Categories
Business

Fed set to keep interest rates near zero until at least 2023


In its policy statement, the Fed also began to pivot from stabilising financial markets to stimulating the economy: the Fed said it would keep its current government bond-buying at least at the current pace of $US120 billion ($164 billion) per month, but described the goal as in part to ensure “accommodative” financial conditions in the future.

US stocks added to earlier gains after the release of the Fed statement, but slid lower as Powell spoke. In late trade, the Dow Jones is up 0.4 per cent, the S&P 500 has lost 0.2 per cent and the Nasdaq has slid 1 per cent. Futures at 4.58am AEST are pointing to a loss of 10 points, or 0.2 per cent, at the open for the ASX.

Loading

The coronavirus epidemic continued to weigh on the economy, the Fed said in the statement, released after the end of its latest two-day policy meeting, even as officials upgraded their immediate outlook for the economy.

The virus “is causing tremendous human and economic hardship,” the rate-setting Federal Open Market Committee said. “The Federal Reserve is committed to using its full range of tools to support the US economy in this challenging time.”

New economic projections released with the policy statement showed interest rates on hold through at least 2023, with inflation never breaching 2 per cent over that time. Policymakers saw the economy shrinking 3.7 per cent this year, far less than the 6.5 per cent decline forecast in June, and unemployment, which registered 8.4 per cent in August, was seen falling to 7.6 per cent by the end of the year.

All Fed policymakers saw rates staying where they are through 2022, with four eying the need for an increase in 2023.

Dissents

But in pledging to keep rates low until inflation was moving above the 2 per cent target, to make up for years spent below it, the Fed reflected its new tilt towards stronger job growth, announced late last month after a nearly two-year review.

Both dissenters to the statement, Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari, took specific issue with the central bank’s guidance that it would keep interest rates where they are “until labour market conditions have reached levels consistent with … maximum employment and inflation has risen to 2 per cent and is on track to moderately exceed 2 per cent for some time.”

Loading

Kaplan said he would have preferred to have “greater flexibility” once inflation and maximum employment were on track to reaching the Fed’s goals, an easier hurdle to reach. Kashkari’s dissent suggests he wanted a higher hurdle: for rates to stay where they are until core inflation – which often runs cooler than overall inflation – has reached 2 per cent “on a sustained basis.”

More to come

Reuters

Business Briefing

Start the day with major stories, exclusive coverage and expert opinion from our leading business journalists delivered to your inbox. Sign up for the Herald‘s here and The Age‘s here.

Market Recap

A concise wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon. Sign up for the Herald‘s here and The Age‘s here.

Most Viewed in Business

Loading



Source link

Categories
Local News - Victoria

Greens seek to double rates for gaming venues and halve them for arts and hospitality sites


Loading

The plan would require changing the council rating system to allow for more differentials than the current scheme, which considers residential and non-residential land. Under the existing system, the highest ratepayer can pay only double the rate of the lowest.

The extra income from gaming venues would also allow for an effective rate freeze on residential and all other non-residential properties in the first year of the scheme, according to the plan.

“To be clear, this is effectively a ‘wealth tax’ on gambling venues for five years to offset significant rate reductions to hundreds of cultural and hospitality venues in the city, to get Melbourne through the recession with as few venue and business closures as possible,” the policy initiative says.

Ms Sabaratnam, who has lived in the Melbourne City Council area for almost 20 years, said gaming venues had more capacity to recover from the COVID-19 pandemic.

“It’s definitely not about punishing one category of business over another. It’s about recognising which businesses will be able to come back from this,” she said.

“It’s about how can we make sure the recovery is as quick as possible for not just hundreds of businesses, we’re talking about thousands of businesses being able to actually survive this pandemic.

“We want to see our bars and clubs thronging with patrons, our live music venues platforming new and exciting talent, and our restaurants and cafes buzzing with diners.”

The rate overhaul would affect pubs that have poker machines in the CBD and all venues with gambling facilities.

Lord mayor Sally Capp remains the frontrunner in the October 24 election. Deputy mayor Arron Wood, Labor candidate Phil Reed and the Greens are also in the race.Labor-aligned Jennifer Yang is also expected to announce her intention to run.

City of Melbourne Greens councillor Rohan Leppert in 2018.

