by Alan Thornhill
Malcolm Turnbull’s big new ministry and cabinet to be sworn in today
Pauline Hanson has made a controversial appearance on ABC’s Q&A as police clashed with a handful of protesters who demonstrated for and against her on the street outside, arresting up to six people theage
Donald Trump’s camp calls Republican’s staying away from their party’s convention in Cleveland “childish” BBC
The black former Marine and Iraq war veteran who shot dead three police officers in the southern US city of Baton Rouge at the weekend planned his attack for days and then “assassinated” the men, officials say. ABC
by Alan Thornhill
Tony Abbott has missed out on a place in Malcolm Turnbull’s new ministry and Christopher Pyne is to become Australia’s new minister for defence industry.
The Prime Minister has also named Josh Frydenberg Australia’s new environment minister.
This has angered environmentalists who say Mr Frydenberg has always favoured the coal industry over the Great Barrier Reef.
Mr Turnbull’s new ministry and cabinet are to be sworn in next week.
The Prime Minister’s decision to leave his predecessor, Mr Abbott, off his front bench comes as no surprise, even though hard right MPs, within the Liberal Party, would have welcomed such a move.
As he promised do before the election, Mr Turnbull generally avoided unecssary changes changes when he announced his new team today.
But Mr Frydenberg will become minister for the environment and energy.
Mr Turnbull said all his previous cabinet ministers had been reappointed although there had been some changes and expansions in their duties.
He said: “Senator Fiona Nash will add Local Government and Territories to her Regional Development and Regional Communications roles.
“Christopher Pyne will be appointed to the new role of Minister for Defence Industry, within the Defence portfolio.
“Mr Pyne will be responsible for overseeing our new Defence Industry Plan that came out of the Defence White Paper.
“This includes the most significant naval shipbuilding program since the Second World War.
“This is a key national economic development role. This program is vitally important for the future of Australian industry and especially advanced manufacturing.
“The Minister for Defence Industry will oversee the Naval Shipbuilding Plan which will itself create 3,600 new direct jobs and thousands more across the supply chain across Australia.
“Beyond shipbuilding, there is a massive Defence Industry Investment and Acquisition Program on land, in the air and inside cyberspace.
“This is a massive step change set out in the Defence White Paper. This investment in Defence Industry, as you know, is a key part of our economic plan.
“It will drive the jobs and the growth in advanced manufacturing, in technology, right across the country. And I’m appointing Christopher to be the Minister to oversee that and ensure that those projects are delivered.
“As I said at the outset, this is a term of government for delivery.
“We will be judged in 2019 by the Australian people as to whether we have delivered on the plans and the programs and the investments that we have promised and set out and described in the lead-up to the election.
Greg Hunt will move from Environment to become the Minister for Industry, Innovation and Science, where he will drive the National Innovation and Science Agenda.
“Can I say that Mr Hunt has been an outstanding Environment Minister and he served in that portfolio in Government and indeed, in opposition.
“He has a keen understanding of innovation, he has a keen understanding of science and technology and he will give new leadership to that important portfolio and those important agendas so central to our economic plan.
“Josh Frydenberg will move to the expanded Environment and Energy portfolio combining all the key energy policy areas.
“These include energy security and domestic energy markets for which he has been previously responsible in the current portfolio. Renewable energy targets, clean energy development and financing and emission reduction mechanisms which are part of Environment.
“Senator Matt Canavan will be promoted to Cabinet as the Minister for Resources and Northern Australia and I welcome Senator Canavan to the Cabinet in this key economic development role,” Mr Turnbull said.
by Alan Thornhill
A body representing older Australians is urging the government to “stick to” its promised reforms to superannuation.
The Council on the Ageing says its “integrity will be at stake” if it doesn’t.
The council’s, Chief Executive Ian Yates said a small number of Liberal members are seeking bigger tax breaks for the rich, at the expense of less well off Australians.
In a statement today. Mr Yates said: ““The Coalition Party Room needs to stand strong on this.
He said that is necessary: “.. in the interests of good social and economic policy, electoral integrity and Budget reform
“… otherwise they will send a message that they govern for the financial interests of the top few percent of wealthy Australians.
