Aussie News n matters

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http://www.google.com/hostednews/afp/article/ALeqM5jcZOoP_o1_RAjhawL-AbxaacoLrg?docId=CNG.1ec18a5caf14b98341da0879e29e0574.5b1

Floods cost to Australia 'higher than Katrina'

By Madeleine Coorey (AFP) – 2 days ago

SYDNEY — Australia's devastating floods could slice more than Aus$10 billion ($10 billion) off GDP and hammer the economy worse than Hurricane Katrina affected the United States, economists said Wednesday.

Experts said the floods, which have turned most of the mining and Great Barrier Reef state of Queensland into a disaster zone, could cut growth by one percentage point in the near term, including lost exports and infrastructure damage.

"Clearly the cost is going to be substantial," said Stephen Walters, chief economist at investment bank JP Morgan, adding that the deluge could shave as much as one percent off GDP -- or up to Aus$13 billion -- in early 2011.

But he said the economy, currently riding a resources boom driven by Asian demand, would likely recover in the second half of 2011 on the back of economic activity related to rebuilding homes, businesses and infrastructure.

"The profile for GDP is going to be... a dip near-term, or at least much weaker growth, not necessarily negative -- but quite a bit stronger in the second half and into 2012," he told AFP.

An analysis released by Westpac said GDP in the quarter to March could be cut by one percent, but the annual fall would translate to about 0.3 percent. Australia's economy is currently tracking annual growth of 2.7 percent.

John Rolfe, an economist with Queensland Central University, said in the short-term the floods would hit coal and primary produce exports but the impact would drag on the economy for several years.

"In the longer term, the economy is going to suffer because of the amount of ongoing disruption to production, mostly because of the additional expenditure -- both private and public expenditure -- to fix infrastructure."

"So essentially investment for the next two or three years is going to be going into repairs instead of into new productivity."

Rolfe said growth would have to be revised down, but only slightly to between 0.1 and 0.3 percent.

But he said the floods in Queensland, which produces half of the world's coking coal and is a major tourist destination, would be proportionally greater than the economic impact of Hurricane Katrina.

"I think the floods in Australia will have a much bigger proportional impact on the economy," he said, declining to comment on whether the costs of the Queensland floods would be greater at an absolute level.

US officials said in 2005 that Hurricanes Katrina and Rita that year caused $70-130 billion in property damage and would have a sharp but short-lived impact on the overall economy.

Rolfe said the difference in Queensland was serious losses in mining and farming production, as well as tourism in a state which is home to the famous Great Barrier Reef and pristine beaches.

The Queensland Tourism Industry Council, which earlier indicated that tourism losses from the floods could reach Aus$100 million, has now indicated that the impact will be even more severe after the damage to Brisbane are added.

Economist Warwick McKibbin, who also sits on the board of the central Reserve Bank of Australia, said it was too soon to predict the economic impact but it would be greater than simply the loss of exports.

"I have no idea of what the costs will be but it's not just the exports," he told AFP. "It's going to be a lot bigger than people think. It's going to be a lot bigger than just the cost of the damage."

Queensland Treasurer Andrew Fraser said it was not yet possible to say how much the worst floods in more than a century would cost, but that they were "a real blow to the Queensland economy".

"We are talking here of billions in terms of budget impact," he said.

via : http://singsupplies.com/showthread.php?t=84908

read about the flooding in Oz.
http://www.celicasg.org/index.php/topic,697.msg83919.html#msg83919

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http://au.finance.yahoo.com/news/Aussie-cities-becoming-world-yahoo7finance-421644262.html?x=0

On Thursday 7 July 2011, 15:20 EST
By AAP

The strong Aussie dollar is giving Sydney, Melbourne, Perth and Brisbane the unenviable reputation of being among the world's most expensive cities, a global survey shows.

It's now cheaper to live in London, Vienna, Rome, Berlin, Hong Kong and Beijing than most Australian capitals, the Economist Intelligence Unit's Worldwide Cost of Living survey found.

Sydney is now the sixth priciest city in the world, up from 32nd place two years ago, while Melbourne has jumped from 38th to seventh.

