Save to curb inflation, RBA says

Australians need to save more for the economy to avoid a more rapid run-up in inflation, triggered by nation’s rising terms of trade, the Reserve Bank said today.

“In putting together the Reserve Bank’s forecasts it has been assumed that more of this boost to income is saved than was the case in the earlier boom in the terms of trade,” RBA assistant governor Phillip Lowe.

“This reflects two factors. The first is the different position of the federal budget and the second is the more cautious approach to spending currently being displayed by the household sector.”

The federal budget, handed down this week, contained no major increases in public spending and is expected the return to a surplus by 2012-13.

In that time, the RBA forecasts Chinese steel production will continue to drive demand for Australian iron ore and coal strong, boosting the nation’s terms of trade.

Terms of trade are the prices of a nation’s exports relative to its imports.

“If this lift in saving does not occur, then demand in the economy could well be stronger than forecast, and this would put additional pressure on capacity,” he said.

A lack of spare capacity in the economy has pushed the year-to-March inflation figure to 2.9 per cent from 2.5 per cent in the year to December, which surprised the RBA, Mr Lowe said.

“Disinflationary forces in the economy are not quite as strong as previously expected, largely because the economy has performed better than previously expected,” Mr Lowe said, in the speech delivered to Colonial First State Investment Forum in Sydney.

The RBA expects inflation to fall only to 2.75 per cent later this year, less than originally anticipated after the release of the March data.

Retail sales have remained lacklustre since the middle of last year, after the end of the government’s cash stimulus grants to households during the financial crisis. Six interest rate rises since October have also cut into demand at retailers, with a number of businesses including Fantastic Furniture, Clive Peeters and Woolworth’s flagging weaker sales ahead.

The RBA lifted interest rates to 4.5 per cent his month, creating more headwinds for shoppers. The latest rate rise added another $46 to the average monthly repayment cost on a $300,000, 25-year mortgage.

Investors currently foresee no chance of an interest rate rise in June, but predict the official cash rate will be at 5 per cent within a year, according to Credit Suisse data.

The central bank predicts 3.25 per cent economic growth this year accelerating to 3.75-4 per cent growth in the next couple of years, amid rising prices for commodities exports.

Source  :  www.watoday.com.au

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Western Australia to invest $5.8 Million in three new Ealry Learning Centers

The Federal Minister for Early Childhood Education and Child Care Kate Ellis  announced $5.8 million for three new Early Learning and Care Centres in Western Australia.

The Australian Government will invest $5.8 million in building new centres at Karratha in the state’s north-west, and Darch and Mirrabooka in Perth’s northern suburbs.

The Karratha centre will be built at Tambrey Primary School with $2.2 million of Australian Government funding. It will provide 120 new long day care places for Pilbara youngsters.

Woodside Energy will provide more than $4 million over three years to the centre.

“This partnership is a fine example of how the Federal Government and local industry are working together to deliver high quality care and education for Australian children and their families,” Ms Ellis said.

“The Pilbara is key to our nation’s economic development and this service will help companies, like Woodside, to attract and retain a skilled workforce.”

About $1.8 million in Australian Government funding will be invested in centres at Darch and Mirrabooka.

Ashdale Primary School will host the Darch centre and will offer at least 50 new long day care places, while the Mirrabooka Early Learning and Care Centre will also offer about 50 new places.

All three centres will be built by 2010 on land contributed by the WA Government.

The construction of the centres on school sites presents opportunities for future integration of education and care services with junior schooling.

“The Australian Government is working hard to provide families with access to quality early childhood education and care,” Ms Ellis said.

“These centres will also provide more job opportunities and boost local economies.”

The Australian Government is continuing to discuss an Early Learning and Care Centre for Port Hedland with the WA Government.

An Autism-specific Early Learning and Care Centre was announced for Perth last month.

The new centres form part of the Australian Government’s $114.5 million plan to build 38 Early Learning and Care Centres by 2010.

This initiative is part of the Australian Government’s Education Revolution, which is improving early childhood care and education for Australia’s children and families.

Source  :  www.thegovmonitor.com

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International cooperation to combat immigration fraud

A new international agreement will boost Australia’s ability to detect and identify immigration fraud and cast a wider net when checking the backgrounds of unauthorised arrivals and other people held in immigration detention.

