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Monday 26th October 2015 - 6:57 am
Comments Off on Looking at the Lodge

Looking at the Lodge

by Alan Thornhill

Analysis

 

Nick Xenophon has a sharp tongue.

 
The South Australian Independent Senator is presently suggesting that the former Treasurer, Joe Hockey,renounce his parliamentary pension when he takes up his new job as Australia’s ambassador to the United States.

 
Just to avoid what some would see as double dipping, of course.

 
So far, there has been no sign that Mr Hockey will comply.

 
Senator Xenophon will, undoubtedly, make a similar suggestion to Tony Abbott, if current talk of the former Prime Minister becoming Australia’s High Commissioner to the United Kingdom proves to be correct.

 
The Senator will, undoubtedly, find some support for what he had to say about Mr Hockey at the weekend.

 
After all, no-one spoke more loudly, or more often, about ending what the former Treasurer called “the Age of Entitlement,” while he held that high post.

 
However the talk around the national capital has become softer – and more measured – since Mr Turnbull seized the nation’s top job from him last month.

 

 

Mr Abbott had tried, in his first two years as PM, to rule the country, with a stream of short, pithy slogans.

 
To the extent that some had started calling him “the slogan bogan.”

 
That worked better, while Mr Abbott was in office than it did when he became Prime Minister.

 

 

In an interview with Fairfax reporters last week, Mr Turnbull confirmed that he is aiming for lower tax rates.

 
Lower rates that is, along with with a broader tax base.

 
Or, in plain words, more people with jobs.

 
Even the overhaul of Family Tax Benefits government has just announced  is  part of his plan to achieve that.

 
How?

 
It saves money that can be  spent on child care thus liberating more women, in particular, from kitchen duties.

 
Mr Turnbull also showed, though, that he is still prepared to criticise those at the big end of town, if he believes that is necessary.

 
Even the banks.

 
He said the rate rises that the big four banks have just announced, have the potential to harm a soft economy.

 
The banks, themselves, had tried to lay some of the blame for those rises onto the government.

 

 
They said its requirement that they increase their capital holdings had left them facing higher costs, which had to be covered.

 
Mr Turnbull did concede, though, that those rate rises were “a commercial matter.”

 
And his government’s insistence on extra liquidity in the banking sector may still prove to be a wise precaution, in these times of heightened uncertainties – and sudden switches – in global financial markets.

 
Mr Abbott boasted, after his downfall, that the new government had scarcely changed any of his policies.

 
That may well have been true at the time, but his successor has been letting it be known since then that he is prepared to do so.

 

Mr Turnbull is  saying that “every single element” of those policies is now back on the table.

 

Even if that allows his political enemies to run scare campaigns.

 
Is Mr Abbott among them?

 
Well, he has been hinting, over the past few days that he still has his eyes on life at the now almost renovated Lodge.

 
And there is recent precedent.

 
After all, Kevin Rudd came back as Prime Minister, after he, too, lost that job in a party room ballot.

 
However Mr Abbott is less likely to do so as memories of his stumbles, while in office, are still fresh.

 
So who, among the current crop of Liberals, might challenge Mr Turnbull, if he slips a little further down the track?

 
It is still too early to ask that question, as the haze of success still surrounds our new Prime Minister.

 
But be assured, though that there are other Liberal MPs who also take short longing looks at the Prime Minister’s official residence in Canberra, on their way to our grand new Parliament House.

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Wednesday 21st October 2015 - 5:37 pm
Comments Off on PM seeks to get families back into the workforce

PM seeks to get families back into the workforce

by Alan Thornhill

Australian families will be encouraged to play bigger roles in the nation’s work force under new measures the Federal government announced today.

 

These include “restructuring” Family Tax Benefits to fund a $$3.5 billion “Jobs for Families Package.”

 

Three ministers  sought to explain this complex strategy in a joint statement they issued this afternoon.

 

The Opposition had made rival claims, earlier in the day, saying it had forced the Federal government to “back away” from its threat to freeze Family Tax Benefits.

