Julia Gillard’s hold on her job is slipping, even though her undeclared rival, Kevin Rudd, is not likely to mount an early challenge.

Despite an improvement in the latest Herald Neilsen poll, published in The Sydney Morning Herald  today, Labor still trails the Coalition 47 -53.

Ms Gillard also saw a 6 point rise in her approval as Prime Minister.

Even on these figures, though,  Labor would still be soundly defeated in a general election.

Even so, that was still an 8 point improvement for Labor.

Meanwhile, the Opposition Leader Tony Abbott has also virtually ruled out an attempt to bring down the Gillard government, by mounting a no confidence motion, when parliament resumes this week.

Instead, the Prime Minister told reporters she was looking forward to a planning session with Labor MPs, when she arrived for a Caucus meeting yesterday.

The meeting decided to attack the opposition on the economy, with MPs saying Mr Abbott had failed to set out an alternative plan for Australia’s economic management, when he addressed the National Press Club last week.

Ms Gillard told the meeting that Labor needed to present its message more clearly.

She also called for discipline, warning MPs to stop backgrounding reporters.

Meanwhile the Treasurer, Wayne Swan, who strongly supports Ms Gillard, reminded the public of Labor’s achievements, since it took office.

Mr Swan said families with a typical $300,000 home loan,  are now saving $3,000 a year on repayments, through lower interest rates.

He also said the Reserve Bank’s marker cash rate, which had been 6.75 per cent, when Labor came to power, is now 4.25 per cent.

Mr Swan also described Australia’s big four banks as “hugely profitable.”

He said they would be well able to pass on any rate cut the Reserve Bank might announce on Tuesday, in full. (see separate story)

Mr Swan claimed, too, that the government’s record of job creation is “outstanding” with 700,000 Australians gaining jobs over the past four years.

Tony Abbott, though, insisted that Australians still  needs a “better government right now.”

“I think we need an election,” Mr Abbott said.

However, Mr Abbott  said that while ever Craig Thompson is in Parliament “I think this government is firewalled against a no confidence motion…”

In a television interview, Mr Abbott also accused Fair Work Australia “or elements of it” of collusion with the government, in the Craig Thompson case.

Fair Work Australia has been investigating allegations that Mr Thomson, now a Labor MP,  misused union credit cards.

However FWA has not yet produced a report on the case, despite long proceedings.

Mr Rudd, the Foreign Minister, who is overseas on duty, did not attend the Caucus meeting, which was followed by a barbeque Ms Gillard held for Labor MPs, at the Lodge.

Although she is likely to survive as Prime Minister, at least in the short term, Ms Gillard’s position remains weak.

Both public and private polling has shown, consistently, that she does not have the public support she would need, to win the Federal election due next year.

That polling also shows that Kevin Rudd, the man she deposed from the nation’s top job, would have a much better chance of victory in that election.

Ms Gillard dismisses talk of a Rudd challenge as media “chatter.”

But Labor party bosses are not completely convinced.

And the chance of even a highly embarrassing victory next year, with a recycled Rudd leading the campaign still tempts them.

Investment is still booming, even though several other parts of the Australian economy are flat.

The latest issue of the Deloitte Access Economics investment monitor shows that $415.4 billion worth of  “definite” projects are now in the nation’s investment queue.

That’s a 43 per cent rise in the 12 months to the end of December..

This matters.

“The value of projects under way provides a healthy buffer against a potential global slowdown in 2012,” the authors of the study say.

“Indeed it is already providing the bulk of growth for the Australian economy at the moment,” they add.

The authors also recalled  the famous wartime “Brisbane Line,” a policy which would have seen Australia abandon all of its territory north of the Queensland capital, if Japan had launched a full scale invasion.

“Fast forward to today and the Brisbane Line could be used to characterise the Australian economy,” they say.

“Today it is economic activity to the north and west which is defining Australia’s prospects…” they add.

That area provides just 20 per cent of Australia’s jobs.

“Yet when it comes to major investment projects under construction, that part of Australia….dominates, with $161.3 billion of investments under construction, or 46 per cent of the total,” the study concludes.

