by Alan Thornhill
A leading motoring body has welcomed the consumer watchdog’s move to take Volkswagen to court over allegations of misleading conduct, in dealing with emissions from its diesel engines.
The Australian Competition and Consumer Commission said it would challenge the German car maker in the Federal Court.
The Australian Automobile Association said this is an important step in delivering clarity to affected owners.
Its Chief Executive Michael Bradley said: “The Volkswagen Group has been shown to have misled millions of consumers globally and is being pursued for alleged breach of laws in other countries.
“It’s fitting the legality of the company’s actions be tested against Australian law.”
US authorities found that Volkswagen had intentionally programmed turbocharged direct injection diesel engines to activate certain emission controls only during laboratory tests.
They ordered VW to pay each of its customers an average of $5,000 each in compensation.
The company has said it won’t be making similar offers in Australia.
“But irrespective of whether or not the Federal Court finds the company guilty of a breach of law, Volkswagen Group is clearly guilty of breaching the trust of the Australian owners of tens of thousands of vehicles,” Mr Bradley said.
He said, too, that Australian authorities need to do more to protect motorists and the environment.
“More broadly, the actions of Volkswagen Group have called into question Australia’s emissions compliance regime and highlighted the fact that no independent vehicle compliance testing is performed in Australia to protect consumers, or the environment,” he said.
Mr Bradley said the AAA itself would be undertaking critical work in this area.
“Amid growing concerns that laboratory emissions testing is susceptible to manipulation and does not reflect the true emissions or fuel usage profiles of vehicles on Australian roads, the AAA is investing $500,000 to conduct an on-road emissions pilot test program of 30 vehicles on the Australian market,” he said.
Initial test results are due next month.
by Alan Thornhill
New vehicle sales rose by 0.1 per cent in July, on trend figures the Australian Bureau of Statistics published today.
However, on seasonally adjusted figures sales fell by 1.3 per cent, over that time.
On trend figures, sales rose by 1.5 per cent in the 12 months to the end of July.
And on seasonally adjusted figures, the rise was 1.6 per cent.
by Alan Thornhill
Confidence in Australia’s property market has eased since the Reserve Bank cut the nation’s interest rates in May.
A survey that the National Australia Bank published today shows that the easing is particularly pronounced among property professionals.
In the first NAB Residential Property Survey since the RBA cut the official cash rate in May this year, housing market sentiment amongst property professionals softened.
The bank said its residential Property Index fell to +3, from +6 in Q1 2016, to remain below its long term average of +13.
“Sentiment moderated in all states except SA/NT, which rose 19 points,” it added.
New South Wales joined Victoria as the best performing state, followed by Queensland, the bank said.
“Confidence has however improved, with the national index rising to +29 next year, and +36 in two years’ time,” it added.
The bank said its residential Property Survey for Q2 2016 also found that respondents expect Victoria and Queensland to provide the best capital returns over the next one to two years.
“It’s still a mixed picture across Australia, with house price expectations for the next 12 months holding up well in the eastern states whilst staying flat in SA/NT and continuing to fall sharply in WA,” the bank’s Chief Economist Alan Oster said.
The bank said it had also revised its national house price forecasts for 2016 upwards to 5.1 per cent (from 1.5 per cent). Unit price forecasts were revised up to 3.6 per cent for 2016.
“Our upwards revisions in price forecasts reflects the strength in prices to date.
Over the last six months, Sydney and Melbourne prices have increased by an annualised rate of nearly 19 per cent and 12 per cent respectively,” Mr Oster said.
“However, while there is significant amount of uncertainty over the outlook for prices, we expect that this renewed momentum in the housing market is unlikely to be sustained over the longer term.”
Looking out to 2017, NAB forecasts prices to be flat across most capital cities, with falls particularly in Perth, Melbourne and Brisbane.
While the declines in Perth largely reflect economic conditions, the falls in Melbourne and Brisbane can be partly attributed to added supply and weaker investor demand.
“NAB is forecasting a much softer residential property market, with 0.5 per cent growth in house prices and nearly 2 per cent decline in unit prices in 2017,” Mr Oster said.
NAB Economics continues to hold the view that residential property prices are unlikely to experience a sharp ‘correction’ without a trigger from a shock that leaves unemployment or interest rates sharply higher.
The Residential Property Survey series also measures foreign buyer activity in the Australian housing market.
Market share of foreign buyers in new Australian housing markets fell for the third straight quarter in a row – to 10.4 per cent.
A sharp fall in foreign buyer activity in Queensland was offset by growth in Victoria and a modest rise in NSW.
Market share of foreign buyers in established markets was unchanged at 7.2 per cent.
