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Thursday 30th June 2016 - 1:49 pm
Comments Off on Our wealth: the $13.2 billion hit

Our wealth: the $13.2 billion hit

by Alan Thornhill

Australians have suffered their first fall in household net wealth since the September quarter of 2011.

 

This is shown in figures that the Australian Bureau of Statistics published today.

 

The Bureau said that during the quarter, household net worth fell by $13.2b.

 

“During the quarter, household net worth decreased by $13.2b, its first decrease since September quarter 2011,” the Bureau said.

 

It said the fall was  driven by “holding gains (real and neutral)  -of -$44.1b.”

 

Holding losses on financial assets, like shares, in the quarter were $46.5b.

 

These were driven by valuation decreases in the listed equities market ($17.8b) and insurance technical reserves (driven by superannuation assets) of $37.3b.

 

Households recorded holding losses of $2.2b on land and dwellings during March quarter.

 

This was their second consecutive quarterly loss, following holding losses of $8.0b in December quarter.

 

The Bureau put our household net worth at $8,640.6b at the end of the March quarter.

 

It said this was made  up mainly of $5,904.7b of land and dwelling assets and $4,305.2b of financial assets.

 

But they were set against $2,234.9b of household liabilities.

 

The Bureau  also said transactions in net worth were driven by net capital formation of $11.9b, of which net acquisitions of land and dwellings were $10.9b while other non-financial assets amounted to $1.0b.

 

It said net financial transactions were $11.3b, of which net acquisition of financial assets were $38.5b and net incurrence of liabilities were $27.2b.

 

The major contributors to financial assets transactions were net equity in reserves of pension funds ($17.7b) and deposits ($12.8b).

 

Households incurred liabilities predominately through long term loan borrowings ($26.3b).

The Bureau said holding losses on financial assets in the quarter were $46.5b.

 

These were driven by valuation decreases in the listed equities market ($17.8b) and insurance technical reserves (driven by superannuation assets) of $37.3b.

 

Households recorded holding losses of $2.2b on land and dwellings during March quarter 2016, their second consecutive quarterly loss, following holding losses of $8.0b in December quarter 2015.

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Tuesday 28th June 2016 - 7:25 pm
Comments Off on Bill Shorten sets his “markers”

Bill Shorten sets his “markers”

by Alan Thornhill

The Opposition Leader, Bill Shorten, set out his objectives for a Labor government after July 2, in his final speech of the current campaign to the National Press Club in Canberra today.

 

He said:   “We are setting our markers for the Australia of 2030.”

 

These were:-

 

  • Strong, universal, affordable Medicare
  • A school system back in the top 5 in the world
  • 50 per cent renewable energy
  • A first-rate, fibre NBN, putting us at the centre of the Asian Century
  • Revitalising advanced manufacturing and apprenticeships
  • Building the nation building, productive infrastructure unclogging our cities and joining our economic operations
  • 3 per cent of our GDP dedicated to science, research and technology
  • 300,000 more women in work
  • Halving the national suicide rate, and
  • Reducing the rates of ovarian cancer.

 

He said all  of this would be  matched with an economic and fiscal plan for the next decade, ” to fully-fund our investments in the future.”

 

This would mean: “Delivering the needed structural savings and tax reforms that will bring the budget back to balance in the same year as our opponents forecast, and build stronger, more sustainable surpluses in the years that follow.

 

“Achieving these goals over the next decade means starting work next week.

 

“My team and I have a clear set of priorities for our first 100 days.
“A new Labor government will hit the ground running:

–    Offering certainty to Arrium in South Australia – and protecting jobs in Laverton, Rooty Hill and Acacia Ridge

–    Setting up our transition fund to support 200,000 automotive supply chain jobs

–    Developing the Financing Mandate for our new $10 billion Concrete Bank, so we can get private investment flowing into public infrastructure

–    Drawing up the terms of reference and appointing a Royal Commissioner to investigate the rip-offs, scams and credit card interest rate rorts in the banking sector

–    And convening a National Crisis Summit on Family Violence, an assembly of the frontline: counsellors, law enforcement, community legal centres, state governments and – most importantly – survivors.

 

 

These are the  people who know, better than anyone, what is wrong with our system and what we need to do to end family violence.

 

“Underpinning all of this – our long-term objectives and our immediate plans for action – will be an old-fashioned focus on good public policy.