 

In their  statement,  the Treasurer, Scott Morrison, Social Services Minister, Christian Porter and the Minister for Education and Training, Simon Birmingham, outlined the government’s revised strategy.

 
They said: “The Turnbull Government will restructure Family Tax Benefit (FTB) payments to give better targeted assistance to families, encourage workforce participation and fund the Government’s $3.5 billion Jobs for Families package.

 

The Government has already introduced the necessary bill into Parliament to change Family Tax measures first flagged in its unpopular 2014 budget.

 

The three ministers said their had been extensive talks on the changes proposed now.

 

“The Turnbull Government is committed to protecting taxpayers by responsibly funding our spending commitments, ” Mr Morrison said.

 

“We are ensuring that additional funding measures are offset by responsible savings.”

 

Mr Porter said the Government is committed to helping Australian families in a generous but sustainable welfare system.

 

“These reforms will give families greater on-going day-to-day financial assistance and will help ensure children get the best possible start in life,” the Social Services Minister said.

 

These measures will replace the unlegislated 2014-15 FTB measures including maintaining FTB rates, limiting FTB-B to children under six years of age and maintaining eligibility thresholds, he added.

 

The new measures will provide FTB-B to families with children under the age of 13, encouraging workforce participation for parents with children in high school.

 

Single parents and grandparents with children over the age of 13 will receive an FTB-B payment of $1,000 a year.

 

From July 2016, all eligible families with a youngest child under one year will receive an extra $1,000 a year through an increase to their FTB-B standard rate.

 

In addition, from 1 July 2018, for families with a child aged up to 19 years, the maximum rate of FTB-A will be increased by about $10 per fortnight.

 

“Significantly, we’re also increasing the fortnightly rates of Youth Allowance and Disability Support Pension so they’re aligned with the new FTB-A rate,” Mr Porter said.

 

“This is an important step towards simplifying and harmonising our complicated welfare system,” he added.

 

As part of the reforms, the Government will phase-out the end of year FTB supplements.

 

Mr Porter said the end-of-year supplements were introduced in 2004 substantially to help families manage FTB overpayments (because of underestimation of income).

 

“The great majority of FTB recipients are never overpaid or are overpaid a small amount and this is an issue that will be substantially addressed by technical changes scheduled for 2018-19,” Mr Porter said.

 

The money saved by phasing out the supplements will be redirected to increasing fortnightly payments and providing more affordable child care.

 

Senator Birmingham said: “We are investing almost $40 billion in child care over the next four years, including an extra $3.5 billion into the Jobs for Families package, to make child care simpler, more flexible, and more accessible.

 

“As a result of the new child care package, families using child care services from July 2017, on incomes of between $65,000 and $170,000, will be on average of $30 a week better off.”

 

Senator Birmingham described increased access to child care as an important productivity measure that will boost workforce participation.

 

“By better supporting parents who want to work or work more hours, Jobs for Families will encourage an estimated 240,000 families to increase their involvement in paid work, including almost 38,000 jobless families.

 

“Our Government’s new child care package supports parents as they balance work and family responsibilities, whilst protecting those most vulnerable, and continuing to ensure high-quality early learning,” Senator Birmingham added.

 

Mr Porter said: “We believe our new package of reforms strikes the right balance between equity and sustainability.”

Wednesday 21st October 2015 - 11:06 am
Comments Off on Free trade breakthrough

Free trade breakthrough

by Alan Thornhill

Labor says it will accept the China-Australia Free Trade Agreement, after it won concessions on jobs, skills and pay rates.

The Opposition Leader, Bill Shorten and Senate Opposition Leader Penny Wong announced the breakthrough, in joint statement they issued today.

 

They said they had secured a comprehensive package of safeguards for Australian jobs.
“These safeguards are complementary to the China-Australia Free Trade Agreement (ChAFTA),” the two leaders said.

 

They said Labor had argued for safeguards in three specific areas.

 

These were:-

  • labour market testing

 

  • protecting Australian wages and conditions and

 

  • upholding workplace skills and safety standards.