Mining projects dominate.

The authors also say that  the present investment surge is not likely to ease any time soon.

Instead, they predict that investment levels will continue rising over 2011-12 and the two following  years.

“This is very much driven by the healthy pipeline of investment projects awaiting approval,” they say.

The authors say, too, that spending on flood reconstruction and the National Broadband Network would also continue for some time yet.

Australians have a great deal of money invested in superannuation.

With more than $1.3 trillion already in that pot, it is one of the biggest sums of money held, anywhere in the world.

Super has produced its shocks.

Anyone hit by the losses sustained after the great crash of 2008 knows, now, just how much money our funds had invested in the share market.

The rules surrounding super, too, are well short of perfect.

Those shortfalls, though, are to be tackled seriously over the coming year.

That was made clear in a joint statement that the Treasurer, Wayne Swan and Superannuation Minister, Bill Shorten, have just issued.

They say the idea is to  “ consider ideas raised at the Tax Forum for providing Australians with more options in retirement and improving certain superannuation concessions.”

The two ministers said: “the government is already implementing important reforms to make superannuation concessions fairer for low-income earners and improve the adequacy and equity of the retirement income system”

They said these include increasing the superannuation guarantee, to 12 per cent,  introducing the low income superannuation contribution, abolishing the age limit on the superannuation guarantee and providing Australians with access to low-cost funds through MySuper.

So what else needs to be done, by a high powered expert committee called the Superannuation Roundtable, that the government has appointed to do this work?

“The first stage of work for the Roundtable will discuss and examine better ways to target and deliver certain concessions,” the two ministers said.

But everything comes with a price tag, in these days of tight budgets.

Superannuation reform is no exception.

“The Roundtable will need to consider offsetting savings from within the superannuation system for any proposals that have a budget cost,” the two ministers said.

The Federal government is, once again, thinking of  means testing  the private health insurance rebate.

Its Health Minister, Tanya Plibersek, said a new report shows that Australia’s private health insurance sector is “healthy and robust.”

The industry had been struggling when this incentive was introduced in 1997.

The government, then, wanted to encourage Australians to take out private health insurance.

Ms Plibersek said it is no longer appropriate to persist with measures that leavelow and middle income earners “subsidising the health insurance of millionaires.”

The Opposition reacted sharply.

Bronwyn Bishop, Shadow Minister for Seniors, described Ms Plibersek’s announcement as “a deliberate attack on senior Australians.”

Ms Bishop said the government would be making its third attempt to apply a means test to private health insurance.

She said older Australians, who have with private health insurance, would be “hit hardest “ as they are likely to be on fixed incomes and are already under pressure from increased cost of living expenses “led by rising electricity costs.”

“The head of the Private Healthcare Australia, Dr Michael Armitage confirmed to me today that should Labor’s means testing go through, premiums would be forced up 10 per cent…,”Ms Bishop said.

However Ms Plibersek said that if the plan applied now individuals earning up to $80,000 a year – and families on incomes of up to $160,000 – would not be affected, by the proposed change.

“Families would need to be earning around $248,000 or more to lose the rebate entirely,” she added.

What would happen if Greece went back to the drachma?

That question is worth asking, as current attempts to overcome European debt problems, by protecting the Euro, are still threatening the stability of financial systems, right throughout the world.

Especially as those problems might be even more deeply seated than we have believed so far.

That disturbing rush by some 500 European banks, for cheap loans offered by the European Central Bank, might well indicate that.

Back to Greece – though – and that opening question.

The most likely outcome is that the drachma would be sharply devalued and Greek people would find imports, like Volkswagen Golfs, even more expensive.

But their exports, to the rest of the world, would be cheaper – and more competitive.

Sharp eyed foreign tourists, too,  would quickly notice that cheap holidays were available on the Agean in a country which gave birth to Western Civilisation.

Tourists are still travelling, despite the global financial crisis.

The latest figures, for example, show that Australia has attracted record numbers of travellers, over the past year.

