• Australia’s new housing problems
• Australians to hit the shops soon:Access Economics
• Parties bid for new mothers’ votes
• Super funds “miked:” Report
• PM repeats tax pledge
• Consumers take heart as good numbers roll in
• Australian economy chalks up 2.7 per cent growth for 2009
• More rate rises to come
• Retailers lure shoppers back
• Super:how it stacks up now
• Australia’s recovery deepens
• Home affordability slumps
• Shop around for your new home loan
• Australians moving past pensions
• Credit cards:Australians discover caution
• Rising health and food bills hit older Australians very hard
• Why neglecting your super isn’t a super idea

The latest

The Dow Jones index rose 11.86 points to 10,564.38

The $A was fetching 91.35US cents early today

Indonesia’s President to address a joint sitting of the Australian parliament today

This week

Today- Housing finance, February

Tomorrow  Unemployment figures, February, RBA March bulletin

Pension payments rise from Saturday

Many more stories, see the separate categories=================>

Thousands of Australians, close to retirement, were devastated last year when they looked at their prospective superannuation payouts.

They were shocked to find that they would be getting much less than they expected.

This was one of the hardest blows delivered by the stock market crash.

Australia’s superannuation funds also suffered, as these events badly damaged their credibility.

What, though, has happened since then?

And how does superannuation stack up now, as a medium to long term investment?

Jeff Bresnahan – and his research team at Superratings – have been taking a very close look at these issues.

The results are published on its website www.superratings.com.au.

It’s well worth taking a look.

The situation now is well illustrated in the title of this research agency’s latest report, called The hit and miss game of super performance.

As might be expected, in times like these, the short term performance of Australia’s major superannuation funds is not impressive.

In January, for example, they slipped backwards by 2.17 per cent.

In the 12 months to January31, though, they gained 12.66 per cent.

That gain, of course, was from a post-crash position that no-one likes to think about now.

The mid to longer term results though are more interesting.

On a rolling 5 year basis, to the end of January, the same funds were chalking up average advances of 4.3 per cent a year.

And on rolling 7 year calculations that result rises to 6.7 per cent a year.

As Mr Bresnahan, himself, says that last result, in particular, represents real gains in wealth, after allowing for inflation.

The essential message here, perhaps, is that superannuation is a mid to long term investment, for most people.

So, perhaps, that is the way it is best assessed – despite all the – mostly true – horror stories of the past year or so.

Malcolm Turnbull is warning that the Coalition’s climate change policy could well lead to higher taxes.

If it did not, there would have to be a cut in government services, the former Opposition Leader said.

Mr Turnbull also said the “command model” of carbon reduction, that the Coalition has adopted, might not reduce emissions, either.

He was speaking on the ABC television program Q & A.

Mr Turnbull narrowly lost his leadership of the Liberal Party, to the present leader, Tony Abbott, over this issue.

And he still supports the emissions trading model, which the Liberal party  abandoned, at that time.

The government, too, supports an emissions trading scheme.

“I believe we owe it to our children – and their children – to take care of the planet,” Mr Turnbull said.

However it was his comments on the tax implications of the Coalition’s policy that will strike hardest, in the political debate over climate change.

That’s because Mr Abbott’s main selling point, for the Coalition’s scheme is that the government’s plan is little more than “a great big tax on everything.”

Mr Turnbull warned, though, that the cost of the  Coalition’s plan – to offer payments to companies, to encourage them to  reduce their emmissions, would  have to be met by taxpayers, one way or another.

The cost could only be met in one of two ways.

These were  higher taxes, or cuts in government services, Mr Turnbull said.

Australia’s job market surged last month.

The Australian Bureau of Statistics reports that 52,700 Australians found jobs in January – and the number unemployed fell by 22,300.

This meant that the nation’s unemployment fell from 5.5 per cent in December to 5.3 per cent in January.

The nation’s critically important work force participation rate held steady at 65.3 per cent.

These are all seasonally adjusted figures.

Many of those who got jobs in January, though, had to be content with part time work.

The Bureau reported that part time employment increased by 36,900 during the month, while full time employment rose by just 15,900.

Even so, the figures were better than many economists had expected.

The bureau also reported that the number of Australians seeking full time work fell by 17,900 during the month, while the number looking for part time work fell by 4,400.

Western civilisation owes a huge debt to ancient Greece.

But it’s the level of debt that modern Greece has chalked up,that is worrying financial markets at present.

Greece is finding it difficult to meet its obligations, in the wake of the global financial crisis.