 

“A careful and considered approach – recognising that government is a most serious business, a long-term policy institution.

 

He said a Labor government would be “Dealing honestly with the challenges we face and being upfront about our plans.”

 

 

Tuesday 28th June 2016 - 1:59 pm
Comments Off on Australian tax revenue “going up in smoke” – report

Australian tax revenue “going up in smoke” – report

by Alan Thornhill

A new report says big miners  – and  tobacco companies –   would be among the main winners from the Federal government’s proposed tax cuts.

 

The report, funded by the Get Up organisation, concluded that shareholders in the USA, UK and Japan would collect 15 per cent of the offshore benefits.

 

The authors described these as the “most significant” gains produced by the proposed scheme, which they described as the “centerpiece” of the Turnbull government’s economic plan.

 

It was produced in consultation with corporate tax experts, including  Associate Professor Roman Lanis, Dr Brett Govendir and Mr Ross McClure from the University of Technology Sydney, with help from to Mikhail Shashnov.

 

The government has yet to comment on the report.

 

Its authors reviewed the 250 largest payers of corporate tax in 2013-14 – the most recent year for which Tax office data was available.

 

It was used to identify the percentage of overseas-based shareholders and calculate the proportion of the corporate tax cut that would flow to them in the form of increased dividend payments.

 

 

A detailed analysis of the top 20 corporations was then undertaken.

 

The results were then assessed to determine who the main beneficiaries of the corporate tax cut were.

 

This had shown that if the corporate tax rate was cut to 25 per cent, in the planned five year period,  those companies would get a total tax benefit of $5.526 billion per annum.

 

The report also said: “an astonishing 40 per cent – at least $2.176 billion – would be lost to offshore investors in dividend payments.”

 

It said too, that:- : “corporations operating in the finance and materials sectors receive the lion’s share of total tax benefits at 38 per cent and and 30 per cent respectively.

 

“This includes banks, insurance, and mining companies.

 

“Seven of the top 20 corporations are mining and energy corporations.

 

“They receive a $1.56 billion windfall, of which 63 per cent would flow offshore.

 

“This is on top of the $7.7 billion the industry receives each year in taxpayer-funded fossil fuel subsidies.

 

It also said two  of the top 20 beneficiaries are Big Tobacco companies – British American Tobacco and Philip Morris.”

 

The report said these companies  stand to receive a combined benefit of $88.5 million, of which 100 per cent would flow offshore.

Monday 27th June 2016 - 9:17 am
Comments Off on PM’s speech: the lustre and bluster

PM’s speech: the lustre and bluster

by Alan Thornhill

Anlysis

 

 

 

Malcolm Turnbull’s policy speech yesterday was a polished performance.

 

He managed to suggest, for example, that something very like the Brexit disaster could well sink Australia, too, if we don’t vote the right way on July 2.

 

Without actually saying so.

 

So is there a danger, in his message that might not be immediately apparent?

 

Arguably.

 

Is the lustre, of his carefully crafted message, for example, brighter than its bluster?

 

The Prime Minister assured voters, constantly, throughout his speech, that his Coalition has a plan to deal with all eventualities, that might arise over the next three years.

 

Without saying, too specifically, what it was

 

He also boasted that some 300,000 new jobs had been created, on his government’s watch.

 

Without mentioning that most of them are part time positions, with pay rates that don’t cover grocery bills

 

This has left many Australians, particularly the young and the old, without a place in Australia’s modern work-force

 

So it might well be worth looking again at just what the Turnbull forces are planning to do, as well as what Mr Turnbull, himself, is actually saying.

 

Tax cuts, both for Australians on high incomes – and the big corporates – are at the heart of his plan.

 

It may well be worth remembering, at this point, that much of the vote for Britain’s exit, from the EU, came from poor areas, in Britain’s north.

 

That is  from the very people who have suffered most, over the years, from the austerity that came with Thatcherism, and its successors.

 

Eminent economists, like America’s Paul Krugman are not impressed by arguments that rising wealth for the rich will produce more jobs for the poor.

 

Krugman says that’s like relying on “the austerity fairy” to overcome unemployment.

 

However that argument still appeals, even if its strongest appeal is to those who benefit most from it.

