Thousands of Australian families struggle to meet their child care bills, with mid level fees, at government approved centres, reaching $285 a week.

That national figure, from a report by the Productivity Commission, is for full time care, of 50 hours a week.

Even the  fees, for approved family day care are not much lower, at a mid level of $267 a week.

As child care fees are commercial charges and the amount of time children spending in care, weekly expenses do vary widely.

But Canberra families, which face the nation’s highest fees, must find more than $300 a week for full time child care, either at their local centres or in appproved family care.

The report, by the Productivity Commission, also exposes significant inequities in the way government child care subsidies are spent.

It shows, for example, that many of the Australian children who most need help miss out on their fair share of subsidised child care places.

These include kids with a disability, those living in remote areas, Aboriginal children and children of migrant families, who don’t speak English well, if at all.

The report says children in all of these groups get fewer places, in subsidised child care, than those from the broader community.

But poor kids don’t.

The Commission, says children from low income families get child care places at much the same rate as the broader community.

Child care subsidies, in various forms, are a big – and rapidly rising – expense for Australian governments.

The Commission reports that Federal, State and Territory governments spent $4.5 billion on these subsidies in 2008-09.

In real terms, that was a 51 per cent rise over their spending in the previous 12 months.

The Australian notion of a fair go suggests that big ticket government spending, like this, should be spread evenly throughout the community.

However the report says only 13.2 per cent of  children from non-English speaking backgrounds benefit from subsidised child care, against 18.8 per cent of the broader community.

The participation rate for Aboriginal children was just 2.3 per cent, although they make up 4.4 per cent of the population.

The Commission also said:”Children aged 0-12 years with a disability had a lower participation in child care (3.2 per cent) compared with their representation in the community (7.7 per cent).

And only 1 per cent of Australian kids, living in remote areas, get subsidised child care, even though 3 per cent of the nation’s children live in remote areas.

The Reserve Bank still has its finger firmly on the interest rate trigger, even though it admits that Australia’s inflation rate – at 1.3 per cent – remains below its target range.

This became clear when the bank released the minutes of the board meeting, earlier this month, which approved its third straight monthly rate rise of 25 basis points.

The minutes said, in part:”Members agreed that if developments unfolded as currently expected, monetary policy would need to be adjusted further to lessen the degree of stimulus.”

But the bank added:”The adjustment would not be intended to slow demand, compared with the current forecast path, but aimed simply at keeping the stance of policy appropriate for improving economic conditions.”

The bank’s target is to keep inflation within a 2-3 per cent range, over the course of a business cycle.

It noted that house prices, which have worried the bank in the past, had continued to rise “at a robust pace” in October.

And it said lending to home buyers is still growing “at a solid rate.”

The bank noted, also,  both that consumer sentiment is still “at very high levels” and that engineering  construction had been at “very high levels.”

These were expected to rise further as LNG projects pick up, the bank said.

There won’t be a fourth rise, next month.

The bank’s board will not meet again, to review rates, until February.

However, on current signals, the chance of another rise then must be rated as high.

The costs of tackling – and not tackling – climate change became clearer over the weekend, as prospects for a firm outcome, at next month’s Copenhagen conference receded.

A new report estimated that some 250,000 coastal properties, around Australia, could be at risk of flooding as sea levels rise, as a result of global warming.

It said Sydney airport is among the properties at risk.

Developments, on that scale, imply social disruption.

But property damage would just the start of all that.

Earlier studies have shown that many low lying Pacific islands could also be flooded, as Antarctic sea ice melts.

That could well involve the relocation of entire Pacific populations, involving people movements on a scale Australia has not yet seen.

Speaking at an APEC Leaders’ meeting in Singapore yesterday, the Prime Minister, Kevin Rudd, admitted officials, who  have been trying to get a firm outcome, from next month’s climate change talks in Copenhagen, had found themselves “running into all sorts of difficulties.”

“…and therefore it is time for leaders, politically, to step in,” he added.

