Private Sector Credit Rises 0.6% In Jan

The value of loans outstanding to the private sector grew in January, but personal credit has continued to flatline, data from the Reserve Bank of Australia shows.

The central bank’s financial aggregates for January show total credit increased by 0.6 per cent, after rising by 0.5 per cent in December. The result beats forecasts by analysts surveyed by Bloomberg, who had tipped a 0.5 per cent increase in the month.

In the 12 months to January total credit growth came in at 6.2 per cent, increasing on the 4.1 per cent rise in the previous year. Again, the result beat expectations, with analysts surveyed by Bloomberg having tipped a gain of 6 per cent.

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But personal credit growth was flat in January — after posting the same flatline result in December and November.

Business credit, meanwhile, increased 0.8 per cent in the month after lifting 0.5 per cent in December.

Housing credit grew by 0.6 per cent in January after posting the same increase in December.

Broad money, which includes currency, deposits and other short-term liquid liabilities, rose by 0.4 per cent in the month, after lifting 0.7 per cent in December.

For the twelve months to January, housing loans rose 7.1 per cent, compared with 5.6 per cent growth in the previous year.

But the growth of personal loans slowed in the last twelve months. Personal loans lifted 0.8 per cent in the year to January, down from a 1 per cent lift in the prior year.

Business loans, meanwhile, had lifted significantly over the year, rising 5.5 per cent, compared with a 1.9 per cent rise in the previous year.

Broad money rose 7.3 per cent over the year, up from 6.3 per cent over the prior year.

This news story is reprinted from www.businessspectator.com.au

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Gillian Triggs: Tony Abbott says Government has lost confidence in Human Rights Commission president

Prime Minister Tony Abbott says his Government has lost confidence in Human Rights Commission (HRC) president Gillian Triggs.

Gillian Triggs

Tensions between the Government and the HRC have been on public display recently, with Mr Abbott saying the commission's damning report into children in detention was "a blatantly partisan, politicised exercise".
Professor Triggs revealed this morning during a Senate estimates hearing that the secretary of Attorney-General George Brandis's department had asked her to resign during a meeting on February 3.
Senator Brandis then confirmed to Senate estimates he had lost confidence in Professor Triggs and wanted her to resign, saying the commission "has to be like Caesar's wife" and "beyond blemish".
Mr Abbott confirmed in Question Time the Government no longer had confidence in Professor Triggs.
"It's absolutely crystal clear this inquiry by the president of the Human Rights Commission is a political stitch-up," he said.
"All I know Madam Speaker is that this Government has lost confidence in the president of the Human Rights Commission."
Professor Triggs told Senate estimates the purpose of the February 3 meeting "was to deliver a request from the Attorney".
"And what was the nature of that request?" Labor senator Jacinta Collins asked.
"The nature of that request was to ask for my resignation," Professor Triggs said.
She said she was deeply shocked by the request and rejected it.
"My answer was that I have a five-year statutory position, which is designed for the president of the Human Rights Commission specifically to avoid political interference in the exercise of my tasks under the Human Rights Commission Act," she said.
Professor Triggs also testified that the secretary, Chris Moraitis, told her she would be offered another job if she did.

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She described the offer as "entirely inappropriate".

"I don't recall the precise words but I know that he said that I would be offered other work with the Government," she said.
She testified she felt her resignation would risk the integrity and independence of the HRC.

Mr Moraitis has a different recollection of the meeting with Professor Triggs.
He said he did not ask Professor Triggs for her resignation but confirmed he told her Senator Brandis had lost confidence in her and that they discussed the possibility of her taking on another government role.

Senator Brandis said he lost confidence in Professor Triggs in mid-January.

"It saddens me to say that because as Professor Triggs herself has said, our relationship has never been anything other than cordial," he said.

