Reserve keeps interest rates on hold

The Reserve Bank has delivered some badly needed relief to mortgage holders, deciding today to leave official interest rates on hold.

For the first time since February, the RBA board did not use its monthly meeting to lift rates which now stand at 4.5 per cent.

In a statement, bank governor Glenn Stevens said the issues around sovereign debt in Europe and its impact on financial markets were a major reason behind the move.

He said the impact of these on the wider economy were still to be determined, arguing global growth is still expected to be around trend for the rest of this year.

But Mr Stevens signalled interest rates were likely in the future on the back of the return of the mining boom.

“In Australia, with the high level of the terms of trade expected to add to incomes and demand, output growth over the year ahead is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing,” he said.

“Inflation appears likely to be in the upper half of the target zone over the next year.

Consistent with that outlook, and as a result of actions at previous meetings, interest rates to borrowers are around their average levels of the past decade, which is a significant adjustment from the very expansionary settings reached a year ago.”

The decision followed new figures from the Australian Bureau of Statistics which showed retail sales growing 0.6 per cent in April and a 14.8 per cent collapse in dwelling approvals.

However, the retail sales – while stronger than expected – were pushed up by food sales which jumped 1.3 per cent. Once this sector, which accounts for 40 per cent of all sales, is excluded retail was up just 0.1 per cent.

Other ABS figures showed government spending is holding up the economy and will add about 0.8 percentage points to tomorrow’s GDP result. Without that burst, the economy may have actually contracted in the March quarter.

CommSec chief equities economist Craig James said the figures showed the RBA had no option but to leave rates where they are for some time to come.

“Given the latest round of data, there are good reasons for the Reserve Bank to leave rates on hold for the next few months,” he said.

“Not only are retail sales holding at very weak levels, but the housing sector is showing signs of consolidation.”

Treasurer Wayne Swan says the Reserve Bank’s decision to leave the official cash rate unchanged is a “welcome relief”.

“This news will be welcome relief to Australian families and businesses around the country, who are of course doing it tough,” Mr Swan told parliament minutes after the decision was announced.

The national accounts for the March quarter are due for release on Wednesday.

“I have every confidence that with right polices in place, our economy can continue to be one of the best in the world over coming years,” Mr Swan said. Consistent with that outlook, and as a result of actions at previous meetings, interest rates to borrowers are around their average levels of the past decade, which is a significant adjustment from the very expansionary settings reached a year ago.”

“Not only are retail sales holding at very weak levels, but the housing sector is showing signs of consolidation.”

“Source  :  www.thewest.com.au

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New boom, bigger problems: poll

One in two West Australians believes there will be greater skills shortages and more pressure on house prices compared with the last mining boom, the latest Westpoll has found.

The results revealed 53 per cent of those surveyed thought there would be more pressure on a housing price bubble and skills shortages than last time, while 32 per cent believed there would be the same level of pressure.

Just 9 per cent of those polled said there would be less pressure.

“There is a clear community expectation that there will be quite severe skills shortages in WA and, perhaps of greater concern, a view that there will be an upward pressure on housing prices,” pollster Keith Patterson said.

“This may lead to significant levels of speculation in housing in the anticipation that values will surge as the resources boom unfolds.”

Australian Manufacturing Workers Union secretary Steve McCartney said the community was right to be concerned about increasing prices.

“I think lower paid members of our community should be concerned because sometimes the benefits of those booms don’t filter down to the low-paid workers,” he said.

Construction, Forestry, Mining and Energy Union spokesman Gary Wood said he did not believe there would be more pressure as the WA economy improved.

“There might be the perception put out by the likes of the employer associations so they can attempt to justify the use of overseas labour but it needs to be fully demonstrated they are not just a propaganda war to bring in overseas labour,” he said.

Opposition Leader Eric Ripper said the Government needed to demonstrate a sense of urgency over labour supply, training issues and housing.

“The experience of the last boom was that house prices rose and rents rose and there were skills shortages which made life difficult for small to medium enterprises,” he said.

“The Government is not ensuring that enough housing lots are released.

“The industry is not building enough houses.

“We are storing up a problem for the future.”

Premier Colin Barnett had previously said there was a need to attract more skilled workers to WA and there needed to be more mobility of workers between States.

Deputy Prime Minister Julia Gillard said last month that interstate and international migration was needed to help fill future job vacancies. 

