Australia's rate forecasts and dollar plunge
AUSTRALIA'S stalling economy is forcing the big financial players to dramatically slash their interest rate forecasts.
Westpac Bank is leading the charge, predicting interest rates will fall to a low of 5.5 per cent within two years as the Reserve Bank moves to stave off a potential recession.
Economists are increasingly concerned the global slowdown that has pushed the economies of the United States, New Zealand and vast swathes of Europe into recession is starting to threaten Australia's 17 consecutive years of growth.
The possibility of a recession in Australia has risen sharply in recent months, with some putting the risk at 40 per cent or even higher.
This comes as the latest TD Securities inflation gauge for July shows annual inflation still running at 4.6 per cent, well above the Reserve Bank's comfort zone of 2-3 per cent annual growth.
Financial markets are now betting a 90 per cent probability exists the RBA will begin cutting rates from their 12-year high of 7.25 per cent in October.
By April next year the market has factored in three interest rate cuts, dropping the official cash rate to 6.5 per cent.
The growing expectation the RBA will cut interest rates dramatically over the coming years has hurt the Australian dollar, which was at US93.55 in late trading yesterday.
The Aussie has fallen 5 per cent since it peaked on July 15 at US98.50.
AMP Capital Investors chief economist Shane Oliver said the Aussie was in for a rough ride over the next six months with a fall to US85 now a "distinct possibility".
But he is optimistic that the combination of interest rate cuts and lower oil prices will rally share markets later this year.
"In our view the slump in the economy is now occurring so rapidly that the RBA should already be cutting rates," Dr Oliver said.
"However, the RBA is likely to take a more cautious approach, leaving official rate cuts till later this year after a further rise in unemployment and when it becomes confident that inflation has peaked.
"The problem though is that the longer interest rates are left at these levels the greater the risk of a serious recession."
The economic slump was again highlighted yesterday when Australian manufacturing activity hit a near three-year low as employers cut jobs, companies received fewer orders and production slowed.
Higher interest rates and consequent softness in housing were blamed for driving the weakness in activity, resulting in the Australian Industry Group/PricewaterhouseCoopers performance of manufacturing index recording the weakest reading since November 2005.
Australian Industry Group chief executive Heather Ridout said the continuing weakness in the manufacturing sector was not surprising, given the pressure of tighter financial conditions.
From Page 85
"The economy more generally, is feeling the ongoing impacts of the Reserve Bank's tightening of monetary policy as well as market based rate rises," Ms Ridout said.
Body: "Inventories were run down significantly, suggesting continuing weaker demand and the potential for further falls in production."
Westpac chief economist Bill Evans yesterday said the gloom and doom had forced a substantial lowering of the bank's consumer spending outlook.
Despite Westpac's view that the RBA will slash rates by 1.75 per cent over the next two years, Mr Evans is forecasting the central bank won't begin its rate cutting until the first quarter of 2009.
But other economists are much more concerned about the outlook and expect rate to start falling much earlier.
Citigroup expects the first RBA rate cut will be in November followed by two more cuts in the first half of 2009.
But Citigroup economist Paul Brennan said there was even a "seasonable risk about 30 per cent" the RBA might cut rates at its meeting on Tuesday.
The rate cuts, however, won't remove all the pain facing companies suffering from the deep slowdown in credit and spending.
181812.1
http://www.kotsemo.com/Www/Extra/News/?newsID=223
The hidden taxes on your new car
Every time Porsche sells a new 911 Turbo in Australia, the tax man makes enough money to buy five Toyota Corollas.
That’s the startling truth about Australia’s tax regime as it applies to motor vehicles.
Taxes on new cars range from 9 per cent for Australian made vehicles to 36 per cent for the most expensive imports.
A third of the price of a new Rolls-Royce Phantom, or a staggering $300,805, goes into the government’s coffers. And that figure will rise even further when the Government lifts the luxury tax on vehicles that cost more than $57,123 from 25 to 33 per cent.
In the wake of the latest slug on car buyers, Drive has calculated the various taxes paid on 10 cars sold in Australia’s, ranging from the Hyundai Getz and Holden Commodore to the 911 Turbo and Rolls-Royce Phantom – and the results aren’t pretty.
Drive can’t tell you exactly how much import duty you pay because the 10 per cent tariff is paid on the wholesale price of the car, before the manufacturer and dealer add their profit margins.
Car companies won’t reveal how much import duty they pay because it would allow their competitors to estimate their profit margins.
So for the purpose of our table, we’ve estimated a 10 per cent profit for both the dealer and manufacturer.
The chief executive of the Federal Chamber of Automotive Industry, Andrew McKellar, says Australia is “right up there” when it comes to taxing car buyers.
“The luxury tax in particular is far higher than any similar tax anywhere in the world,” he says.
