Reserve Bank risks grinding Australia to a halt – economist

FURTHER official interest rate rises could choke off consumer spending and grind the economy to a halt, economists warn.

Herston Economics chief economist Clifford Bennett says if the Reserve Bank raises the cash rate to five per cent by year’s end, the economy would “grind to a standstill”.

The current cash rate is 4.25 per cent, after the RBA lifted the rate by a quarter of a percentage point on Tuesday in an effort to further rein in expansionary pressures.

It was the fifth monthly interest rate rise by the central bank since October last year.

“If the cash rate gets to 5 per cent … the domestic economy will grind to a standstill,” Mr Bennett said.

“The only thing that’s going to be impacted by higher rates are struggling Australian families.

“We’re seeing in the Sydney press examples of them having to choose between buying groceries and paying their electricity bill and the added burden from the RBA is completely unwarranted, unnecessary and unwanted.”

RBA governor Glenn Stevens said it was appropriate to raise the cash rate towards its long-run average given that “the risk of serious economic contraction

Most economists say the average long-run cash rate is around 5 per cent.

Nomura Australia economist Stephen Roberts said rising interest rates meant consumers were paying a greater proportion of their income in servicing debt.

Data compiled by the central bank showed that when the cash rate was 3.75 per cent at the and of the December quarter of 2009, the average household was paying more than 10 per cent of its income, minus taxes and some other regular payments, on interest payments.

When the cash rate topped 18 per cent in December 1989, the average household was spending just under nine per cent of its income on interest payments.

The figures also show that in December quarter of 1989, household debt was slightly less than half household yearly income.

Twenty years later it was equal to one and a half times an average household’s yearly income.

“That data is from fourth quarter (2009) and you have to remember we’ve had two more interest rate rises already,” Mr Roberts said.

He said a lower interest rate of 3.75 per cent to 4 per cent would be more appropriate given the current difference between the cash rate and the interest rates of major lenders.

Official economic data now points to a slowing economy, with building approvals, employment and retail sales data for March all coming in under market expectations.

Mr Bennett said the data suggested Australia’s economic performance post the global financial crisis was weaker than first thought.

“When you look at the domestic economy, there are patchy elements,” he said.

“There are storm clouds on the horizon.”

Source  :  www.news.com.au

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WA needs more migrants

Deputy Prime Minister Julia Gillard says WA needs more migrants amid claims hundreds of thousands of extra workers are necessary over the next decade to thwart a labour crisis.

Speaking at a Perth business breakfast hosted by _The West Australian _and Murdoch University, Ms Gillard said both interstate and international migration was needed to help fill future job vacancies.

It comes as employer groups warn labour shortages are set to hit within months.

Ms Gillard said WA also needed to better utilise its youth market, which was suffering a 10 per cent unemployment rate.

She blamed the labour problem partly on the booming resources sector which was drawing workers, infrastructure and services away from rest of the economy.

“That’s why we need to properly analyse and assess all claims about the West’s needs in the decade or so ahead, including claims about the need to attract hundreds of thousands of new workers,” she said.

“There’s no doubt more interstate and overseas migrants will be needed, but we need to look also at how we can achieve better results with the assets that are already available and underused.

“With a youth unemployment rate of almost 10 per cent, there is more work to be done to create the pathways that will give these kids a future.”

The Chamber of Commerce and Industry said labour shortages would hit in the second half of this year, with WA needing an extra 400,000 workers in the decade from 2007. Based on current population trends, there would be 150,000 shortfall.

CCI supports strong migration to alleviate the skills shortage, which threatened to curb WA’s economic growth during the last boom.

The WA Group Training Scheme, which last year sacked some apprentices because of reduced work, said there had been a quick economic turnaround and expectations of boom-level demand this year.

Ms Gillard said an expanded training initiative announced yesterday, creating 11,000 advanced level training places nationally, would help address some of the skills shortage.

Ms Gillard, who heads to the Pilbara today to inspect the $43 billion Gorgon project, warned unions not to engage in unlawful industrial action, singling out the construction union’s Kevin Reynolds and Joe McDonald. “We have got no tolerance for people who seek to break the rules and I am well aware there is a concern in this State over the propensity of some individuals to believe they are beyond the law,” she said.

Mr Reynolds said he was not surprised at being singled out by Ms Gillard over unlawful industrial action, claiming the pair had an adverse relationship. He said migration should be a back-up with the focus on training. 

Ms Gillard said an expanded training initiative announced yesterday, creating 11,000 advanced level training places nationally, would help address some of the skills shortage.

