Browsing articles in "transport"
Monday 24th August 2015 - 5:50 pm
Comments Off on “We’ve paid off the house, so let’s…”

“We’ve paid off the house, so let’s…”

by Alan Thornhill

Australian families spend more as the value of their homes rises.

This conclusion is reached, in a new study the Reserve Bank published today.

The Research Discussion Paper was called “Housing Wealth Effects:Cross-sectional Evidence from New Vehicle Registrations.”

It was the work of economists Christian Gillitzer and Jin Cong Wang.

The authors say their study is important because it shows how a housing boom can spill over into something much broader.

They studied data from Sydney, Melbourne and Brisbane, comparing housing wealth to new – or near new – car registrations.

The vehicle registrations were taken as a marker for broader consumption.

That technique is used in the United States as well as Australia.

The authors say US evidence indicates that consumption of new vehicles is one of the most prominent uses of housing wealth.

And in Australia?

They note:”We have identified a robust cross-sectional relationship between changes in housing wealth and new vehicle registrations.”

The authors say, too, that rich and poor families respond differently to increases in housing wealth.

It is the poor, rather than the rich family, that is more likely to go out and buy a new car, when the value of their home rises.

Or as the two authors say:-

“Notably, the estimated relationship between new vehicle registrations and housing wealth is about four times larger at the 25th percentile of the income distribution than at the 95th percentile.

“Thus, the effect on aggregate consumption of a change in housing wealth depends on its distribution across income groups.

They add: “We believe this is the first evidence outside of the United States of heterogeneity in MPCs (marginal propensity to consume) by income group for housing wealth.”

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Thursday 20th August 2015 - 12:34 pm
Comments Off on New rules for foreign investors:Joe Hockey explains

New rules for foreign investors:Joe Hockey explains

by Alan Thornhill

The Tax Office will get new compliance powers in an investment reform package that the Treasurer, Joe Hockey, introduced into Federal parliament today.

Mr Hockey also said the Foreign Investment Review Board, too, would be given extra powers, so that Australians could be assured that the rules governing foreign investment would be properly enforced.

Addressing parliament, Mr Hockey said:” Mr Speaker, Australians expect our foreign investment rules to be strong, effective and enforceable.

“Our foreign investment rules have not been significantly revised since introduction in 1975 and have not kept pace with the changes in global investment.

“The Government recognises the changing landscape and has already taken active steps to enforce the existing rules and act decisively on foreign investment breaches,” Mr Hockey said.

“One such step is to encourage those who are in breach to come forward and self-report,” the Treasurer added.

” In so doing, we have announced a reduced penalty period for foreign investors who come forward and self-report non-compliance before 30 November 2015. ”

“This legislative package shall ensure Australia maintains a welcoming environment for investment – but one that ensures that the investment is not contrary to our national interest,” Mr Hockey said.

“These reforms shall ensure that from 1 December 2015, Australia’s foreign investment framework is more modern, simple and effective.

“Importantly, it will add integrity to the system, so that everybody plays by the rules.

“With integrity comes compliance,” the Treasurer said.

“… consistent with the recommendations of the House Economics Committee, the Bill introduces a range of new and stricter penalties that are commensurate to the severity of the breach and ensure that those who break the rules do not profit by their actions,” he added.

“Criminal penalties will be increased from $90,000 to $135,000 for individuals and will be supplemented by civil pecuniary penalties and infringement notices for less serious breaches of the residential real estate rules.

“Third parties such as real estate agents, migration agents, conveyancers and lawyers who knowingly assist a foreign investor to breach the rules will also now be subject to both civil and criminal penalties.”

Wednesday 19th August 2015 - 6:06 pm
Comments Off on Driver-less cars:”coming soon”

Driver-less cars:”coming soon”

by Alan Thornhill

We can expect to see driver-less vehicles on Australian roads soon, according to the Federal Treasurer, Joe Hockey.

He was addressing the Australian Automotive National Summit in Canberra today.

Mr Hockey said:””In November, the first Australian trial of driver-less technology will take place on the Southern Expressway in Adelaide in November and more would follow across the country.”

The benefits would be widespread across the economy.

“Driver-less cars mean freedom for our older Australians, who will be able to get from place to place with ease,” he said.

