Australia Has A Surplus Of Economic  Stupidity!

Australia Has A Surplus Of Economic Stupidity!

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The Australian economy was critiqued again this week. The cash rate remains at 4.25 percent, annual GDP growth the slowest since 2008 and construction shrinks for 21 months in a row. I am more than confident that when the Reserve Bank of Australia (RBA) meets in the first week of April we will see a 0.50 percent cash rate reduction. It is only natural that this uncertainty scaring off home buyers “industry owned property portal realestateVIEW surveyed 1475 consumers across Australia – their findings compelling. “Our survey shows that while interest rates are a key concern for buyers, there are other factors such as household expenses” said general manager Petra Sprekos.

We are all living in interesting times and “Consequently, we’re finding most are adopting a wait – and – see approach. “We definitely don’t see this changing anytime soon, especially as (banks) break ranks with the RBA again and raise mortgage rates each month.” Mark Bouris takes aim at RBA as Gail Kelly warns of ‘frequent’ independent bank rate rises which is an interesting debate. Mark Bouris challenges the RBA to ‘scratch beneath the surface’ with our multi – speed economy. Gail Kelly warns that home borrowers must expect small and more frequent rate changes as banks look to maintain their profitability in a low growth environment.

That said, should the RBA cut the cash rate at its next meeting the banks are likely to increase rates, not drop them. On the flipside interest rates will be lower in the next decade than in the past: Macquarie Group’s Brian Redican.

BUY PRINT

Over to Business Spectator with their CEO PULSE: Time to slash the surplus Australian chief executives have spoken – “wrong way, go back” is their message to the government, and specifically to Treasurer Wayne Swan. The latest quarterly CEO Pulse survey for Business Spectator, conducted by GA Research and sponsored by IBM, is loud and clear: don’t worry about returning the budget to surplus, drop the carbon tax and the NBN, and spend money on infrastructure and superannuation.

  • Most surveyed CEOs do not see returning the 2012/13 Federal Budget to surplus as a high priority. Almost half (48%) said that it should be a low priority. Another 13% said it should not be a priority at all.
  • The highest levels of support for potential items in the upcoming budget included; regional infrastructure funding (80% support), tax offsets for increased superannuation contributions (71% support) and tax cuts for small businesses (70% support).
  • When asked what advice they would give the Federal Treasurer, The Hon, Wayne Swan, the responses from surveyed CEOs fall into categories dealing with the budget surplus, the banks, and interest rates, and the focus of government spending and long – term economic policy. There was also fair amount of negativity around many responses with some respondents calling for him to resign.

No doubt having read this report PM creates forum to cut business red tape in an effort to improve relations with the business sector where the government remains ‘on the nose’. What remains to be seen (or believed) is, will the government listen? Its problem is that it (Labor Party) has not delivered a budget surplus since 1989 – this week’s floods will severely impact productivity on top of GDP figures show economic growth slows.

Key business backers of carbon pricing have called on the government to amend the carbon tax – cut carbon price to $10, Labor told. The Gillard government is on a hiding to nothing on the carbon tax although it simply won’t act. RBA man Warwick McKibbin rounds on Treasurer Wayne Swan when he said Wayne Swan was “incapable of accepting criticism” and of “destroying the fabric of good economic policy in Australia”.

If the current regime is working under the Gillard government then why would the latest Australian Bureau of Statistics (ABS) figures show that industrial disputes cost the nation 241,500 working days in 2011, compared with 126,600 in 2010.

Source: Domain Property Monitors

    MOSMAN – 2088

    • Number of houses on the market last week– 139
    • Number of houses on the market this week – 144
    • Number of apartments on the market last week – 126
    • Number of apartments on the market this week – 115

    CREMORNE – 2090

    • Number of houses on the market last week– 13
    • Number of houses on the market this week – 19
    • Number of apartments on the market last week – 23
    • Number of apartments on the market this week – 25

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 22
    • Number of houses on the market this week – 20
    • Number of apartments on the market last week – 63
    • Number of apartments on the market this week – 65

Mosman house listings continue to hover around the 140 this week, although well below the spring 2011 peak of 168 house offerings. This number should decline in the run – up to Easter otherwise it is not a good sign for our property markets. Mosman posted its second highest ever waterfront sale – Chinese buyers playing property pick a box, but record Mosman price unlikely.

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate – Click Here

For this week’s open for inspections – Click Here

Not great for those renting – Why rents will keep rising: Tim Lawless rental rates across the combined capital cities grew by 6.3% in 2011, compared with a fall in home values to 3.6%. The superior growth performance of rents compared with values has been a consistent trend over the past five years.

This Sunday we are proud to be sponsors of Fighting Chance Celebrity Cricket Day at Alan Border Oval. The day starts at 11.00am – Mosman first graders vs Sydney University. At 2.00 pm, half time entertainment, including an address from Ian Chappell and Mosman Mayor Anne Connon then at 3.00 pm a celebrity game between Stuart MacGills XI and Shane Lee’s XI. So come along as it will be a great afternoon.

Cheers ^__^

3 Responses to “Australia Has A Surplus Of Economic Stupidity!”

  • Hotly Spiced says:

    The RBA definitely needs to drop rates to put some stimulus back into the housing market – but will the banks comply?

  • Ann says:

    Swan and Gillard are wedged now on the surplus, mentioned it 100’s of times, so if he failed, he will have to resign. So expect a big grab in the budget and or creative accounting.

    The $23 carbon tax, now over priced by 250% will be the nail in the coffin.

  • Robbie Mac says:

    Whether or not the RBA needs to drop rates by 0.50% is moot – they won’t, as that in itself will send the wrong message to the markets, and be perceived as panic. They are much more likely to do it in 0.25% increments, as they did recently, although I suspect they will, if they drop it at all, leave it for another month, then consider a second drop the month after. Subject of course to the latest world events, acts of God, and of course, political stupidity.

    The surplus is becoming a millstone, one which has been hung around their necks by their own. A silly promise, not only because it may be hard to keep, but it might also be unnecessary to keep if some fiscal stimulus is the smart option to choose. And choosing smart options hasn’t been a real strength of this government has it….?

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