By Leith van Onselen The Government's planned relaxing of 457 visa rules so that employers can hire an unlimited number of foreign workers under a temporary working visa, potentially opening the system to widespread rorting, is looking even more egregious following the release today of the Department of Employment's preliminary skills shortages report, which reveals that the number of occupations suffering skills shortages is at an "historic low": Employers continue to recruit skilled workers without marked difficulty, and the number of occupations in shortage is at an historical...

By Leith van Onselen The Australian Bureau of Statistics (ABS) released export and import prices for the June quarter, which portends big falls in Australia's terms-of-trade when the national accounts are released next month. According to the ABS, export prices fell by 7.9% in June quarter and by 1.9% over the year. By contrast, import prices fell by a more moderate 3.0% over the June quarter but rose by 5.7% over the year (see below table). The fall in export prices were driven by the following factors: This [7.9% quarterly] decrease was driven mainly by falls in the prices received...

From the quarterly Deloitte Access Economics Investment Monitor out today: Holding pattern As the Australian economy continues its transition away from growth led by investment in the resources sector, there are signs that investment in other sectors may lift over the coming year. Data from Deloitte Access Economics’ Investment Monitor database shows that the value of major projects is currently in a holding pattern. The total value of all projects has barely budged since June 2013, predominately due to the relatively static value of resources projects under construction. The resources...

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released its annual motor vehicle census (MVC), which revealed that Australian's affection for private transport shows no sign of slowing, with the total number of registered vehicles and the per capita number of vehicles rising more strongly than population growth. According to the ABS, the total number of vehicle registrations grew by 2.6% in the year to 2014, with average annual growth of 2.5% recorded between 2009 and 2014 (see next table). Growth in passenger motor vehicles was relatively weaker, however, at...

By Leith van Onselen The Coalition's draconian internet policy is one step closer to becoming reality after the release last week of the Online Copyright Infringement Discussion Paper. According to the Discussion Paper, the Government is seeking to make it easier for the copyright industry to sue internet service providers (ISPs), as well as force them to censor the internet by blocking various overseas sites that carry copyrighted content. Mark Gregory, Senior Lecturer in Electrical and Computer Engineering at RMIT University, last month contended that the Coalition's internet policy...

By Leith van Onselen Employment Minister, Eric Abetz, has acknowledged business' criticism that its beefed-up "Work-for-the-Dole" program, which would require the unemployed to apply for 40 jobs a month in order to continue to receive benefits, could create a deluge of sham job applications, and has signaled possible changes. From The Guardian: Abetz emphasised that the government did not want “red tape and inconvenience to employers” and would listen to feedback... Asked whether there was a risk the 40-application rule would become a box-ticking exercise, with people applying for jobs...

From the annual Graduate Careers Australia survey: This section of the Graduate Destinations report examines the progress of new higher education graduates, from all levels of study, four months after course completion, comparing employment and further study outcomes. Table 1 examines the broad outcomes of 2013 graduates by level of award. Outcomes include graduates available for full-time employment (those in full-time employment as well as those seeking full-time employment), those in full-time study, those graduates interested only in part-time or casual employment (whether in it, or...

By Leith van Onselen The AFR is reporting today that Queensland Treasury Corp has called for expressions of interest to sell $33.6 billion of ports, power generators, electricity distribution networks and water pipelines (see below graphic). Studying the for sale list makes me nervous, as most of the assets appear to be essential infrastructure, whose sale could potentially lead to deleterious outcomes for taxpayers. As argued previously, it is the degree of market competition that usually determines whether an asset sale is positive for the public. And essential infrastructure...

Standard and Poors has today affirmed Australia's AAA sovereign rating: The sovereign credit ratings on Australia benefit from the country's strong institutional settings, its wealthy and resilient economy, and a high degree of monetary and fiscal policy flexibility. The country's high external and household indebtedness, as well as vulnerability to weakening commodity export demand, moderate these strengths. We have affirmed the unsolicited ratings on Australia at 'AAA/A-1+', and the outlook remains stable. The stable outlook is based on our assumption that Australia's historically...