And international markets are unlikely to stabilise, until that situation is addressed.

Sharp falls, on world stock markets last week showed that very clearly.

So a meeting to be held in Europe on Thursday, their time, will be watched very closely.

The main actors at it will be Jean-Claude Trichet, President of the European Central Bank and the finance ministers of the EU’s financially strongest nations, France and Germany.

The world is looking to France and Germany to rescue their Southern neighbour.

Allowing Greece to default on its debts is unthinkable.

Bank collapses are bad enough. Defaults on the sovereign debt of nations, are much worse.  They could send financial markets into outright panic.

That’s why it will not be allowed to happen.

There is no doubt, though, that the EU, itself, will be tested at that meeting.

The Federal Treasurer, Wayne Swan, carefully avoided direct mention of this danger at the weekend.

He merely warned Australians not to be complacent about economic recovery.

But he was confident enough to announce that the Federal government will withdrawing the bank and State funding guarantees that it put in place, after the global economic crisis struck.

Mr Swan also welcomed the stronger domestic growth forecasts that the Reserve Bank released on Friday.

He described the withdrawal of the guarantees as both “very significant” and “market sensitive.”

“I’m pleased to mark a very significant milestone in Australia’s recovery from the worst global recession in over 75 years,” the Treasurer said.

But he added a rider.

“I want to be very clear to all Australians that today’s announcement does not impact on the Financial Claims Scheme.

“This scheme will continue giving over 16 million Australians certainty over their deposits of up to $1 million, with that cap to be reviewed in October 2011.

“This deposit guarantee provides automatic free coverage for an estimated 99.5 per cent of all deposits.  It’s very important to distinguish that from the removal of the wholesale funding guarantee and the large deposit guarantee.

“Over the past 18 months, our financial system has proved itself one of the strongest in the world, thanks in large part to sound regulation and first-class supervision,” Mr Swan said.

“But we have been by no means immune from the effects of the global financial crisis,” he added.
More at www.treasurer.gov.au

Australians look for a strong coffee when times get tough.

And perhaps a light meal, as well.

The Australian Bureau of Statistics has confirmed this, noting that the nation’s cafes, restaurants and take away food stores have continued to record strong trend growth.

In fact, their trade has now increased by at least 1 per cent a month, in trend terms, over the past 12 months.

The bureau also noted that, on raw figures, turnover in Australia’s shops increased by 24.5 per cent in December, as Australians bought their Christmas presents.

After seasonal adjustment, though, retail sales in December actually fell by 0.7 per cent.

But that figure did no discourage the Federal Treasurer, Wayne Swan.

He told Parliament that, in value terms, retail sales in December 2009 were 2.1 per cent higher than those of the same month, in the previous year.

Mr Swan also said that retail sales in the December quarter were 1.1 per cent higher than those of the September quarter.

He said, too, that building approval figures, that the Bureau has just released, also reflect the relatively strong performance of the Australian economy.

These show that total home building approvals rose by 2.2 per cent in December to a level 53.3 per cent higher than that of December 2008.

The government’s subsidy for first home buyers undoubtedly contributed to that result.

The Housing Industry Association was also pleased, saying building approvals are “moving in the right direction.”

Chris Richardson is speaking more frankly about the need for Federal spending cuts, than Kevin Rudd.

The Prime Minister has been delivering a rather obtuse message over the past week, warning that Australia’s productivity must rise over the years ahead, to offset the challenges that Australia’s rapidly ageing population will present to the Federal budget.

That baffled many people because productivity is a technical economists’ word meaning the relationship between output and industrial units of things like labour and capital.

Mr Richardson, a  former Treasury official, who now guides the private forecaster,  Access Economics,  would, certainly knows that. But the many of the people he might meet, on his  bus to work, would not.

Access, though, clearly endorses growing calls for cuts in Federal spending, saying they will be needed in both this year’s Federal budget and  the next,  noting that the first will come before the next Federal election and the second afterwards.

Make no mistake.

If the Federal government does make big cuts in its spending  this year, as Access recommends, your family’s finances will be affected too, one way or another.

In the private forecaster’s latest Business Outlook, published today, Richardson says this all comes down to a single word.

“Courage.”

Richardson has been around Canberra long enough to know that this word will set off alarms.

He would remember, too, that  Sir Humphrey Appleby, of the Yes Minister series,  defined “a courageous decision” by any government, as as one that will cost it the next election.

The forecasster’s message, on Federal spending, was blunt.

