Cheaper Petrol

Gross Domestic Product shows first negative result in 8 years

04/03/2009. Against expectations, the Australian economy declined in the final three months of 2008 by 0.5%. However, this does not indicate we are in a (technical) recession.
A technical recession is defined as two consecutive quarters of contraction.

The economy runs on expectation, fear or confidence.

If people have confidence in keeping their homes and their jobs, they will go out and spend. If not, they save.
If business has confidence in the future, it will invest in people, equipment and stock. If not, it will reduce staff and inventory.
If an investor believes the market will move up, he buys. If he worries it may go down, he sells.

Markets and economies move, based on psychology; proven right, or wrong, by history.

When our treasurer warned us “the inflation genie is out of the bottle”, homeowners assumed interest rates would rise even further and locked in their mortgage rates.
When the treasurer informed us, Australia was heading for a recession and rising unemployment; people started to cut back their spending and saved for the inevitable.
When the prime minister announced a $10 Billion dollar stimulus package, people regarded this as confirmation and saved their “bonus” by paying of debt.
Household savings rate rose to 8.5 per cent from 3.4 per cent, suggesting 80 per cent of the Rudd Government’s $8.7 billion handout in December had been saved

Running around in alarm, handing out large sums of money left right and centre, in the hope that some of it will stick and produce a desired effect, will only contribute to a recession.

It’s a self-fulfilling prophecy.
The recession we had to have.

Victorian Bushfires

13/02/2009. Many lives lost, many families left with nothing.

People who have lost everything are helping each other.
Neighbours helping neighbours.
Over $65 million has so far been raised.
All over the world there is coverage.

Queenslanders, after two thirds of their State was (and still is) flooded, receiving Government assistance, have donated part or all of it to Victorians.

Companies like Coles, DJ and others are donating a full day’s profit.

Dairy farmers who lost their stock make their equipment available to those who lost their equipment.
Volunteer fire-fighters were saving lives and property, while their own home burnt to the ground.
Truckies, delivering donated food, blankets and clothing, are donating their time and part of their pay.

Our cricket team has given up time to raise the spirits of the survivors.

And so it goes on and on and on.

The generosity is overwhelming.

It’s good to be Australian.

Victoria: No power, No Trains, No Water

31/01/2009. Victorian Premier John Brumby -- “We're in uncharted waters, unprecedented conditions”.

"You would never, ever ... no government, no business would ever make the investment for an event that occurs on one day every 100 years because it's a waste of money," the Premier said.

Victorian Energy and Resources Minister Peter Batchelor said there was nothing the Government could have done to prevent the huge power blackout.
“These events are unprecedented, in some respects they are not unlike a natural disaster, impacting on a community like a flood or tornado”.

Hardly unprecedented and not once every 100 years.

A quick Google search shows back in January 2007 “A massive power blackout across Victoria today left 200,0000 homes without electricity and threw Melbourne's public transport system and road network into chaos.” The Age - January 2007

This time all Melbourne train services were canceled and about 500,000 homes and businesses were without electricity in the city's west, some parts of the CBD and western Victoria.
Traffic lights in the city stopped working and signals on the rail network failed.

It is alarming to hear the premier and the minister state that there was nothing the Government could have done to prevent the huge power blackout. Governing is about looking ahead. If this government is incapable of that, it is time for a government that can; before people start dying.

The government cannot be blamed for the heat wave; they can be blamed for a failing infrastructure.

No power, no trains, no water.
Victorians have every right to be angry.

Update 2 February 2009: More than 30 Victorians have died in the record heatwave
A shell-shocked Premier John Brumby: “I know it has not been a perfect week”.

“Green Holden” update

08/01/2009. Only 2 weeks ago, Holden received a $180 million handout (not a loan) from Australian taxpayers to build a new small 4 cylinder “green” car in Adelaide.
At that time, Holden announced it would need 500-600 employees to build the new car.
We had been wondering where these employees necessary to build the “Green Holden” were coming from, given that Holden was not planning to employ any new workers.

Now we know.

GM, Holden’s US parent company, has dropped an export version of the six-litre V8 Commodore Ute made by the same Adelaide factory, as part of GM's "continuing vehicle review".
Federal Industry Minister Kim Carr said yesterday that the decision was disappointing - "but understandable".
F for homework minister. You should have known this before you handed out our money!

$149 Million to build green Holden

24/12/2008. Holden will receive $149 million from the federal government’s $1.3 billion green car innovation fund to produce a “green petrol-fueled car”.
Industry Minister Kim Carr said he expected the car to be "at least 20 per cent more fuel-efficient than other four-cylinder cars on the road today".
This seems to be another case of “hoping and wishful thinking”.
A spokesperson for Holden said the car's exact performance figures could not yet be released because it was still under development.