The differences are most notable in luxury imports. For example, a Porsche 911 that costs more than $200,000 in Australia sells for less than $75,000 in the United States. Holden’s own Commodore SS, which sells for $45,290 here, costs roughly $32,000 in the States.
Australian motorists can potentially pay up to five taxes or duties when they buy a new car.
Import duty is charged when a vehicle arrives on Australian shores, then GST and luxury car taxes are levied, before stamp duty and registration fees take another slice of the pie.
“The tax burden on motorists is already substantial and the increase in luxury tax is simply a punitive measure on top of that,” he says.
He says the tax regime now hits luxury buyers three times during the sale process. Apart from the luxury tax, they also pay more GST by virtue of their car’s higher purchase price.
Then once the sale goes through, they pay a higher percentage of the sale price in stamp duty because the rate is based on a sliding scale, where the tax rate increases in most states at $30,000 and $45,000.
On a Porsche 911 turbo, the GST payable is $25,732, the luxury tax is $51,348 and the stamp duty totals $15,820. Add to that an estimated import duty of more than $20,000 and you come up with a total tax burden that is approaching the cost of a new Porsche Boxster.
The taxes payable on a Toyota LandCruiser would buy a new Toyota Yaris, while the tax on a BMW 5-Series would pay for a Volkswagen Golf.
McKellar says the other injustice is the fact that many cars that were never intended to be caught in the luxury tax net are now affected because the level at which the tax cuts in has not been adjusted in line with inflation.
“There hasn’t been any decent increase in the luxury tax threshold in the past four or five years. It hasn’t kept pace with the changes in the industry. Whatever happened to the good old Aussie notion of a fair go,” he says.
http://www.smartcompany.com.au/Free...ralias-cities-are-getting-more-expensive.html
Australia’s cities are getting more expensive
Thursday, 24 July 2008
Australia’s capital cities have leapt up the ranks in an annual global cost of living survey conducted by consultancy Mercer.
Sydney is Australia’s most expensive city to live in, coming in 15th on the list ahead of famously opulent cities like Vienna, New York and Madrid.
Melbourne comes in next in 36th place, followed by Perth (53rd), Brisbane (57th) and Adelaide (71st).
Across the Tasman, New Zealand’s cities have also grown costlier, but even so the most expensive Kiwi city, 78th placed Auckland, remains a cheaper place to live than the least costly Australian capital.
Most striking, however, is the rapid rise in the cost of living experienced by the occupants of many of Australia’s state capitals. While Sydney only moved up a relatively modest six places, Melbourne jumped 28 places, Perth jumped 31, Brisbane 29 and Adelaide 23.
Changing currency values is a key reason for the shift, according to Mercer’s Rob Knox. “A weakening US dollar coupled with the sustained appreciation of the Australian dollar, has really pushed Australian cities further up the ranks,” he says.
Moscow retained its title as the world’s most expensive city this year, ahead of Tokyo, London, Seoul, Oslo and Hong Kong.
http://au.news.yahoo.com/a/-/entertainment/4769203/artists-defend-magazines-nude-child-cover
Dad defends magazine's nude child cover
July 7, 2008, 11:02 am
ABC © [Enlarge photo]
Australian artists are defending the controversial decision of Art Monthly magazine to run a photograph of a naked child on its front cover.
The front cover of the magazine features Melbourne photographer Polixeni Papapetrou's 2003 photo of her naked daughter, who was six at the time.
The New South Wales Government is referring the magazine to the Classification Board.
The Prime Minister has said he cannot stand the picture and federal Arts Minister Peter Garrett has said the magazine was being needlessly provocative.
The girl's father, art critic Robert Nelson, says the family has no regrets about the photograph and he has rejected the Prime Minister's criticism of the work.
"There's never been any study that suggests that there's a link between paedophilia and art," he said.
"Unfortunately we're working without any science; people are just making these assertions about protecting children, which is unarguable - I mean why would you not want to [protect them]?
"But no-one's really explained, protect them from what."
Prime Minister Kevin Rudd says no child that age could give their consent to such work but Mr Nelson says Mr Rudd should back up his concerns with evidence.
"I think he's welcome to have an opinion on art - I think that's to be encouraged," Mr Nelson said.
"I think the problem arises when, as he did with Bill Henson, he declared that the images are revolting and linked them to the protection of children without a shred of evidence."
But Joe Tucci from the Australian Childhood Foundation says parents should not be allowed to give consent to posing naked on behalf of their children.
"They have the legal right to consent on behalf or their child, but I don't think they have the ethical right to do that," he said.
"I think you can't tell now what the impact will be on that child even today."<h3>'Business as usual'</h3>
Fellow artists are defending the magazine's decision to use the photograph on its cover.
The magazine's editor says the image was published in an attempt to "validate nudity and childhood as subjects for art".
