- Ford Australia to close
- What was Joe really saying?
- Slow payers squeeze business
- Paid parental leave? Look again
- What went wrong:Treasury chief explains
- Working smarter works:Swan
- More rate cuts possible
- Employers urge moderation in the national wage case
- The right man for the job? Wrong question!
- Small business:a warning
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