City of Melbourne Greens councillor Rohan Leppert in 2018.Credit:Justin McManus

Ms Sabaratnam will run with health worker Roxane Ingleton as her deputy.

Greens councillor Rohan Leppert will remain the first councillor candidate, while Cathy Oke will retire and be replaced by Dr Olivia Ball as the second candidate. Emily Corcoran, David Jeffery, Nakita Thomson and Charlotte George are also Greens council candidates.

Ms Sabaratnam was born in Sri Lanka and moved to Melbourne with her family before finishing high school. She teaches at RMIT University and the city campus of Box Hill Institute in marketing, management and human resources.

The Tamil woman also ran for a Victorian Senate spot in 2019 and was the third council candidate for the Greens at the 2016 Melbourne election.

The Greens have also pledged to provide a full rate rebate to bars and restaurants for the duration of the lockdown in this financial year and to push the state government to extend its liquor licence-fee waiver for all venues for another year, until the end of 2022.

Loading

The pensioner rebate subsidy would also be boosted from $120.50 to $198.20 under the Greens plan, which would make it the equal highest in the state with the City of Maribyrnong.

Candidates in greater Melbourne are effectively banned from campaigning outside their homes under lockdown rules. Doorknocking, leafletting, campaign events and advertising on billboards are all ruled out under stage four restrictions.

Last week, Labor lord mayor candidate Phil Reed announced plans to provide a rate holiday to new built-to-rent developments that include at least 30 per cent affordable housing. The concession would be provided for 20 years, for up to 20,000 homes built in the next four years.

Trump Biden 2020

Our weekly newsletter will deliver expert analysis of the race to the White House from our US correspondent Matthew Knott. Sign up for The Sydney Morning Herald‘s newsletter here, The Age‘s here, Brisbane Timeshere and WAtoday‘s here

Most Viewed in National

Loading



Source link

Categories
Business

Dexus predicts higher office vacancy rates before economy recovers


Dexus chief executive Darren Steinberg said demand for office space would remain soft for the next 12-18 months, but once the economy showed signs of an upturn, he predicted people would want to return to the office.

“The office market has slowed but it’s not dead and as the economy improves we expect to see a rise in white-collar employment and people wanting to come back to the office,” Mr Steinberg said.

“However, with Australia in a recession, we are preparing for subdued tenant demand and increased
vacancy levels in our core office markets. In this environment we remain focused on maintaining high portfolio occupancy.”

Loading

According to the latest Property Council of Australia office market report to July, Sydney’s CBD office vacancy was 5.6 per cent, up from 3.9 per cent in January and the Melbourne CBD vacancy was 5.8 per cent, a rise up from 3.2 per cent in January.

“We will also make decisions that set the group up to perform over the long term. We will selectively recycle assets, which may result in short-term earnings dilution but will enable us to reinvest into opportunities that we believe will drive stronger investor returns over the next decade.”

Darren Leung, analyst at Macquarie Equities, said the result showed a better-than-expected COVID outcome but predicts office activity will continue to deteriorate.

Dexus paid a dividend of 50.3¢. The shares are up 0.7 per cent to $8.47 per security in late afternoon trading.



Source link

Categories
Local News - Victoria

Anger as Melbourne councils refuse to freeze rates despite surpluses


Of Melbourne’s 31 metropolitan councils, at least 17 are increasing rates despite recording a surplus.

Yarra Council’s draft budget, to be finalised next week, projects a $3.94 million deficit with $30.54 million earmarked for capital works – almost $7 million below last year’s expenditure.

Yarra councillor Stephen Jolly said the council should not be dumping capital works projects, nor raising rates.

“Every other government in the world from Donald Trump down is borrowing,” Cr Jolly said.

The council is deferring capital works as a result of the pandemic. The Age understands that includes one project for “safety around schools”, as well as the design of protected bike lanes.

The four-bin system, to collect food waste, will also be pushed out of this year’s plans. The rollout of the new glass bins will continue.

Yarra mayor Misha Coleman said the council was prioritising delivery of essential services and support packages.

“We have deferred consideration of some discretionary capital projects until the full community and financial impacts of COVID-19 are known,” she said. “Yarra has committed to a detailed mid-year budget review where we will revisit projects and priorities.”