“There is a big need to save taxpayers’ money, because longer term Federal finances are skint,” it said.

In a string of speeches delivered around the nation, in the week leading up to Australia Day, Mr Rudd, virtually accepted that.

And, while he isn’t saying  much about spending cuts, his government has, in fact, already started to rein in its spending.

It has done that very quietly.

The cuts also go well beyond the gradual phasing out of its stimulus package, which is already well under way, as the Federal Treasurer, Wayne Swan, has noted.

Some changes go right to the heart of the system.

Australians, who believe they might be entitled to some payments from Centrelink,  for example, could once arrange a private meeting with an adviser from this welfare agency,to find out precisely what their entitlements are.

Now, people seeking that agency’s advice, are told to go to its website, instead,  to review their situation.

That’s no easy task, for a 63 year old Italian woman, who is not  all that familiar with English, let alone the internet.

The government will have no shortage of ideas, though, if  it does decide to cut spending in its May budget.

That’s because a Razor Gang, headed by the Federal Finance and Deregulation Minister, Lindsay Tanner, has been working quietly on proposed spending cuts, since last September.

Access says the Federal opposition, too, has responsibilities, when it comes to Federal spending cuts.

“…it is always…easy to argue for spending cuts in in general and to disagree with them in the particular,” it warns.

“So let’s hope that Canberra’s New Year resolution, on both sides of the Hill, is for a little extra courage, it adds.

What else, then, does Access see ahead?

• A “mild” recovery this year, rather than a “wild”  boom, for one thing.

That might dampen hopes in some places, like Western Australia, where the local newspaper is already predicting a return to roaring times, in the near future.

• Access says, too, that Australia will benefit from  a resurgence in China, which chalked up very strong growth last year.

But there will be a price, in the form of greater exposure to China, if anything goes wrong there.

“If China sneezes, Australia will catch pneumonia,” Access  says.

• Recovery in the retail sector will be muted, Access says, noting that Australia’s shopkeepers have already benefited greatly, from Federal stimulus spending.

• It says, too, that business will continue to be restrained by the banks, as they struggle to overcome setbacks suffered in the global financial crisis.

• It warned also that Australia’s interest rates would gradually return to  more normal levels, as the Australian economy gradually recovers.

More at www.accesseconomics.com.au

Australia’s married women do most of their paid work in their twenties and forties.

This is confirmed in research by Dr Lixin Cai, which the Productivity Commission has just published as part of its visiting academics program.

Economists have known for years that married women have been making ever bigger contributions to both Australia’s national economy and their own families’ finances for decades, by increasingly taking jobs outside their homes.

But detailed research on this important social and economic trend has been scarce.

That has meant that successive governments have found it hard to draw up appropriate policies to deal with this major social phenomenon.

Lixin Cai’s works will help to plug the gaps.

Her paper, called Work Choices of Married Women:Drivers of Change, adds much urgently needed detail to previous studies.

It shows, for example, that just 15 per cent of Australia’s married women take full time jobs outside the home, while they have a child under three.

And fewer than 18 per cent do so when they have even one child aged three to five.

Dr Cai’s research also shows that the participation of Australia’s married women in the nation’s workforce falls off rapidly above the age of 56.

Almost 47 per cent of married women, in that age group, do not take paid work outside their homes.

It is that figure, above all, that will grab Kevin Rudd’s attention.

The Prime Minister has been touring the country over the past week, telling Australians that the nation’s rapidly ageing population will put heavy pressure on Federal finances in the years ahead.

He wants all Australians – including married women – to remain financially independent as long as possible.   And for most of us, that means staying at work.

So don’t be too surprised, later this year, if the Rudd government offers some nice tax breaks to encourage older Australians to keep working.

Dr Cai’s conclusions may not be revolutionary, but they will be welcomed.

She confirms, for example, that the age of children, education levels, partners’ incomes and proficiency with English, all affect married women’s participation in Australia’s  workforce, as do age and health.

Her paper is not always an easy read for those who are not academics. But  Dr Cai publishes enough of her sums to allow her peers to tick, or fail, her work.

That must be respected.

There will still be strong public interest,though,  in Dr Cai’s conclusions.

That’s because she has much to say about the way married Australian women take full or part time employment, over the course of their life and family cycles.

She  reports, for example, that between the ages of 18 and 25,  43 per cent  of Australia’s married women have full time employment, while  23 per cent have part time work.

Only 34 per cent  in this age group, are not employed. (Some might be studying).