"But after the November [Senate] estimates — when on any view Professor Triggs gave inconsistent and evasive evidence on the circumstances in which the decision was made to hold the inquiry which we have been discussing, in particular when Professor Triggs conceded that she had made a decision to hold the inquiry after the 2013 election and had spoken during the caretaker period, quite inappropriately, with two Labor ministers, a fact concealed from the then-opposition — I felt that the political impartiality of the commission had been fatally compromised.

"The Human Rights Commission has to be like Caesar's wife, it has to be beyond blemish."

Government should not shoot the messenger: backbencher

Liberal backbencher Craig Laundy has raised concerns about his Government's treatment of Professor Triggs.
In a party room meeting today, the member for Reid told Mr Abbott the Government should not "shoot the messenger".
Several sources said Mr Laundy urged the Government to focus on its policy success in stopping the boats and continue to get more children out of detention.

The ABC has been told Mr Abbott responded to Mr Laundy's question.

The Prime Minister reportedly said the Government had to call people out when it thought it was being treated unfairly.

It is understood Mr Laundy told colleagues he was just echoing the concerns of people in his electorate.
Policies of both parties harm children in detention: Triggs

In her opening address to the Senate committee, Professor Triggs moved to make it clear she believed both Labor and Coalition policies harmed children in detention.

"The bipartisan nature of government responsibility for this damage is clear on any fair reading of this report," she said.

The HRC report, titled The Forgotten Children,found immigration detention was a "dangerous place for children" and called for a royal commission into the practice of putting asylum seeker children into mandatory detention.

From January 2013 to March 2014 the HRC found there were 233 assaults in detention involving children, 33 incidents of reported sexual assault, with the majority involving children, and 128 children who harmed themselves.

The Government said it was committed to removing all children from detention and that under the previous Labor government the number of children in detention reached almost 2,000.

This news is reprinted from  http://www.abc.net.au/news/2015-02-24/gillian-triggs-says-brandis-wants-her-to-quit-rights-commission/6247520

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Tax Break For Rich Worst Public Policy Since White Australia

Superannuation tax breaks for the rich is the ‘worst piece of public policy since white Australia’, Garry Weaven pioneer of industry funds said at Conexus Financial’s 18th annual Investment Administration Conference, held last week.

Addressing more than 200 superannuation professionals, Weaven said most countries view Australia’s system as close to perfection, but despite this significant changes needs to take place to make the system sustainable.

“The Peter Costello gift to the rich by entirely abolishing earnings tax for older people and by lifting the limits dramatically of what they can pump in [to superannuation], has generated massive amounts of concessionality that is devoted to the mega-rich in their later years,” Weaven said.

“It is probably the worst piece of public policy since the white Australia policy.”

Weaven said the continuing increase of average life expectancy is underpinned by a persons’ finances – their access to quality accommodation, health and aged care are all dependent on being able to afford them.

“It will be a tragedy if poor people die and rich go on living forever,” he said.

Ian Silk, chief executive of AustralianSuper agreed, and said superannuation was not designed for taxpayers to provide tax benefits to multi-millionaires.

“I would go with a more interventionist regulatory framework that might have, for example, limits on the taxation benefits that individuals can take out of the systems,” Silk said.

“I’ve seen reports of people with double-digit-million-dollar superannuation accounts, even triple-digit-million-dollar superannuation accounts. Put as much money in the system as you like, but don’t expect to get taxation benefits beyond a reasonable level.”

Silk said that a consensus needs to be reached on the purpose of superannuation as this will allow issues within the sector to be effectively addressed.

“The superannuation system is an arm of public policy, it is essentially a creature of two sets of parliamentary acts, concessionary tax savings vehicle and it’s compulsory, this infers on parliament the right to intrude,” he said.

Weaven, Silk and the chair of MLC’s superannuation funds’ trustee boards, Nicole Smith, are all supportive of the financial systems inquiry recommendation that superannuation should be defined as “providing income in retirement to substitute or supplement the age pension”.

“It may seem simple, but it is profound, if we start from that premise, some problems become easier to solve. I say this with hope of a bipartisan view,” Smith said.

