Thursday, February 05, 2015

RBA cuts interest rate to historic low of 2.25 per cent

THE Reserve Bank has cut interest rates to a historic low of 2.25 per cent in one of the most keenly anticipated central bank board meeting announcements in months.

The decision was welcomed by treasurer Joe Hockey who said a cut to interest rates is good news for business and households.

The Reserve Bank cut the cash rate by a quarter of a percentage point to a new record low of 2.25 per cent.

“This is good news for Australian families and it’s good news for Australian business,” Mr Hockey told reporters in Canberra. “The government is working hard to take the pressure off interest rates by keeping inflation low.”

Mr Hockey said combined with a fall in petrol prices Australians had received the equivalent of a three-quarter of one per cent cut in interest rates.

The treasurer said the Reserve Bank had “more room to move”but that this latest cut would lift business and consumer confidence.  “The shackles are off the Australian economy,” he said.

“I say to Australian business ... go out there, have a go, employ more Australians because the costs of doing business are down.” The treasurer said he expected the banks to pass on the cut immediately across the credit spectrum and not just limit it to home loans.

An International Monetary Fund report due out within days would show global economic headwinds remain of concern, he said.

The central bank’s last move on the official cash rate was in August 2013, with an easing from 2.75 per cent to 2.5 per cent.

Today’s cut means monthly savings for mortgage holders ranging from about $50 on a $300,000 loan to $120 on an $800,000 loan.

After the RBA’s announcement the Aussie dollar took an initial leg lower, and has been extending losses against the US dollar, falling more than 1.5 per cent to below $US0.77.

In its announcement, the RBA said, “The Australian dollar has declined noticeably against a rising US dollar over recent months, though less so against a basket of currencies. It remains above most estimates of its fundamental value, particularly given the significant declines in key commodity prices. A lower exchange rate is likely to be needed to achieve balanced growth in the economy.”

The RBA also noted that the Australian economy continues to grow below-trend, while the unemployment rate is now expected to peak at a higher level than had been previously forecast.

Reserve Bank governor Glenn Stevens said: “Forecasts for global growth in 2015 envisage continued moderate growth.

“Commodity prices have continued to decline, in some cases sharply. The price of oil in particular has fallen significantly over the past few months. These trends appear to reflect a combination of lower growth in demand and, more importantly, significant increases in supply. “The much lower levels of energy prices will act to strengthen global output and temporarily to lower CPI inflation rates.

“In Australia the available information suggests that growth is continuing at a below-trend pace, with domestic demand growth overall quite weak.”

The move is likely to take the typical standard variable mortgage rate down to 5.7 per cent and discounted variable rates to 4.85 per cent — the lowest cost of mortgage debt since July 1968.

Lower mortgage rates have the potential to add some fuel to what are already strong housing market conditions


An Australian politician has gone off to fight the Islamic State – brilliant

Comment from Britain.  Chuka Umunna is a black British dandy and snob in the parliamentary Labour party

Imagine Chuka Umunna hanging up his immaculately tailored suits and heading off to Syria to do battle with the Islamic State. Or Ed Balls ditching his unconvincing blather about how Labour would resuscitate the British economy in preference for picking up a gun and knocking off some ISIS nutters. Imagine if some of the Labour-leaning laptop bombardiers who pepper the British press put down their spittle-flecked iPads and actually filed off to war against IS rather than filing 800 words about why the armies of the West should launch a war against IS.

Crazy, you say? An unacceptable demand to make of politicians and opinion-formers who have serious jobs and nice homes? Not so fast. For it appears that this very scenario has just unfolded in Australia. Matthew Gardiner, head of the Northern Territory branch of the Australian Labor Party, has apparently gone off to Syria to fight alongside the Kurds against IS forces. Gardiner, who was also secretary of the Aussie trade union United Voice, and is a former soldier who served with the Aus army in Somalia in the 1990s, is thought to have left Australia a few weeks ago after making connections with Kurdish militants online. Where most Western politicians talk a good fight against IS, Mr Gardiner seems keen actually to fight one.

There is much to admire in Mr Gardiner’s reported move. He is, it seems, acting on his convictions, putting himself on the line for what we can assume to be his pretty stand-up beliefs: that the Islamic State is a backward and dangerous force and the Kurds deserve solidarity and help. His alleged actions also expose the shallowness of other Western politicians and observers who talk endlessly about the need to launch wars against evil forces overseas — everywhere from Yugoslavia to Iraq to Syria — yet who would never deign to get their manicured hands dirty by actually picking up a gun. Where earlier leftists trekked to Spain to physically fight for their moral beliefs, the greatest exertion that today’s laughably self-defined heirs of Orwell are willing to undergo is to flick through a thesaurus to come up with the juiciest words possible to describe their anger at the various wicked things happening overseas.

