by Alan Thornhill
Malcolm Turnbull says: “the shockwaves in the past 48 hours from Britain’s vote to exit the European Union are a sharp reminder of the volatility in the global economy.”
Delivering his policy speech in Sydney for the July 2 elections, the Prime Minister also spoke of the need for stable majority government, experienced economic leadership and a national economic plan.
An edited copy of his 4,000 word speech is reproduced below.
After praising senior Liberals who attended the launch, Mr Turnbull said Australia needs a national economic plan which “recognises the nature of our times – both the opportunities and challenges – and gives us the resilience we need to succeed.”
“Only the Liberal National Coalition can deliver that plan, that security, that leadership,” he added.
“Everything we seek to achieve, all of our hopes, our dreams depend on strong economic growth, “ Mr Turnbull said.
In a strong economy, business is confident and prepared to risk investing, expanding and hiring.”
Mr Turnbull said: “Our business tax cuts encourage small and medium businesses to do just that.
“A strong economy means a mum whose kids are now at school and wants to work a few more days, or work full time, will have plenty of opportunities to do so,” Mr Turnbull said.
“And our childcare reforms will make it easier for her to do so too,” he added.
“It means that young men and women who have left school and are looking for a job will find an employer who is hiring and is happy to give them a start.”
“Our PaTH program with job training and internships will provide additional support to youth employment,”Mr Turnbull added.
A strong economy means we can fund our Innovation and Science Agenda to ensure our kids learn the digital skills of the 21st century, our research is commercialised to create jobs here at home and investors support start-up companies.
A strong economy means that senior Australians know their children will be in good jobs, their investments will deliver better returns and that Government will have growing revenues to support their pensions and health care.
It means that the farmer is getting much better prices for his cattle and can afford to hire a local contractor to replace his fences, clean out a dam or build a new hay shed.
It means the cafe, the restaurant, the hotel has more tourists and they hire more staff to cater for them.
All thanks to our export trade deals.
A strong economy means that builders will be hard at work on new homes and tradesmen will have more jobs.
It means that a manufacturer has more export orders, can buy more equipment, hire more workers and expand their business.
A stronger economy means we can fund over $50 billion in 21st century road, rail and other infrastructure including the Western Sydney Airport and the 39,000 jobs it will create.
“A stronger economy means we can afford to fund world-class education and health services, including Medicare, without weighing down our children and grandchildren with more debt and deficits,” Mr Turnbull said.
A strong economy means we can meet and beat our international obligations to address climate change and do so without massive hikes in electricity prices as Labor would do.
“We have a national economic plan because the prosperity and security of 24 million Australians depend on it,” he said.
Mr Turnbull said success in the 21st Century cannot be taken for granted.
“Always expect the unexpected.”
“We will need to renegotiate vital trade deals with Europe and Britain,” Mr Turnbull said.
“We concluded five in the last three years – Japan, Korea, China, Singapore and the Trans Pacific Partnership.
“In six years Labor concluded none,” he said.
“We have carefully considered what we need to do to succeed, to make the transition from an economy fired up by a once in a century mining construction boom to one that is more diverse, more innovative, smarter, more productive – an economy that wins, and keeps on winning.”
“So there is a clear cut choice at this election,” Mr Turnbull said.
“We present our fellow Australians with a national economic plan every element of which supports more investment, stronger economic growth and more jobs.
“Our plan invests $1.1 billion to promote leading-edge innovation in our industries and to prepare our children for the jobs of the future.”
Our plan promotes export trade deals to generate 19,000 new export opportunities, giving our businesses premium access to the biggest economies in our region.
Our plan invests in local defence industries to ensure every defence dollar possible supports advanced manufacturers and thousands of Australians jobs.
Our Enterprise Tax Plan provides tax relief to tens of thousands of small-to-medium family businesses now and to all companies over time so they can invest, grow and hire more Australians.
“On the other hand, our opponents in the Labor Party have no economic plan.”
“Labor believes its best hope of being elected is to have trade union officials phone frail and elderly Australians in their homes at night, to scare them into thinking they are about to lose something which has never been at risk,” Mr Turnbull said.
“That’s not an alternative government, that’s an Opposition unfit to govern.”
Every element of Labor’s platform would discourage investment and employment.
He described it as: “a recipe for economic stagnation.”
“If returned at this election, we will convene a joint sitting to restore the rule of law in the construction industry and reinstate the Australian Building and Construction Commission, Mr Turnbull said.