Silk was also heartened to see the FSI recommend responsibility for products to be shared between designers and financial planners, saying in some past instances the designer’s poor product had “strapped a suicide bomb on financial planners”.

This news story is reprinted from www.professionalplanner.com.au

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Economic Growth To Stay Sluggish: WBC

The Australian economy is expected to grow at a below-trend pace of 2.75 per cent for most of 2015 because business investment is expected be weak throughout the year.

The Westpac/Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, only rose by 0.30 percentage points in January, and has been below trend for a twelfth consecutive month.

“We still believe that an interest rate cut in March is the best policy to support domestic demand and maintain downward pressure on the Australian dollar and this outcome remains our forecast,” Westpac chief economist Bill Evans said.

This news story is reprinted from www.businessspectator.com.au

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Unemployment Hits 12-Year High

Australia’s unemployment rate increased to 6.4 per cent in January, its highest level in 12 years, according to official jobs figures.
The ABS said the total number of jobs in Australia fell by 12,200 to 11.67 million in the month, on a seasonally adjusted basis, deteriorating further than market expectations by a wide margin.
According to an AAP survey of 14 economists, the Australian economy was expected to add 7,500 jobs in the month, while the unemployment rate was forecast to rise to 6.2 per cent.
The January unemployment rate compared with 6.1 per cent in December, and is the highest jobless figure since August 2002, when it also hit 6.4 per cent.
The participation rate, which shows the proportion of the population that have a job, or are looking for work or are ready to start working, was steady at 64.8 per cent, unchanged from in December.
The economy added 37,400 jobs in December, 44,900 in November and 16,700 in October.
The Bureau of Statistics said the last time the unemployment rate rose by 0.3 percentage points or more was in September 2012, although on average an increase of this magnitude occurs once every 12 months.
The figures were not affected by recent changes in the ABS employment survey, although usual volatility could have contributed to the increase in the jobless rate, the ABS said.
JP Morgan economist Tom Kennedy said it was a “shocking report all round”.
“There was not a lot of good news in this report,” he said.
“It really does suggest that the Australian labour market is still softening and that’s a trend we think will continue over the next few months, pushing the unemployment rate towards 6.5 per cent and maybe a little bit higher.
Mr Kennedy said the sharp rise in the unemployment rate makes the chances of a Reserve Bank interest rate cut in March a closer call, after it reduced the rate to 2.25 per cent in February.
“At this stage the data has been quite mixed, we had some pretty strong housing numbers yesterday, but then we get this January jobless number, so it is a very fine balancing act,” he said.
“At this stage we think May is more likely than March, but March is going to be a live meeting in terms of market pricing and expectations.”
ANZ senior economist Riki Polygenis said the unemployment rate will stay elevated for an extended period and will rise above 6.5 per cent.
“While new labour demand is holding up, it is not enough at present to offset retrenchments in particular industries such as mining and manufacturing or to keep up with the flow of new workers,” he said.
“We expect a further rate cut in the first half of 2015, most likely at the next board meeting in March.”
National Australia Bank senior economist David de Garis said the disappointing figures pointed to another rate cut in coming months.
He said employment growth is not keeping up with population growth.
The economy was creating about 15,000 jobs per month, for an annual rate of 1.5 per cent, but the working age population was growing at an annual rate of 1.75 per cent, leading to an inevitable rise in unemployment, he said.
“After two strong employment growth numbers, we’ve had some statistical payback,” Mr de Garis said.
“If you’ve got growth in the working age population of 1.75 per cent and you’re only creating jobs at 1.5 per cent, then you’re going to have some people who won’t be lucky enough to find a job.
“It’s consistent with another easing in monetary policy over the next few months.”
This news story is reprinted from www.businessspectator.com.au
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Aust Reform Must Continue

The Abbott government must remain focused on economic reform despite the uncertainty surrounding its leadership.

That’s the view of the Organisation for Economic Cooperation and Development, warning its members that policy action since the global financial crisis appears to be losing steam.

