Browsing articles in "Rural australia"
Monday 2nd May 2016 - 12:03 pm
Comments Off on It’s not just iron ore and coal now

It’s not just iron ore and coal now

by Alan Thornhill

Australian wines, lobster and cherries are starting to appear on Chinese tables.

And that’s just the start of it.

The Federal Minister for Trade and Investment, Steven Ciobo, says our Chinese customers are also buying more fresh mangoes, abalone and boneless beef from us as well.

So our trade, with our most important customer, now goes well beyond their traditional purchases of iron ore and coal.

Mr Ciobo wants us to keep all this in proportion.

In a statement today, he merely says Chinese trade data shows “encouraging early signs that the China-Australia Free Trade Agreement (ChAFTA) is delivering for Australian business.

“Between January and March 2016, Chinese imports of Australian bottled wine grew more than 60 per cent compared to the same period 12 months previously, to reach $200 million, as tariffs were cut twice, from 14 per cent to 8.4 per cent,” he added.

He also said:”with tariffs cut, China’s $11.6 million worth of imports of fresh Australian lobster between January and March were triple those of 12 months ago, and exceeded China’s entire 2015 imports of Australian lobster. 

“Milk powder and fresh cherry imports more than doubled.”

Mr Ciobo also said: “Chinese imports of other products – including fresh mangoes, fresh abalone, fresh and frozen boneless beef, various types of cheese, and hay and chaff – grew impressively as ChAFTA cut tariffs and boosted Australia’s competitive position.”

“Imports of Australian manufactures that benefited from tariff cuts – like titanium for pigments, unwrought zinc and various mixed food preparations – also grew strongly.

He said that:”These impressive results occurred alongside the third round of tariff cuts in early 2016 under both the Korea-Australia Free Trade Agreement (KAFTA) and Japan-Australia Economic Partnership Agreement (JAEPA), which are also driving increased Australian exports to these two major markets where protection is being reduced.”

“Through the trifecta of FTAs Australian businesses now have preferential access to all three giant north Asian markets – access that is unmatched by other major advanced economies.”

“This positions Australia to continue to capitalise on the rapid expansion of Asia’s middle classes and their demand for the high quality produce and other goods we can provide.” 

“This means exciting opportunities for Australian businesses and will drive jobs and growth in the Australian economy.”

“With tariffs on Australian products continuing to be cut annually into north Asian markets, these three FTAs will continue to deliver for Australian business for years to come,” Mr Ciobo said.

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Thursday 10th March 2016 - 6:49 pm
Comments Off on The good customer that keeps getting better

The good customer that keeps getting better

by Alan Thornhill

China is already Australia’s best customer.

However new research suggests it could be much better.

It also suggests that your business might well benefit.

The research, published by the Australia China Relations Institute points out that at 109 million in 2015, China’s middle class is already bigger than that in the United States.

Seventeen million bigger in fact.

So we can expect to sell more than iron ore and coal in future.

The Institute also says : “Australia’s ‘China Resources boom’ may have peaked but 57 cents in every dollar increase in Australian exports between 2009-10 and 2014-15 still came from China”

And it adds: “If managed well, Australia’s ‘China dining and services boom’ could run for decades.

There is much more on the Institute’s website at Australia China Relations.Org

Here, though, are some samples:-

In 2014-15 Australia’s agricultural exports to China stood at $9.0 billion

That was up from $3.7 billion in 2009-2010 and 72 percent more than to the US, our second largest customer.

In 2014-2015 Australia’s services exports to China stood at $8.8 billion.

This was up from $5.5 billion in 2009-2010 and 24 percent more than to the US, our second largest customer.

In 2015 more than one million Chinese  tourists visited Australia spending $7.7 billion.

That was up from $3.3 billion in 2010 and more than double that of UK visitors in second place.

By 2020 Chinese tourist spending is forecast to reach $13 billion and account for 44 percent of the growth in total tourist spending to 2024-25,the Institute said.

It  added:“ China’s middle class is no longer confined to the tier-one metropolises of Beijing, Shanghai, Guangzhou and Shenzhen.

By 2022 84 percent of the middle class is expected to live outside these cities.”

