Category: Business

Prices rose 1.4 per cent over the March quarter, which was marginally above average economist forecasts, but the smallest quarterly rise in more than a year, according to the Australian Bureau of Statistics (ABS).

The ABS said prices had continued to rise for most goods and services, but the scale of those increases had slowed.

Exceptions were seen in steep quarterly price jumps for medical services (+4.2 per cent), tertiary education (+9.7 per cent) plus gas and other household fuels (+14.3 per cent).

“Prices for medical and hospital services typically rise in the March quarter as GPs and other health service providers review their consultation fees, and the Medicare Safety Net is reset at the start of the calendar year,” observed the bureau’s head of price statistics Michelle Marquardt.

“Tertiary education fees are also indexed at the start of the year. This quarter additional strength was seen in tertiary education as changes in student contribution bands and fees introduced in 2021 as part of the Jobs-ready Graduates Package continued to flow through to the index.”

Gas prices rose sharply across the capital cities, although Melbourne had the strongest March quarter rise of 22.7 per cent.

“This quarter’s rise was notable as prices increased in all eight capital cities, whereas typically only Melbourne’s prices are reviewed in the March quarter,” Ms Marquardt added.

Fruit and vegetables (+2.4 per cent) plus snacks and confectionary (+4.1 per cent) led overall food prices a further 1.6 per cent higher over the March quarter.

Domestic holiday travel and accommodation costs continued to rise (+4.7 per cent) over the final months of summer and early autumn, despite a small decline in airfares after recent large increases.

However, not everything went up in price over the past few months.

If you were out in the shops, chances are you found discounts for furniture (-4.6 per cent), household appliances (-3.8 per cent) and clothing (-3.2 per cent).abcaustralia

Assistant Treasurer and Minister for Financial Services Stephen Jones held a round table with peak industry group Association of Superannuation Funds of Australia (ASFA) this week in a bid to secure their investment.

The meeting followed the Prime Minister and Treasurer last week announcing the government would make up to $575 million from the National Housing Infrastructure Facility available to encourage private investment, particularly from superannuation.

That move was aimed at improving the risk-reward ratio for super funds.

The superannuation sector has not opposed the move but is yet to be convinced, citing high risk and low financial returns.

The Assistant Treasurer told the round table there were many opportunities for joint cooperation between government and superannuation funds.

“There are many areas where the government can partner with the super funds to advance the national interest,” Mr Jones said.

“Super funds are already major investors in assets that earn great money for members and produce huge economic benefits for the community [and] we need to find new ways to do this.

“Supercharging our economy with Australian workers’ own savings is smart.

‘Smart governments look for all available options to solve these [economic] problems. Engaging with our super funds is one way we can work together to do that.”

Super funds wary of risk, returns
In a communique released following the round table, ASFA said it was the start of the conversation.

“Identifying models for investment which work economically, both for the government and for fund members, will be key,” it read.

“Where the Commonwealth can create pathways to prove out investment methodologies, there will be greater scope for superannuation fund investment.

“Orchestration of the policy settings will be crucial — requiring ongoing effort and collaboration by stakeholders.”

The superannuation industry has suggested assisting with planning permissions, increasing compensation and ensuring better returns would boost the likelihood of the sector investing further.

Housing shortage ‘endemic’ across Australia
A report prepared for the Community Housing Industry Association estimated the shortfall of social and affordable housing will exceed 700,000 by 2036.

A further paper from Swinburne University associate professor Christian Nygaard, released in March, found the shortage in affordable housing to be endemic across Australia.

That study found the social and economic cost of that shortfall to be in the order of $676 million per annum, a figure projected to rise to $1,286,000,000 by 2036.

A fifth consecutive interest rate hike on Tuesday dealt another blow to housing affordability, a message echoed by federal Housing Minister Julie Collins.

“It will make it more difficult for more Australians to find a safe and affordable place to call home,” she told Question Time.

Minister Collins said the decision to unlock up to $575 million to encourage super funds to invest in social and affordable housing was one part of the government’s plan to improve access.

“This facility has been under-utilised and we want to work with the other tiers of government, social housing providers, but also to try and unlock private capital such as superannuation investment into more social and affordable housing across the country,” she said.

“[Federal, state and territory ministers] are having another meeting at the end of this week to talk about the national plan and get things happening.

“We want to get as many houses on the ground as quickly as possible.”

A report by think tank Per Capita in May estimated less than 55 per cent of Australian residents born after 1990 will own their own home by the time they turn 40, compared to a historical high of nearly 72 per cent.