The reality, though. is that there is now, effectively, no chance of reaching a binding agreement, on steps to tackle climate change, at the Copenhagen meeting.

That became clear when Asian leaders, at the APEC meeting, stepped back from their previous position, which had included a 50 per cent emissions reduction target.

Sources said this had happened at China’s insistence.

Mr Rudd insisted, though, that he will still be looking for “a robust outcome” from the Copenhagen meeting

The retreat by Asian nations, though, is certain to encourage climate change sceptics, when the government’s emissions trading scheme come before Federal parliament again  this week.

The Coalition appeared to be on the verge of a major breakthrough yesterday, in the private talks it has been holding with the government on its proposed legislation.

Reliable reports said the government is prepared to exempt Australia’s farmers, altogether, from its legislation, if the Coalition will pass it through the Senate.

The Reserve Bank Governor Glenn Stevens says the bank must not be “too timid” about raising interest rates, when that is necessary.

Mr Stevens made that unusually blunt observation, while addressing an academic breakfast in Perth today.

He said the bank had been prepared to cut rates very rapidly, after the collapse of Lehman Brothers late last year.

He said that if the bank was prepared to do that “but then (was) too timid to lessen that stimulus in a timely way when the threat passed, we would have a bias in our monetary framework.”

“Experience here and elsewhere counsels against that approach.”

But Mr Stevens added a caution.

“None of this is to say that the economy is, at the moment, too strong.

“It isn’t.

“The point is that the very low policy settings  were designed for a weaker economy than we are facing.

“Plainly, the downside risks to which the board was responding earlier have not materialised.”

Despite these cautious remarks, Mr Stevens’ speech will certainly increase speculation of another interest rate rise, probably of 25 basis points, when the bank’s board meets on the first Tuesday of next month.

What kind of crisis is this, anyway?

Figures released earlier this week showed the price of established houses in Australia’s capital cities have been rising strongly over recent months, particularly in Melbourne and Sydney.

The Aussie dollar seems to be gaining strength by strength, almost by the day.

And Australia’s share market closed yesterday, with prices close to a nine month high.

These things are not supposed to happen in the middle of a global economic crisis.  Especially not in one that is bad enough to shrink US economy to shrink by 3.9 per cent over the past year.

That’s the biggest set back for the American economy, since the Great Depression of the 1930s.

Despite that, Australia produced a record breaking trade performance over the past year.

Figures produced by the Australian Bureau of Statistics showed that the nation chalked up a $5.8 billion trade surplus in the 12 months to the end of June.

It has never turned in a better performance.

The surplus, for the year, was the first since 2001-02.

The Federal Trade Minister, Simon Crean, said the value of Australia’s exports bad risen  by $51.8 billion during the year.

He was jubilant.

“It is a testament to the perseverance of Australian exporters and the quality of their products that they have been able to increase their sales in such difficult circumstances,” Mr Crean said.

He said this was especially so as the value of the Australian dollar had been rising over recent months, making our exports more expensive.

However figures, to be released later today, may well give Australians a sharp reminder of the power of the global economic crisis, despite all this good news.

At 11.30 am today, the bureau will release its Labour Force figures for July.

And these are expected to show unemployment rising, as the global economic crisis tightens its grip on the Australian economy.

Malcolm Turnbull supported the concept of an emissions trading scheme, when he was environment minister in the Howard government.

And he probably still does now.

However he has found little support for the idea in the joint Coalition party room, where it was discussed, yet again, yesterday.

The outcome, if that is not too strong a word, was essentially yet another decision wait and see what developments occur in this area.

That gave the Prime Minister, Kevin Rudd, a brief chance to draw attention away from the Coalition’s sustained attack on his budget.

Addressing parliament at question time, Mr Rudd mounted an attack of his own.

“What the Australian nation saw today was the Leader of the Oppostion rolled in his own joint party room,” the Prime Minister said.