Source  :  www.thewest.com.au

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More WA workers expect a pay rise

West Australians expect the biggest pay rises of any workers in the country, believing the global recession is over and the mining boom has arrived.

A report by Westpac has found 14 per cent of West Australians expect a pay rise of at least 8 per cent over the coming year, while another 21 per cent think they’ll get a rise of between 4 per cent and 8 per cent.

It is the highest proportion of workers in any State who think they will be rewarded with a wage rise two or three times the rate of inflation.

And in a sign of the confidence of WA workers, just 0.4 per cent of those surveyed say they will have a pay cut – the lowest proportion of any State. By contrast, more than 6 per cent of South Australians fear they will have their pay cut while just 19 per cent expect a pay rise of at least 4 per cent.

More than 35 per cent of those aged between 18 and 24 expect a pay rise of at least 8 per cent compared to less than 10 per cent of people aged 55-64. While 35 per cent of respondents who earn more than $100,000 a year expect at least an 8 per cent rise, less than half of those earning under $40,000 expect any pay rise.

CommSec chief equities economist Craig James said that despite signs of optimism, Australian consumers were increasingly conservative. While household disposable income had grown almost 8 per cent last year, close to the fastest rate in 19 years, consumer spending had lifted just 2.2 per cent or the slowest in 16 years.

“And then there is the news that 70 per cent of Commonwealth Bank home loan customers are ahead in their loan repayments – making higher repayments than they need to,” he said. “How long this new conservatism continues remains anybody’s guess.”

Source  :  www.thewest.com.au

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Migration shake-up for WA mining boom

WA will be able to handpick permanent migrants to service the booming resources sector and other areas of critical need under a massive overhaul of the skilled migration program to be unveiled today.

Under the changes, Immigration Minister Chris Evans will revoke and refund 20,000 applications from would-be skilled migrants and instead give top priority to those who are sponsored by employers and States for high-level jobs.

The overhaul is geared towards making Australia’s skilled migration super-responsive to urgent shortfalls in qualified mining and health sector workers, while also tightening permanent visa criteria for overseas students studying courses in low skill occupations.

Senator Evans will immediately abolish the Migration Occupations in Demand List, which gazettes 106 areas of preferred workers, replacing it by April with a more targeted Skilled Occupations List drawn up by the independent Federal authority Skills Australia in consultation with the States and business.

It means doctors, nurses, engineers and high-value professions and trades will have priority over low-skilled workers such as hairdressers and chefs.

In WA, as yesterday’s Olivier Jobs Index showed, the most sought after workers are in engineering, trades and services, and building.

In a marked departure from the existing skilled migration scheme, States will be asked to draw up their own migration plans to allow fast-tracking of applications for migrants sponsored by States or companies for specific jobs.

The bar will be raised for unsponsored skilled migration applicants, with criteria such as proficiency in the English language, work experience and overseas qualifications to be made tougher.

The overall annual skilled migration intake will remain unchanged at 108,100 people.

The changes are likely to have a significant impact on the burgeoning multi-billion-dollar overseas student market where hundreds of thousands of foreign students have come to Australia to undergo trades training, enticed by the prospect of permanent residency.

The Government believes such courses are skewing the migration program, leaving new permanent residents with poor English and little prospect of finding work in their nominated field of expertise.

Foreign students in Australia studying in areas dumped from the new skilled occupation hit list will be given 18 months after completion of their studies to find sponsorship from an employer or sent home.

The Government believes the new regime will help the clampdown on unscrupulous migration agents, many of whom are Indian-based, who con students into believing completion of an Australian course gives automatic entitlement to permanent residence. 

The bar will be raised for unsponsored skilled migration applicants, with criteria such as proficiency in the English language, work experience and overseas qualifications to be made tougher.

The overall annual skilled migration intake will remain unchanged at 108,100 people.

The changes are likely to have a significant impact on the burgeoning multi-billion-dollar overseas student market where hundreds of thousands of foreign students have come to Australia to undergo trades training, enticed by the prospect of permanent residency.

The Government believes such courses are skewing the migration program, leaving new permanent residents with poor English and little prospect of finding work in their nominated field of expertise.

Foreign students in Australia studying in areas dumped from the new skilled occupation hit list will be given 18 months after completion of their studies to find sponsorship from an employer or sent home.

The Government believes the new regime will help the clampdown on unscrupulous migration agents, many of whom are Indian-based, who con students into believing completion of an Australian course gives automatic entitlement to permanent residence.

Source  :  www.thewest.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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