So Australians could have the building infrastructure they need “at a price they can afford.”
He said: “housing values would fall in a fragile property market and rents would rise, because of Labor’s investment destroying ban on negative gearing and 50 per cent hike in capital gains tax.
“This threat is real.
“ So we need to be crystal-clear about what our votes will mean,” Mr Turnbull said.
“If your local vote is for Labor, Greens or an Independent, and you are in one of the 20 or so key battleground seats across the country, it is a vote for the chaos of a hung Parliament, a budget black hole, big Labor taxes, less jobs and more boats,” he warned.
Only a Liberal or National vote ensures stable government, a clear economic plan, real funding for the aged, Medicare and education; more jobs and strong borders.
Mr Turnbull urged Australians to: ““Vote for your local Liberal or National in the House and in the Senate.”
“In the last calendar year, there were 300,000 new jobs,” the Prime Minister said.
“Our unemployment rate of 5.7 per cent is well beneath what was anticipated when the Coalition came to office,” he added.
None of this happens by chance. Strong economic leadership supporting hard-working Australians means that, even with difficult global headwinds, we continue to grow our economy and expand our workforce.
And, today, I can announce additional policies from our Coalition team to support our national economic plan for jobs and growth.
Mr Turnbull said his government is determined to ensure none of our regional communities are left behind as we make the transition to a stronger new economy.
“… our regions must be at the frontline of the drive for innovation, jobs and growth,” Mr Turnbull said.
Our ‘Regional Jobs Fund’ is a major commitment… he added.
“As we build a stronger economy, it is vital that we also do all we can to ensure all Australians, especially young Australians, are not left behind,” he added.
So the Coalition woulds deliver a record $73.6 billion over the next four years for all Australian schools,” he said.
“Today, I can announce an additional $48 million for scholarships under the Smith Family’s Learning for Life program, to help disadvantaged students to complete year 12 and transition to work or further education and training,” he added.
“The Coalition will also invest $31 million in programs to encourage more girls and women to study and work in science, technology, engineering and mathematics,” Mr Turnbull said.
It would also help older Australians get smartphones.
He said only about one household in five, with people aged 60 or above, had a smartphone.
“To make their lives easier, to help them retain their independence, and to keep them connected to families and friends, I am announcing today a $50 million Coalition strategy to assist seniors who want to improve their digital literacy skills,” he said.
“And as announced earlier today, my Government will be investing $192 million more in front line mental health services including twelve suicide prevention sites around Australia and ten more headspace centres; and at the same time using smart phone and other technology to make these services more accessible,” he said.
This complements our support for Veterans’ mental health programs, itself a reminder that we best honour the diggers of Gallipoli and Fromelles by supporting the veterans and their families of today.
Mr Turnbull said; “only a strong Australia can be a safe Australia.
“After six years of abject Labor neglect and indecision, our continuous shipbuilding strategy will ensure Australia retains a sovereign capability to build and sustain naval vessels, securing thousands of advanced manufacturing jobs for decades to come,” he added.
Mr Turnbull said:”Labor’s abandonment of John Howard’s proven border protection policy opened the door to the people-smugglers:
The results had included:-
- 50,000 unauthorised arrivals on 800 boats,
- 1200 deaths at sea, of which we know,
- Over 8000 children put into detention,
- 17 detention centres opened, and
- An $11 billion border protection budget blowout.
“In contrast, the Coalition has restored security at the border, integrity to our immigration program – and with it, public trust,” he said.
“I am proud to announce that today marks 700 days without a successful people-smuggling venture to our country,” he added.
“I am also very proud to announce that we have removed every child from detention in Australia,” Mr Turnbull said.
Labor had failed Australia before.
“The people-smugglers are looking for the earliest sign that an Australian government will waver,” he added.
Mr Turnbull said: “our policies are tough.
“But these policies have stopped the drownings at sea, and restored the integrity of, and trust in, our large but orderly immigration and refugee programs,” he added.
To further strengthen our domestic security I announce initiatives that go to that most fundamental of liberties – the right to live without fear of violence.
Mr Turnbull also said: “my first announcement as Prime Minister was a new $100 million package to encourage all Australians to confront squarely and honestly the ugly truth of violence against women and children in our society.
“Today, I can announce a $64 million commitment to crack down on the trafficking of illegal firearms on our streets, in particular by criminal gangs,” he added.
He said he is asking Australians to make a clear choice — to back a strong and stable Coalition majority government that can press ahead with its plan for a stronger new economy.