The HIA is out with its new home sales index: New home sales took a step higher in the month and quarter of June 2014, said the Housing Industry Association, the voice of Australia’s residential building industry. The HIA New Home Sales Report, a survey of Australia’s largest volume builders, shows an increase of 1.2 per cent in the month of June 2014 and a rise of 2.0 per cent in the June quarter. Sales of multi-units drove the monthly result, surging by 15.9 per cent. Detached house sales fell by 1.0 per cent in June. “Detached house sales increased by 2.6 per cent in the June...

By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index has more than recovered from its Budget-induced slump, rising another 2.7 points in the week ended 27 July to 116.2, and is now at its highest level since late-January and some 2.7% above its long-run average reading of 113.2 (see next chart). According to ANZ chief economist, Warren Hogan: While the improvement in confidence was relatively broadly based last week, households’ perceptions about ‘financial situation compared to a year ago’, a subindex most closely correlated with consumer demand, has...

By Leith van Onselen Business groups have raised concern that the Abbott Government's planned expansion to its "Work for the Dole" program (outlined yesterday) could create a deluge of sham job applications. Under the beefed-up scheme, the unemployed would be required to apply for 40 jobs a month in order to continue to receive benefits. According to The Guardian: The Australian Chamber of Commerce and Industry’s director of employment, education and training, Jenny Lambert, said she understood the government had set the job search target to encourage activity. “[But] what we don’t...

The annual Newport Consulting mining outlook study is out and is sickly reading. Future outlook reaches a new five-year low. An overwhelming 93 percent of mining leaders in this year’s report were not optimistic about their growth prospects for the next 12 months – up by more than 50 percent compared to last year. Most hold low hopes of the sector resuming large-scale projects in the next 12 month, and only 7 percent believe they will see some large-scale projects return during this time. New federal government embraced, but industry wants more action. A sizeable 70 percent of mining...

By Leith van Onselen The Abbott Government is set to expand its controversial "Work for the Dole" program to include all job seekers between the ages of 18 and 49 years of age. Under the new program, which is set to begin from 1 July 2015, those aged 18 to 30 will be required to work 25 hours per week for six months out of 12, while people aged 31 to 49 will have to work 15 hours for six months out of 12. Those between 50 and 60 will be required to participate in an approved activity for 15 hours per week for six months every 12 months, but will have the option of participating in the Work...

By Leith van Onselen The Business Council of Australia (BCA) has urged the federal government to implement policies that facilitate workers relocating interstate or overseas to where they are needed. From The AFR: Members of the BCA said the government must invest in infrastructure and housing to make less developed states more attractive to workers. Companies should also pay incentives to encourage the labour force to move, they say. “Our fly-in, fly-out concept is very unique to Australia and reflects our cultural mindset that we are just not willing to move for work,” KPMG chairman...

By Leith van Onselen The Australian Medical Association (AMA) has urged the Australian government to reject provisions in the Trans Pacific Partnership agreement (TPP) that “could undermine the Pharmaceutical Benefits Scheme and compromise the ability of governments to improve public health”: The AMA Federal Council has called on the Federal Government to reject “any provisions in trade agreements that could reduce Australia’s right to develop health policy and programs according to need”. The Association said it was concerned that aspects of the proposed TPP could be used to...

By Leith van Onselen Infrastructure Australia boss, Mark Birrell, has urged the Senate to stop bickering and allow through the Abbott Government’s “asset recycling” program, arguing that it is essential to clear the project backlog in Australia. From The AFR: He said the plan, unveiled in the May budget, was a crucial next wave of reform that would mirror competition payments to the states in the mid-1990s. “Asset recycling is a key part of the future because it’s a fresh way of funding infrastructure that would otherwise not be built,” Mr Birrell told The Australian Financial...

