by Alan Thornhill
Matt Keogh, Labor’s candidate in the upcoming Canning by-election, says many voters there are worried by the Abbott government’s choice of a cheaper, but slower internet, than Labor had planned for its NBN.
Labor now sees this issue, which many had regarded as settled in the last general election, in a completely new way.
That is as a potential vote changer when the electors in Canning cast their ballots in this critically important poll on September 19.
Mr Keogh explained why, when he told reporters at the weekend, that many voters had raised the matter with him during his door knocking campaign.
He declared:”I am not surprised with the number of people who have serious concerns not only about their current telecommunications systems, but also about their ability for themselves and their children and even their grandchildren to be able to participate and compete in a world where around our region we see governments that have taken the future-proofing steps and made sure they have the highest quality broadband.”
It’s no secret that Western Australia’s neighbours, like India and South Korea, are upgrading their technologies – and living standards – rapidly.
And voters know it is all too easy to fall behind, in such a world.
Otherwise, though, this by-election, on September 19 is the poll almost no-one in Canberra wants.
Especially as it was occasioned by the untimely death of the popular Liberal member for that seat, Don Randall.
Yet Federal parliament is resuming today very much under its shadow.
This poll has assumed political importance far beyond that of the usual by-election.
That’s because, early in the campaign, media pundits began describing it as a test of the unpopular Tony Abbott’s grip on the nation’s top job, that of Prime Minister.
Although Mr Abbott, himself, does not accept that description, he has shown, by his actions, that he is prepared to treat it as a political reality.
Indeed, he tried two distractions, at the weekend.
On Father’s Day, he admitted that he, too, had been affected by the picture of a man, standing on a Middle East beach holding the body of his young son, a victim of the spreading Syrian conflict.
Then, he issued a 28 page flyer, on the second anniversary of his election, which also occurred at the weekend, listing his government’s achievements in its first two years.
That was headed by his claim that job growth, in Australia over that time, had been greater than that of every other G7 nation.
No doubt we will hear more of that – and other claims in the flyer – when question time gets under way later today.
These worries, of course, seem far away from the West Australian electorate of Canning, where that by-election campaign is now entering its final fortnight.
But it helps to explain why that upcoming event is attracting so little enthusiasm in Canberra, even among those who do not have quite so much directly at stake as either Tony Abbott or Bill Shorten, whose Labor leadership, is also seen by some, as a likely loss, if his party can’t chalk up at least a respectable result, on Saturday week.
There are, of course, always exceptions.
And some, even in Canberra, have been thinking of the Canning by-election with a little pleasure.
Your correspondent is one.
He spent a very happy childhood in what is now the neighbouring electorate of Hasluck, and often crossed the border to swim in Bickley Reservoir, play tennis in Kelmscott, or buy fruit grown in a Pickering Brook orchard.
For those unfortunate enough not to know, these near heavenly places are in the Canning electorate, on the South Eastern fringes of the Perth’s vast suburbs.
And well worth a few minutes reminiscence, on yet another busy day facing a demanding computer screen, in the national capital.
Thinking sympathetically, as always, of the plight of fellow West Australians, like the Federal MPs, on both sides of politics, who regularly risk deep vein thrombosis, sitting in over-crowded aeroplanes, making those 4,000 kilometre flights, between Perth and Canberra, to attend to their duties in both capitals.
by Alan Thornhill
Local shoppers are now a little more confident, despite lingering doubts about Australia’s short term economic prospects.
Both developments are evident in the latest results of a major survey of consumer confidence.
The just published results of the latest ANZ-Roy Morgan Consumer Confidence survey showed consumer confidence, overall, rising by 0.3 per cent last week to 113.3.
This was the third consecutive week in which confidence has remained above its long term average.
This was seen as somewhat surprising given volatility on the Australian stock market and global financial markets more generally.
The survey also showed that views on ‘economic conditions in the next five years’ were up 1.8 per cent last week and are unchanged compared with a year ago.
However the outlook for ‘economic conditions in the next year’ continues to weigh on consumer confidence.
This sub-index fell 4.9 per cent last week, reaching the lowest level in eight weeks, when worries around the Greece debt crisis and volatility in the Chinese stock market were high.
This was the weakest sub-index and is now 7 per cent lower than a year ago.
“Consumers’ views towards their finances were mixed.
“Views on ‘financial situation in the next year’ bounced 3.9 per cent, whereas ‘finances compared to a year ago’ fell modestly last week although levels remain elevated.
The ANZ’s Chief Economist Warren Hogan said: “overall, it is surprising how resilient consumer confidence appears to have been to the volatility seen in financial markets recently.”
But he added:”views on the economy in the short term fell last week and are at very subdued levels, which suggests that at least on some level recent ructions in financial markets have had an impact on consumer sentiment.”
Mr Hogan, himself, has doubts.
