The Border Watch : January 21st 2014
BUSINESS 1 in 3 feel finances ‘out of control’ SYDNEY: Australians are more upbeat about the state of the economy but less optimistic about their personal finances in 2014. Two out of three Australians believe the economy is in a strong position this year, according to the annual Westpac Australia Day Index released yesterday. The survey of 1035 Australians showed national economic positivity was up four points since last year, led mainly by the belief that Australia is making sound economic decisions. Tourism and resources were listed as the economy’s greatest strengths followed by Asian growth and agriculture. But Australians are feeling less confident about their personal finances this year, with positivity dropping 11 points, the report said. That was mainly driven by a sense that there were fewer opportunities available with regards to financial independence and the ability to create wealth and pursue a career of choice. Almost one third of Australians said they felt their finances were out of control, citing bills as their top concern. But 53 per cent of those people said they planned on creating a budget to get on track. Westpac retail banking general manager Gai McGrath said those wanting to take control of their finances should start by seeking advice. “Many Australians don’t realise the level of financial expertise that is available to them at their local bank branch,” she said. “There’s also a huge range of digital tools that are simple and effective, such as an online budget planner.” AAP ACCI: We need more than cuts Low employment, investment linked to instability, not rates CANBERRA: A leading business group has warned it will take more than another interest rate cut to lift activity among firms and prevent a further rise in unemployment. Australian Chamber of Commerce and Industry acting chief economist Burchell Wilson believes business confidence has been trashed by federal policy instability over recent years and until that improves there is going to be a lack of willingness to invest and employ. “It is also telling us that the unemployment rate is expected to rise over the next 12 months” “A further reduction in the cash rate would certainly be welcomed but it’s not the main game. The main game is business confidence,” Mr Burchell said yesterday. ACCI’s latest survey of investor confidence showed some positive trends, such as for sales and profitability, but both were recovering from extremely weak levels. The survey’s business conditions index rose to 52.6 points in the December quarter from 51.1 points in the previous three months, which had been the first expansionary reading above 50 in almost three years. However, business expectations index also eased slightly to 55.5 points from 56.5 points. Mr Burchell said the depreciation in the IN BRIEF Wesfarmers snaps up deposit for $70m MELBOURNE: Conglomerate Wesfarmers has snapped up a coal deposit in Queensland for $70 million after it was sold for more than $334 million in 2010. The owner of Coles supermarkets, Wesfarmers said it had agreed to buy the Mineral Development Licence 162 in the coking coal-rich Bowen Basin from US giant Peabody Energy. Macarthur Coal, which was later acquired by Peabody, bought a 90 per cent stake in the deposit for $334.35 million from the Queensland government-owned Stanwell Corporation, in a sign of how far coal prices have fallen. ATO working on deal to come clean CANBERRA: The Australian Taxation Office is considering an amnesty for rich people to come clean on income or assets they previously hid offshore. Such a scheme would recoup billions of dollars at a time when tax receipts are in decline and the federal budget is deteriorating. “We are currently working through the detail of such an initiative,” ATO said yesterday. Blackham shares up 44pc on Wiluna deal Not enough: The ACCI said employment will not increase until other factors are addressed. Picture: AAP Australian dollar will have helped business conditions to a degree but firms are still struggling. “It is also telling us that the unemployment rate is expected to rise over the next 12 months,” he said. The Australian dollar slipped to a fresh threeand-a-half-year low towards US87.50c, having been in a gradual decline since last Thursday’s weak labour force data for December. 2013 a good year for households SYDNEY: Low interest rates and rising house and share prices made last year a good year for Australian households. The St George Melbourne Institute Household Financial Conditions Index jumped 4.3 per cent to 132.6 points in the December quarter – its highest level since 2009. The index rose 9.3 per cent over 2013, the biggest rise since the survey began in 1994. “Recent gains in house prices and a strong performance in the share market have been a key catalyst behind the record improvement for the financial conditions of Australian households,” St George chief economist Besa Deda said. St George retail banking general manager Andy Fell said low interest rates had seen more than 40 per cent of St George customers get ahead on their loan repayments. “We’re seeing the record low interest rates continuing to help people save more money,” he said. The survey of 1200 respondents showed holidays remained the most popular motivation for saving money. 10 - The Border Watch, Tuesday, January 21, 2014 AAP The federal government in its mid-year budget review, released before Christmas, forecast the unemployment rate rising to 6 per cent by June, up from 5.8 per cent as of the end of last year. While the recent jobs data has encouraged thoughts of an additional cut in the Reserve Bank of Australia’s cash rate, TD Securities head of Asia-Pacific research Annette Beacher doubts it will happen. “We remain of the view that the next move remains up for the cash rate, although not until the final months of the year,” she said. She said other recent data has shown that the record low 2.5 per cent cash rate is stimulating consumer spending, mortgage demand and house prices. The RBA will hold it first board meeting of the year on February 4. AAP Inflation expected to remain benign SYDNEY: Inflation figures this week aren’t expected to stop the Reserve Bank of Australia from cutting the cash rate but the falling Australian dollar might. The consumer price index, the key measure of inflation, is forecast to have risen by 0.5 per cent in the three months to December, for an annual rate of 2.5 per cent, an AAP survey of 14 economists shows. Inflation came in higher than expected in the September quarter at 1.2 per cent – economists had forecast a quarterly rise of 0.8 per cent – driven by rising house prices. Another unexpectedly high figure in December could see the end of the RBA’s easing bias while a lowerthan-expected figure could spur another cash rate cut when the RBA board meets in February, JP Morgan chief economist Stephen Walters said. “The easing bias is there. I think it would take a reasonably significant surprise on the upside to get them to change tack,” Mr Walters said. “They’ve made it pretty clear that they’re still willing to cut if they need to, but they’ve also made it pretty clear they want the currency to do most of the work and that is starting to happen – we’ve got the currency below US88c. “If inflation comes in high, it could be enough to take out the easing bias. But, if it comes in lower, then they could easily cut again in a couple of weeks’ time.” Although the currency had drifted lower, it was too soon to see the effects in tomorrow’s inflation figures, Mr Walters said. AAP Monash Uni first to get domain name MELBOURNE: Melbourne’s Monash University has become the first “brand” in the world to secure its own top-level domain on the internet. The global governing body for domain names, the Internet Corporation for Assigned Names and Numbers, has been evaluating new domains, which are joining the likes of .com, .net and .au on the internet. Food executive dies in road accident MELBOURNE: Food company Goodman Fielder’s managing director of Australian operations, Andrew Hipperson, has been killed in a motorcycle accident. The company said Mr Hipperson was killed in an accident south of Nowra in NSW on January 18. PERTH: Blackham Resources shares are up 44 per cent after the minerals explorer agreed to pay $2 million for the Wiluna gold plant in Western Australia. Blackham said the deal complemented Blackham’s 100 per centowned Matilda Gold Project. Chairman Joseph Gutnick said the acquisition was a major step towards bringing the Matilda Gold Project further towards production.
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January 22nd 2014