That would deliver the economic security that enables Australians to fulfill their aspirations.
“That is why I am asking my fellow Australians at this election to support our Coalition’s National Economic Plan for a Strong New Economy,” he said.
by Alan Thornhill
There has been a sceptical response to the Federal government’s offer to spend $1 billion to save the Great Barrier Reef.
The Prime Minister, Malcolm Turnbull, and his Environment Minister, Greg Hunt, made the offer official today, with a joint announcement in Queensland.
Mr Turnbull said the reef had long been “…a great passion for both Greg Hunt and myself.
“As one of his predecessors as Environment Minister I took a great interest in the Great Barrier Reef years ago and always have done,” the Prime Minister said.
“Now what we are announcing today is the largest single investment in protecting the reef in particular in addressing these land side problems of run off,” he added.
“This is to allocate a $1 billion fund from the Clean Energy Finance Corporation which will be available for projects that will both reduce emissions, use clean energy and, of course, protect the ree,” Mr Turnbull said.
But Labor’s environment spokesman, Mark Butler, was not convinced.
“Malcolm Turnbull claims he has made the biggest ever investment in the Great Barrier Reef,” Mr Butler said.
“But it is really just the biggest ever con job.
“It provides no new investment.
“It is just a redirection of existing resources.
“This is spin and political desperation on a grand scale.
“For three years we have seen the Abbott-Turnbull Government duck, weave and avoid doing anything meaningful to address climate change,” Mr Butler said.
The Greens and a citizens’ organisation shared that view.
The Deputy Leader of the Greens, Queensland Senator Larissa Waters, said: “this is a sneaky attempt by the Turnbull Government to try to distract from the damage it is doing to the Reef by approving coal mines to export out through the Reef and cook its corals.
“All of this money is taken from the Clean Energy Finance Corporation and the government hasn’t specified how much will go to clean energy and how much will go to water quality,” Senator Waters added.
The Solar Citizen’s organisation was also unimpresse3d.
“No matter what they try and tell the Australian public, this government has no coherent plan for the shift to clean renewable power beyond 2020.
“These sort of politically driven, piecemeal policies will end up with us responding to emergencies rather t saidhan building a decent plan for our future energy needs,” Claire O’Rourke, National Director of Solar Citizens.
by Alan Thornhill
Australia’s trade performance last year wasn’t quite as bad as we all feared.
This became clear today when the Bureau of Statistics published revised figures for the nation’s services trade in 2015.
These showed that the deficit in Australia’s services trade last year was $10.1 billion.
That was 1 per cent smaller than the deficit originally reported.
Although the revision was based on technical factors, it will encourage Australia’s economists.
They have been looking for an improvement in Australia’s services trade to offset some of the losses incurred when mineral prices fell.
The Bureau explained that it is now using a more accurate method of accounting for sea freight charges.
This is now sourced from Bloomberg and the World Shipping Register, instead of the direct commissions data that was previously used.
by Alan Thornhill
Falling prices have allowed the Reserve Bank to shave interest rates.
But how well with this fit, with the Federal government’s economic policies?
We don’t know yet, because at the time of writing the Treasurer, Scott Morrison, still had not delivered his budget speech, in which he is expected to spell out those aims, in detail.
But we can say, safely, that the patience of Australian investors will be tested, in the months and years ahead.
The Reserve Bank’s decision today, to lower its cash rate from 2 to 1.75 per cent, is of historic significance, in the management of the nation’s finances.
The bank’s Governor, Glenn Stevens, was frank about the bank’s assessment of the circumstances in which it was made.
He said:” This follows information showing inflationary pressures are lower than expected.
“The global economy is continuing to grow, though at a slightly lower pace than earlier expected, with forecasts having been revised down a little further recently.
” While several advanced economies have recorded improved conditions over the past year, conditions have become more difficult for a number of emerging market economies.”
That’s not what investors are looking for, when they decide where to put their money.
Low risk and the prospect of reliable returns are more attractive, or even just acceptable prospects.
Will Mr Morrison’s budget help to produce happier circumstances of that kind?
Well, Australia is, once again, going through a time of quite basic adjustment.
The minerals boom is over.
Investors must look for fresh opportunities, in this time of adjustment.
They will be available.
But will tonight’s budget be compatible with them?
Perhaps that’s the real question.
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.
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.”
by Alan Thornhill
Tourists are coming to Australia in record numbers – and spending more when they get here.
And visitors, coming as students, are adding to the positive impact this is having on the economy.