Perth and Brisbane, meanwhile, are ranked 13th and 14th - almost 25 per cent dearer than New York City.

Survey author Jon Copestake said the strength of Australia's dollar was partly to blame for skyrocketing living costs Down Under.

The local currency reached parity with the US dollar in November 2010 and hit a peak of 110.11 US cents on May 3, its highest since being floated on the foreign exchange market in 1983. It is currently trading around 107 US cents.

"Rising domestic prices, partly due to rising oil and commodity prices, have been compounded by the strength of the Australian dollar, which achieved parity with the US dollar earlier this year, compared to being worth around half that much 10 years ago," Mr Copestake said in a statement on Thursday.

The survey also found Australian cities were among the most expensive for business trips.

In Melbourne, accommodation, meals, taxis, drinks and a newspaper now cost the average business traveller $US760 ($A712.75) a day, with Sydney close behind at $US627 ($A588).

Mr Copestake warned visitor numbers could be hit if Australia's cost of living continued to escalate.

"Australia has long been an attractive destination, with Melbourne and Sydney becoming international cities in their own right," he said.

"Whether the spiralling relative cost of living will dampen this appeal remains to be seen."

The survey ranked Tokyo, Osaka, and Oslo as the three most expensive cities in the world.

Mumbai, Tunis and Karachi were the cheapest among the 140 cities used in the survey.

The UK-based Economist Intelligence Unit provides economic and business research, forecasting and analysis.

Its bi-annual Worldwide Cost of Living survey uses more than 400 individual prices to compare cost of living expenses.
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via : http://singsupplies.com/showthread.php?96452-Aussie-cities-becoming-world-s-priciest

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[youtube]VEgiX2NPx40[/youtube]
http://youtu.be/VEgiX2NPx40

Witness - The Intervention
From: AlJazeeraEnglish  | Jul 28, 2011  | 802 views
Recorded over eight months in the Northern Territory of Australia, this film shows the impact of the government's so-called 'intervention' policy on the aboriginal communities it was designed to 'stabilise'.

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Australia in good shape if another crisis hits, says IMF
Michelle Grattan and Gareth Hutchens
August 7, 2011

AUSTRALIA could lower interest rates and create a second budget stimulus package if there is another global economic collapse, the International Monetary Fund says in a report that also gives the government a tick for its carbon price policy and urges more tax reform.

The report says Australia is one of the few global economies in good health as investors brace themselves for further shocks after the weekend's historic downgrade of America's credit rating to AA-plus from AAA by Standard & Poor's.

Advertisement: Story continues below
Treasurer Wayne Swan said yesterday that while Australia was not immune from events overseas, the IMF's assessment confirmed ''our nation's outlook remains strong despite renewed fragility in the global economy''.

Mr Swan's comments come as China issued a stinging rebuke of the US over its debt crisis, calling for independent supervision of its currency and demanding the country ''learn to live within its means''.

China holds $US1.15 trillion ($A1.09 trillion) in US government bonds and said the US risked further credit rating cuts if it did not pare its ''gigantic military expenditure and bloated social welfare costs''.

''International supervision and a new, stable and secured global reserve currency may also be an option to avert a catastrophe,'' the official Chinese news agency, Xinhua, said.

Europe's central bank governors were due to hold emergency talks overnight intended to prevent Spain and Italy from becoming the next victims of a sovereign debt crisis and limit the fallout from the first US credit-rating cut in history.

Local traders - still reeling from Friday's $60 billion sharemarket rout - fear a negative reaction to the US debt downgrade could drive share prices even lower.

However, economists say there is little danger of Australia losing its AAA-credit rating and, given its safe-haven status, it may even benefit from the global economic turmoil at the expense of the US. Australia is one of only 14 major countries with a AAA-rating.

''I actually think there's a chance the Australian market could be up a bit,'' said Saul Eslake, chief economist of the Grattan Institute. ''I would be surprised if Australian markets took the lead by saying the downgrading of the US's credit rating by one agency is, of its own, sufficient reason to sell Australian shares.''

The IMF says that ''if global financial markets become severely disrupted or world growth falters, [Australia's] macro-economic policy is well positioned to respond''.