The car will be based on the Chevrolet Cruze, which in itself is a replacement for Daewoo's small car, currently sold here as the Holden Viva.
According to the government’s green vehicle guide, fuel consumption for the (manual) Viva is 7.4 l/100km compared to the Toyota Prius of 4.4 l/100km.
GM Holden will build the new car at its Elizabeth plant north of Adelaide alongside the Commodore and will require 500 to 600 existing (not new) employees.
We cannot help but wonder what these existing employees are currently doing. Perhaps another model will be canceled in the near future?

GM Holden Chairman and Managing Director, Mark Reuss said the program would be a major contributor to the economy, generating an estimated $70 million to $80 million in wages and $30 million in research and development.
If Holden is not employing any more workers, does this mean the 600 existing workers will get a $110,000 pay rise?

The Australian auto industry needs help. However, should our government give away our money from the green car innovation fund without setting any conditions? This is not an electric vehicle or a plug-in hybrid. It is not even a hybrid. It is just another small 4-cylinder petrol driven car. Hardly green or innovative.

GM Press release: http://www.holdencampaign.com.au/greatnews/

Surplus Virtually Gone

08/12/2008. There are claims the Rudd government has spent too much of the budget surplus in one big hit.
$8.7 billion worth of bonus payments will be handed out to pensioners, carers and low income families from today, in a bid to boost the economy.
We don’t think anyone resents pensioners and carers receiving this Christmas bonus, but pensioners and carers want and deserve certainty in their lives.
We support their call for a $30 per week increase in their pension.
This one-off payment will be good for retailers. But they too will be thinking: “But what AFTER Christmas?” A tax cut, a cut in fuel excise, an increase in the pensions, these are measures that are on-going. Business can plan for the future as can pensioners.
Not a headline grabber, no photo opportunity, no quick fix, but planning ahead.
Treasurer Wayne Swan says that it's “hoped” the government's stimulus payments will create up to 75,000 new jobs.
We think he’s dreaming.
Unless there is a sustained cash flow, business will just as fast lay-off those employees, if they were to employ them at all.

Do something about global warming?

Without it affecting your pocket or your lifestyle?

OPEC agrees to cut output by 1.5 million bpd

24/10/2008. An emergency OPEC meeting on Friday reached agreement to cut oil production by 1.5 million barrels per day (bpd) in an effort to halt a steep oil price slide.
In September OPEC decided to lower its production ceiling to 28.8 million bpd from earlier targets of 29.67 million bpd.
OPEC is in a difficult position; a high price means renewables can make a big impact, which they want to prevent, yet countries like Nigeria, Venezuela and Iran need prices above $90 for their investments.
Today crude prices were as low as $63.32 per barrel, down from $145.29 on 4 July, a 56.4% drop. (Average petrol prices went down from 167.4 to 149.8 a 10.5% decline.)

RBA cuts rates by 1% to 6.0%

08/10/2008. The last time rates were cut by a full percent was 16 years ago in May 1992.
The rate cut is very good news for mortgage holders, but will have an effect on the Australian dollar. When interest rates are high, compared to other countries, overseas investors will buy Australian dollars and thereby increase the value of the Australian dollar, to take advantage of our higher rates.
Only last week our dollar was trading at 80.59 US cents, today it's 72.43.
A low dollar is not bad for our economy. Exporters (e.g. miners and farmers) will benefit, as does our tourist industry.
However imports will rise.
Crude oil has come down 43% from $147 to $83 per barrel, but only 22% in Australian dollars. Petrol has come down even less: Only 11.5%.
The RBA and the Government are still fixated on inflation. Inflation is the least of our worries. A slowdown in our economy and job losses are a much greater threat.
Credit card interest rates, currently between 18 and 22% and the high cost of fuel ($1.47 per litre) should be addressed as they are crippling household budgets.

Prof Garnaut calls for urgent climate action

04/07/2008. Prof Garnaut warned the biggest losers under emissions trading would be the poor and recommended compensation. He wants petrol included - with no compensatory cut to fuel excise. Agriculture should be left out of emissions trading for now. He rejected the coalition policy to cut petrol excise to compensate for higher prices under emissions trading and dismissed their calls to consider delaying emissions trading beyond 2010.
Garnaut Review
The Final Report is expected at the end of September 2008.

Today:
Average Unleaded Petrol = $1.233
Crude Oil: (Brent Spot) US $64.86 per barrel
That's 51 AU cents per litre.
So who gets the rest?

