by Alan Thornhill
Australians planning to buy new homes are still finding them less affordable.
However, a new survey, by the Housing Industry Association confirms that significant differences between the various State capitals persist.
The association’s Affordability Report, published today, showed that affordability overall fell by 3.7 per cent in the June quarter.
It was also 2.1 per cent less favorable than that of the same period a year earlier.
The Association said the capital city housing affordability index fell by 4.3 per cent during the quarter, while regional market index experienced a 1.9 per cent improvement.
“Home price growth moderated in the early part of the year and the HIA Housing Affordability Index showed an improvement in affordability during the March 2016 quarter,” HIA Economist, Geordan Murray said.
“However, in the June quarter dwelling price growth returned and the index reverted to the level we saw at the end of 2015,” he added.
“While there was a decline in the headline index tracking the national picture, there was substantial variation around the country – with substantial differences between states, and also differences between capital city markets and regional markets.”
“The geographic variation in affordability is most evident in the comparison between Melbourne and Perth,” Mr Murray said.
Over the last year, the median dwelling price in Perth has fallen by 4.7 per cent while Melbourne’s has grown by 11.5 per cent,” he added.
This has seen the affordability index for Perth increase by 6.2 per cent over the last year, while the index for Melbourne has fallen by 6.2 per cent.”
“These differences in affordability align with the relative economic performance of these two states.
“The Western Australian economy is navigating the tail end of the mining boom which has seen conditions in the local labour market deteriorate and consequently the rate of population growth has fallen quite sharply.
“ In contrast, Victoria has experienced a healthy level of growth in the labour force and continues to record the strongest rate of population growth in the country,” Mr Murray said.
During the June 2016 quarter, improvements in affordability were observed in three capital cities with the largest improvement in Perth (+3.2 per cent), Darwin (+2.9 per cent) and Hobart (+2.2 per cent).
Affordability worsened in the remaining five capital cities during the March 2016 quarter with the largest decline recorded in Melbourne (-7.4 per cent), followed by Canberra (-5.7 per cent), Sydney (-1.6 per cent), Adelaide (-1.3 per cent), and Brisbane (-1.0 per cent).
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
New vehicle sales were flat in June, on trend figures the Bureau of Statistics published today.
On this basis, 97,801 new vehicles were sold during the month.
The biggest rise, of 2 per cent, occurred in the ACT.
And the biggest fall – of 1.1 per cent – was seen Western Australia, where new vehicle sales have been falling since December last year.
by Alan Thornhill
Australia’s seasonally adjusted unemployment rate rose by 0.1 per centage points in June to 5.8 per cent.
However the Bureau of Statistics reported today that its “more reliable” indicator of unemployment, the trend series, had stayed steady at 5.7 per cent.
Th bureau said our participation rate also remained steady at 64.8 per cent.
As always, the detail of the Bureau’s employment figures were important last month.
And it said employment grew by 0.07 per cent in June, consistent with the average growth rate over the last six months, on trend figures.
The bureau added that, over the past month,, trend employment increased by 8,300 people to 11,933,400.
Trend full-time employment increased by 700 after falling for the previous four months.
Part-time employment increased by 7,600 persons, its weakest monthly growth since August 2014.
The Bureau also said that the hours worked by employed people fell, but not by as much as in previous months.
“This reflects the small increase in trend employment,” bureau said.
The trend unemployment rate remained steady at 5.7 per cent. The participation rate also remained steady at 64.8 per cent.
“Trend series smooth the more volatile seasonally adjusted estimates and provide the best measure of the underlying behaviour of the labour market,” Mr Hockman said.
The seasonally adjusted number of persons employed increased by 7,900 in June 2016.
The seasonally adjusted unemployment rate for June 2016 increased 0.1 percentage points to 5.8 per cent and the seasonally adjusted labour force participation rate increased by less than 0.1 percentage points to 64.9 per cent.
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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.
by Alan Thornhill
The Prime Minister, Malcolm Turnbull, said today that Australians should “celebrate” their democracy and “not take it for granted.”
He was speaking to reporters in Sydney shortly after the Labor Leader, Bill Shorten, had telephoned him to concede defeat in the July 2 elections.
“Earlier today Bill Shorten called me and congratulated me on being re-elected.” Mr Turnbull said.
He added: “when Bill called me I had our little granddaughter Isla on my left hip.
“So she was a one-year-old witness to history when I was having that discussion with Mr Shorten.”
Mr Turnbull recalled that many issues in the election had been “fiercely fought.”
“We have resolved this election,” he said.
“ We’ve gone through this election with fiercely fought arguments.
“Issues of policy, issues of principle.
“And we’ve done so peacefully and constructively.
“And it is something we should celebrate but not take for granted.
“That here in Australia we settle these big political issues, we settle who sits in our parliaments, we settle who governs our country and we do so peacefully through our democratic processes.
“So above all, I want to thank the Australian people,” Mr Turnbull said.
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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