 

“Today Labor has delivered new legal safeguards in each of these areas,” they said.

 

“Labor has stood up for local jobs and a safety net of decent wages and conditions for all workers.”

 

So what happens now?

 

Mr Shorten and Senator Wong said:Having secured these outcomes, Labor will support the ChAFTA enabling legislation in Parliament.”
They said this would will allow Australian exporters to gain improved access to the Chinese market at the earliest opportunity.

 

“The new obligations will be written into the Migration Regulations, ensuring they are legally binding,” they added.

Monday 19th October 2015 - 8:17 am
Comments Off on Coal:are we prepared?

Coal:are we prepared?

by Alan Thornhill

Analysis

Australia’s conservative Federal government still sees a future for coal.

 
Josh Frydenberg’s assertion at the weekend that there is “a strong moral case for the development of the Adani coal mine, which is slated to become Australia’s biggest, illustrates this.

 
It was even clearer with the recently deposed Prime Minister, Tony Abbott. who made no secret of his belief that coal was a gift to mankind.

 
In his own often repeated words, the “gift of cheap power.”

 
Mr Frydenberg hasn’t been silent on the subject, either.

 
Only last month in Melbourne, at an Interenationnal Conference on Coal Science and Technology, he said the resource sector, in which the coal industry plays a major role, has done much for Australia’s prosperity.

 
“The massive $400 billion investment in the Australian resources industry driven by the decade long super-cycle over the period from 2003 to 2014 has expanded our economy and lifted the average Australian household’s weekly income by $100 per week, ” Mr Frydenberg said.

 

 

The investment phase of that boom is now clearly over.

 

 

But the Federal Resources Minister was right when he said:

 
“We are now in the third phase of the boom, which is seeing significant increases in export volumes, and Australians are continuing to benefit.

 

Higher volumes, yes,

 

 

But at a much reduced price.

 
Yet there has been little sign, so far, of the Federal government taking a prudent look at an Australia, in the future, in which coal has a much smaller role in financing the nation’s financial stability.

 

Critics might even accuse is of leaning on this industry, for every piece of political support it can extract, while that is still possible.

 

The Greens, certainly, came close to doing so at the weekend, in their assessment of Mr Frydenberg’s stance.

 

 

The Queensland Green Senator, Larissa Waters,  isn’t holding back.

 
She described Mr Frydenberg’s claim that exporting coal is “moral” as “deranged.”

 

So what was behind it?

 

The idea that Australia could help supply cheap power to poor people in India had a lot to do with it.

 

“Minister Frydenberg’s claim on Insiders today that there is a strong moral case for the Adani coal mine to relieve energy poverty in India is a sick joke,” Senator Waters said.

 

 

She ridiculed Mr Frydenberg’s claim,  saying four of every five people who live without electricity in India are not connected to an electricity grid.

 

 

So they can’t access coal-fired power.

 

 

“Building electricity grids is slow and expensive and the much cheaper, healthier solution is localised renewable energy,” she added.

 
Senator Waters  sees the situation quite differently.

 

 

“There’s a strong moral case for Australia to help develop the renewable energy technology that will safely provide people in developing countries with power,” she says.

 

Why?

 

 

Because she believes there is a better path.

 

“Burning coal causes local health impacts, with millions of premature deaths from air pollution a year, and pollutes local water supplies, “ she said.

 

 

“Of course, the biggest problem it creates is global warming, which is devastating the poorest countries the most.

 

“The Indian Energy Minister has repeatedly stated that India will end coal imports in the next few years and India is working to double its clean energy by 2022,” she added.

 

 

“Claiming there’s a moral case for coal exports confirms yet again how out of touch the Coalition is with the rest of the world,” Senator Waters said.

 

 

 

Mr Abbott once dismissed concern over global warming as “absolute crap.”

 

 

 

The Liberals don’t do that, anymore.

 

 

 

But there are still concerns that some, at least, are not giving the challenge of global warming sufficient weight.

