Tuesday, April 20, 2010

Australia leads world in investor safety

Interesting that Canada did well too

AUSTRALIA has been rated equal-first as the safest country in which to invest while the economies of other countries continue to deteriorate.

Sixteen countries, including Japan, Spain and Greece have had their ratings downgraded since the beginning of this year, amid a big shift in debt from the private sector to the public sector during the global financial crisis.

Dun & Bradstreet's latest economic and risk outlook report said the forecast for Australia's key trading partners was mixed, with the payment performance of companies in Japan, China and India a key risk this year.

In the US, tight credit conditions and ongoing problems in the financial sector are expected to limit private consumption and new investment, while domestic demand in Britain is expected to remain weak.

D&B said this could affect Australian firms exporting to those regions, which are respectively ranked fifth and sixth based on analysis of their political, commercial, external and macroeconomic risks. But the outlook for the Australian economy remains strong and is expected to continue to improve, according to D&B director of corporate affairs Damian Karmelich.

The nation is in equal-first position with Canada, Norway and Switzerland as the safest country in which to invest. "Domestically, Australia never experienced the slow-down that the rest of the developed world did and therefore we have a very robust domestic situation in terms of the economic outlook," Mr Karmelich said.

"Secondly, we are exposed to the upside of China and generally we are exposed to the upside of countries which are industrialising at a very rapid pace.

"The other thing which is very much in our benefit, particularly compared to somewhere like the US, is that because unemployment never reached the heights that many had feared it means consumer confidence has remained very strong."

The other countries that were downgraded this year were Algeria, Argentina, Belgium, Chile, Colombia, Iran, Guatemala, Iceland, Kuwait, The Netherlands, Nigeria, United Arab Emirates and Yemen.

Mr Karmelich said many of the downgrades were related to governments taking on bad debts during the crisis in order to rescue companies, with Greece the most extreme example of a public debt crisis. "The consequence of that is those governments are now struggling with those very same issues that the corporates were struggling with and they have very large deficits," he said.

Mr Karmelich said Iran and Yemen faced significant political issues that negatively impacted their risk rating.

Overall, D&B said conditions had improved markedly from early last year and that global growth was expected to reach 2.4 per cent this year.


Conservatives would give people a reason to save

"Hartsuyker" is Dutch for "hard sugar". Rather a good metaphor for savings, I think

OPPOSITION spokesman on superannuation Luke Hartsuyker says he would scrap some of the Rudd government's key changes to super, including the mandatory default funds for each industry and the new concessional contribution caps. He also criticised the Cooper review's MySuper proposal, a low-cost, no-frills option, saying it would encourage apathy.

Speaking at an Australian Institute of Superannuation Trustees lunch in Sydney yesterday, Mr Hartsuyker said a Coalition government would focus on measures that encouraged and engaged people to save more for their retirement.

This would include removing the mandatory default funds in modern awards and encouraging both the employer and the employee to make a choice, he said.

Under the Rudd government's award modernisation program, the Australian Industrial Relations Commission nominated a list of super funds that must be used by employers when a new employee does not request one.

"Labor's default funds are reversing the competitive pressure on fees and performance," Mr Hartsuyker said. "Why should a superannuation fund strive to excel when their client base is guaranteed by legislative instrument?"

However, AIST chief executive Fiona Reynolds said a default system was necessary in a compulsory super system. "I do not think a lot of employers would want that responsibility either, to know they might put people into a fund (that) is no good," she said.

Mr Hartsuyker, also the opposition spokesman on consumer affairs, financial services and corporate law, said the Coalition would also reverse Labor's cutbacks on concessional contribution rates "by redesigning concessional rates and what they hope to achieve".

Last budget, the Rudd government halved the caps on the amount of money people could add to their super without having to pay too much tax. Mr Hartsuyker said contribution levels needed to be increased but stopped short of saying the level of compulsory contributions should be raised from 9 per cent.

"If we can design the right program of encouragement, there is no reason why this percentage can't rise," he said. In terms of the MySuper proposal, Mr Hartsuyker said forcing funds to have a no-frills default product for disengaged members would "encourage apathy in superannuation, rather than encourage voluntary contributions and much-needed engagement".


Population debate ignores the dire social fallout

WHEN the federal government blithely sets the annual immigration rate, including in it a significant number of refugees, it clearly does so without giving a toss for either the needs of those who are brought in or the needs of the existing communities into which they are settled. Unless it starts to invest considerably in this number there is a very big risk that Australians will not only remain opposed to further immigration but that immigration will continue to contribute to a range of gut-wrenching social problems as well as Australia's economic growth.

This particularly applies to refugees. Refugees differ from other migrants in a number of ways; they often don't have local family connections and support or the skills that would guarantee employment. They also haven't planned to come to Australia in the way that others might have and are often severely traumatised by their experiences at home.

This means they need extensive government assistance, and so do the suburbs expected to take large numbers of them. Traumatised schoolchildren who are years behind in educational attainment do not make it easy for classmates and teachers, however sympathetic. The same goes for parents. With the exception of some limited assistance for counselling and trauma, it is very difficult to see where the federal government has contributed to meeting refugee needs. As usual the states get counted out of the population and immigration debate but are left picking up the pieces.