About 230 property professional participated in the Q2 Survey, the bank said.
by Alan Thornhill
New vehicle sales were flat in June, on trend figures the Bureau of Statistics published today.
On this basis, 97,801 new vehicles were sold during the month.
The biggest rise, of 2 per cent, occurred in the ACT.
And the biggest fall – of 1.1 per cent – was seen Western Australia, where new vehicle sales have been falling since December last year.
by Alan Thornhill
The Federal government and opposition differed sharply today, after a major ratings agency, Standard and Poors, put Australia’s prized triple A status on negative watch.
It did so citing both the still unresolved Federal election result and high levels of both household and external debt.
The Treasurer, Scott Morrison, said the agency’s move, “reaffirmed the government’s fiscal direction and the need to “stick to the plan” the Coalition set out in its last budget.”
However the shadow treasurer, Chris Bowen, said it underlined the government’s “fiscal failure” and cast further doubt on its budget projections.
The agency’s warning means that Australia’s AAA credit rating might be slashed in future if there is no improvement in its budgetary performance.
This could increase government borrowing costs and weaken international investment.
Mr Bowen said S&P statement is “sombre reading.”
He said the agency “…calls out the Government on three years of fiscal failure, based on unrealistic Budget revenue forecasts and savings measures that will never pass the Parliament.
“S&P makes it clear that it doesn’t have much faith in the Government’s Budget revenue forecasts – a point Labor has consistently made since the Budget in May,” Mr Bowen added.
However Mr Morrison took a different view.
He said the agency’s warning reinforces the government’s message that Australia must “live within its means”.
He said S&P were clearly concerned about the outcome of the election and that “the pace of fiscal consolidation may be postponed”.
Mr Morrison said it would be irresponsible to increase the deficit over the next few years, because “that increases the debt and you can’t get that money back”.
by Alan Thornhill
Australia has had great success in attracting visitors over the past year, particularly from South Korea and Japan.
The Bureau of Statistics reported today that, in trend terms, the number of visitors arriving from South Korea increased by 30.8 per cent, in the 12 months to the end of May, while arrivals from Japan rose by 30.6 per cent.
Overall, too, the number of arrivals also rose strongly in this time, chalking up a 10.9 per cent increase.
Visitor numbers from the United States rose by 18.4 per cent.
Relatively new markets are also rapidly gaining strength, too, in Australia.
On trend figures, for example, 99,400 visitors arrived in this country from China, during May this year.
That number was 18.6 per cent higher than that seen 12 months earlier.
The Statistician also reported that the number of Australians travelling overseas, as short term visitors rose by 3.4 per cent, over the 12 months to the end of May this year.
by Alan Thornhill
Australia’s trade deficit rose $433 million in May to $2,218 million.
This is shown in figures published by the Bureau of Statistics today.
The bureau also reported that Australia’s retail sales rose by 0.2 per cent in that month.
The bureau said that, on seasonally adjusted figures, Australia’s exports had been worth $26,170 million in May.
But imports had been worth $28,387 million.
So our trade deficit that month was 24 per cent bigger than that of the previous month.
Why did that happen?
Our exports rose by 1 per cent in May.
However our imports rose by 2 per cent in the month, on seasonally adjusted figures.
The Statistician also reports that we spent more in food stores and in Australia’s cafes and restaurants in May than we did in April.
But trade in Department stores was flat and we spent less on shoes and clothes in May than we had in April.
by Alan Thornhill
Business confidence in Australia was weak before two recent shocks.
A survey, by Dun and Bradsreet, showed that expectations for sales and selling prices, in the three months to the end of September, had hit their lowest levels since 2014.
Stephen Koukoulas, an economic adviser to the firm, said this result should be treated with caution, as the survey was conducted before both the British vote to leave the EU and the inconclusive result of last Saturday’s Federal elections.
However Mr Koukoulas added: “the slide in business expectations over the past year appears to have been arrested in the most recent survey.”
And he added: ““there were some mildly encouraging signs, with expectations for capital expenditure edging up from the recent low point.”
But he said: “there were, worryingly, signs of further weakness in expected sales and selling prices…”
The Business Expectations Index is an aggregate of the survey’s measures of sales, profits expected sales and selling prices.
He said the low price expectations confirmed by the survey, “points to ongoing low inflation.”
The survey also showed that: “profits, Employment and Selling Prices” in Australia’s construction industry, have all been “plunging into negative territory.”
It also revealed that: “the Retail industry fared poorly for the first three months of the year, with its Actual Sales and Actual Employment indices falling to -3.9 points and -4.3 points respectively
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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