by Alan Thornhill
Treasury Chief, John Fraser, admitted today that he is worried that Australians are too complacent about their nation’s long term prospects.
Addressing economists in Brisbane, Mr Fraser said:” My message today is rather basic, possibly boring and it is not novel.
“Put simply, I worry that we are overly complacent about our longer-term outlook.”
Mr Fraser said this is especially so as Australians live in a region that’s pushing ahead at a remarkable rate of knots and may leave us behind.
“Some of this complacency can be explained by the fact that the Australian economy is now entering its 25th consecutive year of growth,” the Treasury Secretary said.
“This is the second longest continuous period of growth of any advanced economy in the world.
“And the growth continues.
“There will always be doubters but the recent Budget economic forecasts still describe one of the better shorter-term economic outlooks in the world.
“And data since the Budget have not given Treasury a reason to rethink the thrust of these forecasts.
“The March quarter National Accounts confirm there is increasingly broad-based momentum in the Australian economy – the real economy grew by 0.9 per cent in the quarter, to be 2.3 per cent higher over the past year.
“And labour market outcomes have been a little better than expected,” Mr Fraser said.
“There will always be risks to the economic outlook but, for this year, there is little reason to be a doomsayer,” he added.
“But we are, of course, keeping a keen eye on international developments, particularly in China and Europe, “Mr Fraser said.
These might affect the global outlook and global confidence, which could have flow-on effects to Australia.
“Having said this, our current and recent record should not distract us from recognising and addressing the deep challenges that lie before us,” Mr Fraser said.
“Laying the foundations for future growth is of great strategic importance if we are going to take our full place in the fastest growing region in the world,” he added.
Mr Fraser said sustained, long-term growth would clearly require structural reform.
by Alan Thornhill
Jay Weatherill is coming to Canberra today as a man with a plan.
And the South Australian Premier was prepared to speak about it, in a statement early today.
Revealing a few highlights, from the speech he will deliver at the National Press Club at noon, Mr Weatherill said:” …people across Australia want good public hospitals and schools, they want good roads and housing.
“… they care less about which level of Government is delivering it.
” Reform of our Federation is about ensuring the relationship between the Commonwealth and the States is best placed to help us build a new economy for this nation.
“…one that is open and high growth.
“It is about how we can assure the best quality of services in our community and develop a highly skilled workforce.
“It is about having a taxation system that doesn’t punish those who want to grow and invest,but also paying for high-quality services that are delivered fairly across the country.
“Today I will be focusing on the areas of health, education, infrastructure and housing, providing practical examples of how these outcomes can be advanced.”
“The Commonwealth has torn up $80 billion in health and education agreements with the States.
“Our proposals will help to fund this gap.
“But we also need to find new measures to create revenue.”
Mr Weatherill will say South Australia is willing to work constructively with the other States and the Federal Government to deliver on the vision of these reforms.
“I will always fight for South Australia’s best interests, but I believe the public has grown tired of the endless blame game between levels of government,” he said.
“That is why I am bringing constructive ideas to the table, and I will be advancing these ideas at the COAG Leaders’ Retreat later this month.”
Position papers on the four key areas will be released after the speech.
by Alan Thornhill
Australian manufacturers are finding their feet again.
A new survey of Industrial trends, in the three months to the end of June, reflected strengthening conditions for the third consecutive quarter.
The results of the survey, conducted by Westpac and the Australian Chamber of Commerce and Industry, were published today.
Its Composite index rose 2.2 points in the June quarter to 58.4.
This result builds on the positive tone of the previous two quarters.
The strengthening of the survey’s Composite index was centred on new orders and output, as well as overtime.
The survey showed that the manufacturing sector is benefiting from a strong upswing in home building activity and some improvement in service sector investment.
Another plus is the small business package in the 2015 Federal Budget.
However, the survey also showed that the current cycle remains constrained.
Consumer spending is below trend, mining investment is turning down sharply and global fragilities persist.
However Kate Carnell, CEO of ACCI, said:“This latest survey shows that things are looking positive for Australia’s industrial production.”