The proportion working full time drops to just 32 per cent, among  26 to 35 year olds, while another 34 per cent have  time jobs.

Once again 34 per cent do not have paid work.

Among  36 to 45 year olds, 30 per cent have  full time jobs, outside the home, while  45 per cent have part time employment.

Only 25 per cent do not have paid work.

With 46 to 55 year olds, 38 per cent have full time outside jobs, while another 39 per cent are working part time.

Only 23 per cent do not have paid jobs.

See the full report at www.pc.gov.au

Australia’s rapidly ageing population will make faster productivity growth a necessity, the Prime Minister Kevin Rudd says.

He made the declaration yesterday, in a pre-Australia Day speech, that he delivered in Melbourne.

Developing a theme he clearly means to take to the next Federal election, later this year, Mr Rudd said Australia had chalked up strong productivity growth in the time of the Hawke and Keating governments.

But that growth had eased in the time of the Howard government, Mr Rudd said.

He based much of his speech on a still to be released report, that is to be called Australia to 2050:Future Challenges.

Mr Rudd said the report, which his Treasurer Wayne Swan, will publish soon, would analyse the long term challenges Australia would face in the first half of the new Century.

He said the nation’s population would grow from its present 22 million, to 36 million by then.

Mr Rudd said, too, that in 1970, Australia had 7.5 people of working age for every person aged 65 or over.

But by 2050, there would be just 2.7 working people for every person of the present retirement age.

“Unless we make big changes, we will either generate large, unsustainable budget deficits into the second quarter of the century, or else we’ll need to reduce government services – including health services – as the needs of an ageing population become greater,” the Prime Minister said.

Australia must take decisive action to drive productivity growth forward – to improve living standards, to deliver better services while keeping the Budget on a sustainable footing, and to improve Australia’s international competitiveness.”

Mr Rudd said the Government had already begun investing in the key drivers of productivity in its first two years in office.

He said it had done that by:-

• investing in record levels of long-term nation-building economic infrastructure – more than $18 billion worth of investments, including in roads, rail and ports
• implementing an education revolution, doubling the investment in Australian schools over the next five years, and increasing overall real investment in education by over 50 per cent;
• investing in business innovation, including innovative manufacturing and helping businesses use technology to work smarter and faster wherever they are, through the high-speed National Broadband Network, and

• implementing microeconomic reforms to cut red tape for business and build a seamless national economy.

Fuel prices are still a big item in most family budgets.

So how can you reduce the costs of essential car travel?

Converting your car to LPG is one way.

The figures stack up well.

Currently, a litre of unleaded petrol will cost at least 124.7 cents in Sydney.

But LPG is selling for prices as low as 57.9 cents a litre, in the same market.

In real life, though, the comparisons are never quite that simple.

Fuel consumption, for example, is slightly higher in LPG vehicles, than in conventional petrol powered ones.

Besides, there’s the cost of the conversion, itself, or the purchase of a new LPG vehicle to consider.

And new vehicles, already equipped for LPG, do cost more than their petrol powered counterparts.

But there are offsets, which you shouldn’t forget.

In both cases, the Federal government is offering a $2,000 grant, to get you behind the wheel of a vehicle that runs on liquid petroleum gas.

Why?

According to a new report, it wanted to help families, like yours, with fuel costs.

It also wanted to promote cleaner fuels.  And LPG is better for the environment than petrol.

Australians responded enthusiastically, even though LPG tanks, which are bigger than petrol ones, can take up a lot of space in a car.

The report, by the National Audit Office, says  almost 227,000n grants were made under the scheme between August 2006 and June last year.

And the cost, of almost $452 million, was well above the government’s own estimate, of a likely bill of some $305 million, for this period.

The Audit Office says 93 per cent of applications for the grant are approved on the first application – and even more are approved, once initial problems with the paperwork are sorted out.

You can apply either through Centrelink or your local Medicare office.

Could Australia’s long housing bubble burst?

That’s not likely.  Especially as the nation’s population is still rising faster than new homes are being built.

Yet very few people, in this country, are giving that risk the slightest thought.  Even though the recent collapse of the US housing bubble, produced disastrous consequences.

It played a significant role in the stock market crash of September 1998.

That – combined with unrealistic expectations – at the highest level – in US banking and financial  circles – led directly to a stock market collapse and a global financial crisis.

All of this suggests that the Federal government should proceed very cautiously with new recommendations that are now before it.