Michael Glynatsis, who runs the Aegean Greek Restaurant on Brunswick Street in Fitzroy, said it was not the time for Yarra Council to raise rates and urged struggling ratepayers to complain before Tuesday’s budget vote.

“They will close everyone up,” said Mr Glynatsis, who is living off JobKeeper. “It will be a sorry state for everyone in Brunswick Street, Bridge Road, Victoria Street. Everything’s going to be up for lease.”

Mr Glynatsis is concerned that his restaurant, which has been there for decades but has been completely closed during the pandemic, might not survive.

Homeowners and businesses experiencing hardship in some municipalities can apply for an interest-free deferral because of COVID-19, while pensioners can apply for rebates. There have also been food relief and council grants for those in hardship.

Darebin Council is among those raising rates by 2 per cent, clawing $2.6 million back for a $5.7 million surplus, despite losing $15 million in revenue because of COVID-19.

Councillor Gaetano Greco, who stressed he was not speaking on behalf of Darebin, said it felt out of step to postpone capital works while other governments pumped money into the economy.

“That’s a lot of jobs, and now that’s not going to happen,” said Cr Greco, who disagreed with the rate rise.

Stonnington Council has recorded a $22.19 million surplus, despite a $9.6 million decline in revenue from the 2019-20 forecast.

Chapel Street traders are outraged at the proposed increase, which will be voted on at the end of August.

A Chapel Street Precinct Association survey found all of its 2200 members were against the hike, with most reporting they were struggling to stay afloat. Fourteen businesses had already folded.

“This increase during a pandemic is completely unethical,” general manager Chrissie Maus said. “I’m hearing from people who can’t actually afford to feed their family.”

In Victoria, about 975,000 people are relying on the federal government’s JobKeeper scheme for employment.

Ms Maus said an offer to waive the increase if ratepayers paid upfront would only benefit those who did not have cash flow issues and were not already in financial distress.

Council spokesman Jim Carden said the revenue loss combined with delivering critical services, including increased demand on waste collection and park infrastructure as more residents stayed home, meant it couldn’t afford to freeze rates.

“We are constrained by the state government’s cap on rate rises, meaning we are expected to do more with less year on year,” he said. “We are also not immune to the impact of the pandemic.”

Port Phillip councillor Dick Gross has defended the rates system.

Port Phillip councillor Dick Gross has defended the rates system.Credit:Penny Stephens

Mr Carden said the council had stood down hundreds of staff and set aggressive internal savings and efficiency targets.

Port Phillip has taken an estimated $19.3 million hit in 2020-21 because of the pandemic, recording a $15.95 million deficit.

The COVID-19 Financial Impact Index shows its suburbs Elwood, St Kilda and St Kilda East are among the hardest hit financially by the pandemic in greater Melbourne.

Campbell Spence, of Ratepayers of Port Phillip, said the council had spent more than $100 million a year more than neighbouring councils Stonnington and Hobson Bay.

“We believe the council has no respect for the ratepayers,” he said. “They are a massive bureaucracy. It doesn’t serve the community and it wants to grow year on year. There’s money wasted everywhere.”

Port Phillip councillor Dick Gross defended the rates system, arguing it took significantly less from residents than state and federal taxes.

“It attracts disproportionate scrutiny,” he said. “It’s a very, very fair tax. Wealthier people pay more than poor people.”

Cr Gross said the state government had imposed the cap while passing on costs, and that it was important not to be reckless with council finances by getting into too much asset-poor debt.

“We have a reduced capacity to be generous, but an increased demand,” he said. ”We’re doing extraordinary efforts in trying to house the homeless and feed the hungry.”

Constituents in Kingston and Melton have pressured councillors to follow the City of Melbourne’s lead and freeze or cut rates in their 2020-21 budgets. Maribyrnong Council has also implemented a freeze.

Melbourne City Council voted to freeze its rates after suffering a $101 million loss in revenue sending it into the red for the first time in 30 years.

Monash Council’s rates will go up by 2 per cent, but its ratepayers will be provided with a 10 per cent waiver, meaning rates will decrease by about 8 per cent.

Ratepayers Victoria president Dean Hurlston said councils should prioritise freezing or cutting rates over non-essential capital works projects.