“The combination of low interest rates, an easing local currency, support in the Federal Budget and rising home building activity is creating a virtuous groundswell.
“We finally have some reasons for our manufacturers to smile,” Ms Carnell said.
by Alan Thornhill
Tony Abbott declared today that 99.9 per cent of Australia’s resource, energy and manufacturing exports would enter China duty free within four years.
The Prime Minister was welcoming a new free trade agreement that Australia has just signed with China, which he said is now by far Australia’s biggest customer.
Business and farm leaders enthusiastically welcomed the deal.
The Chief Executive Officer of the Australian Chamber of Commerce and Industry, Kate Carnell, said:” “This landmark trade deal opens up lots of exciting opportunities for Australian businesses.
“We encourage all businesses, large and small, to look carefully at the China market to consider the potential it offers them to expand.
“The deal also will benefit Australian consumers by giving them cheaper and easier access to goods and services produced in China.”
And the President of the National Farmers’ Federation, Brent Finlay, said Australia’s farm exports to China had doubled over five years to be worth more than $7 billion in 2013.
“Completing this agreement is an outstanding achievement that will build Australia’s important trading future with China and provide significantly improved international market access for Australian agricultural goods, underpinning agriculture as a key pillar of the economy,” Mr Finlay added.
However Mr Abbott earned a mild rebuke in Parliament from the Speaker, Bronwyn Bishop, when he proposed a round of applause for his Trade Minister, Andrew Robb, who had led Australian side, in talks on the then proposed agreement.
The Prime Minister then stood – and led the clapping, himself.
Ms Bishop smiled, but said she did not want this to be taken as a precedent.
However when she later welcomed Chinese negotiators, who were in the distinguished visitors gallery, MPs once again applauded.
Mr Abbott said Mr Robb had now negotiated “a trifecta” of free trade agreements, as similar deals had already been concluded with Japan and South Korea.
He said this would mean more trade and stronger economic growth for Australia, and better pay for Australian workers.
“And I trust that today our Chinese friends will enjoy the fine beef and the good wine that will soon be more readily enjoyed by their countrymen,” Mr Abbott said.
“As I said, this is a momentous day,” he added.
“We seize this opportunity of more trade and more investment with China.
“And we complete a trifecta of with trade with our major trading partners, not only China but also Japan and South Korea.”
Mr Abbott said these markets – together – account for more than 60 per cent of Australia’s export goods.
We again show that Australia is open for business and that we deliver more opportunities for Australian companies and the people they employ.
by Alan Thornhill
The Federal government has hailed the Senate’s decision today to pass its $5.5 billion budget package of assistance measures for small business.
The Prime Minister, Tony Abbott, and the Treasurer, Joe Hockey, both welcomed the decision.
Mr Abbott said:”The Growing Jobs and Small Business Package is the centre piece of our ‘have a go’ Budget and the next step in our plan to build a strong, safe and prosperous future for all Australians.
“It cuts the small business company tax rate to its lowest level in almost 50 years,” he added.
Mr Hockey said:” All small businesses can immediately deduct every asset costing less than $20,000 that they have purchased since Budget night and can continue to do so until the end of June 2017.”
He also said small companies with a turnover of less than $2 million will benefit from a 1.5 per cent tax cut from 1 July 2015.
“This will mean we have delivered the lowest tax rate to small business since 1967,” Mr Hockey said.
He described the package as “historic.”
The $5.5 billion Jobs and Small Business package is the biggest small business package in our nation’s history,” Mr Hockey said.
He said said small businesses, throughout Australia, had been energised by the measures announced in the budget.
“These measures in our Budget had given them the confidence to carefully invest in growing their business,” the Treasurer said.
“The Government is committed to ensuring Australia is the very best place to start and grow a small business,” Mr Hockey said.
“Our Jobs and Small Business package is creating the right conditions for Australian businesses to thrive and grow,” he added.
by Alan Thornhill
Tony Abbott refused – again – today to say whether Australian officials had paid people smugglers to turn their boat back towards Indonesia.
Addressing reporters, at a doorstop interview in Canberra, the Prime Minister said:” There’s really only one thing to say here and that is that we have stopped the boats.