These include simplifying Australia’s tax system for foreign investors.

This recommendation – and many others – are contained in a report that the Federal government ordered, as part of its plan to make Australia a powerful hub, in world finance.

The Australian Financial System Forum, which prepared the 166 page  report, specifically rejected the idea of offering broad tax cuts, to attract foreign investment.

But it said tax measures, which affect expenses on funds borrowed from parent banks abroad should be reviewed.

The government welcomed the report, promising that it would be considered, along with a broader  tax review, conducted by  the Treasury Secretary, Ken Henry.

The Liberal Party has supported moves to make Australia an international financial hub for years.

Australia’s financiers, based largely in Sydney, now manage one of the world’s biggest pool of funds.

That is the $1.2 trillion, built up over recent years, in the nation’s compulsory superannuation system, that Paul Keating launched.

However  Australia’s finance industry is still relatively isolated from those of other world financial hubs, like New York, London and Hong Kong.

As the Forum’s report notes, there are clear advantages for a country like Australia, which still relies heavily on the primary production, of its mines and farms, in acquiring access to a bigger, more broadly based, pool of savings.

But as the global financial crisis, itself, also shows, there are risks, too.  The most obvious is exposure to  reckless speculation.

And recent evidence, given by men regarded as the brightest of the world’s financiers,  to the US Financial Inquiry Commission, shows  all too clearly, just how stark this risk is.

Jamie Dimon of JP Morgan Chase, for example, was asked at that Commission, what he thought had caused the meltdown that led to the global financial crisis.

He replied, simply, that a  financial crisis “happens every five to seven years.

“We shouldn’t be too surprised,” he added.

No great illumination there.

Then there was Lloyd Blankfein, of Goldman Sachs, who compared the latest crisis to a hurricane, that nobody could have predicted.

Blankfein also warned that the US Congress should not press too hard for reform.

“We should resist a response…that is solely designed around protecting ourselves from the 100 year storm,” he said.

Does this kind of weak analysis, from such men, justify the huge salaries and bonuses that both  are still being paid, so soon after their reckless behaviour – and that of others like them – led the world’s financial system to the brink of collapse?

Clearly,  even the global financial crisis, which has produced much misery and despair, has not yet been able to temper the idea that greed is good, in the minds of these masters of the universe.

Australia’s relative isolation from the worst of the greed that produced the collapse has, undoubtedly, played a part in protecting this country  from the worst effects of the global crisis.

We should, certainly, pursue whatever benefits that a bigger role in world financial affairs might offer this country.

But recent events show, beyond any shadow of doubt, that this must be done carefully and judiciously.

The risks, too, remain stark.

Australians are now better dressed – and shod – than they were in the months following the stock market crash.

New figures, from the Australian Bureau of Statistics, tell the story.

They show that retail sales surged in November, rising by 1.4 per cent, on seasonally adjusted figures,  during the month, with sales in clothing and shoe stores leading the way.

This follows a pattern, established earlier, with Australians starting to spend again, in the nation’s coffee shops, as the economic  recovery started.

Regular readers will remember that as the latte led recovery.

That has now broadened.

Consumer confidence also bounced back, with the Roy Morgan organisation reporting that it a  7.4 per cent jump, in the week to January 2.

On seasonally adjusted figures, the Bureau said, spending on clothing, footwear and personal accessories rose by 2.5 per cent in November.

Our homes are looking brighter, too, with spending on  household goods rising by 1.7 per cent during the month.

But coffee – and a meal out – still haven’t lost their attraction.

The bureau said this kind of  spending in coffee shops, restaurants and take-away food bars, rosey another 1.1 per cent in November.

But the big stores are capturing much of the
new business.

The bureau also says that, on current price, original figures, Australia’s chain stores and other large retailers saw a 4.4 per cent rise in their sales during November.

But smaller retailers saw their sales, overall, fall by 0.2 per cent, in the same time.

Other figures, that the Bureau also released yesterday, confirm that Australia has not yet escaped the grip of the global economic crisis.

They show that Australia’s exports fell by 2 per cent during November.

However, the nation still recorded a smaller trade deficit, as imports also fell, by 3 per cent.

The Federal Trade Minister Simon Crean said, though, that he had been encouraged by an 8 per cent rise in Australia’s exports to the European Community.

Corporate executives will soon be hit with new laws curbing pay levels that are deemed to be excessive.

The Financial Services Minister, Chris Bowen, told  reporters in Sydney yesterday, that this would happen before the end of the year.