Mr Rudd said the Liberal party’s “hard men” of the right had combined with the National Party to produce that result.

“The leadership of the current Leader of the Opposition has been fundamentally undermined by his inability to stand up to the climate change sceptic in his own party,” Mr Rudd crowed.

What the business community is looking for on climate change is certainty, the Prime Minister added.

These were powerful points.

And they would have been even more powerful if Mr Rudd, himself, had managed to take the firm stance he recommended on climate change.

But he hasn’t

The government has, formally, adopted a carbon pollution reduction scheme, but it has not,  so far settled firm targets.

And it has also delayed the start of its new scheme until July 2011, well after the next election, which must be held by late next year.

The Federal government’s stimulus cheques will start flowing today.

The Treasurer, Wayne Swan, says families receiving Family Tax Benefit Part A will soon receive bonuses of up to $950, as part of  the government’s nation building package.

More than 1.2 million families will benefit.

The payment will come in the form of a back to school bonus of $950 for each eligible school age child.

Mr Swan said many parents would “certainly welcome” the payment.

“This will assist something like 2.8 million school age children with the costs of the 2009 academic year,” Mr Swan told parliament at question time.

He said, too, that more than 1 million families, who rely on one main income earner, would also begin to receive the single income family bonus of $900.

“All families eligible for Family Tax Benefit Part B, when we announced the Nation Building and Jobs Plan, will receive this bonus,” Swan said.

“The remaining Centrelink bonuses to eligible farmers and students….will be paid on March 24,” he added.

“And, of course, we have a tax bonus for 8.7 million working Australians, which will begin to be paid on March 24,” Swan added.

“These bonuses are a key part of our efforts to support jobs by strengthening demand in the economy so that companies can afford to keep on and employ workers because there is sufficient demand in the economy,” Swan said.

But he said the stimulus payments are not a substitute for the direct government investments which would kick in later this year.

Several Coalition Senators revolted overnight as the Federal government’s critical Infrastructure Bill passed through Parliament.

Five National Party Senators voted against the bill, in the vain hope of protecting $2 billion, that the Howard government had set aside from the sale of Telstra, for regional and rural communications.

And several Liberals abstained from the vote, absenting themselves from the Senate Chamber.

These included one of the most senior Liberals, Nick Minchin.

Minchin told the ABC later:”Of course I support the Shadow Cabinet decision.”

But he spoke tersely.

The Shadow Cabinet had decided, earlier, to drop opposition amendments to  the Infrastructure Bill, which would have protected that $2 billion.

Ultimately, though, only five Liberal Senators voted in the Senate for the Shadow Cabinet’s decision.

The Government Leader in the Senate, Chris Evans, described the vote as “a massive revolt.”

“They ran out of the chamber” he said, speaking of the Liberals who, effectively,  refused to support the Shadow Cabinet’s position.

As the old saying has it, “disunity is death” in politics.

And the chaotic vote was the first major embarrassment for the new Liberal Leader, Malcolm Turnbull.

But the Nationals are still furious.

“Rural and regional Australia has been sold out with the decision early this  morning to allow the Government to siphon off the $2 billion Future Fund,” Senators John Williams and Fiona Nash said in a joint statement.

They said the money will now be spent on the Federal government’s proposed National Broadband Network.

For the past eight years, the Federal government has been adding 11 cents to the price of every  litre of fresh milk that Australians buy.

That money, which added up to about $240 million a year, was used to help 13,000 Australian dairy farmers adjust to the necessary changes in their industry.

It worked well.

Australia is now the third biggest dairy exporter in the world, after the European Union and New Zealand it brings Australia an estimated $2.4 billion a year in export revenue.

In fact, the scheme has worked so well, that it is now being wound up.

It was finalised in Federal parliament yesterday.

The dairy farmers have already received their last quarterly payment, under the adjustment scheme.

Of course, as with any wind up, there are still a few final bills to be paid.

The 11 cent levy will gradually be wound down from today.

And it should be removed, completely, by early next year, according to the experts.

