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Wednesday, October 18, 2017
Thursday, October 12, 2017
Weaker mining exports and housing investment hurt by bad weather earlier this year have prompted the International Monetary Fund to cut its growth forecasts for the Australian economy.
In what appears to be a blip, the IMF's latest World Economic Outlook released overnight has sharply revised Australian growth down to 2.2 percent in 2017 from projected of 3 percent just six months ago.
While Australia's economy is expected to recover in 2018, the forecast has also been softened to 2.9 percent down from an anticipated 3 percent.
"Growth is expected to soften temporarily to 2.2 percent in Australia, where housing investment and mining exports in the first half of the year were undermined by bad weather," the IMF says.
Treasurer Scott Morrison, in Washington for the IMF's annual meetings, said he remains committed to the government’s own budget forecasts but will take the IMF's outlook into account.
"We'll obviously revise or review that as necessary as we go into the mid-year economic statement. That's the time to do that," Mr Morrison said.
While not rejecting the IMF's revision, Mr Morrison pointed to "encouraging" economic data including the latest business survey from the NAB which described business conditions as rock solid.
"So the better days I spoke about in the budget is being borne out by this data and let's not forget 325,000 Australians getting a job last year," Mr Morrison said.
The IMF has cited the impact from Cyclone Debbie in March as a factor where delays in coal transportation triggered a decline in the coal price index which has since recovered by 16.5 percent.
The report says strong demand from China assisted in the price recovery in addition to labour dispute at Australian mines restricting supply.
The IMF has urged Australia to use low interest rates to deal with an "infrastructure deficit" alongside Canada, Germany, the United Kingdom and the United States.
It urges greater attention to upgrading surface transportation and improving technologies such as high speed rail, ports, telecommunication, broadband and green investments.
"After three decades of almost continuous decline, public investment in infrastructure and the stock of public capital as a share of output are near historic lows in advanced economies," the IMF says.
"Many countries could take advantage of the favourable funding environment to improve the quality of the existing infrastructure stock and implement new projects."
The IMF also raises concerns about stalling reforms to productivity and work practices once again singling out Australia in addition to Greece, Italy, Japan and Spain.
"Persistently sluggish productivity in some countries has led to greater emphasis on product and labor market reforms," the IMF says.
"These reforms have been found to raise productivity and employment and to improve resilience to shocks."
The IMF's slight revision comes after 26 years of continuous economic growth in Australia where fallout from the global economic crisis was largely avoided because of the mining investment boom and government support to banks.
Cautious confidence about the global economy is based on the IMF forecasts for pickups in investment, trade and industrial production after a long period of slow growth and low inflation.
Wednesday, October 11, 2017
Speaking in Sydney, Bill Clinton's transport czar in the 1990s says while regulators grapple with the issues of automation, Australia is in a positin to teach the rest of the world.
"If you look at most of your mining, you already have autonomous vehicles doing a lot of that work," Mr Slater told the ABC.
"It's in a structured and limited environment but that's exactly the kind of environment we have to create for automation to be used in cities like Sydney and Melbourne.
"I think you have the kind of public leadership and the kind of dynamic corporate leadership to help Australia to not only be a player but a leader."
But Mr Slater said Australia and the world needed to look beyond comparing automation to fantasies played out on The Jetsons and Star Trek.
"Imagine your elderly parents who may have had to give up the ability to drive or someone who has a disability and can't drive can now being able to enjoy it in a way that is independent for them," Mr Slater said.
"That's really the magic of this expansion of transportation and portability that automation provides."
Mr Slater says a challenge for governments. regulators and motorists will be how traditional cars driven by humans share roads with automated vehicles.
"I think we'll get to a point where we'll have to have set routes in certain parts of certain areas you're likely to have set routes for all vehicles that will allow for greater automation."
However, Mr Slater says trust is a major factor and worried that some technology like drones could be "weaponised" and possibily exploited alluding the last week's deadly mass shooting in Las Vegas.
"But we cannot live being paralysed by fear. We cannot allow something just because it can be used for ill to not have the benefit of being used for good," Mr Slater said.
"I think both the public and private sector have a responsibility to help the public with these types of vehicles and with this new technology."
Mr Slater says 94 percent of motor vehicle accidents are caused by human error meaning automated vehicles could be important in lower the road toll.
Former Victorian premier John Brumby has rejected concerns about China's influence in Australia higher education sector as he projected the flow of Chinese tourism is about to boom.
Speaking as president of the Australia China Business Council, Mr Brumby sought to downplay comments from Foreign Affairs& Trade secretary Frances Adamson that universities need to remain secure and resilient against potential foreign interference.
"We don't see that in business. I think with influence every country around the world exerts its own influence internationally and China is no different," Mr Brumby told the ABC's AM program.
"What we've got to make sure in Australia is that we stick to our values and our views around the world."
Mr Brumby said that in his role as a university lecturer he has seen no evidence of influence or interference that concerned him.
"My first hand experience as someone who has a lot of contact with students from masters level down is that I don't see any influence. I see happy students , keen students, students who want to learn."