Loading

“We live in times of severe financial distress for many businesses and residents who simply don’t know how they will make their rates payments,” he said.

No councils have applied to the Essential Services Commission to breach the 2 per cent cap, set by the Andrews government in December last year.

Opposition local government spokesman Tim Smith called on all councils to freeze or cut rates.

“And if they won’t do it, the Andrews Labor government must intervene to ensure that pressure is taken off ratepayers immediately,” he said.

Greater Geelong is lifting rates by 1.9 per cent, with mayor Stephanie Asher saying ratepayers could apply for hardship support if they were struggling to pay their rates.

“We will remain flexible on how we do that; we are taking a compassionate view,” she said.

In Ballarat, the city council voted for a zero rate rise in its 2020-21 budget. It has also frozen increases on fees and charges, including car parking fees.

Victorian councils were granted an extension this year to August 31 to adopt the 2020-21 budget.

With Benjamin Preiss

Sign up to our Coronavirus Update newsletter

Get our Coronavirus Update newsletter for the day’s crucial developments at a glance, the numbers you need to know and what our readers are saying. Sign up to The Sydney Morning Herald’s newsletter here and The Age’s here.

correction

An earlier version of this story stated incorrectly that Yarra is a Greens-dominated council. Two of its nine councillors are Greens members.

Most Viewed in National

Loading



Source link

Categories
Australian News

The Last Dance, NBA could be behind surging basketball participation rates in country WA


Esperance schoolboy Duke Polkinghorne’s favourite sports team is from a city known for its Cajun crawfish, its NASA control centre, and for being the hometown of singing superstar Beyonce Knowles.

But it is their top basketball team, the Houston Rockets, that has the United States’ fourth biggest city on the 12-year-old’s radar.

Although Duke also follows the West Coast Eagles AFL team, he picks watching the Houston Rockets over them any day.

“I watch the AFL a lot with my dad [but I prefer the] Houston Rockets, because they have my favourite player, James Harden,” Duke said.

“He shoots a lot of three-pointers and deep threes, so that’s why he’s my favourite.”

And Duke’s not alone; many of his friends say they follow the US National Basketball Association (NBA) more closely than they do any Australian sport.

“The NBA is way better [than the AFL],” agreed his teammate, Jaymes Wynne.

Community basketball on the rise

Part of the fascination with the NBA could be down to surging basketball participation rates.

Over the past two years Basketball WA figures show that participation rates picked up 11 per cent in metro areas, while country areas recorded a 22 per cent growth.

But in Esperance numbers jumped by 29 per cent in just the last year, making it one of the fastest growing basketball regions in the state.

Matt Thornton, the Esperance Basketball Association president, said more people played basketball than any other sport in town, with 86 teams and more than 680 players.

He thought the NBA was behind some of that uptick.

“It’s all over Facebook and Instagram that the kids get on,” Mr Thornton said.

“I think that’s why people are really noticing the NBA now, and that’s really gone down to our local communities.”

The US league is so popular that junior Esperance teams no longer wear generic coloured singlets and instead wear the uniforms of NBA teams, like the Chicago Bulls, the Boston Celtics or Golden State Warriors.

Asked how the players decided who to support given they had no connection to many of the places represented by NBA teams, Mr Thornton said many would pick a favourite player and follow their team.

“I go for the Lakers because my favourite player plays there and it’s LeBron [James],” James said.

LeBron James takes the ball in his left hand and drives towards the basket with another player in dark blue watching him
NBA players like LeBron James, right, are role models for young Australian players.(AP: Nell Redmond)

Mr Thornton also said the rise in participation could be due to the sport’s accessibility, with even a three-on-three half-court competition included at the next Olympics.

“You can play anywhere — you can grab a basketball and shoot the ball if you’ve got a hoop,” he said.

“Even at home you throw things in the bin — you’re still kind of playing basketball.”

Vying to be the next Michael Jordan

Earlier this year ESPN released a documentary called The Last Dance about one of the NBA’s all-time greatest players, Michael Jordan, and the Chicago Bulls.