Mr Bowen also signalled that he will be be studying fat payouts, for executives,  in particular.

But he dismissed criticism from the Greens and the ACTU, who  both said the Productivity Commission went soft, on these issues, in its final report on the matter.

In that report, which the government received just before Christmas, the commission rejected executive salary caps, describing them as “unworkable.”

It made 17 recommendations the government, on ways in which excessive pay for executives might be curbed.(see www.pc.gov.au)

Corporate executives, who do not believe their pay is excessive, will still be relieved, at least, to find  that the government will now be considering this issue in a less highly charged environment than that which followed the share market crash.

When the government referred this issue to the Commission, early last year, public anger was running high, on these issues.

Mr Bowen said the Government had referred this issue to the Productivity Commission because it wanted it considered in a thorough and well considered manner.

“And that’s what the Productivity Commission has done,” he added.

” This Report follows consultation around the country, a range of hearings, consultation both before and after the Draft Report released last year.”

“We’ll be considering those recommendations and it’s our intention to respond in the first quarter of this year,

Mr Bowen added.

The Productivity Commission found that while Australia’s corporate governance is good by world standards, some pay practices had led to poor corporate performance.

That had damaged public confidence.

Mr Bowen also said the public rightly expects Governments to ensure  appropriate accountability and transparency in this area.

“…this Report provides the Government with a good basis for the next round of reforms,” he said.

But he admitted that there had been  bad examples.

These included of “poor salary practices” and “excessive termination pay in particular.”

” In some instances it’s hard to see the relationship between good corporate performance and salaries.

“In some instances, corporate performance has been very poor and salaries have been very high, Mr Bowen said.

Australians rushed to finance new homes in October as the Reserve Bank started to move interest rates upwards.

The Bureau of Statistics reports that the number of loans taken out to build new homes  rose by 9.2 per cent during the month,

However that was offset by a 3.9 per cent fall in the number of loans approved to finance newly built “spec” homes.

But Ben Phillips, a senior economist with the Housing Industry Association, is warning that continued weakness in lending for rental investment could, ultimately, force up rents.

He says the bureau’s figures also signal “another year of skinny rental vacancies.”

Other data also suggests that the current round of rate rises hasn’t yet had a big impact on consumer confidence.

The Westpac bank reported that there had been a “surprisingly modest” fall in its consumer confidence index during December.

It made the observation as the Prime Minister, Kevin Rudd, pressed the government’s attack on banks – including Westpac – which have raised their home loan interest rates by more than the Reserve Bank’s targets.

“Jacking up interest rates, in excess of what the Reserve Bank has determined, is not in my view acting responsibly in terms of your customers,” Mr Rudd said.

Westpac’s index of consumer confidence fell by just 3.8 per cent this month, even though the Reserve Bank had increased its target interest rate three times – by a total of 75 basis points – by then.

The bank’s chief economist Bill Evans said a much bigger fall had been a “real possibility.”

The index fell by no less than 15.5 per cent, after a single rate rise of just 25 basis points, back in March 20065.

Mr Evans said each subsequent rise, over the course of 2006 and 2007, had also produced a double digit fall in consumer sentiment.

He said Australia must now be getting close to a situation in which similarly large falls in consumer confidences would be seen again.

And the National Australia Bank is now warning that global growth, in the fourth quarter of this year, might be weaker than  had been expected.

Although it hasn’t gained much attention yet, the Federal government has been trying hard to convince Australians that the nation’s move to a greener economy will be accompanied by the creation of many new jobs.

This will be an uphill battle for the government, as many of the 55 year old coal miners, who have traditionally voted Lahor, are very sceptical about such changes.

So far, the government has been using question time in Federal parliament, as its main weapon.

The Deputy Prime Minister, Julia Gillard, told parliament yesterday that Australia would see 50,000 new jobs created, as the government moved to tackle climate change.

Young people would be given training in the new skills that would be required, in areas like plumbing and the maintenance of hybrid cars.

Older workers would also have retraining available, to update their skills.

Although she did not say so, Ms Gillard was relying on Treasury research.

The Federal Treasurer, Wayne Swan, was more specific, in a reply he gave parliament earlier this week.

“There is Treasury modelling on this,” Mr Swan said.

He said $31 billion worth of clean energy projects were already under way or planned “in response to the government’s climate change policies, according to a Climate Institute study.

“We on this side of the house are the party that is supporting jobs,” Mr Swan said.

He described climate change sceptics in the Senate as “economic vandals.”