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Reserve Bank governor Glenn Stevens has signalled interest rates are on their way back up with mortgage rates likely to edge up between half and a full percentage point.

Giving evidence to the House of Representatives economics committee in Canberra, Mr Stevens said the RBA’s focus continued to be on what mortgage rates were offered by commercial banks rather than on the Reserve’s official cash rate.

He said given the commercial banks had lifted rates over and above what the RBA had done, there was still about a half and a full percentage point to go before mortgage rates were back to what the Reserve would consider close to their long term average.

“There’s a little distance to go yet before I think you could characterise the setting of interest rates as normal or average,” he said.

The RBA surprised markets by leaving official rates on hold at its February meeting.

Mr Stevens said on top of the Reserve’s own lift in official rates, the commercial banks actions had effectively delivered three and a half interest rate rises to mortgages cases, and in the case of Westpac customers, four rate hikes.

He said one of the advantages of lifting rates as the RBA did in the last three months of 2009 was that it could hold rates in February and get a clearer picture of how the economy was travelling.

“You get that luxury when you can wait a little a bit further down the line,” he said.

Mr Stevens said Australia had performed much better than even the RBA had expected out of the global recession.

But he warned that meant the economy was now heading into an upswing stronger than otherwise would have been the case.

“With the economy having had only a mild downturn with begin the upswing with less spare capacity than would typically be the case after a recession,” he said.

“There’s less scope for robust demand growth without inflation starting to rise again down the track.

“Monetary policy must be careful not to overstay a very expansionary setting.”

Mr Stevens said the resources sector in particular was looking to grow quickly, with the terms of trade likely to head back to the record highs seen in 2008 this year.

He also highlighted the strength of Australia’s sovereign debt position, hosing down fears the country was carrying too much debt.

“Australia’s position is by any measure very strong indeed,” he said.

The governor also played down fears raised by Opposition finance spokesman Barnaby Joyce that Australia could default on its debts.

Mr Stevens said Australia had never defaulted before and there were no signs it would now.

“I very much doubt there ever will be,” he said. 

“Monetary policy must be careful not to overstay a very expansionary setting.”

Mr Stevens said the resources sector in particular was looking to grow quickly, with the terms of trade likely to head back to the record highs seen in 2008 this year.

He also highlighted the strength of Australia’s sovereign debt position, hosing down fears the country was carrying too much debt.

“Australia’s position is by any measure very strong indeed,” he said.

The governor also played down fears raised by Opposition finance spokesman Barnaby Joyce that Australia could default on its debts.

Mr Stevens said Australia had never defaulted before and there were no signs it would now.

“I very much doubt there ever will be,” he said.

Source www.thewest.com.au

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Industry leaders in Australia are urging the Australian federal government to overhaul its skilled immigration program to address a looming shortage of workers.

Recent changes by DIAC to the skilled migration visa processing times have meant that many hundreds of applicants for visas have been told that they may have to wait up to 3 years and this is slated to impact on several massive projects announced for Western Australia, including the Gorgon gas development, expansion of the Pluto LNG plant and the development of the Mid-West iron ore region including the massive Gindalbie iron ore mine which will need upwards of 1500 workers during the construction stage.

 The recent Australian Financial Review (afr.com.au) has stated that skills shortages are set to intensify in coming years.

The article calls for the Department of Immigration and Citizenship to urgently look at reviewing Australian visa policies to ensure that these shortages can be filled. More immigrants will be needed to work in Australia in industries such as energy, mining  and IT which, according to the review, face a major skills shortage unless something drastic is done to alleviate it.

Major Australian firms such as infrastructure giant United Group have also released warnings to the government that they will be facing skills shortages within 12 to 18 months.

The firm’s CEO Richard Leupen declared that the shortage has been brought about as a result of the tightening of the business visa rules. He says this has coincided with the company’s reduction in training programmes for staff in response to the recession.

In the IT industry, the need is even more acute. A study, commissioned by Microsoft Australia, has found the IT industry will generate $21 billion for GDP by the end of 2013 but any potential growth could be stifled by the shortage of skilled labour.

Bruce Mills, chief executive of IT consultancy firm 3W, says as more IT work becomes available, such as the National Broadband Network, companies will struggle to grow and obtain new projects if the number of skilled workers remains flat.

“What has occurred is that everything that was done to avoid the global financial crisis has sort of spilled over, and so by the time any of the results were felt any issue that caused the crisis is over, and that is what has happened with the tightening of 457 visas.”

Source  :  www.australiamagazine.co.uk

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Some of WA’s finest restaurants are offering five-star meals at cafe prices in a bid to ensure cash-strapped customers still enjoy their pleasures despite the recession.

Top chefs and restaurant owners say they are keen to show punters top food is not only for special occasions.

Margaret River’s Vasse Felix and Must Wine Bar, Bistro Felix in Subiaco and Villa D’Este in West Perth are some of the hotspots offering set menus where customers can enjoy two or three-course meals, sometimes with wine, for $37-$55 a head.

Vasse Felix proprietor Paul Holmes a Court said the winery had made the decision to offer a standard set menu – two courses for $45 and three for $55 – for the first time this winter and it had worked so well it would be continued through spring.

“The idea stuck when I was in France with my family,” he said. “There were set menus everywhere we went and it worked well.” Mr Holmes a Court said he was keen to ensure as many people as possible could enjoy the world famous winery’s restaurant, without compromising high standards.

