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 looks to Down Under Live to help tackle skill shortages

The government of Western Australia is coming to Down Under Live in London to recruit skilled workers to help tackle the state’s impending skill shortages.

According to a respected economic analyst, Peter Kenyon, professor of economic policy at Perth’s Curtin University, the state is set to revisit the skills shortages that were the downside of the mining boom that ended in late 2008.

‘‘WA is doing well in terms of population growth and labour supply is increasing … we are likely to see a little bit of amelioration in the absolute skills shortage that we saw towards the end of the boom in 2008,’’ Prof Kenyon said. ‘‘I think that will be short-lived.

‘‘I think before very long we will again see the job advertisements increasing for waiters and all sorts of staff in the windows of all the businesses around Perth.

‘‘Not enough time has passed for us to build the skills base to get over that shortage.’’

As part of its commitment to build a strong base of skills in the state, representatives from the state’s Immigration and Health departments will be at the show, recruiting for a range of state sponsored jobs, and interviewing likely candidates. The participation of Western Australia at Down Under Live London, comes on the back of a successful show in Birmingham, where over 1,300 people came to the show in search of a new life in Australia or New Zealand.

Over 3,000 people are expected to attend the London event, and pre registrations are already strong, with jobseekers looking to take advantage of the pre show offer of 2 tickets for £10.

Anyone interested in getting tickets for the event should call               01179 323586         01179 323586 or go to www.downunderlive.co.uk

Source  :  www.australiamagazine.co.uk

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Small business and general business tax break ends 31st December 2009

Businesses can claim an additional tax deduction when they buy certain assets, and when they spend money to improve existing assets, for a limited time. It’s called the Small Business and General Business Tax Break – ‘business tax break’ for short.

The Australian Government announced the tax break as an ‘investment allowance’ in December 2008 aimed at helping businesses meet the challenges of the economic downturn.

The government later extended this tax break in the May Budget to allow small businesses to claim a 50% tax deduction on eligible assets bought by 31 December 2009.

Source  :   www.ato.gov.au

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Winemakers to boycott Swan Valley ‘debauch’

Swan Valley winemakers have vowed to boycott the coming Spring in the Valley festival, saying the two-day event has become too unruly and overcrowded.

Little River Winery and John Kosovich Wines said they would have nothing to do with the popular festival when it was staged on October 10 and 11 because it was a “debauch”. Other wineries said they would hold their own separate events to coincide with its running.

It comes as the Swan Valley Tourism Council, which organises the event, confirmed it would introduce a $5 entry fee for the first time in the festival’s history. The fee will apply to all people attending the event, with 40 per cent of proceeds to go to Ticketmaster and the rest to the council. With as many as 70,000 people expected to attend, the fee could net the council $200,000. Swan Valley Tourism Council executive officer Geraldine Riggir said patrons would need to show their tickets at all participating venues.

The cost of the ticket will not entitle patrons to entry into all venues, with many set to charge their own admission prices. Ms Riggir said the council’s $5 fee would help cover the cost of staging the event, while it would also allow organisers to better manage crowds. She defended the festival in the face of criticism from some Swan Valley businesses, arguing it was the best way of showcasing local products to a broad market.

“It’s not a terrible festival, it’s a fantastic festival,” she said. “It’s just a small element of it that is a problem. All the valley is trying to do is showcase the region and what it has to offer.”

Upper Reach Winery owner Laura Pearse said she would sell a limited number of tickets privately to ensure crowd numbers were kept under control. She backed the festival as a going concern, saying it was predominantly a “lovely day out”. But Little River Winery owner Jan de Tastes said she would close her winery in protest because she no longer felt the festival represented the best interests of producers in the valley.

“If it was a quality festival you could be proud of it but at the moment you’ve got the drunkenness taking over to such as degree that the whole thing is a debauch,” she said.

Mrs de Tastes threatened to sue the council and event sponsors if anything happened to her winery during the event.

Source  :  www.thewest.com.au

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Joondalup will be a Tourism Precinct

Joondalup Mayor Troy Pickard has welcomed the announcement in Parliament that the Joondalup City will be granted tourism precinct status later this year.

The announcement was a fantastic result for the City of Joondalup.  Becoming a tourism precinct will allow trading hours similar to those in Fremantle and Perth for local Joondalup businesses.

As a tourism precinct it will allow the City to improve on existing attractions like the award winning Joondalup resort and Hillarys Marina the second most visited tourism venue in WA.

It will create a more exciting City and will encourage and attract a variety of businesses and visitors to the North West region of Perth.