Ms Gillard, who heads to the Pilbara today to inspect the $43 billion Gorgon project, warned unions not to engage in unlawful industrial action, singling out the construction union’s Kevin Reynolds and Joe McDonald. “We have got no tolerance for people who seek to break the rules and I am well aware there is a concern in this State over the propensity of some individuals to believe they are beyond the law,” she said.

Mr Reynolds said he was not surprised at being singled out by Ms Gillard over unlawful industrial action, claiming the pair had an adverse relationship. He said migration should be a back-up with the focus on training.

Source  :  www.thewest.com.au

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Annual Report 2008–09 – Economic migration

This output:

• strengthens the economic and budgetary benefits from granting permanent residence visas to skilled and business migrants
• addresses key and emerging skill shortages, particularly in regional Australia
• expands business establishment and investment.

Performance

In 2008–09, the department issued 114 777 Skill Stream visas, compared to 108 542 in 2007–08.

Regional migration and state-specific initiatives now account for 29.2 per cent of the Skill Stream of the Migration Program. The Australian Government works with state and territory governments to encourage Australian employers and potential overseas applicants to use these programs.

During 2008–09, the department issued 33 474 state specific and regional migration visas, an increase of 27.9 per cent over the previous year. Since the introduction of these programs in 1996, a total of 169 328 visas have been issued.

Regional migration continues to be a priority under the Skill Stream. Through their sponsorship of skilled migrants, state and territory governments have a direct influence on the number and skill sets of migrants who settle in their jurisdictions. The number of visas granted to people sponsored by states and territories was 14 055 in 2008–09. 

Read more go to  :  http://www.immi.gov.au/about/reports/annual/2008-09/html/outcome1/output1-1-1.htm

 

 

Description

Under this output, the department manages the entry of skilled and business migrants. State-specific and regional migration programs help employers and state and territory governments fill skill shortages that cannot be filled locally. These programs are targeted to address existing and projected skill shortages and help in the development of local communities.

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Immigration plan brings Australia’s needs to the fore

IMMIGRATION officials are preparing a 50-year migration plan to ensure that intakes consider a range of long-term issues such as climate change, water needs and national security.

The Secretary of the Department of Immigration and Citizenship, Andrew Metcalfe, said yesterday the department was conducting a review of the nation’s migration needs to ensure a more rounded and visionary approach.

”In terms of the future, we are trying to lift ourselves away from year-to-year decisions to a 50-year vision,” he told the Australian and New Zealand School of Government conference in Canberra.

”We are trying to move away from an immigration department that is responsive to one that can help the government achieve long-term objectives … A long-term planning framework … is something whose time has come.”

Mr Metcalfe said a well-planned skilled migration program could contribute to Australia’s long-term economic, demographic and environmental goals.

”We want to ensure our skilled migration programs are responding to longer-term skill needs which cannot be addressed through domestic training and skills development,” he said.

”The question then is how we can best address shorter-term labour market requirements … It will be important that the skilled migrants we choose are not only young and healthy but also have a high level of education, language proficiency and other skills. This will ensure that skilled migration contributes both to labour force growth and to the productivity of our labour force.”

Mr Metcalfe said the review will include an examination of the points system used to select skilled migrants, known as the Migration Occupations in Demand List.

”The MODL is not as flexible as we would like to address a rapidly changing and uncertain global environment. In my view, one of themes of this century will be the increased mobility of people around the globe, and we need to manage this adroitly.”

But the Government has denied it has adopted a new policy towards asylum seekers in the wake of a decision this week to process a group of 10 Afghan children on the mainland rather than on Christmas Island.

”These are 10 unaccompanied minors and therefore what’s happened is that they’ve been transferred from Christmas Island to the mainland on September 2,” he said

Asked whether there had been a change of policy, the Prime Minister, Kevin Rudd, said: ”Absolutely not.”

He told 3AW yesterday the group of 10 children had been transferred to the mainland because unaccompanied minors were given priority in processing.

”That’s what’s happening in the case of these minors,” he said. ”That’s why they’re treated separately.”

Source  :  www.smh.com.au

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Interest rates on hold

The Reserve Bank of Australia (RBA) left interest rates on hold at 3 percent as predicted.                                                

A  survey by AAP had expected the RBA to leave the cash rate at the lowest since 1960.

Treasurer Wayne Swan said last weekend that it was obvious that rates will rise, while Minister for Financial Services, Chris Bowen, warned yesterday that rates can’t stay low forever.