Sunday 26th June 2016 - 3:23 pm
Comments Off on PM urges Australians to vote for “stability”

PM urges Australians to vote for “stability”

by Alan Thornhill

Malcolm Turnbull says:  “the shockwaves in the past 48 hours from Britain’s vote to exit the European Union are a sharp reminder of the volatility in the global economy.”

Delivering his policy speech in Sydney for the July 2 elections, the Prime Minister also spoke of the need for stable majority government, experienced economic leadership and a national economic plan.

An edited copy of  his 4,000 word speech is reproduced below.

After praising senior Liberals who attended the launch, Mr Turnbull said Australia needs a national economic plan  which “recognises the nature of our times – both the opportunities and challenges – and gives us the resilience we need to succeed.”

“Only the Liberal National Coalition can deliver that plan, that security, that leadership,” he added.

“Everything we seek to achieve, all of our hopes, our dreams depend on strong economic growth, “ Mr Turnbull said.

In a strong economy, business is  confident and  prepared to risk investing, expanding and hiring.”

Mr Turnbull said:  “Our business tax cuts encourage small and medium businesses to do just that.

“A strong economy means a mum whose kids are now at school and wants to work a few more days, or work full time, will have plenty of opportunities to do so,” Mr Turnbull said.

“And our childcare reforms will make it easier for her to do so too,” he added.

“It means that young men and women who have left school and are looking for a job will find an employer who is hiring and is happy to give them a start.”

“Our PaTH program with job training and internships will provide additional support to youth employment,”Mr Turnbull added.

A strong economy means we can fund our Innovation and Science Agenda to ensure our kids learn the digital skills of the 21st century, our research is commercialised to create jobs here at home and investors support start-up companies.

A strong economy means that senior Australians know their children will be in good jobs, their investments will deliver better returns and that Government will have growing revenues to support their pensions and health care.

It means that the farmer is getting much better prices for his cattle and can afford to hire a local contractor to replace his fences, clean out a dam or build a new hay shed.

It means the cafe, the restaurant, the hotel has more tourists and they hire more staff to cater for them.

All thanks to our export trade deals.

A strong economy means that builders will be hard at work on new homes and tradesmen will have more jobs.

It means that a manufacturer has more export orders, can buy more equipment, hire more workers and expand their business.

A stronger economy means we can fund over $50 billion in 21st century road, rail and other infrastructure including the Western Sydney Airport and the 39,000 jobs it will create.

“A stronger economy means we can afford to fund world-class education and health services, including Medicare, without weighing down our children and grandchildren with more debt and deficits,” Mr Turnbull said.

A strong economy means we can meet and beat our international obligations  to address climate change and do so without massive hikes in electricity prices as Labor would do.

“We have a national economic plan because the prosperity and security of 24 million Australians depend on it,” he said.

Mr Turnbull said success in the 21st Century cannot be taken for granted.

“Always expect the unexpected.”

“We will need to renegotiate vital trade deals with Europe and Britain,” Mr Turnbull said.

“We concluded five in the last three years – Japan, Korea, China, Singapore and the Trans Pacific Partnership.

“In six years Labor concluded none,” he said.

“We have carefully considered what we need to do to succeed, to make the transition from an economy fired up by a once in a century mining construction boom to one that is more diverse, more innovative, smarter, more productive – an economy that wins, and keeps on winning.”

“So there is a clear cut choice at this election,” Mr Turnbull said.

“We present our fellow Australians with a national economic plan every element of which supports more investment, stronger economic growth and more jobs.

“Our plan invests $1.1 billion to promote leading-edge innovation in our industries and to prepare our children for the jobs of the future.”

Our plan promotes export trade deals to generate 19,000 new export opportunities, giving our businesses premium access to the biggest economies in our region.

Our plan invests in local defence industries to ensure every defence dollar possible supports advanced manufacturers and thousands of Australians jobs.

Our Enterprise Tax Plan provides tax relief to tens of thousands of small-to-medium family businesses now and to all companies over time so they can invest, grow and hire more Australians.

“On the other hand, our opponents in the Labor Party have no economic plan.”

“Labor believes its best hope of being elected is to have trade union officials phone frail and elderly Australians in their homes at night, to scare them into thinking they are about to lose something which has never been at risk,” Mr Turnbull said.

“That’s not an alternative government, that’s an Opposition unfit to govern.”