November rainfall reached record levels in Australia before 2021 officially became the country’s coolest year in almost a decade, the Bureau of Meteorology said.

BOM’s annual climate statement on Thursday has revealed 2021 was the wettest since 2016, with states receiving rainfall up to 30 per cent above average thanks to unprecedented showers late last year.

Overall rainfall in Australia was nine per cent above average in 2021, with the wettest November registered since national records began in 1910.

BOM senior climatologist Dr Simon Grainger said the precipitation had ensured the majority of the country was not experiencing rainfall deficits or drought for the first time in five years.

“After three years of drought from 2017 to 2019, above average rainfall last year resulted in a welcome recharge of our water storages but also some significant flooding to eastern Australia,” he said.

Overall above average rainfall was observed for NSW (30 per cent above average), Western Australia (nine per cent), Queensland (eight per cent), Victoria (five per cent), Northern Territory (three per cent) and Tasmania (one per cent).

Only South Australia missed out, with rainfall two per cent below average in 2021.

Dr Grainger said the rainfall was influenced by the impacts of a negative Indian Ocean Dipole – a period of warmer than usual temperatures in the western Indian ocean – and La Nina, cooling of the central and eastern tropical Pacific Ocean.

Dr Grainger said they also had an impact on Australia’s mean temperature for 2021, which was 0.56C above average (1961-90 climate reference period) but still the coolest year since 2012.

“It turns out 2021 was almost 0.4 degrees cooler than the average temperature over the last decade (since 2012),” he said.

Temperatures were above average for most of northern Australia, Tasmania and WA’s west coast but below average for parts of inland NSW and around the southern border of the Northern Territory and WA.

“The cooler and wetter conditions because of that meant we continued our recovery from the really extreme drought we had over 2017-19 period,” Dr Grainger said.

Unions are questioning whether a quick return to pre-pandemic levels of migration may suppress forecast wages growth, particularly as the cost of living climbs.

While inflation is expected to outpace wages growth until mid-next year, real wages are predicted to steadily rise after June 2022.

It is one of the federal government’s key selling points from Thursday’s mid-year budget update, telling voters to look forward to fatter pay packets in years ahead.

As wages are forecast to rise, so is migration — steadily climbing back to roughly pre-pandemic levels.

Treasurer Josh Frydenberg argues migration can climb alongside wages.

“I don’t see it as a binary choice between having a sensible, measured immigration program … as well as getting a tighter labour market and putting the policies in place that drive real wages up,” he said.

Labor has agreed migration is an important source of economic growth but says it should not be a substitute for training Australians to fill workforce shortages.

Unions have called for a migration rethink and suggested rushing back to pre-pandemic levels will “clearly” push wages lower than they otherwise would be.

Where is migration headed?

Australia is currently in the very unusual position of actually losing people overseas, rather than gaining them.

In 2020-21, roughly 100,000 more people left Australia than moved here due to strict border policies.

That trend is expected to continue this financial year, even as borders slowly open — with 41,000 more people to depart than arrive.

But in 2022-23, things will start to quickly turn around.

That year is expected to see 180,000 more people arrive than depart, followed by 213,000 the following year, and 235,000 in 2024-25.

To put that number in context, during the last “normal” year (2018-19), that number was 241,000.

And it has been much higher than that in the past — in 2008-09, it fell just short of 300,000.

Unions worry it is too much, too soon
Some union leaders have expressed concern about the rapid return of significant migration, just as wages growth is forecast to rise.

Acting Secretary of the ACTU Liam O’Brien said he was worried about temporary migration in particular.

“We’re deeply concerned about the fact that the Morison government looks to be restarting and really ramping up temporary migration in this country,” he said.

“This clearly puts downward pressure on wages just when we need to see them going up.”

Mr O’Brien said after years of stagnant wages, the government should be doing everything it can to drive them up as fast as possible.

He said rising wages will drive economic growth more effectively than migration, or anything else.

“Sixty per cent of our economy is workers spending money,” he said.

“And if we don’t have serious efforts to increase wages, then economic growth is going to slow over the long term.”

Are migration and wages really linked?

Some economists pour doubt over suggestions increased migration might affect wages, and others claim it is unequivocally good news.

Chris Richardson from Deloitte Access Economics suggests migrants coming to Australia tend to be younger and more skilled than the general population.

“Over time, migrants don’t affect wages for everybody else,” he said.

“If a migrant arrives and puts up their hand to take a job, they get a job and spend that money and it creates the next job.

