by Alan Thornhill
The Prime Minister, Malcolm Turnbull, is trying to steer the election campaign back to where it started.
That is with his attempt to restore peace in the building and construction industry.
And in a speech to the American Australian Association & US Studies Centre last night, Mr Turnbull also argued that Australia’s increasing involvement with Asia is making this country’s reliance on America more important than ever.
He said the government had launched an unusually long –eight week – campaign for re-election “in order to break the deadlock between the House of
Representatives and the Senate over two critical pieces of legislation relating to industrial relations.
“and one of those is the restoration of the Australian Building and Construction Commission,” Mr Turnbull said.
That aim had – previously – been hardly mentioned during the campaign, which has now passed its half-way mark.
But, last night, Mr Turnbull declared that the course he had chosen is: “the only way we can get the rule of law restored to the construction sector.”
He said the sector employs one million people.
“ and the restoration of law to that sector is a vital economic reform, and part of our economic plan to secure our prosperity.”
“the only way we can get that passed is through this double dissolution and getting the numbers collectively in the House and the Senate to pass that law and restore rule of law through a joint sitting of the parliament,” Mr Turnbull said.
“ That’s our commitment,” he added.
Mr Tunbull also paid tribute to a previous Liberal Prime Minister, John Howard, who attended last night’s function.
He said: “John understood that the United States is the irreplaceable anchor to the global rules-based order – an order built upon shared political values and common economic and security interests.
“The truth of his insight has been affirmed by every subsequent Prime Minister of Australia.
“Earlier this year I visited and thanked our men and women serving alongside US forces in Afghanistan, in what is now the longest commitment in our military history.
“And also our forces in Iraq, where we are together with the United States and other allies jointly pushing back, rolling back the brutality and barbarity of Daesh or ISIL.
“And not a day, truthfully not a minute, goes by without our intelligence agencies working together – saving lives – in the fight against terrorism.
“Our ANZUS alliance and broader relationship is anchored in a history that is even deeper and richer than many of us realise,” Mr Turnbull concluded.
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.
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.
by Alan Thornhill
Home building approvals continued to rise in April, with medium and high density projects still dominating the scene.
The Bureau of Statistics reported today that in trend terms the total number of home building approvals rose by 1.2 per cent during the month.
This was the fifth straight monthly rise on this indicator.
However, on trend figures, approvals to build private sector houses rose by just 0.2 per cent during the month.
On seasonally adjusted comparisons, the rise in total approvals was even bigger, at 3 per cent.
And approvals for medium and high density projects rose by 8.7 per cent.
The Bureau also reported that home building approvals in the ACT rose by 6.7 per cent in April.
Approvals also rose by 2.9 per cent in Queensland, 2.2 per cent in South Australia, 1.9 per cent in Tasmania and 1.4 per cent in NSW.
But there were falls in the Northern Territory and WA on trend comparisons.
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.
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.”
by Alan Thornhill
Exports are pushing Australia’s economic growth, which rose 1.1 per cent in the March quarter and 3.1 per cent through the year.
These seasonally adjusted figures were published by the Bureau of Statistics today.
The Bureau said the Australian economy is moving from mining based investment to production.
It said too that new engineering construction had fallen for the tenth consecutive quarter.
But mining production had grown by 6.2 per cent.
The Bureau also said mining related products significantly contributed to the 4.4 per cent growth in exports.
Service based industries were the other contributor to growth with Finance, Retail trade, Accommodation and food services, and Arts and recreation all increasing.
The Bureau said this is consistent with the steady growth in service to households.
However it added broad based price falls were evident across the economy this quarter.
This was shown in the Consumer Price Index (CPI) which fell 0.2 per cent.
The GDP price deflator, which shows the overall price movement in the Australian economy, fell 0.6 per cent in the March quarter.
The terms of trade fell 1.9 per cent in the March quarter and fell 11.5 per cent through the year.
by Alan Thornhill
Australian governments are still better at talking about spending restraint than matching their outlays to their income.
This is shown once again in March quarter figures that the Bureau of Statistics published today.
These showed that our governments – at all levels – raised $116.605 billion through tax collections in the quarter, a 2.4 per cent fall from the result seen in the final quarter of 2015.
The Bureau also reported that once general government expenses were counted the nation’s governments were left with a net operating shortfall of almost $4.6 billion, for the first quarter of this year.
So how did we cope?
The authorities simply brought out our governments’ credit cards and borrowed another $7.6 billion.
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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