But the new technology would require changes to road rules.

“In response, the South Australian Government has said it wants to update road laws to lead the facilitation of this new technology,” Mr Hockey said.

But the new technologies could make our roads safer.

Mr Hockey said that, at present, nine out of every 10 accidents are caused by human error, such as speeding.

He said new technologies, like these, also offer opportunities for Australian companies to increase their competiveness.

“These technologies will help address the productivity challenge in our economy,” Mr Hockey said.

“For example, Rio Tinto has been operating massive mining trucks in Northern Australia from an operations centre at Perth Airport.

“The trucks operate seamlessly 24 hours a day — and the savings have been enormous,” Mr Hockey said.

“Logistics and transport without drivers may sound threatening for some,” he added.

“But the opportunity to re-skill and up-skill former drivers of trucks and cars will result in more jobs and better pay for workers in that field.”

Thursday 13th August 2015 - 11:12 am
Comments Off on Australia joins new Asian bank

Australia joins new Asian bank

by Alan Thornhill

Joe Hockey says Asia will face an $US8 trillion infrastructure financing shortfall over the coming decade.

To help deal with that gap, the Treasurer said, Australia would become a founding member of the Asian Infrastructure Development Bank.

He introduced enabling legislation into Federal Parliament today.

Mr Hockey said this would be “a significant step to address this challenge.”

” This is a global multilateral initiative that will strive to bring best practice for the delivery of much-needed infrastructure to the region,” he added.

” It will catalyse private sector investment and will co-finance projects with other development banks and private sector financiers.”

Mr Hockey said:”Australia’s prosperity and economic growth is tied closely to the region.

“It is therefore important that Australia is involved in major regional economic initiatives like the Bank.

“On the 29th of June this year, I gave effect to the Government’s commitment to join the AIDB by being the first to sign the Bank’s Articles of Agreement in Beijing.”

Mr Hockey said 49 other countries had followed.

“The decision to join the Bank was made following extensive discussions with key partners inside and outside the region.

“This included participating in negotiations on the Bank’s design with 56 other prospective founding member countries.

“These negotiations resulted in a commitment that the Bank will be based on best practice.

“This will ensure that all members will be involved in the direction and decision making of the Bank,” Mr Hockey said.

“As the fifth-largest regional shareholder of the Bank, Australia will be able to influence the Bank’s decisions and strategic direction,” he added.

Tuesday 11th August 2015 - 8:13 am
Comments Off on The Treasury Secretary’s warning

The Treasury Secretary’s warning

by Alan Thornhill

John Fraser is warning Australian business leaders not to place all their hopes in the Asia Pacific.

The Treasury Secretary also urged them to remember that “business as usual” won’t guarantee success in future.

Addressing a business forum in Melbourne yesterday, Mr Fraser first assessed prospects for business in Europe, then said:” closer to home, we need to keep close watch on the prospects of the Asia-Pacific region more generally.

“You might think this is an unusual statement to make, given that the region will remain the fastest-growing in the immediate-term at least.

“But growth has started to slow in some of the major economies in the region. And there are different issues driving the change in many of these countries.

“And in some countries, crucial reforms to address slowing growth have been stalled.

“That is why we can’t put all of our eggs in the ‘Asia-Pacific basket.’”

Mr Fraser also noted that:” the Australian economy is now entering its 25th consecutive year of growth.

“This is the second longest continuous period of growth of any advanced economy in the world.”

And he said its short term outlook is better than that of many other countries.

But he warned against complacency.

“In essence, we need to do more to secure our future prosperity,” Mr Fraser said.

“Global growth remains subdued and a number of major economies face long-term challenges.

“This is not new.

“It has been seven years since the collapse of Lehman Brothers and yet the global economy continues to struggle to regain rates of growth seen prior to the global financial crisis.

“This is not to say there aren’t any bright spots.

“The US economy is one of them.

“The US labour market is strengthening and recent data suggest renewed momentum.”

Tuesday 4th August 2015 - 4:47 pm
Comments Off on Rates:where we are now

Rates:where we are now

by Alan Thornhill

With inflation cotained – and growth low – the Reserve Bank has again decided to keep its marker interest rate on hold at 2 per cent.

