Monday, May 30, 2016

"There goes the neighbourhood" - climate change warning on coastal real estate


Property owners in Australian coastal areas face significant and increasing losses the from impact of climate change, according to a report out today.

Research by the Climate Institute warns the potential damage bill from coastal erosion is conservatively estimated at $88 billion excluding the value of land.

Listen to my report on "There Goes The Neighbourhood" from The Climate Institute

With growing evidence of changing weather patterns, the Institute says governments, insurers and especially major banks need to provide better information to investors.

Climate Institute chief executive John Connor says more than two percent of all houses are already exposed to moderate to extreme risks of flooding.

Read the Climate Institute report here

"Growing climate impacts means the costs of these and other hazards exacerbated by climate change will have worsening repercussions for households, the financial sector and ultimately the economy itself," Mr Connor said.

"There has been insufficient action from government, insurers and most notably the banks, perhaps surprisingly as they are mortgage lenders."

The claims are contained in the Climate Institute's report "There goes the neighborhood" which examines the climate change risks to Australian housing and the overall financial sector.

The warning is critical given that the economy directly or indirectly drives a third of the economy and accounts for 60 percent of the assets of the big four banks.

"People continue to buy homes that continue to be built and sold in areas that may be at more risk than they realise," Mr Connor said.

But Mr Connor says that while the  climate risks "most banks have so far done relatively little to try and address this complex problem."

The research comes as the insurance industry continues to lobby local governments for more accurate flood mapping data to better address risks.

Mr Connor has called for great action from the finance sector and governments.

"It's not a political football. It's not ideology, it's real and we've got to get on with integrating climate change like other risks".

Climate Institute chief executive John Connor at Maroubra Beach    Picture: Peter Ryan

Thursday, May 26, 2016

Digital startups thrive in Fishburners Sydney hub

Late last year - well before the election date was called - the Prime Minister unveiled his "innovation statement" to provide more support and opportunities for digital startups.

Malcolm Turnbull wants to drive an "ideas boom" and has set aside a billion dollars to promote research, development and innovation.

But how are those aspirations playing out in the real world of business where the race to commercialise the next big idea is more cut-throat than ever?

I visited the Fishburners startup hub in central Sydney to find out.

Listen to my report here

Read the the story on ABC News Online






Wednesday, May 25, 2016

Living standards to fall without budget repair, ACCI warns

  
A major business lobby group is warning that living standards in Australia are in jeopardy without significant budget repair.

The Australian Chamber of Commerce and Industry has jumped on research from the OECD (Organisation for Economic Cooperation & Development) which shows Australia has tumbled in a key ranking for global competitiveness.


According to the OECD, Australia slipped from tenth position to 21st over the past decade, coming in behind the tiny European nation of Luxembourg.

ACCI's newly-appointed chief executive James Pearson told the ABC's AM program Australia's demise on the competitiveness scale was "unacceptable" and risked living standards.

"Australia's global competitiveness must improve or we risk sacrificing the high living standards which we, our parents and our children have come to expect," Mr Pearson said.

"We are an economy in transition and a nation at the crossroads. We cannot be complacent."



The Chamber - which represents more than 300,000 businesses - will today unveil a ten point strategy to boost global competitiveness and to boost the path to budget repair.

The plan appears to back the Coalition's economic agenda with a lower company tax rate of 25 percent over ten years, tax reform and the restoration of the Australian Building and Construction Commission (ABCC).

However, James Pearson told AM  the proposal was bipartisan and aimed at protecting Australia against global shocks.

"Whichever party becomes the government after this election has it within their grasp to commit to sensible reform," Mr Pearson said.

"It is also vital that parties throughout this campaign demonstrate economic responsibility. Every dollar of additional tax places a bigger burden on future generations."

Mr Pearson also rejected suggestions that the return of the ABCC was the restoration of Workchoices under a different name.

"Workchoices is a ghost story told by the union movement. It really belongs to the past," he said.

"The Fair Work Act alone has around a thousand sections, over 200, 000 words. That's hardly streamlined system."

Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog http://mainstreetwiththeabcspeterryan.blogspot.com.au/


Monday, May 23, 2016

China flags growing demand for Australian dairy products

China has flagged an even greater appetite for Australian dairy products as consumer demand surges for high quality agricultural imports from downunder.


Bank of China executive vice president Gao Yingxin told a conference in Sydney this morning that Australian remains well positioned to feed China given its history of "riding on the sheep's back".

"Australia is endowed with a mild climate, vast farmlands and fertile pastures providing unlimited potential for agricultural development," Mr Yingxin said.

Mr Yingxin said China's appetite for Australian dairy products was a major focus in catering for the appetitie of its rising middle class.

"Between 2005 and 2013, the children's milk market in China great at average of 20 percent. Recently the adoption of a two child policy will create even more business opportunities ," he said.



More than six hundred delegates have travelled from China for a major investment conference hosted by the Bank of China and the Australian Chamber of Commerce & Industry.

Around 240 business - 120 from China - and another 500 attended have gathered by Sydney Harbour for the China-Australia Agribusiness Trade & Investment Conference.

The carefully choreographed event is designed to bring small to medium business from Australia and China together to develop trade opportunities.

Trade between Australia and China is estimated to be worth $150 billion a year.

The Federal Minister for Trade and Investment Steve Ciobo says Australia has to adjust to the changing commodity price landscape to exploit even greater trade opportunities with China.

Thursday, May 19, 2016

Jobless rate steady, adds to case for August rate cut

Unemployment has remained unchanged at 5.7 percent, with the estimated addition of 10,800 jobs last month.

Listen to my analysis from The World Today

The Bureau of Statistics figures for April show that a small decline in the proportion of people in work or looking for it helped hold the jobless rate steady, despite relatively weak employment growth.

The Australian dollar fell, signalling bets are rising for a Reserve Bank rate cut as early as August.

US Federal Reserve surprises with signal for a June rate rise

The US Federal Reserve has signalled that a June rate rise is firmly on the agenda if economic conditions continue to improve.

In the minutes from the Fed's April meeting where rates were left steady at between 0.25 and 0.5 percent, officials say a hike would be “appropriate” if key indicators on inflation and employment stay on a positive track.


"Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen and inflation making progress toward the committee's 2 percent objective, then it likely would be appropriate for the committee to increase the target range for the federal funds rate in June," the minutes say.

But the minutes also show that Fed members remain divided on whether those critical conditions will be met.

"Participants expressed a range of views about the likelihood that incoming information would make it appropriate to adjust the stance of policy at the time of the next meeting."

The hawkish tone of the minutes surprised many Fed watchers who had pushed expectations for a US rate rise to later in the year.

Listen to this morning's report from the ABC's Rebecca Hyam

While the Fed awaits better news on the US economy, officials are cautious about global developments that have the potential to trigger volatility.

The minutes warn that global markets could be "sensitive" to the referendum on Britain's membership of the European which occurs a week before the Fed's June meeting.

The Fed also remains concerned about China and "unanticipated developments" associated the China's management of its exchange rate.


US dollar surges after Federal Reserve Minutes      Source: Bloomberg

National Australia Bank senior economist David de Garis agrees the likelihood of a June rate rise comes despite earlier comments from Federal Reserve chair Janet Yellen that the federal funds rate would only be increased gradually.

In a note to clients, Mr de Garis says despite the Brexit caution "the Fed is still seriously considering enacting some further gradual removal of monetary accommodation."

The US dollar rose sharply after the release of the Fed minutes, pushing the Australian currency as low as 72.15 US cents.

The Federal Reserve hiked interest rates in December ending a extensive period of emergency support in the wake of the Lehman Brothers collapse in 2008.