The Minister for Immigration and Citizenship, Senator Chris Evans, said today that an agreement for biometric data-sharing between Australia, Canada and the United Kingdom was signed last night. Under the partnership, Australia will be able to securely and confidentially cross check fingerprints with Canadian and UK databases.

Currently, the Department of Immigration and Citizenship collects fingerprints from all people in immigration detention, including irregular arrivals and illegal foreign fishers. It is expected fingerprint collection will be progressively rolled out to other people in the immigration caseload in the future.

‘The Australian Government’s ability to detect immigration and identity fraud will be greatly improved as a result of new biometric data-sharing arrangements with partner agencies in Canada and the United Kingdom,’ Senator Evans said. ‘This data-sharing will help to establish the true identities of unknown people, and ensure that fraudulent cases are dealt with appropriately through the improved ability to detect inconsistent identity and immigration claims.

It will also help authorities to increase the chance of detecting people with criminal histories and other people of concern, aid in the timely removal of unlawful non-citizens where their identities and/or nationalities were previously unknown or uncertain, and improve detection of fraudulent immigration practices and trends.

The new biometric data-sharing plan was developed at the Five Country Conference, which is a forum on immigration and border security between Australia, Canada, New Zealand, the United Kingdom and the United States. The US is expected to join the data-sharing arrangement in due course.

The benefits of international biometric data sharing were highlighted recently when an individual claiming asylum in the UK was found to have previously been fingerprinted in the USA while travelling on an Australian passport.

The individual was subsequently confirmed as an Australian citizen wanted for sexual assault. The man was removed to Australia to face court, and is now serving a jail sentence.

Senator Evans said the new data-sharing arrangements would not affect privacy laws.

‘The protection of personal information is important to all the countries involved in these arrangements. All data shared by my department will adhere to the Privacy Act 1988,’ the minister said.

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Migration Agents – Migrant numbers need to increase to support infrastructure projects

The Migration Institute of Australia (MIA) has warned the government that work on infrastructure projects will be difficult to accomplish following the decision to put  restrictions on the skilled migration program.

While the MIA welcomed the Australian immigration ministers decision to increase the number of humanitarian and family reunion Australian visas for the 2009/10 Migration Program, they were less than impressed with the decision to remove a number of trade-level occupations from the skilled occupation list.

“The MIA awaits with great interest to see how the Government proposes to administer the new job-readiness criteria for trade occupations. It’s hard to imagine a one-size-fits-all assessment system of employability,” said Maurene Horder, CEO of the Migration Institute of Australia.

The Government reduced the Australian skilled migration program at the turn of 2009, when the recession was starting to take effect. The planning level for the remainder of the 2008-09 financial year was reduced from 133,500 to 115,000 skilled migration visas and the Critical Skills List (CSL) and priority processing order were both introduced so that the Government could target the skills it needed most.

As of the 01 July 2009, the Australian skilled migration planning levels will be further reduced to 108,100 visas, and the CSL and priority processing order will remain as guidelines for the Department of Immigration and Citizenship’s visa processing officers. This means that sponsored visas and independent visas with skills nominated in the health, engineering and IT sectors will constitute a major part of Australian visa approvals during the start of the next financial year.

Fortunately, the Australian skilled migration program remains flexible to the needs of the Australian economy. While states/territories and employers have been given greater power to target the skills they need, the Immigration Minister Chris Evans also has the ability to extend the planning levels for the Australian skilled migration program and amend the CSL so that certain nominated trades can have priority for processing, if the economy needs a boost in skilled workers.

Senator Evans said in a recent statement that the Government is committing itself to “a long-term planning framework for migration as a key component of the current reform agenda” and that their extension of the family migration scheme is testament to its perception of the importance of family.

“We are recognising the importance of family through this boost which will benefit Australians who seek to have their parents, partners or children join them to live here permanently,” Senator Evans added.

The family stream of the Australian migration program has had 2,500 places added to the Spouse and Fiancée Visa program, 1,000 places to the Parent Visa program, and 300 to the Child Visa program.

Source www.gettingdownunder.com

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Troy Buswell delivers $647m surplus to WA

WESTERN Australia’s Liberal Government has handed down its first Budget, delivering a $647 million surplus but warning the state will be in deficit by 2012.

Treasurer Troy Buswell today delivered his first Budget since the Liberal Government came to power last year.

He said the 2008/09 surplus of $647 million would shrink to $409 million in 2009/10, and just $23 million the following year.

By 2011/12 the state will be in deficit to the tune of $513 million.