In a statement today, after a bank board meeting, its Governor, Glenn Stevens, said:” While the rate of growth has been somewhat below longer-term averages, it has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year.”

Mr Stevens also said:” Recent information confirms that domestic inflationary pressures have been contained.

“That should remain the case for some time, given the very slow growth in labour costs.

“Inflation is thus forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate.”

The bank aims to keep Australia’s underlying inflation rate between 2 and 3 per cent, over the course of a business cycle.

Mr Stevens said:”” In such circumstances, monetary policy needs to be accommodative.

” Low interest rates are acting to support borrowing and spending.

” Credit is recording moderate growth overall, with growth in lending to the housing market broadly steady over recent months.”

The Reserve Bank Governor then noted that:” Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities.”

He said:” The Bank is working with other regulators to assess and contain risks that may arise from the housing market.”

And he added:” In other asset markets, prices for equities and commercial property have been supported by lower long-term interest rates.

” The Australian dollar is adjusting to the significant declines in key commodity prices,” Mr Stevens said.

He said:” The Board today judged that leaving the cash rate unchanged was appropriate at this meeting.

” Further information on economic and financial conditions to be received over the period ahead will inform the Board’s ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.”

Tuesday 4th August 2015 - 1:33 pm
Comments Off on What we’re buying

What we’re buying

by Alan Thornhill

Home renovators and gardeners boosted Australia’s retail sales in June, contributing heavily to the 0.7 per cent rise seen in the month.

This seasonally adjusted figure – which the Bureau of Statistics published today – was far stronger than the rise – of just 0.4 per cent – recorded in May.

The Bureau noted that we spent 2.8 per cent more on hardware building materials and garden supplies in June than we did in May, on seasonally adjusted figures.

We also spent 2.4 per cent more on electrical and electronic goods and 1.2 per cent more on furniture and floor coverings.

However we were much more careful with what we spent in our local supermarkets.

The Bureau reported, once again on seasonally adjusted figures, that we spent 0.4 per cent less there in June than we had in May.

However we increased our spending in other specialised food stores by 1.8 per cent.

We also spent 0.8 per cent more on liquor.

The Bureau also noted that we spent 1.2 per cent more in the nation’s cafes, restaurants and take away food stores, on seasonally adjusted estimates, in June.

It said, too, that online retail sales contributed 3.3 per cent to total retail turnover during the month, on original figures.

Tuesday 4th August 2015 - 8:01 am
Comments Off on A new light on the economic horizon

A new light on the economic horizon

by Alan Thornhill

Spears of light are starting to shine through the dark economic clouds that descended with the global economic crisis eight years ago.

The strongest so far, perhaps, appeared today in the results of the latest Dun & Bradstreet Survey of Business Expectations, for the fourth quarter of this year.

It showed that the Sales Expectations Index for the fourth quarter surged to 40.8 points, up from 28.6 points last quarter and to the highest level recorded since the fourth quarter of 2003.

Some 48 per cent of companies surveyed now expect to see an increase in their sales in the fourth quarter of 2015.

In a further positive sign, the Actual Sales Price Index leapt to 17.6 points, up from 10.1 points in the prior quarter but still below the 2014 peak of 24.7 points.

According to the survey, 36 per cent of businesses increased sales during the second quarter, while 19 per cent saw a drop in sales.

Adam Siddique, Head of Corporate Affairs at Dun & Bradstreet, said the findings indicate the corporate sector may be emerging from its recent state of inertia.

“The strong survey results suggest businesses have a brighter short-term outlook than we’ve seen in recent months, which is a positive sign for increased economic activity during the second half of the year,” Mr Siddique said.

“The upward trajectory broadly reflected throughout the survey results is encouraging.

“The sharp rise in sales expectations is particularly noteworthy and may indicate the recently announced budget measures for small to medium-sized businesses are gaining traction,” Mr Siddique added.

But the survey also showed that the spike in the Sales Expectations Index was not uniformly reflected across all sectors, with the Business Expectations Survey revealing sales expectations in the wholesale sector eased slightly lower to 33.4 points, down from 34.2 in the prior quarter and comfortably below the 41.5 points recorded for the same period last year.


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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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