Every element of Labor’s platform would discourage investment and employment.

He described it as: “a recipe for economic stagnation.”

“If returned at this election, we will convene a joint sitting to restore the rule of law in the construction industry and reinstate the Australian Building and Construction Commission, Mr Turnbull said.

So Australians could  have the building infrastructure  they need  “at a price they can afford.”

He said:  “housing values would fall in a fragile property market and rents would rise, because of Labor’s investment destroying ban on negative gearing and 50 per cent hike in capital gains tax.

“This threat is real.

“ So we need to be crystal-clear about what our votes will mean,” Mr Turnbull said.

“If your local vote is for Labor, Greens or an Independent, and you are in one of the 20 or so key battleground seats across the country, it is a vote for the chaos of a hung Parliament, a budget black hole, big Labor taxes, less jobs and more boats,” he warned.

Only a Liberal or National vote ensures stable government, a clear economic plan, real funding for the aged, Medicare and education; more jobs and strong borders.

Mr Turnbull urged Australians to: ““Vote for your local Liberal or National in the House and in the Senate.”

“In the last calendar year, there were 300,000 new jobs,” the Prime Minister said.

“Our unemployment rate of 5.7 per cent is well beneath what was anticipated when the Coalition came to office,” he added.

None of this happens by chance. Strong economic leadership supporting hard-working Australians means that, even with difficult global headwinds, we continue to grow our economy and expand our workforce.

And, today, I can announce additional policies from our Coalition team to support our national economic plan for jobs and growth.

Mr Turnbull said his government is determined to ensure none of our regional communities are left behind as we make the transition to a stronger new economy.

“… our regions must be at the frontline of the drive for innovation, jobs and growth,” Mr Turnbull said.

Our ‘Regional Jobs Fund’ is a major commitment… he added.

“As we build a stronger economy, it is vital that we also do all we can to ensure all Australians, especially young Australians, are not left behind,” he added.

So the Coalition woulds deliver a record $73.6 billion over the next four years for all Australian schools,” he said.

“Today, I can announce an additional $48 million for scholarships under the Smith Family’s Learning for Life program, to help disadvantaged students to complete year 12 and transition to work or further education and training,” he added.

“The Coalition will also invest $31 million in programs to encourage more girls and women to study and work in science, technology, engineering and mathematics,” Mr Turnbull said.

It would also help older Australians get smartphones.

He said only about one household in five, with people aged 60 or above, had a smartphone.

“To make their lives easier, to help them retain their independence, and to keep them connected to families and friends, I am announcing today a $50 million Coalition strategy to assist seniors who want to improve their digital literacy skills,” he said.

“And as announced earlier today, my Government will be investing $192 million more in front line mental health services including twelve suicide prevention sites around Australia and ten more headspace centres; and at the same time using smart phone and other technology to make these services more accessible,” he said.

This complements our support for Veterans’ mental health programs, itself a reminder that we best honour the diggers of Gallipoli and Fromelles by supporting the veterans and their families of today.

Mr Turnbull said; “only a strong Australia can be a safe Australia.

“After six years of abject Labor neglect and indecision, our continuous shipbuilding strategy will ensure Australia retains a sovereign capability to build and sustain naval vessels, securing thousands of advanced manufacturing jobs for decades to come,” he added.

Mr Turnbull said:”Labor’s abandonment of John Howard’s proven border protection policy opened the door to the people-smugglers:

The results had included:-

  • 50,000 unauthorised arrivals on 800 boats,
  • 1200 deaths at sea, of which we know,
  • Over 8000 children put into detention,
  • 17 detention centres opened, and
  • An $11 billion border protection budget blowout.

“In contrast, the Coalition has restored security at the border, integrity to our immigration program – and with it, public trust,” he said.

“I am proud to announce that today marks 700 days without a successful people-smuggling venture to our country,” he added.

“I am also very proud to announce that we have removed every child from detention in Australia,” Mr Turnbull said.

Labor had failed Australia before.

“The people-smugglers are looking for the earliest sign that an Australian government will waver,” he added.

Mr Turnbull said: “our policies are tough.

“But  these policies have stopped the drownings at sea, and restored the integrity of, and trust in, our large but orderly immigration and refugee programs,” he added.

To further strengthen our domestic security I announce initiatives that go to that most fundamental of liberties – the right to live without fear of violence.