Becoming a tourism precinct will complement the large number of events, concerts and festivals held in Joondalup City and will help assist Joondalup to become an even more vibrant and bustling place to visit.

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Perth waterfront plans unveiled

The Government has released its scaled-down idea of what it wants the Perth waterfront to look like – but it’s after the same effect as at some of Australia’s best-known sites.

Premier Colin Barnett yesterday unveiled proposals radically different from those suggested by his Labor predecessor Alan Carpenter.

 The plans include a mix of civic, commercial, residential, retail, education and cultural areas.                 

Premier Colin Barnett yesterday unveiled proposals radically different from those suggested by his Labor predecessor Alan Carpenter.the foreshore, similar to those in Sydney’s Darling Harbour and Circular Quay and Melbourne’s Southbank,” Mr Barnett said.

Unlike Mr Carpenter, who committed the Government to fully-funding his vision, Mr Barnett wants a mixture of public and private capital.

Mr Barnett said the new plans aimed to feature world-class architecture “without being over the top”.

“Western Australians have been shown many plans for the foreshore over many years and nothing has actually happened,” he said.

“The Government does not want to impose yet another grand vision on the WA community. This is a more modest concept that shows a ground-scale depiction of what could be developed.”

Mr Barnett said his plans provided for greater public access, while the previous government wanted to develop “monuments” that blocked off the river from the public.

“It would have been an enclave for the wealthy and businesses.”

Work on the project was expected to start within 18 months.

Source  :  www.watoday.com.au

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Bringing Australia to life in the UK – G’Day UK 2009

G’dayUK 2009 is a series of events positioning Australia as an innovative and thriving economy. The aim is to encourage British companies and consumers alike to take another look at Australia as a great place to invest in, work, holiday, do business with and generally get to know.

By highlighting the unique range of skills, resources and opportunities offered by Australia, the heavy-weight burst of activity aims to reinforce business and consumer partnerships between the two nations by focusing on four main areas: trade & investment, food & wine, migration and tourism.

Whilst G’dayUK has a serious message, the week will also be a vibrant celebration of uniquely Australian products, people, places, businesses, skills and attitude and an invitation for the British to get involved. A stellar cast of well-known Australians, including politicians, business leaders, artists, winemakers and chefs will showcase Australia as a modern, energetic and desirable business and leisure destination.

G’dayUK 2009 is supported by the New South Wales, Queensland, South Australian, Victorian and Western Australian State Governments, Australian Trade Commission, Qantas and Tourism Australia in conjunction with the Department of Foreign Affairs and Trade, Wine Australia, Australian Business and key private sector sponsors.

G’Day UK 2009 is a chance for Australian celebrities, governments, businesses and agencies to show off the sunshine in Australia.

Two week’s worth of events will showcase Australia as a place of investment, tourism, business, and more importantly, as a prime destination for skilled migrants.

The G’Day UK Week will begin with a Manchester Migration Open Day on the 21 June, and will end with tasting premium Australian wines and Australian-themed food and wine menus cooked by Michelin-starred chefs on the 4 July in Selfridges, Oxford Street, London.

All information at http://www.gday-uk.co.uk/events

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WA small firms lead recovery from crisis

Signs are emerging that the worst of the global financial crisis is over, according to a new survey, and the State’s small businesses are leading the way.
  
The Commonwealth Bank-Chamber of Commerce and Industry quarterly survey of business expectations, released yesterday, shows that economic conditions in WA appear to be stabilising after six months of decline.
  
CCI chief economist John Nicolaou said that the community could “take heart” from the results and that an economic recovery within the next 12 months was on the horizon.
  
“This survey is an important lead indicator of future economic activity,” he said.
  
“While just over half of all businesses remain pessimistic about the next 12 months, that’s come back from around 75 per cent of businesses that were pessimistic last quarter, and at the same time businesses that think conditions will improve (over the same time) has doubled.”
  
Mr Nicolaou said small businesses in service industries were the most optimistic, with 17 per cent of the firms surveyed believing conditions would improve over the next 12 months.
  
Beaumonde Catering owner Mark Dimmitt said he felt small business was better prepared for the slowdown than in other downturns because it had taken time to flow to Australia from the US.
  
He said that though his trade had been affected and was patchy, February was a record month for his 20-year-old business and he expected an upturn over the next year.
  
Woolworths regional manager Brad Bolin criticised “illogical barriers to doing business”, referring to trading hours in WA.
  
Mr Bolin said “conservative estimates” showed the group would need to employ another 300 staff in WA if trading hours were extended to 9pm.
  