“Australia’s ability to withstand any hit to global activity is limited by the fact that the economy is already battling several headwinds: soft commodity prices, weak wages growth, and subdued non-mining business investment,” he said.
“In this environment consumer confidence could consolidate around current levels, but is unlikely to see a sustained rise from here,” he said.
by Alan Thornhill
Australia’s shopkeepers have welcomed today’s decision to apply GST to all online purchases ordered from overseas suppliers from July 2017.
The decision was taken at a meeting of Federal, State and Territory treasurers in Canberra today.
At present, the tax only applies to overseas online purchases worth $1,000 or more.
The Federal Treasurer, Joe Hockey, said this low-value GST-free threshold would be abolished from that time.
He said:”This will deliver competitive neutrality for Australian businesses it will ensure there is a fair and equal treatment of all goods and services.”
Anna McPhee, who is CEO of the Retail Council, described this decision as an important step forward in ensuring our tax system is fair and efficient.??
“This is sensible reform that delivers greater consistency in our consumption tax system,” she said.
“We commend Treasurer Hockey for his leadership in progressing the removal of the current GST exemption for goods bought internationally…,” she added.
Ms Mcphee said:”The additional revenue will relieve some pressure on State budgets and go toward delivering important services for the community.”
She said modelling ordered by the Retail Council had shown that extending the GST to all imported consumer goods would result in a net increase in GST collections of more than $1 billion in 2015-16 and $1.7 billion in 2020-21.
The collection costs would be just $37 million.??
“We are encouraged by the demonstrated commitment from governments to progress meaningful reform of our tax system…”Ms Mcphee said.
It would help to support demand for better schools, roads and hospitals for Australians.
??“This is an important first step forward in tax reform to ensure our system is fair and efficient,” she said.
“We are again encouraged to see our leaders maintain an open mind on tax reform and recognise the importance of maintaining principles of fairness and efficiency in discussions about the design of Australia’s tax system.”
Ms McPhee said the Retail Council has been seeking the removal of this low-value threshold since 2012.??
by Alan Thornhill
The Federal Treasurer, Joe Hockey, says his meeting with his State and Territory counterparts in Canberra today is “a unique opportunity” for “consensus” on tax reform.
“We believe that Australia’s personal and corporate tax rates are too high and that we need to reduce the burden of tax on hardworking Australians,” he said in a statement he issued on the eve of the meeting.
Perhaps Mr Hockey felt a need to put his objectives for today’s meeting in writing, as raucous verbal exchanges in Federal parliament yesterday, may have left some people confused.
His written statement on the matter,though,was quite clear.
“The Australian people will be looking to us to reach agreement on reform options that will promote economic growth and create jobs to ensure Australia’s continued standard of living,” he said.
“All governments across Australia must work together to improve the economic climate for business, and ensure the efficient delivery of government services while keeping taxes as low as possible.”
“At the recent Council of Australian governments retreat, leaders agreed there is an opportunity to consider more durable revenue arrangements to address growing financial pressures facing all governments. In addition, any revenue arrangements need to be fair, efficient and sustainable.”
“…we will have a broad discussion on the strategic issues facing Australia’s tax system and seek to develop a shared perspective for progressing the tax reform process.”
“As Federal Treasurer, I will take the opportunity to advise my state and territory counterparts of the six principles that the Commonwealth is pursuing through the Tax White Paper process.”
“Also on (the) agenda are a number of specific measures to promote greater integrity in the tax system.”
“These include the draft legislation to ensure greater consistency in the application of the GST to digital products and services and the request by COAG to broaden the GST to cover overseas online transactions (physical goods) under $1,000.
The Commonwealth will report to the states and territories on progress in these areas and provide reports on progress by various working groups led by the states on other areas of reform.
by Alan Thornhill
We can expect to see driver-less vehicles on Australian roads soon, according to the Federal Treasurer, Joe Hockey.
He was addressing the Australian Automotive National Summit in Canberra today.
Mr Hockey said:””In November, the first Australian trial of driver-less technology will take place on the Southern Expressway in Adelaide in November and more would follow across the country.”
The benefits would be widespread across the economy.
“Driver-less cars mean freedom for our older Australians, who will be able to get from place to place with ease,” he said.
But the new technology would require changes to road rules.
“In response, the South Australian Government has said it wants to update road laws to lead the facilitation of this new technology,” Mr Hockey said.
But the new technologies could make our roads safer.
Mr Hockey said that, at present, nine out of every 10 accidents are caused by human error, such as speeding.
He said new technologies, like these, also offer opportunities for Australian companies to increase their competiveness.
“These technologies will help address the productivity challenge in our economy,” Mr Hockey said.
“For example, Rio Tinto has been operating massive mining trucks in Northern Australia from an operations centre at Perth Airport.
“The trucks operate seamlessly 24 hours a day — and the savings have been enormous,” Mr Hockey said.
“Logistics and transport without drivers may sound threatening for some,” he added.
