Tuesday, April 08, 2014

Australia signs Free Trade Agreement with Japan

A big win for Australia

THE cost of buying household goods for Australian families will be slashed by hundreds of dollars a year under a historic free trade agreement struck with Japan tonight.

Prices on the $1.3 billion in electrical goods imported from Japan every year including fridges, microwaves, stereo systems, air conditioners and dishwashers will be cut by five per cent this year.

And in return, in an unexpected win for Australian farmers, tariffs will be lifted on Australian wool, cotton, lamb and beer exported to Japan. Japan has agreed for the first time to also reduce tariff barriers on Australian beef and dairy in a deal worth $2.8 billion to the industry over 20 years.

Prime Minister Tony Abbott and Japanese Prime Minister Shinzo Abe announced the historic economic partnership following two days of intense talks headed by Trade Minister Andrew Robb.

After seven years of negotiation, it was hailed as a major win for Mr Abbott on the second day of a seven day trade mission to North Asia.

A joint communiqué released by the two leaders, which also promised to elevate security and defence co-operation to a new level, hailed the deal as the “most significant economic accord between the two countries since 1957”.

News Corp Australia revealed this morning that the price of an average imported Japanese car in Australia will drop by up to $1500 with the existing five per cent tariffs on imported cars axed.

A similar FTA recently secured with Korea was estimated to be worth savings of $700 a year for the average Australian family.

It is expected that the new deal with Japan will add to those estimated cost of living savings by at least as much again.

Australian agriculture will also be allowed unprecedented access to Japanese markets with tariffs eliminated on the majority of horticultural products.

Cheese and wine makers and sea food producers will also be given greater access to sell products into Japan with tariffs cut on some while others will benefit from a lifting in quotas.

As expected, rice was excluded from the deal.

Foreign investment rules will also be lifted with the threshold for referral to the Foreign Investment Review Board being lifted from $248 million to $1 billion. The threshold for State owned investment will remain at zero.

A statement released by Mr Abbott said the agreement, which would come into effect later this year when ratified by Parliaments of both countries, will be a major boost for the Australian economy.

“It will be good for jobs, good for farmers and good for consumers,” Mr Abbott said.

“Australian consumers will be the major beneficiaries of this agreement, with tariffs eliminated on imported cars from Japan as well as household appliances and electronics.

“Australian service provisors will also gain significant new access to the Japanese market across areas such as financial services, education and telecommunications and legal services.”

Australia currently imports $6.8 billion worth of Japanese cars a year. The axing of tariffs will be immediate on the deal being ratified later this year for 75 per cent of cars, with the remainder becoming tariff within three years.

While the elimination of tariffs will deliver a hit to the Government’s budget bottom line of more than $300 million, it is expected to be largely offset over time with the boost in value to Australian export industries.

The deal on liberalised two way trade now estimated at $70 billion a year will also see tariffs cut for Australian frozen beef exporters into Japan from 38.5 per cent to 19.5 per cent and fresh beef to 23.5 per cent over the next 15 years, adding an estimated $2.8 billion to the value of industry.

The deal is the first of its kind to be struck by Japan with any country, affording Australian most favoured nation status on both beef and agriculture trade.


Institute of Public Affairs calls for the abolition of the minimum wage

It has been a feature of Australia’s social safety net since not long after federation - a minimum wage not set just by market forces, but that considers the living needs of a worker.

But the Institute of Public Affairs - an influential free-market think tank well-connected within the Liberal Party - wants Australia’s minimum wage abolished.

The institute’s Aaron Lane said there was a "moral case" to abolish minimum wages to allow people to experience the "dignity of work".

"Our position is an ideological one and we don’t shy away from that," he said. "This position can be seen as heartless and wanting people to work for a low wage. But it’s about empowering individuals in being able to choose their own employment."

Mr Lane said the current system priced thousands of people out of work and forced employers to cut back staff hours.

"I’m not so concerned about the working poor, I’m more concerned about the unemployed poor," he said.

"Continuing to increase the minimum wage is a threat to the dignity of the unemployed."

For this year’s minimum wage decision, to be decided by the Fair Work Commission in June, the institute wants to see it frozen at $16.37 an hour, but its longer-term goal is for there to be no minimum wage at all.It is a radical position.

Most years employer groups push for modest increases in minimum wages.

Australia has the fourth highest minimum wage in the world, according to one measure. Unemployment is rising, but is much lower than the wealthy country average.

The idea of a "living wage" has been a feature of Australia’s labour market since 1907.

Then, Justice Higgins decided that wages at the Sunshine Harvester Company in Melbourne had to consider the needs of the "workman" and his family.