“Over the past months, as the global economy has been in decline, the state has been hit by large downward revisions to projected taxation revenue, GST grants from the Commonwealth and mining royalties,” Mr Buswell told parliament.

“Since the mid-year review, the Budget has lost a massive $4 billion in forecast revenue from these sources.”

Last year, then treasurer Eric Ripper delivered a surplus of more than $2 billion on the back of a booming commodities sector.

Economic growth remained high at 8 per cent for the 2008/09 financial year.

But forecasts predicted growth would fall into negative territory in 2009/10, with unemployment expected to peak, and business investment to fall by 17.5 per cent.

Mr Buswell said the Government would provide a one-year payroll tax rebate to small businesses with payrolls of up to $3.2 million to help protect jobs.

“Some 6,700 small businesses will be eligible for this payroll tax rebate, which will fully offset payroll tax for around 68,000 employees,” he said.

“The cost of this rebate is estimated at $100 million.”

A $47 million jobs training and skills package, and a $8.3 billion spend on infrastructure in the next financial year are key components of the Budget.
Mr Buswell said law and order were also strong focuses, in line with the Government’s election promises to boost funding for police and pump more money into prisons

Mr Buswell said the Government’s election promise to toughen up sentencing laws and introduce mandatory sentencing for people who assault police was underpinned in the Budget by a significant investment in prison capacity.

 

A total of $655 million will be invested in 2012/13 to create an extra 1657 prison beds across the state.

A record $5.1 billion spend on health services in the next year – rising 5.9 per cent, or $282 million from last year – will include the fast tracking of forward works for a new children’s hospital, the construction stage of the Fiona Stanley Hospital, and new hospitals in two regional centres.

Mr Buswell said the Government would push ahead with public sector reforms in a bid to achieve improved performance and efficiency.

The first stage of the economic audit committee promised by the Government during the last election was complete and a range of hard decisions had delivered $7.6 billion over the forward estimates, Mr Buswell said.

“I am looking forward to the second stage of the economic audit to identify strategies for broader reform over the longer term, so we can ensure the budget stays in surplus,” he said.

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Budget verdict – single mother

Sarah MacPherson, Melville

Sarah has a 19-year-old daughter living at home, and is in the process of starting up a technology-based business.                
 
What Sarah wanted:
Measures to help vulnerable in society, such as pensioners, carers and single parents;
. Increased taxes on cigarettes and alcopops;
. Stimulus packages for small startup companies;
. Maintenance of the First Homeowners Grant boost;
. Investment in education;
. Dumping of the GST charged on sanitary products.
 What she got:
. Increased pensions – by $32.49 for singles and $10.14 per couple.
. The pension age lifted to 67 between years 2017 and 2023.
. First Homeowners Grant boost to remain until September 2009, but to be halved after that.
. Opening up university places for additional 50,000 students over four years from next financial year.
. $437 million over four years to boost number of disadvantaged students at university.
. A 50 per cent small business tax break for eligible capital expenditure.
Her verdict:
“I suppose the first word that came to mind was ‘predictable’,” Sarah said.
 
“The rise in pension age means many of the battlers will have to battle a little longer.
 
“But if you look at the current global economy, they probably haven’t done too badly – they can’t please everybody”

www.watoday.com.au

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First Home Owner Grants

A NATIONAL affordable housing organisation has called on the Federal Government to scrap its first-homeowner grant.

The grant, which was raised from $7000 to $14,000 for existing dwellings and from $14,000 to $21,000 for new homes as part of Labour’s $10.4 billion stimulus package last year, is due to expire on June 30.

The National Shelter has called on Treasurer Wayne Swan to axe the scheme when he hands down his second budget tomorrow, saying it inflates housing prices beyond the value of the grant.

“We’d be in favour of getting rid of all of it,” chief executive Adrian Pisarski told ABC Radio today, adding if the scheme was continued, it should be means-tested.

“That actually targets those lower-income families who really struggle to get into the housing market and doesn’t advantage wealthy families who can support their kids into the market at the cost of those lower income families.”

But the Master Builders Association says the enhanced scheme should be kept as it is, minimising the effects of the global financial crisis.

“We put to the government that … the best bang for the taxpayers’ buck would come from keeping the boost for new housing,” chief executive Wilhelm Harnisch said.

“It does generate new activity, it does generate jobs, it also has the multiply effect into retail, manufacturing and other sectors.”
http://www.news.com.au

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