The Australian Bureau of Statistics reported today that the nation’s consumer price index rose by 0.9 per cent in the March quarter.

This was well above the 0.5 per cent rise in the December quarter, which  left Australia with a 2.1 per cent annual inflation rate at the end of last year.

However, the bureau also reported today that Australia’s underlying inflation rate, on a weighted median basis, fell from a revised 3.5 per cent last year to 3.1 per cent now.

The Reserve Bank aims to keep Australia’s underlying inflation rate within a 2-3 per cent annual range, over the course of a business cycle.

It has warned that Australians can’t expect  interest rates stay below normal levels, where they have been since the global economic crisis struck, late in 2008.

Its  current marker rate, at 4.25 per cent, is still below the 4.5 to 5 per cent range most economists regard as normal.

The bank’s board will meet again, to review rates, on the first Tuesday in May.

The bureau’s figures show that housing prices rose by 1.5 per cent in the March quarter and 6.1 per cent in the 12 months to the end of March.

This was the biggest price rise Australians have faced, over the past year.

However education costs have risen sharply, too. They leapt by 5.6 per cent in the March quarter, at the start of the new scholastic year, and by 5.7 per cent in the 12 months to the end of March.

The bureau also reported that health costs have been rising sharply, jumping by 4.7 per cent in the March quarter and 5.1 per cent over the year.

The price of pharmaceuticals, alone, leapt by 13.3 per cent in the March quarter.

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.

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.

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.

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.

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.

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 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.

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.

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.