The Chicago Bulls, including Michael Jordan, sit with their NBA championship trophies at a victory parade.
After six titles in eight years, the Bulls’ championship core was dismantled in a matter of weeks.(AP: Beth A Keiser)

Mr Thornton said Esperance players were definitely among the 5.6 million viewers to tune into the 10 episodes and that boosted the game’s popularity even further.

“We’re hoping our season could help them become the next big thing.

“If we could get a kid halfway there, or even the full way there, I think we’re doing a pretty good job here in Esperance.”

Mitchell, Duke, Jaymes and their teammate Taj Liddelow all play in an Esperance talent development squad and say they want to play in the NBA.

“I think all of us; [getting to the NBA] that’s our goal,” Mitchell said.

Asked whether they were aiming to play at all in Australia’s National Basketball League (NBL), Mitchell said, “I mean, it would still be nice”, but with less enthusiasm.

New stadium could increase numbers

Later this month a new $6 million indoor stadium is forecast to open in Esperance.

Mr Thornton expects it will lead to further growth in the sport.

“I think our numbers will increase a lot,” he said.

“I’m hoping to even try and get a vets’ competition going for the older population.



Source link

Categories
Australian News

FIFA rates Australia-New Zealand as top bid for 2023 Women’s World Cup


Australia’s hopes of co-hosting the 2023 Women’s World Cup with New Zealand has received a significant boost with FIFA rating it the best of the bids.

The Australia and New Zealand joint bid topped the scoring over the two remaining bidders, Japan and Colombia.

FIFA announced on Wednesday that Australia-New Zealand scored 4.1 points from a maximum of five in evaluating its project plan for the first 32-team women’s tournament.

Football Federation Australia chairman Chris Nikou said he was confident the bid would gain the support of FIFA’s ruling council.

“I am delighted that we have scored so strongly in FIFA’s Bid Evaluation Report,” Nikou said.

“We are confident that our combination of technical excellence, record-breaking crowds, commercial certainty, a warm embrace from our 200 different cultures and genuine impact across the region where the legacies will be profound will prove a compelling offer to FIFA and its confederations.”

Sam Kerr wearing a yellow Matildas team shirt kicks a soccer ball on the turf of a sports arena.
Matildas captain Sam Kerr may have the chance to challenge for a World Cup on home soil.(AAP: Brendon Thorne)

Japan scored 3.9 and Colombia trailed with 2.8, though it still qualifies for consideration by FIFA’s ruling council, which picks the winner on June 25.

Each of the votes from the 37-member panel will be made public.

FIFA rated the Australia-New Zealand bid the “most commercially favourable”.

It also offered a rare example of “unity and cooperation” across continental bodies.

“We are two nations from two confederations, united in proposing a historic and exciting step forward for world football,” Nikou added.

Australia is an Asian Football Confederation member and New Zealand is from the Oceania group. The complexity of cross-border working was also noted.

Australia's women's football team celebrate Tameka Butt's winning goal against USA in Seattle in July 2017
Australia has never hosted the Women’s World Cup.(Reuters/USA TODAY Sports: Joe Nicholson)

New Zealand Football president Johanna Wood said the combined bid would make the football world proud.

“We will place the interests of the greatest female footballers in the world at the centre of everything we do, to deliver a World Cup the global football family can be proud of,” Wood said.

Japan’s experience hosting big events was praised, though it prefers to host in the cooler weather of June-July instead of FIFA’s preferred July-August dates.

Colombia met FIFA’s minimum requirements but the plan needs “significant amount of investment and support” with just three years to prepare.

Earlier this week, Brazil pulled out of the running, citing an “environment of economic and fiscal austerity,” which meant it could not guarantee it would be able to fulfil FIFA’s criteria for hosting.

The winner will follow France which hosted a 24-nation tournament in 2019, won by the United States.

ABC/AP



Source link

Categories
News

Despite extended nursing home admissions, hip fracture rates remain persistently high


A recent study of hip fracture rates in nursing homes in the U.S. reports a slight rise in the rate of hip fractures among long-stay residents in recent years.

Researchers looked at data collected between 2007 and 2015 and found, despite a dip in 2013, rates have begun to rise again even though long- stay nursing home admissions have declined. Sarah T. Berry, M.D., M.P.H., Associate Director of the Musculoskeletal Research Center in the Hinda and Arthur Marcus Institute for Aging Research, is lead author on the paper recently published in the Journal of Bone and Mineral Research.