Some economists believe the first rate rise could come this year, but the general view is that rates will remain on hold until the middle of next year.

In a statement released after the announcement, governor Glenn Stevens said the risk of “severe contraction” in the Australian economy had abated.

“Economic conditions in Australia have been stronger than expected a few months ago, with both consumer spending and exports notable for their resilience,” the statement says.

“Measures of confidence have recovered a good deal of ground.”

The statement adds: “The board’s judgment is that the present accommodative setting of monetary policy is appropriate given the economy’s circumstances.

“The board will continue to monitor how economic and financial conditions unfold and how they impinge on prospects for sustainable growth in economic activity and achieving the inflation target.”

 

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Bold vision on the horizon for city

A vibrant foreshore entertainment district, an indigenous cultural centre, cheap inner-city housing for students, voting at 16 and gay marriage are some ideas for improving Perth that Australia’s 2008 youth ambassador to the United Nations will take to today’s C2030 Summit.
 
One of many speakers at the summit, Elizabeth Shaw, 25, said a bold plan to bring the river to the city should be at the top of the State Government’s to-do list.  
 
Ms Shaw, of Claremont, is on the City of Perth youth advisory council.
 
She said it was time Perth realised its potential. “We need to stop talking about things like connecting the city to the river and just do them,” she said.
 
“When you’ve got a space like the foreshore, you’ve got to be bold and innovative and take risks.”
 
Ms Shaw’s vision for the foreshore included a variety of housing for all social economic backgrounds, a range of restaurants, live music, wine bars, a rowdy pub, an art gallery, a public space for weekend markets and an indigenous cultural centre.

Diversifying usage on each city block to achieve a balance of retail, housing, business and industry combined with deregulated trading hours would keep the city activated and vibrant at all times.
 
Ms Shaw said attracting and retaining skilled local and international students could be improved by building high-density housing in the city and making it an exciting place to be.
 
“We need a big resident population to create flow-on services,” she said. 

JOSEPH CATANZARO  :   www.thewest.com.au

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PCB secures healthy dose of convention tourism for Western Australia

The Perth Convention Bureau has secured 88 new business events for Western Australia worth an estimated US$66.6 million to the local economy.

Achieved against the backdrop of the global economic crisis, the US$66.6 million, end-of-financial-year result saw the bureau exceed its 2008/09 delegate expenditure target by US$2 million.

The events, which consist of national and international conferences, corporate meetings, and incentive groups, are expected to attract an estimated 35,500 delegates to Western Australia over the next four years.

Bureau managing director Christine McLean described the result as a “fantastic achievement” in what has been an extremely difficult global economic environment.

“This result demonstrates the resilience of the business events sector and why the state government has committed increased funding to attract high-yield visitors,” Ms. McLean said.

“In the short term, the global economic crisis is impacting on our business with reduced delegate numbers at conferences and fewer corporate reward programs being booked, but the long-term prospects for the business events sector look extremely buoyant.                                                                                                            

“In spite of all the global communication options available these days, people still prefer to meet face to face.”

A string of significant medical conferences contributed to this year’s healthy scorecard of conference bid wins.

Among these include the Royal Australian College of Surgeons Annual Scientific Conference in May 2010 (2,800 delegates); the Australian and New Zealand College of Anaesthetists Annual Scientific Meeting in May 2012 (2,000 delegates); National Alcoholics Anonymous Convention in April 2011 (1,550 delegates); and the 11th National Rural Health Conference in March
2011 (1,200 delegates).

Ms. McLean said that the events will further Perth’s reputation as a leading center of medical research excellence.

“Perth’s reputation for, and expertise in, hosting major medical and science meetings is growing internationally and will help to position Perth over rival international destinations in the future.”

Given that the bureau’s new business events target has increased to US$81 million this year, it will be critical to position Perth and Western Australia front and center in the minds of event decision-makers around the world.

The expansion of the PCB’s Convention Scholarship Program and the creation of the new Business Events Brand for Western Australia are expected to lead to both an increase in opportunities and exposure for the destination.

“The scholarship program, which has already been hugely successful in unearthing local conference hosts and bidding opportunities through partnerships with Perth universities and the city of Perth, will be expanded to run in conjunction with Perth hospitals.

“Since the program’s inception, an estimated US$46.33 million worth of meetings has been generated on disciplines ranging from environment and education to engineering and resources. By including Perth’s top hospitals in the initiative, we aim to further profile the state’s expertise in the areas of medical research and health sciences.