Keep up-to-date
with the Road Rules

High and Low petrol price for today
(MotorMouth - New Window)

Volunteer Sacked For Swearing

10/03/2009. John Willis lost his job as captain of a Gippsland brigade for swearing on emergency radio during the Black Saturday bushfire crisis.
John was battling a fire that had already claimed 50% of his own dairy farm and was threatening a house.

The CFA said the firefighter, who has 40 years experience, (has travelled on his own time to hundreds of fires - in Victoria and interstate - and worked at car accidents, storms and other emergencies, saving countless lives) was stripped of his rank after at least two outbursts during last month's tragic inferno.

"He wasn't a suitable person to represent his brigade, let alone CFA in a senior role," Mr Hogan said. "He's got a history of that sort of behaviour."

In our opinion, when John is willing to put his own life on the line to save someone else or their property, he may swear to his heart’s content.

This volunteer was fighting fires, some deliberately lit, where flames four storeys high, raced across the land like a speeding train, wiping out towns within an hour and where so far 210 people died.

And he swore.

It is not as if he was doing a cooking show on national television.

Tax Cut for Small Business - Smoke and Mirrors

12/12/2008. "Small business will get an 'effective' tax cut by deferring part of their next tax installment", PM Kevin Rudd says.
Businesses with an annual turnover under $2 million will be allowed to postpone 20 per cent of their next Pay As You Go (PAYG) tax installment - due in January and February - until annual tax returns fall due in July.
This is not a tax cut. It's a deferral, and not a reduction, of tax liabilities.
Typically, businesses estimate in advance how much tax they will pay each quarter. These estimates can be varied downwards each quarter but most business operators do not bother, preferring to reconcile their return at the end of the financial year.

FuelWatch dead and buried

12/11/2008. The Federal Government's stalled FuelWatch plan to regulate petrol prices has finally been killed in the Senate with the upper house voting against the legislation this morning.
Independent Nick Xenophon was the crucial vote.
The scheme was to start on the 15th of December and would have cost $20.9 million over 4 years.

Changes to NSW Road Rules

26/06/2008. New road rules come into effect on the 1st of July 2008.
Main Changes
Full List of Changes (pdf)

Labor's $70 million hybrid gift to Toyota

11/06/2008. PM Kevin Rudd yesterday pledged $35 million to Toyota from Labor's new Green Car Innovation Fund as an incentive to assemble the Hybrid Camry at the Altona facility in Victoria.
Victoria matched the $35 million.
To us this sounds like policy on the run. No inquiry and no HCC (Hybrid Car Commissioner). Also, according to last month's budget, the Green Car Innovation Fund (for which guidelines have not yet been developed) does not start operating until 2011.
Toyota announced it would have build the cars here "with or without assistance".

Rates blamed for house price dive

07/06/2008. A SUCCESSION of interest rate rises is blamed for the greatest single drop in Australian house prices on record.
The national median house price lost nearly $13,000 in the first quarter of this year.
Home prices may slide further this year after housing affordability deteriorated in the first quarter to the worst on record, according to a separate report by the real estate institute published May 28.

Member calls for investigation into benefits and risks associated with genetically modified orgasms.

03/06/2008. We're not touching this one.

Wages, House Prices and Petrol

16/05/2008. Data from the Australian Bureau of Statistics show that Adult average wage has increased by 4.8 % over the 12 months to Feb 2008.
The Capital Cities House price Index rose 13.8% over 12 months to Mar 2008.
In the 12 months to Feb 2008 petrol has increased from $1.06 to $1.46.
An increase of 40 cents or 37.7 %.

BUDGET SPEECH 2008‑09

13/05/2008. Read the full text of the Budget Speech delivered on the 13th May 2008.

RBA lifts rates to 7.25%

05/03/2008. As predicted, yesterday the Reserve Bank of Australia has raised its official interest rate by 0.25 of a per cent to 7.25 per cent. Government response: Mr Rudd said the Government was focused on fighting rates rises by tackling inflation. But did he not say earlier he was raising rates to fight inflation?
Inflation in Australia is not a big problem. A big risk is that the interest rate rises will cause a slowdown in our economy and possibly a recession.

Another rate rise - to cut inflation??

05/02/2008. The RBA increased rates by yet another .25%. This marks the bank's 11th increase since May 2002, which has lifted the rate from 4.25 percent to now 7.0%. But isn't the increase in interest rates contributing to inflation? Lifting rates did not work the last 10 times, why would it work now? Can we look forward to another rate rise in March?

Kevin Rudd sworn in as Australia's 26th Prime Minister

03/12/2007. Kevin Rudd has been officially sworn in as Australia's 26th Prime Minister in a ceremony at Government House this morning.
The new Prime Minister wants to get preparation under way in the key areas of industrial relations and education before Christmas.
Interim legislation on industrial relations will be introduced as soon as the new Parliament commences in early February.