“It doesn’t affect job numbers, it doesn’t affect wages over time.”

But he does warn a very steep climb in migration could have unintended consequences.

“If the return to migration is rapid, it may take some time for those people to get jobs — that may be something that slows wage growth, temporarily,” he said.

Danielle Wood from the Grattan Institute said seeing borders open faster than expected is a very good thing.

“What that does is lifts the overall growth rate — if you have more people, the economy grows stronger overall,” she said.

“Given some of the pressure points in labour markets and shortages in various parts of the economy, that will very welcome news for a lot of businesses.”

‘We have to be more ambitious’: Business groups argue forecasts aren’t enough

Business groups are pushing back strongly against suggestions of any slowdown in migration and some are arguing what is being forecasted will fall short of what is needed.

Many industry groups have for months been complaining of significant skills shortages due to the effective suspension in migration, particularly in sectors like IT and hospitality.

Andrew McKellar from the Australian Chamber of Commerce and Industry argues any question over Australia’s migration levels has been long settled.

“The economics of this is well established — migration has been a positive for the Australian economy over a long period of time,” he said.

“We know that it will add to demand, we know it will add to our skills base.”

Mr McKellar said there is a strong argument for larger numbers in the next few years, to make up for lost time.

“We have to get back to much stronger levels of migration,” he said.

“Even the numbers that are factored into the budget at the moment, I’m not sure that’s enough.

“I think we have to be more ambitious and we shouldn’t run away from it, we shouldn’t be afraid of it — we need leadership on both sides on this issue.”

Fully vaccinated international students will be able to return to NSW without quarantining, the NSW Government has announced.
The first chartered flight carrying 250 students from 15 countries will arrive in Sydney on December 6. The state government has brought the rules for international students in line with returning Australians.

NSW Premier Dominic Perrottet said international education plays a “vital role in connecting NSW to the rest of the world.”
“This is a significant milestone in our roadmap to recovery and I can’t wait to welcome back such an important part of our community,” Mr Perrottet said.

Deputy Premier Stuart Ayres added students will require Commonwealth Government approval to travel to Australia.
“I welcome continued collaboration with the Commonwealth Government in supporting international students as they return to NSW,” Mr Ayres said.
Students will return on flights to NSW from December under the NSW International Student Arrivals Pilot Plan.

Return of skilled migrants

The federal government’s post-COVID economic recovery plan includes the return of skilled migrants.
“We are going to have a business led recovery here in Australia,” Prime Minister Scott Morrison said.
The plan would also offer incentives to get workers back into the office to rejuvenate struggling CBD businesses.
Since Australia shut its borders, businesses and industries have been struggling with a shortage of workers. 9NEWS

An Australian ugg boot manufacturer says his legal battle with a US company has received a major boost thanks to federal government support.

Footwear giant Deckers holds the UGG trademark in more than 130 countries and, in 2019, successfully sued Western Sydney boot maker Eddie Oygur over the sale of about a dozen products into the US.

After losing a US court appeal against Deckers in April, Mr Oygur said he was facing the collapse of his business, owing $US450,000 ($572,629) in damages and millions in legal fees.

South Australian former senator and lawyer Nick Xenophon is part of his legal team and has been lobbying for federal government support.

Mr Xenophon said the government had briefed a senior American appeals lawyer to file a “friend of the court” brief that would provide “critical support” to help take the case to the US Supreme Court.

“We’ve now filed an appeal in the US Supreme Court to say this trademark ‘ugg’ can’t belong to the US or to any country or any private company because ‘ugg’ is a generic Australian term,” he said.

“The Australian government has coughed up $US150,000 for the American lawyers.

“It’s a defibrillator … that should make a huge difference in actually getting before those nine justices of the US Supreme Court.”

Mr Oygur said he was elated by the news, saying he had “no other choice” than to continue his fight.

“I’m really grateful … I really need all the Australian support I can to bring ugg back home,” he said.

“We’re still on our feet, thank God. We’re still fighting them and we’re going to bring ugg back home.

“It did put a tear in my eye, I must say, because it made me proud to be an Australian. I put all my life savings into this. But I knew I was fighting and I’m still fighting for what’s right for Australia and for my business.”

Mr Xenophon said preliminary arguments would be heard as early as next month, and is hoping the US Supreme Court will then hear the case in May or June.

The term “ugg” is widely used in Australia to refer to sheepskin boots, but in major markets, including the US and the UK, Deckers owns the UGG trademark. ABC