These developments are confirmed in a report, which the Minister for Tourism and International Education, Senator Richard Colbeck released today.
He said it shows further record international arrivals, visitor nights and spending.
“The report reveals spending reached a new high of $34.8 billion, an increase of 13 per cent or ?$4.1 billion over the year,” Senator Colbeck said.
This was the strongest growth seen since 2001.
“International visitor arrivals increased 7 per cent to 6.7 million while nights were up 10 per cent, reaching 242 million during the year ending September 2015,” he said.
“The Government’s efforts to boost flight capacity, our visa reforms and focused international marketing are increasing Australia’s appeal in the growing global tourism market,” he added.
“We have also made tourism infrastructure one of five National Investment Priorities, backing the growth of a key industry which supports around a million jobs.”
“Australia’s strong international education sector is clearly having a positive impact on our tourism industry; with every international student in Australia attracting visits from friends and family,” he said.
“Visiting Australia for the purposes of education is supporting strong growth, with visitation up 19 per cent and nights up 18 per cent. Total trip spend for education visitors increased by 27 per cent for the year to $8.2 billion, which drove 43 per cent of the overall increase.”
“With approximately 600,000 international students currently enrolled onshore, and growing, that adds up to a significant contribution,” he said
Senator Colbeck said the report shows spending growth in several areas, including:-
-Education visitor spending: up 27 per cent to $8.2 billion
Employment visitor spending: up 26 per cent to $2.8 billion
Visiting friends and relatives spending: up 14 per cent to $5.8 billion and
Holiday visitor spending: up 7 per cent to $13.2 billion
China continues to lead the growth with huge increases.
“Visitor numbers are up 22 per cent to 896,000, nights up 25 per cent to 39.3 million and spend up a huge 43 per cent to $7.7 billion,” he said.
“There was record spending by visitors from 10 of Australia’s top-20 markets: New Zealand, China, the United States, Singapore, Hong Kong, India, Malaysia, Taiwan, France and Switzerland.”
“The Cricket World Cup also paid dividends this year with arrivals from India increasing 20 per cent to 213,000, nights up 35 per cent to 13.4 million and spend growing 34 per cent to $1.1 billion.”
“A further eight markets had record visitor arrivals during the year, including New Zealand (up 5 per cent to 1.2 million), the US (up 8 per cent to 551,000) and Singapore (up 4 per cent to 334,000),” he added,
by Alan Thornhill
Business optimism falls away
Business optimism has weakened as results fail to meet expectations .
This is reflected in the latest Dun & Bradstreet’s Business Expectations Survey.
The results of the survey, which were published today, suggest a fairly subdued outlook for the first quarter of 2016.
The firm reports that, as the new year approaches, business are lowering their expectations sales, profits, employees and capital investment.
It said, too, that in the September quarter, the percentage of businesses reporting an actual increase in activity minus percentage of businesses reporting an actual decrease fell short of expectations a across all components, except Selling Prices,
That exceeded expectations by a marginal 0.33 points.
Meanwhile, the actual increase in both Selling Prices and Employees exceeded expectations for the September quarter.
The firm said 25.2 per cent of businesses reported an increase in selling prices for q3, compared to the 24.2 per cent that had expected an increase.
It noted too that 23.0 per cent of businesses had reported an increase in employees for the quarter, compared to the 21.1 per cent that had expected an increase.
The firm said the muted outlook comes despite an improvement in Actual Indices for Profit, Capital Investment and Selling Prices in the September quarter compared to the June quarter.
Only the actual sales index decreased; the actual employees index remained unchanged from the previous quarter.
Adam Siddique, the Head of Group Development at Dun & Bradstreet, said business confidence remains historically strong,.
However he warned that the cooling in housing market activity might present challenges in the year ahead.
“There can be no doubt the Sydney and Melbourne housing markets are now slowing down, which is to be expected after a period of spectacular growth,’ he said.
In light of the Treasury’s recent cut to its growth forecast, from 3 per cent to 2.75 percent, it will be interesting to see how business confidence fares if this key driver of economic activity begins to fade,” Mr Siddique said.
“Housing, along with construction and other related activities, has underpinned growth following the end of the mining boom.”
“The lack of business investment in non-mining areas of the economy suggests there will be no obvious candidates to pick up the slack should this turn into a sustained easing in the housing market.”
“The recent trend of Actual and Expected results gradually aligning in the headline and component indices has continued, and this is something we’ll track with interest as we head into 2016,” Mr Siddique added.
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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