There is scope to cut the official interest rate and increase bank liquidity, similar steps to those Australia took at the height of the global financial crisis, the IMF says.

It projects Australia's real GDP growth will be 2 per cent this calendar year and 3.5 per cent next year, with employment growth slowing but unemployment staying under 5 per cent.

The Reserve Bank last week revised its growth forecast down to 2 per cent for 2011, but its 2012 forecast slightly up to 4.5 per cent.

The upside risk to the economy is that larger-than-expected resource investment adds to inflationary pressures, the IMF says. On the downside, global recovery could stall or Asian growth falter.

If recovery remains on track, the IMF says, an interest rate rise is likely to contain the inflationary pressures from the mining boom.

The IMF praised the government for a commitment to returning the budget to surplus in 2012-13, and recommended a budget surplus target of more than 1 per cent of GDP, on average, for the period beyond 2013-14, ''while the mining boom continues to support growth''.

''Although Australia's public debt is relatively low, larger fiscal buffers would give greater

scope to spend during a downturn to support income and jobs.''

The IMF welcomes the carbon price, health and taxation reform, while urging more in this last area.

Mr Swan said the IMF's assessments were ''a timely reminder of Australia's strong fundamentals given the recent heightened concerns about the global economic outlook.

'' We should never forget our economic credentials are among the strongest in the world.

''I'm not going to sugar-coat the fact that the global economic outlook remains uncertain and this uncertainty is likely to continue for some time. And of course there are soft spots in the Australian economy as well. The higher dollar and a cautious consumer are making things tough for retailers, the tourism sector and manufacturers,'' Mr Swan said.

He stressed: ''Now is not the time to shirk the reforms that will continue to keep our economy strong.''

Rio Tinto head Tom Albanese said it was especially important for Australia to do a better job of controlling costs to stay competitive - one way was to introduce the price on carbon only gradually.

''Some of the uncertainty in the financial markets that we've been seeing over the past two weeks only reinforces the point: this is not the time to experiment with an economy.''

via : http://singsupplies.com/showthread.php?98495-Australia-in-good-shape-if-another-crisis-hits-says-IMF

o, really?

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http://www.cnbc.com/id/44839610

The Australian jobs market is showing further signs of weakness, with job advertisements in newspapers and on the internet slipping for a third consecutive month in September. ANZ’s monthly survey shows job ads dipped 2.1 percent in September, from August. Job ads have fallen five times in the past six months and are up just 3.1 per cent on a year ago.

ANZ Head of Australian Economics and Property Research, Ivan Colhoun said “moderating job advertising points towards a further softening in employment growth in the months ahead and a modest rise in the unemployment rate.”

ANZ expects the Australian unemployment rate to rise to 5.5 percent by mid-next year. However, the lender doesn’t expect the slowdown in jobs growth to be as bad as during the last financial crisis.

“To date, the weakening trend for job advertising is more like the 1995-96 experience, rather than the sharp slowdown during the global financial crisis in 2008-09”, said Mr Colhoun. The unemployment rate rose 0.4 percent between June 1995 and December 1996.

According to brokerage firm CommSec, the possibility of an interest rate cut from the RBA has increased, following the release of the job ads data.


CommSec Chief Economist, Craig James said “job ads are a forward-looking indicator of the broader job market. So in simple terms if fewer employers are seeking staff, employment is likely to remain flat in coming months.”

“The worst case scenario is that employers are not hiring and at the same time they are trimming staff. As a result employment numbers will ease in coming months with unemployment drifting higher.

“The troubling aspect for the Reserve Bank is how quickly economic momentum has been lost. Up to March the economy appeared to be chugging along. But since April, business and consumer confidence has fallen sharply, affecting spending and hiring decisions”, Mr James said.

The ANZ data comes just days before the official September employment report, which is due out on Thursday. Analysts polled by Reuters expect a rise in employment of 10,000, with the unemployment rate to stay at 5.3 percent.

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The $200,000-a-Year Mine Worker
Resources Boom Fuels Demand for Underground Labor, Spurs Skyrocketing Pay; a $1,200 Chihuahua


The Wall Street Journal



James Dinnison, a 25-year-old high school dropout from Western Australia, makes $200,000 a year running drills in underground mines to extract gold and other minerals. Despite having earned roughly US$1 million since he started, he has no savings and doesn't apologize. 'The mines are so dull, that when you get back here, everything is stimulation and excitement.'