Cross-posted from Martin North's DFA blog: The CPI data which came out from the RBA yesterday registered 3%. This was very bad news for households with savings in deposit accounts at the banks, because ever more are finding that returns after tax are well below CPI. This is part of a worrying trend for many, and is prompting them to seek out alternative and possibly higher risk saving vehicles. Today we examine this issue in the light of latest data from our household surveys. First, here are some benchmark savings rates mapped to the CPI and RBA benchmark rate. Many savings rates are now below...

By Leith van Onselen Boston Consulting Group CEO, Andrew Clark, and Deloitte Digital head, Frank Farrall, have today urged Australian business to embrace the digital revolution to ensure that it maintains competitive with the world. From The AFR: “Australian companies are in danger of being pushed aside by innovative competitors from at home and abroad unless they move more quickly to catch up with the digital revolution”... Mr Clark said in an interview... “Up until a few years ago, you had Bernie Brookes from Myer saying our customers don’t want to shop online and you had Gerry...

Aurizon CEO Lance Hockeridge needs a new speech writer: Aurizon chief executive Lance Hockridge has claimed the expansion of a coal export terminal at Queensland’s Abbot Point will be done in an “environmentally sensitive manner” as he reiterated confidence in Asian demand for Australian resources. “The ‘Chicken Little’ view of resource demand does not recognise the reality of the long term dynamics in China, Indian and other Asian economies,” Mr Hockridge told the Israel Chamber of Commerce in Brisbane on Wednesday. “Despite the emergence of renewables, coal will remain the...

By Leith van Onselen As noted briefly by Houses & Holes, the Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the June quarter 0f 2014, which registered a modest quarterly increase in prices, with the result also coming in line with economists’ expectations. According to the ABS, headline CPI rose by a modest 0.5% in the June quarter, which follows March’s 0.6% rise (see next chart). On an annual basis, headline CPI growth rose to 3.0% from 2.9% in the March quarter, which is at the top of the Reserve Bank of Australia’s (RBA) target...

The Australian Bureau of Statistics has just released the June quarter CPI and it's about expected at 0.5 headline with slightly higher analytical measures. The dollar jumped on the latter. At first blush it looks like tradable inflation is still firmish but the dollar has overreacted because it's priced for cuts. JUNE KEY FIGURES Mar Qtr 2014 to Jun Qtr 2014 Jun Qtr 2013 to Jun Qtr 2014 Weighted average of eight capital cities % change % change All groups CPI 0.5 3.0 Food and non-alcoholic beverages 0.4 2.5 Alcohol and...

The Department of Employment (DEEWR) job vacancies report for June is out and firmed 1.5%: The trend remains weakly up: Composition was unexciting (economically) with carers taking the gong: Skilled looks more encouraging: No change, really. Insipid labour market. Full report...

From Westpac comes the following Q2 CPI preview (released today): Our Q2 headline CPI forecast is 0.6%qtr/3.2%yr. Core  inflation, as measured by the average of the trimmed mean and weighted median, is forecast to rise by 0.7%qtr/2.8%yr. We estimate that the 6 month annualised pace of core inflation eased back to 2.5%yr in Q2 from 2.8%yr in Q1 and 3.0%yr in 2013Q4. The pulse of core inflation has eased back from the top of the RBA’s 2-3% target band and the lack of wage inflation, well anchored low inflation expectations and a robust AUD suggests that the most likely outcome is for this...

By Leith van Onselen Australia's independent infrastructure umpire, Infrastructure Australia, has launched a scathing attack on road-based infrastructure investment undertaken by Australia's governments, arguing that it has been "hideously inefficient" in a new leaked report. From The Canberra Times: More than $20 billion a year of national road funding is being spent in a “hideously inefficient” manner, according to a leaked assessment by Australia’s independent infrastructure umpire... “The unhealthy focus of road agencies appears set on ‘getting, controlling and spending’ more...