So shoppers can expect to see milk prices drop by 11 cents a litre, at that time?

Well, no.

Not exactly.

The Federal Agriculture Minister, Tony Burke, says high demand and severe droughts have pushed up milk prices, over the past  eight years.

Too true, Tony.

So, he adds, we can only expect a “modest” fall in the price of our milk, when the levy is completely abolished.

But isn’t there just a little double counting going on here?

We have already paid extra, to cover that high demand and drought.

Now we are being asked to keep on paying most of that extra 11 cents, just because no-one wants to give it back.

While it’s true that we can’t expect milk from bulls, we certainly can expect bull from politicians.

With a new book, called Power Plays, just published by Canberra press gallery veteran Laurie Oakes, we thought you might like to hear of a new – and particularly bright – one.

Coalition Senators, in Queensland, had a problem.

No less than 324 Queenslanders had acquired criminal records, by fishing in coastal waters, where they and their families had always fished.

Mums and Dads out for a day’s break, in a tinnie.

Grandfathers, taking their grandsons out, to show them all the tricks.

The trouble was that the Great Barrier Reef Marine Park Authority, known locally as Grumpa, had been greatly expanded.

And fishing in its forbidden green zones had becom a very big no-no.

Fines, ranging from $5,000 to $60,000 were being applied.

And criminal convictions were being recorded.

Queensland Liberal Senator Ian Macdonald said that, as a result, one local business man had found it difficult to get an insurance policy he wanted.

Others, wanting to travel abroad, also had to admit, on official papers, that they were, effectively, criminals.

Criminal convictions weren’t recorded, for these offences, after December 2006.

But the old ones still stood.

This was patently unfair.

But Senator Macdonald, a solicitor, came to the rescue.

He discovered an obscure clause, in the Crimes Act, under which certain convictions could be classed as “spent,”  after 10 years.

Why not advance that, just a bit, in the case of these fishing convictions?

That is precisely what the Senate decided to do, yesterday, over the objections of both the government and the Greens, who did not agree.

But the government has its own potential embarassment, over this matter.

It promised, before the last elections, that these convictions would be quashed.

It won’t want to look as though it is reneging now.

The Reserve bank surprised everyone again today, cutting Australia’s marker interest rates by 0.75 percentage points.

Most economists had expected a rate cut of just 0.5 percentage points.

That leaves the marker rate, the overnight cash rate, at 5.25 per cent.
The bank said:”World financial markets remained turbulent over the past month.”

“International economic data have continued to point to significant weakness in major industrial economies.” it added.

The bank said, too, that:”…there have been further signs that China and other parts of the developing world are slowing as well.”

It warned, also, that “deteriorating international conditions”  and “falling commodity prices” would  have a “dampening impact” on the Australian economy.

The bank said that, in these conditions, “it is reasonable to assume” that Australia’s inflation ,” which now stands at 5 per cent, will soon start to fall.”

“Global disinflationary forces will assist in this regard,” the Reserve Bank added.

“Weighing up these international and domestic developments, the Board judged that a further significant reduction in the cash rate was warranted.”

“The board will continue to monitor developments and make adjustments as needed to promote sustainable growth consistent with achieving the 2-3 per cent inflation target over time,” it said.

Anyone who wonders why the Aussie dollar has fallen so sharply over recent months should take a look at figures the Reserve Bank has just released.

Remember the 98 US cent $A, that looked as if it would hit parity with the greenback, earlier this year?

Yes.  That’s the one.  The one that looked recently, as if even 60 US cents might not be the floor.

The $A has, of course, recovered a little since then.

But even its bounce back, to  almost 68 US cents last night, has been less than impressive.

The reason usually given for its fall is that Australia’s is a commodity based economy, and commodity prices, too, have been weak over the past month or so.

The Reserve Bank’s index of commodity prices recorded a 5.1 per cent fall last month, in terms of special drawing rights.