MANDURAH, Australia — One of the fastest-growing costs in the global mining industry are workers like James Dinnison: the 25-year-old high-school dropout from Western Australia makes $200,000 a year running drills in underground mines to extract gold and other minerals.

The heavily tattooed Mr. Dinnison, who started in the mines seven years ago earning $100,000, owns a sky-blue 2009 Chevy Ute, which cost $55,000 before a $16,000 engine enhancement, and a $44,000 custom motorcycle. The price tag on his chihuahua, Dexter, which yaps at his feet: $1,200.

A precious commodity himself, Mr. Dinnison belongs to a class of nouveau riche rising in remote and mineral-rich parts of the world, such as Western Australia state, where mining companies are investing heavily to develop and expand iron-ore mines. Demand for those willing to work 12-hour days in sometimes dangerous conditions, while living for weeks in dusty small towns, is huge.

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"It's a historical shortage," says Sigurd Mareels, director of global mining for research firm McKinsey & Co. Not just in Australia, but around the world. In Canada, example, the Mining Industry Council foresees a shortfall of 60,000 to 90,000 workers by 2017. Peru must find 40,000 new miners by the end of the decade.

Behind this need for mine workers is a construction boom in China and other emerging economies that has ramped up the demand for iron ore, used to make steel, and other metals used in construction, such as copper, typically used for wiring buildings.

The manpower dearth comes with a hefty price tag. "Inflationary pressures are driving up costs and wages at mining hot spots like Western Australia, Chile, Africa," said Tom Albanese, CEO of Rio Tinto PLC the world's third-biggest miner by sales. "You're seeing double-digit wage growth in a lot of regions."

The shortage is particularly acute in Australia, the world's biggest source of iron ore and the world's second-biggest gold producer.

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The Minerals Council of Australia estimates the country needs an additional 86,000 workers by 2020, to complement a current work force estimated at 216,000. "It's a tight labor market and difficult cost environment," said Ian Ashby, president of BHP Billiton Ltd.'s iron-ore division. To attract workers, BHP and other companies are building recreation centers, sports fields and art galleries in hardscrabble company towns. BHP said rising manpower and capital costs reduced earnings by $1.2 billion during the first half of 2011, when the company posted profit of $11.2 billion.

Some workers in Australia commute from the Philippines and New Zealand. "It makes sense for me," says 47-year-old Ricky Ruffell. The New Zealander, who drives a grader at Port Hedland in northern Australia, flies home once a month on a $1,200 ticket, paying for the fare himself out of his $120,000 annual income.

Mr. Ruffell's employer, Welshpool, Australia-based NRW Holdings Ltd., said the company covers air fares only from within Australia. NRW declined to comment on individual workers but says it pays what the market demands.

The average salary in the Australian mining industry was about 108,000 Australian dollars, or about US$110,000, in 2010, which includes some part-time and lower-skilled workers and is well above the A$66,594 average for all Australians, according to the Australian government's Bureau of Statistics.

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William Boal, a professor at Drake University in Des Moines, Iowa, who studies the labor economics of mining, said the higher salaries reflect in part the higher expenses in isolated areas. "There's also inflation because people have never seen this kind of money before, and they're spending it," he said, referring to further increases in local prices as miners purchase more homes, cars and consumer goods.

Mr. Dinnison went into mining solely for the pay. While in high school, he said, he broke somebody's skull and teeth "in a bar fight that I deeply regret and have never repeated". He said the judge in his case told him that he could spend a year in prison or pay a $10,000 fine plus $16,000 compensation for the victim. "I needed the money, so I went to the mines," he said.

Barminco Ltd., a Western Australia-based mining-services company, hired him. Barminco CEO Neil Warburton didn't return calls seeking comment. Mr. Dinnison, who has mined copper, tin, nickel and gold, drills holes that are then packed with explosives to extract ore. He wears a $5,000 gold chain crucifix. "I'm not religious, but I am conscious that what I do is serious," he said. "But then you come home and you have all that cash."