 

Tuesday 13th October 2015 - 11:37 am
Comments Off on Our “fundamentals strong” Reserve Bank chief

Our “fundamentals strong” Reserve Bank chief

by Alan Thornhill

A Reserve Bank chief says “the fundamentals” of the Australian economy “are strong” and provide grounds for “optimism” about the future.

 

Philip Lowe, the Bank’s Deputy Governor, made the observation in a speech he delivered to the CFA Institute Australia Investment Conference in Sydney today.

 

Mr Lowe said the central message of his speech was: “that these fundamentals are strong.”

 

“…and that they provide us with the basis to be optimistic about the future.”

 

“ At the same time, none of us has a crystal ball, so we can’t be sure exactly what that future holds,” Mr Lowe added.

 

“What we can be sure of is that we will be best placed to take advantage of our strong fundamentals if our economy is flexible and if it is able to adapt to the changing world in which we find ourselves,” Mr Lowe added.

 

“Hence the title of my remarks this morning: Fundamentals and Flexibility.”

 

Mr Lowe said advancing technology had greatly affected the way Australians work.
“The advances in technology are reshaping, in unexpected ways, the jobs that we do,“ he said.

 

“If we were to go back to 1995, or perhaps even to just 2005, I suspect that there are very few of us who could have imagined many of the new occupations that have emerged.”

 

“There are big data architects, cloud computing experts, social media strategists, mobile app developers, information security technicians, green retrofit architects, genetic counsellors and the list goes on.”

 

“Each of these new occupations is possible only because of advances in technology.”

 

“More broadly, the huge growth in employment in the services sector has taken many by surprise,” Mr Lowe said.

 

“I suspect that if in the early 1990s we had known that there would be a net loss of over 100 000 jobs in the manufacturing sector in Australia over the next 25 years, there would have been a sense of despair about the future.”

 

“This despair would probably have been compounded if we had also known there would be no growth in jobs in both the utilities and wholesale trade sectors over the next quarter of a century.”

 

“Yet, over this period, we have enjoyed a strong rise in our living standards, the unemployment rate has come down substantially and we have generated around 4 million new jobs across the economy, mostly in the services sector.”

Friday 2nd October 2015 - 8:04 am
Comments Off on The mini summit – a lifesaver?

The mini summit – a lifesaver?

by Alan Thornhill

The party’s over.

Unions, employers and community groups have had a long, hard look at the risky economic circumstances Australia now faces, as the mining investment boom fades.

That was evident, above all, at the economic mini-summit Malcolm Turnbull called in Canberra yesterday.

All present accepted that the path of consensus and innovation that the new Prime Minister is suggesting might be worth trying, after all.

That spirit, faintly evident in the days leading up to the meeting, strengthened during the three hours the participants spent in the Cabinet room, assessing their options.

The results won’t be immediate, or dramatic.

Tax reform is back on the table.

Employers will be less vocal, in their campaign for cuts to Sunday penalty rates.

But how do the participants, themselves, see what has happened?

Some tax concessions which favour the rich – and sometimes distort markets – are to be reviewed.

Jennifer Westacott, the Chief Executive of the Business Council of Australia said: “there was a very, very strong agreement that concessions needed to be looked at.”

A statement  that would once have raised eyebrows.

But she didn’t stop there.

“I think the more important discussion we’ve had today though is what is the nature of work … and how you get a collaborative framework for lifting productivity and opportunity,” Ms Westacott added.

The ACTU, secretary Dave Oliver revealed the summit had been his first meeting with an Australian Prime Minister since the last Federal elections.
And the ACTU President, Ged Kearney, described it as “absolutely a step forward.”

The three hour meeting, itself, was of course just the first step in what is likely to be a long process of hard bargaining.
But,with positive assessments like these emerging from it, there is now a real chance that the same spirit will take hold in the broader community.

And that would be a very big achievement, indeed.

Friday 25th September 2015 - 8:45 am
Comments Off on Population growth approaches a 10 year low

Population growth approaches a 10 year low

by Alan Thornhill

Sharp falls in both natural increase – and net migration – have left Australia facing its lowest population growth for almost a decade.

So does that mean current policies towards boat people are too harsh?