“That’s good for Australia
“It’s good for Indonesia
“And it’s particularly good for all of those who want to see a better world.
“Because if the boats start again, the deaths start again.
“None of us should want to see deaths at sea and the only way to avoid that is to ensure that the boats stay stopped, “Mr Abbott said.
Indonesia has asked the Australian government if reports of such payments are true.
The Opposition Leader, Bill Shorten, is also demanding clarity on the issue.
He said:”It is now time for Mr Abbott to make it clear.
“Has taxpayers’ money, Australian taxpayers’ money, been paid by the Abbott Government to criminal people smugglers or not?
“Australians deserve that answer,” Mr Shorten said.
by Alan Thornhill
Joe Hockey says Australia has now become one of the fastest growing economies in the developed world.
The Treasurer was speaking to reporters in Canberra, on the latest national account figures.
The Bureau of Statistics, which published them, said that Australia had chalked up 0.9 per cent growth in the three months to the end of March, on seasonally adjusted figures.
It also calculated that gross domestic product – in the March quarter of this year – was 2.3 per cent above that seen in the same quarter last year.
Mr Hockey said these figures show that the government’s economic policies are working.
He said:”This growth is broad-based.
“Growth in exports, household spending, services and new dwellings confirms that the Government’s economic plan is working.
“Indeed, Australia’s 0.9 per cent growth in the March quarter makes us one of the fastest growing economies in the developed world.
“Exports continue to support our economy,” the Treasurer said.
These grew by 5 per cent in the March quarter.
“…and this is the strongest quarterly result in 15 years,” Mr Hockey said.
” In part, they highlight the dividends Australia is reaping from the mining investment boom,” he added.
“More and more resource projects are hitting full production, resulting in record-breaking mining exports.
“But there is a more important story in these figures.
“On numerous occasions I have highlighted the huge potential of our services sector, which represents 70 per cent of our economy but just 17 per cent of our exports.
“Significantly, services exports are up 8 per cent over the past year in line with rising demand from Asia.
“This is the fastest growth since 2007,” Mr Hockey said.
“There is growth in areas such as tourism, education and professional services, which are set to become increasingly important drivers of growth in the future.”
Mr Hockey said this would be supported by our free-trade agreements with China, Japan and Korea. Once again I say our economic plan is working. The transition in our economy is being managed well.
The Treasurer also said:” consumer spending is continuing to strengthen.
“Higher household spending is being supported by low interest rates and rising household wealth,” Mr Hockey said.
by Alan Thornhill
The wages of Australian workers fell in the first three months of this year, on seasonally adjusted figures the Bureau of Statistics published today.
The fall was – perhaps – the most striking figure in a mostly dismal batch of business indicators, produced by the Bureau.
Although the fall, in the March quarter, was apparently small, at 0.1 per cent, it was also remarkable, as it was the first fall in Australian wages recorded since the September quarter of 2009, when the pain of the global economic crisis was at a peak.
It also reflected real pressure on family budgets, as prices – on the Consumer Price Index – rose by 0.2 per cent in that time.
Wages did rise – by 1.4 per cent – in the 12 months to the end of March.
But that barely covered price rises – of 1.3 per cent – in the same time.
Employees were not alone in their misery, though, by any means.
The Bureau also reported that Australian manufacturers suffered a 4.1 per cent fall in their sales in the first three months of this year – and a 5.1 per cent drop in the 12 months to the end of March.
Wholesalers did better, with a 1.9 per cent rise in their sales in the March quarter and a 3.3 per cent rise over the year.
Company profits, though, rose by a bare 0.2 per cent in the quarter – and fell by 7.5 per cent over the year.
The building industry, which has been a rare bright spot in the Australian economy, suffered a set back in April, when home building approvals fell by 4.4 per cent, on seasonally adjusted figures produced by the Bureau.
But they rose by 16.3 per cent over the year.
Australia’s tourist trade showed a distinct bounce, though, when short term visitor arrivals, hit their highest January level ever.
The Bureau reported that 584,800 visitors arrived that month, with many likely to have counted the lower $A among Australia’s attractions.
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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