Mr Turnbull also said: “my first announcement as Prime Minister was a new $100 million package to encourage all Australians to confront squarely and honestly the ugly truth of violence against women and children in our society.

“Today, I can announce a $64 million commitment to crack down on the trafficking of illegal firearms on our streets, in particular by criminal gangs,” he added.

He said he is asking Australians to make a clear choice — to back a strong and stable Coalition majority government that can press ahead with its plan for a stronger new economy.

That would deliver the economic security that enables Australians to fulfill their aspirations.

“That is why I am asking my fellow Australians at this election to support our Coalition’s National Economic Plan for a Strong New Economy,” he said.

Friday 24th June 2016 - 1:11 pm
Comments Off on High Brexit vote hits markets

High Brexit vote hits markets

by Alan Thornhill

The $A tumbled today, as the vote to leave the EU came in higher than expected.

 

However, a short time ago, the BBC still had the vote to stay higher than the vote to leave.

 

At that point, 2,933,388 Britons had voted to stay in the EU.

 

But 2,841,709 had voted to leave.

 

The $A fell by 1.35 per cent, to 75.35 US cents in the confusion that followed the unexpectedly high vote to leave.

 

That vote is seen, in large part, as a product of British impatience with calls for austerity.

 

But British Conservatives are being urged today to maintain their faith in the British Prime Minister, David Cameron, who campaigned hard for the no vote, that would keep Britain in the EU.

Friday 24th June 2016 - 9:49 am
Comments Off on Labor to announce its temporary worker policy

Labor to announce its temporary worker policy

by Alan Thornhill

Labor says it is planning to ensure that temporary workers are not exploited and that local workers get priority.
In a statement early today, the opposition leader, Bill Shorten, said: “Australians have rightly been appalled by the systematic exploitation of workers on temporary work visas.”

 

He said thousands of employees at 7-Eleven stores had been exploited through the underpayment of more than $100 million in wages.”

 

The issue of temporary work visas has already become controversial in the current election campaign, with the National Party urging the government to clarify issues with 457 visas.

 

These allow farmers to employ visiting students, on pay rates they consider affordable.
Mr Shorten said: “Labor believes the temporary work visa system must have robust safeguards in place to protect all workers.”

 

It must not be used as a back door avenue to source cheap labour.

 
“This means that we need policies and systems in place that support a growing economy, prioritise Australian workers, allow industry to access the skills they need, and importantly, ensure and importantly, ensure workers are not disadvantaged or exploited,” Mr Shorten said.

 

He said Labor’s policies would meet these tests.

Wednesday 22nd June 2016 - 6:55 pm
Comments Off on Who gets the good jobs?

Who gets the good jobs?

by Alan Thornhill

The hours you spend studying – after you leave school – are  likely to  lead to better jobs – and much better pay.

These lessons have not been lost on Australia’s migrants, who often come to this country seeking better chances in life.

 

We can say these things confidently, because they are based on research just published by the Australian Bureau of Statistics.

 

The Bureau notes, for example, that more than three quarters – 82 per cent – of people with a non-school qualification were employed last year, compared with  just 61 per cent of those who didn’t.

A second degree, or other non school qualification, can also do much to boost personal income.

In fact the bureau said:  “average personal weekly income increased with the number of non-school qualifications completed.

 

“Men working full-time, who held two or more non-school qualifications, earned on average $813 per week more than their full-time working counterparts without a non-school qualification.

 

“Similarly, full-time employed females with multiple non-school qualifications earned an average $504 per week more than those working full-time without a non-school qualification.”

 

But what of those adult migrants?

 

That is people who came to this country after their 15th birthdays.

 

The Bureau said:  “In 2015, 73 per cent of adult migrants aged 15–64 years had a non-school qualification compared with 58 per cent of those born in Australia.

 

The proportion of adult migrants who had a Bachelor degree or higher on arrival had increased from 23 per cent  for those who migrated before 2001 to 45 per cent for those who migrated after 2010.

 

“The proportion of adult migrants who held a non-school qualification on arrival to Australia increased from 39 per cent for those who arrived before 2001, to 62 per cent for those arriving after 2010.

 

“This increase is most notable in female adult migrants, with 32 per cent having a non-school qualification on arrival before 2001 compared with 61 per cent for those arriving after 2010,”  the bureau said.

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