Mr Yates said there are fundamental equity issues here .
“…superannuation tax breaks cost over $25 billion in foregone revenue.
He said that is“ – over ten per cent of income tax – and growing fast.
“Middle and lower earners, the majority of whom are women, have to pay more in taxes – both now and in the future – to pay for super tax breaks that largely benefit high-income men,”Mr Yates said.
He said: “…said the fact that the Prime Minister and Treasurer are under pressure to reverse sound policy to make super fairer, based on a weak narrative about selected poor election results and fewer well-heeled supporters manning polling booths, would be laughable if it wasn’t so serious.”
“In fact a few Coalition dissenters giving air to the complaints of a privileged minority created space during the campaign for Labor to ‘dog whistle’ a so-called threat to super; while later banking the whole of the savings from the super reforms” Mr Yates said.
by Alan Thornhill
By late tomorrow (Monday), we should know what the new Turnbull government will look like, but not what it will do about its proposed changes to superannuation.
The Prime Minister, Malcolm Turnbull, signalled yesterday that a decision on that matter is still some way off.
Labor called that a “humiliating back down.”
Its superannuation spokesman, Jim Chalmers noted that Mr Turnbull had had said before the July 2 election that the government’s proposed changes to superannuation were “absolutely ironclad”.
There are many critics, including some critical ones within the Liberal party, who don’t like the caps the government is proposing to put on tax free contributions to super.
Mr Turnbull, though, insists that they are needed, to make the system fairer.
But he warned reporters in Sydney today not to expect a quick resolution of this issue.
That’s good advice, as those internal critics, in particular, are very powerful.
And they would seriously embarrass the Prime Minister if they forced him to back down, from a position that he, himself, has described as “fair,” so soon after an election.
Mr Turnbull told reporters today that he is listening “very carefully” to the concerns that “my colleagues and others” have raised at the proposed superannuation tax reforms.
“And they will go through the normal Cabinet and party room process.
“We are listening very keenly, I am listening very keenly and carefully to concerns that have been raised by my colleagues, and of course by other people in the community as well,” he said.
But Mr Turnbull added that he would not say more at a press conference.
Mr Chalmers ridiculed Mr Turnbull’s new stance.
“Well, it will be champagne flutes at twenty paces tonight at The Lodge as the members of the Turnbull Government gather to brawl about their superannuation changes,” he said.
“ No amount of taxpayer-funded champagne and prawns will fix the deep divisions in the Liberal Party, in the Turnbull Government, over the mess they’ve made of superannuation,” Mr Chalmers added.
Mr Turnbull also coonfirmed today that there would be some changes between his old ministry cabinet and cabinet and his new ones.
His junior Coalition partner, the Nationals, for example, are expected to get at least one extra seat, because they polled well in the July 2 elections.
by Alan Thornhill
Confidence in Australia’s property market has eased since the Reserve Bank cut the nation’s interest rates in May.
A survey that the National Australia Bank published today shows that the easing is particularly pronounced among property professionals.
In the first NAB Residential Property Survey since the RBA cut the official cash rate in May this year, housing market sentiment amongst property professionals softened.
The bank said its residential Property Index fell to +3, from +6 in Q1 2016, to remain below its long term average of +13.
“Sentiment moderated in all states except SA/NT, which rose 19 points,” it added.
New South Wales joined Victoria as the best performing state, followed by Queensland, the bank said.
“Confidence has however improved, with the national index rising to +29 next year, and +36 in two years’ time,” it added.
The bank said its residential Property Survey for Q2 2016 also found that respondents expect Victoria and Queensland to provide the best capital returns over the next one to two years.
“It’s still a mixed picture across Australia, with house price expectations for the next 12 months holding up well in the eastern states whilst staying flat in SA/NT and continuing to fall sharply in WA,” the bank’s Chief Economist Alan Oster said.
The bank said it had also revised its national house price forecasts for 2016 upwards to 5.1 per cent (from 1.5 per cent). Unit price forecasts were revised up to 3.6 per cent for 2016.
“Our upwards revisions in price forecasts reflects the strength in prices to date.
Over the last six months, Sydney and Melbourne prices have increased by an annualised rate of nearly 19 per cent and 12 per cent respectively,” Mr Oster said.