Earlier this week, the federal education minister Simon Birmingham agreed with Ms Adamson that Australian universities needed to be vigilant about their academic integrity and independence.
Concerns about China's growing influence came as the Australia China Business Council released research showing the number of Chinese tourists visiting Australia is set to more than triple to 3.3 million per year by 2026
The report conducted with LEK Consulting and Trade Victoria says over a million Chinese tourists visited Australia last year and spent $9.2 billion underscoring the deepening economic and trade relationship.
However, Australia’s ability to handle the projected Chinese tourist boom has been highlighted as a concern, with a China Readiness Score delivering a score of 65 out of 100.
John Brumby points to recommendations urging better Mandarin signage, improved transport and the availability of Chinese payment options like Alipay.
Mr Brumby says Australia's accommodation sector is particularly under pressure from the expected boom in Chinese tourist numbers,
"We're not really ready. We've had issues with Chinese new year when you get 150,000 or 200,000 tourists and the hotels struggle," Mr Brumby said.
"So if they are struggling now they're really going to struggle with 3.3 million visitors ."
The rise of Chinese tourism is also likely to overtake the importance of Australia exports of iron ore to China, according to Mr Brumby.
"Put education, financial services and tourism together and the services market for a state like Victoria is already much more important than the resources market."
Concerns about growing Chinese influence were fuelled when Frances Adamson used a speech in Adelaide to warn that universities needed to be on alert.
"We have seen attempts at untoward influence and interference," Ms Adamson said told an audience at Adelaide University's Confucius Institute.
"When confronted with awkward choices, it is up to us to choose our response, whether to make an uncomfortable compromise or decide instead to remain true to our values, "immune from intolerance or external influence" as Adelaide University's founders envisaged."
Tuesday, October 10, 2017
|Source: Industry Super Australia|
Scandals, alleged misconduct, and poor financial advice have cost major banks and insurance companies almost half a billion dollars in payouts and compensation over the past two years, according to research by Industry Super Australia.
The largely union-backed umbrella group is using the rising payouts bill for banks and insurers in its ongoing battle to thwart moves by the Federal Government to overhaul the composition of superannuation fund boards to mandate at least a third of trustees are independent.
In addition to shaking up the role of trustees, the government is also pushing to ensure the chairs of super boards are independent.
Evidence to be presented to a Senate committee examining the governance of super fund boards will claim that banks and insurers paid out more than $480 million in compensation, reimbursements and refunds for alleged financial misconduct.
Industry Super head of public affairs Matt Linden will present the scandals line by line which includes $200 million of "money for nothing" compensation after banks charged for advice fees but provided no service to clients.
"These are only the things that have been made public where there's been admitted fault. It doesn't include scandals that we've seen on the front page recently around things like alleged money laundering," Mr Linden told the ABC's AM program.
"We certainly do not accept the proposition that mandating a particular quota of independent directors drawn from the finance sector is a sensible way to outcomes for industry super fund members."
Key brands named by Industry Super Australia include flashpoints of recent scandals including CommInsure, Commonwealth Bank, ANZ, Westpac, National Australia Bank, Bankwest, AMP.
Industry Super Australia (ISA) argues that in contrast not-for-profit industry funds have avoided scandals and continue to outperform funds owned by banks and insurers.
As the government attempts to push through changes to trustee arrangements, ISA maintains that the "equal representation model" where trustees are split between employers and worker representatives continues to be used by the world's top performing super funds.
Financial Services Minister Kelly O'Dywer has consistenly rejected claims the push to overhaul super boards is part of an idealogical union busting mission.
Ms O'Dwyer recently announced the superannuation overhaul bills would be re-introduced being defeated in 2015 by the Senate crossbench led by Senator Nick Xenophon.
However, Matt Linden is confident of once again winning support to block the legislation.
"When I've talked to those crossbenchers they have not had people walking in their doors complaining about the returns they're getting from industry super funds," Mr Linden said.
"However they'd had dozens come in their doors which been ripped off in scandals perpetrated by the banks."
The payouts are based on public information and cover a two year period from September 2015 but do not include private settlements or payments made to financial literacy or community programs.
The government is also facing a fightback from other parties such as the Australian Institute of Superannuation Trustees.
"It is inappropriate to mandate a governance model to apply to all superannuation funds because no evidence has been presented that the current system is failing or that mandating independence would be beneficial," the AIST submission says.
ISA also says it is false to the government to claim that having independent directors on boards is international; best practice.
ISA quotes research showing the 70 percent of independent directors are either current or former chief executives with 60 percent coming banking or resource sectors.
In addition to Industry Super Australia, the hearing by the Senate Standing Committee on Economics will take evidence from David Murray (head of the government's financial system inquiry), former ACCC chairman Graeme Samuel and the former Reserve Bank governor Bernie Fraser.
The Australian Securities & Investments Commission, the Australian Prudential Regulation Authority, the Financial Services Councilm the ACTU and Treasury have made submissions to the inquiry and will also give evidence.