“During this time of economic uncertainty there are still companies (looking) to hire more people — these efforts shouldn’t be undone by illogical barriers to doing business,” he said.
  
Coles and Kmart have said they expected to employ another 350 workers if 9pm trading was approved.

Source www.thewest.com.au

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Swan slams ‘selfish’ CBA rate decision

Treasurer Wayne Swan has taken aim at Australia’s biggest home lender, labelling it selfish for lifting its mortgage and business lending rates. 

Other banks have refused to rule out following the Commonwealth Bank of Australia’s (CBA’s) surprise decision to lift its home and business loan rates by 10 basis points to offset higher funding costs.

The opposition said the government’s huge debt burden was putting pressure on interest rates, while a prominent market economist said it may force the Reserve Bank of Australia (RBA) to cut the official rate again to counter any impact from CBA’s move.

CBA said it took Friday’s decision “reluctantly”, but at a standard variable mortgage rate of 5.74 per cent, up from 5.64 per cent, it was still the lowest on the market.

The rate hike will add $18 a month to repayments on a $300,000 home loan over 25 years.

The bank said it had absorbed as much of its additional funding costs for as long as it could.

“Unfortunately, we have seen the bank’s wholesale funding costs remain high and continue to increase as previous long term funding matures and is replaced with new funding at significantly higher cost,” CBA group executive of retail banking services Ross McEwan said in a statement.

Such reasoning drew no sympathy from the treasurer.

There are ups and downs when it comes to those decisions over time, but there are few decisions I can think of that are more selfish than this one,” Mr Swan told reporters in Brisbane.

“I think Australians, rightly, will be furious with the Commonwealth Bank.”

Prime Minister Kevin Rudd echoed those sentiments during a speech to a business lunch in Brisbane.

“We are all in this together – businesses, workers, government and the Reserve Bank – and today’s decision by the Commonwealth Bank runs counter to this nationwide effort,” Mr Rudd said.

The other three major banks – ANZ, National Australia Bank and Westpac – said their rates were constantly under review.

NAB said it had no current plans to raise its home loan rate but noted “all Australian banks” had been incurring significantly higher funding costs for some time.

Opposition treasury spokesman Joe Hockey said the government was putting pressure on interest rates by running up a huge debt.

“Kevin Rudd and Wayne Swan feigned outrage about this interest rate increase, yet they are directly responsible for it,” Mr Hockey told reporters in Sydney.

“This is the beginning. You will end up with higher interest rates directly as a result of the spending binge of the Rudd government and the massive debt they are accruing.”

Home buyers may be enjoying the lowest mortgage rates in 41 years, but have already missed out on about 30 to 40 basis points of the RBA’s total 425 basis points of official rate cuts, with banks refusing to pass on the cuts in full because of the cost of funding.

For small businesses it has been even worse, being short changed by about 140 basis points.

The CBA’s decision comes in a week that saw massive boosts to both consumer and business confidence, as well as data showing sustained growth in home lending – sucked in by low mortgage rates and a more generous first home owners grant.

April mortgage data showed loan demand has grown for seven straight months to a 14-month high, as well as record demand from first home buyers and the strongest interest from investors in nearly two years.

It also showed that the banks have cornered more than 92 per cent of all loans – a 33-year high.

Westpac chief economist Bill Evans said CBA’s decision could well be countered by another cut by the RBA.

“If it does have an impact, particularly on confidence in the housing market, which has been the most encouraging source of recovery in the Australian economy, it may bring a rate cut back on the table at the Reserve Bank,” Mr Evans told Sky News

Source  :  www.thedaily.com.au

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Green Built Homes Perth

With more people, not only in Australia but around the world becoming aware of our negative impact on the environment change is coming fast.

• There are increasing responsibilities for governments and businesses on a global stage                                       
• Governments are changing legislations
• Businesses are making changes
• People may soon be responsible for their individual carbon footprint
• Green build homes are no longer a dream of hippies

If you are building a new home, now is the time to make a difference and to be sure your new home is built to emit a low carbon footprint.
Making this choice now not only lessens the impact you have on the environment, it also saves your hip pocket.

Green built homes are solar passive in their design. They reduce heating and cooling costs, use less resources and save you money.
Alternative Living’s solar passive home designs encourage:

• the sun’s natural light to comfortably heat and cool your home
• cross ventilation though design layout and positioning
• a naturally occurring comfortable living space through the use of a thermal mass in the slab of our home designs; reducing extremes in temperature
• Use compact fluorescent lighting through our entire range of eco-friendly homes, using a staggering 1/5th of the electricity of normal lighting.
• www.alternativeliving.com.au

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