He said he wanted to restore some dignity to the debate following the controversy in May, when artist Bill Henson's photographs of a naked prepubescent girl in a Sydney gallery were confiscated by police.
Martyn Jolly is the co-author of an article on the controversy that is published in the same edition of Art Monthly. He is also the head of photography and media arts at the Australian National University.
"The original photograph, the Bill Henson photographs have been found to be OK ... they were passed by the Board of Review," he said.
He says putting the photo on the front cover was just "business as usual".
"It could be a provocation or it could be simply saying, 'No we aren't going to ... buckle'," he said.
"We aren't going to let this small pressure group dictate what we can and can't show. We aren't going to let the tabloid media, who are always wanting to create media panics, dictate what we can and can't show.
"And we aren't going to let politicians who are always wanting to jump on populist bandwagons dictate what we can and can't show."<h3>'Artistic duty'</h3>
Mr Jolly says the magazine had a duty to reignite the debate over children in art.
"I guess if you're the editor of a magazine which is meant to be reporting on Australia on a month-by-month basis and this has been the biggest thing in Australian art for a long time, you'd be [neglecting] your duty if you didn't actually discuss the debate," he said.
Art Monthly receives funding from the Australia Council, which has issued a statement saying the magazine has been and remains a very effective and valuable means of communication for the visual arts.
"We don't think it appropriate to judge any journal covering a wide field of interests and a diverse range of issues on one deliberately provocative statement which in itself is reaction to an already overheated controversy," the statement read.
"For many years our society has managed to differentiate between artistic creativity and the totally unacceptable sexual exploitation of children.
"Continuing to argue extreme positions is not creating any greater clarity."
The magazine is also funded by the Federal and ACT Governments, and ACT Chief Minister Jon Stanhope has defended the magazine's right to publish the photo.
Mr Stanhope says he has not seen the picture but he says the magazine is a reputable publication.
"To suggest that this particular photograph that's on the cover of this paper is in anyway pornographic or represents child pornography - I haven't seen it but that's a huge leap to suggest that a photograph of a young child is inherently pornographic if it is displayed publicly," he said.
"That's a concept that causes me enormous difficulty."
The Federal Government says the Australia Council will now be asked to draw up a set of protocols on the representation of children in art.
178340.1
http://www.stuff.co.nz/timaruherald/4551382a6010.html
Aust housing crisis forcing Kiwis to leave
The Timaru Herald | Saturday, 17 May 2008
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Kiwis are missing out on the big bucks in Western Australia because it's too difficult and too expensive to find accommodation.
Booming business is drawing hundreds of people to Western Australia but the accommodation crisis gripping the state is forcing many people to leave.
An anonymous letter sent to the Herald warned Kiwis thinking of moving to "the lucky country" that: "Life is not all milk and honey in Australia."
The letter writer said rental demand is forcing up rentals with some families sleeping in their cars and sharing accommodation with other families.
The West Australian newspaper reported that the State's resource boom is to blame for soaring rents and rising house prices and has created a poverty epidemic in the state.
The number of homeless in Perth is believed to have risen 20 per cent to more than 7000 since the 2001 census and is predicted to worsen.
The letter writer said between one and two dozen families are sleeping in cars each night near Kwinana beach which is south of Perth.
"If people from New Zealand come to Australia without much money they could soon be in the cactus."
A former Timaru woman is also warning people to do their homework before booking a one-way ticket to Perth.
Wendy Tapper said the accommodation shortage is spoiling many Kiwi's plans.
The human resources coordinator said people are coming to Perth in search of big money but can't stay because they can't find anywhere to live.
"I often have Kiwis and other nationalities applying for positions here but unless they have contacts or plenty of money accommodation becomes a huge issue and more often than not they either have to return to New Zealand or try their luck in other states."
Former Waimate man Paul Dillon had a place to stay before he moved to Perth three years ago.
He urged people to arrange accommodation before moving to Western Australia because flat hunting can be a long and painful process with as many as 30 people vying for one flat.
He admitted the money was good but it was an expensive lifestyle. "The rent here's like a mortgage back home."
Water has always been a big problem in Australia.
At least Sam's Alfresco Coffee Shop is still growing strong with these newbie - OzSucks!
I guess emigration is a bold decison and need to be well reseach...for me the satisfaction of comparing the overall of quality living standard in a scale of 10...OZ - 7.23 and SG - 6.99. Very country will has it's pros n cons...
For all singaporeans whom is planning to emigrate...what is there to lost if you don't even try? Your life deserve an alternatives! At least you won't regret in life later when you're too old to even qualified...
Yes...it's a fact that in near future there don't be much pension left for the oldie...so each Aussie individual gonna be self sufficient...sigh...
Yes, there's a trend now that OZ is heading to NZ for retirement...being an Aussie, living in NZ can be indefinite with no visa issue...so worth considering - OZ or NZ! You make your pick!