Trying to save the Euro, by ordering austerity measures in countries like Greece, have cost thousands of jobs, led to public protests, and – yes – cut government revenues – as unemployed people don’t pay tax.

What, though, if hordes of tourists descended on Greece, creating thousands of new jobs, in hotels, restaurants and department stores?

That, alone, would lead to a dramatic improvement in Greece’s economy.

The same pattern, broadly, would hold also for Italy, Spain and Ireland,  which all have severe national debt problems, too.

Present attempts to restore confidence, by imposing austerity in these countries, have produced less than impressive results, so far.

What else, though, could be expected of committees of the unwilling, led by the unimaginative?

Yes, excessive debt is a worry.

Essentially, though, current efforts to preserve the centralised European currency system, at such a high cost, might well be seen as counterproductive, too.

Even the Reserve Bank is now acknowledging that.

Free trade can do wonders for any economy, as Australia’s stand out performance shows.

The wealth of Australian families is likely to “remain concentrated” in real estate and superannuation.

That assessment comes from no less a source than the Australian Bureau of Statistics.

It has just been published in a new analysis of household wealth in this country, as part of a Social Trends report.

The Bureau’s view is remarkable because it effectively ignores events like the huge property market collapse,  in the United States.

The Bureau is just not listening to the Jeremiahs who say that the same thing could happen here.

Instead, it boldly states that: “Household wealth is likely to remain concentrated in real estate and superannuation into the foreseeable future…”

The Bureau says there are “several reasons” for that.

It says these include: “The exemption of the family home from both capital gains tax, and means testing for determining eligibility for the receipt of government pensions and benefits.”

It says this “will favour investment in the family home.”

The Bureau also notes “the ready availability of mortgage finance for negatively geared investments.”

It says this, too, “will favour investment in rental property.”

The Bureau notes that there are valuable tax breaks for super, too.

“The concessional taxation treatment of superannuation contributions, fund earnings and retirement income streams will favour investment in superannuation,” it says.

But that’s not all.

“The Federal Parliament is also presently considering the Australian Government’s proposal to gradually raise the current 9 per cent Superannuation Guarantee to 12 per cent between 2013–14 and 2019–2020,” the Bureau adds.

A big union has sharply criticised Julia Gillard’s reshuffle, but it a major employer body welcomed it.

The Australian Workers’ Union is making no secret at its anger at  Kim Carr’s removal from Cabinet.

Ian Jones, who heads the union’s vehicle division, said the downgrading of manufacturing, to the outer ministry is “yet another sign that the Prime Minister does no understand manufacturing’s importance to the economy.”

Senator Carr, who was Innovation, Industry and Science Minister – at Cabinet level – becomes Minister for Manufacturing and Defence Materiel, in the outer ministry.

Greg Combet becomes Minister for Industry and Innovation, within Cabinet.

Peter Anderson, the Chief Executive of the Australian Chamber of Commerce and Industry, urged business leaders to seize the opportunities presented by the reshuffle.

He said the new arrangements should  be seen as “a chance to redirect the government’s energy to lifting economic capacity, productivity and competitiveness.”

The superannuation industry welcomed Bill Shorten’s elevation to Cabinet.

Pauline Vamos,  Chief Executive Officer of the Australian Superannuation Funds Association, said this provided “certainty and continuity” in a period of “significant reform.”

But the AWU’s reaction was sharp.

Mr Jones said the Prime Minister should pop her head out into her electorate to see the 4,000 Toyota workers she has just “downgraded.”

Her message is that “they are a second tier priority,” the union chief said.

Economic growth is possible in a finite world – if we increase productivity.

But what does that mysterious, economists’ word,  really  mean?

Getting more blood out of a stone, perhaps, by working smarter, not harder.

Frustration with the way we are expected to work is very common  and – all often – thoroughly justified.

Your correspondent has some experience with this, as joint author of a book on productivity, called “Because no Bastard Ever Asked Me.”

The anecdote, which led to that odd title, was  of a production worker,   Bob,  who worked in factory making  washing machines.

But too many of those washing machines were so unstable that they “walked” around laundry floors.