“Add to this the launch of the business events brand for Perth and Western Australia, which we expect will attract unprecedented international and national exposure as a business events destination, and we are in a strong position to achieve our 2009/10 target.”

The bureau has been responsible for marketing Western Australia as a destination for business events since 1972. The business events industry is the highest-yielding sector of the tourism industry, with international delegates spending six times that of the leisure tourist.

Source  :  www.eturbonews.com

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Rudd signs deal to help jobless

A PLAN to help up to 124,000 retrenched workers has united the states but drawn criticism in Canberra.

Prime Minister Kevin Rudd signed a deal with the states and territories to give intensive help to unemployed people aged over 25.

The Council of Australian Governments (COAG) conference in Darwin agreed to give the jobless access to government-subsidised vocational training.

Labor says the “compact with retrenched workers” will help up to 124,000 people.

“Workers who have been retrenched as a consequence of this global recession have lost their jobs through no fault of their own,” Mr Rudd said.

“Acting to support young Australians who are finding it hard to enter the labour market … represents an important intervention by government.”

Under the agreement, the Federal Government’s new employment agency Job Services Australia matches retrenched workers, aged over 25, with a path to a qualification.

The state and territories would set aside training places.

The training is for people who have been out of work since January 2009 and who are registered with a Job Services Australia provider.

The entitlement is available from now until the end of 2011.

It follows an “earn or learn” COAG agreement reached in April to make youths aged 15 to 19 undertake training and guarantee places for 20-24 year-olds in skills development.

The Rudd Government says it has invested $300 million in programs to help retrenched workers, but it did not provide a cost for the latest one.

Queensland Premier Anna Bligh said COAG’s new scheme would prepare Australia for economic recovery.

“We know only too well how quickly this country can find itself in a situation of serious skills shortage.”

But Opposition employment participation spokesman Andrew Southcott said training programs for the unemployed had failed when Labor last took that approach in the mid-1990s.

“Training for training’s sake, without a job at the end of it, is cruel to the unemployed,” Mr Southcott said.

“The experience around the world is that a skills-first approach for the unemployed tends to be very expensive and you have poor outcomes.”

Source  :  www.news.com.au

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Flights ‘cheaper than a carton of beer’

TRAVELLERS can fly to destinations around Australia for less than the price of carton of beer thanks to cut-price airline Tiger Airways. 

As part of its latest discount assault on rivals Qantas, Jetstar and Virgin Blue, Tiger Airways has aggressively cut the cost of some of its airfares.

For a limited time some of Tiger’s one-way flights from Sydney to Melbourne cost as little as $25.51, the Gold Coast to Melbourne from $23.33, or Adelaide to Perth costs $22.78, including taxes, The Advertiser reports.

But there is a catch. While there are 30,000 seats available for various destinations, the price is for a one-way flight which must be taken on a Tuesday or a Wednesday between August 4 and March 24.

The discount flights aren’t available during the summer school holidays, from December 15 to January 27, or on March 9 and 10.

Tiger Airways says the fares include all fees and taxes, so in essence, it is giving away the seat on the plane.

The fares include up to 7kg of carry-on luggage, but passengers are charged $10 for up to 15kg and $35 for up to 25kg of check-in luggage. The one-way discount fares include Adelaide to Sydney for $28.76 and to Melbourne for $25.14.

“For the price of a couple of movie tickets or a few beers you can travel some of Tiger Airways’ most popular routes midweek,” Tiger commercial director Steve Burns said.

“While everyone’s tightening their belts in the current economic climate, it’s nice to know you can still take a short break or get that work-life balance back on track with incredible deals like this.”

Comparable airfares from Adelaide to Perth aboard Jetstar during the same period currently cost $79, with Virgin Blue’s from $89 and Qantas’s from $129.

King William Travel manager Sandra Cosic said people needed to be wary of what they received for a low fare, taking into account extra charges for luggage and other services.

“But there are some great deals out there,” she said.

Tiger’s 30,000-seat “Just Pay Taxes and Charges” sale is on until midnight tomorrow.

HOW TO PAY FOR YOUR FARE

Don’t buy that carton of Platinum Pure Blonde for the weekend. SAVE $37.98.

Instead of heading out for dinner, stay at home and eat in. SAVE $20-$30.

Wait for that new movie to hit the DVD shelves instead of catching it on opening night. SAVE $34.

Give up that manicure. Your nails can wait a little longer. SAVE $40.

Bring instant coffee to work for a week instead of buying two a day. SAVE $35.

Catch public transport to work for a week instead of driving. SAVE $40.

Source  :  www.news.com.au

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