“In 2011 the only direct flights to Australia were from Beijing, Shanghai, Guangzhou and Shenzhen”

“ Now there are direct flights from 11 Chinese cities, including inland centres such as Chengdu, Chongqing, Wuhan and Xian.”

“ In 2015 there were 170,212 enrolments by Chinese students at Australian educational institutions, 2.4 times the number of students from India in second place

In 2013-14 the number of Australian student visa applications lodged from China’s traditionally less wealthy inland provinces was 12,345, up 30 percent from a year earlier.

“Those from coastal provinces stood at 23,805, up 24.6 percent.”

Sunday 14th February 2016 - 6:39 pm
Comments Off on Decentralisation:who really benefits?

Decentralisation:who really benefits?

by Alan Thornhill


Barnaby Joyce’s imminent rise, to the post of Australia’s Deputy Prime Minister, is producing some apprehension in the nation’s capital, Canberra.

Not least on the issue of decentralisation.

Mr Joyce’s promotion became inevitable last week, when his National Party colleagues chose him to succeed the party’s previous leader, Warren Truss, who is retiring.

The National Party, now the junior partner in Malcolm Turnbull’s coalition government, was once called the Country Party.

And Mr Joyce retains its strong rural and regional focus.

That is reflected in his attitudes to decentralisation.

So no-one in Canberra was particularly surprised when plans to decentralise government scientific and other work to the Great Southern region, near Albany in Western Australia’s Great Southern region, Northam in that State’s Wheatbelt, or even to Tasmania, seemed to take on new life, with the announcement  of Mr Joyce’s new job.

He doesn’t actually become Deputy Prime Minister, of course, until he takes the oath of office.

That is scheduled for Thursday this week,at Government House in Canberra.

Those looking for differences between Mr Joyce and Mr Turnbull, won’t have too much trouble finding them.

Mr Turnbull is, after all, a free-trader, right to the soles of his highly polished shoes.

There is something of a protectionist about Mr Joyce.

He would not shrink from a direct intervention in a market, if he believed that to be valuable.

All this is illustrated, clearly enough, in his attitude towards decentralization.

But he is clever about it.

Earlier this month, while announcing the relocation of three research organisations from Canberra to regional Australia, he said:”I have accepted proposals from three Canberra-based research and development corporations to increase their regional presence, which will boost jobs and growth in Dubbo, Wagga Wagga, Toowoomba and other areas.

“As well as being home to vibrant farming communities, these regions also have some of the best agricultural universities and research facilities in the country.

“It is logical that strong links should exist between the RDCs, universities and farmers on the ground in each industry.

“Being geographically closer to the industries they serve will strengthen their relationships and help the RDCs better understand their individual industry’s needs.”

There are limits to this kind of thing, of course.

Valuable knowledge, built up over years, in a sophisticated city like Canberra, which offers a wide range of educational and medical services, can be lost if a key scientist, chooses to leave a particular project, rather than accept a particular transfer.

And that whole process can become economically expensive, if adopted for political, rather than industrial reasons.

There are some fine questions of balance, here.

Wednesday 9th December 2015 - 8:58 am
Comments Off on Warming up for next year’s election

Warming up for next year’s election

by Alan Thornhill

Speculation on tax reform has peaked ahead of a meeting between the Treasurer, Scott Morrison, and State premiers on Friday.


The Federal government has insisted, in the lead up to this meeting, that “everything will be on the table” as these talks progress.


Labor has responded by alleging that Malcolm Turnbull is secretly planning to increase the GST.


Opposition strategists know that an effective campaign on the GST will be their best chance of defeating the still popular Prime Minister, at the Federal elections expected next year.
Lingering divisions in the Liberal party – mostly flowing from the September coup in which Mr Turnbull replaced Tony Abbott as Prime Minister, might help.


Especially as Mr Abbott is finding it difficult to remain heroically silent, about his loss.


But Mr Turnbull knows, deep in his political heart, that his own scare campaign, on the carbon tax, is also the best card he has in his hand.


And – perhaps for that reason – he has been reluctant to say – flatly – that his government won’t increase the GST if it is re-elected next year.


There are several good reasons for not doing so.


After all, coalition governments don’t have a particularly good record, when it comes to keeping pre-election promises, particularly on tax.


Why draw attention to that?


Then there would be recalcitrant premiers to convince, if a Prime Minister did want to increase the GST.