 
Politicians, from all major parties, readily admit that Australia has relied heavily on foreign investment, to sustain its development, over recent decades.

But our debt to those we once called “new Australians” is not so readily acknowledged these days.

It may be time to think again, about that.

 
Especially as, the Bureau of Statistics has just confirmed that Australia’s overall population growth, in the 12 months to March this year, slowed to a level last seen almost a decade ago.

On preliminary estimates, we gained 142,900 people through natural increase in the 12 months to the end of March.

This was a – quite substantial – fall of 9.7 per cent – from the comparable figure for the previous year.

Preliminary estimates also show that we gained 173,100 people from net overseas migration, in that time.

That was a 16 per cent fall from the previous year’s “catch.”

These are not catastrophic figures, by any means, but they do demand some thought.

However that is not yet prominent in our national discussions.

Are we really still as “young and free” as we declare, so boldly, in a national song?

Or are those politicians who now worry, increasingly about the rapidly rising the cost of the tax concessions, paid on superannuation, in a wealthy country, with an aging population, closer to the truth?

Questions, like these, cannot be dealt with, adequately, in three word slogans.

Yet that seems, at times, to be all we are offered.
Our economists, arguably, are doing better.

Alexandra Heath, the head of economic analysis at the Reserve Bank, for example, made some important connections in a speech she gave to an Urban Institute lunch in Perth today.
She said: “the transition from the investment to the production phase of the mining boom is one of the important drivers of developments in the domestic economy today.”

And she added:“ I don’t need to tell an audience in Perth about the impact the declines in mining investment and commodity prices are having on economic activity.”

No-one, in her audience, would have been surprised, either, to find that the Bureau had reported that the once-booming State of Western Australia actually lost population to other States, as the mining investment boom passed.

Or that the Australian economy weakened, as that happened.

For population movements still have a big impact on economic growth, or lack of it.

And on pay rates.

Wednesday 23rd September 2015 - 3:56 pm
Comments Off on Government services hit as pay strike spreads

Government services hit as pay strike spreads

by Alan Thornhill

Strikes over a bitter pay dispute are continuing to disrupt Federal public services and they are expected to spread on Thursday afternoon.

The Community and Public Sector Union said in a statement Wednesday that tens of thousands of public sector workers would be out when Medicare, Tax Office staff and others join industrial action that has already hit international airports.

Their half-day action will begin at lunchtime.
It will also involve workers from the departments of Human Services, Employment, Environment, Education, Agriculture, Defence and Veteran Affairs, along with the Tax Office, the Bureau of Meteorology and the Bureau of Statistics.

The uinion’s National Secretary Nadine Flood said: “These workers are extremely frustrated with the Government’s 18-month attack on their rights and conditions.”

She said:“ We are calling on Prime Minister Malcolm Turnbull and Minister Michaelia Cash (who assists him with public service matters) to rethink this failed bargaining policy and work with the union to find a sensible way forward.”

Ms Flood also said: “This dispute was caused by Government policy requiring Commonwealth agencies to go to war with their own workforce.”

Important workplace rights and conditions had been stripped from enterprise agreements.

Ms Flood said the strikers would include “mums and dads working at Centrelink and Medicare who are are deeply worried about the loss of family-friendly conditions.”

“The previous Minister responsible, Senator Eric Abetz, refused to even meet with the union to discuss these concerns since January,  2014,”  Ms Flood said.

She said the on-going industrial action is sending a clear message to the government.

“Minister Cash now has a clear opportunity to move away from the failed bargaining policy of her predecessor and instead take a modern, productive approach to public sector workplace relations,” she added.

Ms Flood  noted that Mr Turnbull had clearly stated that he does not want to wage war with workers or unions.

“We are calling on the Government to change the way it deals with its own workforce,” she declared.

She said, though, that  many government departments still do not have new enterprise agreements..

“Earlier this week workers with the Department of Immigration and Border Protection became the latest to emphatically reject the Government’s negotiating approach to date,” Ms Flood said.

 

 

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Alan Thornhill

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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