Despite having earned roughly US$1 million since he started, he has no savings and doesn't apologize. "The mines are so dull, that when you get back here, everything is stimulation and excitement," he said. "The money I spend supports other businesses because of the [stuff] I blow it on."

Mr. Dinnison proudly calls himself a Cub—a Cashed-up Bogan, a bogan referring to Australian slang for an uneducated blue-collar worker. Books and documentaries are coming out about this group, exploring the country's unease with the thought that conspicuous consumption by undereducated people is what is helping to keep the country afloat.

"I have civil-servant friends who talk about giving it all up and going to the work in the mines," says David Nichols, author of "The Bogan Delusion", a sociological book about the riches of blue-collar Australians. Jules Duncan, who filmed a short documentary called "Cashed-Up Bogans" that he is hoping to turn into a feature, admits jealousy prompted his curiosity.

"But I've come to respect these people who are just doing what I'd be doing if I wasn't a self-indulgent filmmaker," he says.

Mr. Dinnison hopes to be promoted to another underground job paying $1,400 a day, up from $800 a day. Lina Mitchell, his 28-year-old fiancée, said she is committed to teaching Mr. Dinnison how to manage his money. "The miners will spend the money on cars, bikes, parties," she said. Mr. Dinnison, meanwhile, said he is committed to mining. "I'm qualified enough now that I'll always have a job," he said. "Without mining, I'd be an auto mechanic making $600 a week. I love mining, mate."

Write to John W. Miller at john.miller@dowjones.com

via : http://singsupplies.com/showthread.php?104639-The-200-000-a-Year-Mine-Worker

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Aussie Markets at Turning Point as China Slows Further
Published: Thursday, 22 Mar 2012 | 4:56 AM
By: Jean Chua
http://www.cnbc.com/id/46818160

Latest data out of China shows factory activity shrinking for the fifth consecutive month in March, heightening concerns that this could be the turning point for Australia's resource plays and currency as chances increase of a protracted slowdown in the world’s largest consumer of commodities.


Jonty Wilde | Iconica | Getty Images

One analyst told CNBC on Thursday that he was thinking of reworking his Australian portfolio keeping in mind a slowing China.

“The numbers are showing us that there is slowing down, we will therefore construct portfolios with less expectations that growth from China will drive,” Jeremy Hook, Investment Director of TMS Capital, an advisory firm based in Sydney, told CNBC.

“Therefore some of the domestic (Australian) stories, some of the beaten-up cyclicals such as brick works and the building sector, which have been terrible here. That might be the better place to invest where nothing is expected rather than the resource sector where a lot is expected and we could end the year being a bit disappointed,” Hook said.

Australia exported A$64.8 billion (US$67.9 billion) worth of goods to China in the last fiscal year that ended June 30, 2011, out of which iron ore and concentrate shipments to China made almost 62 percent, according to data from Australia’s Department of Foreign Affairs and Trade.

Therefore any slowdown in its biggest export market, will have a ripple effect on Australia’s mining sector say market watchers, who forecast commodity prices will trend lower because of an expected decline in Chinese demand.

“There’s a sense that there’ll be weakness in the first half and that will weigh on soft metals,” Peter Hickson, Global Commodities and Basic Materials Strategist at UBS, told CNBC.

BHP Billiton, the world's biggest miner, also said on Tuesday it was seeing signs of “flattening” iron ore demand from China.

Aussie to Hurt

The Australian dollar [AUD=X  1.0372     -0.0071  (-0.68%)      ] also fell to a two-month low on Thursday on news that new factory orders in China sunk to the lowest level in four months, according to HSBC’s preliminary measure of manufacturing activity.

According to Jonathan Barratt, CEO of Sydney-based commodity market research and analysis firm Barratt's Bulletin, the Aussie dollar could potentially fall to parity against the U.S. dollar if the Chinese economy continues to show weakness.

“We have seen a lot of news concerning the economy slowing and this just adds to the frustration,” he said. “The Australian dollar looks weak. If we see a break of US$1.04 on a daily chart this will potentially see US$ 1.0170 and even parity,” Barratt said.