2 April 2008

Repeat after me: 'THE LIBERAL GOVERNMENT LEFT THE ECONOMY IN GOOD FINANCIAL SHAPE'

Despite the best efforts of Kevin Rudd, Wayne Swan & Co. to talk down the achievements of the Coalition government, the real evidence that the Howard-Costello Government managed the Australian economy and its machinery well keeps mounting.

Comments by Glenn Stevens, Chairman of the Reserve Bank of Australia, in the RBA's March quarter "Review of Financial Stability" make interesting reading.

"In Australia, the financial system has coped better with the recent strains than have the financial systems of many other countries. The banking system remains highly profitable and well capitalised, with the banks having minimal direct exposure to the sub-prime problems in the United States. The credit ratings of the larger banks remain high, with none of them having been put on negative credit watch or having their ratings downgraded.

The solid position of the Australian banking system partly reflects the high quality of its assets, with the banks having considerably less risky portfolios than banks in many other countries. Ratios of non-performing loans to total loans remain at low levels, with arrears rates having declined over the past six months. While lending criteria were relaxed over recent years, credit standards in Australia did not fall by nearly as much as they did in the United States.

The tighter financial conditions in Australia are having an impact on both household and business finances, although overall balance sheets remain in good shape. Recently, the household sector has benefited from favourable labour market conditions and strong income growth and, over the past decade, has experienced a significant increase in its net wealth relative to income (my emphasis). Reflecting these developments, the share of households not able to meet their debt obligations is low by both historical and international standards. There are, nonetheless, some pockets of stress, with higher interest rates and weaker asset markets putting more pressure on many households’ finances...

The favourable macro-economic conditions of recent years have also meant that, at the aggregate level, business balance sheets are in a healthy shape: profitability is high, and both debt-servicing requirements and arrears rates are at relatively low levels. Notwithstanding this positive picture, the recent sharp increase in risk aversion and higher funding costs have created difficulties for some firms...

Despite the strains in global financial markets, the underlying resilience of the Australian financial system, together with the relatively favourable outlook for the domestic economy, means that the system is much better positioned than the financial systems of many other countries to cope with the current difficulties."

We've handed over an economy in good shape, with air in the tyres and petrol in the tank. Whether it was wise to give the keys to a government on "P" plates remains to be seen.

The full report is available on the RBA website.

The Coalition Record

• In March 1996, when the Howard Government was elected, unemployment was 8.2% and Australia had just been through the worst economic period since the Great Depression.
• More than 2.1 million jobs have been created since 1996.
• Unemployment is now at 4.0% - the lowest level for more than 30 years.
• Wages grew in real terms under the Coalition by 20.8%, compared with a 1.8% decrease under the Hawke/Keating Labor Governments.
• By 2007 working days lost to strikes every year had fallen to fewer than 75,000 days - the lowest level in more than 100 years. Days lost to strikes during the Hawke/Keating years reached up to 1.6 million a year.

FIDO TIPS - ADVICE FOR MORTGAGEES

FIDO - the section of the Australian Securities & Investment Commission (ASIC) offering consumer education and information - deserves to be better known than it is.

April’s FIDO has a wealth of useful information for mortgagees looking at switching lenders, including a qualitative study of the perils of uninformed refinancing.

ASIC's responsibilities cover superannuation, financial planning, investment and insurance.

It is also a very useful source of information on fraud - it's amazing the number of intelligent people who manage to get drawn into some of these schemes.

The latest ACCC "Little Black Book of Scams" is available to download here. I have a limited number of printed copies available at my office, so please contact me with your details if you would like one. If you have some spare time, visit the Scambaiter website at http://www.419eater.com/ to see examples of what happens when the tables are turned.

NEW LIBERAL PARTY STATE PRESIDENT

Congratulations to Gary Spence on his election last weekend as the acting President of the Queensland Liberal Party, following Warwick Parer's decision to resign. While I'm opposed to any plans to subsume the Liberal Party into any Liberal-National merger, I'm pleased that our State Council decided to refer the amalgamation proposals to a federal Liberal-National working group for further examination.

Federal Women's Committee

Congratulations to Robyn Nolan, from WA, who was elected as the President of the Liberal Party's Federal Women's Committee at their AGM in late March. Robyn has served for a number of years as President of her State's Liberal Women's Council and will now represent the combined women's councils on Federal Executive.

This morning, ex-Minister Mal Brough has formally announced his candidacy for the position of State President at State Convention at the end of May. There's no doubt that the involvement of someone of Mal's stature would be a fillip for the Party.

NATIONAL EMPLOYMENT STANDARDS

Having wiped out the ability for employers and employees to agree to individual statutory agreements, Julia Gillard is now looking for new ways to make business in Australia more difficult.

A draft of 10 proposed National Employment Standards (NES) has been released, and will cover the minimum entitlements for all Australian employees. Once enacted, the standards will apply from January 1, 2010.

The headings for the standards look reasonable enough but the devil is in the detail. The standards cover the following areas:

• Maximum weekly hours of work
• Requests by parents for flexible working arrangements
• Parental leave (and related entitlements)
• Annual leave
• Personal/carer’s leave and compassionate leave
• Community service leave
• Long service leave
• Public holidays
• Notice of termination and redundancy
• Fair Work Information Statement

However, employers would no longer be able to ask staff to take leave at specific times, such as Christmas shutdown. Employers, regardless of their size, would need to find alternative “safe” employment for pregnant women experiencing problems or let them take leave on full pay until the problem passed. As an example of the issues raised by employers, the Australian Mines and Metals Association (AMMA) submission is available at http://www.amma.org.au/home/publications/AMMA_NES_Submission_Final_31March2008.pdf

Responses to the discussion paper - available at www.workplace.gov.au - close on April 4, 2008.

UNESCO ON-LINE FORUM ON EDUCATIONAL INCLUSION

More than 30 years on from the first moves to include children with disabilities in mainstream Australian schools, educational inclusion is often still a myth. Many special education units within mainstream schools operate like small special schools. The children are ‘included’ within the mainstream school fence but that’s about it.

UNESCO, the United Nations Education and Scientific and Cultural Organization, is running an online discussion forum on “Quality Education to End Exclusion” throughout April. People can join the discussion at www.unesco.org/education/en/efa/global-action-week/forum

The forum provides a platform for sharing information, views and good practices to enrich the current debates on inclusion and quality education, with a section available for comments and suggestions by children and young adults.

'ANGELS AND DEMONS' - MENTAL HEALTH

This week I've been attending meetings of the Senate Inquiry into Mental Health Services in Australia, and I’ve been surprised by the number of witnesses who’ve told our committee that stigmatisation of people with mental illness continues to be one of the major problems.

Self Help Queensland Inc is a community-based network of self help organisations and groups in Queensland. The organisation is based at Sunnybank in Brisbane, and was formed by self help organisations to share resources, support each other, assist in the development of new groups and raise community awareness of the importance of self help.

Sue Boyce
Liberal Senator for Queensland