“But the opportunity to re-skill and up-skill former drivers of trucks and cars will result in more jobs and better pay for workers in that field.”
by Alan Thornhill
The Australian economy could be losing momentum again, according to a major leading index.
The Westpac–Melbourne Institute Leading Index, published today, points to that outcome.
That was indicated by its six month annualised deviation from trend growth rate which decreased from 0.02 per cent in June to – 0.49 per cent in July.
This indicates the likely pace of economic activity three to nine months in the future.
Westpac’s Chief Economist, Bill Evans, said: “As we noted last month, the change in the growth rate of the Index is indicating that the economy appears to be losing momentum through the middle of 2015.”
“As we noted last month, the change in the growth rate of the Index is indicating that the economy appears to be losing momentum through the middle of 2015,” Mr Evans said.
In the first four months of 2015 the average growth rate was 0.20 per cent above trend.
That was a welcome lift in momentum from the second half of 2014 when the average growth rate was 0.66 per cent below trend.
However, in the last three months the growth rate has eased back again averaging 0.17 per cent below trend.
“With the deviation from trend now back below zero the promising signs that we saw in the early months of 2015 that growth in the economy might be lifting into ‘above trend’ territory through the second half of 2015 appear to be waning.
That profile is certainly in line with Westpac’s forecasts that annualised growth pace in the economy will be stuck around 2.5 per cent in both halves of 2015, largely unchanged from the disappointing result in 2014 of around 2.5 per cent,” Mr Evans added.
“The disappointment from the lack lustre Leading Index growth prints mid-year is that a lack of momentum going into 2016 might start to question the generally held view that 2016 will be a better year than 2014 and 2015.
by Alan Thornhill
The Reserve Bank now expects Australia’s economic growth to be below earlier forecasts for the “next couple of years.”
This assessment, published today in the minutes of its board meeting on August 4, contrasts with more optimist assessments given recently by both the Prime Minister, Tony Abbott, and his Treasurer, Joe Hockey.
The bank said:”the Board’s discussion of the domestic economy commenced with the observation that GDP growth over the next couple of years was expected to be slightly lower than forecast in May.”
It said, though that this:”revision was minor relative to the usual range of uncertainty.”
And it added:”A downward revision to population growth had contributed to lower forecast growth in consumption and non-mining business investment.
“The forecasts for growth in public demand and business investment had been revised lower in light of new data.”
But the bank also said:” in contrast, the recent exchange rate depreciation had led to an upward revision to net exports.
And it added:”aggregate growth was expected to remain moderate for a time before strengthening.”
And said: “members recognised that the period of significant structural change for the Australian economy associated with the winding down of the mining investment boom would continue for some time.”
Despite those comforting words, the bank’s talk of reduced prospects for growth, over the next two years is not likely to please the government.
Federal parliament is sitting this week – and Labor will certainly try to exploit the difference in outlooks now being expressed by the government and the Reserve Bank.
The government also has to face the people, in a general election, within the two year period in which the bank is now predicting slower growth.
The differences in the ways that government ministers and the bank are talking about Australia’s growth prospects are, indeed, quite sharp.
The Prime Minister, Tony Abbott, for example, was quite upbeat, in a speech he gave to the Liberal party faithful in Adelaide last weekend.
He said then:“You will be pleased to know that Australia’s economic growth in the March quarter was amongst the very highest in the developed world.”
“You will be pleased to know that there are 335,000 more jobs in our economy than there were on election night in September 2013.
“Bankruptcies are at record lows.
“Car sales are at record highs,” he continued.
The Treasurer, Joe Hockey, too, has been talking up the Australian economy, predicting better times ahead.
by Alan Thornhill
Consumer confidence has surged – rising by 7.8 per cent this month.
This is shown in the results of the latest Westpac-Melbourne Institute Index.
Westpac economist Bill Evans, described this result as “very surprising.”
“Movements of the Index of this magnitude are unusual and generally associated with highly significant events such as interest rate moves or Commonwealth Budgets,” Mr Evans said.
He could not identify such an event this time.
“It seems that with the tensions in Greece and the Chinese equity market no longer dominating the media consumers are feeling more relaxed,” Mr Evans said.
However he noted that – at 99.5 – the Index remains below 100.
It is therefore the 16th reading out of the last 18 where the Index has been
This indicates that pessimists have consistently been outnumbering optimists.
“Ongoing positive news around house prices may also have buoyed confidence,” Mr Evans said.
“Certainly there was a much larger lift in the confidence levels of those respondents who wholly own a property – up 6.2 per cent – or who hold a mortgage -up 11.0 per cent – than those who are out of the housing market – up 4.3 per cent.
“However confidence is not being boosted by the expectation of more interest rate relief,” Mr Evans added.
In our special question around the outlook for mortgage rates 55 per cent of respondents expect mortgage rates to rise over the next 12 months; 35 per cent expect rates to be steady; and 5 per cent expect further rate cuts.
The remaining 5 per cent had no opinion.
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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