He said the decision to cap prices was also driven by a belief that top food should be affordable.

Vasse Felix executive chef Aaron Carr said the new spring menu boasted Asian and Indian influences, with highlights including roasted barramundi with sweet potato dhal and hot and sour soup with shredded chicken and coconut.

Bistro Felix owner Jeremy Cariss said although his set menu was dubbed the “recession concession”, it had been on offer for more than two years and was enormously popular.

Villa D’Este owner Enrico Morichetti said his business lunch menu allowed people to enjoy three courses for $36.80. He said it encouraged people to come out for lunch and enjoy the delights of the restaurant.

Source  :   www.thewest.com.au

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Channel Nine has announced an Australian version of The Apprentice will be made, to be fronted by Wizard Finance creator Mark Bouris.   donald_trump_story

To be produced by FremantleMedia Australia, it’s a surprising move given the franchise is now several years old and hardly considered “hot property” anymore. It’s been some time since we’ve seen The Trump on free-to-air, and even Seven’s attempt at the UK Apprentice, with Alan Sugar, didn’t exactly light up our screens either.

So can a local version work? FremantleMedia at least has a good track record at Australian adaptations of international series, including MasterChef Australia, Australian Idol, The Biggest Loser and Project Runway Australia.

Nine also found that its local version of Ladette to Lady did quite nicely, thank you. But in this game there are no guarantees.  Neither Australian Survivor or Celebrity Survivor, which like this format are both Mark Burnett franchises, worked in Australia.

It will also be risky launching a show that has succeeded with its wealthy excess in a time of recession.  But most reality shows hinge on their casting. Mark Bouris is offering the winner of the local series an executive position in his financial-services firm company, Yellow Brick Road on a cool six-figure salary.

To be part of my team you will need to understand the concept that everyone has financial dreams, and that this is something that all Australians are entitled to, he says. “In many cases owning your own home and a comfortable retirement is ultimately what people want. For me empathy is really important and I’m not interested in an apprentice who only wants to look after the top end of the financial spectrum.  Being in my team means that you will want to help both.”

If you are aged 18 and over from August 1st and available for filming from July to September then you’ve met the first two criteria for auditions. You can apply for the show until Friday July 3rd at www.ninemsn.com.au/apprentice.

The show is due to screen later this year.

Source  :  http://www.tv.com/story/15621.html

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AUSTRALIA is still doing better than other major economies despite a jump in jobless figures, Prime Minister Kevin Rudd says.  kevin-rudd

The unemployment rate has risen to 5.7 per cent, after the total number of people in work fell by 1700, official May jobs data showed today.

 “Today we have seen an increase in unemployment to 5.7 per cent, returning to where it was in March this year, although employment remained fairly steady falling by 1700,” he told delegates at an Australian Industry Group lunch in Sydney.

He said the unemployment figures were indicative of how the financial crisis was affecting Australia.

“The global recession is continuing to have a direct impact on the Australian economy and Australian jobs,” Mr Rudd said.

“No one likes to see unemployment rise because of the global recession … (but) Australia’s unemployment rate remains lower than all other major advanced economies except Japan.”

He said the figures would have been far worse had it not been for the government’s stimulus packages.

“`Without our nation building plans, over 200,000 more Australians would be out of work,” he said.

Source www.news.com.au

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The residential construction industry has been assisted by growth in the first time home-buyer activity along with the low interest rate.mvc-construction-workers-blog

Home builders are offering some competitive priced housing, and in the last few months things have started to pick up as we see with the display homes traffic which has increased by around 1000 more visitors a week compared to the same period last year.

With the growing concerns of the recession, some homebuyers are investing in the single storey home which is allowing them to lower their debt, rather than building the two storey home.

The Commercial developments throughout Perth have slowed down, but the ones with less financial risk attached to them are still going ahead.

What is happening is there is a  big demand for the first home buyer homes, therfore a lot of  houses being sold are at this price range therefore bringing down the median house price. 

There are also alternative financing options in WA such as the WA Governments Keystart Home Loans which has helped a lot of new home owners get on the property ladder.

Activity in the residential construction is providing  jobs at time when needed.

The first homebuyer’s stimulus is moving through two stages this year  :

From now until October 1, 2009  $21,000 on a house and land package, or a new house built that  has not been lived in.

$14,000 for an established home.

From October 1 until December 31, 2009 the boost will be lowered to  :

$14,000 for a house and land package, or a new built house that has not been lived in.

$10,500 for an established home.

From January 1, 2010 is to be confirmed.

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Australia has been voted  the best place to be during the global economic crisis, in a business survey.   AUS_Perth_Milner_Swan_River  

One in five international business people have voted for Australia to be the best place to live in  during the economic crisis as a survey released by Servcorp International Business. 

The Servcorp survey asked 7,500 international business people all being in  24 nations to vote which countries they believe are surviving the crisis the best.

Australia was indeed far in front by 20% of all international business people choosing it as the country that is surviving overall the best.

Taine Moufarrige, Servcorp Executive Director says: “In my experience working with international businesses around the world, especially during the last six months, I’ve noticed how relatively unaffected Australian businesses and the Australian business person’s attitude by the economic downturn.

Over 71% of Australian business people believe we are the “lucky country” and it’s interesting to see that the rest of the world agrees.”

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