Why give them time to organise, too?



Much better to keep mumbling about “everything being on the table” when it comes to tax reform.

There are risks, of course.


That was illustrated – all too well – today when Fairfax newspapers claimed to have a secret document showing not only that massive increases to the GST are likely, but that the Medicare Levy could rise as well.


There is an old game, in politics, called “frightening the horses.”


And our politicians – on all sides – are quite good at it.

Monday 30th November 2015 - 5:38 pm
Comments Off on Pollster says support for Turnbull government still strong

Pollster says support for Turnbull government still strong

by Alan Thornhill

The Turnbull government has maintained its lead over Labor in the latest Morgan poll.


It would easily win an election held today.


The poll results, published today , give the government 56 per cent support, on a two party preferred basis, to Labor’s 44 per cent.


They also show confidence in the government up 2.5 points to 122, its highest level since March 2011.


Pollster Gary Morgan said the study showed the Turnbull Government’s honeymoon continuing  as Australia heads towards Christmas.


This week Prime Minister Turnbull has travelled to the Commonwealth Heads of Government Meeting in Malta – his first meeting with the Queen since becoming Prime Minister – and on to the United Nations Climate Conference in Paris.


“However, despite the issues of Global Warming and terrorism dominating the news headlines lately, Turnbull’s most important task as Prime Minister is to ensure a growing Australian economy which provides gainful employment to as many Australians as possible.”


“Ultimately it is job creation and sustainable economic growth in Australia which will decide the success or otherwise of Turnbull’s Prime Ministership,” Mr Morgan said.
“To be a successful Prime Minister Turnbull needs to take advantage of the boost to confidence his ascension to the top job has created …. and not allow Labor and the Greens to obstruct the implementation of overdue reforms to the Australian economy.


“If they continue to hold-up needed reforms, Turnbull must bypass this ‘blackmail’ and let Australian electors decide by calling an election early in 2016.” Mr Morgan added.

Wednesday 18th November 2015 - 12:25 pm
Comments Off on RBA chief sees new opportunities in China

RBA chief sees new opportunities in China

by Alan Thornhill

A Reserve Bank chief says Australia can expect to benefit from changing patterns of demand in China and Asia generally.


Christopher Kent, the bank’s Assistant Governor (Economic), made the observation at a UBS conference in Sydney today.


He said a slowing in the Chinese economy had already affected Australia in at least two ways..
First, the substantial slowing in industrial production has contributed to a further decline in commodity prices over the course of this year,” Mr Kent said.



Second, the shift in demand towards services and agricultural products within China and the Asian region more broadly presents new opportunities for Australian exporters.


And he added:“ While our comparative advantages in service industries are perhaps less obvious than they are for mineral resources, the rise in the demand for services from a large and increasingly wealthier populace in our region will no doubt be to our benefit.
Mr Kent also said:”The easing in the growth of the Chinese economy over the past year or so has two related parts.


The economy is slowing as it matures, and this is to be expected.


Overlaying that, there has been a substantial slowing in the industrial sector, linked in part to earlier excesses in construction.


How all of this will play out and the effects on the Australian economy are uncertain.


But he added:I’ll briefly highlight some possibilities.”


“Let me be clear though, many of these have positive implications for our economy.
It is natural for the speed of China’s economic development to ease and for its nature to evolve.”
He also  said:”part of this reflects slower growth of the working-age population, which is now in decline.


Other than increasing the retirement age, there is little that can be done to alter that in the coming years, notwithstanding the ending of the one-child policy.
“However, growth continues to be supported by the process of urbanisation, which uses commodities intensively.”
“This has further to run, albeit at a more gradual pace.”
“Productivity growth appears to be slowing as windfall gains from earlier reforms have waned.”


“But there remains a large gap between productivity in China and in advanced economies.”


“That gap could be closed more quickly via additional reforms to allow a greater role for market forces in allocating productive resources.”

“The authorities have expressed support for such reforms.”
“The authorities would also like to see growth rebalancing from investment towards consumption.”


“That is happening gradually.”


“It is also being accompanied by a rise in the share of activity accounted for by the services sector as the economy develops and household incomes rise.”
“While these longer-run changes imply a decline in the growth rates of investment and industrial production, both have also experienced a noticeable cyclical slowing over the past year or more,” Mr Kent said.