“However, while there is significant amount of uncertainty over the outlook for prices, we expect that this renewed momentum in the housing market is unlikely to be sustained over the longer term.”
Looking out to 2017, NAB forecasts prices to be flat across most capital cities, with falls particularly in Perth, Melbourne and Brisbane.
While the declines in Perth largely reflect economic conditions, the falls in Melbourne and Brisbane can be partly attributed to added supply and weaker investor demand.
“NAB is forecasting a much softer residential property market, with 0.5 per cent growth in house prices and nearly 2 per cent decline in unit prices in 2017,” Mr Oster said.
NAB Economics continues to hold the view that residential property prices are unlikely to experience a sharp ‘correction’ without a trigger from a shock that leaves unemployment or interest rates sharply higher.
The Residential Property Survey series also measures foreign buyer activity in the Australian housing market.
Market share of foreign buyers in new Australian housing markets fell for the third straight quarter in a row – to 10.4 per cent.
A sharp fall in foreign buyer activity in Queensland was offset by growth in Victoria and a modest rise in NSW.
Market share of foreign buyers in established markets was unchanged at 7.2 per cent.
About 230 property professional participated in the Q2 Survey, the bank said.
by Alan Thornhill
Australia is making too little progress in tackling climate change, according to the Climate Council.
The council’s CEO Amanda McKenzie said this is confirmed by new data.
She said a new survey, by the Australian Bureau of Statistics shows coal’s market share has barely moved over the past three years., slipping only marginally from 65.3 per cent to 64.9 per cent
Yet burning coal to generate electricity is one one of the major drivers of climate change.
Ms McKenzie noted that renewable power generation has increased from 9.6 per cent to 12 per cent, according to the survey.
However, shr said the true test of a climate change policy is how much emissions are reduced.
And the US is doing much better than Australia in this regard.
“In the U.S, emissions from the electricity sector fell 18 per cent in 2014 and coal-fired power generation fell from 39 per cent in 2014 to 33 per cent in 2015,” Ms McKenzie said.
She said also that the fact that electricity generation from coal has barely moved in Australia, is a sign of two things.
One, the renewable energy industry is not growing at anywhere near the rate we need it to in order to tackle climate change.
“That’s because of the chopping and changing of policy.
“We’ve got enough renewable energy resources to power the country 500 times over – but we are not capitalising on it.
‘And two, it’s a sign that there is our climate policy is not robust enough to reduce emissions at the source.
“We must introduce climate policy which reduces our fossil fuel emissions if we are to effectively tackle climate change and protect the Great Barrier Reef,” Ms McKenzie said .
by Alan Thornhill
Too little credit can present risk to an economy, a Reserve Bank chief warned today.
Luci Ellis,who heads the bank’s financial stability department said this is something policymakers need to keep in mind.
Addressing a seminar in Sydney, Ms Ellis said the dangers of too much credit are well known.
“Over-exuberant lending and borrowing can mean that some people are getting loans that they have little prospect of being able to repay even in good times,” she said.
But she added: “Less well appreciated are the costs of having too little credit available.
“The point here is simply that in recognising that too much credit can be dangerous, we should not instead fall into the trap of thinking of all borrowing as illegitimate or somehow immoral,” Ms Ellis said.
“Less credit isn’t always and everywhere better.
“ The low levels of credit available in economies in the regulated era of past decades are not the benchmark we should be evaluating ourselves against now when we try to assess the risk in the system.”
“ Some activities can and should be financed with at least some debt, even in bad times – even though there are plenty of others that should not.”
Ms Ellis then said: “in their efforts to protect the real economy, policymakers need to ensure that credit is still being supplied to good borrowers even in bad times.
A healthy and resilient banking sector can help achieve that;” Ms Ellis said
“Indeed, it would be difficult to manage it without one,” she added
She said though that Australia is not facing a credit squeeze.
“Let me be clear that Australia is not anywhere near having this problem,” Ms Ellis said.
“Whatever the concerns about concentration and competition in the Australian financial system, there is plenty of finance readily available to lower-risk customers.
“ But some recent examples overseas show the damage that can be done when there isn’t enough credit available
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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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