The purpose of the study was to describe trends in hip fracture rates and post-fracture mortality among 2.6 million newly admitted U.S. nursing home residents from 2007 to 2015, and to examine whether these trends could be explained by differences in resident characteristics.

Understanding the prevalence of fractures and what puts individuals at risk is important to reducing the incidence of fractures in this vulnerable population.

Thirty-six percent of nursing home residents with hip fractures will die within six months, and another 17.3 percent of ambulatory residents will become completely disabled.

Among survivors, infections and pressure ulcers are common, leading to functional decline and a diminished quality of life.

Given the high morbidity, mortality, and financial expense associated with these fractures, hip fractures are a major public health concern.

It is important then to characterize temporal trends of hip fractures to inform interventions and national policies aimed at ameliorating these fractures.

Our findings underscore the magnitude of the hip fracture problem in the U.S. and should prompt widespread interventions to reduce the suffering associated with hip fractures in older adults.”


Sarah T. Berry, M.D., M.P.H., Associate Director of Musculoskeletal Research Center, Hinda and Arthur Marcus Institute for Aging Research

The study’s researchers can only speculate at this point as to why nursing home fracture rates have not declined during the past decade.

Among non-institutionalized older adults, a ten year downward trend in hip fracture incidence has been leveling out in the past few years.

According to the paper, “available strategies exist to prevent falls and associated injuries, albeit, the success of falls prevention programs in the nursing home has been less than in the community setting. In general, nursing home residents are older and sicker, with more cognitive and functional impairment than community-dwellers.

One possible explanation of these high rates is the underutilization of medications to treat osteoporosis.”





Source link

Categories
Australian News

Unemployment rates rise, what true figures mean for future


Australia received the “heartbreaking” news that almost 600,000 workers had lost their job in just one month yesterday.

But at the same time, the unemployment rate had only jumped by 104,500, taking it to 6.2 per cent, compared to the previous month’s 5.2 per cent.

On the surface, that mere one per cent difference doesn’t seem too disastrous.

But the reality of our current jobs market is far more complicated – and far more worrying.

THE DATA

According to the Australian Bureau of Statistics, seasonally adjusted employment fell by 594,300 people between March and April.

That equates to about 19,810 jobs lost each day during that period.

Unemployment increased by 104,500 people to 823,300, the unemployment rate increased by 1 percentage point from 5.2 per cent to 6.2 per cent and total hours worked fell by around 9.2 per cent between March and April.

RELATED: PM fears ‘even deeper impact’
RELATED: Shock collapse of denim empire

TRUTH BEHIND 1 PER CENT JUMP

The ABS explained that the comparatively small jump in unemployment – even as almost 600,000 jobs were lost – was the result of a drop in people actively looking for employment.

“The large drop in employment did not translate into a similar-sized rise in the number of unemployed people because around 489,800 people left the labour force,” stated Bjorn Jarvis, head of labour statistics at the ABS.

The spike in people leaving the labour force also meant the participation rate plummeted by 2.4 percentage points to 63.5 per cent.

Crucially, Australians who are not “participating” in the “labour force” are not considered to be unemployed, nor are those who have been “stood down” but who expect they may keep their job in future, therefore driving down the overall rate.

Given the widespread government restrictions that have forced businesses to close, it is believed many out of work Aussies have hit pause when it comes to trying to find a new job, as there’s simply no point at the moment.

EY Chief Economist Jo Masters said the situation was likely to “get worse before it gets better”, despite the easing of restrictions.

“While the lower participation rate cushioned the rise in the unemployment rate, which jumped to 6.2 per cent, well below expectations of 8.3 per cent, this figure is not good news given it is driven by people leaving the workforce” she explained.

“Indeed, this data suggests getting people back to jobs will be even more challenging as they will first need to be enticed back in to the workforce, and then find a job.”

And Callam Pickering, APAC Economist at global job site Indeed, said the figures “didn’t pass the pub test” and did not “do justice to the economic destruction”.

“Australia’s under-utilisation rate jumped to 19.9 per cent, with the unemployment rate rising to 13.7 per cent, while hours worked fell by 9.2 per cent. That does a better job, than the unemployment rate, of measuring the economic impact of COVID-19,” he said.