"I cannot think that an employer and a workman contract on an equal footing, or make a ‘fair’ agreement as to wages, when the workman submits to work for a low wage to avoid starvation or pauperism . . . for himself and his family," Justice Higgins wrote.

"Or that the agreement is ‘reasonable’ if it does not carry a wage sufficient to insure the workman food, shelter, clothing, frugal comfort, provision for evil days."

ACTU secretary Dave Oliver sings a similar tune. He wants a $27-a-week rise in the minimum wage. He attacked the institute, saying: "Many Australians would find it offensive for executives of the IPA to say our lowest paid workers don’t deserve a wage increase.

"The truth is that productivity is up, wages growth is slow, businesses are enjoying huge profits while workers’ share of the pie is diminishing."

Mr Oliver said the minimum wage in Australia was slipping when compared with average wages. He said if the trend continued Australia would have an "entrenched US style working poor" by 2035.


Macquarie Island declared pest free after 7-year eradication program

Great news if true.  Mac I. is not much in itself but this is a great proof of concept

The World Heritage-listed Macquarie Island has been declared free of pests after a near-seven-year campaign to eradicate it of rats, rabbits and mice.

Macquarie Island lies 1,500 kilometres south-east off Tasmania in the sub-Antarctic.

In 2007, the Australian and Tasmanian governments jointly funded a $25 million project to eradicate all rabbits, rats and mice from the 13,000-hectare island.

A baiting program was undertaken, before hunters and their dogs were brought in to eradicate any surviving animals.

A monitoring program since then has not detected any pests for the past two years and the eradication program has been declared a success.

The project manager, Keith Springer, says the monitoring process has been intensive.

"We've had teams that have scoured the island by day and by night, covering a total of 92 thousand kilometres on the island, in terms of their tracked travel, searching every nook and cranny that they could access, to make sure that there's none left, no rabbit and no rodent," said Mr Springer.

'Global significance'

The Tasmanian Government says it is the largest successful island pest-eradication program ever attempted.

Former acting project manager Noel Carmichael has told ABC Local Radio the success is of worldwide significance.

"There's been intense interest in the progress of the eradication on Macquarie because rabbits, rats and mice haven't been eradicated from an island of this size, all at the same time before," he said.

"It really is an important step in progressing the field of island eradication."

Mr Springer says people running other island pest eradication programs around the world are keen to learn from the success.

"We've certainly been able to share some of the lessons that we've learnt on Macquarie with the people planning the South Georgia project, amongst others," he said.

"Also in New Zealand and elsewhere in Australia there's certainly been interest in what we've been doing and what we've achieved and how we've gone about it.

"So it's a good thing to be able to share and try to progress other results around the world."


Federal Environment Department to shed 480 more public servants in latest round of job cuts


Nearly 500 jobs will be lost at the Federal Department of the Environment over the next three years.  Public servants based in Canberra were told at a meeting today that 480 staff will lose their jobs over the next 36 months.  They were told 250 of those positions will go by the end of this year.

The Community and Public Sector Union (CPSU), which represents public servants, says the job cuts will affect the department's ability to protect the natural environment.

CPSU national secretary Nadine Flood says the community expects the government to protect iconic environmental assets such as Kakadu, Antarctica and the Great Barrier Reef.

"You need talented experienced people to do that and cutting 480 jobs means fewer people on the ground who are doing that work," she said.

"These latest cuts bring the total tally of job losses announced by the Abbott Government to well over 5,500 nationally."

Positions at executive levels 1 and 2 will be the primary target of the predicted job cuts, with a 26 per cent reduction in senior executive service (SES) numbers anticipated.

The latest round of cuts comes on top of almost 200 positions which are being shed in the current round of voluntary redundancies.

A strategic review says structural change will reduce the department's operating budget by $100 million over four years, from $460 million in 2013-14 to $361 million in 2017-18.

Public servants were also told that if the requirements for job losses are not met through the voluntary redundancy round, then a merit-based process would be introduced.

The union says this announcement is concerning for nervous staff waiting for next month's federal budget.

"These are real people with families, bills and mortgages to pay," Ms Flood said.  "It is very stressful for staff in the Department of the Environment and other places where jobs are being cut.

"We are of course working with the department to ensure that all redundancies are voluntary and we save as many jobs as we can."

Changes across the public service recommended by the Commission of Audit have not yet been introduced, so the department's final job loss figures could be larger.

A large number of staff from the now defunct Federal Department of Climate Change and Energy Efficiency were moved into the Department of the Environment prior to the change of government last year.


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