“As earlier excesses in residential construction gave rise to a large stock of unsold housing, house prices declined and so too did housing construction.”


“Sales and prices have recovered a bit since the start of this year, but there is little sign to date of a sustained improvement in construction activity.”

Tuesday 13th October 2015 - 11:37 am
Comments Off on Our “fundamentals strong” Reserve Bank chief

Our “fundamentals strong” Reserve Bank chief

by Alan Thornhill

A Reserve Bank chief says “the fundamentals” of the Australian economy “are strong” and provide grounds for “optimism” about the future.


Philip Lowe, the Bank’s Deputy Governor, made the observation in a speech he delivered to the CFA Institute Australia Investment Conference in Sydney today.


Mr Lowe said the central message of his speech was: “that these fundamentals are strong.”


“…and that they provide us with the basis to be optimistic about the future.”


“ At the same time, none of us has a crystal ball, so we can’t be sure exactly what that future holds,” Mr Lowe added.


“What we can be sure of is that we will be best placed to take advantage of our strong fundamentals if our economy is flexible and if it is able to adapt to the changing world in which we find ourselves,” Mr Lowe added.


“Hence the title of my remarks this morning: Fundamentals and Flexibility.”


Mr Lowe said advancing technology had greatly affected the way Australians work.
“The advances in technology are reshaping, in unexpected ways, the jobs that we do,“ he said.


“If we were to go back to 1995, or perhaps even to just 2005, I suspect that there are very few of us who could have imagined many of the new occupations that have emerged.”


“There are big data architects, cloud computing experts, social media strategists, mobile app developers, information security technicians, green retrofit architects, genetic counsellors and the list goes on.”


“Each of these new occupations is possible only because of advances in technology.”


“More broadly, the huge growth in employment in the services sector has taken many by surprise,” Mr Lowe said.


“I suspect that if in the early 1990s we had known that there would be a net loss of over 100 000 jobs in the manufacturing sector in Australia over the next 25 years, there would have been a sense of despair about the future.”


“This despair would probably have been compounded if we had also known there would be no growth in jobs in both the utilities and wholesale trade sectors over the next quarter of a century.”


“Yet, over this period, we have enjoyed a strong rise in our living standards, the unemployment rate has come down substantially and we have generated around 4 million new jobs across the economy, mostly in the services sector.”

Wednesday 9th September 2015 - 6:09 pm
Comments Off on It’s “manageable” Hockey says

It’s “manageable” Hockey says

by Alan Thornhill

The Treasurer, Joe Hockey, says the challenges now facing major global economies are “manageable.”

In a statement to parliament today, Mr Hockey said : “whilst the global economy faces some headwinds, there is a deep resolve amongst policy makers to implement domestic and international initiatives that help to deliver structural improvements in growth.”

But he added:” The recent volatility in global financial markets reminds us that this is not a time to be complacent.”

“We have all been affected by the deterioration in business and consumer confidence as a result of significant volatility in currency markets, equity markets and commodity prices.

“As a result of this, all countries must do more to implement enduring structural reforms that boost growth and create new jobs.”

Mr Hockey, who has just returned from a G20 meeting in Turkey, said: ” The frank and honest exchange about the real challenges we all face provided me with a sense of cautious optimism.”

He said US representatives at that meeting had flagged their intention to start raising interest rates soon.

“This is a positive signal that illustrates a sustainable improvement in the US economy.”

But Mr Hockey cautioned.

“Yes, there may be some volatility in markets as a result of the decision.”

“… but like the previous so called “taper tantrum” associated with the ending of quantitative easing, the transition is definitely manageable.”

Mr Hockey said China needs to undertake some “difficult structural reforms.”

However he sees bright prospects there, too, although he admits this process will take some time.

This is a process that will take a number of years as China moves from an investment economy to a consumption economy, Mr Hockey said.

But he added.

“This will be of great benefit to the Australian economy where non-mining exports represent the greatest opportunity for medium-term job growth.”

Mr Hockey said, too, that:” Our involvement with other economies such as Europe has not waned.”

“The recovery in the euro area will continue, supported by accommodative monetary policy and low oil prices, but at a slower pace.”


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Alan Thornhill

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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