It comes as Prime Minster Tony Abbott conceded, after fending off a party room push for a leadership spill, that his first budget may have been too ambitious.

Foreign Affairs Minister Julie Bishop this morning told the Nine Network that Mr Hockey’s job as Treasurer was safe, despite ongoing criticism, meaning much of the OECD’s call for reform will fall on his shoulders.

“Joe’s continuing as treasurer,” she said.

“In fact, we had a very strong discussion, a very frank discussion in cabinet last night about the budget he is now preparing.”

The OECD makes a number of recommendations in a report prepared for the G20 finance ministers meeting in Istanbul on Monday that supports the Australian government’s agenda.

It is Turkey’s first major meeting since taking over the G20 presidency from Australia.

Treasurer Joe Hockey was unable to attend because of the leadership spill, sending Nationals MP and parliamentary secretary to the finance minister Michael McCormack instead.

The Paris-based institution backs the government’s road-building push, including the asset recycling initiative that promotes privatization to fund new projects, even though this is causing angst among some states.

But it says the government must ensure such spending delivers value for money while taking into account environmental concerns through user and congestion charges.

It also backs the 1.5 per cent cut in the company tax rate promised from July 1, describing income taxes in Australia as “heavy”, yet it is still not clear from the government that all businesses will get this cut.

The OECD again pushed for a higher and broader GST, but Prime Minister Tony Abbott said only last week the government had no plans to touch the GST “this term or next”, insisting the rate could not change unless all the states and territories agreed.

Among other key recommendations, the OECD said the government must pursue greater access to affordable childcare to allow combining work and family life.

In its latest Going for Growth report, the OECD concedes the headwinds facing the global economy are “impressive”, including persistently high unemployment, slowing productivity, high debt and deficits, and the lingering effects of the financial crisis.

“Addressing these challenges requires commensurate and steady policy changes,” it says.

This news story is reprinted from www.businessspectator.com.au

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Australians Losing Thousands With Multiple Super Accounts

Australians with multiple superannuation accounts could be paying thousands in unnecessary fees every year.

According to new figures released today by the Australian Taxation Office (ATO), 45% of working Australians have more than one super account.

The ATO is encouraging those with multiple accounts to consider consolidating their super into one preferred account. Australian Prudential and Regulation Authority (APRA) figures show the median figure for fees and charges paid by Australians for a low cost superannuation account is $532 per year.

“Consolidating your super into one preferred account is easier than ever and the New Year is the perfect opportunity to make a fresh start with your finances.” says ATO Assistant Commissioner of Superannuation, John Shepherd.

“It is not uncommon for people to open a new super account when they start a new job instead of taking their super fund with them when they change jobs.

“People might also have super accounts which they have lost track of, for example, they may not have updated their contact details with their funds when they moved house — there are still $5.8 billion worth of accounts in this category.”

Australians are encouraged to use the improved myGov online portal to check their super accounts and consolidate multiple accounts.

“myGov has made it much easier for people to combine their super accounts in one place,” Shepherd said.

“Users can see all their accounts and consolidate them with a few clicks and having one account minimises fees and can help maximise retirement savings.

“We’ve recently seen a significant increase in Australians merging their super into one preferred account with more than 265,000 accounts with balances totalling $1.13 billion consolidated in the six months to December 2014. In one case, 17 accounts were consolidated.

“This is a rise of 400% from the six months to December 2013 when 52,000 accounts worth more than $270 million were consolidated.

“If you’ve tried to combine your accounts before and found it difficult to do, give it another go. We have simplified the process since our online services were first launched and it’s now easier than ever to consolidate your super.”

Shepherd said that before people consolidate, they should look at any insurance cover with each fund, as it will be cancelled once they close their account.

“People should also make sure their super fund has their tax file number. They’ll pay less tax on their super and it will help us to make sure all their super accounts are displayed online,” he said.

This news story is reprinted from www.propertyobserver.com.au

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