In desperation, Bob’s boss had hired consultants, to find out why.

As the consultants watched machines moving down the production line, Bob’s boss heard Bob, mutter “another bad one.”

Bob did that  once or twice more.

So the  boss asked him if he could identify machines that would “walk” before they left the factory.

“Yes,” Bob said.

“They have rough metal under the rim of their bowls.”

“We have had this problem for for a long time,” the boss replied.

“Why didn’t you speak up?”

“Because no bastard ever asked me,” Bob said.

(We still have a few copies of the book. Email me at alanthornhill@netscape.net if you want one).

The Treasurer, Wayne Swan, also argued the case for increased productivity at the weekend, saying the government is pursuing it by:-

• A doubling of the investment in roads, rail and ports over the six years from 2008-09;
• Building the National Broadband Network, which will help drive down costs of doing business;
• A greater focus on skills, training and apprenticeships, including the $3 billion investment in the Budget;
• Putting a price on carbon pollution, which will help shift our economy to clean energy and low-pollution technologies in a way that provides maximum support to productivity growth;
• Promoting innovation through better targeting of tax incentives, and $9.4 billion in spending on science and research;
• Reducing regulatory barriers and business red tape by working with the states on consistent rules and processes, such as uniform occupational health and safety laws and a national occupational licensing system;
• Building on our tax reform agenda, such as cutting the company tax rate to boost competitiveness, and tripling the tax-free threshold to provide workforce incentives; and
• A Fair Work Act built on enterprise bargaining that supports firms’ efforts to be more productive, and balances fairness and flexibility.

That’s the government’s response to the Coalition’s argument that it is wasting taxpayers’ money.

It’s a wordy one,  though.

Tax revenue has taken a 15 per cent hit over recent months.

But cuts in government spending have not kept pace with that fall.

So a $20.9 billion hole has appeared in  government account books.

These figures, for the September quarter, have just been published by the Australian Bureau of Statistics.

The Treasurer, Wayne Swan, blames the European debt crisis, for this problem.

He says that has caused Australians to cut their spending – and made employers more cautious about hiring.

The Bureau also  reported today that Australia chalked up a $5.637 billion current account deficit in the September quarter.

That compares with the $6.66 billion deficit seen in the June quarter.

To many economists, it was not a big event.

The US Federal Reserve, commonly known as the Fed, said it would make dollar liquidity available to other central banks, as needed.

It also reduced the rate it charges on such loans by 50 basis points.

The response, from many economists, was pretty much in the “so what?” sector.

Indeed one American economist, Mark Thomas,  admitted that he was “somewhat mystified” when markets simply “went wild.”

The Dow, for example, leapt 4.2 per cent.

In Australia, too, share prices rose almost 2.5 per cent.

Mr Thomas also admitted that the Fed’s decision appeared, to him, to be “little more than a non event.”

After all, he wrote, the Fed Chairman, Ben Bernanke, “doesn’t want to be seen as the man who destroyed the world to save a few pennies.”

True, perhaps, but economists are a miserable lot.

And the deal, on which all this was based, had some nice touches about it.

The European Central Bank, for example, was in on it.

The central banks of England, Canada, Japan and Switzerland were, too.

So it only took a little imagination to see this agreement as a sign of a serious attack on Europe’s debt problems.

The Fed’s action could also be seen as seriously realistic.

Although the Fed’s primary duty, like that of all central banks, is to stabilise its home market, the deal recognises that this can no longer be done in isolation.

Serious, long lasting and deep recessions in European countries would, inevitably destabilise the US economy as well.

Destabilisation, throughout the world, has been all too obvious, over recent months.

Austerity programs, alone, were never going to fix that.

Positive actions were needed, too.

And the Fed’s action, along with the promised co-operation of five other central banks, looked very much like that, at least to market traders.

So their enthusiastic response was hardly surprising.

This isn’t the end of the present period of destabilized markets, though.

There are more fluctuations to come.

But the interbank agreement was, at least, a sign of a positive, concerted approach to European debt issues.

As such, it was very welcome.