The bank said falls in copper, wheat, nickel and aluminium prices were largely to blame.

Although commodity prices generally  have eased, the Reserve Bank’s index does also show that, historically, they are still high.

As usual, though, the devil is in the detail.

Australia is a major world producer and exporter of base metals.

And the bank’s figures show that, in $US dollar terms, base metal prices halved, between May last year and October this year.

A fall of that size, in a major sector of any economy, would have consequences.

And, in our case, it hit $A very hard.

Australian firms will get advantages from the Federal government’s proposed carbon trading scheme, if other countries follow, eventually.

And given the grim warnings, that the world’s scientists are delivering, on the perils of global warming, it seems very likely that they will.

These are, perhaps, the key points to emerge from a background briefing, that Treasury officials gave yesterday, on their modelling of proposed carbon trading schemes.
The officials, who spoke on background, admitted that some critics believe their assumptions are optimistic.

But they insisted that those assumptions had been subjected to sensitivity testing, to ensure that they are robust.

The officials made no secret of the fact that the proposed scheme will involve cost increases.

But they said that, in most cases, these would be moderate, both for industry and families at home.

Australian families would face bigger electricity and gas bills.

The Treasury model estimates that electricity prices would rise by $4 to $5 a week, for a typical Australian family.

And gas bills would rise by about $2 a week.

But what’s on the plus side?

Good times ahead.
In a foreword to the report, the Treasurer, Wayne Swan says:”Climate change poses a clear risk to Australia’s future prosperity.”

Mr Swan warns, too, that the only way of reducing that risk is making significant reductions in the nation’s greenhouse gas emissions.

You can get the whole report, at:- http://www.treasury.gov.au/lowpollutionfuture/

The drought assistance programs that the Federal government provides for  Australian farmers should be redirected, according to the Productivity Commission.

In a report just released, the commission suggests that the government should introduce risk management procedures instead.

“In an assessment of existing drought programs, the Commission found that, when measured against policy objectives relating to self-reliance, preparedness and climate change management, the programs have many shortcomings,” the report said.

In particular, the Commission said the current exceptional circumstances declaration process is “inequitable and divisive.”

It said, too, that  interest subsidies and payments for the transport of fodder and livestock are “ineffective” and can “perversely encourage poor farm practices.”

The commission said also that farm families, trapped in hardship, could miss out on relief if their farms were outside drought declared areas.

Commissioner Mike Wood said that while drought is not new to dry land farming, current conditions are similar to those encountered both at the time of Federation and in the 1940s.

“Yet despite the severity of the conditions, most farmers have been self reliant and have not received drought assistance,” Commissioner Wood said.

He proposed that all farm families facing hardship, not just those in drought declared areas, should have access to temporary income support, through a scheme designed specifically for farm conditions.

Farmers who wanted to leave the land should be eligible for retraining, the Commission said.

The report is available at http://www.pc.gov.au/

On the best estimates, it takes each new migrant some 20 years to repay the “work debt” that he incurs on arrival.

New migrants need homes.

They need transport.

They also usually need need new clothes – and many other things, besides.

And as all economists know, meeting these needs creates work.

New migrants might, indeed,  “take jobs” when they arrive.

But, on balance, they make a lot more.

Predictably, though, with Australia’s unemployment likely to head to 6 per cent next year, calls for cuts in the Federal government’s migration targets are gathering strength.

There may be some reason for that, if only to reduce social tensions.

On economic grounds, though, these arguments, now being advanced by the Federal opposition, as well as the unions, simply don’t hold water.

The opposition’s immigration spokeswoman, Dr Sharman Stone, is urging the Federal government to cut its planned 2008-09 migrant intake, from 190,300, to the 2005-06 level of 142,930.

But the Immigration Minister, Chris Evans, is reluctant.

He is arguing that new migrants are bringing special skills to Australia, that will allow this country to expand its exports.

Mr Evans said the government would base any decision it makes on this matter on the mid year economic forecasts, which are due out next month.