At a recent seminar I attended in South West Sydney for the African Family Safety Project, the irresponsibility of our refugee program was forcibly brought home. Domestic violence is rife in parts of this community and it and their leadership groups are struggling, almost unaided, to cope with it. The community's efforts to contain family violence are fought at every turn by their own demons and the NSW and federal government's refusal to recognise that it needs to be dealt with now before another ghetto of crime and disadvantage is established.

SydWest Multicultural Services, which ran the seminar, receives some funding from the Women's Policy Office but little else. The seminar's main focus was with mostly Sudanese refugees who came from Africa under Australia's Humanitarian program. In the four years from 2002-03 to 2006-07 escapees from the Sudanese civil war accounted for a quarter of our intake. They included boys who had been soldiers, girls and women who had been raped, men who had been tortured, men and boys who had fought for their lives and killed. Eighty-two per cent of these people have little or no English language. Why should we be surprised that there might be difficulties establishing them in metropolitan Blacktown, where they have been sent?

There was good and bad news from the seminar. The good news was the presence of men at the seminar and a general agreement that domestic violence was wrong and should be stopped.

The bad news was that this is going to be difficult. We are talking about intensely traumatised people. Some will be silent, others will act. But there is also the culture gap. Some male participants complained about the nature of the Australian welfare system and what they saw as its preferential treatment of women. In the space of a few days these families had been transported from violent and lawless refugee camps or traditional community life in rural villages to brick veneer homes and welfare incomes in Anglo-Celtic Sydney. In Australia, welfare income is mostly given to mothers rather than fathers. Refugee women are in frequent contact with community services where men are not included and many men felt community service providers were breaking up their families by telling their wives they had the right to walk away from a marriage that made them unhappy. It was the men who were isolated and powerless, they said, and domestic violence was retaliation.

Male frustration was compounded by the generous youth allowances provided to their children once they turned 16. It meant their children could defy them (I assured them they were not alone in this) and traditional family respect was broken.

As the meeting progressed it was clear that for this community, the dramatic transition to Australia, lack of work for men and the power of the welfare dollar had become a diabolical cocktail. Official letters and phone calls from polite Department of Community Services workers were clearly not cutting it with families desperate for some face-to-face contact with people prepared to listen to them. One young man pointed to a poster on the wall. "That poster is a lie. It says Australia is a multicultural country. It is not. We were not told our ways would not be respected, that there was only one rule and that was the Australian way," he said.

"My wife was encouraged to leave me when she should stay." Others agreed.

There are hundreds of changes we need to make if we are serious about averting a social disaster in Blacktown and anywhere else that has to deal with a very different group of newcomers, especially if they are traumatised, unable to find work and struggling to bridge cultural divides. If we do not we will spend the next 20 years digging our new citizens out of the ghettoes to which we have condemned them and addressing crime and social dislocation.

While a theoretical discourse about the most desirable population size rages in the remote political echelons of Canberra, a city with strikingly few refugees of Sudanese or Afghani extraction, real Australia has to get on with the job of dealing with it. A little less theory and a lot more practical assistance would make the intellectual vanity of the population debate easier to take.


Labor whacked on boatpeople in Newspoll

THERE has been a huge swing to the Tony Abbott-led Coalition on who is best to handle the issue of asylum-seekers arriving in Australia, with the Liberals holding almost a two-to-one advantage over the Rudd government.

The swing to the opposition came despite the government's suspension of refugee applications from Sri Lankan and Afghan asylum-seekers and the reopening of the notorious Curtin detention centre in remote Western Australia.

The results, in a Newspoll taken exclusively for The Australian last weekend, came as a six-month asylum-seeker deadlock at the Indonesian port of Merak was finally broken yesterday, but at least 18 of the Sri Lankans involved have already reached Christmas Island.

During the past three weeks of political debate, dominated by Kevin Rudd's plan to take over 60 per cent of state health funding and the government's suspension of refugee applications from Sri Lankans and Afghans, Labor's primary vote has remained unchanged on 43 per cent while the Coalition's has gone from 38 to 40 per cent. Based on preference flows at the last election, Labor leads the Coalition with an election-winning two-party-preferred vote of 54 to 46 per cent.

Under the Opposition Leader, the Coalition's position on asylum-seekers is that the Howard government's policy of issuing temporary protection visas "stopped the boats". This has not only greatly attracted support among Coalition supporters but is also winning over Labor voters. Support for the Coalition on handling asylum-seekers has doubled from 23 per cent in November last year to 44 per cent last weekend.

Since Mr Abbott became Liberal leader last December, there have been more than 100 illegal boat arrivals and Christmas Island is filled to overflowing with refugees. During the same period, support for the Rudd government's ability to handle asylum-seekers has risen from 20 per cent to 26 per cent.

Voters who were undecided about which party to trust on border protection have shifted overwhelmingly in Mr Abbott's favour.

The Newspoll shows that Mr Abbott's demands for a tougher line on illegal boat arrivals have attracted stronger support among Coalition voters than when Malcolm Turnbull was Liberal leader. In November last year, 54 per cent of Coalition supporters said they preferred the Coalition to handle the issue but last weekend that jumped 27 percentage points to 81 per cent.

Mr Abbott also picked up a large number of Labor supporters, almost tripling his support among them. In November, 8 per cent of ALP supporters backed the Coalition but last weekend the figure jumped 15 points to 23 per cent.


1 comment:

rloader said...

It is very hard to trust the Polls. We do not know who they ask or what questions they ask. However, it always seem to be that the Govt is winning on a two preferred party basis no matter what failures they have on every policy.