Ours is age in which too many people live vicariously through the military interventionism of Western armies. Bereft of the old, clear politics of left and right, lacking any serious moral or political vision, politicians and observers alike prefer to stage fantasy battles between Good and Evil in far-off fields and then watch them on their TV screens in the hope that they will imbue their sad, anchorless, post-ideological existences with some clout and meaning. And the fact that these interventions make things worse, turning tinpot states into post-states in which all manner of odious forces can take root and take power (think Afghanistan, Iraq, Libya)? Don’t mention that. All that matters is that, for a few weeks or so, Westerners who have watched politics and morality at home fall apart can temporarily reconstruct it on the rubble of someone else’s war and hardships.

Well, Mr Gardiner shows, if the reports are correct, that there is another way. That you can fight on the ground with local forces who might actually make a real difference and create a new, potentially democratic system — something a Western missile is utterly incapable of doing. He has shown that it is possible to get to the Kurds, to train with them, to work with them. So, those Westerners who are relatively young and relatively fit and who have spent years demanding that we Do Something about nasty forces overseas — now your’s chance. Follow Matthew Gardiner. Take up arms. Fight the backward armies. Do something.


Qld.: Energex whistleblower claims culture of waste, inefficiency

A FORMER insider of state-owned power corporation Energex has given a damn­ing assessment of staffers whiling away their days while collecting paypackets far outstripping market rates.

Energex whistleblower Cally Wilson has made a submission to the federal ­energy regulator alleging a “public sector mentality” was racking up costs borne by consumers through their power bills.

“Energex staffing levels, based on my observations, are excessive for its actual needs,” Ms Wilson, a former treasury analyst before quitting last year, has told the Australian Energy Regulator of her time at Energex headquarters.

“Walking around the building, I saw row upon row of employees spending large amounts of their day engrossed in personal activities while … employees often spend large parts of their days in unproductive meetings.

“Staff are provided exceedingly generous income and benefits compared to commercial standards for the same roles.

“This in itself contributes to an inefficient workplace, as once people are in jobs that provide pay and benefits well in excess of market conditions, employees are more likely to cling to jobs.”

The submission urges the regulator to take a “razor” to Energex’s latest revenue bid, which influences network costs – making up about half of power bills – for the next five years.

An independent review into network costs commissioned by the outgoing Newman government found that an alarming 647 staffers earned more than 1½ times their base salary across the three state-owned network businesses – Ergon, Energex and Powerlink.

And 27 staff doubled their base pay in 2011-12, likely spawning “lower levels of productivity”.

Energex staff are virtually unsackable due to longstanding “no forced redundancy” clauses.

The Courier-Mail spent a day at a coffee shop a short walk from Energex’s $90 million Newstead base mid last year, witnessing a series of laid-back meetings.

One employee was heard joking with three Energex staff: “Don’t rush, you still have another two hours until you have to be back.”

The Courier-Mail revealed early last year that taxpayers were forking out $100,000 a month for more than 100 people whose jobs no longer existed but who could not be sacked.

An Energex spokesman said it was impossible to respond to inefficiency claims before seeing the submission, but blamed overtime for excess staff pay.


Is mathematics Confucian?

The author below thinks so

Chinese Australians consistently outperform their peers in mathematics and according to QUT researcher Michael Mu this is not only because of pushy parents or motivated students.
Mr Mu's research has found in addition to a strong emphasis on mathematics, Chinese Australians' mathematical achievement is also passed down through generations.

Mr Mu, who is undertaking his PhD through the Faculty of Education, said Chinese cultural identity counted in mathematical success.

As part of his study, Mr Mu surveyed 230 young Chinese Australians relating their mathematical achievement to their level of association with their Chinese cultural dispositions.

"I found there is a trend showing Chinese Australians' mathematics learning is influenced, consciously or unconsciously, by the values and expectations that they get from their cultural identity," he said.

"It's not only about Chinese parents pushing their children at mathematics, or students putting in more effort, or the belief that Chinese students have a great interest in maths, it's much more deeply rooted in their cultural history."

Mr Mu said "habitus" or as it was more commonly understood as structures that generate, but not determine, certain cultural dispositions, was what pushed Chinese Australians to do well at maths - and it could be done consciously or unconsciously.  "The importance of mathematics is steeped in Chinese tradition and culture. It is part of Confucius ideas and beliefs," he said.

"Chinese traditions and beliefs play an important part in Chinese culture and they are passed down from generation to generation. "Despite some possible imperfect intergenerational reproduction, Confucian way of being, doing, and thinking continues over thousands of years.

"This perception becomes the underpinning mechanism that leads to Chinese Australians' putting in more effort in mathematics learning and therefore better mathematics achievement compared to their counterparts."

Mr Mu's study is published as "Does Habitus Count in Chinese Australians' Mathematics Achievement?"


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