“Employment fell by 594,300 people in April but unemployment jumped by only 104,300 people. That obviously doesn’t pass the pub test. Due to methodology, which doesn’t always sit well with reality, 489,800 people simply left the Australian labour force in April. Had the size of the labour force held steady, with everyone losing employment shifting to unemployment, then the unemployment rate would have spiked to 9.6 per cent.

“The rate of unemployment would also be much higher in the absence of the JobKeeper wage subsidy. The subsidy is imperfect – failing to cover vulnerable casual workers and – but it has preserved the connection between business and employee.”

JOBKEEPER

Meanwhile, the six million-odd Australians now receiving the JobKeeper wage subsidy are also not factored in – even if they’re working zero hours.

Speaking to ABC News yesterday, the Grattan Institute’s Danielle Wood said that has “significantly” masked the true extent of the economic damage caused by the coronavirus crisis.

“I mean certainly in terms of the number of people becoming unemployed, (it) is extremely high by historical standards and the rate we are seeing unemployment shoot up again is like nothing we have ever seen,” she said.

“So in terms of that headline unemployment figure, certainly a bit lower than what we are expecting, but it does really bring home just how significant and how fast this shock has been.”

During a press conference following the release of the ABS figures, Prime Minister Scott Morrison also touched on whether the exclusion of JobKeeper disguised the true story.

RELATED: How JobKeeper scheme flopped

“When you get underneath the numbers I think what you’ll see is the estimates that Treasury put together earlier are reflected in these numbers,” he said.

“While the headline rate is just over six (per cent), when you have almost 600,000 people exit employment, that is a devastating set of numbers.

“And when you look at hours worked and all of those issues as well what you do see is an even deeper impact.”

Meanwhile, Treasurer Josh Frydenberg said it was a “tough day” and that the figures were “heartbreaking” – but that Australia had “confronted this global pandemic, this economic shock … from a position of economic strength.”



Source link

Categories
Business

Penalty rates reductions result in $50 million loss in wages


Mr Stanford said when partial holidays for Christmas Eve in the Northern Territory, Queensland and South Australia and New Year’s Eve in the Northern Territory and South Australia were taken into account the total in lost wages due to the reduction in holiday penalty rates tipped over $50 million.

He estimated that an additional $13 million in wage losses for work on Sunday, December 29.

Dr Jim Stanford, economist and director of the Centre for Future Work at the Australia Institute.

Dr Jim Stanford, economist and director of the Centre for Future Work at the Australia Institute.

Mr Stanford said a weakening economy, widespread pessimism about a potential recession next year, and the negative shock of the bush fires had all taken the wind out of consumer spending.

“This was already a very bleak Christmas season for consumer spending,” Mr Stanford said.

“Withdrawing $63 million in incomes from some of the most low-paid and insecure workers in the whole economy can only make things worse.

“We are witnessing the cascading impact of negative economic, labour, and environmental policies – all culminating in a brutal holiday season for Australia’s retailers.”

Australian Industry Group chief executive Innes Willox said the independent Fair Work Commission decided that previous rates were modestly adjusted after being deemed unfair.

“It is employers that have been disadvantaged the most this Christmas/New Year period by the penalty rates payable – not employees,” Mr Willox said.

Innes Willox, chief executive of the Australian Industry Group.

Innes Willox, chief executive of the Australian Industry Group.

“The Queensland Government’s decision to proclaim an additional public holiday on Christmas Eve resulted in large cost increases for thousands of employers.

“A detailed analysis by Ai Group showed that the estimated cost impact on businesses of the Queensland Christmas Eve public holiday, for additional labour costs alone, were up to $410 million.”

Jo-anne Schofield, national president of the United Workers Union, said hospitality staff working hard to ensure that others can enjoy New Year’s Day were having millions of dollars ripped from their pay packets every public holiday.

“Public holiday penalty rates are about fairly compensating workers who forfeit spending time with family on holidays. These penalty rates are relied on by hospitality workers to meet normal household expenses,” she said.

“With workers continuing to have millions ripped from their penalty rates every holiday, they have less to spend supporting local businesses.”

Most Viewed in Business

Loading



Source link